Person:
Hallegatte, Stéphane
Author Name Variants
Fields of Specialization
Green growth,
Climate change,
Urban development
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Last updated
December 4, 2023
Biography
Stéphane Hallegatte is a Senior Climate Change Adviser at the World Bank. He joined the World Bank in 2012 after 10 years of academic research in environmental economics and climate science for Météo-France, the Centre International de Recherche sur l’Environnement et le Développement, and Stanford University. His research interests include the economics of natural disasters and risk management, climate change adaptation, urban policy and economics, climate change mitigation, and green growth.
Mr. Hallegatte was a lead author of the 5th Assessment Report of the Intergovernmental Panel on Climate Change (IPCC). He is the author of dozens of articles published in international journals in multiple disciplines and of several books, including Green Economy and the Crisis: 30 Proposals for a More Sustainable France , Risk Management: Lessons from the Storm Xynthia , and Natural Disasters and Climate Change: An Economic Perspective .
He also co-led the World Bank reports Inclusive Green Growth: The Pathway to Sustainable Development , published in 2012 and Decarbonizing Development in 2015, and was member of the core writing team of the 2014 World Development Report Risk and Opportunity: Managing Risks for Development . Most recently, he led the World Bank reports Shock Waves: Managing the Impacts of Climate Change on Poverty , Unbreakable: Building the Resilience of the Poor in the Face of Natural Disasters , and Lifelines: the Resilient Infrastructure Opportunity.
He was the team leader for the World Bank Group Climate Change Action Plan, a large internal coordination exercise to determine and explain how the Group will support countries in their implementation of the Paris Agreement.
Mr. Hallegatte holds engineering degrees from the Ecole Polytechnique (Paris) and the Ecole Nationale de la Météorologie (Toulouse), a master's degree in meteorology and climatology from the Université Paul Sabatier (Toulouse) and a Ph.D in economics from the Ecole des Hautes Etudes en Sciences Sociales (Paris).
Publication Search Results
1 - 10 of 73
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Publication
Floods and Their Impacts on Firms: Evidence from Tanzania
(World Bank, Washington, DC, 2021-09)This study explores how businesses in Tanzania are impacted by floods, and which strategies they use to cope and adapt. These insights are based on firm survey data collected in 2018 using a tailored questionnaire, covering a sample of more than 800 firms. To assess the impact of disasters on businesses, the study considers direct damages and indirect effects through infrastructure systems, supply chains, and workers. While direct on-site damages from flooding can be substantial, they tend to affect a relatively small share of firms. Indirect impacts of floods are more prevalent and sizable. Flood-induced infrastructure disruptions—especially electricity and transport—obstruct the operations of firms even when they are not directly located in flood zones. The effects of such disruptions are further propagated and multiplied along supply chains. The study estimates that supply chain multipliers are responsible for 30 to 50 percent of all flood-related delivery delays. To cope with these impacts, firms apply a variety of strategies. Firms mitigate supply disruptions by adjusting the size and geographical reach of their supply networks, and by adjusting inventory holdings. By investing in costly backup capacity (such as water tanks and electricity generators), firms mitigate the impact of infrastructure disruptions. The study estimates that only 13 percent of firms receive government support in the aftermath of floods. -
Publication
Transportation and Supply Chain Resilience in the United Republic of Tanzania: Assessing the Supply-Chain Impacts of Disaster-Induced Transportation Disruptions
(World Bank, Washington, DC, 2019-06)The economy of the United Republic of Tanzania is growing fast but remains vulnerable to disasters, which are likely to worsen with climate change. Its transportation system, which mainly consist of roads, often get disrupted by floods. How could the resilience of the transportation infrastructures be improved? We formulate a new type of model, called DisruptSCT, which brings together the strength of two different approaches: network criticality analyses and input–output models. Using a variety of data, we spatially disaggregate production, consumption, and input–output relationships. Plugged into a dynamic agent-based model, these downscaled data allow us to simulate the disruption of transportation infrastructures, their direct impacts on firms, and how these impacts propagate along supply chains and lead to losses to households. These indirect losses generally affect people that are not directly hit by disasters. Their intensity nonlinearly increases with the duration of the initial disruption. Supply chains generate interdependencies that amplify disruptions for nonprimary products, such as processed food and manufacturing products. We identify bottlenecks in the network. But their criticality depends on the supply chain we are looking at. For instance, some infrastructures are critical to some agents, say international buyers, but of little use to others. Investment priorities vary with policy objectives, e.g., support health services, improve food security, promote trade competitiveness. Resilience-enhancing strategies can act on the supply side of transportation, by improving the quality of targeted infrastructure, developing alternative corridors, building capacity to accelerate post-disaster recovery. On the other hand, policies could also support coping mechanisms within supply chains, such as sourcing and inventory strategies. Our results help articulate these different policies and adapt them to specific contexts. -
Publication
How Inertia and Limited Potentials Affect the Timing of Sectoral Abatements in Optimal Climate Policy
(World Bank, Washington, DC, 2012-08)This paper investigates the optimal timing of greenhouse gas abatement efforts in a multi-sectoral model with economic inertia, each sector having a limited abatement potential. It defines economic inertia as the conjunction of technical inertia -- a social planner chooses investment on persistent abating activities, as opposed to choosing abatement at each time period independently -- and increasing marginal investment costs in abating activities. It shows that in the presence of economic inertia, optimal abatement efforts (in dollars per ton) are bell-shaped and trigger a transition toward a low-carbon economy. The authors prove that optimal marginal abatement costs should differ across sectors: they depend on the global carbon price, but also on sector-specific shadow costs of the sectoral abatement potential. The paper discusses the impact of the convexity of abatement investment costs: more rigid sectors are represented with more convex cost functions and should invest more in early abatement. The conclusion is that overlapping mitigation policies should not be discarded based on the argument that they set different marginal costs (`"different carbon prices"') in different sectors. -
Publication
Designing Climate Change Adaptation Policies : An Economic Framework
( 2011-02-01)Adaptation has long been neglected in the debate and policies surrounding climate change. However, increasing awareness of climate change has led many stakeholders to look for the best way to limit its consequences and has resulted in a large number of initiatives related to adaptation, particularly at the local level. This report proposes a general economic framework to help stakeholders in the public sector to develop effective adaptation strategies. To do so, it lays out the general issues involved in adaptation, including the role of uncertainty and inertia, and the need to consider structural changes in addition to marginal adjustments. Then, it identifies the reasons for legitimate public action in terms of adaptation, and four main domains of action: the production and dissemination of information on climate change and its impacts; the adaptation of standards, regulations and fiscal policies; the required changes in institutions; and direct adaptation actions of governments and local communities in terms of public infrastructure, public buildings and ecosystems. Finally, the report suggests a method to build public adaptation plans and to assess the desirability of possible policies. -
Publication
Best Investments for an Economic Recovery from Coronavirus: An Illustration Based on the Fiji Climate Vulnerability Assessment to Pinpoint Stimulus Options
(World Bank, Washington, DC, 2020-08-25)The COVID-19 crisis is causing massive suffering across the globe. In addition to the human consequences of the disease, containment measures to slow down and control the virus have deprived people of their livelihood and put many firms in a difficult financial situation. As a result, governments are planning massive stimulus packages to accelerate recovery once the health emergency is under control. To help governments think through investments for a green recovery, we proposed a sustainability checklist to screen potential projects and policies. To test how the sustainability checklist might work for a specific country, the checklist was applied to the Fiji Climate Vulnerability Assessment (CVA). The objective is to demonstrate how the checklist can be used as a screening, scoring, and prioritization tool to identify projects that create synergies between short-term needs and long-term objectives. -
Publication
A Dynamic Model of Extreme Risk Coverage : Resilience and Efficiency in the Global Reinsurance Market
( 2011-09-01)This paper presents a dynamic model of the reinsurance market for catastrophe risks. The model is based on the classical capacity-constraint assumption. Reinsurers choose every year the quantity of risk they cover and the level of external capital they raise to cover these risks. The model exhibits time dependency and reproduces a market dynamics that shares many features with the real market. In particular, market price increases and reinsurance coverage decreases after large shocks, and a series of smaller losses may have a deeper impact than one larger loss. There is a significant oligopoly effect reducing reinsurance supply, and the market is segregated into strategic large actors that influence market prices and price-taker smaller firms. A regulation trade-off between market efficiency and resilience is identified and quantified: improving the ability of the market to cope with exceptional events increases the cost of reinsurance. This model provides an interesting basis to analyze further capacity needs for the insurance industry in view of growing worldwide exposure to catastrophic risks and climate change. -
Publication
The Economics of Natural Disasters : Concepts and Methods
( 2010-12-01)Large-scale disasters regularly affect societies over the globe, causing large destruction and damage. After each of these events, media, insurance companies, and international institu-tions publish numerous assessments of the "cost of the disaster." However these assessments are based on different methodologies and approaches, and they often reach different results. Besides methodological differences, these discrepancies are due to the multi-dimensionality in disaster impacts and their large redistributive effects, which make it unclear what is included in the estimates. But most importantly, the purpose of these assessments is rarely specified, although different purposes correspond to different perimeters of analysis and different definitions of what a cost is. To clarify this situation, this paper proposes a definition of the cost of a disaster, and emphasizes the most important mechanisms that explain and determine this cost. It does so by first explaining why the direct economic cost, that is, the value of what has been damaged or destroyed by the disaster, is not a sufficient indicator of disaster seriousness and why estimating indirect losses is crucial to assess the consequences on welfare. The paper describes the main indirect consequences of a disaster and the following reconstruction phase, and discusses the economic mechanisms at play. It proposes a review of available methodologies to assess indirect economic consequences, illustrated with examples from the literature. Finally, it highlights the need for a better understanding of the economics of natural disasters and suggests a few promising areas for research on this topic. -
Publication
When Starting with the Most Expensive Option Makes Sense : Use and Misuse of Marginal Abatement Cost Curves
( 2011-09-01)This article investigates the use of expert-based Marginal Abatement Cost Curves (MACC) to design abatement strategies. It shows that introducing inertia, in the form of the "cost in time" of available options, changes significantly the message from MACCs. With an abatement objective in cumulative emissions (e.g., emitting less than 200 GtCO2 in the 2000-2050 period), it makes sense to implement some of the more expensive options before the potential of the cheapest ones has been exhausted. With abatement targets expressed in terms of emissions at one point in time (e.g., reducing emissions by 20 percent in 2020), it can even be preferable to start with the implementation of the most expensive options if their potential is high and their inertia significant. Also, the best strategy to reach a short-term target is different depending on whether this target is the ultimate objective or there is a longer-term target. The best way to achieve Europe's goal of 20 percent reduction in emissions by 2020 is different if this objective is the ultimate objective or if it is only a milestone in a trajectory toward a 75 percent reduction in 2050. The cheapest options may be sufficient to reach the 2020 target but could create a carbon-intensive lock-in and preclude deeper emission reductions by 2050. These results show that in a world without perfect foresight and perfect credibility of the long-term carbon-price signal, a unique carbon price in all sectors is not the most efficient approach. Sectoral objectives, such as Europe's 20 percent renewable energy target in Europe, fuel-economy standards in the auto industry, or changes in urban planning, building norms and infrastructure design are a critical part of an efficient mitigation policy. -
Publication
Should Marginal Abatement Costs Differ Across Sectors? The Effect of Low-Carbon Capital Accumulation
(World Bank, Washington, DC, 2013-04)The optimal timing, sectoral distribution, and cost of greenhouse gas emission reductions is different when abatement is obtained though abatement expenditures chosen along an abatement cost curve, or through investment in low-carbon capital. In the latter framework, optimal investment costs differ in each sector: they are equal to the value of avoided carbon emissions, minus the value of the forgone option to invest later. It is therefore misleading to assess the cost-efficiency of investments in low-carbon capital by comparing levelized abatement costs, that is, efforts measured as the ratio of investment costs to discounted abatement. The equimarginal principle applies to an accounting value: the Marginal Implicit Rental Cost of the Capital (MIRCC) used to abate. Two apparently opposite views are reconciled. On the one hand, higher efforts are justified in sectors that will take longer to decarbonize, such as urban planning; on the other hand, the MIRCC should be equal to the carbon price at each point in time and in all sectors. Equalizing the MIRCC in each sector to the social cost of carbon is a necessary condition to reach the optimal pathway, but it is not a sufficient condition. Decentralized optimal investment decisions at the sector level require not only the information contained in the carbon price signal, but also knowledge of the date when the sector reaches its full abatement potential. -
Publication
Green Industrial Policies : When and How
(World Bank, Washington, DC, 2013-10)Green industrial policies can be defined as industrial policies with an environmental goal -- or more precisely, as sector-targeted policies that affect the economic production structure with the aim of generating environmental benefits. This paper provides a framework to assess their desirability depending on the effectiveness and political acceptability of price instruments. The main messages are the following. (i) Greening growth processes to the extent and with the speed needed cannot be done without industrial policies, even if prices can be adjusted to reflect environmental objectives. (ii) "Sunrise" green industrial policies are needed because they support the development of critical new technologies and sectors, bring down costs, and allow for reduced emissions in the short term even in the absence of carbon pricing. (iii) "Sunset" green industrial policies and trade policies may be needed in conjunction with safety nets to make carbon pricing politically or socially acceptable. They can help mitigate the impact of a carbon price on competitiveness and unemployment and smooth the transition by helping industries adjust to the new conditions. (iv) Green or not, industrial policy requires carefully navigating the twin dangers of market and governance failure. The viability of supported technologies and sectors is difficult to assess through a market-test given their dependence on continued environmental policies or pricing -- such as a carbon price. Particular attention must be paid to avoid potential unintended negative effects, such as rebound effects (especially if prices are inappropriate), misallocation of capital, or capture and rent-seeking behaviors.