Assessing the Real Cost of Disasters
The Need for Better Evidence
Disasters disrupt socio-economic activities and cause substantial damage. Yet, their full economic impact remains largely unknown, especially the cost of smaller disasters and indirect impacts such as those due to business disruptions. Similarly, little information exists on the total amount of public resources that countries devote to disaster risk management. Reliable, comprehensive and comparable data on the economic impact of disasters as well as on public spending on disaster management and risk prevention are essential for developing effective disaster risk management policies. This report provides an overview of countries' efforts to improve the quality and quantity of information on the costs of disasters.
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Improving the Evidence Base on the Costs of Disasters
OECD countries are exposed to a range of hazards that cause disruptions to socio-economic activities and lives. Despite this, decision-makers currently rely on an incomplete record of the damages and losses caused by past disaster events. Often, the picture of evidence on disaster risk management expenditure is no more complete. This chapter illustrates that there is value in knowing the real cost of disasters. On a macro level, data on the socio-economic impact of disasters as well as the public expenditures invested to reducing them enables an evaluation of countries’ strategies and disaster risk management policies overall. On a project level, such data is useful to improve the effectiveness of resource allocation decisions. Overall, this information is valuable to make the case for investments in disaster risk management by all of society’s actors.
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