Special lecture: Economic aspects of disasters
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Special lecture: Economic aspects of disasters Ricardo Zapata-Marti Regional Advisor Focal Point for Disaster Evaluation, ECLAC PowerPoint PPT Presentation


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Special lecture: Economic aspects of disasters Ricardo Zapata-Marti Regional Advisor Focal Point for Disaster Evaluation, ECLAC. Task Force for Emergency Preparedness Second Emergency Management CEO Seminar August 12-14 Lima, Perú . The bottom line.

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Special lecture: Economic aspects of disasters Ricardo Zapata-Marti Regional Advisor Focal Point for Disaster Evaluation, ECLAC

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Special lecture economic aspects of disasters ricardo zapata marti regional advisor focal point for disaster evaluation

Special lecture: Economic aspects of disastersRicardo Zapata-MartiRegional AdvisorFocal Point for Disaster Evaluation, ECLAC

Task Force for Emergency Preparedness

Second Emergency Management CEO SeminarAugust 12-14

Lima, Perú


The bottom line

The bottom line

  • Experience over the recent years both in Latin America and Southeast Asia supports the notion that a comprehensive socioeconomic and environmental assessment of disasters leads to a profiling of disasters that enables the formulation of reconstruction of affected infrastructures (including the protection of critical infrastructures, with particular reference to public security in sectors such as health, water and sanitation, food security, energy, etc.).

  • A comprehensive analysis of damage (physical destruction of assets in all sectors of a society, community or economy valued at replacement costs) and losses (income lost, production not realized, employment reduction, budget deficits associated wih post-event emergency and recovery expenditures and tax revenue losses incurred) allows

    • a perspective on cross-cutting themes such as gender and disasters, ethics in risk management, environmental risk and the issues of governance,

    • risk dialogue and consensus building based on assessments, and the mobilisation of resources for risk reduction


Special lecture economic aspects of disasters ricardo zapata marti regional advisor focal point for disaster evaluation

]

New

Gap

]

An additional deficit is created from the pre-existing gap between the prevalent situation vis-à-vis the development goals and the emerging recovery objectives.


Special lecture economic aspects of disasters ricardo zapata marti regional advisor focal point for disaster evaluation

  • HUMAN

  • Health

  • Education

  • Livelihoods

  • Housing and shelter

  • Cultural identity

SOCIAL

Social capital and social networks (solidarity and equity)

Family ties, gender perspective and extended family networks and links

Violence, security and rights

NATURE / ENVIRONMENT

Clean water, wage disposal and sanitation

Clean air

Biodiversity and integrity of ecosystems

Climate variability and change

  • PHYSICAL INFRASTRUCTURE

  • Quality and resilience of human built environment (settlements and rural/urban planning)

  • Transport and communications, energy and other basic lifelines

  • Productive infrastructure

  • Other built infrastructure (public services, government buildings)

  • POLITICAL

  • Governance

  • Transparency

  • Participation, inclusion and political rights

  • Access to information

  • FINANCIAL

  • Access to credit

  • Land tenure, legal rights

  • Compensatory mechanisms and funds

  • Insurance and financial protection


Risk management and adaptation

Risk management and adaptation

Damage and costs

MANAGEMENT,

TRANSFER AND

REDUCTION

MITIGATION

ADAPTATION

EVOLUTION

HAZARDS

Baseline

modified

by

variability

and

change

RISK

Multi stresses

More severely affected

by vulnerability

but aggravated

by changes

in hazards

patterns

VULNERABILITY

Diverse, local

Sector specific

RESILIENCE


An integrated framework a systemic perspective

An integrated framework, a systemic perspective

IMPACTS ON NATURAL NAD HUMAN SYSTEMS

Food and water resources

Ecosystems and biodiversity

Human settlements

Human health

CLIMATE CHANGE

Temperature rise

Sea level rise

Precipitation change

Droughts and floods

Adaptation

Unwanted evolution

Adaptation and Mitigation

EMISSIONS AND CONCENTRATIONS

Greenhouse gases

Pollution (air, water, soil, sea)

Socioeconomic

development paths

Economic growth

Technology

Population

Governance

Current paradigm


Reasons for the increase in natural catastrophes and natural catastrophe losses

Reasons for the increase in natural catastrophes and natural catastrophe losses

  • Global population growth (exponential development); in 1800, for example, there were one billion people living on the earth, today there are 6.3 billion.

  • The rising standard of living in nearly all countries of the world produces growing accumulations of wealth which are hit in the event of a catastrophe.

  • Concentration of population and values in conurbations: the emergence of numerous mega cities - even in exposed regions (e.g. Tokyo: 30 million inhabitants)

  • Settlement and industrialisation of very exposed regions, especially coasts and river basins, tourism in danger zones, e.g. Florida

  • Vulnerability of modern societies and technologies, structural engineering, devices and equipment, networks; problems involving suppliers too

  • Increasing insurance penetration throughout the world, i.e. the proportion of insured goods is mounting globally. Consequently, insured losses are escalating even faster.

  • Global changes in environmental conditions, climate change, water scarcity, loss of biodiversity


Eclac s disaster assessments over the years

ECLAC´s disaster assessments over the years


Total insurance growth penetration and density by region

Total insurance growth, penetration and density by region


Appropriation of risk needed to promote risk reduction

Appropriation of risk needed to promote risk reduction:

  • Need for institutional and regulatory changes

  • Use of market to value (“price”) risk

  • Need for social policies for compensation and promotion (provide gender, age, ethnic sensitive instruments)

  • See risk reduction as a business opportunity

    Imperfect or inactive markets require government action / intervention


Level of disaster impact

LEVEL OF DISASTER IMPACT

  • Indicates coping and adapative capacity

Excedence (residual or excedent risk)

Risk to be covered (financial gap)

“Acceptable risk”


Special lecture economic aspects of disasters ricardo zapata marti regional advisor focal point for disaster evaluation

ESTABLISHING RISK FINANCING NEEDS

CAT

bonds

Probability or return period

Risk type

50-200 years

Parametric coverage

Resource gap

Catastrophic risks

20-30 years

Contingency funds

Budget constraint

2-3 years

Reserve funds

Recurrent multi-hazard risks


Policy implications

Policy implications

  • Exposure to disaster risks is not unlike exposure to other risks (financial, commercial, social, political)

  • Exposure to risk has a positive correlation with poverty: disasters impacts are not distributed homogeneously neither in location nor in impact

  • Social impact is regressive: direct linkage between vulnerability and poverty, vulnerability and marginalization, vulnerability and gender or ethnicity


Appropriation to promote reduction of risk in the face of extreme events and climate change

Appropriation to promote reduction of risk (in the face of extreme events and climate change)

  • Need for regulatory and institutional changes

  • Markets as clearing houses to price risk (beyond insurance)

  • Need for social policies for compensation, promotion and solidarity

  • Risk management is an investment / business opportunity

  • Imperfect markets require governmental intervention


  • The role of eclac in respect of disaster assessment and risk reduction

    The role of ECLAC – in respect of disaster assessment and risk reduction

    • In response to its member countries, has over 35 years assessed disasters’ socioeconomic impact

    • Developed a methodological tool for damage and loss assessment (DALA), now recognized as the international standard for post-disaster assessment

    • Has accumulated quantitative evidence that allows for economic analysis of risk, which may be extrapolated for disaster’s future impact and could be used to quantify partially the socioeconomic implications of climate change and approach the valuation of adaptation costs

    • Has increased national capabilities and contributed to policy changes in Latin America and the Caribbean and in other regions, namely South East Asia in cooperation with ESCAP and the World Bank’s GFDRR


    Special lecture economic aspects of disasters ricardo zapata marti regional advisor focal point for disaster evaluation

    Thank you!

    http://www.eclac.org/

    http://gfdrr.org/

    http://www.proventionconsortium.org/

    http://groups.google.com/group/pdna-for-recovery

    http://www.recoveryplatform.org

    http://www.undp.org/cpr/iasc


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