Transcript Special lecture: Economic aspects of disasters Ricardo

Special lecture: Economic
aspects of disasters
Ricardo Zapata-Marti
Regional Advisor
Focal Point for Disaster Evaluation, ECLAC
Task Force for Emergency Preparedness
Second Emergency Management CEO
Seminar
August 12-14
Lima, Perú
The bottom line
•
Experience over the recent years both in Latin America and Southeast Asia
supports the notion that a comprehensive socioeconomic and
environmental assessment of disasters leads to a profiling of
disasters that enables the formulation of reconstruction of affected
•
infrastructures (including the protection of critical infrastructures, with
particular reference to public security in sectors such as health, water and
sanitation, food security, energy, etc.).
A comprehensive analysis of damage (physical destruction of assets in all
sectors of a society, community or economy valued at replacement costs) and
losses (income lost, production not realized, employment reduction, budget
deficits associated wih post-event emergency and recovery expenditures and
tax revenue losses incurred) allows
– a perspective on cross-cutting themes such as gender and disasters,
ethics in risk management, environmental risk and the issues of
governance,
– risk dialogue and consensus building based on assessments, and the
mobilisation of resources for risk reduction
Post disaster
situation
Recovery
Objectives
International
standards or
Development
goals
(such as MDGs)
New
Gap
An additional deficit is created
from the pre-existing gap
between the prevalent
situation vis-à-vis the
development goals and the
emerging recovery objectives.
SOCIAL
100
Social capital and social
networks (solidarity and
equity)
Family ties, gender
perspective and extended
family networks and links
10
Violence, security and rights
1
Quality and resilience of
human built environment
(settlements and rural/urban
planning)
Productive infrastructure
Other built infrastructure
(public services, government
buildings)
NATURE / ENVIRONMENT
Clean water, wage disposal and
sanitation
Clean air
PHYSICAL INFRASTRUCTURE
Transport and
communications, energy and
other basic lifelines
HUMAN
Health
Education
Livelihoods
Housing and shelter
Cultural identity
Biodiversity and integrity of
ecosystems
Climate variability and change
POLITICAL
Governance
Transparency
FINANCIAL
Participation, inclusion and
Access to credit
political rights
Land tenure, legal rights
Access to information
Compensatory mechanisms and funds
Insurance and financial protection
Past
In the m edium term
AS ALTERED BY DISASTERS
Current
In the long term
Risk management and
adaptation
Damage and costs
HAZARDS
Baseline
modified
by
variability
and
change
VULNERABILITY
Diverse, local
Sector specific
RISK
Multi stresses
More severely affected
by vulnerability
but aggravated
by changes
in hazards
patterns
RESILIENCE
MANAGEMENT,
TRANSFER AND
REDUCTION
MITIGATION
ADAPTATION
EVOLUTION
An integrated framework, a systemic
perspective
CLIMATE CHANGE
Temperature rise
Sea level rise
Precipitation change
Droughts and floods
IMPACTS ON NATURAL
NAD HUMAN SYSTEMS
Adaptation
Adaptation
and
Mitigation
Unwanted evolution
EMISSIONS AND
CONCENTRATIONS
Greenhouse gases
Pollution (air,
water, soil, sea)
Food and water resources
Ecosystems and
biodiversity
Human settlements
Human health
Current
paradigm
Socioeconomic
development paths
Economic growth
Technology
Population
Governance
Reasons for the increase in natural
catastrophes and natural
catastrophe losses
•
•
•
•
•
•
•
Global population growth (exponential development); in 1800, for
example, there were one billion people living on the earth, today there
are 6.3 billion.
The rising standard of living in nearly all countries of the world
produces growing accumulations of wealth which are hit in the event
of a catastrophe.
Concentration of population and values in conurbations: the
emergence of numerous mega cities - even in exposed regions (e.g.
Tokyo: 30 million inhabitants)
Settlement and industrialisation of very exposed regions, especially
coasts and river basins, tourism in danger zones, e.g. Florida
Vulnerability of modern societies and technologies, structural
engineering, devices and equipment, networks; problems involving
suppliers too
Increasing insurance penetration throughout the world, i.e. the
proportion of insured goods is mounting globally. Consequently,
insured losses are escalating even faster.
Global changes in environmental conditions, climate change, water
scarcity, loss of biodiversity
Historical distribution of disasters, by origin
3000
2500
2000
1500
1000
500
0
190009
191019
192029
193039
194049
195059
196069
197079
198089
1990- 200099
2005
Number of events recorded
Hydrometeorological
Geological
Biological
TOTAL AMOUNT OF ECONOMIC
DAMAGE BY REGIONS
Europe
13.3%
Oceania
1.3%
Africa
0.8%
Americas
36.1%
Asia
48.4%
600.00
500.00
400.00
300.00
200.00
100.00
0.00
Africa
Americas
Hydrometeorological
Asia
Europe Oceania
Geological
Biological
ECLAC´s disaster assessments
over the years
Period
AFFECTED POULATION
TOTAL DAMAGE
AND LOSSES
Deaths
Primary affected
population
(millions of US
dollars, at 2004
value)
1972-1980
38,042
4,229,260
78,085
1980-1990
34,202
5,442,500
101,251
1990-1999
32,648
2,518,508
31,367
2000-2010
(estimated)
18,032
35,478,470
50,050
1972-2005
122,924
47,668,738
260,753
Yearly average
3,725
1,444,507
7,902
Of which of
meteorological or
climatic nature
50,067
22,929,198
127,923
Source: ECLAC led assessments since 1973
Total insurance growth, penetration
and density by region
Appropriation of risk needed to
promote risk reduction:
• Need for institutional and regulatory
changes
• Use of market to value (“price”) risk
• Need for social policies for
compensation and promotion (provide
gender, age, ethnic sensitive
instruments)
• See risk reduction as a business
opportunity
Imperfect or inactive markets require
government action / intervention
LEVEL OF DISASTER IMPACT
• Indicates coping and adapative capacity
100000000000
10000000000
1000000000
100000000
10000000
1000000
100000
10000
1000
100
10
1
Excedence (residual or excedent risk)
Risk to be covered (financial gap)
“Acceptable risk”
100500
50-100
25-500
10-25
Amount of macro impact
Probability
Potencial (Amount of macro impact)
5-10
1-5
ESTABLISHING RISK FINANCING NEEDS
Probability or return period
CAT
bonds
50-200 years
Risk type
Parametric
coverage
Resource
gap
Catastrophic risks
20-30 years
Contingency
funds
Budget constraint
2-3 years
Reserve funds
Recurrent multihazard risks
Policy implications
• Exposure to disaster risks is not unlike exposure
to other risks (financial, commercial, social,
political)
• Exposure to risk has a positive correlation with
poverty: disasters impacts are not distributed
homogeneously neither in location nor in impact
• Social impact is regressive: direct linkage
between vulnerability and poverty, vulnerability
and marginalization, vulnerability and gender or
ethnicity
Appropriation to promote reduction of risk
(in the face of extreme events and climate change)
– Need for regulatory and institutional changes
– Markets as clearing houses to price risk
(beyond insurance)
– Need for social policies for compensation,
promotion and solidarity
– Risk management is an investment / business
opportunity
• Imperfect markets require governmental
intervention
The role of ECLAC – in respect of
disaster assessment and risk reduction
• In response to its member countries, has over 35
years assessed disasters’ socioeconomic impact
• Developed a methodological tool for damage and loss
assessment (DALA), now recognized as the
international standard for post-disaster assessment
• Has accumulated quantitative evidence that allows for
economic analysis of risk, which may be extrapolated
for disaster’s future impact and could be used to
quantify partially the socioeconomic implications of
climate change and approach the valuation of
adaptation costs
• Has increased national capabilities and contributed to
policy changes in Latin America and the Caribbean
and in other regions, namely South East Asia in
cooperation with ESCAP and the World Bank’s
GFDRR
Thank you!
http://www.eclac.org/
http://gfdrr.org/
http://www.proventionconsortium.org/
http://groups.google.com/group/pdna-for-recovery
http://www.recoveryplatform.org
http://www.undp.org/cpr/iasc