Understanding the full cost of climate events in cities
Climate change may bring more frequent storm floods and extreme precipitation events, and urban communities struggle to decide how to adapt. Current methods to assess the cost of such events are lagging behind, in turn reducing perceived benefits of adaptation and risk reduction measures. This project take an innovative and novel econometric approach to identify and measures important parts of these costs, and we bring forward the new knowledge to improve decision making on urban climate change adaptation.
The first hypothesis we aim to address is the idea that the property market captures the costs of a wider set of impacts than reflected in insurance payments. If that is the case, property market data may reveal that prices of properties in areas affected by climate damage events are lower than similar properties elsewhere, implying a loss. Furthermore, as properties are often mortgaged, the losses represent an increase in risk for the financial sector. Thus, avoiding the losses through adaptation measures represent a directly bankable asset protection.
The second hypothesis we aim to address is that households in affected areas may experience stress, anxiety and other negative impacts that could have health implications at least in the short term. The result may be more visits to and prescriptions from their doctor, more sick and other absence days from work, in affected.
We make use of three types of data (property data, incl. prices, register and survey data on health etc.) to target two key hypotheses i) Climate change events affect property values and ii) citizens in areas subject to climate events experience health impacts. We evaluate these hypotheses using state-of-the art spatial econometric models and results are translated into policy relevant decision support.
The overall objective and outcome of this project is to increase our insight into the true benefits of urban climate adaptation, that protect against storm floods and extreme precipitation events, and to process these insights into models and tools improving the business case of climate adaptation. The project is in high demand among end-users from both the public and the private sector, as evident by the co-funding made available. Six supporting objectives will contribute to this outcome:
This project welcomes anyone interested in the above challenges and objectives addressed by this project. We already have a strong group of stakeholders engaged with the project including the insurance sector, the public utilities sector (water works etc.), the consultancy sector, municipalities and regional and national government bodies.
Our result will be relevant to planners and decision makers in and around the entire urban planning ecosystem addressing aspects of climate change in urban development.
The consortium includes both the lead university partner, University of Copenhagen, ensuring research based decision support, a private sector partner, COWI, ensuring that the tailoring of results into decision support fits the modus operandi and INRA, the large French research institute, to prepare for subsequent upscaling in later activities.
Demand for this project is substantial, as evident by the fact that the co-funding for this Climate KIC demonstrator is a project funded by a consortium led by Gladsaxe Municipality and including also the Captial Region of Denmark, several municipalities, the utility companies NOVAFOS and HOFOR, the insurance companies’ umbrella organisation Forsikring og Pension, Realdania and several others.
Toke Emil Panduro
The project scientific leader is assistant professor Toke Emil Panduro. He has worked extensively on spatial and urban economic models for several years, including how to assess the impact of climate change events and other environmental changes in the urban environment.
University of Copenhagen
Department of Food and Resource Economics
Rolighedsvej 23, 1958 Frb. C
Phone: +45 35 33 10 76