The EU FP7 Coordination Action project CONHAZ (Costs of Natural Hazards; contract 244159; 2010-2012) aimed at compiling and synthesising current knowledge on cost assessment methods to strengthen their role in the development of integrated natural hazard management and adaptation planning.
Cost assessments of damages, prevention and responses to natural hazards supply crucial information to decision support and policy development in the fields of natural hazard management and climate change adaptation planning. Significant diversity in the methodological approaches taken and the terminology used in costs assessments of different natural hazards and impacted sectors makes it difficult to establish comprehensive, robust and reliable costs figures, and to compare costs across hazards and impacted sectors. The project has provided more insight into cost assessment methods, which is needed for integrated planning, budgeting and policy action prioritisation for the various natural hazards. This comprehensive approach has enabled CONHAZ to clearly identify overlaps, commonalities and knowledge gaps in cost assessments of natural hazards, including floods, coastal hazards, droughts and alpine hazards.
Various reports have been produced by the project, either hazards orientated or cost orientated, and several policy briefs (available on the CONHAZ website).
| Topics | Title | Authors |
|---|---|---|
| Droughts: direct, indirect, intangible, mitigation costs | Methods for Assessment of the Costs of Droughts | Ivana Logar, Jeroen C.J.M. van den Bergh – University of Barcelona |
| Floods: direct, indirect, intangible, mitigation costs | Guidance for assessing flood losses (pdf 1.77mb) | Colin Green, Christophe Viavattene, Paul Thompson – FHRC-Middlesex University |
| Coastal hazard: direct, indirect, intangible, mitigation costs | Methods for Estimating the Costs of Coastal Hazards | Quentin Lequeux, Paolo Ciavola – University of Ferrara |
| Alpine hazard: direct, indirect, intangible, mitigation costs | Costs of Alpine Hazards | Clemens Pfurtscheller,Bernard Lochner, Annegret H. Thieken – University of Innsbruck |
| Direct costs: droughts, floods, coastal hazard, alpine hazard | Natural Hazards: direct costs and losses due to the disruption of production processes | Philip Bubeck, Dr. Heidi Kreibich – GFZ |
| Indirect costs: droughts, floods, coastal hazard, alpine hazard | Indirect Costs of Natural Hazards | Valentin Przyluski, Stéphane Hallegatte – CIRED |
| Intangible costs: droughts, floods, coastal hazard, alpine hazard | The intangible effects of Natural Hazards | Vasileios Markantonis, Volker Meyer, Reimund Schwarze – UFZ |
| Mitigation costs: droughts, floods, coastal hazard, alpine hazard | Methodology report on costs of mitigation | L.M. Bouwer, J. Poussin, E. Papyrakis, V.E. Daniel,C. Pfurtscheller, A.H. Thieken, and J.C.J.H. Aerts – Institute for Environmental Studies, University of Innsbruck |
| Synthesis | Costs of Natural Hazards -A Synthesis (pdf 0.6mb) | All previous authors |
Synthesis Report – key lessons:
The CONHAZ Final Synthesis Report presents an overview of general as well as hazard-specific findings and outlines the recommendations. Overall it was found that, despite the improvements made over the last decades, the costs assessment remains often incomplete and biased:
Direct costs assessments are based on the use of susceptibility functions. The functions are developed using an empirical or synthetic approach. However, the functions are often limited to one hazard parameter and to broad characteristics for limited assets. The needs of asset-specific multi-parameter damage models are acknowledged as well as adequate data collection protocols to develop and validate them. The assessment of losses related to business interruption remains limited and should be better considered.
Indirect costs assessments (higher order) methods include the use of surveys and economic models (e.g. IO, CGE). However, further research is required to develop new and suitable models for understanding and assessing the recovery process, and the roles of social and institutional factors should also be addressed.
Methodology for assessing Intangibles costs in economic terms is available (e.g. revealed preference, stated preference, benefit transfer method) but they require time and effort and are case-specific. They are often not included in costs assessment. An alternative is to include them in the decision process using Multi-Criteria Analysis or Cost-Effectiveness Analysis.
Costs of risk mitigation tends to measure exclusively the direct costs (e.g. design, capital and O&M) but other indirect and intangible costs associated with risk mitigation should be better embraced. The estimation of the costs of non-structural measures was found to be particularly lacking.
In the future natural hazard costs assessment should:
- Better reflect uncertainty;
- Enforce a proper data collection process and usage;
- Integrate climate change scenarios and multi-hazards (e.g. use of integrative model);
- Combine both CBA and MCA;
- Support the participatory and transparency process;
- Include the recovery phase and better consider the importance of social and institutional factors.
Guidance for assessing flood losses – Key lessons
The document provides an overview of the concept and the existing methodologies to guide the stakeholders in assessing the losses from floods. However, it is recognized that there are many stakeholders and many potential decisions in which an assessment of the cost of flooding is relevant. It is these different needs that the guidelines seek to address. Therefore, the document is not set out to be a ‘cookbook’ enabling a detailed flood loss assessment to be undertaken in each one of the 27 countries of the European Union. Instead, it sets out how each of those countries can best develop practical methodology, and associated data, so that flood loss assessments for specific questions can be routinely undertaken. The document concludes by providing the following programme of implementation:
The suggested actions in the first two years are:
1. Establish a user community of stakeholders, perhaps including an annual specialized conference;
2. Review the availability of data on building stock and other assets;
3. Decide upon a system of land use classification. The categorisation is likely to be based upon a combination of built form and the activity engaged.
4. Identify ‘critical installations’ (e.g. emergency services locations, distribution and network centres delivering important services, vulnerable areas, such as schools).
5. Identify major networks (traffic, gas, electricity, rail etc.) and their topologies and associated flows.
6. Identify areas with extreme and unusual hazard(s).
7. Develop synthetic depth-damage curves for each of the land use classes. It is essential to establish a coherent framework for data collection and assessment.
8. Flood loss assessment is centrally about probabilities. Fragility curves for the failure of different intervention options need to be developed or agreed. A sampling strategy for the loss-probability curve must be agreed.
In the third year onwards, improvement in the assessment should be sought where necessary and prioritised.