A framework for building climate storylines based on downward counterfactuals: The case of the European Union Solidarity fund

Alessio Ciullo,Olivia Martius,Eric Strobl,David N Bresch

doi:10.1016/j.crm.2021.100349

Abstract

Recent research introduced the concept of climate storylines as an alternative approach to estimate climate impact and better deal with uncertainties. A climate storyline is an event-based approach which aims at building “physically self-consistent unfolding of past events, or of plausible future events or pathways”. As such, climate storylines may profit from downward counterfactual thinking, which aims at analyzing how past events could have been worse. Notwithstanding the various applications of downward counterfactual thinking in the natural risk management literature, no study relates this with the climate storyline approach. The main goal of this paper is thus to introduce a framework that supports the development of climate storylines from downward counterfactuals. The framework is event-oriented, it focuses on impact, and it is designed to be applied in a participatory fashion. As a proof-of-concept application, we study the impact of tropical cyclones on the European Union Solidarity Fund (EUSF) without conducting a participatory analysis. Tropical cyclones represent a serious threat for the European outermost regions, and their impact to the EUSF capital availability has never been studied. We find that payouts due to tropical cyclones can hamper a recovery of the fund if large payouts concurrently occur in mainland Europe. To avoid this also considering future changes, an increase in capitalization up to 90 % percent may be required.

Highlights

The increasing need for climate adaptation policies is raising interest within the climate research community about the most appropriate use of climate data and impact models when supporting decision-making under deep uncertainty
We study the implications of tropical cyclones on the financial capacity of the European Union Solidarity Fund (EUSF), a fund set-up in 2002 to provide financial relief to European Union Member States affected by large disasters following natural hazards
As a proof-of-concept application of the framework presented in Section 2, we assess whether, and to what extent, EUSF payouts due downward counterfactual tropical cyclone events may compromise the stability of the EUSF

Summary

Introduction

The increasing need for climate adaptation policies is raising interest within the climate research community about the most appropriate use of climate data and impact models when supporting decision-making under deep uncertainty. Within this debate, Hazeleger et al (2015), Shepherd et al (2018), Shepherd (2019) and Sillmann et al (2021) challenged the conventional probabilistic approach of modeling uncertainty in regional climate that generates local climate information by downscaling results from global climate model ensembles simulations. The climate storyline approach is well-suited to study compound climate risk, namely risk rising from the interaction of several weather or climate events (Zscheischler et al 2020; 2018)

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