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2023 | OriginalPaper | Chapter

3. The Economics of External Shocks

Author : Stefan Brunnhuber

Published in: Financing our Anthropocene

Publisher: Springer International Publishing

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Abstract

In this chapter, we will introduce the economics of external shocks, which can involve several potential scenarios and two main cost components: the cost of a shock and the cost of the policies to mitigate and adapt to that shock. The second cost is typically far lower than the first. Intelligent measures and interventions can provide the cheapest and most resilient way to build back better.

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previous chapter Two Forms of the Unknown

next chapter The Traditional Way to Do It

See the Building Back Better Initiative: https://recovery.preventionweb.net/

According to the latest research in the field, we can expect another 15,000 instances of zoonoses over the next 50 years. They will definitely happen, and are being accelerated by climate change and land use; the only question is how to deal with them (Carlson et al., 2022).

For example, the Global Adaptation Committee estimates that an investment in climate adaptation programmes, including mitigation measures such as flood defences and climate-adapted agriculture, of 1.8 trillion USD would yield over 7.1 trillion USD in benefits by 2030. For more details, see https://unfccc.int/Adaptation-Committee

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Carlson, C. J., et al. (2022). Climate change increases cross-species viral transmission risk. Nature, 607(7919), 555–562. https://doi.org/10.1038/s41586-022-04788-wCrossRef

Lomborg, B. (2020). False alarm – How climate change panic costs us trillions, hurts the poor, and fails to fix the planet. Basic Books.

Nordhaus, W. (2018). Projections and uncertainties about climate change in an era of minimal climate policies. American Economic Journal: Economic Policy, 10(3), 333–360.

Nordhaus, W. (2019). Climate change: The ultimate challenge for economics. American Economic Review, 109(6), 1991–2014.CrossRef

Schumacher, E. F. (1973). Small is beautiful: Economics as if people mattered. Harper & Row.

Title: The Economics of External Shocks
Author: Stefan Brunnhuber
Publisher: Springer International Publishing
Book: Financing our Anthropocene
Print ISBN: 978-3-031-23284-8

Electronic ISBN: 978-3-031-23285-5

Copyright Year: 2023
DOI: https://doi.org/10.1007/978-3-031-23285-5_3