IPCC Report.pdf - Adam Curry

Chapter 2Determinants of Risk: Exposure and VulnerabilityHondurasBarbadosDominican RepublicBelizeNicaraguaEl SalvadorPanamaGuatemalaPeruJamaicaColombiaBoliviaEcuadorCosta RicaTrinidad & TobagoArgentinaMexicoChileDisaster Deficit Index (DDI) for 500-year Return PeriodEvaluated for 20080.460.420.370.960.801.471.461.852.472.402.842.733.424.594.555.415.756.96Probable Maximum Loss (PML) for 500-year Return PeriodEvaluated for 20084261,4201,6161,1973,1032,8872,2702,3463,9843,5404,0435,6647,8186,9428,22317,54423,25626,2890 1 2 3 4 5 6 7 8 0 10,000 20,000 30,000$US millionsFigure 2-2 | Disaster deficit index (DDI) and probable maximum loss (PML) in 500 years for 19 countries of the Americas for 2008. Source: Cardona, 2010.reposition costs are liabilities that become materialized when the hazard events occur. The Disaster Deficit Index (DDI) provides anestimation of the extreme impact (due to hurricane, floods, tsunami, earthquake, etc.) during a given exposure time and the financialability to cope with such a situation. The DDI captures the relationship between the loss that the country could experience when anextreme impact occurs (demand for contingent resources) and the public sector’s economic resilience – that is, the availability of fundsto address the situation (restoring affected inventories). This macroeconomic risk metric underscores the relationship between extremeimpacts and the capacity to cope of the government. Figure 2-2 shows the DDI for 2008.A DDI greater than 1.0 reflects the country’s inability to cope with extreme disasters, even when it would go into as much debt aspossible: the greater the DDI, the greater the gap between the potential losses and the country’s ability to face them. This disaster riskfigure is interesting and useful for a Ministry of Finance and Economics. It is related to the potential financial sustainability problem ofthe country regarding the potential disasters. On the other hand, the DDI gives a compressed picture of the fiscal vulnerability of thecountry due to extreme impacts. The DDI has been a guide for economic risk management; the results at national and sub-national levelscan be studied by economic, financial, and planning analysts, who can evaluate the potential budget problem and the need to take intoaccount these figures in the financial planning.decisionmakers and the general public. Many assessments still focussolely on one dimension, such as economic risk and vulnerability. Thus,they consider a very limited set of vulnerability factors and dimensions.Some approaches, e.g., at the global level, view vulnerability primarily withregard to the degree of experienced loss of life and economic damage (seeDilley et al., 2005; Dilley 2006). A more integrative and holistic perspectivecaptures a greater range of dimensions and factors of vulnerability anddisaster risk. Successful adaptation to climate change has been basedon a multi-dimensional perspective, encompassing, for example, social,economic, environmental, and institutional aspects. Hence, risk andvulnerability assessments – that intend to inform these adaptationstrategies – require also a multi-dimensional perspective.93