Direct Economic Damage Research Articles

The Hydro-Economic Modeling of Low-Flow Events on the Middle Elbe: Assessing Socio-Economic Impacts on River Navigation

Low-flow events cause socio-economic impacts in various sectors. However, there are few hydro-economic models to quantify these. This article presents a hydro-economic modeling approach to determine the direct economic damage of low flows to freight and tourist navigation on free-flowing rivers. This includes the description of the required hydrological and economic input variables, a presentation of the calculation approach and the development of the damage functions. Damage and replacement costs were calculated for the study area of the middle Elbe in order to test the model and show how low-flow events affect freight and tourist navigation. Our results indicate that considerable economic losses occur not only during low flows, but also when the reference water levels for navigation are only slightly exceeded over a long period of time. It was also shown that certain river sections are more vulnerable to low-flow events and therefore cause higher costs. The model represents an analytical tool that considers both economic and hydrological aspects. As a part of a holistic risk assessment, it can help decision-makers to understand the interactions between water and the economy and to develop strategies that promote sustainability in water resource management.

Impact of Hermodice carunculata (Pallas, 1766) (Polychaeta: Amphinomidae) on artisanal fishery: A case study from the Mediterranean sea

Invasive species can cause severe economic damages, ecosystem alterations, and can even threat human health. In the global warming scenario, which can act as a driving force for the expansion of thermophilic species, we investigated for the first time the economic damage caused by the invasive bearded fireworm, Hermodice carunculata, to artisanal longline fishery in the Mediterranean Sea. We focused on bottom longline fishery targeting the highly prized white seabream Diplodus sargus, investigating catch composition of the fishing gear and Catch Per Unit Effort (CPUE) of species caught, with particular emphasis on the economic damage caused by the bearded fireworm, H. carunculata, in relation to water temperature. Our results clearly indicated direct and indirect economic damage to fishing activities practiced in the southeastern coast of Sicily (Ionian Sea). Type and extent of the damage caused by the invasive worm (H. carunculata) were discussed in relation to temporal scale and overall yields obtained by this traditional artisanal fishery, and some solutions are proposed. However, the actual situation requires special attention because it is expected to worsen in the context of the global warming future scenarios, such that further studies are urgently needed.

Small Island Developing States under threat by rising seas even in a 1.5 °C warming world

Small Island Developing States (SIDS) have long been recognized as some of the planet’s most vulnerable areas to climate change, notably to rising sea levels and coastal extremes. They have been crucial in raising ambitions to keep global warming below 1.5 °C and in advancing the difficult debate on loss and damage. Still, quantitative estimates of loss and damage for SIDS under different mitigation targets are lacking. Here we carry out an assessment of future flood risk from slow-onset sea-level rise and episodic sea-level extremes along the coastlines of SIDS worldwide. We show that by the end of this century, without adaptation, climate change would amplify present direct economic damages from coastal flooding by more than 14 times under high-emissions scenarios. Keeping global warming below 1.5 °C could avoid almost half of unmitigated damage, depending on the region. Achieving this climate target, however, would still not prevent several SIDS from suffering economic losses that correspond to considerable shares of their GDP, probably leading to forced migration from low-lying coastal zones. Our results underline that investments in adaptation and sustainable development in SIDS are urgently needed, as well as dedicated support to assisting developing countries in responding to loss and damage due to climate change.

코로나19 전후 항만 효율성 분석에 관한 연구

Since COVID-19, congestion has become an important factor that can hinder the efficient operation of ports and cause direct and indirect economic damages. Therefore, this study conducted an SBM-DEA analysis with congestion as a undesirable output variable to investigate the impact of congestion on the efficiency of four Korean ports (Busan, Yeosu-Gwangyang, Ulsan, and Incheon) before and after COVID-19. The analysis revealed that the overall efficiency of the ports was lower after the outbreak of COVID-19 than before, and that the efficiency of each port was relatively different depending on its infrastructure and budget. This analysis shows that port efficiency is being negatively affected by congestion both pre- and post- COVID-19. Additionally, port infrastructure and budgets have a direct impact on congestion levels. To enhance port efficiency, it's important to implement appropriate systems and policies to manage congestion while considering the unique characteristics of each port.

Estimating the Socioeconomic Impacts of Flooding on Regional Economies With a Computable General Equilibrium Model

AbstractThe growing number of flood events in urban areas is causing far‐reaching economic losses and social disruptions. To implement suitable flood risk management strategies and measures for flood prevention and mitigation, it is paramount to adequately assess economy‐wide losses associated with potential flood events. The assessment of potential flood damage in the USA relies significantly on the Federal Emergency Management Agency (FEMA) Hazus Flood Model. A primary requirement to reduce uncertainty is to empirically gather user input data. Consequently, there is a need to integrate publicly accessible business data for accurate evaluation of losses in business activities. We present a novel approach for estimating both the direct losses in business activities during a flood and the total economy‐wide impact that arise from these disruptions. First, we integrate the FEMA Hazus Flood Model with Reference Solutions business‐level data to estimate the reduction in business activities (i.e., direct losses) following a 100‐year flood event in New Hanover County, North Carolina. Second, we estimate the broader economy‐wide impact these business activity losses have on total industry output, employment, value‐added and household income using a regional computational general equilibrium model. The advantage of our approach is the easy replicability of the business loss estimation process for US cities and regions of interest, which, when used in a follow‐up economic impact study, leads to estimating the total economy‐wide losses in economic activities. Policy makers relying solely on direct physical and economic damages would, by ignoring indirect losses, underestimate the benefits of investing in flood mitigation and protection.

Cost-benefit analysis of mitigating subsidence damage in Semarang and Demak, Indonesia

Since the early 1990s, the coastal Semarang City in Indonesia has been undergoing rapid industrialization and population expansion. To meet growing water demand, groundwater is abstracted with an ever-increasing number of abstraction wells. This has led to lower groundwater tables in the largely unconsolidated substrate and this, in turn, causes land subsidence in the area. This has led to significant direct and indirect economic damage. In the context of limited public resources, this study aims to analyze the economic rationale of alternative (public) investment strategies to reduce subsidence impact in the Semarang-Demak region. With Cost-Benefit Analysis (CBA), three alternative strategies to replace groundwater abstraction wells are analyzed: (1) Installment of a piped clean water supply system with 1,000 L/s capacity, (2) a new 2 km2 coastal freshwater reservoir in West Semarang, (3) installment of a piped clean water supply system with 2,000 L/s capacity. All strategies have a positive (>1) benefit-cost ratio, which indicates that there is an economic rationale for investment to mitigate subsidence in Semarang and Demak. Under a low water demand scenario, the best strategy is strategy 1; under a high water demand scenario, the best strategy is strategy 3. As strategy 3 gives the highest economic benefit in the worst-case scenario, this is the most robust strategy.

Quantify the Contribution of Nature-Based Solutions in Reducing the Impacts of Hydro-Meteorological Hazards in the Urban Environment: A Case Study in Naples, Italy

Urban areas are vulnerable to multiple risks associated with hydro-meteorological hazards (HMHs). The assessment of the climate benefits of implementing nature-based solutions (NBSs) in urban areas, especially in open spaces, is widely recognised and discussed within the scientific literature; however, the quantification of these benefits, in terms of the HMHs reduction, human safety and human well-being, is still a subject of debate. In this context, this contribution proposes a methodological approach that, starting from the analysis of the impacts of coastal flooding and in terms of the potential direct and tangible economic damages, heatwave events and vulnerability of open spaces, proposes the application and assessment of NBSs in terms of the reduction in these impacts. The process was developed in the GIS environment based on the processing of open-source data. The test was conducted in the case study of Naples’ waterfront to identify the potentialities and limitations of the approach. The results showed the contribution of NBSs in reducing the economic damages due to coastal flooding and the improved vulnerability conditions to heatwave events.

Financial consequences of ice breaks in state forests in Eastern Serbia in 2014

Financial consequences of ice breaks in state forests in Eastern Serbia in 2014

Effective antibiotic therapy for community-acquired otorhinolaryngological respiratory infection (clinical description)

The State Report on the state of sanitary and epidemiological well-being of the population in the Russian Federation speaks of the continued growth of respiratory infections, reaching more than 33 million cases and amounting to more than 606 billion rubles of direct economic damage in 2021. Of particular importance is the new coronavirus infection SARS-CoV-2, and manifestations of its various new genovariants, for example, variant B.1.1.529 called omicron, causes various inflammatory nosologies on the part of the mucous membranes of the ENT organs (acute rhinosinusitis, acute tonsillopharyngitis, acute otitis media). The viral agent, damaging the epithelium of the upper respiratory tract, creates favorable conditions for the activation of the microbial flora. Identification of a respiratory agent is most often carried out only in severe cases of the disease, so the basic diagnosis is based on clinical symptoms. The relevance of studying the rational use of antibacterial drugs in the treatment of community-acquired respiratory infections in practical otorhinolaryngology is associated not only with the frequency of occurrence, but with a high risk of complications. As a rule, antibacterial drugs are actively used in the complex therapy of acute bacterial etiology of the upper respiratory tract. Due to the high variability and increasing antibiotic resistance, antimicrobial agents are not always rationally used for outpatients. In this context, as noted in the clinical guidelines, one of the topical issues is the rational dosed use of antibacterial drugs in accordance with the pharmacokinetics, pharmacodynamics and efficacy of prescribing a cephalosporin antibiotic in the form of dispersible tablets in the treatment of patients with acute inflammatory diseases of the upper respiratory tract and ear, as an example, clinical cases.

Intercomparison of regional loss estimates from global synthetic tropical cyclone models

Tropical cyclones (TCs) cause devastating damage to life and property. Historical TC data is scarce, complicating adequate TC risk assessments. Synthetic TC models are specifically designed to overcome this scarcity. While these models have been evaluated on their ability to simulate TC activity, no study to date has focused on model performance and applicability in TC risk assessments. This study performs the intercomparison of four different global-scale synthetic TC datasets in the impact space, comparing impact return period curves, probability of rare events, and hazard intensity distribution over land. We find that the model choice influences the costliest events, particularly in basins with limited TC activity. Modelled direct economic damages in the North Indian Ocean, for instance, range from 40 to 246 billion USD for the 100-yr event over the four hazard sets. We furthermore provide guidelines for the suitability of the different synthetic models for various research purposes.

The Future Impacts of ESL Events in Euro-Mediterranean Coastal Cities: The Coast-RiskBySea Model to Assess the Potential Economic Damages in Naples, Marseille and Barcelona

In coastal cities, the effects of climate change will cause an increase in the intensity and frequency of extreme sea level (ESL). In this scenario, the application of the Coast-RiskBySea model is proposed to assess the economic impacts of ESL on the built environment in three Euro-Mediterranean coastal cities: Naples, Barcelona, and Marseille. The risk (land use-based) is assessed in the GIS environment as a function of the potential direct and tangible economic damages. The results highlight risk scenarios in all three cities with significant economic damages expected, requiring the implementation of climate mitigation and adaptation measures to reduce the current impacts and limit future ones. The simulations highlight the potential of both remote sensing data and GIS systems to carry out homogeneous environmental analyses over wide areas. The results that were obtained are compared with existing works to verify the reliability of the Coast-RiskBySea model.

Assessing the economic impacts of future fluvial flooding in six countries under climate change and socio-economic development

Floods are among the most frequent and costliest natural hazards. Fluvial flood losses are expected to increase in the future, driven by population and economic growth in flood-prone areas, and exacerbated in many regions by effects of climate change on the hydrological cycle. Yet, studies assessing direct and indirect economic impacts of fluvial flooding in combination with climate change and socio-economic projections at a country level are rare. This study presents an integrated flood risk analysis framework to calculate total (direct and indirect) economic damages, with and without socio-economic development, under a range of warming levels from < 1.5 to 4 °C in Brazil, China, India, Egypt, Ethiopia, and Ghana. Direct damages are estimated by linking spatially explicit daily flood hazard data from the Catchment-based Macro-scale Floodplain (CaMa-Flood) model with country- and sector-specific depth-damage functions. These values input into an economic Input-Output model for the estimation of indirect losses. The study highlights that total fluvial flood losses are largest in China and India when expressed in absolute terms. When expressed as a share of national GDP, Egypt faces the largest total losses under both the climate change and climate change plus socio-economic development experiments. The magnitude of indirect losses also increased significantly when socio-economic development was modelled. The study highlights the importance of including socio-economic development when estimating direct and indirect flood losses, as well as the role of recovery dynamics, essential to provide a more comprehensive picture of potential losses that will be important for decision makers.

The economic aftermath of Hurricanes Harvey and Irma: The role of federal aid

This paper empirically examines the economic impacts of Hurricanes Harvey and Irma in 2017 and the role of federal aid in the recovery process. Data from 90 disaster counties in Texas and Florida reveal a strong relationship between direct economic damages and localized measures of storm intensity. The impact of the storms on local unemployment and employment dissipated within one year. Along with individual communities’ inherent resilience capacity, federal policy responses to economic losses played a role in supporting local recovery across the two disaster regions. Regressions with spatial effects show that following a hurricane strike, employment and wages moved in the opposite directions between a disaster county and its neighboring counties.

Modeling the inter-regional economic consequences of sequential typhoon disasters in China

Inter-regional economic development is threatened by high direct economic damage (DED) from multiple natural disaster events. However, estimations of the indirect economic impacts (IEIs) of a single disaster event cannot accurately reflect the superimposed impacts of sequential disasters on the inter-regional social-economic system. Thus, we employed the modified adaptive inter-regional input-output (MAIIO) model to reproduce the superimposed impacts of three typhoons (Utor, Usagi, and Fitow) on the economy under three scenarios. The results showed that the superimposed disturbance of sequential disasters amplified the IEIs of the DED and increased the amplitude of the negative fluctuations of the value added; the spatial ripple effects induced by the superimposed disturbance of multiple typhoon disasters were also different due to the spatial heterogeneity of the economic structure; the dynamic adaptive process of economic system with sequential disasters was that it tried to recover from early inter-regional IEIs after an initial disaster event, and then the occurrence of a new disaster before completion of the initial recovery brought new (amplified) IEIs. This study suggests that the sequential disasters within a short time interval impose a complex superimposed disturbance on the inter-regional economic system, and modelling the economic trajectory with sequential disasters is valuable for designing strategies for the synergistic development of inter-regional economic sustainability and disaster mitigation.

Regional tropical cyclone impact functions for globally consistent risk assessments

Abstract. Assessing the adverse impacts caused by tropical cyclones has become increasingly important as both climate change and human coastal development increase the damage potential. In order to assess tropical cyclone risk, direct economic damage is frequently modeled based on hazard intensity, asset exposure, and vulnerability, the latter represented by impact functions. In this study, we show that assessing tropical cyclone risk on a global level with one single impact function calibrated for the USA – which is a typical approach in many recent studies – is problematic, biasing the simulated damage by as much as a factor of 36 in the north West Pacific. Thus, tropical cyclone risk assessments should always consider regional differences in vulnerability, too. This study proposes a calibrated model to adequately assess tropical cyclone risk in different regions by fitting regional impact functions based on reported damage data. Applying regional calibrated impact functions within the risk modeling framework CLIMADA (CLIMate ADAptation) at a resolution of 10 km worldwide, we find global annual average direct damage caused by tropical cyclones to range from USD 51 up to USD 121 billion (value in 2014, 1980–2017) with the largest uncertainties in the West Pacific basin where the calibration results are the least robust. To better understand the challenges in the West Pacific and to complement the global perspective of this study, we explore uncertainties and limitations entailed in the modeling setup for the case of the Philippines. While using wind as a proxy for tropical cyclone hazard proves to be a valid approach in general, the case of the Philippines reveals limitations of the model and calibration due to the lack of an explicit representation of sub-perils such as storm surges, torrential rainfall, and landslides. The globally consistent methodology and calibrated regional impact functions are available online as a Python package ready for application in practical contexts like physical risk disclosure and providing more credible information for climate adaptation studies.

Assessing Property Level Economic Impacts of Climate in the US, New Insights and Evidence from a Comprehensive Flood Risk Assessment Tool

Hurricanes and flood-related events cause more direct economic damage than any other type of natural disaster. In the United States, that damage totals more than USD 1 trillion in damages since 1980. On average, direct flood losses have risen from USD 4 billion annually in the 1980s to roughly USD 17 billion annually from 2010 to 2018. Despite flooding’s tremendous economic impact on US properties and communities, current estimates of expected damages are lacking due to the fact that flood risk in many parts of the US is unidentified, underestimated, or available models associated with high quality assessment tools are proprietary. This study introduces an economic-focused Environmental Impact Assessment (EIA) approach that builds upon an our existing understanding of prior assessment methods by taking advantage of a newly available, climate adjusted, parcel-level flood risk assessment model (First Street Foundation, 2020a and 2020b) in order to quantify property level economic impacts today, and into the climate adjusted future, using the Intergovernmental Panel on Climate Change’s (IPCC) Representative Concentration Pathways (RCPs) and NASA’s Global Climate Model ensemble (CMIP5). This approach represents a first of its kind—a publicly available high precision flood risk assessment tool at the property level developed completely with open data sources and open methods. The economic impact assessment presented here has been carried out using residential buildings in New Jersey as a testbed; however, the environmental assessment tool on which it is based is a national scale property level flood assessment model at a 3 m resolution. As evidence of the reliability of the EIA tool, the 2020 estimated economic impact (USD 5481 annual expectation) was compared to actual average per claim-year NFIP payouts from flooding and found an average of USD 5540 over the life of the program (difference of less than USD 100). Additionally, the tool finds a 41.4% increase in average economic flood damage through the year 2050 when environmental change is included in the model.

Assessment of the economic cascading effect on future climate change in China: Evidence from agricultural direct damage

The agricultural sector is extremely vulnerable to climate change and also plays a very important role in the operation of the entire economic system, leading many studies to evaluate the possible agricultural direct economic damage (ADED) of climate change. However, this damage may have an amplification impact through the intricate industrial linkages that exist among sectors, and this impact may be even greater than the original damage. Therefore, to elucidate the economic cascading effect (ECE) in China caused by ADED and industrial linkage, this paper used the ARIO model to evaluate the total ECE and analyse the differences in the 19 sectors by taking the ADED under future annual mean temperature (AMT) increases of 1–5 °C as the input condition and adjusting the exogenous parameters to enhance the adaptability of the model; the goal was to assess the economic impact of climate change in China. The results show that (i) there is a significant amplifying impact of ECE due to industrial linkage under the influence of warming, ECE will be 4.24–5.25 times that of ADED, and the total economic impact (ADED + ECE) will exceed the GDP of the Chinese capital of Beijing in 2012 when the AMT increases by 1.5 °C, while it will exceed one tenth of China’s GDP when it increases by 4 °C. (ii) Manufacturing will be the sector most affected by the industrial linkage under ADED, which accounts for 26.58% of total ECE, followed by agriculture (10.39%) and construction (8.5%). (iii) The decrease in cultivated land area will have a significant impact on the economy; when it is reduced to the minimum demand (1.41% less than 2012), ADED increases by 1.65 times and ECE increases by 2.35 times. This paper aims to provide a new perspective from which to evaluate the economic impact of climate change by studying ECEs behind sectoral interactions.

Climate Change Effects on Agricultural Production: The Regional and Sectoral Economic Consequences in China

AbstractClimate is an essential element in agricultural production, and climate change inevitably have an impact on agriculture. Assessing the economic consequences of climate change requires comprehensive assessments of the impact chain from climate to crops and the economy. In our previous study, we derived a dose‐response function to estimate the response of crop yields to climate variables through a systematic review. In this paper, a dynamic multiregional input‐output model is established to assess the economic consequences of changes in agricultural production on China's regional and sectoral levels. The results show that (1) the direct economic damage is equivalent to 1% of gross domestic product (GDP) which implies the resulting economic cascade effect (ECE) that amounts to 17.8% of China's GDP. At the end of 21st century, the ECE is −0.1% to 13.6% of GDP (negative values indicate economic gains) without considering CO2 fertilization effect, of which the ECE in the most pessimistic pathway are equivalent to the total agricultural output in China today. (2) Regional‐level results show an uneven distribution of economic impact in China, which is related to the regional economic development. The least developed region in China experiences 2.8 to 8.5 times more ECE caused by climate change than the most developed region. (3) Sector‐level results show that agriculture is still the main affected sector, but in developed regions, manufacturing and services also bear part of the ECE.

Large Scale Flood Risk Mapping in Data Scarce Environments: An Application for Romania

Large-scale flood risk assessment is essential in supporting national and global policies, emergency operations and land-use management. The present study proposes a cost-efficient method for the large-scale mapping of direct economic flood damage in data-scarce environments. The proposed framework consists of three main stages: (i) deriving a water depth map through a geomorphic method based on a supervised linear binary classification; (ii) generating an exposure land-use map developed from multi-spectral Landsat 8 satellite images using a machine-learning classification algorithm; and (iii) performing a flood damage assessment using a GIS tool, based on the vulnerability (depth–damage) curves method. The proposed integrated method was applied over the entire country of Romania (including minor order basins) for a 100-year return time at 30-m resolution. The results showed how the description of flood risk may especially benefit from the ability of the proposed cost-efficient model to carry out large-scale analyses in data-scarce environments. This approach may help in performing and updating risk assessments and management, taking into account the temporal and spatial changes in hazard, exposure, and vulnerability.

Surface Pressure a More Skillful Predictor of Normalized Hurricane Damage than Maximum Sustained Wind

AbstractAtlantic hurricane seasons have a long history of causing significant financial impacts, with Harvey, Irma, Maria, Florence, and Michael combining to incur more than 345 billion USD in direct economic damage during 2017–2018. While Michael’s damage was primarily wind and storm surge-driven, Florence’s and Harvey’s damage was predominantly rainfall and inland flood-driven. Several revised scales have been proposed to replace the Saffir–Simpson Hurricane Wind Scale (SSHWS), which currently only categorizes the hurricane wind threat, while not explicitly handling the totality of storm impacts including storm surge and rainfall. However, most of these newly-proposed scales are not easily calculated in real-time, nor can they be reliably calculated historically. In particular, they depend on storm wind radii, which remain very uncertain. Herein, we analyze the relationship between normalized historical damage caused by continental United States (CONUS) landfalling hurricanes from 1900–2018 with both maximum sustained wind speed (Vmax) and minimum sea level pressure (MSLP). We show that MSLP is a more skillful predictor of normalized damage than Vmax, with a significantly higher rank correlation between normalized damage and MSLP (rrank = 0.77) than between normalized damage and Vmax (rrank = 0.66) for all CONUS landfalling hurricanes. MSLP has served as a much better predictor of hurricane damage in recent years than Vmax, with large hurricanes such as Ike (2008) and Sandy (2012) causing much more damage than anticipated from their SSHWS ranking. MSLP is also a more accurately-measured quantity than is Vmax, making it an ideal quantity for evaluating a hurricane’s potential damage.