The impact of extreme weather events on budget balances and implications for fiscal policy

Arbeitspapier

This paper explores implications of climate change for fiscal policy by assessing the impact of large scale extreme weather events on changes in public budgets. We apply alternative measures for large scale extreme weather events and conclude that the budgetary impact of such events ranges between 0.23% and 1.1% of GDP depending on the country group. Developing countries face a much larger effect on changes in budget balances following an extreme weather event than do advanced economies. Based on these findings, we discuss implications for fiscal policy and publiclyprovided disaster insurance. Our policy conclusions point to the enhanced need to reach and maintain sound fiscal positions given that climate change is expected to cause an increase in the frequency and severity of natural disasters.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ECB Working Paper ; No. 1055

Classification and Topics

• Classification: Wirtschaft ; Climate; Natural Disasters and Their Management; Global Warming ; Environmental Economics: Government Policy ; International Relations and International Political Economy: Other ; International Fiscal Issues; International Public Goods
• Subject: climate change ; disasters ; Fiscal sustainability ; Global warming ; Klimawandel ; Katastrophe ; Öffentlicher Haushalt ; Finanzpolitik ; Nachhaltigkeit ; Entwicklungsländer ; EU-Staaten ; OECD-Staaten ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lis, Eliza M. ; Nickel, Christiane
• Event: Veröffentlichung
• (who): European Central Bank (ECB)
• (where): Frankfurt a. M.
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/153489
• Last update: 10.03.2025, 11:44 AM CET