This report presents a high-level, desk-based assessment of the economic costs of disasters, and of the costs and benefits of various approaches to managing the risks of natural disasters, normally known as Disaster Risk Reduction (DRR). The desk-based research has been supplemented by limited consultations with NGOs active in disaster prevention and relief.Prepared in the context of increasing donor and NGO activity in DRR, the report categorises various methods of DRR. The authors note that research into the costs of natural disasters and the costs and benefits of DRR measures is not well developed, and that much of the evidence is anecdotal. Key findings include:natural disasters have been shown to have major impacts at the macroeconomic level. Research has tended to focus on the costs of physical damage and clean up the studies show that developing countries suffer far greater economic costs because of natural disasters (in relative terms), with World Bank estimates suggesting annual costs of 2 to 15 percent of GDP for affected countries bottom-up, or micro-economic assessments, or DRR measures have also been undertaken. These typically examine a proposed package of DRR measures for a specific area. Such studies have identified a wide range of DRR measures with positive benefit-cost ratiosThe report concludes that limited research has been undertaken on both the costs of natural disasters, and on the costs and benefit of DRR measures. This body of evidence strongly suggests that there can be positive economic returns from DRR measures, and that additional development benefits can be realised. However, the research is not comprehensive, and consistent methods have not always been used. The existing research is also of little practical help to those seeking to implement DRR programmes and projects.
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