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| Resilience - March 2024

Assessing, Pricing, and Mitigating the Risk of Floods and Other Natural Hazards

In 2022, economic losses from extreme weather and climate disaster events such as droughts, floods, heatwaves, severe weather, and wildfires resulted in global losses exceeding $300B. Of these, only a fraction ($181B) of losses were covered by insurance. This “protection gap” gives rise to financial instability that can be disruptive to both public- and private-sector actors. While managing environmental financial risk can be achieved via a combination of actions/tools that involve risk reduction (e.g., infrastructure), risk retention (e.g., cash reserves, loans), and risk transfer (e.g., insurance), it also relies on a robust quantification of the frequency and severity of potential losses as a result of extreme weather and climate events predicated on integrated modeling of natural (e.g., hydro-meteorologic), engineered (e.g., reservoirs, levees), and economic/financial (e.g., water/electricity markets) systems. This presentation will describe novel approaches to characterizing and managing environmental financial risk in coupled natural–engineered–economic systems, followed by a discussion of several recent studies that have been conducted by the Center on Financial Risk in Environmental Systems (CoFiRES) at UNC Chapel Hill. Special attention will be given to recent work that focuses on characterizing the systemic financial risks that arise from repetitive flood exposure in Eastern North Carolina and potential opportunities to increase resilience to flooding at household and community scales through targeted intervention.

Characklis Presentation: Download File
Sebastian Presentation: Download File

Presented by
Greg Characklis | Antonia Sebastian
Professor, University of North Carolina Chapel Hill | Professor, University of North Carolina Chapel Hill