Arbeitspapier
The day after tomorrow: mitigation and adaptation policies to deal with uncertainty
The catastrophic events are characterized by "low frequency and high severity". Nevertheless, during the last decades, both the frequency and the magnitude of these events have been significantly rising worldwide. In 2021, the European Commission adopted a new Strategy on Adaptation to Climate Change aiming to reinforce the adaptive capacity and minimize vulnerability to the effects of climate change and natural catastrophes. In a continuous time framework over an infinite horizon, we solve in closed form the problem of a representative consumer who holds a production technology (firm) and who optimises with respect to both the intertemporal consumption and the mix between an insurance (adaptation) against the magnitude of the catastrophic losses, and an effort strategy (mitigation) aimed at reducing the frequency of such losses. The catastrophic events are modelled as a Poisson jump process. We then propose some numerical simulations calibrated to the country-specific data of the five main European economies (Germany, France, Italy, Spain, and Netherlands). Our model demonstrates that an optimal mix of mitigation/effort strategies allows to reduce the volatility of the economic growth rate, even if its level may be lowered due to the effort costs. Simulations allow us to also conclude that different countries must optimally react differently to catastrophes, which means that a one-for-all policy does not seem to be optimal.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 022.2021
- Klassifikation
-
Wirtschaft
Optimization Techniques; Programming Models; Dynamic Analysis
Climate; Natural Disasters and Their Management; Global Warming
- Thema
-
Uncertainty Modelling
Catastrophic Events
Mitigation
Adaptation
Optimal management
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Bazzana, Davide
Menoncin, Francesco
Vergalli, Sergio
- Ereignis
-
Veröffentlichung
- (wer)
-
Fondazione Eni Enrico Mattei (FEEM)
- (wo)
-
Milano
- (wann)
-
2021
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Bazzana, Davide
- Menoncin, Francesco
- Vergalli, Sergio
- Fondazione Eni Enrico Mattei (FEEM)
Entstanden
- 2021
Ähnliche Objekte (12)
Adaptation for Mitigation
Adaptation for Mitigation
Games with adaptation and mitigation
Gender in climate change mitigation and adaptation
The Political Economy of Mitigation and Adaptation
On the relationship between adaptation and mitigation
On the Relationship between Adaptation and Mitigation
Saccade adaptation and visual uncertainty
An Adaptation-Mitigation Game: Does Adaptation Promote Participation in International Environmental Agreements?
Adaptation, mitigation and risk-taking in climate policy
Prospect theory, mitigation and adaptation to climate change
Prospect theory, mitigation and adaptation to climate change
Adaptation for Mitigation
Adaptation for Mitigation
Games with adaptation and mitigation
Gender in climate change mitigation and adaptation
The Political Economy of Mitigation and Adaptation
On the relationship between adaptation and mitigation
On the Relationship between Adaptation and Mitigation
Saccade adaptation and visual uncertainty
An Adaptation-Mitigation Game: Does Adaptation Promote Participation in International Environmental Agreements?
Adaptation, mitigation and risk-taking in climate policy
Prospect theory, mitigation and adaptation to climate change
Prospect theory, mitigation and adaptation to climate change
Adaptation for Mitigation
Adaptation for Mitigation
Games with adaptation and mitigation
Gender in climate change mitigation and adaptation
The Political Economy of Mitigation and Adaptation
On the relationship between adaptation and mitigation
On the Relationship between Adaptation and Mitigation
Saccade adaptation and visual uncertainty
An Adaptation-Mitigation Game: Does Adaptation Promote Participation in International Environmental Agreements?
Adaptation, mitigation and risk-taking in climate policy
Prospect theory, mitigation and adaptation to climate change