Economic implications of autonomous adaptation of firms and households in a resource-rich coastal city.

Climate change intensifies the likelihood of extreme flood events worldwide, amplifying the potential for compound flooding. This evolving scenario represents an escalating risk, emphasizing the urgent need for comprehensive climate change adaptation strategies across society. Vital to effective response are models that evaluate damages, costs, and benefits of adaptation strategies, encompassing non-linearities and feedback between anthropogenic and natural systems. While flood risk modeling has progressed, limitations endure, including inadequate stakeholder representation and indirect risks such as business interruption and diminished tax revenues. To address these gaps, we propose an innovative version of the Climate-economy Regional Agent-Based model that integrates a dynamic, rapidly expanding agglomeration economy populated by interacting households and firms with extreme flood events. Through this approach, feedback loops and cascading effects generated by flood shocks are delineated within a socio-economic system of boundedly-rational agents. By leveraging extensive behavioral data, our model incorporates a risk layering strategy encompassing bottom-up and top-down adaptation, spanning individual risk reduction to insurance. Calibrated to resemble a research-rich coastal megacity in China, our model demonstrates how synergistic adaptation actions at all levels effectively combat the mounting climate threat. Crucially, the integration of localized risk management with top-down approaches offers explicit avenues to address both direct and indirect risks, providing significant insights for constructing climate-resilient societies.

Uncertainty in boundedly rational household adaptation to environmental shocks.

Despite the growing calls to integrate realistic human behavior in sustainability science models, the representative rational agent prevails. This is especially problematic for climate change adaptation that relies on actions at various scales: from governments to individuals. Empirical evidence on individual adaptation to climate-induced hazards reveals diverse behavioral and social factors affecting economic considerations. Yet, implications of replacing the rational optimizer by realistic human behavior in nature-society systems models are poorly understood. Using an innovative evolutionary economic agent-based model we explore different framings regarding household adaptation behavior to floods, leveraging on behavioral data from a household survey in Miami, USA. We find that a representative rational agent significantly overestimates household adaptation diffusion and underestimates damages compared to boundedly rational behavior revealed from our survey. This "adaptation deficit" exhibited by a population of empirically informed agents is explained primarily by diverse "soft" adaptation constraints-awareness, social influences-rather than heterogeneity in financial constraints. Besides initial inequality disproportionally impacting low/medium adaptive capacity households post-flood, our findings suggest that even under a nearly complete adaptation diffusion, adaptation benefits are uneven, with late or less-efficient actions locking households to a path of higher damages, further exacerbating inequalities. Our exploratory modeling reveals that behavioral assumptions shape the uncertainty of physical factors, like exposure and objective effectiveness of flood-proofing measures, traditionally considered crucial in risk assessments. This unique combination of methods facilitates the assessment of cumulative and distributional effects of boundedly rational behavior essential for designing tailored climate adaptation policies, and for equitable sustainability transitions in general.

Uncertainty in individual risk judgments associates with vulnerability and curtailed climate adaptation.

Risk assessments are key for the effective management of potential environmental threats. Across probabilistic phenomena, climate change is an exemplar of paramount uncertainties. These uncertainties have been embraced in supporting governments' decisions; yet receive scarce attention when studying individual behavior. Analyzing a survey conducted in the USA, China, Indonesia, and the Netherlands (N=6242), we explore socio-economic, psychological, and behavioral differences between individuals who can subjectively assess risks, and those who are risk-uncertain. We find that risk-uncertain individuals are more likely to belong to societal subgroups classically considered as vulnerable, and have reduced capacities and intentions to adapt to hazards-specifically floods. The distinctions between risk-aware and risk-uncertain individuals indicate that ignoring differences in individuals' capacity to assess risks could amount to persistent vulnerability and undermine climate-resilience efforts. While we use floods emblematically, these finding have consequences for the standard practice of dropping or bootstrapping uncertain responses, irrespective of the hazard, with implications for environmental management.

One and done? Exploring linkages between households' intended adaptations to climate-induced floods.

As climate change increases the probability and severity of natural hazards, the need for coordinated adaptation at all levels of society intensifies. Governmental-level adaptation measures are essential, but insufficient in the face of growing risks, necessitating complementary action from households. Apprehending the drivers of household adaptation is critical if governments are to stimulate protective behavior effectively. While past work has focused on the behavioral drivers of household adaptation, little attention has been paid to understanding the relationships between adaptation measures themselves-both previously undergone and additionally (planned) intended adaptation(s). Using survey data (N = 4,688) from four countries-the United States, China, Indonesia, and the Netherlands-we utilize protection motivation theory to account for the behavioral drivers of household adaptation to the most devastating climate-driven hazard: flooding. We analyze how past and additionally intended adaptations involving structural modification to one's home affect household behavior. We find that both prior adaptations and additionally intended adaptation have a positive effect on intending a specific adaptation. Further, we note that once links between adaptations are accounted for, the effect that worry has on motivating specific actions, substantially lessens. This suggests that while threat appraisal is important in initially determining if households intend to adapt, it is households' adaptive capacity that determines how. Our analysis reveals that household structural modifications may be nonmarginal. This could indicate that past action and intention to pursue one action trigger intentions for other adaptations, a finding with implications for estimating the speed and scope of household adaptation diffusion.

Contextualizing cross national patterns in household climate change adaptation.

Understanding social and behavioral drivers and constraints of household adaptation is essential to effectively address increasing climate-induced risks. Factors shaping household adaptation are commonly treated as universal; despite an emerging understanding that adaptations are shaped by social, institutional, and cultural contexts. Using original surveys in the United States, China, Indonesia, and the Netherlands (N=3,789) - we explore variations in factors shaping households' adaptations to flooding, the costliest hazard worldwide. We find that social influence, worry, climate change beliefs, self-efficacy, and perceived costs exhibit universal effects on household adaptations, despite countries' differences. Disparities occur in the effects of response efficacy, flood experience, beliefs in governmental actions, demographics, and media, which we attribute to specific cultural or institutional characteristics. Climate adaptation policies can leverage on the revealed similarities when extrapolating best practices across countries, yet should exercise caution as context-specific socio-behavioral drivers may discourage or even reverse household adaptation motivation.