by Alessandro Taberna

In the summer of 2022, I had the opportunity to participate in the Young Scientist Summer Program (YSSP) held at the International Institute of Applied Systems Analysis (IIASA). Founded in 1972 to promote East-West scientific cooperation during the Cold War, IIASA has been hosting the YSSP program since the early 80’s in its home: the beautiful Schloss Laxenburg near Vienna. The YSSP is a 3-month mentored research program where participants (YSSPers) jointly work with IIASA researchers on an agreed-upon project. Specifically, I was hosted by the Systemic Risk and Resilience (SYRR) group and under the mentoring of Dr. Stefan Hochrainer-Stigler. SYRR group research agenda aims to assess and support the management of systemic anthropogenic and environmental risks. Stefan, in particular, focuses on the risk management of systemic risk and extreme events.

It was an inspirational environment to develop the CRAB model further. Specifically, we include different bottom-up adaptation strategies of households and firms and their interactions with top-down government subsidies within the CRAB regional economy. The primary objective of this project was to address the impact of various private and government-driven CCA strategies on regional economic growth and fiscal stability amidst extreme flooding, the differential effects on households with varied adaptive capacities, and the regional implications of inaction for an agglomeration economy under extreme flooding.

This novel framework led to interesting results, such as showing how single CCA strategies are ineffective and fail to curb compounding risks. Instead, the combination of CCA actions at all levels -top-down government subsidies, bottom-up protective measures from households, and insurance from households and firms – can produce climate-resilient long-term economic growth and development. When accounting for non-linear effects in the economic response to hazards, government subsidies for individual CCA actions appear cost-effective as they do diminish not only direct damages but also create indirect co-benefits like decreasing public spending in unemployment subsidies and sustained tax revenues from firms’ profits in the region. In particular, top-down subsidies show particular effectiveness in the case of consecutive events and in providing financial resources to the most vulnerable individuals. However, due to a lack of resources and opportunities, the latter remains the most exposed to direct and indirect risk, highlighting the possible presence of poverty traps.

This work on the CRAB models provides a general understanding of the importance of a comprehensive framework that includes both firms and households and how their interactions, as well as cumulative individual actions, shape regional climate-induced damage and resilience. Importantly, the model shows how synergies of adaptation actions undertaken at all levels of society offer the best chance to tackle the rising climate threat.

The project culminated with the writing of a report available online and then transformed into a paper recently published open access in Scientific Report.

As I reflect on my time at IIASA, it was a multifaceted experience that offered both professional growth and personal enrichment. While engaging in diverse departmental events, I delved into the ongoing projects within the institute that broadened my perspective. Notably, a great deal of insights came from the interactions with the cohort of global researchers attending the YSSP.

These engagements expanded beyond our typical research focus, encouraging insightful interdisciplinary discussions. Exploring Vienna’s cultural richness and its surrounding landscapes profoundly enriched my stay, encompassing everything from delightful mountain hikes to the exploration of historical landmarks, all while enjoying the region’s diverse culinary and wine culture.