Annual economic losses and fatalities caused by natural disasters are subject to large fluctuations and are strongly linked to extreme events such as the Indian Ocean tsunami in 2004, cyclone Nargis in 2008 or the Haiti earthquake of 2010 (CRED, 2015). However, there is a clear trend of increasing economic and human losses over the last 40 years.
There are several reasons for this trend. Firstly, a rising world population leads to the increased settlement of socially disadvantaged segments of the population in high-risk areas such as riverine flood plains or areas with high probability of landslides. Secondly, human-induced climate change leads to an increased frequency of hydro-metrological extreme events. These combined effects produce a growing number of disasters due to natural hazards.
The objective of this paper is the development of a structured synthesis of available case studies to create generalised statements about the economic efficiency of DRR. Furthermore, the goal is to present results specifically for different hazard types to allow for a comparison of DRR across all hazards.
Key results include:
- DRR pays off – Based on 117 case studies, 102 report average cost-benefit ratios above the economic equilibrium. This is a powerful argument for future investments in disaster prevention
- the lower the human development index (HDI) of a country the higher the economic gain of DRR measures – on average there is a higher gain from DRR measures in countries with a low HDI compared to highly developed nations