Natural Hazards: direct costs and losses due to the disruption of production processes

Description:

In recent decades, Europe has witnessed a significant increase in direct damages from natural hazards. A further damage increase is expected due to the on-going accumulation of people and economic assets in risk-prone areas and the effects of climate change, for instance, on the severity and frequency of drought events in the Mediterranean basin. In order to mitigate the impact of natural hazards on European economies and societies, an improved risk assessment and management needs to be achieved. While natural hazard analysis and modelling has made considerable progress over the last decades, there is still much research effort needed to improve assessments of the costs of natural hazards. Particularly in comparison with hazard modelling, simple approaches still dominate loss assessments, mainly due to limitations in available data and knowledge on damage processes and influencing factors. Moreover, the significant diversity in methodological approaches makes it difficult to establish comprehensive, robust and reliable cost figures that are comparable across different hazards and countries. This is also, because state-of-the-art approaches for the assessment of direct costs as well as of losses caused by the disruption of production processes are not only natural hazard specific, but also specific for different sectors or elements at risk in defined regions or countries. These methods as well as data sources and terminology are compiled, systemized and analysed in the present report. Similarities and differences between the cost assessment methods of different natural hazards are identified, so that most can be learned from the various approaches applied in different European countries. In addition, knowledge gaps and research needs are highlighted and recommendations for best practices of cost assessments are provided.

This report is part of the EU project ConHaz. The first objective of ConHaz is to compile state-of-the-art methods and terminology as used in European case studies. This compilation will consider droughts, floods, storms, and alpine hazards, as well as various impacted sectors, such as agriculture, health and nature. It will consider direct, indirect and intangible costs. ConHaz further examines the costs and benefits of risk-prevention and emergency response policies. The second objective of ConHaz is to evaluate the compiled methods by considering theoretical assumptions underlying cost assessment methods and issues appearing in application of the methods, such as availability and quality of data. ConHaz will also assess the reliability of the end results by considering the accuracy of cost predictions and best-practice methods of validation, and will identify relevant gaps in assessment methods. The third objective of ConHaz is to compare available assessment methods with end-user needs and practices, so as to better identify best practice and knowledge gaps in relation to policy-making. A final objective of ConHaz is to give recommendations about best practices and to identify resulting research needs.

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