The document presents a vision for a more integrated and comprehensive approach to assessing costs related to natural hazard risk management. It proposes assessing both tangible and intangible costs across all phases of the risk management cycle, including damage costs, business interruption costs, risk mitigation costs, and more. This continuous cost assessment cycle would provide a better understanding of total costs to support more efficient risk management decisions under increasing natural hazard risks and uncertainty from climate change.

1. A vision for an integrated cost
assessment in natural hazard risk
management
Heidi Kreibich
Section Hydrology, German Research Centre for Geosciences - GFZ

2. Risk management for efficient adaptation
 Damage and risk was increasing and is expected to increase further
 Detection and attribution of changes as well as projections for the future
are difficult
 Risk management in a changing system under high uncertainty

3. Vision: Integrated, continuous, comprehensive costing
Kreibich, van den Bergh, Bouwer, Bubeck, Ciavola, Green, Hallegatte, Logar,
Meyer, Schwarze, Thieken (2014): Costing natural hazards. - Nature Climate
Change, 4, p. 303-306.

4. Tangible costs Intangible costs
Damage costs including
recovery costs
Direct costs
• Physical damage to
assets e.g. buildings
• Loss of life
Business
interruption
costs
• Production interruption
• Ecosystem services
interrupted
Indirect costs
• Induced production losses
of suppliers
• Increased vulnerability of
survivors
Risk mitigation costs
Direct costs
• Design and set-up of
mitigation measures
• Environmental damage, e.g.
due to development of
mitigative infrastructure
Indirect costs
• Induced costs in other
sectors
Costs arise in all phases of the risk management cycle
and need to be comprehensively assessed
Kreibich, van den Bergh, Bouwer, Bubeck, Ciavola, Green, Hallegatte, Logar,
Meyer, Schwarze, Thieken (2014): Costing natural hazards. - Nature Climate
Change, 4, p. 303-306.

5. Conclusions
 A better understanding of the total costs, is needed to accomplish
efficient risk management of natural hazards.
 The cost assessment cycle involves the continuous monitoring of costs,
thus enabling the early detection of inefficient risk mitigation strategies.
 A close link between the cost assessment cycle and the risk
management cycle guarantees integrated cost assessment and supports
improved decision making for more efficient risk management.