The document discusses the importance of boosting resilience through innovative risk governance due to significant economic losses from disasters, highlighting gaps in infrastructure and regulatory reforms. It emphasizes the necessity for improved disaster risk management frameworks and the need to address governance shortcomings to enhance resilience measures. The OECD plans a comparative study to assess countries' progress in disaster risk reduction strategies and inform institutional improvements.

1. BOOSTING RESILIENCE THROUGH
INNOVATIVE RISK GOVERNANCE
OECD High Level Risk Forum
Public Governance and Territorial Development Directorate
Catherine Gamper, IDRC Davos, August 27 2014

2. Resilience is…
… the capacity of a system to absorb disturbance and reorganise
while undergoing change so as to still retain essentially the same
function, structure, identity, and feedbacks.
Source: OECD (2014). Boosting Resilience through Innovative Risk Governance. OECD Publishing, Paris.

3. Why boosting resilience matters
• Past decade: USD 1.5 trillion in economic damages from man-made
disasters (industrial accidents, terrorist attacks) and natural
disasters (primarily storms and floods)
350
300
250
200
150
100
50
0
Economic losses due to disasters in OECD
and BRIC countries, 1980-2012 (USD Billion)
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Annual economic losses in USD billion
Source: EM-DAT: The OFDA/CRED International Disaster Database, Université catholique de Louvain, Brussels, Belgium, www.emdat.be
(accessed 14 November 2013).

4. Why boosting resilience matters
• Driven by significant increase in intensity and complexity:
o Increased concentration of populations , especially elderly, more vulnerable
groups, and economic assets in risk prone areas
o Accelerated urbanisation
o Increased global economic integration, facilitated by transport mobility and
communication
o Deteriorating environmental conditions coupled with climatic changes
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Australia
Austria
Belgium
Canada
Czech Republic
Denmark
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Portugal
Slovak Republic
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
OECD Total
% of population aged 65 and over
2009 2050
Source: OECD (2009), OECD Factbook 2009: Economic, Environmental and Social Statistics.
80%
70%
60%
50%
40%
30%
20%
10%
0%
Luxembourg
Korea
Czech Rep.
Slovak Rep.
Ireland
Belgium
Netherlands
Hungary
Finland
Austria
Sweden
Estonia
Norway
Slovenia
Switzerland
Chile
Portugal
Denmark
Israel
Germany
Poland
Japan
France
Australia
Greece
United Kingdom
Mexico
Spain
Italy
United States
Turkey
Canada
New Zealand
Global value chain participation index
Source: Mirdoudot, S. and K. De Backer (2012), “Mapping Global Value Chains”.

5. Why boosting resilience matters
• Some disasters caused economic losses in excess of 20% of GDP
(Chile, NZ), with local economies especially affected
15%
10%
5%
0%
-5%
-10%
• Shocks propagate across economic sectors and geographic
boundaries through interconnected economies
• Considerable uncertainty challenges good policy making for
resilience
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Annual Regional GDP growth
to previous year
The impact of disasters on local economies
Abruzzo Queensland New York
9/11 Attacks
L‘Aquila Earthquake
6/4/2009
Queensland
Flooding
2010/11
Source: OECD (2012), Large regions, TL2: Demographic statistics, OECD Regional Statistics (database), accessed on
14 November 2013, doi: 10.1787/data-00520-en

6. OECD countries have made substantial
progress in achieving resilience…
• Improved disaster risk management framework
conditions:
o General level of social and economic welfare
o Facilitating institutional environment
• Concrete and successful disaster risk management
measures:
o Increased understanding of risks
o Central government leadership
o Mainstreaming of disaster risk management across public
policy areas
o High level of risk awareness and information sharing

7. High income countries are still exposed to
considerable economic damages
Source: EM-DAT: The OFDA/CRED International Disaster Database, www.emdat.be - Université catholique de Louvain - Brussels - Belgium; OECD (2013),
“Gross domestic product (GDP) MetaData : GDP per capita, US$, constant prices, reference year 2005”, National Accounts OECD Statistics Database,
accessed on 14 November 2013, http://stats.oecd.org/

8. Significant gaps are made apparent
during disasters…
Storm Surge, Norfolk, United Kingdom, December 2013

9. Revealing resilience shortcomings …
… In protective infrastructure and its maintenance
(e.g. dam breaks during floods in 2002/13 in
Europe; great infrastructure destruction during
Great East Japan Earthquake in 2011)
… Lagging regulatory reforms
(e.g. building codes that are not adapted to new housing design -
in Italy L’Aquila 2009; rigidity in air safety regulations during
volcanic eruption in Iceland 2010)
… Lagging enforcement of regulations
(e.g. significant increase in population around the Vesuvius despite
known hazard exposure; informal construction of houses in Mexico
in risk-prone areas)

10. Also among non-governmental
stakeholders
… Private sector–gaps in business continuity planning
(e.g. large bankruptcy rate during Great East
Japan Earthquake 2011; UK floods 2007 –
average of 9 days of interruption);
… Individual households do not invest sufficiently in self-protection
(e.g. 84% of population affected by UK floods 2007 believe nothing
they can do to protect better; only a fifth of population of Istanbul
took protective action after the Marmara EQ in 1999; in Germany
only 25% of HH insured against flood risk)
… Low levels of international collaboration
(e.g. lack of incentives to share information; lack of appreciation of
benefits of joint investments; diverging capacity levels across borders)

11. … undermining trust
in public institutions
Trust in government put to particular
test during disasters:
o previous neglects in resilience measures
have had disproportionately negative
effects on trust in government
o Governments and companies have to
react with drastic
measures to restore trust
(e.g. resignation of government officials in
charge)
o and implement expensive
spending measures, clean-up costs
and compensation funds
(e.g. Deepwater Horizon)
Source: BP (2014), "BP ADS Share Price History", British Petroleum, http://ir2.flife.de/data/bp/hpl_us.php
(accessed 8 April 2014); McDermott, M. (15 November 2012), “BP will pay biggest criminal fine in US history
for Gulf oil spill”, Treehugger, www.treehugger.com/energy-disasters/bp-will-pay-biggest-criminal-fine-u-s-
history-gulf-oil-spill.html.

12. Why do resilience gaps persist?
• Constrained resources
• Lack of awareness (households, private sector
etc.)
• Limited knowledge of resilience measures
among stakeholders
• BUT shortcomings in risk governance may be
an important and often overlooked aspect

13. Why do resilience gaps persist?
→ Risk governance mechanisms determine whether an
actor participates in putting resilience measures in place;
for example:
o Households may decide not to self-protect in
expectation of governments doing so for them
o Local governments may not build protective measures
as result of other jurisdictions benefiting but not
contributing to the costs
o Central government actors reluctant to invest in
resilience – ex-ante investments not visible and levels
of rewards low
o Countries may not collaborate because of
disincentives for data-sharing
o …

14. How to address governance gaps?
• How to identify governance shortcomings and
addressing them?
→ Employ diagnostic framework that can
identify institutional barriers and help realign
incentives

16. How does this play out in practice ?
Towards an OECD comparative study
• Assess progress, achievements and existing challenges
across OECD countries in designing and implementing
DRR strategies to close resilience gaps
• Concretely inform the improvement of institutional
frameworks by analysing different country contexts
• Study will be conducted by looking at:
– Concrete resilience case studies adopting a bottom up
approach
– Core institutional frameworks
– Prioritisation and financing of disaster risk prevention
– The role of non-governmental actors
– The role of international collaboration

17. For further information please contact:
catherine.gamper@oecd.org