Managing Water Stress and Climate Risk in South Florida

Climate risk analysis and assessment studies are typically conducted relying on historical data. These data, however, represent just one single realization of the past, which could have unfolded differently. As an example, Hurricane Irma might had struck South Florida at Category 4 and, had it done so, damages could have been as high as 150 billion, about three times higher than damage estimated from the actual event. To explore the impacts of these potentially catastrophic near-misses, downward counter-factual risk analysis (Woo, Maynard and Seria, 2017) complements standard risk analysis by exploring alternative, plausible realization of past climatic events. As downward counter-factual risk analysis frames risk in an event-oriented manner, corresponding more closely to how people perceive risk, it is expected to increase climate risk awareness among people and policy makers (Shepherd et al., 2018).We present a counter-factual risk analysis study of climate risk from tropical cyclones on the Caribbean islands. The analysis is conducted using the natcat impact model CLIMADA (Aznar-Siguan and Bresch, 2019). Impact is estimated based on forecasts of past tropical cyclones tracks from the THORPEX Interactive Grand Global Ensemble (TIGGE) dataset, as they all represent plausible alternative realizations of past tropical cyclones. The goal is to study whether, and to what extent, the estimated impacts from forecasts provide new insights than those provided by historical records in terms of e.g. cumulated annual damages, maximum annual damages and, in so doing, perform a worst-case analysis study to support climate risk management planning. Aznar-Siguan, G. and Bresch, D. N.: CLIMADA v1: a global weather and climate risk assessment platform, Geosci. Model Dev., 12, 3085-3097, doi.org/10.5194/gmd-12-3085-2019, 2019.Woo, G., Maynard, T., and Seria, J. Reimagining history. Counterfactual risk analysis. Retrieved from: https://www.lloyds.com/~/media/files/news-and-insight/risk-insight/2017/reimagining-history.pdf, 2017.Shepherd, T.G., Boyd, E., Calel, R.A. et al.: Storylines: an alternative approach to representing uncertainty in physical aspects of climate change. Climatic Change 151, 555&#8211;571, doi.org/10.1007/s10584-018-2317-9 , 2018.

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Physical Climate Risk and Foreign Direct Investment: Is China Different?

10.21203/rs.3.rs-471186/v1 ◽

2021 ◽

Author(s):

Xia Li ◽

Kevin Gallagher

Keyword(s):

Foreign Direct Investment ◽

Water Stress ◽

Foreign Investment ◽

Direct Investment ◽

Multinational Companies ◽

Climate Risk ◽

Host Countries ◽

Climate Risks ◽

Physical Risk ◽

Typhoon Risk

Abstract This study deploys newly available data to examine the exposure of multinational companies’ overseas investments to physical climate risk. Globally, we find that foreign investment in the agriculture and mining sectors is most associated with physical risk. We also examine China, as it is fast becoming one of the largest centers of both inward and outward foreign investment across the globe. We find that foreign facilities located in China are associated with higher hurricanes and typhoon risk than their domestic counterparts in China. For Chinese firms operating abroad, we find that China’s overseas facilities are associated with higher water stress, floods, and hurricanes & typhoon risks across host countries, compared with non-Chinese companies. Within host countries, however, climate risks of Chinese facilities are comparable to that of non-Chinese facilities.

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