Global Assessment Report on Disaster Risk Reduction 2015
Making development sustainable: The future of disaster risk management

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While flood risk should be managed through prospective measures such as land-use planning, the continued industrial, commercial and residential development on floodplains, together with climate change, has made flooding a very dynamic risk. Corrective measures such as flood defences can protect against losses up to a certain threshold, and countries like Japan and the Netherlands have made major investments in flood protection. However, flood defences may encourage further development on floodplains, leading to devastating consequences if a low-frequency but high-severity loss above the protection threshold were to occur. In contrast, flood risk in low-income countries often reflects a lack of capacity to invest in flood protection.
As the 2011 Chao Phraya River floods in Thailand demonstrated, flooding may produce major correlated losses that equal those arising from earthquakes or tropical cyclones. The Thailand floods
also revealed the risk to global supply chains when industries are concentrated on floodplains (UNISDR, 2013a

UNISDR. 2013a,Global Assessment Report on Disaster Risk Reduction: From Shared Risk to Shared Value: the Business Case for Disaster Risk Reduction, Geneva, Switzerland: UNISDR.. .
; CEO Risk Forum, 2012

CEO Risk Forum. 2012,CEO Risk Forum, Spring 2012.. .
). A recent analysis of “hidden hotspots” in emerging markets revealed that other countries in the world present an even greater flood loss potential than Thailand (Swiss Re, 2012

Swiss Re. 2012,Flood – an underestimated risk: Inspect, inform, insure, Zurich.. .
): China tops the ranking, followed by Brazil, Russia and India (Figure 3.19).
Floods also cause major losses in high-income countries. While the average annual economic damage from floods in the United Kingdom, for example, is in the range of US$250 million (Penning-Rowsell, 2014

Penning-Rowsell, Edmund C. 2014,A realistic assessment of fluvial and coastal flood risk in England and Wales, Transactions of the Institute of British Geographers, Vol. 40. Issue 1: 44-61 (published online: March 2014).. .
), the United Kingdom saw the second wettest year on record in 2012 (second only to 2007), with flood-related losses reaching approximately US$1.8 billion. The RMS UK Inland Flood Model estimated that nearly half of the UK’s expected average annual flood loss comes from major river flooding, and the remainder is attributed to small river and stream flooding, flash
(Source: UNISDR with data from Global Risk Assessment and the World Bank.)
Figure 3.18 Top 15 countries: Tsunami PML500 in relation to capital stock
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