Exploring the Intersection of Climate Risk Assessment and Economic Analysis with IMPLAN
Did you know IMPLAN’s data can help you measure the impact of climate change on specific regions and industries?
With many different levels of data available, including national, state, county, ZIP code, and MSA models, IMPLAN empowers decision-makers to manage supply chain risks associated with lending, assets, and underwriting. Our wide variety of data, covering industry supply chains, greenhouse gas emissions, taxes, and household spending, also helps government agencies and corporations make informed decisions and balance economic risks.
Exploring Hidden Risks with IMPLAN: A Case Study
Our recent webinar, Adding IMPLAN to Your Climate Risk Assessment Toolkit, delved into a compelling case study centered around the impact of a hurricane in the Gulf of Mexico on the oil and gas extraction industry. Using IMPLAN’s robust modeling capabilities, we can gain insights into the intricate web of supply chain linkages and the ripple effects of industry disruptions.
The first step in utilizing IMPLAN for climate risk assessment involves translating environmental risks such as hurricanes, droughts, wildfires, and flooding into economic terms. By doing so, users can grasp the potential economic ramifications of these events.
IMPLAN enables users to identify the industries directly impacted by climate events, thus gauging the initial shock to regional economies. For instance, plant shutdowns, decreased tourism, and population exodus are among the first-order economic effects that IMPLAN helps to analyze.
However, IMPLAN’s utility extends beyond quantifying direct impacts. Its input-output framework allows for the estimation of hidden economic risks, including indirect and induced effects. By modeling the magnitude and reach of these upstream effects, IMPLAN reveals the broader economic implications of climate events.
Exploring the impact of a hurricane in the Gulf of Mexico on the oil and gas extraction industry showcases how localized events can ripple through the broader economy. Our case study revealed that a shutdown of the oil and gas extraction industry on the Gulf Coast could impact 400,000 jobs in the United States as a whole and disrupt $200 billion worth of economic activity.
Even industries and regions seemingly distant from the epicenter of a climate event can experience significant repercussions due to supply chain disruptions and expenditure changes. Along the supply chain, a shutdown of Gulf Coast oil and gas extraction would cause significant effects to custom computer programming, steel wire drawing, industrial gas manufacturing, management, commercial and industrial machinery, water and sewage systems, pipeline transportation, cement manufacturing, and other industries. With comprehensive modeling, IMPLAN demonstrates the interconnectedness of industries and regions within the economic landscape. IMPLAN’s ability to filter and analyze data provides users with valuable insights into the multifaceted nature of economic risks.
From job losses and output declines to tax implications and environmental effects, IMPLAN can be a key player in your toolkit for assessing and mitigating climate-related risks. By integrating IMPLAN into climate risk assessment strategies, organizations can enhance their ability to anticipate, understand, and respond to the economic challenges posed by environmental hazards.
Empowering Informed Decision-Making
IMPLAN is a vital ally in navigating the complexities of climate risk management. Its robust analytical capabilities empower users to make informed decisions and develop effective strategies to safeguard economic resilience in the face of environmental uncertainty.
To learn more, watch our webinar recording or schedule a demo and see IMPLAN in action for yourself.