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Assessing the Real Cost of Disasters: The Need for Better Evidence - OECD Report

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Presentation from the launch of the OECD report "Assessing the Real Cost of Disasters - The Need for Better Evidence". For further information see oe.cd/cost-of-disasters

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Assessing the Real Cost of Disasters: The Need for Better Evidence - OECD Report

  1. 1. ASSESSING THE REAL COST OF DISASTERS Stéphane Jacobzone Public Governance Directorate, OECD 11th Meeting of High-Level Experts and Leaders Panel on Water and Disasters (HELP) Geneva, 3-4 May 2018 The need for better evidence
  2. 2. 0 50 100 150 200 250 300 350 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 AnnualeconomiclossesinUSDbillion • Past decade: USD 1.5 trillion in economic damages from man- made disasters (industrial accidents, terrorist attacks) and natural disasters (primarily storms and floods) Why we need to better account for the real costs of disasters Source: EM-DAT: The OFDA/CRED International Disaster Database,UniversitécatholiquedeLouvain,Brussels,Belgium,www.emdat.be (accessed 14 November 2013). Economic losses due to disasters in OECD and BRIC countries, 1980-2012 (USD Billion)
  3. 3. • Increase in economic damages believed to outpace national DRR investments… • … though this claim cannot be supported by data as there is hardly any available, especially on an internationally comparative level • The development of standardised and comparable accounting frameworks for DRM expenditure and disaster losses can: – Support the evaluationand prioritisationof economic benefits of DRR investments – Faciliatecross-ountry comparisons – Provide systematic indicatorson global DRR objectives (Sendai Framework, SDG’s) Why we need to better account for the real costs of disasters Source: EM-DAT: The OFDA/CRED International Disaster Database,UniversitécatholiquedeLouvain,Brussels,Belgium,www.emdat.be (accessed 14 November 2013).
  4. 4. Australia Bangladesh Bolivia Chile Costa Rica Egypt Estonia Ethiopia Fiji Finland France Germany Greece Haiti Honduras India Indonesia Iran Italy Jamaica Japan KenyaMadagascar Malawi Mexico Mozambique Nepal Netherlands New Zealand Norway Pakistan Philippines Poland Portugal Slovenia Thailand Turkey United Kingdom United States Venezuela Yemen 0.5 1 1.5 2 2.5 3 3.5 2.7 3.2 3.7 4.2 4.7 AverageDeathTollperDisaster 1980-2013(log) Real GDP per Capita, Year 2010 (log) Significant decreaseinfatality ratesfromdisasterswithincreasing income 1980-2013 OECD Non-OECD • Resilience against disasters in OECD countries is high , but higher income countries still experience large economic losses Disaster losses in OECD countries Source: Source: EM-DAT: The OFDA/CRED International Disaster Database,www.emdat.be - Universitécatholiquede Louvain - Brussels - Belgium". Data for OECD and BRIC countries (1980-2012).Figures areshown true to the year of the event. OECD Stat National Accounts GDP per capita in US$,constant prices,reference year 2005
  5. 5. • Resilience against disasters in OECD countries is high , but higher income countries still experience large economic losses • Policy makers need a good understanding of past losses to face this challenge and understand better whether their DRR investments are effective Disaster losses in OECD countries Source: EM-DAT: The OFDA/CRED International Disaster Database,www.emdat.be - Université catholiquede Louvain - Brussels - Belgium;OECD (2013), “ Gross domestic product (GDP) MetaData : GDP per capita,US$, constantprices,reference year 2005”, National Accounts OECD Statistics Database, accessed on 14 November 2013, http://stats.oecd.org/
  6. 6. 1. Review national and international efforts recording ex-post disaster losses: – Analyse their comparability – Analyse strengths and weaknesses → provide basis for developing better methods, setting new international standard and providing repository for such information 2. Assess ongoing national efforts and propose draft framework for assessing public spending for DRM: – To better understand countries‘ expenditures ex-ante and ex-post of disasters – Help policy makers understand whether their spending efforts lead to future reductions in disaster losses → goal is to be sufficiently comprehensiveso as to account for most such expenditure items, while being broad enough to capture similar expenditures across countries OECD work on assessing the real costs of disasters: objectives
  7. 7. • A review of national and international approaches and datasets regarding disaster losses and damages found: – Significant progress has been made in accounting for a number of social loss indicators (such as the fatalities from a disaster)… – …but that efforts to calculate economic losses remain inconsistentand incomparable across countries (only an estimated 30-40%of disasters are reported with economic loss figures) Assessing disaster losses and damages: country evidence
  8. 8. • Losses are challenging to asses as they can be: – Short, medium, or long-term – Direct or indirect – Not only felt locally,but trigger through economic sectors and countries globally • Identifying expenditure information across different departments and sectors equally challenging: – There are no central repositories for DRM expenditure information – Multipleagencies and levels of government have DRM expenditures, each their own way of describing this in budgets and nationalaccounts – Even more complex if expenditure for DRM is “embedded” – Requires much effort and judgment to identify spending categories across sectors and levels of government Disaster losses vs. expenditures
  9. 9. Country Host institution Hazards Australia No centralized national repository,but various comprehensive databases Natural Austria No centralized national repository,but sectoral repositories for different ministries Natural Canada Public Safety Canada Natural & man-made Colombia Unidad Nacional para la Gestión del Riesgo de Desastres Natural Costa Rica Ministry of Economic Policyand National Planning (MIDEPLAN) Natural Finland No centralized national repository,but sectoral repositories for different ministries Natural & man-made France Observatoire national des risques naturels Natural Japan No centralised national repository,but sectoral repositories for different ministries Natural Mexico National Disaster Prevention Centre (CENAPRED) Natural & man-made Poland Ministry of the Interior and Administration Natural Slovak Republic Ministry of Interior and Ministry of the Environment Natural Slovenia Administration for Civil Protection and Disaster Relief,Ministry of Defence Natural Sweden Swedish Civil Contingencies Natural Switzerland No centralized national repository,but sectoral repositories for different ministries Natural Turkey Disaster and EmergencyManagementAuthority Natural & man-made 9 Assessing disaster losses and damages: country evidence Source: 2016 OECD surv ey ; Many OECD & partner countries collect disaster loss data …
  10. 10. … but data comparability is not a given 10 Assessing disaster losses and damages: country evidence Thresholds for collecting disaster impact data Distinction between publicly and privately accrued damages  Disaster loss data collection lacks common language  Aggregated disaster loss figures hide the distributional impacts of disasters, hampering effective disaster risk reduction strategies Are direct and indirect losses separately accounted? Source: 2016 OECD surv ey ; 17 country responses
  11. 11. 11 Improving disaster loss and damage assessments: measuring indirect impacts Damages to infrastructure and businesses have important cascading effects  Critical infrastructure failure = cause of triggering cascade effects of major disasters  Disaster related business interruption & supply chain disruptions have an impact far beyond directly affected areas  Most countries report only direct damages, although sometimes estimations on indirect losses are made for large-scale disasters
  12. 12. 12 Improving disaster loss and damage assessments: the value of public private partnerships Sharing data collected by non-government agencies  Data on insured losses often more comprehensive, systematically recorded  Can provide a basis for estimating overall economic losses  Public-private partnerships as an innovative way to improve information sharing between public authorities and private organisations Example: National Observatory of Natural Risks (ONRN)
  13. 13. … policy makers rely on an incomplete picture of their country’s spending on disaster risk management 13 How much is spent on disaster risk management: what do we know? Is information on expenditure collected? 41% 47% 12% Yes No N.a.  Available data focuses predominantly on specific spending categories & central government spending  Disaster risk management expenditure not always earmarked in public accounts/ budgets  Embedded disaster risk management expenditure across many government sectors Source: 2016 OECD surv ey ; 17 country responses
  14. 14. Assessing public (and private) expenditure for DRM: the need for increased comparability  Reviews that exist are result of specific project to retrieve DRM expenditure information from national accounts and sectoral budgets  Usually one-off efforts (although some include historical data)  Some focus on distinguishing expenditure along the DRM cycle (e.g. preparedness vs. response spending), others gather information on specific hazards  A harmonised approach is needed  Objective is to find a way to obtain such information from governments in a comparative way on a continuous basis
  15. 15. Disaster-related contingent liabilities in publicfinance frameworks Assessing the real cost of disasters 15 OECD work on the cost of disasters
  16. 16. Thank you stephane.jacobzone@oecd.org

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