Economics of 'natural' disasters: Bridging disaster risk reduction and climate adaptation efforts and strategies

Initiative on Climate Change policy and Governance
International Center for Climate Governance, Island of San Giorgio Maggiore


Over the past decades, the world witnessed a striking increase in the economic losses caused by natural disasters. While in principle natural hazards cannot be prevented, their impacts can be moderated if not avoided.

It is well established that rising population and economic growth are the major drivers in the trend of the observed losses. In the coming decades, anthropogenic climate change will very likely lead to more frequent and intense meteorological and climate extreme events (Parry et al., 2007) and thus further amplify the disaster losses, if no preventive actions are taken.
Disaster risk management addresses several global changes at the same time: First, it reduces the harm caused by natural disasters, and increase the ability of societies to respond, recover and develop. Second, it is vital for designing preventive measures to adapt to a changing climate.

However, an effective risk management necessitates accurate knowledge including key uncertainties of what is at stake. The knowledge about impacts of past disasters as well as current and future disaster risk is all but incomplete. At best, only direct losses are known and this only for some of the key sectors. Little attention is paid to indirect (knock-on) and intangible effects, albeit these together may exceed the direct losses.
As a consequence, actual and potential losses are underestimated and policy responses which are based on such data are insufficient or inadequate to mitigate the future disaster risks. Often, poor assessments of inflicted or potential losses favours primarily structural policy responses which, in the long run, may increase the sensitivity to disasters and further exacerbate the problem.

The workshop will bring together social scientists from two so-far disconnected domains: i) analytical and probabilistic risk assessment of today’s natural hazards, and ii) adaptation to future climate extremes and disasters. During the workshop, the state-of-the-art knowledge and practice in assessment of economic costs imposed by natural hazard disasters will be critically reviewed and outstanding challenges and research needs will be identified.

The workshop is meant to establish of a network of social scientists working on welfare effects of natural disasters, in current and future climate(s). As a follow-up activity, FEEM will develop a network platform enabling all members to exchange information about ongoing research and research outcomes, events and exchange of academic staff. The platform will be linked to the UNISDR portal. The aforementioned network will be instrumental for facilitating the collaboration between the institutions the network members belong to. As a first step, a proposal to established a new EUROCORES research programme dealing with the Welfare effects of Natural Disasters will be discussed during the workshop. This proposal will include topics identified during the workshop as having highest priority for the sound risk assessment and evaluation of disaster risk reduction strategies/policies.


The workshop will be designed to foster in-depth discussion. The workshop will be structured around three plenary sessions, each combining individual presentations, interventions by discussants, questions/replies and roundtable/panel discussions. Each presentation will be given by two or more participants who will be encouraged to prepare together the talk and background research paper. Each talk/paper will be discussed by one expert who will highlight gaps and links to other topics (5’); followed by a general discussion (10’). Round table at the end of each session will review the main messages and draw up a list of actions for future short and longer-term collaboration.

February 9th, 2010: 20:00 –22:00
Welcome reception
Invited lecture: Recent large scale assessments of disasters

February 10th, 2010:
09:45 – 12:30 :
Economic costs of natural hazards, past trends and key challenges
09.45 – 10.20: Trends in disaster losses: data availability and coverage/gaps, normalisation and comparability issues
10.20 – 10.55 Assessment of economic costs of natural disasters
11.20 – 11.55 : Economic vulnerability and resilience
11.55 – 12.30: Risk Reduction strategies, policies and new Initiatives: identifying necessary inputs from economics
14:00 – 18:00: Key challenges in assessing the economic costs of climate adaptation to extremes
14:00 – 15:45 : Economic costs of extreme event climate adaptation strategies
16:15 – 18:00 : Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation

February 11th, 2010
09:00 – 11:15:
Disaster Economics for Disaster Risk Reduction and Climate Adaptation - Positions
09.00 – 09.30 : United Nations International Strategy on Disaster Reduction
09.30 – 10.00: International Council for Science’s Integrated Research on Disaster Risk
10.00 – 10.30 : Intergovernmental Panel on Climate Change’s Fifth Assessment Report
10.30 – 11.00 : Priorities for the future research funding – Directorate General Research and Integrated Research on Disaster Risk
11.30 – 13.00 : Panel Discussion, Including follow-up research activities, network activities and specific outputs

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