CLIMATE_AFFECT- Implications of Climate Change and Climate-induced Disasters for Individuals, Firms and the Insurance Sector

Start of Project 11/2018
End of Project 09/2022

In order to achieve the necessary de­carbonisation of society and the economy, the attitude and mo­tivation of the popu­lation and com­panies is crucial. There­fore, CLIMATE_AFFECT studies the attitudes and know­ledge of in­di­viduals and com­panies re­garding climate change and the fac­tors by which they are de­ter­mined. Reactions with re­gard to de­ci­sions to migrate within and across national boundaries are investigated. Finally, the role of climate insurance for mitigating these effects is analysed. 

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Project results

The project results show that the effects of climate-induced natural disasters go beyond the direct damage. A stable negative effect of the catastrophe risk on life satisfaction was shown. Data from Vietnam showed persistent migration effects for both floods and droughts, but not for tropical storms. However, an increase in temporary migration within Vietnam was found for storms. It was also shown that German companies feel significantly affected by extreme weather events, although there are certainly regional and industry-specific differences. Based on a global panel data set, it was also empirically proven that the occurrence of different types of extreme weather events leads to increasing dissatisfaction with government environmental policies. Finally, it was shown that regional average temperatures in summer in Germany have the greatest potential for index insurance that increases welfare. For Southeast Asia, it was also shown that stricter regulation of the insurance sector has a significantly positive effect on demand for insurance against environmental risks.

Illustration of project results

The figure is taken from the paper "Natural Hazard Risk and Life Satisfaction - Empirical Evidence for Hurricanes" (Berlemann & Eurich 2020) and shows the mean value of the hurricane risk indicator over the period 2010-2018 for the U.S. at the zip code level. We construct the hurricane risk indicator on the basis of past hurricane events which come from the International Best Track Archive for Climate Stewardship (IBTrACS) dataset.

Main Findings

  • Climate-related extreme weather events (EWEs) lead to higher acceptance of en­viron­mental policy.
  • The risk of EWEs occurring alone is al­ready welfare-reducing.
  • German companies are in­creasingly affected by EWEs.
  • EWEs cause both tem­porary and per­manent internal mi­gration.
  • Insurance can help meet climate-related challenges. Innovative pro­ducts but also in­sti­tutional frame­­work con­ditions play an im­portant role here.


Berlemann, M., Eurich, M. (2021):
Natural Hazard Risk and Life Satisfaction – Empirical evidence for hurricanes. Ecological Economics 190: 107194.

Berlemann, M., Eurich, M. (2020)
Does Drought Risk Depress Expected Well-Being? Applied Economics Letters 29 (13): 1229-1233.

Berlemann, M.,  Lehmann, R. (2020):
Extremwettersensibilität deutscher Unternehmen Ergebnisse einer Unternehmensbefragung. ifo Schnelldienst 73 (8): 45-55.

Berlemann, M., Tran, T. X. (2020):
Climate-Related Hazards and Internal Migration. Empirical Evidence for Rural Vietnam. Economics of Disasters and Climate Change 4: 385-409.

Bumann, S. (2021):
What are the determinants of public support for climate policies? A review of the empirical literature. Review of Economics 72 (3).

Hott, C., Tran, T. X. (2020):
NatCats and Insurance in a Developing Economy - New Theoretical and Empirical Evidence. VfS Annual Conference 2020: Gender Economics: 224551.