The role of disasters in building and maintaining the cycle of poverty and undermining development progress is increasingly recognized as a major global challenge. While many recent disasters are related to geophysical events (earthquakes, tsunamis, etc.), approximately 70% are weather related and this proportion is likely to grow as climate change processes increase the variability and intensity of weather events. As a result, cost-effective strategies for reducing disaster risk are central both to meeting development goals and responding to the challenges climate change will present all sectors of society, particularly the poor, women and other vulnerable groups.

The paper is a methodology summary that presents practical approaches for identifying, prioritizing and ultimately demonstrating the costs and benefits of tangible interventions to reduce disaster risks, particularly those likely to emerge as a consequence of climate change. Such practical approaches are essential if governments, humanitarian organizations, the private sector and local communities are going to invest substantial resources in reducing both current and anticipated disaster risks from climate change.

The paper states that cost-benefit analysis should be seen not as a "stand alone" activity but as part of a larger process of decision-making. The numerical results from cost-benefit analysis can be misleading and inappropriate to utilize for decision-making unless they emerge from such a process. In addition, ethical decisions must often be made regarding who benefits and who bears the cost of interventions.

The paper concludes by emphasizing that the suite of methods presented, including quantitative cost-benefit analysis represent powerful tools for translating broad concepts for disaster risk reduction into practical strategies that can be justified on a combination of economic and other grounds.