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Estimating Regions' Relative Vulnerability to Climate Damages in the CRED Model

This report introduces the Climate and Regional Economics of Development (CRED) model — a climate vulnerability index that estimates the economic damage from climate change in nine world regions based on three measures: freshwater resources per capita, the share of population living in coastal areas, and the percentage of gross domestic product (GDP) of climate-sensitive economic sectors.

The report reviews the current literature of climate change vulnerability indices and describes the CRED climate model, including the data sources and methods used to create the index. It presents the results by region and compares them with the results of other indices. It concludes that although other indices contain more variables that produce more detailed results, they are more difficult to interpret. CRED indicators are quantifiable, can be updated when new information becomes available, and inform climate change policy by identifying regions and countries where intervention to prevent damages is crucial.