Mitigating Disaster Risks in the Age of Climate Change

IF 6.6 1区 经济学 Q1 ECONOMICS Econometrica Pub Date : 2023-10-03 DOI:10.3982/ECTA20442
Harrison Hong, Neng Wang, Jinqiang Yang
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Abstract

Emissions abatement alone cannot address the consequences of global warming for weather disasters. We model how society adapts to manage disaster risks to capital stock. Optimal adaptation—a mix of firm-level efforts and public spending—varies as society learns about the adverse consequences of global warming for disaster arrivals. Taxes on capital are needed alongside those on carbon to achieve the first best. We apply our model to country-level control of flooding from tropical cyclones. Learning rationalizes empirical findings, including the responses of Tobin's q, equity risk premium, and risk-free rate to disaster arrivals. Adaptation is more valuable under learning than a counterfactual no-learning environment. Learning alters social-cost-of-carbon projections due to the interaction of uncertainty resolution and endogenous adaptive response.

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减轻气候变化时代的灾害风险
仅靠减排无法解决全球变暖对天气灾害的影响。我们模拟了社会如何适应资本存量来管理灾害风险。最佳适应——企业层面的努力和公共支出的结合——随着社会了解到全球变暖对灾难到来的不利影响而有所不同。资本税和碳税是实现第一个最佳目标所必需的。我们将我们的模型应用于国家层面的热带气旋洪水控制。学习使实证结果合理化,包括托宾q、股权风险溢价和无风险率对灾害到达的反应。在学习的情况下,适应比在反事实的无学习环境下更有价值。由于不确定性解决和内源性适应性反应的相互作用,学习改变了碳预测的社会成本。
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来源期刊
Econometrica
Econometrica 社会科学-数学跨学科应用
CiteScore
11.00
自引率
3.30%
发文量
75
审稿时长
6-12 weeks
期刊介绍: Econometrica publishes original articles in all branches of economics - theoretical and empirical, abstract and applied, providing wide-ranging coverage across the subject area. It promotes studies that aim at the unification of the theoretical-quantitative and the empirical-quantitative approach to economic problems and that are penetrated by constructive and rigorous thinking. It explores a unique range of topics each year - from the frontier of theoretical developments in many new and important areas, to research on current and applied economic problems, to methodologically innovative, theoretical and applied studies in econometrics. Econometrica maintains a long tradition that submitted articles are refereed carefully and that detailed and thoughtful referee reports are provided to the author as an aid to scientific research, thus ensuring the high calibre of papers found in Econometrica. An international board of editors, together with the referees it has selected, has succeeded in substantially reducing editorial turnaround time, thereby encouraging submissions of the highest quality. We strongly encourage recent Ph. D. graduates to submit their work to Econometrica. Our policy is to take into account the fact that recent graduates are less experienced in the process of writing and submitting papers.
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