Preprints
https://doi.org/10.5194/nhess-2020-386
https://doi.org/10.5194/nhess-2020-386

  26 Nov 2020

26 Nov 2020

Review status: this preprint is currently under review for the journal NHESS.

Are interactions important in estimating flood damage to economic entities?

David Nortes Martínez1, Frédéric Grelot1, Pauline Brémond1, Stefano Farolfi2, and Juliette Rouchier3 David Nortes Martínez et al.
  • 1G-EAU, Univ Montpellier, AgroParisTech, CIRAD, IRD, INRAE, Montpellier SupAgro, Montpellier, France
  • 2CIRAD, UMR G-EAU, 34398 Montpellier, France, Univ Montpellier, 34090 Montpellier, France
  • 3LAMSADE, CNRS, Paris, France

Abstract. Estimating flood damage, although crucial for assessing flood risk and for designing mitigation policies, continues to face numerous challenges, notably the assessment of indirect damage. It is widely accepted that damage other than direct damage can account for a significant proportion of total damage. Yet due to more scarce data sources and lack of knowledge on links within and between economic activities, indirect impacts have received less attention than direct impacts. Furthermore, attempts to grasp indirect damage through economic models have not gone below regional levels. Even though local communities can be devastated by flood events without this being reflected in regional accounts, few studies have been conducted from a microeconomic perspective at local level. What is more, the standard practices applied at this level of analysis tackle entities but ignore how they may be linked.

This paper addresses these two challenges by building a novel agent-based model of a local agricultural production chain (a cooperative winemaking system), which is then used as a virtual laboratory for the ex-ante estimation of flood impacts. We show how overlooking existing interactions between economic entities in production chains can result in either overestimation (double counting) or underestimation (wrong estimation of the consequences for the activity) of flood damage. Our results also reveal that considering interactions requires thorough characterization of their spatial configuration.Based on both the application of our method and the results obtained, we propose balanced recommendations for flood damage estimation at local level.

David Nortes Martínez et al.

 
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David Nortes Martínez et al.

David Nortes Martínez et al.

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Short summary
Estimating flood damage, although crucial for assessing flood risk and for designing mitigation policies, continues to face numerous challenges, notably the assessment of indirect damage. We focus on flood damage induced by the interactions between economic activities. By modeling the production processes of a cooperative winemaking system, we show that these interactions are important, depending on their spatial and temporal characteristics.
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