The methodology for disaster assessment Conceptual framework and history of the methodology

1. The methodology for disaster assessmentConceptual framework and history of the methodology Ricardo Zapata. ECLAC UNECA Capacity Development Workshop on Disaster Risk Reduction (DRR) and Disaster Risk Management (DRM) for the African Union Commission (AUC), the Regional Economic Communities (RECs), Intergovernmental Organizations (IGOs) and UNECA Staff Dates: 25-29 June 2012 (Addis Ababa, UNECA,UNCC)

2. Disaster risk has to be measured There are different approaches to disaster risk: • Living in it • Living with it What is impossible is to ignore it. Not measuring the impact of unattended built risk is precisely ignoring it: • Quantifying and making it visible to decision makers is the first step • A healthy approach is to reduce it and, by appropriating it, transferring it. • Other development goals and major strategies for poverty reduction must live wit risk: appropriate it and discount it as part of the investment strategy and programme and project planning Ricardo Zapata Martí

3. 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) Ricardo Zapata Martí

4. The role of ECLAC – in respect of disaster assessment and risk reduction • In response to its member countries, has over 35 years assessed disasters’ socioeconomic impact • Developed a methodological tool for damage and loss assessment (DALA), now recognized as the international standard for post-disaster assessment • Has accumulated quantitative evidence that allows for economic analysis of risk, which may be extrapolated for disaster’s future impact and could be used to quantify partially the socioeconomic implications of climate change and approach the valuation of adaptation costs • Has increased national capabilities and contributed to policy changes in Latin America and the Caribbean and in other regions, namely South East Asia in cooperation with ESCAP and the World Bank’s GFDRR Ricardo Zapata Martí

5. How was the methodology developed • ECLAC developed a comprehensive, integrated methodology based on member’s requests since the 1970s. Initial assessments were earthquakes, later cyclones and storms and eventually all sorts of natural events-related disasters in the LAC region. • There is a vast experience and dozens of evaluations in the Caribbean showing the impact on small developing countries, island economies and highly exposed territories. • Experience in drought assessments and complex conflict-disaster events also sprung from LAC but was enriched in Asia and Africa. • ECLAC’s DALA was adopted by the World Bank in the 1990s and GFDRR uses it regularly, at governments’ requests • DALA became an integral part of PDNAs in an international agreement to generate a single tool for disaster evaluation, signed by the UN, WB and the EU Ricardo Zapata Martí

6. The bottom line • Experience over the years both in Latin America, Southeast Asia and West and Sub-Saharan Africa supports the notion that a comprehensive socioeconomic and environmental assessment of disasters leads to a profiling of disasters that enables the formulation of reconstruction of affected infrastructures (including the protection of critical infrastructures, with particular reference to public security in sectors such as health, water and sanitation, food security, energy, etc.). • A comprehensive analysis of damage (physical destruction of assets in all sectors of a society, community or economy valued at replacement costs) and losses (income lost, production not realized, employment reduction, budget deficits associated wih post-event emergency and recovery expenditures and tax revenue losses incurred) allows • a perspective on cross-cutting themes such as gender and disasters, ethics in risk management, environmental risk and the issues of governance, • risk dialogue and consensus building based on assessments, and the mobilisation of resources for risk reduction Ricardo Zapata Martí

7. Presentation of the ECLAC methodology • General considerations • Valuation as a tool for reconstruction, mitigation and planning resilience • Usefulness of historical records • Methodological considerations • Definitions: risk, vulnerability, mitigation recurrence, etc. • Basic concepts: direct (assets/capital), indirect (flows/economical, financial, fiscal) • Valuation criteria • Sources of information: remote, statistical, direct observation, surveys, second hand, etc. Ricardo Zapata Martí

8. WHAT IS IT: • 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) Ricardo Zapata Martí

9. 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 • Provides and integrated assessment, as a single undertaking, covering all sectors and servicing all concerned: affected population, government institutions, international financial and cooperation agencies, the international community and the media Ricardo Zapata Martí

10. ] New Gap ] An additional deficit is created from the pre-existing gap between the prevalent situation vis-à-vis the development goals and the emerging recovery objectives. Ricardo Zapata Martí

11. HUMAN • Health • Education • Livelihoods • Housing and shelter • Cultural identity SOCIAL Social capital and social networks (solidarity and equity) Family ties, gender perspective and extended family networks and links Violence, security and rights NATURE / ENVIRONMENT Clean water, wage disposal and sanitation Clean air Biodiversity and integrity of ecosystems Climate variability and change • PHYSICAL INFRASTRUCTURE • Quality and resilience of human built environment (settlements and rural/urban planning) • Transport and communications, energy and other basic lifelines • Productive infrastructure • Other built infrastructure (public services, government buildings) • POLITICAL • Governance • Transparency • Participation, inclusion and political rights • Access to information • FINANCIAL • Access to credit • Land tenure, legal rights • Compensatory mechanisms and funds • Insurance and financial protection Ricardo Zapata Martí

12. Main Concepts Damage (Stocks) • Impact on assets • Infrastructure • Capital • Stocks • Occur immediately during or after the phenomenon that caused the disaster Losses (Flows) • 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 Ricardo Zapata Martí

13. Decomposition of total damage • Damages • Losses Reconstruction costs Effects on the economy Primary damage • Asset losses • Production costs • Cost increases • Income reduction Secondary effects Tertiary impact • Public sectorPrivate sector Public investment Private investment Projects and resource fund raising Ricardo Zapata Martí

14. From damage and loss assessment Determine recovery and reconstruction needs Road back to development Post disaster recovery Reconstruction Development Pre disaster Plans and programmes Emergency response Evaluation of needs Needs Data, information Needs Needs AFTER EMERGENCY BEFORE Reconstruction Strategy (financing gaps) 2-3 months Emergency Humanitarian requests (Flash appeal) 3-7 days Local Specific Community Needs 2 weeks Recovery Framework Request to Donors 1 month Ricardo Zapata Martí

15. 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 Ricardo Zapata Martí

16. Measuring the cost of impact (to which will be added DRR and climate change mitigation or adaptation) Baseline situation (ex ante) Measurement of impacts Damages and losses Over the preexisting situation (baseline, historical trend, by sector) Carried into the national accounts as effect on value added and estimated for alternative scenarios as the gap between trend and scenario results. Scenarios reflect on the one hand impact cost and on the other mitigation / adaptation investment Historical trend (without disaster) based on past performance of economy Disaster impact (ex post) To include expected or desired investment Ricardo Zapata Martí

17. 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) • The value of the environment, cultural and religious values and assets • 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 Ricardo Zapata Martí

18. Timeline The PDNA “framework” Common objectives, diverse tools and proposals, leading to coherent integrated strategy Results Framework: Diverse actionable proposals but coherent, strategically consistent as “back to development” process 1) ! ! ! ! 2) Analysis: diverse but compatible, additionalities y and complementarities (synergic) 3) Collection of data: compatibility, comparability, transfer (multi use) Beyond Before During Ricardo Zapata Martí

19. Institutional capacity Needs Integrated evaluation framework of post disaster needs (PDNA) / mosaic of needs – decision tree Housing and habitat Needs Agrofood and nutrition Environment and climate Industry and commerce Needs Capacity Needs “Branches” of estimated damages and needs Education, culture, gender Needs Subsistence Coping Immediate humanitarian needs Labour and livelihoods Health Loss Loss Loss Loss Loss VALUTION “TRUNK” PHYSICAL DAMAGE (from damage and loss assessment to recovery and reconstruction needs leading to a sustained development agenda) Ricardo Zapata Martí

20. Common trunk, branches that allow the integrated mosaic of interventions (DALA/PDNA/Recovery to Development) Reconstruction Needs Needs Needs Needs Needs Reconstruction Recovery Recovery Recovery Recovery VALUTION Recovery Loss Loss Loss Loss Loss Common Trunk DAMAGE Disaster RESPONSE CAPACITY Ricardo Zapata Martí

21. Economic assessment DISASTER RISK MANAGEMENT Policy strategies Poverty reduction Risk Assessment International Level National Level RESOURCE MOBILIZATION Macroeconomic equilibriums IMF commitments Millennium Development Goals National planning Ricardo Zapata Martí

22. NUTRITION ASSESSMENT – WFP-FAO SECTORAL ASSESSMENT WHO – Health needs LIVELIHOOD ASSESSMENT - (FAO-ILO) CROSS CUTTING – ENVIRONMENT (UNEP) OTHER ASSESSMENT – CULTURAL IMPACT, OTHER INFRA STRUCTURE - NEEDS ASSESSMENT OTHER ISSUES ASSESSMENT – GOVERNANCE The Post Disaster process requires an assessment of damages, losses and needs to define a recovery/reconstruction strategy to be framed in a results oriented framework Consensus, negotiated goals DISASTER Ricardo Zapata Martí

23. Adaptation Build resilience in the recovery and reconstruction process Mitigation Reduce negative impact in response and recovery The “do no harm” principle for interventions Resilience: bend and not brake, strong but flexible for DRR Ricardo Zapata Martí

24. Risk management and adaptation Damage and costs MANAGEMENT, TRANSFER AND REDUCTION MITIGATION ADAPTATION EVOLUTION HAZARDS Baseline modified by variability and change RISK Multi stresses More severely affected by vulnerability but aggravated by changes in hazards patterns VULNERABILITY Diverse, local Sector specific RESILIENCE Ricardo Zapata Martí

25. An integrated framework, a systemic perspective IMPACTS ON NATURAL NAD HUMAN SYSTEMS Food and water resources Ecosystems and biodiversity Human settlements Human health CLIMATE CHANGE Temperature rise Sea level rise Precipitation change Droughts and floods Adaptation Unwanted evolution Adaptation and Mitigation EMISSIONS AND CONCENTRATIONS Greenhouse gases Pollution (air, water, soil, sea) Socioeconomic development paths Economic growth Technology Population Governance Current paradigm Ricardo Zapata Martí

26. Reasons for the increase in natural catastrophes and natural catastrophe losses • Global population growth (exponential development); in 1800, for example, there were one billion people living on the earth, today there are 6.3 billion. • The rising standard of living in nearly all countries of the world produces growing accumulations of wealth which are hit in the event of a catastrophe. • Concentration of population and values in conurbations: the emergence of numerous mega cities - even in exposed regions (e.g. Tokyo: 30 million inhabitants) • Settlement and industrialisation of very exposed regions, especially coasts and river basins, tourism in danger zones, e.g. Florida • Vulnerability of modern societies and technologies, structural engineering, devices and equipment, networks; problems involving suppliers too • Increasing insurance penetration throughout the world, i.e. the proportion of insured goods is mounting globally. Consequently, insured losses are escalating even faster. • Global changes in environmental conditions, climate change, water scarcity, loss of biodiversity Ricardo Zapata Martí

27. Looking at the evolution of disaster’s impact Ricardo Zapata Martí

28. Evolution of disasters by type Ricardo Zapata Martí

29. World wide impact: disasters trend and cost Ricardo Zapata Martí

30. Different rate of growth of climatological and the rest of disasters in Latin America and the Caribbean Ricardo Zapata Martí

31. Disasters Impact Evolution over Decades in Latin America and the Caribbean Ricardo Zapata Martí

32. Microeconomic consequences of disasters • In addition to the loss of life or injury (measureable in terms of DALYs, i.e. disability adjusted life years lost), destruction or reduction of human capital • Destruction partial or total of family/individual, enterprise, private assets (economic capital affected) leading to income losses, revenues reduction, employment reduction • Breakdown in societal linkages and social capital (affecting family and community structures) Ricardo Zapata Martí

33. Macreoconomic consequences • Impact on economic size and performance of affected economy-country-region • Measurable as value of damage and losses as percentage of GDP • Measurable as flows changes due to disaster impact on GDP sector by sector value added • Visible in variation in rate of growth in the disaster year and subsequent ones (impacts may be felt for a number of years) • Impact on economic variables such as price index, investment and indebtedness ratios • Impact on external balances as exports and imports will be affected (increased needs of supplies, reduced production for export) • Fiscal consequences and deficit increase risk (to cover emergency needs and recovery and reconstruction investments) Ricardo Zapata Martí

34. Total insurance growth, penetration and density by region Ricardo Zapata Martí

35. Appropriation of risk needed to promote risk reduction: • Need for institutional and regulatory changes • Use of market to value (“price”) risk • Need for social policies for compensation and promotion (provide gender, age, ethnic sensitive instruments) • See risk reduction as a business opportunity Imperfect or inactive markets require government action / intervention Ricardo Zapata Martí

36. LEVEL OF DISASTER IMPACT • Indicates coping and adapative capacity Excedence (residual or excedent risk) Risk to be covered (financial gap) “Acceptable risk” Ricardo Zapata Martí

37. ESTABLISHING RISK FINANCING NEEDS CAT bonds Probability or return period Risk type 50-200 years Parametric coverage Resource gap Catastrophic risks 20-30 years Contingency funds Budget constraint 2-3 years Reserve funds Recurrent multi-hazard risks Ricardo Zapata Martí

38. Policy implications • Exposure to disaster risks is not unlike exposure to other risks (financial, commercial, social, political) • Exposure to risk has a positive correlation with poverty: disasters impacts are not distributed homogeneously neither in location nor in impact • Social impact is regressive: direct linkage between vulnerability and poverty, vulnerability and marginalization, vulnerability and gender or ethnicity Ricardo Zapata Martí

39. Appropriation to promote reduction of risk (in the face of extreme events and climate change) • Need for regulatory and institutional changes • Markets as clearing houses to price risk (beyond insurance) • Need for social policies for compensation, promotion and solidarity • Risk management is an investment / business opportunity • Imperfect markets require governmental intervention Ricardo Zapata Martí

40. Thank you! http://www.eclac.org/ http://gfdrr.org/ http://www.proventionconsortium.org/ http://groups.google.com/group/pdna-for-recovery http://www.recoveryplatform.org http://www.undp.org/cpr/iasc Ricardo Zapata Martí