Global Assessment Report on Disaster Risk Reduction 2013
From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction

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Part I - Chapter 4
The production of extensive risk
In-depth analysis of new national disaster loss data confirms a previously recognised and yet regularly ignored truth: accumulated losses from small-scale, highly frequent and localised disaster events approach in magnitude those of major disasters and contribute to declines in social welfare, economic growth and ecosystems. Urban and rural areas alike, particularly in low and middle-income countries, experience regular small disasters that undermine local development as well as national competitiveness.
GAR09 (UNISDR, 2009

UNISDR. 2009.,Global Assessment Report on Disaster Risk Reduction: Risk and poverty in a changing climate., United Nations International Strategy for Disaster Reduction., Geneva,Switzerland: UNISDR.. .
) highlighted four underlying risk drivers that characterise the accumulation of extensive risks. (1) Badly planned and managed urban development, for example, can generate flooding, through factors such as increased run-off from a growing area of impermeable surfaces, inadequate investment in drainage and water management and the development of low-lying flood prone areas. (2) The decline of regulatory ecosystem services, such as wetlands, aquifers, forests, floodplains and mangroves, exacerbate and magnify hazard levels. (3) Low-income households are often unable to participate in the formal market to land and housing and urbanise hazard prone areas, through informal mechanisms. (4) Cities and regions with weak governance may either lose control
over the above processes or contribute to them. Given that not only exposure and vulnerability but also hazards are produced through these underlying drivers, extensive risk is endogenous to and produced by urban and economic development.
Wealthier, better-governed city regions are likely, over time, to successfully manage the processes that generate extensive risk. Rapid urban growth often reflects economic success and major inflows of capital into infrastructure and productive development (Mitlin and Satterthwaite, 2012

Mitlin, D. and Satterthwaite D. 2012.,Urban Poverty in the Global South: Scale and Nature., London,Routledge. .
). In fact, in high-income and in many middle-income countries, the growth in GDP per capita has outpaced growth in urban population (UN-HABITAT, 2012

UN-HABITAT (United Nations Human Settlements Programme). 2012.,State of the World’s Cities 2012/2013: Prosperity of Cities., Nairobi,Kenya.. .
). Although exposure and intensive risk increase over time, these cities and countries reduce their extensive risk, for example, through investments in protective infrastructure, environmental management and upgrading of informal settlements.
In contrast, in many low-income countries, growth in urban population has outstripped growth in GDP per capita (Ibid.) in part from population migration owing to declining rural economies and crises. In these cities, a greater proportion of low-income households participate in urbanisation through informal mechanisms of land acquisition (GAR 13 paperJohnson et al., 2012

GAR13 Reference Johnson, C., Adelekan, I., Bosher, L., Jabeen, H., Kataria, S., Wijitbusaba, A. and Zerjav, B. 2012.,Private Sector Investment Decisions in Building and Construction: Increasing, Managing and Transferring Risks., Background Paper prepared for the 2013 Global Assessment Report on Disaster Risk Reduction., Geneva,Switzerland: UNISDR..
Click here to view this GAR paper.
; Hamdan, 2012

Hamdan, F. 2012.,Incentive and Extensive Disaster Risk Drivers and Incentives for Disaster Risk Management in the MENA region., Background Paper prepared for the 2013 Global Assessment Report on Disaster Risk Reduction. Geneva, Switzerland., Geneva,Switzerland: UNISDR. .
). Governments have little capacity to reduce risks over time, and both extensive and intensive risks lead to
Extensive risk is associated with localised, mainly weather-related hazards with short return periods. These highly localised, yet frequent hazards include surface water and flash flooding, landslides, fires and both agricultural and hydrological drought. They are exacerbated by badly managed urban development, environmental degradation and poverty.
An analysis of the scale of economic losses shows that extensive risk continues to be underestimated. The real cost of these largely human produced risks is rarely highlighted. Although extensive risk events cause only 13 percent of total mortality, they are responsible for 42 percent or more of total economic losses.
These losses are hidden in largely invisible risk layers that no insurance covers. And yet they can amount to more than 10 percent or more of annual capital formation.
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