MacroMode

Abstract:

Indirect risks due to natural disasters, for example losses due to business interruption or an increase of indebtedness, and associated climate change impacts are a growing concern for many risk bearers, including the private sector as well as governments, around the world.Especially in highly developed countries, a shift in the disaster risk management perspective can be recently observed with respect to indirect losses, namely, to ask how indirect losses due to natural hazard risks can be decreased within a highly interlinked and complex system such as the economy of a country like Austria. This question has so far not been addressed and is one of the main objectives of this project.

MacroMode aims to identify, quantify and evaluate risk management options that can decrease indirect risks from extreme flood hazards for today and in the future in Austria for public and private stakeholders. To meet this objective an integrated economy wide modelling approach will be developed that incorporates non-linear linkages across agents and sectors, as well as different time-horizons. In MacroMode three economy-wide modelling approaches will be applied: Input-Output modelling (IO), Computable General Equilibrium (CGE) Modelling and Agent Based Modelling (ABM).

The model assumptions, scenarios and risk management results will be presented to and discussed with key decisionmakers and stakeholders in an iterative manner, to make sure that the results and identified risk management options are policy relevant and can be used for determining strategies for today and the future to decrease the risk of large scale indirect losses and systemic risks due to flood events. Key stakeholders and institutions involved will be the ministry of finance, ministry of the interior, the insurance sector, the Natural Disaster Fund, as well as the European Solidarity Fund.