Articles | Volume 13, issue 5
Nat. Hazards Earth Syst. Sci., 13, 1351–1373, 2013

Special issue: Costs of Natural Hazards

Nat. Hazards Earth Syst. Sci., 13, 1351–1373, 2013
Review article
29 May 2013
Review article | 29 May 2013

Review article: Assessing the costs of natural hazards – state of the art and knowledge gaps

V. Meyer1, N. Becker1, V. Markantonis1, R. Schwarze1, J. C. J. M. van den Bergh2,3,4,5, L. M. Bouwer5,*, P. Bubeck6, P. Ciavola7, E. Genovese8, C. Green10, S. Hallegatte8,9, H. Kreibich6, Q. Lequeux7, I. Logar3,**, E. Papyrakis5,11, C. Pfurtscheller12,***, J. Poussin5, V. Przyluski8, A. H. Thieken12,****, and C. Viavattene10 V. Meyer et al.
  • 1Helmholtz Centre for Environmental Research – UFZ, Leipzig, Germany
  • 2ICREA, Barcelona, Spain; Department of Economics and Economic History, Universitat Autònoma de Barcelona (UAB), Barcelona, Spain
  • 3Institute of Environmental Science and Technology, Universitat Autònoma de Barcelona (UAB), Barcelona, Spain
  • 4Faculty of Economics and Business Administration, VU University, Amsterdam, the Netherlands
  • 5Institute for Environmental Studies, VU University, Amsterdam, the Netherlands
  • 6Helmholtz Centre Potsdam, German Research Centre for Geosciences (GFZ), Potsdam, Germany
  • 7Department of Physics and Earth Sciences, University of Ferrara (UniFe), Ferrara, Italy
  • 8Société de Mathématique Appliquée aux Sciences Sociales (SMASH-CIRED), Paris, France
  • 9Ecole Nationale de la Météorologie, Toulouse, France
  • 10Middlesex University, Flood Hazard Research Centre (MU), Middlesex, UK
  • 11School of International Development, University of East Anglia, Norwich, NR4 7TJ, UK
  • 12University of Innsbruck (UIBK), Institute of Geography, Innsbruck, Austria
  • *now at: Deltares, Delft, the Netherlands
  • **now at: Swiss Federal Institute of Aquatic Science and Technology (EAWAG), Dübendorf, Switzerland
  • ***now at: Austrian Academy of Sciences, Institute of Mountain Research: Man and Environment, Innsbruck, Austria
  • ****now at: University of Potsdam, Institute of Earth and Environmental Sciences, Potsdam, Germany

Abstract. Efficiently reducing natural hazard risks requires a thorough understanding of the costs of natural hazards. Current methods to assess these costs employ a variety of terminologies and approaches for different types of natural hazards and different impacted sectors. This may impede efforts to ascertain comprehensive and comparable cost figures. In order to strengthen the role of cost assessments in the development of integrated natural hazard management, a review of existing cost assessment approaches was undertaken. This review considers droughts, floods, coastal and Alpine hazards, and examines different cost types, namely direct tangible damages, losses due to business interruption, indirect damages, intangible effects, and the costs of risk mitigation. This paper provides an overview of the state-of-the-art cost assessment approaches and discusses key knowledge gaps. It shows that the application of cost assessments in practice is often incomplete and biased, as direct costs receive a relatively large amount of attention, while intangible and indirect effects are rarely considered. Furthermore, all parts of cost assessment entail considerable uncertainties due to insufficient or highly aggregated data sources, along with a lack of knowledge about the processes leading to damage and thus the appropriate models required. Recommendations are provided on how to reduce or handle these uncertainties by improving data sources and cost assessment methods. Further recommendations address how risk dynamics due to climate and socio-economic change can be better considered, how costs are distributed and risks transferred, and in what ways cost assessment can function as part of decision support.

Special issue