Understanding, and preparing for, the higher-order impacts of natural disasters
Beyond the physical destruction of assets and lives, disasters may affect the economy through means such as the disruption of critical infrastructure, displacement of labor, and other interruptions to supply chain activities. For governments, firms, and households to adequately prepare for, and reduce, disaster risk, it is therefore important to understand what is referred to as the direct as well as the indirect or higher-order impact of disasters.
The CATSIM Inter-industry Impact Assessment module was developed in 2015 to assess the higher order impact of flood damage in Cambodia and Laos.
The inter-industry model expresses the time dependent nature of natural disaster impact, and quantifies the benefits of improved disaster preparedness.
IIASA’s Risk and Resilience team has built a CATSIM module which quantifies the inter-industry impact of natural disasters. The model estimates the economic costs of natural disasters across sectors and takes into account the economy’s existing production structures and estimated disaster recovery time. The model may be calibrated using commonly available datasets such as input-output tables and users may see the economic benefit of better fiscal preparedness (faster disaster recovery). This software module has been built as part of the CATSIM framework, and may be used in policy assessment and capacity building activates. Further software development which includes interface and other visualization tools is being planned.
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Quantifying the fiscal consequences of extreme climate events
Climate change is already causing a visible impact on biological, physical, and human systems and this trend will likely continue. For countries and regions to be adequately prepared for the increased risks posed by climate change, longer-term assessments will be crucial. Longer-term drivers of extreme climate risks include factors such as changes in hazard frequency and intensity due to climate change and socioeconomic trends such as urbanization, aging, and other land-use changes. Longer-term fiscal assessments of climate extremes must integrate these underlying risk drivers.
The CATSIM Stochastic Debt Assessment has been applied in the assessment of flood risk in 28 EU countries.
The model is currently being applied in Austria to assess flood and drought risk under climate change.
IIASA’s Risk and Resilience team has built a CATSIM module which quantifies the fiscal cost of extreme climate risks. Building on IIASA’s expertise in longer-term scenario-based integrated assessments, the CATSIM Stochastic Debt Assessment estimates the fiscal risk under alternative Shared Socioeconomic Pathways (SSPs) and Representative Concentration Pathways (RCPs). This software module has been built as part of the CATSIM framework, and may be used in policy assessment and capacity building activities. Further software development including interfacing and other visualization tools is being planned.
Application of the Stochastic Debt Assessment: The ECONADAPT Project
Last edited: 20 September 2017
Mochizuki J, Vitoontus S, Wickramarachchi B, Hochrainer-Stigler S, Williges K, Mechler R, & Sovann R (2015). Operationalizing iterative risk management under limited information: fiscal and economic risks due to natural disasters in Cambodia. International Journal of Disaster Risk Science 6 (4): 321-334. DOI:10.1007/s13753-015-0069-y.
Williges K, Hochrainer-Stigler S, Mochizuki J, & Mechler R (2015). Modeling the indirect and fiscal risks from natural disasters for informing options for enhancing resilience and building back better. UNISDR
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