EXPERIENCES IN ECONOMIC ASSESSSMET OF DISASTERS IMPACT AS A TOOL FOR RISK REDUCTION AND MAINSTREAMING DISASTER REDUCTION IN DEVELOPMENT POLICY Ricardo Zapata-Marti, Focal Point for Disaster Evaluation
ECLAC s experience over 30 years Demand-driven driven technical cooperation with member countries: from 1973 in Central America (Managua earthquake in 1972 the first) More than 30 mission-assessments since including earthquakes in Central America and Mexico M (1984-85), 85), volcanic eruptions (Cerro Negro in Nicaragua, Colima volcano in Mexico), tsunami (Nicaragua), hurricanes in Caribbean an Central America such as Mitch (1998), ENSO and climate variability in 70s, 80s and 90s in Central and South America, drought in Central America (2001), 2004-2007 hurricanes in the Caribbean and Central America, 2005 Indian n Ocean disaster (Indonesia, India, etc.), 2007-2008 2008 applications in joint assessments with WB-GFRR Development of a standardized, internationally recognized DAMAGE AND LOSSES ASSESSMENT METHODOLOGY (DALA), which is Recognized by donors as credible and reliable, Increasingly used in coordination with UN system, Increasingly validated in academia Partially used as a proxy to determine the potential impact of climate c change (as a contribution to the 4AR of IPCC Development of partnerships and cooperation with IFIs at the sub regional, regional and world level --IADB, CAF, CABEI, WB (IBRD GFDRR) and the UN system s s agencies and UNDP Institution and capacity building at national, sub regional and regional level, by training in DALA and supporting national and local levels to adapt/adopt DALA (Guajarat( in India with ADPC, Mexico with CENAPRED, Central America with CEPREDENAC, Caribbean with CDERA) CDERA PRESENTATION 2
Ongoing activities Training and dissemination of UN-ECLAC DALA: in the region with IDB, UNDP and WB-GFDRR (over 10 countries in 2007-2008) 2008) Use of DALA Joint assessment missions (2007-2008) 2008) with IDB, UN, ASEAN and UN-GFDRR (Bangladesh, Bolivia, Dominican Republic, Haiti, Madagascar, Mexico, Myanmar, Nicaragua) Development of PDNA framework for integrated UN system (for UNDP-BCPR and integration to IASC) Research on disaster risk indicators (with IDB, through national case studies, Chile, Colombia, Jamaicda,, Mexico and Nicaragua) Advocacy of risk reduction through standardized (DALA based) disaster assessments with OFDA-CRED, ISDR Global platform, IFRC Provention Consortium, regional and subregional bodies such as CEPREDENAC, CDERA, APEC, CAPRADE CDERA PRESENTATION 3
Post disaster situation Recovery Objectives International standards or Development goals (such as MDGs) New Gap An additional deficit is created from the pre-existing existing gap between the prevalent situation vis-à-vis the development goals and the emerging recovery objectives. CDERA PRESENTATION 4
The systemic development framework to assess disaster s impact SOCIAL Social capital and social networks (solidarity and equity) Family ties, gender perspective and extended family networks and links Violence, security and rights 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) 100 10 1 HUMAN Health Education Livelihoods Housing and shelter Cultural identity NATURE / ENVIRONMENT Clean water, wage disposal and sanitation Clean air Biodiversity and integrity of ecosystems Climate variability and change POLITICAL Governance Transparency FINANCIAL Participation, inclusion and Access to credit political rights Land tenure, legal rights Access to information Compensatory mechanisms and funds Insurance and financial protection Past In the medium term AS ALTERED BY DISASTERS Current In the long term CDERA PRESENTATION 5
Probability of extreme events: Atlantic Tropical Cyclone Frequency 2006-2010:An 2010:An Experimental Forecast Based on Multi-decadal Analogues, JORGE SÁNCHEZS NCHEZ SESMA,Coordinación de Hidrología, Instituto Mexicano de Tecnología del Agua, Morelos,, México. M ATC frequency [1/yr] 30 25 20 15 10 5 0 1850 1870 1890 1910 1930 1950 1970 1990 2010 Time [yr] ATC Frequencies [1/yr] 22 20 18 16 14 12 10 8 6 1973 1978 1983 1988 1993 1998 2003 2008 Year AMO index [ C] 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0-0.1-0.2-0.3 1970.00 1975.00 1980.00 1985.00 1990.00 1995.00 2000.00 2005.00 2010.00 Time [yr] Registered Model RegisteredCDC Lag [yr] 80 70 60 50 40 30 20 10 0 1970 1975 1980 1985 1990 1995 2000 2005 Forecast time [yr] CDERA PRESENTATION 6
3000 2500 2000 1500 1000 500 Historical distribution of disasters, by origin 0 19 0 0-09 19 10-19 1920-29 1930-39 1940-49 19 50-59 1960-69 19 70-79 19 8 0-89 1990-99 2000-2005 Number of events recorded Hydrometeorological Geological Biological CDERA PRESENTATION 7
TOTAL AMOUNT OF ECONOMIC DAMAGE BY REGIONS Europe 13.3% Oceania 1.3% Africa 0.8% Americas 36.1% Asia 48.4% 600.00 500.00 400.00 300.00 200.00 100.00 0.00 Africa Americas Asia Europe Oceania Hydrometeorological Geological Biological CDERA PRESENTATION 8
ECLAC s disaster assessments over the years Period 1972-1980 1980 1980-1990 1990 1990-1999 1999 2000-2010 2010 (estimated) 1972-2005 2005 Yearly average Of which of meteorological or climatic nature AFFECTED POULATION Deaths 38,042 34,202 32,648 18,032 122,924 3,725 50,067 Primary affected population 4,229,260 5,442,500 2,518,508 35,478,470 47,668,738 1,444,507 22,929,198 Source: ECLAC led assessments since 1973 TOTAL DAMAGE AND LOSSES (millions of US dollars, at 2004 value) 78,085 101,251 31,367 50,050 260,753 7,902 127,923 CDERA PRESENTATION 9
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 y 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 ent 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 CDERA PRESENTATION 10
The road ahead Financial protection instruments (both to extreme events and climate change) Insufficient use of insurance and other risk transfer mechanisms Inappropriate pricing of risk in the market: A vicious circle in which public goods (the state s responsibility to protect lives and property) become public calamities A virtuous circle to be promoted: transparent risk appropriation of risk, pricing and valuation leading to risk reduction investment CDERA PRESENTATION 11
LEVEL OF DISASTER IMPACT Indicates coping and adaptive capacity 100000000000 10000000000 1000000000 100000000 10000000 1000000 100000 10000 1000 100 10 1 100-500 Excedence (residual or excedent risk) Risk to be covered (finanical gap) Acceptable risk 50-100 25-500 10-25 5-10 1-5 Amount of macro impact Probability Potencial (Amount of macro impact) CDERA PRESENTATION 12
ESTABLISHING RISK FINANCING NEEDS (based on World Bank work) Probability or return period CAT bonds Risk type 50-200 years Resource gap Parametric coverage Catastrophic risks Budget constraint 20-30 years 2-33 years Contingency funds Reserve funds Recurrent multi- hazard risks CDERA PRESENTATION 13
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, alongside of promoting competitiveness through trade, equity and poverty reduction and macroeconomic stability CDERA PRESENTATION 14
Thank you! http://eclac.cl/mexico http://gfdrr.org/ http://groups.google.com/group/pdna-for for-recoveryrecovery http://www.recoveryplatform.org http://www.undp.org/cpr/iasc CDERA PRESENTATION 15