Abstract

This project aims to develop an environmental soundness index summarising the resilience to climatic and natural events at the country level. To reach such an objective, we will use a fully data-driven approach able to leverage both the latent set of information contained in a number of publicly available indicators and the spillover measures that summarise the potential triggering effects of climatic events within and across countries. Such spillover measures will be calculated by extending and applying multivariate count time series models on the time series of the number of events, aggregating them by country and event-type. The developed indicator will provide policymakers and institutions at large with a monitoring and policy tool that is easy to implement, understand and update.

Through this research, we will first be able to understand the propagation of shocks due to disaster events so as to allow countries and institutions to prepare and adapt accordingly, contributing to the literature that has typically focused on shocks occurring in the economic and financial markets through the employment of models for continuous variables (returns, macroeconomic figures).

On the other hand, we will be able to investigate the possible impacts of environmental threats country-wise, by assessing the environmental soundness at a global scale. The environmental soundness index could become an important tool not only to monitor and compare the different countries but also to be included as a predictor in further analyses focused on climate risk and the related financial impacts.

Team

Corresponding researcher / coordinator: Paola Cerchiello

§ Other researchers : Arianna Agosto (UNIPV), Alessandro Bitetto (UNIPV), Paolo

Pagnottoni (Uninsubria), Prof. Charilaos Mertzanis (Abu Dhabi University)

§ Additional research team members: Yana Kostiuk Ph.D. student IUSS