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The debate on whether natural disasters cause significant macroeconomic impacts and indeed hinder development is ongoing. Most analyses along these lines have focused on impacts on gross domestic product. This paper looks beyond this standard national accounting aggregate, and examines whether traditional and alternative national savings measures combined with adjustments for the destruction of capital stocks may contribute to better explaining post-disaster changes in welfare as measured by changes in consumption expenditure. The author concludes that including disaster asset losses may help to better explain variations in post-disaster consumption, albeit almost exclusively for the group of low-income countries. The observed effect is rather small and in the range of a few percent of the explained variation. For low-income countries, capital stock and changes therein, such as forced by disaster shocks, seem to play a more important role than for higher-income economies, where human capital and technological progress become crucial. There are important data constraints and uncertainties, particularly regarding the quality of disaster loss data and the shares of capital stock losses therein. Another important challenge potentially biasing the results is the lack of data on alternative savings measures for many disaster-exposed lower-income countries and small island states.

Air pollution --- Banks and Banking Reform --- Centre for research on the epidemiology --- Climate change --- Conflict and Development --- CRED --- Damages --- Development network --- Disaster --- Disaster events --- Disaster Management --- Disaster reduction --- Disaster risk --- Disaster risk reduction --- Disasters --- Droughts --- Economic Theory and Research --- Emerging Markets --- Environment --- Finance and Financial Sector Development --- Financial Intermediation --- Hazard Risk Management --- Hurricane --- Insurance and Risk Mitigation --- Macroeconomics and Economic Growth --- Natural disaster --- Natural disasters --- Predictability --- Private Sector Development --- Relief --- Savings --- Sudden onset disasters --- Urban Development

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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.

Co-Benefits --- Disaster Risk Management --- Fiscal Policy --- Risk Financing

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Efficient and equitable policies for managing disaster risks and adapting to global environmental change are critically dependent on development of robust options supported by integrated modeling. The book is based on research and state-of-the art models developed at IIASA (International Institute for Applied Systems Analysis) and within its cooperation network. It addresses the methodological complexities of assessing disaster risks, which call for stochastic simulation, optimization methods and economic modeling. Furthermore, it describes policy frameworks for integrated disaster risk management, including stakeholder participation facilitated by user-interactive decision-support tools. Applications and results are presented for a number of case studies at different problem scales and in different socio-economic contexts, and their implications for loss sharing policies and economic development are discussed. Among others, the book presents studies for insurance policies for earthquakes in the Tuscany region in Italy and flood risk in the Tisza river basin in Hungary. Further, it investigates the economic impact of natural disasters on development and possible financial coping strategies; and applications are shown for selected South Asian countries. The book is addressed both to researchers and to organizations involved with catastrophe risk management and risk mitigation policies.

Economics --- Methodology of economics --- Economics --- Operational research. Game theory --- Probability theory --- Geophysics --- Meteorology. Climatology --- Geology. Earth sciences --- Applied physical engineering --- Business economics --- Production management --- Geography --- waarschijnlijkheidstheorie --- stochastische analyse --- economie --- economie --- duurzame ontwikkeling --- geografie --- kwaliteitscontrole --- geologie --- ingenieurswetenschappen --- kansrekening --- natuurrampen

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National governments are key actors in managing the impacts of extreme weather events, yet many highly exposed developing countries - faced with exhausted tax bases, high levels of indebtedness, and limited donor assistance - have been unable to raise sufficient and timely capital to replace or repair damaged infrastructure and restore livelihoods after major disasters. Such financial vulnerability hampers development and exacerbates poverty. Based on the record of the past 30 years, this paper finds many developing countries, in particular small island states, to be highly financially vulnerable, and experiencing a resource gap (net disaster losses exceed all available financing sources) for events that occur with a probability of 2 percent or higher. This has three main implications. First, efforts to reduce risk need to be ramped-up to lessen the serious human and financial burdens. Second, contrary to the well-known Arrow-Lind theorem, there is a case for country risk aversion implying that disaster risks faced by some governments cannot be absorbed without major difficulty. Risk aversion entails the ex ante financing of losses and relief expenditure through calamity funds, regional insurance pools, or contingent credit arrangements. Third, financially vulnerable (and generally poor) countries are unlikely to be able to implement pre-disaster risk financing instruments themselves, and thus require technical and financial assistance from the donor community. The cost estimates of financial vulnerability - based on today's climate - inform the design of "climate insurance funds" to absorb high levels of sovereign risk and are found to be in the lower billions of dollars annually, which represents a baseline for the incremental costs arising from future climate change.

Banks & Banking Reform --- Climate change --- Climate Change Economics --- Damages --- Debt Markets --- Disaster --- Disaster aid --- Disaster risk --- Disaster risks --- Disasters --- Drought --- Extreme event --- Extreme events --- Extreme weather --- Extreme weather events --- Famine --- Farmers --- Finance and Financial Sector Development --- Flooding --- Hazard Risk Management --- Insurance --- Insurance & Risk Mitigation --- Insurance contract --- Macroeconomics and Economic Growth --- Natural disaster --- Natural hazards --- Relief --- Urban Development

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This book provides an authoritative insight on the Loss and Damage discourse by highlighting state-of-the-art research and policy linked to this discourse and articulating its multiple concepts, principles and methods. Written by leading researchers and practitioners, it identifies practical and evidence-based policy options to inform the discourse and climate negotiations. With climate-related risks on the rise and impacts being felt around the globe has come the recognition that climate mitigation and adaptation may not be enough to manage the effects from anthropogenic climate change. This recognition led to the creation of the Warsaw International Mechanism on Loss and Damage in 2013, a climate policy mechanism dedicated to dealing with climate-related effects in highly vulnerable countries that face severe constraints and limits to adaptation. Endorsed in 2015 by the Paris Agreement and effectively considered a third pillar of international climate policy, debate and research on Loss and Damage continues to gain enormous traction. Yet, concepts, methods and tools as well as directions for policy and implementation have remained contested and vague. Suitable for researchers, policy-advisors, practitioners and the interested public, the book furthermore: • discusses the political, legal, economic and institutional dimensions of the issue • highlights normative questions central to the discourse • provides a focus on climate risks and climate risk management • presents salient case studies from around the world.

Environmental law --- Meteorology. Climatology --- Production management --- risk management --- milieurecht --- milieupolitiek --- klimaatverandering --- broeikaseffect