Assessing effects of nature-based and other municipal adaptation measures on insured heavy rain damages

Abstract

Intense short duration rainfall events are expected to increase in severity and frequency due to climate change. Densely populated urban areas are vulnerable to these events, resulting in high losses. Implementing nature-based (e.g. green streets, rain gardens and green roofs) and other municipal adaptation measures (e.g. water storage facilities) can be a way to mitigate these damages. Little is known about the effectiveness of these measures combined in a municipality. This study assesses municipal climate adaptation measures being taken by the municipality of Amsterdam. Unique claims data of almost all Dutch insurers is used to understand the impact of these climate adaptation interventions. We study one neighborhood in Amsterdam which has been renovated using climate adaptation measures, including nature-based solutions. We implement a quasi-experimental difference-in-Differences (DiD) analysis that compares insured rainfall damages in the area to a similar neighboring area that was not renovated with climate adaptation measures. We find a negative significant relation between climate adaptation measures and insured damage when comparing the area where measures were taken to the similar area were measures were not taken, i.e. damage is reduced by climate adaptation measures by EUR 1375–5648 per rain day in the treatment area. Furthermore, precipitation per day is positively and significantly associated with insured damage. We suggest that nature-based and other adaptation measures can be installed by local governments and stimulated by insurers and banks to increase climate resilience in urban areas.