MultihazardMitigationCouncil

A public/private partnership designed to reduce the societal and economic costs of natural hazards

MMC is a Council of the National Institute of Building Sciences

Mitigation Saves

An Independent Study to Assess the Future An Independent Study to Assess the Future Savings from Mitigation ActivitiesSavings from Mitigation Activities

Conducted by the Multihazard Mitigation CouncilConducted by the Multihazard Mitigation Councilwith funding from thewith funding from the

Federal Emergency Management AgencyFederal Emergency Management Agency

Congressional Directive

““to fund an independent study to to fund an independent study to assess the future savings resulting assess the future savings resulting from the various types of mitigation from the various types of mitigation activities.”activities.”

——from Report 106-161, FY 2000 Senate Appropriations Committee from Report 106-161, FY 2000 Senate Appropriations Committee Subcommittee for the Veterans Administration, HUD and Independent Subcommittee for the Veterans Administration, HUD and Independent AgenciesAgencies

Independent Study

Two-year study (after Two-year study (after a study design phase)a study design phase)

Involved experts in Involved experts in wide variety of wide variety of disciplinesdisciplines

TransparentTransparent ConservativeConservative Quality controlledQuality controlled

MultihazardMitigation

Council Board

Project ManagementCommittee and

Management Consultant

35+ member multidisciplinaryresearch team

organized by a subcontractor

Key Study Participants

MMC Project Management CommitteeMMC Project Management Committee

Philip Ganderton, University of New MexicoPhilip Ganderton, University of New Mexico David Godschalk, University of North CarolinaDavid Godschalk, University of North Carolina Anne Kiremidjian, Stanford UniversityAnne Kiremidjian, Stanford University Kathleen Tierney, University of ColoradoKathleen Tierney, University of Colorado Carol Taylor West, University of FloridaCarol Taylor West, University of Florida

MMC Project Management ConsultantMMC Project Management Consultant

L. Thomas TobinL. Thomas Tobin

Lead Investigators organized by the Applied Technology Lead Investigators organized by the Applied Technology CouncilCouncil

Tom McLane, Project ManagerTom McLane, Project Manager Ron Eguchi, Technical DirectorRon Eguchi, Technical Director Adam Rose, Lead EconomistAdam Rose, Lead Economist Elliott Mittler, Community Case Study LeaderElliott Mittler, Community Case Study Leader

Study Focus

FEMA’s major mitigation programs:FEMA’s major mitigation programs:Hazard Mitigation Grant ProgramHazard Mitigation Grant ProgramFlood Mitigation Assistance programFlood Mitigation Assistance programProject ImpactProject Impact

Hazards considered:Hazards considered:EarthquakesEarthquakesFloodsFloodsWind (tornadoes, hurricanes, etc.)Wind (tornadoes, hurricanes, etc.)

During the decade from 1993 to 2003During the decade from 1993 to 2003

Types of Mitigation Activities

ProjectProject Mitigation Mitigation activities to avoid or activities to avoid or

reduce damage reduce damage resulting from hazard resulting from hazard eventsevents. .

Strengthening public buildingsStrengthening public buildings Upgrading utility systemsUpgrading utility systems Buying out repeatedly flooded Buying out repeatedly flooded

homeshomes Elevating buildings above flood Elevating buildings above flood

levelslevels Adding hurricane shuttersAdding hurricane shutters

ProcessProcess Mitigation Mitigation activities that lead to activities that lead to policies, practices policies, practices and projects that and projects that reduce risk. reduce risk.

Awareness effortsAwareness efforts Encouraging individual Encouraging individual

preparednesspreparedness Strengthening building codesStrengthening building codes Developing community hazard Developing community hazard

mitigation plansmitigation plans

Study Components

Benefit-Cost Benefit-Cost Analysis of GrantsAnalysis of Grants Statistical sampleStatistical sampleGrants sample Grants sample included projects for:included projects for:

Each hazard typeEach hazard type Each level of riskEach level of risk Both activity typesBoth activity types

Community Case Community Case StudiesStudies

Purposive sample Purposive sample Criteria for inclusion:Criteria for inclusion:

Received FEMA Received FEMA grantsgrants

High risk of at least High risk of at least 1 of the 3 hazards1 of the 3 hazards

Community Community population (S, M, L)population (S, M, L)

Regional distributionRegional distribution

Benefit-Cost Analysis

Identify standingIdentify standing Identify benefits and costsIdentify benefits and costs Monetize using efficient prices (as Monetize using efficient prices (as

available)available) Discount to present valueDiscount to present value Sensitivity analysisSensitivity analysis

Benefits ConsideredAnnualized and discounted reduced losses due to:Annualized and discounted reduced losses due to:

Direct property damage, e.g., buildings, contents, bridges and Direct property damage, e.g., buildings, contents, bridges and pipelinespipelines

Direct business interruption loss, e.g., damaged factory Direct business interruption loss, e.g., damaged factory shutdown;shutdown;

Indirect business interruption loss, e.g., ordinary multiplier Indirect business interruption loss, e.g., ordinary multiplier effects;effects;

Non-market losses, e.g., damage to wetlands, parks, wildlife, Non-market losses, e.g., damage to wetlands, parks, wildlife, and historic sites;and historic sites;

Societal losses, e.g., casualties and homelessness; andSocietal losses, e.g., casualties and homelessness; and Emergency response, e.g., ambulance service and fire Emergency response, e.g., ambulance service and fire

protection.protection.

The estimated benefits (losses avoided) are $14 billion.The estimated benefits (losses avoided) are $14 billion.

Costs Considered

Federal share and local match taken from the Federal share and local match taken from the National Emergency Management Information National Emergency Management Information System (NEMIS) databaseSystem (NEMIS) database

Administrative costs assumed to be offsetAdministrative costs assumed to be offset

FEMA grants for flood, wind and earthquake FEMA grants for flood, wind and earthquake mitigation totaled $3.5 billion between 1993 and 2003mitigation totaled $3.5 billion between 1993 and 2003

Loss Estimation

HAZUSHAZUS®®MH used to estimate direct property MH used to estimate direct property damage from earthquake and hurricane wind.damage from earthquake and hurricane wind.

Supplemental methods used to estimate:Supplemental methods used to estimate:Direct property loss from flood and tornadoDirect property loss from flood and tornado

Business interruption loss for utilitiesBusiness interruption loss for utilities

Environmental and historic benefitsEnvironmental and historic benefits

Process mitigation activitiesProcess mitigation activities

Ratios Vary by Grant Category

Grants Have High Benefit-Cost Ratios Grants Have High Benefit-Cost Ratios -- A dollar -- A dollar spent on mitigation saves society an average of $4spent on mitigation saves society an average of $4

Earthquake grants = 1.50Earthquake grants = 1.50 Wind grants = 3.9Wind grants = 3.9 Flood grants = 5.0Flood grants = 5.0

Project grants = 4.1Project grants = 4.1 Process grants = 2.0Process grants = 2.0

Flood

Casualties, 3%

Environmental &

Historical, 1%

Building &

Contents, 95%

(c)

Business Interruption& Displacement, 1%

WindEnvironmental &

Historical, 0%

Casualties, 61%

Building &

Contents,

13%

Business Interruption & Displacement,26%

(b)

Earthquake

Casualties,

62%

Building

& Contents,

27%

Business Interruption& Displacement, 10%

(a)

Community Studies

RepresentativeRepresentative Blind selectionBlind selection Consider contextConsider context

Freeport, NY Freeport, NY Hayward, CAHayward, CA Horry County, SCHorry County, SC Jamestown, NDJamestown, ND Jefferson County, ALJefferson County, AL Multnomah County, ORMultnomah County, OR City of Orange, CACity of Orange, CA Tuscola County, MITuscola County, MI

Community Study Methods

Identify individuals, projects, & collect reportsIdentify individuals, projects, & collect reports Conduct telephone interviews & administer Conduct telephone interviews & administer

confidential questionnairesconfidential questionnaires Community visits & interviewsCommunity visits & interviews Analyze dataAnalyze data Identify synergiesIdentify synergies Calculate benefits & costsCalculate benefits & costs

Community Study Findings

Mitigation grants tend to have synergy – Mitigation grants tend to have synergy – creating more mitigation activities.creating more mitigation activities.

Interviewees in all 8 communities said:Interviewees in all 8 communities said: FEMA funding helped reduce community risks and FEMA funding helped reduce community risks and Increased community capacity to mitigate natural Increased community capacity to mitigate natural

hazards.hazards.

These findings support the analysis of grants, These findings support the analysis of grants, but eight cases are not enough to generalize.but eight cases are not enough to generalize.

Savings to Federal Treasury

Considered avoided relief and recovery Considered avoided relief and recovery costs, and tax revenues foregone costs, and tax revenues foregone because of disaster losses;because of disaster losses;

A dollar spent by FEMA for mitigation A dollar spent by FEMA for mitigation grants potentially saves the federal grants potentially saves the federal treasury about $3.65.treasury about $3.65.

Study Conclusions

FEMA grants issued between 1993 and FEMA grants issued between 1993 and 2003 for flood, wind and earthquake 2003 for flood, wind and earthquake mitigation are expected to:mitigation are expected to:

- reduce future losses by $14 billion, and- reduce future losses by $14 billion, and

- save 223 lives and avoid 4,699 injuries.- save 223 lives and avoid 4,699 injuries.

Study Conclusions

Mitigation is sufficiently cost-effective to warrant Mitigation is sufficiently cost-effective to warrant federal funding on an on-going basis both before federal funding on an on-going basis both before disasters and during post-disaster recoverydisasters and during post-disaster recovery

Community context counts—Community context counts—

Mitigation is most effective when carried out on a Mitigation is most effective when carried out on a comprehensive, community-wide, long-term basis.comprehensive, community-wide, long-term basis.

Sensitivity analyses indicate robust results. Sensitivity analyses indicate robust results.

MMC Board Recommendations to the

Federal Government

Invest in natural hazard mitigation as a Invest in natural hazard mitigation as a matter of policy on an ongoing basis:matter of policy on an ongoing basis:

Before disasters occur, andBefore disasters occur, and

Through federally funded disaster recovery Through federally funded disaster recovery and rebuilding activities and programs.and rebuilding activities and programs.

MMC Recommends

Support ongoing evaluation of mitigationSupport ongoing evaluation of mitigation

Develop a structured process to assess the Develop a structured process to assess the performance of buildings and infrastructure performance of buildings and infrastructure after natural disaster, andafter natural disaster, and

Measure the benefits that accrue from Measure the benefits that accrue from process mitigation activities.process mitigation activities.

MMC Recommends

Support mitigation activities that will Support mitigation activities that will increase the resilience of communities increase the resilience of communities by increasing knowledge and promoting by increasing knowledge and promoting institutional commitments to mitigation institutional commitments to mitigation at the local level.at the local level.

Additional Information

Multihazard Mitigation CouncilNational Institute of Building Sciences1090 Vermont Avenue, NW, Suite 700Washington, DC 20005

Phone 202-289-7800Fax 202-289-1092

E-mail mmc@nibs.org

Download Report from Download Report from http://www.nibs.org/MMC/mmcactiv5.htmlhttp://www.nibs.org/MMC/mmcactiv5.html