Economics for Disaster Prevention and Preparedness in Europe

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00:01 Natural hazards in Europe are increasing,

00:03 and with them their impact on people's lives,

00:05 infrastructure and public finances.

00:09 Between 1980 and 2020,

00:11 natural hazards affected nearly 50 million people in the European Union

00:16 and have cost member states on average €12 billion per year.

00:21 This trend will continue.

00:23 Being prepared is key in order to mitigate devastating effects of disasters.

00:30 That is precisely why the World Bank and the European

00:33 Commission decided to take a close look at the costs

00:36 and benefits of investments in disaster resilience

00:40 and their financing at both national and EU levels.

00:45 By modeling the impact of earthquakes and floods on EU economies,

00:50 the study shows that these two hazards alone are

00:53 likely to erode a significant part of national GDPs.

00:58 In the case of extreme events,

01:00 damages could exceed 17% of GDP in some countries.

01:06 Each year there is a 10% chance that EU countries

01:09 will experience an earthquake and flood that will exhaust resources.

01:13 Leading to budget reallocations,

01:15 borrowing,

01:16 increased taxation,

01:17 and external assistance.

01:20 Actions to strengthen financial preparedness and reduce these funding

01:24 gaps could mitigate impacts of disasters on people,

01:27 economies,

01:28 and government budgets.

01:31 But finance is not enough.

01:33 It needs to be combined with investments in green and resilient infrastructure.

01:39 The benefits of investing in resilience are traditionally underestimated.

01:44 Analyzing 74 real investments for prevention and preparedness across Europe,

01:49 the study estimates their economic benefits by focusing on

01:53 avoided damages and losses.

01:56 Unlock potentials to economic development,

01:59 as well as social and environmental co-benefits.

02:05 It turns out the benefits of investment almost always exceed the costs,

02:10 especially when resilience measures are combined with climate action.

02:15 For example,

02:16 earthquake prevention measures in buildings combined with investments in

02:20 energy efficiency protect lives and mitigate climate change.

02:25 Flood prevention that uses nature-based solutions both reduces flood risks

02:30 and creates numerous benefits for the environment and ecosystems.

02:35 These smart investments provide the greatest benefits for cost

02:38 of investment and yield the biggest dividends of resilience.

02:43 Europe has a once in a generation chance to promote a green and resilient growth.

02:49 In line with the EU's Green Deal and the adaptation strategy,

02:52 the recently upgraded Union Civil Protection mechanism will give Europe

02:57 more robust data for modeling future risks.

03:01 A stronger capacity to prepare the investments needed to become more resilient.

03:06 Disaster scenarios so that we can be

03:08 better prepared for increasingly complex risks.

03:13 As this report shows,

03:15 investing in disaster resilience pays off.

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Natural hazards in Europe are increasing, and with them their impact on people's lives, infrastructure and public finances. Between 1980 and 2020, natural hazards affected nearly 50 million people in the European Union and have cost member states on average €12 billion per year. This trend will continue. Being prepared is key in order to mitigate devastating effects of disasters. That is precisely why the World Bank and the European Commission decided to take a close look at the costs and benefits of investments in disaster resilience and their financing at both national and EU levels. By modeling the impact of earthquakes and floods on EU economies, the study shows that these two hazards alone are likely to erode a significant part of national GDPs. In the case of extreme events, damages could exceed 17% of GDP in some countries. Each year there is a 10% chance that EU countries will experience an earthquake and flood that will exhaust resources. Leading to budget reallocations, borrowing, increased taxation, and external assistance. Actions to strengthen financial preparedness and reduce these funding gaps could mitigate impacts of disasters on people, economies, and government budgets. But finance is not enough. It needs to be combined with investments in green and resilient infrastructure. The benefits of investing in resilience are traditionally underestimated. Analyzing 74 real investments for prevention and preparedness across Europe, the study estimates their economic benefits by focusing on avoided damages and losses. Unlock potentials to economic development, as well as social and environmental co-benefits. It turns out the benefits of investment almost always exceed the costs, especially when resilience measures are combined with climate action. For example, earthquake prevention measures in buildings combined with investments in energy efficiency protect lives and mitigate climate change. Flood prevention that uses nature-based solutions both reduces flood risks and creates numerous benefits for the environment and ecosystems. These smart investments provide the greatest benefits for cost of investment and yield the biggest dividends of resilience. Europe has a once in a generation chance to promote a green and resilient growth. In line with the EU's Green Deal and the adaptation strategy, the recently upgraded Union Civil Protection mechanism will give Europe more robust data for modeling future risks. A stronger capacity to prepare the investments needed to become more resilient. Disaster scenarios so that we can be better prepared for increasingly complex risks. As this report shows, investing in disaster resilience pays off.

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