W ASHINGTON, D.C., November 11, 2010 –A new joint report from the World Bank and the United Nations says that 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 then add $28-$68 billion more in damages each year from tropical cyclones alone. The report also says that the number of people exposed to storms and earthquakes in large cities could double to 1.5 billion by 2050.
The 250-page report, Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention, was released in Washington. Targeted directly at the world's finance ministers, it stresses that “prevention pays but you do not always have to pay more for prevention”.
The report outlines a number of measures to prevent death and destruction from natural hazards such as earthquakes, hurricanes, and flooding. These measures are almost stunning in their simplicity and common-sense approach. For example, governments can make information about hazards and risks easily accessible. Providing land titles reduces the possibility of eviction or demolition, and encourages individuals to invest in safer structures. Removing rent controls restores incentives for landlords to maintain buildings. And, reorienting existing public spending to prioritize day-to-day operations and maintenance – mending pot-holes, painting steel bridges, keeping drains clear –would increase prevention. Undertaking these measures does not necessarily require governments to spend more, says the report, but to spend better.
"This report presents necessary evidence and a compelling case for our client countries to reduce their vulnerability to natural hazards so that they can develop in sustainable and cost-effective way," said World Bank Group President Robert B. Zoellick. "We, and our partners in the Global Facility for Disaster Reduction and Recovery (GFDRR), stand ready to scale up efforts to assist disaster-prone developing countries in addressing this threat to the safety and livelihoods of poor people.”
Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention emphasizes that it is the vulnerable, not the rich, who face the brunt of natural hazards compounded by often distorted policies. There were 3.3 million deaths from natural hazards in the 40 years to 2010. Almost one million people died in Africa’s droughts alone.
"This timely report arrives when so many disasters have already happened this year and affected millions of people in Haiti, Pakistan, China, Vietnam, Indonesia and elsewhere," said Margareta Wahlstrom, the Special Representative of the United Nations Secretary-General for Disaster Risk Reduction. "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."
As well, the report says that property damage between 1970 and 2008 totaled $2,300 billion (in 2008 US$), with earthquakes and droughts causing most of the losses. Damages are disproportionally high in middle-income countries.Poor and middle-income countries suffer the most but the report emphasizes that geography is not destiny.
One area where the report calls for more spending is on early warning systems, particularly weather forecasting. There have been many advances in predicting weather, with three-day accuracy now over 95 per cent and more than half the seven-day forecasts correct. Few countries, however, have taken full advantage of this progress since many governments do not fund their hydro-meteorological services adequately.
"Warning people of impending hazards saves lives and livelihoods," said Michel Jarraud, World Meteorological Organization Secretary-General. "The report clearly shows that more can be done to take full advantage of many technological advances in predicting weather through investing in hydro-meteorological services. The most vulnerable countries in particular require strengthening of their observing networks and infrastructure to establish effective early warning systems to warn their population against disasters."
“It is the moral and ethical duty of all humanitarian and development workers to ensure that every dollar is well spent – even more so in this age of frugal necessity,” said Bekele Geleta, Secretary-General of the International Federation of the Red Cross and Red Crescent Societies.
The report calls for governments to ensure that new infrastructure does not introduce new risk. Locating infrastructure out of harm’s way is one way of doing so. Where that may not be possible, the report proposes low-cost, multipurpose infrastructure, such as schools that double up as cyclone shelters – as in Bangladesh, or roadways which double up as drains – as in Malaysia.
Looking ahead, the report notes that growing cities and a changing climate will shape the disaster prevention landscape. “The report is not sanguine about the future but is not alarmist either,” said Apurva Sanghi, the report’s Task Team Leader. “Growing cities will expose more people and property to hazards, but growing cities also suggest growing incomes, which means people are better able to adapt. A rise in vulnerability is not inevitable, if cities are well run. We will have disasters even without climate change. Doing a better job in preventing them today will help us deal with tomorrow’s challenges.”
The report is the culmination of a two-year effort by 70 experts from various disciplines and institutions, primarily economists but also climate scientists, geographers, political scientists, and psychologists. It is funded by the GFDRR (www.gfdrr.org), a partnership of 35 countries, as well as the ACP Secretariat, the European Commission, the United Nations International Strategy for Disaster Reduction, and the World Bank.
Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention has attracted the critical attention of prominent reviewers, including Nobel Prize winners in economics. Among them is Nobel Laureate Kenneth Arrow, who noted that “… it provides a deep understanding of the relative roles of the market, government intervention, and social institutions in determining and improving both the prevention and the response to hazardous occurrences.” Nobel Laureate Amartya Sen remarked that “this is an excellent piece of work with really practical lessons that will influence the way disasters are handled - and indeed prevented. It could inform and illuminate policy analyses in a way that would make a gigantic difference to the lives of vulnerable people.”
The report also emphasizes the often overlooked role of markets and private exchanges, such as remittances, in both prevention and recovery. “I particularly like the chapters on how quickly do countries and regions recover from disasters - a topic discussed at least ever since John Stuart Mill - and how good are markets in responding in terms of land and other values to the prospect of disasters,” noted Nobel Laureate Gary Becker.