Review article: assessing the costs of natural hazards - state of the art and knowledge gaps

Efficiently reducing natural hazard risks requires a thorough understanding of the costs of natural hazards. Current methods to assess these costs employ a variety of terminologies and approaches for different types of natural hazards and different impacted sectors. This may impede efforts to ascertain comprehensive and comparable cost figures. In order to strengthen the role of cost assessments in the development of integrated natural hazard management, a review of existing cost assessment approaches was undertaken. This review considers droughts, floods, coastal and Alpine hazards, and examines different cost types, namely direct tangible damages, losses due to business interruption, indirect damages, intangible effects, and the costs of risk mitigation. This paper provides an overview of the state-of-the-art cost assessment approaches and discusses key knowledge gaps. It shows that the application of cost assessments in practice is often incomplete and biased, as direct costs receive a relatively large amount of attention, while intangible and indirect effects are rarely considered. Furthermore, all parts of cost assessment entail considerable uncertainties due to insufficient or highly aggregated data sources, along with a lack of knowledge about the processes leading to damage and thus the appropriate models required. Recommendations are provided on how to reduce or handle these uncertainties by improving data sources and cost assessment methods. Further recommendations address how risk dynamics due to climate and socio-economic change can be better considered, how costs are distributed and risks transferred, and in what ways cost assessment can function as part of decision support

Inter-basin transfers as a supply option: the end of an era?

International audienceThis chapter discusses the evolving role of interbasin transfers (IBT) in urban water management. After providing an historical overview of IBT development, the chapter describes how IBTs are challenged by a change in the technological and socio-economic context. The emergence of alternative technologies, such as desalination, wastewater reclamation and reuse, or managed artificial groundwater recharge is reducing the attractiveness of IBTs. Water utilities are also becoming increasingly aware that water conservation programs can save volumes of water at a much cheaper cost than IBT. Various international examples are used to show that IBTs trigger increasing concerns from communities involved or affected, in particular related to the environmental impact on donor and receiving river basins, the economic impact on donor regions, the impact on local cultures and livelihoods, how costs and benefits are distributed (social justice), and issues related to public participation. The chapter concludes by looking ahead at new and more efficient uses of existing IBTs. As conjunctive use management approaches gain support, IBTs will be operated in conjunction with aquifer storage and recovery schemes. They will probably also support the development of emerging water markets, in particular during drought years

Climate change, adaptation and economic growth

This paper explores the links between economic growth and the impacts of climate change. Inclusive, pro-poor growth is central to the development of low-income countries. There is also a broad consensus that growth and development are important to reduce vulnerability to climate change. Growth does not automatically reduce vulnerability, only the right kind of growth does. The paper aims to develop a better understanding of what the “right kind of growth” may be. We find that many growth policies, such as investment in skills and access to finance, indeed reduce vulnerability to climate change. However, climate change calls for some adjustments in growth policy. In particular, investment in infrastructure and efforts to stimulate entrepreneurship and competitive markets must take more of a risk management perspective and recognise climate risks