The Total Cost of Hydrological Disasters

Abstract

The rising costs of disasters caused by floods and landslides make it a high priority to improve the quality and the reliability of the assessment exercises, so as to inform risk prevention policies. The concept of total cost is much more ambitious than what has been traditionally provided, because it aims at describing the total burden imposed by a disaster to a socio‐ecosystem. The true costs of disasters include costs (and benefits) which are difficult to identify and quantify. It comprises all direct, indirect, tangible and intangible costs. Apart from direct and tangible costs, the remaining cost elements have been largely neglected in the field of economics of natural disasters. This report builds on these categories of costs presenting specific examples for the hydrological disasters. A brief review of economic valuation methodologies and project appraisal methods is also provided. Given that the full estimation of the total costs might turn challenging and controversial, we propose alternative options to traditional cost‐benefit analysis for processing the retrievable information, including non‐monetary impacts.