PhD Position Climate Expectation Gap: Perspectives Risks Households

Join our ERC SPHINX Team to elicit how people and businesses think about climate risks, if their choices lead to stranded assets, and how they shape climate adaptation.

This 4-year fully funded PhD position is part of the ERC Consolidator project “Systemic physical climate risk in complex adaptive economies” (SPHINX) made possible thanks to the European Research Council. Join our ERC SPHINX Team to elicit how people and businesses think about climate risks, if their choices lead to stranded assets, and how they shape climate adaptation. Help uncover when behavioral biases ignite systemic impacts to uncover levers towards climate-resilient policies!

Globally, climate change already manifests via physical risks – damages from floods, storms, wildfires, heatwaves, droughts, and sea-level rise. Concerns are rising that these risks may become systemic, when local damage cannot be contained and adversely affects the entire socio-economic system. Usually, physical climate risk assessments overlay hazard probability, exposure and vulnerability to estimate future damage. These estimates linearly extrapolate historic data and assume that markets efficiently capitalize information about climate risks.

This leads to gradual adjustments of economic actors with perfect future insight, and thus to reactions and pricing of unprecedented climate-induced hazards as if they are simple variations on past experience. This approach is criticized for underestimating the true costs of climate change (e.g., at just 1-3% of GDP loss even under severe scenarios), impeding climate action. Instead, analysis of systemic risks embraces complex interactions among elements/agents, adjusting expectations, mechanisms of contagion dynamics, feedback loops, and non-linear tipping of system dynamics.

The SPHINX research program aims to fundamentally advance simulation methods and consolidate novel data to understand how systemic physical climate risks affect the wider socio-economic system, and to explore strategies to curtail their spiraling costs. The project focuses on Europe, with a detailed analysis of three selected case-study regions. Methodologically, SPHINX embraces five pillars, ranging from data collection to agent-based and computable general equilibrium modeling, led by five team members.

The current PhD position focuses on developing surveys and conducting statistical analysis of the unique microdata collected from households and firms across three countries.

The successful candidate will work within the SPHINX research team to explore when and how households and firms consider long-term climate risks in their economic decisions, such as buying a house or investing in business activities, and how they think about climate adaptation investments. To explore how these decisions depend on people’s expectations about climate physical risks, the candidate will develop theory-grounded questionnaires to be administered across three countries using online surveys.

During this 4-year-long project, the PhD student will build on the latest progress in surveys of households and businesses (e.g., regarding risk perceptions, private and public climate adaptation decisions, and traditional expectations measurements), grounded in a range of theories from different social sciences. Synthesizing and extending the knowledge on socio-behavioral factors affecting such long-term economic decisions and people’s views on a fair distribution of adaptation funding will be essential here.

Most of this PhD project will focus on the statistical analysis of these rich cross-country datasets, also examining whether firms’ decisions differ from households. The goal of this data collection and analysis research is to identify where and how real expectations regarding uncertain climate risks deviate from perfectly rational long-term expectations, and which socio-behavioral biases are most critical in facilitating climate risks to become systemic.

This data collection and analysis work will benefit from the computational agent-based and macroeconomic modeling carried out by other team members.

• MSc…