The Total Cost of Water-Related Disasters

Abstract

Water-related disasters have caused increasing losses in recent years. Efficient risk reduction policies require accurate assessment approaches, with careful consideration of costs, beyond material damages, which are commonly used in practice. Faced with possible risk reduction scenarios, limited financial resources require an improvement in the quality of cost estimation, thereby contributing to an efficient allocation of resources. This paper reviews the concept of total cost in the context of water-related disasters, elaborating on the typical direct/indirect and tangible/intangible cost categories. These categories are defined and explained, supported by a comprehensive assessment of economic valuation methods. Based on this information, practice relevant suggestions are made concerning the most appropriate methods for different cases in terms of scale, availability of data and of technical resources. JEL classification: Q54

Application of project management to disaster resilience

“…To capture the resilience capability of a community group, we need to develop an integrative measure of the level of recovery, speed of recovery, and loss minimization. This measure needs to be able to capture direct and indirect costs, business interruptions, intangible costs, and even risk mitigation costs (Balbi et al 2015) in addition to taking time into consideration (Vugrin et al 2011). Resilient communities have the ability to cushion the costs associated with the disaster, thus decreasing the total magnitude of the losses (Vugrin et al 2011) and enabling individuals and groups to conserve and reuse resources (Rose and Liao 2005).…”