Catastrophe risk models as quantitative tools for climate change loss and damage: A demonstration for flood in Malawi, Vietnam, and the Philippines

We show how catastrophe models, as commonly used in the insurance and reinsurance industries, can be used to quantify climate change loss(es) and damage(s), fulfilling a key need to make urgent progress in this arena of international climate policy. We explore the impact of climate change on inland flood risk in three Global South regions (Chikwawa in Malawi, Hanoi in Vietnam, and Cagayan in the Philippines) and three exposure types (residential buildings, agricultural crops, and population) to demonstrate the ability and potential flexibility of catastrophe models to quantify impacts for both economic and non-economic loss and damage. We show that standard metrics can be used to quantify loss and damage, as well as guide and evaluate adaptation and disaster risk resilience measures. We also discuss and summarise the challenges that remain to be overcome, including sourcing high-quality exposure and vulnerability data and confronting the deeply uncertain climate change information at the scales of interest for loss and damage. For the latter, we propose a “storylines” framework to tractably sample the uncertainty space. Finally, we emphasise that progress in this area will need meaningful collaboration between stakeholders, developers, local experts, and vulnerable communities, to increase the quality of the data and ensure that the economic and non-economic losses are appropriately, legitimately, and justly chosen and quantified. Overall, we hope to encourage new activity, improvements to our work, and extensive collaboration in this important space.