UN ECLAC’s methodology on disaster impact assessment

1. UN ECLAC’s methodology on disaster impact assessment An area of inter-regional cooperation that has sparked interested in countries, regional and international institutions. ECLAC / ESCAP Workshop

2. ECLAC’s substantive actions • Update the methodology for socioeconomic and environmental damage assessment, publishing an expanded handbook that includes new cross-cutting analyses such as environmental impact and the gender perspective. • Extend the analytical capacity to prospective analysis and the cumulative implications of disasters on growth path and development. • Use mathematical and econometric models, develop scenarios on the projected impact of damage • Keep a proactive advocacy for disaster reduction and mitigation, focusing on decision makers in the economic and financial sectors as well as the private sector • Maintain technical assistance to governments both • in terms of damage appraisal after disasters, when required, and • training in the use of the methodology • Maintain and encourage interagency, inter-institutional, multidisciplinary and inter-regional cooperation and joint actions with relevant organizations both within the United Nations system and at the regional and subregional level ECLAC / ESCAP Workshop

3. The vision Development is a systemic process, integrated and global, based on some structural pillars: Competitiveness (in a globalized environment) Equitable (in terms of opportunities and access as a means to reduce poverty) Governance (in terms of addressing economic, social and political exclusions) Sustainable and sound (in terms of global change, environmental responsible management, preserving inter-temporal equilibriums and a smooth growth path) Resilience (in terms of addressing vulnerabilities both to external shocks, natural events and increasing the community’s (stakeholders) response) The Mission Follow-up and analyze economic, social and environmental as well as political development processes in the LAC region Provide assistance to governments in formulating development policies Contribute to the debate on development processes and models in the region Promote exchange of experiences (lessons learned, good practices, etc.) by comparative and monographic studies Promote dialogue within the region and with other development countries on development issues Basic premise and ECLAC’s vision and mission:Economic valuation reduces vulnerability ECLAC / ESCAP Workshop

4. General considerations • Formalize the systemic nature of the concepts of risk, vulnerability and mitigation • Given the recurrence of disasters promote proactive policies that establish the difference between disaster and risk management. • Promote the use of disaster valuation as a tool for reconstruction, mitigation and the use of planning as a cross-cutting tool for a more resilient development process. • Given the usefulness of historical records both in terms of probability of recurrence and damages incurred and expected, promote studies to expand these. ECLAC / ESCAP Workshop

5. System External processes Sensibility INTERNAL PROCESSES HAZARD Probability of occurrence Type Magnitude Intensity Speed and velocity Persistence Recurrence VULNERABILITY Response Capability Interaction of system and environment EXPOSURE IMPACT - TRANSFORMATION ECLAC / ESCAP Workshop

6. Vicious circle: Man, Environment, Disasters • Human actions progressively deteriorate the environment • Natural phenomena affect the environment (positively / negatively) • Impact of disasters tends to increase NATURAL PHENOMENA HUMAN ACTIONS ENVIRONMENT ECLAC / ESCAP Workshop

7. International Level Or the link between disasters, poverty and development National Level RESOURCE MOBILIZATION Macroeconomic equilibria IMF commitments Millennium Development Goals National planning ECLAC / ESCAP Workshop

8. The images we see The figures we determine ECLAC / ESCAP Workshop

9. The importance of scientific research and information • Have reliable information on the type of event • Build prediction scenarios • Know the evolution of successive, cumulative events • Allow early warning, prevention, mitigation and reduction • Make information available and understandable by affected or exposed population ECLAC / ESCAP Workshop

10. TYPE OF HAZARDS IN DEVELOPING LATIN AMERICA: VOLCANIC , SISMIC STORMS AND HURRICANES ECLAC / ESCAP Workshop

11. The importance of economic assessment of damage and needs • Have a record on damage caused by past events • Establish link between level of damage and magnitude or strength of a certain category of event • Value losses to quantify needs for rehabilitation and reconstruction • Put in evidence the benefits of mitigation and reduction • Make information available to potentially affected or exposed communities (stakeholders) ECLAC / ESCAP Workshop

12. Dynamic global effects Macroeconomic effects • Repercussions on the economic performance of national or regional economy affected by the disaster • May persist for a number of years after the disaster, depending on the characeristics and magnitude • Is reflected in • Gross Domestic Product growth • Performance of the external sector • Evolution of public finance • Increases of prices and inflation ECLAC / ESCAP Workshop

13. Relative importance of magnitudeTotal damage as % of GDP 13.2 1.4 3.3 3.6 0.4 ECLAC / ESCAP Workshop

14. Eastern Caribbean: GDP at factor costs Effects Hurricanes Luis and Marilyn ECLAC / ESCAP Workshop

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16. EL SALVADOR: POSSIBLE RECONSTRUCTION SCENARIOS, 2001-2003 ECLAC / ESCAP Workshop

17. Some figures on the impact of disasters in Latin America and the Caribbean Deaths (1972-2003) 110,000 0.02% a/ Directly affected population (primary) (thousands) 15,000 2.68% a/ Total affected population (‘000) 160,000 28.57% a/ Total Damage (millions of dollars) 65,000 Yearly average amount (millions of dollars) 2,300 As percentage of exports of goods and services 0.55% As percentage of foreign direct investment 7.92% Source: ECLAC a/ as percentage of total ECLAC / ESCAP Workshop

18. Impact of major recent disasters PERIOD TOTAL DAMAGE (millions of dollars de 2000) Effects External TOTAL DIRECT INDIRECT sector 1998-1999 31,845 14,922 16,923 8,677 2000-2001 3,614 2,210 1,478 866 2002-2003 1,529 864 665 366 TOTAL 36,988 17,996 19,067 9,909 ECLAC / ESCAP Workshop

19. Algunas cifras sobre el impacto en el Caribe ECLAC / ESCAP Workshop

20. Source: Overview of Hydro-meteorological Disasters in Asia, Ti Le-Huu, Water Resources Section, Environment and Sustainable Development Division, UNESCAP ECLAC / ESCAP Workshop

21. ECLAC / ESCAP Workshop

22. Break disaster’s vicious cycle Adaptado de Mora, “El impacto de los desastres, aspectos sociales, polítifcos económicos, ambientales y su relación con el desarrollo de nuestros países (BID, 1999) Level of damage is reduced (lower vulnerability) Improvisation is avoided Post-disaster phase NEW DISASTER * Tragic experience is not forgotten to keep mitigation effort as ongoing Stabilization - recuperation Experience is recorded and valued (lessons learned) Planning focuses on vulnerability reduction ECLAC / ESCAP Workshop

23. BREAKING THE CYCLE OF CONFLICT AND RESUMING THE PATH OF DEVELOPMENTConflict Prevention and Reconstruction SECURITY (Reduced Vulnerability) PEACE SOCIAL STABILITY * Link to Millennium Development Goals GOOD GOVERNANCE ECONOMIC RECOVERY DEVELOPMENT DEMOCRACY ECLAC / ESCAP Workshop

24. Source: Overview of Hydro-meteorological Disasters in Asia, Ti Le-Huu, Water Resources Section, Environment and Sustainable Development Division, UNESCAP ECLAC / ESCAP Workshop

25. Source: Overview of Hydro-meteorological Disasters in Asia, Ti Le-Huu, Water Resources Section, Environment and Sustainable Development Division, UNESCAP ECLAC / ESCAP Workshop

26. Exposure to risk and level of development: UNDP’s Disaster Risk Index Source: United Nations Development Programme, Bureau for Crisis Prevention and Recovery, presentation at ESCAP Regional Workshop, May 2004 ECLAC / ESCAP Workshop

27. WHAT IS THE ECLAC METHODOLOGY • A tool for the socio-economic and environmental assessment of disasters • Multi-sectoral and multidisciplinary damage evaluation and quantification method for disaster affected sectors • Standard sectoral procedures that allows comparability of results • Instrument for the decision making process and for policy formulation as it identifies more severely affected sectors, geographical areas and vulnerable groups • Conceptual improvement for measuring aspects not included in national accounting and assessing specific vulnerability (of social groups, such as women and the environment) ECLAC / ESCAP Workshop

28. Some things are easier to measure than others • IT IS DIFFICULT TO DETERMINE • The value of lives lost or affected • The opportunity cost, cost-benefit or investment / profitability. This is associated with the lack of adequate base lines that assess the level, quality and efficiency / efficacy of health services provided • The value and quality of services provided (both curative and preventive) • The duration of the transition / emergency phase (when field hospitals and evacuation processes are operational) • IT IS EASIER TO DETERMINE • The amount of investment required for reinforcement vs. The potential losses in equipment and inventories • The cost of reinforcement as compared to the reposition cost of affected infrastructure • The alternative cost of providing services when infrastructures collapse ECLAC / ESCAP Workshop

29. WHAT IT DOES: • Allows projecting future performance of the affected economy in the short and medium term, and implement the necessary corrective economic policy measures • Allows to determine the State’s capacity to face reconstruction tasks and determine needs for cooperation and international financing • Facilitates training in damage valuation and formulation of mitigation strategies • Involves affected population with relevant authorities and aid providers • Puts in evidence the systemic character of the development process and the interaction among sectors and stakeholders ECLAC / ESCAP Workshop

30. Direct damages Impact on assets Infrastructure Capital Stocks Occur immediately during or after the phenomenon that caused the disaster Indirect Damages Effects on flows Production Reduced income and increased expenses Are perceived after the phenomenon, for a time-period that can last from weeks to months, till recuperation occurs Main Concepts ECLAC / ESCAP Workshop

31. Measuring the damage “delta” or damage gap Pre-existing conditions (ex ante) The measure Of direct and indirect damages Upon the pre-existing situation (sector by sector baselines) is aggregated into the national accounts and determines the resulting disaster-caused scenario, as the gap over the expected performance prior to the event. Several scenarios may be outlined, based on the assumptions made for the reconstruction process Expected performance (without disaster) 3-5 years Disaster impact (ex post) 3-5 years ECLAC / ESCAP Workshop

32. Social Sectors Housing Health Education, culture, sports Infrastructure Transport and communications Energy Water and sewerage Productive sectors Goods: agriculture, industry Services: commerce, tourism, etc. Global impact On the environment Gender perspective Employment and social conditions Macroeconomic assessment SECTOR BY SECTOR VALUATION METHODOLOGY ECLAC / ESCAP Workshop

33. Summary table ECLAC / ESCAP Workshop

34. Summary of global impact ECLAC / ESCAP Workshop

35. ORGANIZATION OR PROCEDURAL ASPECTS OF ASSESSMENT EXERCISES • Composition of team: multisectoral, interdisciplinary, interinstitutional • Timeliness: within the “window of opportunity”, not interfering with emergency actions • Ensure full coverage and avoid duplication • The need for “judgment calls” or the educated guessing of experts • Difference between emergency needs and rapid assessment of need for reconstruction ECLAC / ESCAP Workshop

36. ECLAC’s additional tools • Through the use of REDATAM (a software developed to geo-reference information of household surveys) it has been possible to visualize the changing map of poverty and welfare reduction caused by disasters (as exemplified in the El Salvador earthquakes of 2002) ECLAC / ESCAP Workshop

37. Geographical distribution of damages: Geo-referencing and impact on poverty and welfare levels in the case of El Salvador, both quakes (millions of dollars) ECLAC / ESCAP Workshop

38. ECLAC’s current activities in the field of an interregional nature • IDB-ECLAC project on disaster indicators and national studies: In this two part project ECLAC is executing a component that, through a modified, dynamic version of the methodology will look at the cumulative impact of disasters in selected countries • World Bank/Disaster Management Facility (DMF)-ECLAC work programmes first allowed the publication in English and Spanish of the methodology and the presentation of it beyond Latin America and the Caribbean by participating and / or organizing workshops at the World Bank Headquarters (two since 2001) and with the Asian Disaster Preparedness Center (ADPC) in Bangkok (2001) with a regional nature and Manila (2004) at the national level with the civil defense authority. • World Bank Institute (WBI)-ECLAC collaboration in WBI regional courses by introducing in urban planning and development the disaster valuation module (in Panama, 2003, and Guatemala, 2004). Currently completed such module for a distance learning course that will be launched in a training for trainers seminar at the world level (Moscow, June 2004) ECLAC / ESCAP Workshop

39. In other regions • ECLAC-ADPC, through a memorandum of understanding in the process of being signed, support ADPC’s activities in adapting the ECLAC methodology to Asian countries. Currently providing technical expertise to a project in Gujarat, India • ECLAC-ESCAP, at the invitation and with the funding of ESCAP/UNDP (Bureau for Crisis Prevention and Reduction, BCPR) participated in a Regional Workshop on Methodologies of Assessment and their Application for Poverty Eradication and Economic Development (Bangkok, 18 - 20 May 2004) • ECLAC-ISDR, ongoing collaboration with the secretariat both at the regional level with its Latin American and Caribbean office in Costa Rica and headquarters in Geneva, which allowed in the past the translation to French of the methodology, and now preparing collaboration for the participation in the 2nd. World Conference on Disaster Reduction (to be held in Kobe, Japan, January 2005) ECLAC / ESCAP Workshop

40. FUTURE DEVELOPMENT • Lessons from past events and changing conditions associated with climate variability and change • Move from “forensic” appraisal of disasters as done for over 30 years to “preventive medicine” where valuation is a tool for disaster reduction • Improvement and expansion of methodology in social and environmental aspects • Combine the existing methodology of ECLAC with econometric modeling and prospective analysis and forecasting • Train national local authorities to gather relevant baseline data and government officials in the economic planning and financial ministries • Promote mitigation policies and risk management beyond response to prevention ECLAC / ESCAP Workshop

41. The images we do not want to see ECLAC / ESCAP Workshop

42. Where do we want to be in the future? (in the medium and long term) • Changed emphasis from relief and damage valuation after the event to use of risk management instruments and cooperation for disaster reduction • Have increasingly in place policies that include: • Economic instruments (from the public sector) • Financial products (public and private, including such as Cat Bonds, etc.) • Public and private assessment of risk and auditing of risk management strategies, including questions of accountability and liability ECLAC / ESCAP Workshop

43. Concrete proposals for the short term • ECLAC – ESCAP cooperation in methodological development and adaptation • Joint project to be undertaken with the support and cooperation of Asian countries and UNDP (BCPR) • Contribute to the development of UNDP’s Disaster Risk Index, which is based on lives lost and requires increase weight of socio-economic impact • Participation in the 2nd. Conference on Disaster Reduction (Kobe, January 2005) • Partnership with ISDR Secretariat • Partnership with the World Bank and the Provention Consortium • Explore possibilities for cooperation activities with ECA and the other regional commissions for example in the valuation of droughts and watershed management (as part of the Water Decade) • Expand the analysis of the linkage and systemic relation between disasters, poverty and the achievement of the MDGs ECLAC / ESCAP Workshop

44. www.eclac.cl www.eclac.cl/mexico Thank you ECLAC / ESCAP Workshop