About this Research Topic
The dismal science of economics is, in many ways, quite optimistic about climate change. This multidisciplinary Research Topic focuses on the intersection between climate resilience and adaptation and how we implement economic planning, evaluation, and management for what the IPCC AR6 has called “water-based adaptation.” Traditionally, economic analysis evaluates programs and investments through the improvement of efficiency and optimized tradeoffs between competing uses by maximizing Net Present Value (NPV), Economic Internal Rate of Return (EIRR), cost-benefit ratios, or by assessing outcomes through cost-effectiveness analysis. Climate change impacts on the water cycle challenge these assumptions. Such impacts are often complex and difficult to project with confidence, which often leads to economists discounting potential, uncertain, and/or distant climate impacts. The emerging practice of climate resilience suggests that efficient, optimized solutions may also be brittle and prone to systemic failure if key assumptions are violated or not tested for sensitivity. How can we show that approaches such as redundancy, robustness, and flexibility are critical components for ensuring broader water resilience and economic resilience?
Recent climate impacts in regions such as the Colorado River basin in North America, unprecedented flooding in Pakistan and Thailand, or long-term loss of frozen water resources in the Andes and Himalayas suggest that resilience perspectives that take account of climate-driven water risks and synergies are important contributions to macroeconomic planning and evaluation. Decision makers in California, for instance, have recently called for a shift from a competitive water scarcity system to a “water abundance” framework to ensure long-term faith and credit in the US state’s economic viability and health. One interpretation is that we are seeing a divergence between “sustainable” development and “resilient” development. Our ambition in this collection is to move beyond the water community or climate communities per se and reach out to economic decision makers, such as the economic planners and managers in economics and finance ministries and in central banks.
How do we ensure that economic decision makers consider future risks related to water availability and shifts in seasonal variations, even when these impacts are associated with significant uncertainties? How should resilience be reflected in the economic structure? How do we ensure changes in key economic sectors in order to continue to provide essential services despite uncertain shocks and stressors? Can we manage shared water resources for energy, agriculture, healthcare, and the environment in ways that encompass the climate-dynamic and uncertain qualities of the water cycle? How do we enable resilience, robustness and flexibility thinking in economic planning and evaluation? This collection will seek to promote tools, methods, frameworks, indicators, and cases that show evidence of a new, emerging landscape in the theory and practice of economics.
Recent climate impacts in regions such as the Colorado River basin in North America, unprecedented flooding in Pakistan and Thailand, or long-term loss of frozen water resources in the Andes and Himalayas suggest that resilience perspectives that take account of climate-driven water risks and synergies are important contributions to macroeconomic planning and evaluation. Decision makers in California, for instance, have recently called for a shift from a competitive water scarcity system to a “water abundance” framework to ensure long-term faith and credit in the US state’s economic viability and health. One interpretation is that we are seeing a divergence between “sustainable” development and “resilient” development. Our ambition in this collection is to move beyond the water community or climate communities per se and reach out to economic decision makers, such as the economic planners and managers in economics and finance ministries and in central banks.
How do we ensure that economic decision makers consider future risks related to water availability and shifts in seasonal variations, even when these impacts are associated with significant uncertainties? How should resilience be reflected in the economic structure? How do we ensure changes in key economic sectors in order to continue to provide essential services despite uncertain shocks and stressors? Can we manage shared water resources for energy, agriculture, healthcare, and the environment in ways that encompass the climate-dynamic and uncertain qualities of the water cycle? How do we enable resilience, robustness and flexibility thinking in economic planning and evaluation? This collection will seek to promote tools, methods, frameworks, indicators, and cases that show evidence of a new, emerging landscape in the theory and practice of economics.
Keywords: Deep uncertainty, Economic analysis, Economic evaluation, Macroeconomic policy, Central banks, Planning, Water resources management, Decision making, Climate finance, Green investment, Economic development
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