Economic and Financial Impacts from Rapid-Onset Compound and Cascading Climate related Risks

Rapid-onset hazards often compound (i.e. combination of multiple hazards) or cascade (i.e. when a single hazard triggers a sequence of secondary hazards), being a main source of concern for disaster and financial risk mangers due to the potential massive direct (e.g. capital stock destruction) and cascading indirect economic (e.g. employment and GDP), social (e.g. inequality) and financial (e.g. public debt) impacts.

While the current understanding on how Rapid-Onset Compound and Cascading Climate related (ROC3) hazards interconnect is progressively improving, less attention is given to how ROC3 risks lead to direct and cascading indirect impacts.

The research theme proposed in this project proposal will advance the understanding of ROC3 risks by building on state-of-the-art risk models to tackle three interconnected research gaps, related to the need for: (i) identifying which, how and where ROC3 risks may occur; (ii) reliable ROC3 direct impact estimates, and; (iii) a comprehensive and dynamic assessment of the cascading indirect impacts of risks.

Building on an innovative analytical framework that integrates disciplines from different scientific fields including environmental, social, and economic sciences, the project will be the first of its kind to develop and apply a comprehensive methodological framework integrating the intrinsic dynamics of ROC3 risks and the cascading macroeconomic and financial indirect impacts.

The researcher and two host institutions will mutually benefit from three-way transfer of knowledge.

By providing open-access datasets and open-source software, the project results have the potential to inform disaster and financial risk managers and promote the conditions for building resilience to ROC3 risks. The project is aligned with the Sendai Framework for Disaster Risk Reduction and the Paris Agreement.