Policy and Economics of Hazards

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Prescribed burning in northern NSW
Prescribed burning in northern NSW

Project Status:

The 2015 Productivity Commission’s report on natural disaster funding arrangements in Australia found that governments overinvest in post-disaster reconstruction and underinvest in mitigation activities that would limit the impact of natural disasters. Given the multitude of natural hazards that require mitigation and response from government agencies and the tighter budgets at both state and national levels, natural hazards managers are increasingly under pressure to justify the use and allocation of resources for mitigation efforts.

The 2015 Productivity Commission’s report on natural disaster funding arrangements in Australia found that governments overinvest in post-disaster reconstruction and underinvest in mitigation activities that would limit the impact of natural disasters. Given the multitude of natural hazards that require mitigation and response from government agencies and the tighter budgets at both state and national levels, natural hazards managers are increasingly under pressure to justify the use and allocation of resources for mitigation efforts.

Governments need to ensure that the benefits justify the cost and that they are getting the best value for money out of these investments. However, most existing government decisions are not informed by formal analyses examining the value for money of the alternatives. There are several reasons for this.

  1. Economic analyses of natural hazard management options are rare for some hazards.
  2. Many of the benefits of natural hazard management are intangible (or non-market), such as lives saved, health benefits, environmental benefits, and social values.
  3. There is a general lack of information to carry out economic analyses.
  4. Economic analysis of natural hazards can be complex, and there is a lack of economics capacity in the sector.

To date this study has addressed some of these issues by developing a tool for generating estimates of non-financial benefits (called the value tool) and undertaking integrated economic analysis of management options for floods in Adelaide and for prescribed burning in private land in South Australia’s Mount Lofty Ranges.

The next stage will build on this work and create tools that will help emergency service and land management agencies conduct and utilise more rigorous economic analyses of management options and identify the options that generate the best value for money. These new tools, which consider both market and non-market (intangible) values, will help meet important end-user needs. The intangible values will include social, environmental and health related values so that decisions are made to maximise the benefits to society in the management of natural hazards.

Expected outcomes will be:

  • An online platform for the value tool that will be updated and maintained after the study concludes so that end-users can easily integrate intangible values in their analyses.
  • Fill major knowledge gaps identified in the literature on intangible values that are affected by the management of natural hazards.
  • An economic analysis tool for the evaluation of the tangible and intangible costs/benefits of risk treatment options that enables end-users to evaluate and prioritise the treatment options that are likely to provide the best value for money.
  • Training materials relating to the application of economics to the assessment of natural hazard management options.
Ed Pikusa and Holger Maier receive their outstanding achievement award from Dr Richard Thornton.
18 September, 2017
A cluster team and PhD student have been recognised with CRC awards at AFAC17 powered by INTERSCHUTZ, the CRC's annual conference held in collaboration with AFAC in Sydney recently.
Dr Veronique Florec is making the trip to Antarctica with fellow West Australian’s Jessica Brainard (Western Australia Museum), Rachel Zombor (WA Department of Heath), Anais Pages (CSIRO) and Valerie Sage (CSIRO).
24 August, 2017
Project leader Dr Veronique Florec one of 80 scientists to join an all-female international expedition to Antarctic next year.
16 August, 2016
New journal articles and reports on CRC research are available online.
Holger Maier presents at the 2016 Hobart RAF
24 June, 2016
A number of insights around who dies in floods, mitigation benefits, estimating resilience and economics were key takeways for me from the Research Advisory Forum in Hobart.
Prescribed burning in northern NSW
12 June, 2015
This is the first of a series of project updates to keep end users up to date on project activities.
Year Type Citation
2017 Conference Paper Rumsewicz, M. Research proceedings from the 2017 Bushfire and Natural Hazards CRC and AFAC Conference. Bushfire and Natural Hazards CRC & AFAC annual conference 2017 (Bushfire and Natural Hazards CRC, 2017).
2017 Conference Paper Florec, V. & Pannell, D. J. Where do we put our dollars? Economic analysis of different bushfire management options in Western Australia. AFAC17 (Bushfire and Natural Hazards CRC, 2017).
2017 Conference Paper Rogers, A., Gibson, F. L., Florec, V., Hailu, A. & Pannell, D. J. Including the intangible benefits of bushfire mitigation in economic analyses: a 'value tool' for informed decision making. AFAC17 (Bushfire and Natural Hazards CRC, 2017).
2016 Conference Paper Chalak, M., Florec, V., Hailu, A., Gibson, F. L. & Pannell, D. J. Integrated economic assessment of flood management options for Adelaide. AFAC16 (Bushfire and Natural Hazards CRC, 2016).
2016 Conference Paper Gibson, F. L., Pannell, D. J., Rogers, A., Kragt, M. & Hailu, A. Non-market valuation in the economic analysis of natural hazards. AFAC16 (Bushfire and Natural Hazards CRC, 2016).
2016 Conference Paper Rumsewicz, M. Research proceedings from the 2016 Bushfire and Natural Hazards CRC and AFAC conference. Bushfire and Natural Hazards CRC & AFAC annual conference 2016 (Bushfire and Natural Hazards CRC, 2016).
2016 Report Pannell, D. J. et al. Economics of natural hazards: Annual project report 2015-2016. (Bushfire and Natural Hazards CRC, 2016).
2015 Report Pannell, D. J., Hailu, A., Gibson, F. L. & Florec, V. Economics of natural hazards: Annual project report 2014-2015. (Bushfire and Natural Hazards CRC, 2015).
2015 Report Pannell, D. J. Economics of natural hazards annual project report 2014. (Bushfire and Natural Hazards CRC, 2015).
Economics of natural hazards
25 Aug 2014

The project tackles a range of economics issues, including estimation of non-financial benefits from hazard reduction, risk analysis, and development of decision making frameworks that would help deliver value for money from public investments in natural hazard management.

Key Topics:
Economics of Natural Hazards: Valuing Intangibles
18 Aug 2015

Natural disasters impact many things that people value: life, health, belongings, poprerty, essential services and the environment. Quantifying the cost of a natural disaster or the benefit from mitigation often excludes some of these things, because their values are not easily measureable.

Key Topics:
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Veronique Florec Conference Poster 2016
12 Aug 2016

This project evaluates the tangible and intagible costs and benefits of natural hazards and mitigation options to help decision makers prioritise investments

Appreciating the whole picture: including intangible values in decision making
29 Jun 2017

Natural Hazards impact many things that people value: life, health, amenity, safety, recreation and the environment. Quanfiying the impact of natural hazards on these intagible things is not easy. But if we do not include them, we are missing a big part of the picture.

Key Topics:

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