Revealing the indirect risks of flood events: A multi-model assessment for Austria

Flood events and the associated damages trigger direct as well as indirect effects due to economy-wide linkages. Hence, flood events pose indirect risks to complex socioeconomic systems and their individual agents. Despite their increasing importance in the light of ongoing climate change impacts, such indirect risks are not well understood. Using a set of three different economy-wide models – an input output model, a computable general equilibrium (CGE) model and an agent-based model – we reveal and study indirect risks of flood events for the case of Austria. The three models are fed with high resolution data on sector-specific capital stock damages, which is a major improvement with respect to existing approaches in disaster and climate change impact assessment. We find that indirect risks are very high for most economic sectors and that only the minority of sectors can gain from flood events. Furthermore, on the side of private households we find that floods pose a risk in terms of unequal distributional effects, since capital rents tend to increase while wages tend to decrease in the aftermath of a flood, leading to a re-distribution of income from highto low-income households. The study thus offers highly relevant leverage points for indirect risk management options in Austria. The used methodologies can be transferred to other regions