A comparison of definitions of affordability for flood risk adaption measures: a case study of current and future risk-based flood insurance premiums in Europe

Risk-based insurance is a commonly proposed and discussed flood risk adaptation mechanism in policy debates across the world such as in the United Kingdom and the United States of America. However, both risk-based premiums and growing risk pose increasing difficulties for insurance to remain affordable. An empirical concept of affordability is required as the affordability of adaption strategies is an important concern for policymakers, yet such a concept is not often examined. Therefore, a robust metric with a commonly acceptable affordability threshold is required. A robust metric allows for a previously normative concept to be quantified in monetary terms, and in this way, the metric is rendered more suitable for integration into public policy debates. This paper investigates the degree to which risk-based flood insurance premiums are unaffordable in Europe. In addition, this paper compares the outcomes generated by three different definitions of unaffordability in order to investigate the most robust definition. In doing so, the residual income definition was found to be the least sensitive to changes in the threshold. While this paper focuses on Europe, the selected definition can be employed elsewhere in the world and across adaption measures in order to develop a common metric for indicating the potential unaffordability problem.     

Framework for improved confidence in modeled nitrous oxide estimates for biofuel regulatory standards

Biofuels vary greatly in their carbon intensity, depending on the specifics of how they are produced. Policy frameworks are needed to ensure that biofuels actually achieve intended reductions in greenhouse gas emissions. Current approaches do not account for important variables during cultivation that influence emissions. Estimating emissions based on biogeochemical models would allow accounting of farm-specific conditions, which in turn provides an incentive for producers to adopt low emissions practices. However, there are substantial uncertainties in the application of biogeochemical models. This paper proposes a policy framework that manages this uncertainty while retaining the ability of the models to account for (and hence incentivize) low emissions practices. The proposed framework is demonstrated on nitrous oxide (N₂O) emissions from the cultivation of winter barley. The framework aggregates uncertainties over time, which (1) avoids penalizing producers for uncertainty in weather, (2) allows for a high degree of confidence in the emissions reductions achieved, and (3) attenuates the uncertainty penalties borne by producers within a timescale of several years. Results indicate that with effective management, N₂O emissions from feedstock cultivation may be <?5% of the carbon intensity of gasoline, whereas the existing policy approach estimates emissions >?20% of the carbon intensity of gasoline. If these emissions reductions are monetized, the framework can provide up to $0.002 per liter credits (0.8 cents per gallon) to fuel producers, which could incentivize emissions mitigation practices by biofuel feedstock suppliers, such as avoiding fall N application on silty clay loam soils. The conservatism in the current approach fails to incentivize the adoption of biofuels, while the lack of specificity fails to incentivize site-level mitigation practices. Improved uncertainty accounting and consideration of farm-level practices will incentivize mitigation efforts at landscape to global scales.