SLICE

SLICE is investigating Short- and Long-Term Impacts of Climate Extremes and aims to develop a systematic understanding of the channels through which climate extremes impact socio-economic development all the way from the household to the macroeconomic level. This will help developing effective strategies for long-term economic development under climate change.

Project Period
1 November 2018 – 31 October 2021

Partners
Potsdam-Institut für Klimafolgenforschung e.V. (Coordinator) and Ifo Institute for Economic Research (Munich)

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Website
www.climate-impact-economics.org

Contact

Floods, tropical cyclones, heatwaves, and droughts cause not only substantial direct damages but also have the potential to deteriorate socio-economic development perspectives in the long-term. The SLICE project – funded by the German Federal Ministry of Education and Research via the funding line Economics of Climate Change – aims at combining econometric methods and dynamic, process-based modelling from the household to the macroeconomic perspective to gain a deep process-based understanding of how climate extremes impact socio-economic development.

The SLICE consortium is a joint project of the Potsdam Institute for Climate Impact Research (Potsdam), Climate Analytics (Berlin), and the Ifo Institute for Economic Research (Munich). It is coordinated by the Potsdam Institute for Climate Impact Research.

SLICE’s research is conducted within seven work packages. The research in all work packages is strongly stakeholder-oriented and guided by ongoing stakeholder interaction. The interlinkages between work packages and how the results of one area of work feed into another is demonstrated in the workflow chart below:

Climate Analytics’ focus of work in the project lies in the empirical study of impacts of climate-related disasters. More precisely we analyse how households in low-income countries are impacted by climate-related shocks and extreme events.

We combine multiple rounds of large household surveys to identify which shocks households report as problematic, and combine this information with spatial information on key risk indicators provided from historical observations and consistent cross-sectorial impact projections. In selecting the case study countries, we take care to analyse a diverse set of climate related shocks such as droughts and floods, heat or cold extremes and cyclones. Controlling for household characteristics such as wealth, education, gender and health, we analyse the impact of these shocks on household well-being and coping capabilities across different population groups. Combining multiple rounds of household-level data for a particular country allows us to better capture trends and dynamics over time, in addition to social and non-economic ones (e.g. education and health effects). Using the results from the analysis of historical observations and consistent cross-sectorial impact projects on future climate risks (WP1), we plan to also provide estimates of future impacts on household well-being for differing policy scenarios for each of the selected countries. Ultimately, in comparing results across case study countries, we hope to gain key insights into common climate impact patterns for households.

Based on these insights, we aim to gain a deeper understanding of the channels and mechanisms which translate immediate impacts of extreme events on households into long-term consequences for economic development and poverty levels such as delaying investments into health and education after an extreme event due to short-term consumption needs.