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We develop a theoretical model to study the combined effect of lobbying and time preferences on emission tax policies. With a two-period model, we show that the influence of lobbying, by dirty industries and by environmental organizations, on the equilibrium tax decreases with the time horizon of the policymakers. An extension of the model to four periods shows that social welfare maximising policymakers may implement a tax higher than the marginal cost in the first period to speed up the transition to green technology. A policymaker influenced by lobby groups may, however, do the opposite, because future lobbying income will decrease if more firms invest in green technology. The results of this study indicate that countries with powerful lobby groups and a short-sighted policymaker are not likely to implement the optimal carbon tax. The influence of lobbying in combination with time preferences may explain some of the diversity in carbon taxes that we observe in practice. The results lead to the policy recommendation to combine carbon taxes with trade policies, which create an incentive for short-sighted governments to participate in carbon pricing policies.

Coastal flood risk is expected to increase as a result of climate change effects, such as sea level rise, and socioeconomic growth. To support policymakers in making adaptation decisions, accurate flood risk assessments that account for the influence of complex adaptation processes on the developments of risks are essential. In this study, we integrate the dynamic adaptive behavior of homeowners within a flood risk modeling framework. Focusing on building-level adaptation and flood insurance, the agent-based model (DYNAMO) is benchmarked with empirical data for New York City, USA. The model simulates the National Flood Insurance Program (NFIP) and frequently proposed reforms to evaluate their effectiveness. The model is applied to a case study of Jamaica Bay, NY. Our results indicate that risk-based premiums can improve insurance penetration rates and the affordability of insurance compared to the baseline NFIP market structure. While a premium discount for disaster risk reduction incentivizes more homeowners to invest in dry-floodproofing measures, it does not significantly improve affordability. A low interest rate loan for financing risk-mitigation investments improves the uptake and affordability of dry-floodproofing measures. The benchmark and sensitivity analyses demonstrate how the behavioral component of our model matches empirical data and provides insights into the underlying theories and choices that autonomous agents make.

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Sea-level rise (SLR) threatens millions of people living in coastal areas through permanent inundation and other SLR-related hazards. Migration is one way for people to adapt to these coastal changes, but presents an enormous policy challenge given the number of people affected. Knowledge about the relationship between SLR-related hazards and migration is therefore important to allow for anticipatory policymaking. In recent years, an increasing number of empirical studies have investigated, using survey or census data, how SLR-related hazards including flooding, salinization, and erosion together with non-environmental factors influence migration behavior. In this article, we provide a systematic literature review of this empirical work. Our review findings indicate that flooding is not necessarily associated with increased migration. Severe flood events even tend to decrease long-term migration in developing countries, although more research is needed to better understand the underpinnings of this finding. Salinization and erosion do generally lead to migration, but the number of studies is sparse. Several non-environmental factors including wealth and place attachment influence migration alongside SLR-related hazards. Based on the review, we propose a research agenda by outlining knowledge gaps and promising avenues for future research on this topic. Promising research avenues include using behavioral experiments to investigate migration behavior under future SLR scenarios, studying migration among other adaptation strategies, and complementing empirical research with dynamic migration modeling. We conclude that more empirical research on the SLR-migration nexus is needed to properly understand and anticipate the complex dynamics of migration under SLR, and to design adequate policy responses. This article is categorized under:. Climate Economics < Aggregation Techniques for Impacts and Mitigation Costs Vulnerability and Adaptation to Climate Change < Learning from Cases and Analogies Assessing Impacts of Climate Change < Evaluating Future Impacts of Climate Change.

Elevated flood risk due to sea level rise is expected to increase migration from coastal areas. This presents an enormous policy challenge given the hundreds of millions of people living in low-lying coastal areas globally. Despite its relevance, little empirical research has been done on what drives coastal residents to migrate or stay under increased flood risk. This study aims to improve the knowledge base on this topic by collecting and analyzing unique survey data of flood-prone coastal residents in Central Vietnam. To explain permanent migration intentions under increased flood risk, we present respondents with realistic scenarios of more frequent severe flooding and utilize a theoretical framework that incorporates flood risk indicators as well as key indicators of sustainable livelihoods. Results indicate that flood risk could play a major role in future migration behavior; permanent migration intentions strongly increase under the scenarios of increased flood risk. Several individual characteristics also play an important role in the migration decision. Regression analyses reveal that respondents who implemented in situ flood adaptation, and thereby reduced their flood risk, are less inclined to migrate. Past experiences during flooding such as evacuation or the reception of help from community members or the government are also strong predictors of migration intentions. Of the sustainable livelihood indicators, social capital plays the most important role, where a larger social network inside (outside) the place of residence is negatively (positively) related to migration intentions. We draw lessons from these insights for policymakers aiming to anticipate the challenge of sea level rise-induced migration.

The Nationally Determined Contributions (NDCs) represent the world's first effort toward the Paris Agreement goal of keeping global temperature increase well below 2 °C and pursuing 1.5 °C. Little is known about how much the proposed mitigation efforts can reduce the risks and economic damages from unabated climate change and about the consequences if key emitters drop the Paris Agreement. Here, we use CLIMRISK, an integrated assessment model designed to support climate policy at the global, national, and subnational scales where mitigation and adaptation policy decisions are made. We characterize the consequences of unabated climate change and the benefits of current climate policy proposals by means of probabilistic estimates of the economic damages of climate change and uni- and multivariate dynamic climate risk indices at a detailed spatial resolution. The results presented reveal that the economic costs and risks are highly unequally distributed between and within countries and larger than previously estimated when warming in urban areas and temporal persistence of impacts are accounted for. Costs and risks can be significantly limited by strict implementation of NDCs, but increase noticeably under noncompliance by large emitters, like the United States.

The mixed results in Pielke (2020) for natural disaster loss normalisation studies are due to methodological differences. Flaws exist in commonly used normalisation approaches that assume unitary elasticities between exposure indicators and losses. We refute Pielke’s arguments that statistical studies estimating these relationships are biased. We conclude with an agenda for future research.

This study aims to improve the estimates of the economic impacts of climate change by developing a river flood risk model CLIMRISK-RIVER and introducing it into an existing climate-economy integrated assessment model (IAM). It operates on a local scale and can project climate change-related river flood damage for various socioeconomic, climate and flood adaptation scenarios. Whereas other IAMs have relied on temperature as a climate change proxy, we show that precipitation is a key variable in projecting river flood damage. The way adaptation is accounted for in our flood damage functions has a large influence on the results, highlighting the relevance of modelling local level adaptation in IAMs. Results presented at different spatial scales demonstrate the relevance of river flood damage functions for estimating the economic impacts of climate change and allows for exploration of the spatial distribution of impacts through local estimates.

Flooding is one of the most significant natural disasters worldwide. Nevertheless, voluntary take‐up of individual damage reduction measures is low. A potential explanation is that flood risk perceptions of individual homeowners are below objective estimates of flood risk, which may imply that they underestimate the flood risk and the damage that can be avoided by damage reduction measures. The aim of this article is to assess possible flood risk misperceptions of floodplain residents in the Netherlands, and to offer insights into factors that are related with under‐ or overestimation of perceived flood risk. We analyzed survey data of 1,848 homeowners in the Dutch river delta and examine how perceptions of flood probability and damage relate to objective risk assessments, such as safety standards of dikes, as well as heuristics, including the availability heuristic and the affect heuristic. Results show that many Dutch floodplain inhabitants significantly overestimate the probability, but underestimate the maximum expected water level of a flood. We further observe that many respondents apply the availability heuristic.

The U.S. 2020 hurricane season was extraordinary because of a record number of named storms coinciding with the COVID-19 pandemic. This study draws lessons on how individual hurricane preparedness is influenced by the additional risk stemming from a pandemic, which turns out to be a combination of perceptions of flood and pandemic risks that have opposite effects on preparedness behavior. We conducted a survey in early June 2020 of 600 respondents in flood-prone areas in Florida to obtain insights into households’ risk perceptions and preparedness for the upcoming hurricane season under COVID-19. The results show that concerns over COVID-19 dominated flood risk perceptions and negatively impacted people’s evacuation intentions. Whereas hotel costs were the main obstacle to evacuating during Hurricane Dorian in 2019 in the same geographic study area, the main evacuation obstacle identified in the 2020 hurricane season is COVID-19. Our statistical analyses investigating the factors influencing evacuation intentions show that older individuals are less likely to evacuate under a voluntary order, because they are more concerned about the consequences of becoming infected by COVID-19. We observe similar findings based on a real-time survey we conducted in Florida with another group of respondents under the threat of Hurricane Eta at the end of the hurricane season in November 2020. We discuss the implications of our findings for risk communication and emergency management policies that aim to improve hurricane preparedness when dealing with additional health risks such as a pandemic, a situation that may be exacerbated under the future climate. Supplementary Information The online version contains supplementary material available at 10.1007/s11069-021-05064-2.

One of the key challenges for risk, vulnerability, and resilience research is how to address the role of risk perceptions and how perceptions influence behaviour. It remains unclear why people fail to act adaptively to reduce future losses, even when there is ever richer information available on natural and human-made hazards (flood, drought, etc.). The current fragmentation of the field makes it an uphill battle to cross-validate the results of existing independent case studies. This, in turn, hinders comparability and transferability across scales and contexts and hampers recommendations for policy and risk management. To improve the ability of researchers in the field to work together and build cumulative knowledge, we question whether we could agree on (1) a common list of minimal requirements to compare studies, (2) shared criteria to address context-specific aspects of countries and regions, and (3) a selection of questions allowing for comparability and long-term monitoring. To map current research practices and move in this direction, we conducted an international survey – the Risk Perception and Behaviour Survey of Surveyors (Risk-SoS). We find that most studies are exploratory in nature and often overlook theoretical efforts that would enable the comparison of results and an accumulation of evidence. While the diversity of approaches is an asset, the robustness of methods is an investment. Surveyors report a tendency to reproduce past research design choices but express frustration with this trend, hinting at a turning point. To bridge the persisting gaps, we offer several recommendations for future studies, particularly grounding research design in theory, improving the formalisation of methods, and formally comparing theories and constructs, methods and explanations while collecting the most-in-use themes and variables and controlling for the most-in-use explanations.

Natural disaster losses are projected to increase worldwide, in part due to climate change. As well as offering financial protection against the impacts of climate change, insurers can promote behavioural change by stimulating individuals’ preparedness choices. Norm nudges aim to improve preparedness for risks through information provision that appeals to social norms. Based on data collected in an online experiment among homeowners, we tested for the influence on flood insurance demand of providing individuals with a norm nudge about the flood insurance purchase decisions of their neighbours. Potential moderators of the effectiveness of this norm nudge were examined, such as whether the norm is consistent with homeowners’ prior beliefs as well as whether homeowners trust insurance agents, who are used as the messenger of the norm. Based on this investigation, we suggest recommendations for policies that aim to improve preparedness against increasing losses related to climate change.

We introduce the concept of time of emergence of economic impacts (ToEI), which identifies the initial moment when the climate change impact signal exceeds a previously defined threshold of past economic output shocks in a given geographic area. We compute the ToEI using probabilistic climate change projections and impact functions from three integrated assessment models of climate change: DICE, RICE and CLIMRISK. Our results demonstrate that, in terms of the business-as-usual carbon emissions scenario, the global economy could reach its ToEI by 2095. Regional results highlight areas that are likely to reach the ToEI sooner, namely Western Europe by 2075, India by 2083, and Africa by 2085. We also explore local-scale variations in the ToEI demonstrating that, for example, Paris already reached the ToEI around 2020, while Shanghai will reach it around 2080. We conclude that the ToEI methodology can be applied to impact models of varying scales when sufficient historical impact data are available. Moreover, unprecedented impacts of climate change in the 21st century may be experienced even in economically developed regions in the US and Europe. Finally, moderate to stringent climate change mitigation policies could delay the extreme economic impacts of climate change by three decades in Latin America, the Middle East, and Japan, by two decades in India, Western Europe, and the US, and by one decade in Africa. Our results can be used by policymakers interested in implementing timely climate policies to prevent potentially large economic shocks due to climate change.

This paper provides a systematic review of the literature on 80 experimental, hypothetical survey and market data studies of insurance demand against low-probability/high-impact risks. The objective of the review is to extract lessons from these studies and to outline an agenda for future research. We contrast the results of experimental and survey studies to findings from market data. We focus on experimental design methods, insurance characteristics, as well as results about theories, heuristics, behavioural biases and explanatory variables. Lessons for policymakers are drawn which can facilitate disaster preparedness.

Through stylized damage functions, Integrated Assessment Models (IAMs) provide estimates of the economic costs that would occur for absolute changes in global temperature. In these damage functions, adaptation, sensitivity and their interactions are often combined in an intractable way. In this theoretical study we propose a new type of damage functions that allows mapping economic losses in terms of how extreme global temperature changes are in relation to a coping range representing the capacity of a system to deal with the climate conditions experienced at a particular period of time. In these new damage functions, which can be applied to the regional and global scales, adaptation to a changing climate is introduced by allowing the reference climate to be a function of time instead of a fixed quantity. Different formulations of damage functions discussed in the literature arise as special cases.

Little is known about why individuals place either a high or a very low value on mitigating risks of disaster‐type events, like floods. This study uses panel data methods to explore the psychological factors affecting probability neglect of flood risk relevant to the zero end‐point of the probability weighting function in Prospect Theory, and willingness‐to‐pay for flood insurance. In particular, we focus on explanatory variables of anticipatory and anticipated emotions, as well as the threshold of concern. Moreover, results obtained under real and hypothetical incentives are compared in an experiment with high experimental outcomes. Based on our findings, we suggest several policy recommendations to overcome individual decision processes, which may hinder flood protection efforts.

Social norms are rules of behavior that are commonly approved by society and personal norms represent what people believe to be appropriate behavior for themselves. Nudges based on social norms (norm-nudges) can be compelling interventions compared to traditional interventions such as taxes and regulations, but they do not work in all circumstances. We tested two empirical norm-nudge frames in an online experiment with large representative samples of homeowners (N = 1805) in two European countries, to evaluate the possible interactions between norm-nudge effectiveness, individual characteristics and intercultural differences. We contrasted these norm-nudge treatments with a control treatment and a norm focusing treatment, where respondents are asked to express their beliefs about what other respondents would do before making a decision relevant to their own payoff. We find no evidence of a treatment effect, suggesting that social norm-nudges do not affect flood preparedness in the context of a flood risk investment game. However, results demonstrate that investments in risk reduction measures are positively related to beliefs and personal norms as well as other variables related to risk perceptions. We discuss our contribution to the environmental nudge literature and derive policy implications.

Default options may provide a low-cost way of influencing behaviour without modifying incentives and constraining choices between alternatives. However, an improved understanding is needed on whether they are effective when individuals have experience with making the choice in practice and have preferences for specific alternatives. We study whether defaults can be used to increase insurance coverage against low-probability/high-impact risks, like floods, and whether past flood insurance purchases and flooding experience moderate the effect of defaults. Our study uses a naturally occurring difference in experience, comparing the surveyed flood insurance choices of 1,187 homeowners, half of whom are in the Netherlands, where flood insurance penetration rates are low and recent flooding caused minor losses, and the other half of whom are in the United Kingdom (UK), where the opposite is true. We find defaults are effective amongst homeowners with little to no flood-related experience: in the Netherlands defaults increase the likelihood of insuring by between 17 and 18 percentage points. Although there is no overall effect of defaults in the UK, defaults increase flood insurance coverage for risk averse individuals, and those who have no reported previous flood experience and have not purchased flood insurance. Anticipated regret about not having insurance coverage in the event of a flood, and perceptions about the insurance cost explain between 34 and 37 percent of the relationship between the default and flood insurance demand. We discuss policy implications of our findings.

Highlights • The COVID-19 pandemic can be viewed as a rapid learning experiment about how to cope more effectively with climate change. • Using insights into behavioral biases, we illustrate parallels between decisions about COVID-19 and climate change risks. • Climate change risk can be mitigated by policies that work with, instead of against, an individual’s risk perceptions and biases. • We conclude with recommendations for communication policies that make people pay attention to climate change risks. • Government responses to the COVID-19 crisis should be linked with environmental sustainability and climate action., COVID-19 and climate change share several striking similarities in terms of causes and consequences. For instance, COVID-19 and climate change affect deprived and vulnerable communities the most, which implies that effectively designed policies that mitigate these risks may also reduce the widening inequalities that they cause. Both problems can be characterized as low-probability–high consequence (LP-HC) risks, which are associated with various behavioral biases that imply that individual behavior deviates from rational risk assessments by experts and optimal preparedness strategies. One could view the COVID-19 pandemic as a rapid learning experiment about how to cope more effectively with climate change and develop actions for reducing its impacts before it is too late. However, the ensuing question relates to whether the COVID-19 crisis and its aftermath will speed up climate change mitigation and adaptation policies, which depends on how individuals perceive and take action to reduce LP-HC risks. Using insights into behavioral biases in individual decisions about LP-HC risks based on decades of empirical research in psychology and behavioral economics, we illustrate how parallels can be drawn between decision-making processes about COVID-19 and climate change. In particular, we discuss six important risk-related behavioral biases in the context of individual decision making about these two global challenges to derive lessons for climate policy. We contend that the impacts from climate change can be mitigated if we proactively draw lessons from the pandemic, and implement policies that work with, instead of against, an individual’s risk perceptions and biases. We conclude with recommendations for communication policies that make people pay attention to climate change risks and for linking government responses to the COVID-19 crisis and its aftermath with environmental sustainability and climate action.

This paper presents a lab-in-the-field experiment with 2111 Dutch homeowners in floodplain areas to examine the impacts of financial incentives and behavioral motivations for self-insurance under different flood insurance schemes. We experimentally varied the insurance type (mandatory public versus voluntary private) and the availability of a premium discount incentive for investing in flood damage mitigation measures. This set-up allowed us to examine the existence of moral hazard, advantageous selection and the behavioral motivations of individual agents who face these different insurance types, without the selection bias that makes a causal inference from survey studies problematic. The main results show that a premium discount can increase investments in self-insurance under both private and public insurance. Moreover, we find no support for moral hazard in our natural disaster insurance market, but we do find a substantial share of cautious people who invest both in private insurance as well as in self-insurance, indicating advantageous selection. The results have implications for the design of insurance schemes to cope with increasing natural disaster risks.

Cost-benefit analysis (CBA) of flood risk adaptation strategies offers policymakers insight into economically optimal strategies for adapting to sea level rise. However, building-level adaptation measures such as floodproofing or building elevation are often evaluated at aggregated spatial scales, which may result in sub-optimal investment decisions. In this paper, we develop a flood risk model and combine it with a micro-scale CBA at the building level to obtain an optimal mix of adaptation measures per area. We apply this approach to Venice Beach in Los Angeles and Naples in Long Beach. We subsequently compare our results with the conventional, spatially aggregated area-based CBA approach. Our findings show that a mix of 35%–45% dry-floodproofing measures and 55%–65% building elevation measures is optimal. Elevation works best in areas with high inundation depths, while dry-floodproofing is preferable in areas with shallow inundation depths. The optimal mix of measures derived from our micro-scale approach results in an economic efficiency up to 85% higher than that yielded by the commonly applied spatially aggregated approach. We therefore recommend that economic evaluations of building-level adaptation measures are conducted at the smallest possible scale, or that CBAs are performed on disaggregated areas based on inundation depth.

The concept of tipping points has received much attention in research on climate change. In the biophysical realm, climate tipping points describe critical thresholds at which large-scale elements of the Earth switch to a qualitatively different state; and ecological tipping points describe thresholds separating distinct dynamic regimes of ecosystems. The tipping point metaphor is also used to indicate transformative change in adaptation and mitigation strategies. However, there remains an underexplored field: climate change induced socio-economic tipping points (SETPs). We define an SETP as: a climate change induced, abrupt change of a socio-economic system, into a new, fundamentally different state. We make a distinction between SETPs in terms of transformational response to climate change and SETPs in terms of socio-economic impacts.SETPs are points where a gradual change in climatic conditions causes an abrupt, fundamental reconfiguration of the socio-economic system. Through a stakeholder consultation, we identified 22 candidate SETP examples with policy relevance for Europe. Three of these were investigated in more detail, with special attention for their tipping point characteristics (stable states at both sides of a critical threshold, abrupt transition between those states, and the mechanism explaining the non-linear and abrupt behaviour).The first example is the collapse of winter sports tourism in low-altitude ski resorts. In the face of climate change, this may occur abrupt, cause a fundamental reconfiguration of the local and regional economy, and is very hard to reverse. In some cases, it could be possible to achieve a fundamental shift towards summer tourism.The second example is the farmland abandonment in Southern Europe. Large parts of Spain have already seen widespread farmland abandonment and associated migration. Increasing heat and drought may worsen the conditions, with considerable social, and to a lesser extent, economic consequences. On the local scale, this manifests itself as a clear SETP: a lively agricultural area suddenly tips to the ‘Spanish Lapland’: deserted farms, villages with ageing population, little economic activity and underdeveloped infrastructure and facilities.The third example is sea-level rise induced reconfiguration of coastal zones. In the face of accelerating sea level rise (SLR), threatened communities may retreat from vulnerable coastal zones. This may be caused by migration (voluntary human mobility), displacement (involuntary movement following a disaster) or relocation (retreat managed by the government). The SETP of retreat from a certain area is usually triggered by a flood event. However, also the adaptation to increasing flood risk may be so transformative, that it can be considered a structural configuration of the system. This is currently seen in The Netherlands, where studies on extreme SLR have triggered a debate in which very transformative strategies are proposed, such as: constructing a dike in front of the entire coast, retreat from areas with economic stagnation and population decline, or elevating all new buildings above sea level.A key insight is that the rate of climate change may exceed the capacity of society to adapt in the traditional way, triggering a shift towards fundamentally different policies and a reconfiguration of the socio-economic system.

Flood insurance coverage can enhance financial resilience of households to changing flood risk caused by climate change. However, due to increasing risk in many areas, premiums are likely to rise, which may cause insurance to become unaffordable for low-income households. This issue can become especially prominent in high-risk areas, when premiums are risk-reflective. Consequently, increasing premiums can reduce the demand for insurance coverage when this is optional, as individuals often underestimate the flood risk they face. After a flood, uninsured households then have to rely on private savings or ex-post government disaster relief. This situation is suboptimal as households may not save sufficiently to cover the damage, and government compensation can be uncertain. Using a modeling approach we simulate unaffordability and uptake of various forms of flood insurance systems in EU countries. To do this, we build upon and advance the “Dynamic Integrated Flood Insurance” (DIFI) model, which integrates flood risk simulations, with an insurance sector and a consumer behavior model. We compute the results using various climatic- and socio-economic scenarios in order to assess the impact of climate- and socio-economic change for flood insurance in the EU. Furthermore, we assess the impact of remote natural disasters on flood insurance premiums in EU countries, which occurs through the global reinsurance market. More specifically, after large natural disasters or compound events occurring outside the EU, which are likely to occur more often due to climate change, reinsurance premiums can temporarily rise as a result of a global “hard” capital market for reinsurers. The higher cost of capital for reinsurers is then transferred to households in the EU through higher flood insurance premiums. We find that rising average, and higher variance, of flood risk towards the end of the century can increase flood insurance premiums, and cause higher premium volatility resulting from global reinsurance market conditions. The rise in premiums increases unaffordability of insurance coverage and results in declining demand for flood insurance. A proposed policy improvement is to introduce a public reinsurance system for flood risk, as governments can often provide cheaper reinsurance coverage and are less subject to volatility on capital markets. Besides this, we recommend a limited degree of premium cross-subsidization to limit the growth of premiums in high-risk areas, and insurance purchase requirements to increase the level of financial protection against flooding.

In a world in which economic losses due to natural disasters are set to increase, it is essential to study risk reduction strategies, including individual homeowner investments in damage-reducing (mitigation) measures. In this lab experiment (N = 357), we investigated the effects of different financial incentives, probability levels, and deductibles on self-insurance investments in a natural disaster insurance market with compulsory coverage. In particular, we examined how these investments are jointly influenced by financial incentives, such as insurance, premium discounts, and mitigation loans. We also studied the influence of behavioral characteristics, including individual time and risk preferences. We found that investments increase when the expected value of the damage increases (i.e., higher deductibles, higher probabilities). Moral hazard is found in the high-probability (15%) scenarios, but not in the low-probability (3%) scenarios. This suggests that moral hazard is less of an issue in an insurance market where probabilities are low. Our results demonstrate that a premium discount can increase investment in damage-reduction, as can a policyholder‘s risk aversion, perceived efficacy of protective measures, and worry about flooding.

Tipping points have become a key concept in research on climate change, indicating points of abrupt transition in biophysical systems as well as transformative changes in adaptation and mitigation strategies. However, the potential existence of tipping points in socio-economic systems has remained underexplored, whereas they might be highly policy relevant. This paper describes characteristics of climate change induced socio-economic tipping points (SETPs) to guide future research on SETPS to inform climate policy. We review existing literature to create a tipping point typology and to derive the following SETP definition: a climate change induced, abrupt change of a socio-economic system, into a new, fundamentally different state. Through stakeholder consultation, we identify 22 candidate SETP examples with policy relevance for Europe. Three of these are described in higher detail to identify their tipping point characteristics (stable states, mechanisms and abrupt change): the collapse of winter sports tourism, farmland abandonment and sea-level rise-induced migration. We find that stakeholder perceptions play an important role in describing SETPs. The role of climate drivers is difficult to isolate from other drivers because of complex interplays with socio-economic factors. In some cases, the rate of change rather than the magnitude of change causes a tipping point. The clearest SETPs are found on small system scales. On a national to continental scale, SETPs are less obvious because they are difficult to separate from their associated economic substitution effects and policy response. Some proposed adaptation measures are so transformative that their implementations can be considered an SETP in terms of 'response to climate change'. Future research can focus on identification and impact analysis of tipping points using stylized models, on the exceedance of stakeholder-defined critical thresholds in the RCP/SSP space and on the macro-economic impacts of new system states. © 2020 The Author(s). Published by IOP Publishing Ltd. This paper has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 776479 for the project CO-designing the Assessment of Climate CHange costs. https://www.coacch.eu/

This study examines the impacts of climate change on future mortality in the Netherlands and the related economic costs. Our methods account for changes in both cold- and heat-related mortality for different age classes, the time dynamics associated with temperature-related mortality, demographic change and the urban heat island effect. Results show that heat and cold impacts on mortality vary considerably between age classes, with older people being more vulnerable to temperature extremes. The sensitivity of mortality to temperature is higher on hot (4.6%/°C) than cold (2.1%/°C) days for the most vulnerable group (≥ 80 years), and extreme temperatures have long time lags on mortality, especially in the cold. A main finding is that climate change is expected to first decrease total net mortality in the Netherlands due to a dominant effect of less cold-related mortality, but this reverses over time under high warming scenarios, unless additional adaptation measures are taken. The economic valuation of these total net mortality changes indicates that climate change will result in net benefits of up to €2.3 billion using the Value of a Statistical Life Year and €14.5 billion using the Value of a Statistical Life approaches in 2050, while this changes over time in net economic costs under high warming scenarios that can reach up to €17.6 billion in 2085. Implementing adaptation policies that reduce the negative impacts of warming on mortality in the heat can turn these net costs into net benefits by achieving a continued dominating effect of reduced mortality in the cold.

Default options may provide a low-cost way of influencing behaviour without modifying incentives and constraining choices between alternatives. However, an improved understanding is needed on whether they are effective when individuals have experience with making the choice in practice and have preferences for specific alternatives. We study whether defaults can be used to increase insurance coverage against low-probability/high-impact risks, like floods, and whether past flood insurance purchases and flooding experience moderate the effect of defaults. Our study uses a naturally occurring difference in experience, comparing the surveyed flood insurance choices of 1,187 homeowners, half of whom are in the Netherlands, where flood insurance penetration rates are low and recent flooding caused minor losses, and the other half of whom are in the United Kingdom (UK), where the opposite is true. We find defaults are effective among homeowners with little to no flood-related experience: in the Netherlands defaults increase the likelihood of insuring by between 17 and 18 percentage points. Although there is no overall effect of defaults in the UK, defaults increase flood insurance coverage for risk averse individuals, and those who have no reported previous flood experience and have not purchased flood insurance. Anticipated regret about not having insurance coverage in the event of a flood, and perceptions about the insurance cost explain between 34 and 37 percent of the relationship between the default and flood insurance demand. We discuss policy implications of our findings.

Nudges based on social norms (norm-nudges) can be compelling behavioral interventions compared to traditional interventions such as taxes and regulations, but they do not work in all circumstances. We tested two empirical norm-nudge frames in an online experiment on taking measures for flood preparedness with large samples of homeowners (N =1805) in two European countries, to evaluate the possible interactions between norm-nudge effectiveness, individual characteristics and intercultural differences. We contrasted these norm-nudge treatments with a control and norm focusing treatment by asking respondents to express their beliefs about what other respondents would do before making a decision relevant to their own payoff. We find no evidence of a treatment effect, suggesting that our social norm-nudges do not affect flood preparedness in the context of a flood risk investment game.

Climate change adaptation strategies should anticipate that the 2020 situation which resembles an above average hurricane season coinciding with a pandemic may occur more frequently in the future. This study draws lessons on how individual hurricane preparedness is influenced by a pandemic, which turns out to be a combination of perceptions of flood and pandemic risks that have opposite effects on preparedness behavior. We conducted three waves of surveys during 2019-2020 to monitor hurricane preparedness activities in flood-prone coastal areas in Florida, including a survey of 600 respondents in early June 2020 to obtain insights into households’ risk perceptions and preparedness for this hurricane season under COVID-19. The results show that this hurricane season is dominated by concerns over COVID-19 which influences people’s evacuation intentions. Whereas hotel costs were the main obstacle to evacuating during Hurricane Dorian in 2019, the main evacuation obstacle identified in the 2020 hurricane season is COVID-19. Our statistical analyses that investigates the factors influencing evacuation intentions consistently show that older individuals are less likely to evacuate voluntarily, because they are concerned about becoming infected by COVID-19. We discuss the implications of our findings for adaptation policies that aim to improve hurricane preparedness in situations of a pandemic, such as risk communication and emergency management policies.

With increasing flood risk due to climate change and socioeconomic trends, governments are under pressure to continue implementing flood protection measures, such as dikes, to reduce flood risk. However, research suggests that a sole focus on government-funded flood protection leads to an adverse increase in exposure as people and economic activities tend to concentrate in protected areas. Moreover, governmental flood protection can reduce the incentive for autonomous adaptation by local households, which paradoxically results in more severe consequences if an extreme flood event occurs. This phenomenon is often referred to as the ‘safe development paradox’ or ‘levee effect’ and is generally not accounted for in existing flood risk models used to assess developments in future flood risk under climate change. In this study we assess the impact of extreme flood events for the European Union using a large-scale agent-based model (ABM). We quantify how the safe development paradox affects (1) population growth and the increase in exposed property values, (2) the reduction in investments to flood-proof buildings as public protection increases, and (3) the increase in potential damage should a flood occur. For this analysis, we apply an ABM that integrates the dynamic behaviour of governments and residents into a large-scale flood risk assessment framework, in which we include estimates of changing population growth. We find that the impact of extreme flood events increases considerably when governments provide high protection levels, especially in large metropolitan areas. Moreover, we demonstrate how policy that stimulates the flood-proofing of buildings can largely counteract the effects of the safe development paradox.

The flood insurance protection gap, the level of uninsured flood risk, is a problem faced by many European countries and is expected to increase due to climate change. In some countries a cause of low demand for flood insurance is the crowding out of private insurance uptake due to the anticipation of government compensation for uninsured damage, a phenomenon known as charity hazard. This study applies a partial equilibrium model of flood insurance markets to explore the extent of charity hazard and the insurance protection gap for EU-countries until 2050. For this analysis, we apply an expected utility framework with insurance purchase decision functions that capture the probability, ambiguity and extent of government compensation. By accounting for country-level insurance systems and government compensation types, as well as regional flood risk, we aim to assess how charity hazard develops under different conditions. The extent of charity hazard decreases with uncertainty of government compensation, as well as with higher flood risk. Considering current and future conditions, the highest impact of charity hazard is observed in regions of Germany and Italy. The projected insurance protection gap is highest in Germany, followed by Spain, Poland and Italy, and is expected to grow towards 2050.