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Invest now to avert soaring disaster costs, report urges governments

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Thursday, 11 November 2010 17:14 GMT

LONDON (AlertNet) - A report released by the World Bank and the United Nations on Thursday aims to persuade governments that investing in disaster prevention will be less costly in economic and human terms than cleaning up after increasingly expensive crises.

It estimates that annual losses from natural disasters around the world could triple by the end of the century, and the effects of climate change will likely raise that sum substantially. Exposure to natural hazards will increase as cities grow, but people in urban centres need not become more vulnerable if those cities are well managed, it says.

Poor communities bear the brunt of hazards such as earthquakes, hurricanes and floods, with their impact often made worse by distorted policies and a lack of public services, says the two-year study, Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention.

It outlines simple measures to prevent death and destruction, including making information about risks available to the public, spending more on maintaining infrastructure, providing land titles and removing rent controls to give landlords an incentive to maintain buildings.

The report calls for more spending on early warning systems, particularly weather forecasting, noting that few governments have taken advantage of more accurate predictions as many do not provide enough funding for their hydro-meteorological services.

And it says governments should locate new infrastructure out of harmÂ?s way, or where that is impossible, invest in low-cost facilities that serve more than one purpose - as in Bangladesh where some schools double up as cyclone shelters, or in Malaysia where roads also serve as drains.

The study finds that budget allocations for prevention are generally lower than relief spending, which rises after a disaster and stays high for several years after. But itÂ?s not just the amount that counts - how funds are used is key to effective prevention.

Bangladesh, for example, has reduced deaths from cyclones by investing modest sums in shelters, weather forecasts, early warnings and evacuation arrangements - at a lower cost than building large-scale and less effective embankments.

Â?We hope that the report will help governments better understand the added value of disaster risk reduction policies so that they can invest more in prevention and protect more people and their assets in the future,Â? Margareta Wahlstrom, special representative of the U.N. Secretary-General for disaster risk reduction, said in a statement.

Here are some facts and figures from the report:

ECONOMIC LOSSES

  • Annual global losses from natural disasters could triple to $185 billion by the end of this century, even without

    calculating the impact of climate change

  • Climate change could add $28 billion to $68 billion more in damages each year from tropical cyclones alone

  • Property damage between 1970 and 2008 totalled $2,300 billion (in 2008 dollars)

  • Earthquakes and droughts cause the most damage

  • Economic damages are disproportionately high in middle-income countries, because poor countries with few assets incur little damage, and rich countries are effective at preventing damage

HUMAN IMPACTS

  • There have been 3.3 million deaths from natural hazards in the 40 years to 2010 - roughly about 82,500 a year

  • Poor countries suffer the most, with almost 1 million people dying in African droughts alone in those four decades

  • The number of people exposed to storms and earthquakes in large cities could double to 1.5 billion by 2050

  • Children who were more exposed to earthquakes between 1980 and 2000 have lower secondary school enrolment rates

INVESTING IN DISASTER PREVENTION

  • The estimated benefit-cost ratios of household-level disaster prevention measures in four cases studied - Jakarta, St Lucia, Istanbul and IndiaÂ?s Rohini Basin - range from +1.5 to +5.7 (a ratio of over 1.0 is evidence that prevention pays)

  • About one fifth of total humanitarian aid between 2000 and 2008 was devoted to spending on disaster relief and response

  • The share of humanitarian funding going on disaster prevention is small but increasing, rising from about 0.1 percent in 2001 to 0.7 percent in 2008

Our Standards: The Thomson Reuters Trust Principles.

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