Changes in fiscal risk against natural disasters due to Covid-19
In: Progress in disaster science, Band 10, S. 100176
ISSN: 2590-0617
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In: Progress in disaster science, Band 10, S. 100176
ISSN: 2590-0617
In: Disaster and Risk Research: GADRI Book Ser.
Intro -- Contents -- 1 Introduction -- References -- 2 Recognition of Earthquake-Prone Areas for Seismic Hazard Evaluation -- 2.1 Introduction -- 2.2 Methodology -- 2.3 Case Study I: Andean Mountain Belt -- 2.4 Case Study II: Significant Earthquakes in the Caucasus (M ≥ 5.0) -- 2.5 Relation to the Sendai Framework -- 2.6 Discussion -- References -- 3 Resilience to Volcano- and Landslide-Related Hazards -- 3.1 Introduction -- 3.2 Direct Disaster Due to Discharge of Magma -- 3.2.1 Ballistic Bomb -- 3.2.2 Lapilli and Ash -- 3.2.3 Pyroclastic Flow -- 3.2.4 Lava Flow -- 3.2.5 Volcanic Gases -- 3.3 Damage Caused by Accompanying Phenomena -- 3.3.1 Earthquakes -- 3.3.2 Topographic Change -- 3.3.3 Sector Collapse, Landslide -- 3.3.4 Debris Flows and Flooding -- 3.3.5 Tsunamis -- 3.3.6 Air Shock -- 3.4 Measures Against Large Eruption for Increased Resilience -- 3.4.1 Information -- 3.4.2 Evacuation -- 3.4.3 Additional Disaster Simultaneous to Volcanic Eruption -- 3.4.4 Long-Term Evacuation -- 3.4.5 Heavy Volcanic Ash Removal -- 3.5 Evacuation from a Volcano and Resilience-Case Study of the 2014 and 2015 Kuchinoerabujima Eruptions -- 3.6 Collaboration Among Organizations -- 3.7 Discussion and Conclusion -- References -- 4 Toward Natech Resilient Industries -- 4.1 Introduction -- 4.2 Resilience Engineering: An Evolving Notion for Industrial Installations -- 4.3 Resilience When Coping with Natural Hazards in Industrial Installations -- 4.4 A Framework for Natech Resilient Industries -- 4.4.1 Infrastructure -- 4.4.2 Organization and Management -- 4.4.3 Risk Communication and Risk Governance -- 4.4.4 External Environment -- 4.5 The Way Forward in Natech Resilience -- References -- 5 Resilience and Electricity -- 5.1 Introduction -- 5.1.1 Overall Architecture of Power Grid Infrastructure -- 5.1.2 Inter- and Intra-dependencies of the Power Grids.
In: Asian Development Bank Economics Working Paper Series No. 601
SSRN
Working paper
In: Environmental management: an international journal for decision makers, scientists, and environmental auditors, Band 61, Heft 1, S. 24-33
ISSN: 1432-1009
This paper addresses the question whether and how co-benefits, through disaster resilience building, can be further promoted. Co-benefits are defined as positive externalities that arise deliberately as a result of a joint strategy that pursues several objectives synergistically at the same time, such as disaster risk management and development goals, or disaster risk management and climate change adaptation. Of particular interest is the question of how the economic and broader benefits of disaster risk management can be recognized and realized by those in charge of fiscal policy decisions. The paper considers the interplay between public disaster risk management investment and fiscal policy, and provides an overview of the current debate as well as assessment methods, tools, and policy options. In fiscal budgeting, it has been standard practice to focus on direct liabilities and recurrent spending. Costs of disasters are often dealt with after the fact only, rather than being considered as contingent liabilities. As a consequence, the full costs of disasters have often not been budgeted for, and, with a price signal missing, there is lack of clear incentives for investing in disaster risk management. Overall, the paper identifies four steps and three dividends to be harnessed: (i) understanding fiscal risk; (ii) protecting public finance through risk financing instruments, the first dividend; (iii) managing disaster risk comprehensively, the second dividend; and (iv) pursuing a synergistic, co-benefits strategy of concurrently managing disaster risks and promoting development, the third dividend.
BASE
In: International journal of mass emergencies and disasters, Band 31, Heft 2, S. 106-129
ISSN: 2753-5703
This paper provides in-depth information on the multiple realities and time-dependencies during droughts over different sub-groups of an affected society. Dynamics are analyzed based on categorization of impacts into human, social, financial and natural capital effects and using the theory of conservation of resources for the behavioral explanation of selected coping strategies. A qualitative field study based on this approach was conducted in a village in southern Iran. It was found that droughts can cause waves of negative effects on various capital dimensions to farmers, especially the poor. The dimensions are very much interrelated and can multiply negative effects, decreasing resilience to drought to very low levels that can eventually lead to poverty trap-like situations. Furthermore, it was found that government aid interventions unintendedly worsened the situation of the poor. To avoid such situations it is suggested to shift from relief or ex-post interventions to a proactive risk management approach.
In: Risk analysis: an international journal, Band 42, Heft 12, S. 2639-2655
ISSN: 1539-6924
AbstractMany risks we face today will very likely not stay the same over time. For example, it is expected that climate change will alter future risks of natural disaster events considerably and, as a consequence, current risk management and governance strategies may not be effective anymore. Large ambiguities arise if future climate change impacts should be taken into account for analyzing risk management options today. Risk insurance, while albeit only one of many risk management actions possible, plays an important role in current societies for dealing with extremes. A natural starting point for our analysis is therefore the question of how ambiguity may be incorporated in a world with changing risks. To shed light on this question, we study how ambiguity can affect the uptake of insurance and risk mitigation within a risk‐layer approach where each layer is quantified using distortion risk measures that should reflect the risk aversion of a decisionmaker toward extreme losses. Importantly, we obtain a closed‐form solution for such a problem statement which allows an efficient numerical implementation. We apply this model to a case study of drought risk for Austrian farmers and address the question how ambiguity will affect the risk layers of different types of farmers and how subsidies may help to deal with current and future risks. We found that especially for small‐scale farmers the consequences of increasing risk and model ambiguity are pronounced and subsidies are especially needed in this case to cover the high‐risk layer.
In: Ecology and society: E&S ; a journal of integrative science for resilience and sustainability, Band 18, Heft 2
ISSN: 1708-3087
In: Environmental science & policy, Band 125, S. 10-20
ISSN: 1462-9011
Climate-related disaster risks pose a threat to sustainable development today and in the future. Major global agendas, such as the Sendai Framework for Disaster Risk Reduction and the Sustainable Development Goals, address ways of developing effective management strategies for tackling such risks. Risk management is increasingly focusing on low probability but high impact events, next to the more traditional attention on expected losses. We focus on urban riverine flood risk across 200 countries for today, 2030, and 2080, and develop a risk-threshold approach for identifying whether a country is exposed to risk of extreme events and, if so, when and how much. Furthermore, we apply a risk-layer approach to delineate the kinds of risk reduction or financing instruments that may be needed to manage emerging risks at the national level. Based on these country-level results, we analyze the macroeconomic consequences of setting up a global fund as one international option for coping with floods today and in the future. An additional macroeconomic analysis of different funding schemes for capitalizing the global fund provides insights into linking national risk management efforts with global efforts to manage risks. The global fund could be capitalized according to different equality principles. Our results provide an argument for an equity-based capitalization principle rather than a risk-based one, as the former makes damages at the local level a global responsibility.
BASE
In: Hochrainer-Stigler , S , Schinko , T , Hof , A & Ward , P J 2021 , ' Adaptive risk management strategies for governments under future climate and socioeconomic change : An application to riverine flood risk at the global level ' , Environmental Science and Policy , vol. 125 , pp. 10-20 . https://doi.org/10.1016/j.envsci.2021.08.010
Climate-related disaster risks pose a threat to sustainable development today and in the future. Major global agendas, such as the Sendai Framework for Disaster Risk Reduction and the Sustainable Development Goals, address ways of developing effective management strategies for tackling such risks. Risk management is increasingly focusing on low probability but high impact events, next to the more traditional attention on expected losses. We focus on urban riverine flood risk across 200 countries for today, 2030, and 2080, and develop a risk-threshold approach for identifying whether a country is exposed to risk of extreme events and, if so, when and how much. Furthermore, we apply a risk-layer approach to delineate the kinds of risk reduction or financing instruments that may be needed to manage emerging risks at the national level. Based on these country-level results, we analyze the macroeconomic consequences of setting up a global fund as one international option for coping with floods today and in the future. An additional macroeconomic analysis of different funding schemes for capitalizing the global fund provides insights into linking national risk management efforts with global efforts to manage risks. The global fund could be capitalized according to different equality principles. Our results provide an argument for an equity-based capitalization principle rather than a risk-based one, as the former makes damages at the local level a global responsibility.
BASE
In: Risk analysis: an international journal, Band 44, Heft 1, S. 229-243
ISSN: 1539-6924
AbstractCascading risks that can spread through complex systems have recently gained attention. As it is crucial for decision‐makers to put figures on such risks and their interactions, models that explicitly capture such interactions in a realistic manner are needed. Climate related hazards often cascade through different systems, from physical to economic and social systems, causing direct but also indirect risks and losses. Despite their growing importance in the light of ongoing climate change and increasing global connections, such indirect risks are not well understood. Applying two fundamentally different economic models—a computable general equilibrium model and an agent‐based model—we reveal indirect risks of flood events. The models are fed with sector‐specific capital stock damages, which constitutes a major methodological improvement. We apply these models for Austria, a highly flood exposed country with strong economic linkages. A key finding is that flood damages pose very different indirect risks to different sectors and household groups (distributional effects) in the short and long‐term. Our results imply that risk management should focus on specific societal subgroups and sectors. We provide a simple metric for indirect risk, showing how direct and indirect losses are related. This can provide new ways forward in risk management, for example, focusing on interconnectedness of sectors and agents within different risk‐layers of indirect risk. Although we offer highly relevant leverage points for indirect risk management in Austria, the methodology of analyzing indirect risks can be transferred to other regions.
In: Risk analysis: an international journal, Band 37, Heft 11, S. 2212-2228
ISSN: 1539-6924
AbstractAs recent events have shown, simultaneous crop losses in different parts of the world can cause serious risks to global food security. However, to date, little is known about the spatial dependency of lower than expected crop yields from global breadbaskets. This especially applies in the case of extreme events, i.e., where one or more breadbaskets are experiencing far below average yields. Without such information, risk management approaches cannot be applied and vulnerability to extremes may remain high or even increase in the future around the world. We tackle both issues from an empirical perspective focusing on wheat yield. Interdependencies between historically observed wheat yield deviations in five breadbaskets (United States, Argentina, India, China, and Australia) are estimated via copula approaches that can incorporate increasing tail dependencies. In doing so, we are able to attach probabilities to interregional as well as global yield losses. To address the robustness of our results, we apply three different methods for constructing multivariate copulas: vine copulas, ordered coupling using a minimax approach, and hierarchical structuring. We found interdependencies between states within breadbaskets that led us to the conclusion that risk pooling for extremes is less favorable on the regional level. However, notwithstanding evidence of global climatic teleconnections that may influence crop production, we also demonstrate empirically that wheat production losses are independent between global breadbaskets, which strengthens the case for interregional risk pooling strategies. We argue that through interregional risk pooling, postdisaster liabilities of governments and international donors could be decreased.
In: Risk analysis: an international journal, Band 35, Heft 11, S. 2102-2119
ISSN: 1539-6924
Losses due to natural hazard events can be extraordinarily high and difficult to cope with. Therefore, there is considerable interest to estimate the potential impact of current and future extreme events at all scales in as much detail as possible. As hazards typically spread over wider areas, risk assessment must take into account interrelations between regions. Neglecting such interdependencies can lead to a severe underestimation of potential losses, especially for extreme events. This underestimation of extreme risk can lead to the failure of riskmanagement strategies when they are most needed, namely, in times of unprecedented events. In this article, we suggest a methodology to incorporate such interdependencies in risk via the use of copulas. We demonstrate that by coupling losses, dependencies can be incorporated in risk analysis, avoiding the underestimation of risk. Based on maximum discharge data of river basins and stream networks, we present and discuss different ways to couple loss distributions of basins while explicitly incorporating tail dependencies. We distinguish between coupling methods that require river structure data for the analysis and those that do not. For the later approach we propose a minimax algorithm to choose coupled basin pairs so that the underestimation of risk is avoided and the use of river structure data is not needed. The proposed methodology is especially useful for large‐scale analysis and we motivate and apply our method using the case of Romania. The approach can be easily extended to other countries and natural hazards.
In: The Geneva papers on risk and insurance - issues and practice, Band 40, Heft 2, S. 295-315
ISSN: 1468-0440