Conference Agenda

Natural disasters can affect territories not just once but repeatedly, with increasing frequency and intensity. This paper analyzes the causal impact of natural disasters on municipalities' budgetary decisions, accounting for both the sporadic nature and repetition of these extreme events. Using an original dataset covering all French municipalities from 2000 to 2022, I employ a staggered difference-in-differences methodology with a non binary treatment approach. The findings reveal that each disaster triggers an immediate increase in municipal spending, followed by a long-term rise in tax revenues. Additionally, a heterogeneity analysis highlights variations across territories vulnerability and disaster types, shedding light on the specific factors that shape municipal responses.

Climate change has disruptive effects on economic activity. This paper focuses on one channel through which this disruption materialises: contract suspension. If adverse weather conditions force the interruption of work, contractual payments to the firms assigned to the project are delayed. The delay imposes several costs on these firms. They experience lower liquidity due to deferred payments, coupled with uncertainty regarding the duration of the suspension. Concurrently, firms cannot fully reduce their labour and capital costs, since they may have to suddenly resume work when the suspension is lifted. I quantify these costs using data on Italian construction firms and public infrastructure projects, obtained from a new database on the universe of public procurement contracts in the country. The suspension channel is isolated with a staggered DiD design matching similar firms. Suspensions lead to extensive financial damages, with sales dropping on average by 30%, employment by 15.3%, and total assets by 18.5% in the years after a firm’s first suspension. This contraction in firm operations arises both from the adverse liquidity effects of weather suspensions, and from their knock-on effects on firms’ other contracts, which are also hit by delays.

This paper examines the impact of floods on regional import dynamics in South Africa. Natural disasters like floods can disrupt firms' production activities, hindering their participation in import markets. However, firms may increase imports to offset disruptions in their domestic supply networks. Our study explores this adjustment behavior using administrative firm-level and customs transactions data from South Africa. Analyzing a monthly panel of import aggregates and market entries across local municipalities from 2013 to 2021, we find that floods generally deter new firms from entering import markets, yet the disruption to domestic supply chains prompts firms to seek alternative suppliers abroad. Although overall average import values remain unchanged, firms adjust by increasing imports of capital goods. Our results also show stronger import responses from the European Union following supply chain disruptions due to floods. Additionally, firms in manufacturing or mining tend not to respond to flood shocks by adjusting their import levels. Instead, such adjustments are more likely to occur through the trade sector. Such adjustment dynamics would be overlooked when focusing solely on manufacturing firms' data.

Austria faces a substantial flood insurance and adaptation protection gap. As a result, after a damaging flood, households and governments need to redirect funding to cover uninsured damages. Households may not be able to afford expensive recovery costs, and governments may need to redirect funds and reduce spending on planned objectives, or increase debt. The resulting indirect impacts caused by slow recovery, increased debt, or redirected government spending, may be prevented by reducing flood risk and/or increasing coverage by insurance. Reducing the flood insurance protection gap in Austria, as in many other countries, can be done by various means, which differ in how flood risk is born and spread amongst the population. This study's objective is to assess these different flood insurance systems that policymakers have at their disposal in terms of their distributional impacts. Potential insurance systems are assessed on whether they are able to provide financial protection for all citizens. This assessment is done by using a partial equilibrium model of the flood insurance sector and by applying spatially detailed data on household income. Results show that improvements in flood protection have short-term benefits to reduce the protection gap, but this strategy becomes less effective due to climate change. Enabling the development of a private flood insurance market is beneficial for higher income households to reduce the financial consequences of a flood, but for lower income households, high costs prove to be a substantial barrier to insurance uptake. Government involvement in the provision of flood insurance is beneficial for ensuring equality regarding the ability to insure against flooding, preventing increasing inequality in flood vulnerability. The Austrian government should maintain insurance uptake requirements and ensure a degree of risk-sharing. A limited degree of risk-reflective pricing is beneficial to stimulate adaptation.