Climate stress test of the global supply chain network: the case of river floods

Javier Ojea Ferreiro, Roberto Panzica and Georgios Papadopoulos

No 2025-09, JRC Working Papers in Economics and Finance from Joint Research Centre, European Commission

Abstract: "This study investigates how extreme flood events can indirectly impact the global supply chain through production disruptions. Using a data-driven, agent-based network model that combines company-level data with flood hazard maps, the research simulates the transmission and amplification of shocks. The findings emphasize that the size of inventories is crucial; a lean-inventory system leads to faster shock propagation, higher losses, and fewer recoveries compared to an abundant-inventory system. Additionally, the study identifies that the number and criticality of flooded companies’ trade links, along with the magnitude of the flood, correlate with the speed and severity of contagion. Interestingly, a key metric —the average criticality of affected firms’ outgoing links— consistently peaks before the onset of the shock’s fast-propagation regime. This could serve as an early warning indicator, giving businesses and policymakers precious time to react. By identifying these critical vulnerabilities, this research provides a framework for enhancing the resilience of global supply chains in the face of increasing climate-related and other risks."

Date: 2025-06
New Economics Papers: this item is included in nep-agr and nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
https://publications.jrc.ec.europa.eu/repository/handle/JRC141288 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jrs:wpaper:202509

Access Statistics for this paper

More papers in JRC Working Papers in Economics and Finance from Joint Research Centre, European Commission Contact information at EDIRC.
Bibliographic data for series maintained by Peter Benczur ().