Short- and Long-Term Impacts of Climate Extremes - identifying key impact channels and effective strategies for long-term economic development under climate change
November 2018 until October 2022
715.228 € funded by BMBF, PT DLR: Ökonomie des Klimawandels
Christian Otto
PIK number / OEH

Floods, tropical cyclones, heatwaves, and droughts cause not only substantial direct damages but also have the potential to deteriorate socio-economic development perspectives in the long-term. A systematic understanding of the main impact channels of climate extremes on socio-economic development from the household to the macroeconomic level is missing to date. The SLICE project - funded by the German Federal Ministry of Education and Research via the funding line Economics of Climate Change - aims at closing this gap by providing stakeholder-guided output in terms of scientific publications, policy briefs, open-access datasets and open-source software development.

SLICE aims to identify hotspot countries where the largest environmental forcings impact on the most vulnerable economies. This analysis is based on a comprehensive set of future climate and socio-economic scenarios. SLICE intent to inform climate negotiations by estimating the costs averted at low-levels of global warming (1.5-2°C) in accordance with the Paris agreement with higher levels of warming in accordance with current pledges within the National Determined Contributions. SLICE seeks ongoing cooperate with stakeholders from the World Bank, the International Fund for Agricultural Development, Munich Re and Swiss Re from the reinsurance industry and the rating agency Standard & Poors. SLICE targets to provide a deep processed-based understanding of how climate extremes impact on socio-economic development trajectories in the short- and long-term, using econometric methods and dynamic modeling approaches. SLICE intends to study long-term distributional impacts of climate extremes at the household level, considering relevant metrics such as well-being, health, and education. SLICE seeks to analyse differences in coping capacities and resilience across high-income and low-income countries at the macroeconomic level, considering socio-economic channels such as disaster insurance, sovereign debt, governance. SLICE looks to assess the effectiveness and integrability of adaptation measures from physical means such as building dikes to political instruments such as climate risk insurances and national and international reconstruction aid.