IMPROVING THE EVIDENCE BASE ON

THE COSTS OF DISASTERS –TOWARDS AN OECD FRAMEWORK FOR ACCOUNTING RISK

MANAGEMENT EXPENDITURES AND LOSSES OF DISASTERS

OECD High Level Risk Forum

Catherine Gamper10 December 2015, Loy Henderson Conference centre,

Washington DC

Why we need to better account for costs of disasters

• Past decade: USD 1.5 trillion in economic damages from man-made disasters (industrial accidents, terrorist attacks) and natural disasters (primarily storms and floods)

• Increase in economic damages believed to outpace national DRR investments…

• … though this claim cannot be supported by data as there is hardly any available, especially on an internationally comparative level

• The development of standardised and comparable accounting frameworks for DRM expenditure and disaster losses can:– Support the evaluation of economic benefits of DRR investments– Facilitate cross-country comparisons– Systematic indicators on global DRR objectives could be built (Sendai, SDG’s)

Results from the first project phase:• A review of national and international approaches and datasets regarding

disaster losses and damages found:– Significant progress has been made in accounting for a number of social loss indicators (such

as the fatalities from a disaster)………– ………….but that efforts to calculate economic losses remain inconsistent and incomparable

across countries (only an estimated 30-40% of disasters are reported with economic loss figures)

• A review on the expenditure side of the costs of disasters found that countries need:

– A common language to collect data on public and private expenditures for disaster management

– Tracking risk management expenditures to provide a full picture that might promote prevention, mitigation and preparedness funding

– To collect expenditure information more consistently– A central repository (such as the national accounts) that clearly distinguishes and accounts

for risk management expenditures

OECD work on improving the evidence base on the costs of disasters

Going forward the OECD seeks to:1. Conduct a loss and damage survey across OECD (and partner) countries to:

– provide a first evidence base on the costs of disasters– inform the monitoring of the implementation of the OECD Recommendation on

the Governance of Critical Risks – evaluate the economic benefits of DRM investments

2. Develop a standard OECD methodology on the collection of direct and indirect economic losses3. Conduct a complementary survey on loss and damage information collection processes and methods, integrating expenditure information4. Conduct a pilot review of countries’ ex-ante loss estimation methods (desk-based)

OECD work on improving the evidence base on the costs of disasters

• A pre-filled out survey based on an Excel file (with PDF instructions document)

• Countries will then be asked to validate, complement or replace pre-filled out information

• The survey includes the following sections and variables:

I. Event IDII. Hazard characteristicsIII. Social losses – fatalitiesIV. Social losses – affected peopleV. Direct economic losses VI. OECD physical lossesVII.Insured losses

OECD Disaster Loss And Damage Survey

Examples of how to fill out the survey: Event ID

If you wish to correct the reported date please add the official one. Otherwise, leave the cell blank to validate.

Examples of how to fill out the survey: Hazard characteristics

If you wish to correct the reported location or hazard type and sub-type please add the official one. Otherwise, leave the cell blank to validate.

• Countries need to confirm the geographic location and the hazard type and sub-type

Examples of how to fill out the survey: Hazard characteristics

€220,000,000 (includes direct costs: Agricultural loss, Private businesses, private housing, public infrastructures) + €100,000,000 estimated indirect costs

Please provide the official figure by listing the categories of costs included in parenthesis. The Secretariat asks for the inclusion of direct tangible costs in this categories. However, If your country also includes indirect costs, please specify. Leave the cell blank if you wish to validate.

IV Direct economic loss

• Questionnaire to understand:– the methods used to collect economic loss and expenditure

data (definitions)– the motivation (or absence of such) to collect this

information– the use of this information– the criteria for collecting this information– the responsibilities for collecting this information– identify the need or usefulness of developing international

standard

Complementary survey on processes and methods to collect evidence on costs of disasters

Direct and indirect economic loss questionnaire (cont.)

1. Collect evidence on the cost of disasters to:– Facilitate cross-country comparison on ex-post disaster losses– Build systematic indicators to monitor disaster losses and disaster risk

reduction– Evaluate the economic benefits from countries’ ex–ante disaster risk

investment– Monitor the implementation of the OECD recommendation on the Governance

of critical risks – Inform a potential flagship report

2. Understand different methods for collecting economic loss data – To inform the development of standard methodologies

Conclusions

• Comment on the instructions and design of the pre-filled OECD disaster loss and damage survey

• Comment on the structure and questions of the direct and indirect economic loss questionnaire

Both questionnaires will be revised with HLRF comments and will circulate before Christmas

• Express interest in participating in the expert meeting that will be organized in April to discuss the survey results, based on which a draft methodology will be developed

• Express interest in a potential in-depth information collection on expenditures for disaster risk management

Delegates are invited to….

For further information please contact:catherine.gamper@oecd.org