Features of Natural Disaster Risk
Hirokazu TatanoDisaster Prevention Research
Institute, Kyoto University
Economics of Natural Disaster, April 16, 2008
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
ContentsNatural Disaster in the WorldNatural Disaster in Japan Features of Natural Disaster RiskHow can we deal with this risk?: HFA
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Great Natural Disasters in the World
Source: Munich RE. 2005
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Economic losses and insured losses with trend
Source: Munich RE. 2005
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Trend of Natural Disaster in the worldTrend of Natural Disaster in the world
Larger catastrophic disaster is more likely to occur.
Number of Disaster for which some international aid is executed. 60s:90s=1:3
Economic losses glowed in high rate60s:90s= 1:9
Insured losses increased in higher rateAnti-catastrophe insurance available in high-income countries60s:90s =1:16
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
What is happening?
Increase in exposure : Population and assets are concentrating to hazardous area
Vulnerability : Population and assets have not enough resistance against natural hazards
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Natural Hazard →DisasterConsequences ofHuman Behavior
Hazard: Flood, Earthquakes,,etc
Population & AssetExposure:population and asset
exposed to the threat of natural hazards
Vulnerability: degree of resistance of the asset & population against disaster
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatanohttp://www.faculty.fairfield.edu/faculty/hodgson/Courses/so11/population/urbanization.htm
Urban population is dominating in the world
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Higher vulnerability in less income countries
Source: Munich Re. 2005
Large natural disasters over period 1980- 2005
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Proactive CounterProactive Counter MeasuresMeasures ofofDisasterDisaster Risk ManagementRisk Management
R isk C ontro lR isk C ontro l
R isk F inanceR isk F inance
R isk A vo idance/P revention
L and use R egulation
R isk A vo idance/P revention
L and use R egulation
M itiga tionsB uilding codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
M itiga tionsB uild ing codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
R isk T ransferInsuranceA R T , C at-B ond
R isk T ransferInsuranceA R T , C at-B ond
R isk A cceptanceB uilding R isk R eserveSelf-Insurance, C aptiveF inite, etc
R isk A cceptanceB uild ing R isk R eserveSelf-Insurance, C aptiveF inite, etc
A ctions taken before catastrophic events as to prevent/reduce (direct) losses
A ctions taken before catastrophic events as to prepare funds for recovery process
R isk F inanceR isk F inance
R isk A vo idance/P revention
L and use R egulation
R isk A vo idance/P revention
L and use R egulation
M itiga tionsB uilding codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
M itiga tionsB uild ing codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
R isk T ransferInsuranceA R T , C at-B ond
R isk T ransferInsuranceA R T , C at-B ond
R isk A cceptanceB uilding R isk R eserveSelf-Insurance, C aptiveF inite, etc
R isk A cceptanceB uild ing R isk R eserveSelf-Insurance, C aptiveF inite, etc
A ctions taken before catastrophic events as to prevent/reduce (direct) losses
A ctions taken before catastrophic events as to prepare funds for recovery process
R isk C ontro lR isk C ontro l
R isk F inanceR isk F inance
R isk A vo idance/P revention
L and use R egulation
R isk A vo idance/P revention
L and use R egulation
M itiga tionsB uilding codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
M itiga tionsB uild ing codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
R isk T ransferInsuranceA R T , C at-B ond
R isk T ransferInsuranceA R T , C at-B ond
R isk A cceptanceB uilding R isk R eserveSelf-Insurance, C aptiveF inite, etc
R isk A cceptanceB uild ing R isk R eserveSelf-Insurance, C aptiveF inite, etc
A ctions taken before catastrophic events as to prevent/reduce (direct) losses
A ctions taken before catastrophic events as to prepare funds for recovery process
R isk C ontro lR isk C ontro l
R isk F inanceR isk F inance
R isk A vo idance/P revention
L and use R egulation
R isk A vo idance/P revention
L and use R egulation
M itiga tionsB uilding codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
M itiga tionsB uild ing codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
R isk T ransferInsuranceA R T , C at-B ond
R isk T ransferInsuranceA R T , C at-B ond
R isk A cceptanceB uilding R isk R eserveSelf-Insurance, C aptiveF inite, etc
R isk A cceptanceB uild ing R isk R eserveSelf-Insurance, C aptiveF inite, etc
A ctions taken before catastrophic events as to prevent/reduce (direct) losses
A ctions taken before catastrophic events as to prepare funds for recovery process
R isk F inanceR isk F inance
R isk A vo idance/P revention
L and use R egulation
R isk A vo idance/P revention
L and use R egulation
M itiga tionsB uilding codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
M itiga tionsB uild ing codeH igh-T ech. Instrum ents:
(A ctuator, dum per, etc)
R isk T ransferInsuranceA R T , C at-B ond
R isk T ransferInsuranceA R T , C at-B ond
R isk A cceptanceB uilding R isk R eserveSelf-Insurance, C aptiveF inite, etc
R isk A cceptanceB uild ing R isk R eserveSelf-Insurance, C aptiveF inite, etc
A ctions taken before catastrophic events as to prevent/reduce (direct) losses
A ctions taken before catastrophic events as to prepare funds for recovery process
Benefit of Mitigation can be different. It depends on the possibility of risk transfer [ Kobayashi & Yokomastu2000].
Combination of Risk control and financing measure is important!
Needs for integration
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Smaller insurance coverage natural disaster losses in lower income countries
Source: Munich Re. 2003
Large natural disasters over period 1980- 1999
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Proactive risk financing is less used in developing countries
Source: Warner 2005.
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Current and ideal disaster risk management counter measures in developing countries
Source: Warner 2005.
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Observations and IssuesDisaster related losses are increasing in the world.Less developed countries are more vulnerable and have less insurance coverage. Proactive disaster risk management is ideal but difficult in practice in developing countries.
How can we overcome such problems?
Natural Disasters in Japan
A Natural disaster-prone country
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Japan, 95,21%
Other, 359,79%
Japan, 96,11%
Other, 743,89%
Number of earthquakes with magnitude of 6.0 or larger
• Japan covers only 0.25% of the land area on the grove, the number of earthquakes and distribution of active volcanoes is quite high.
• 20% of earthquakes with magnitude of 6.0 or larger were occurredin Japan.
• 10% of active volcanoes is located in Japan.
Number of active volcanoes
JAPAN: A Disaster-Prone Country
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Epicenters of Earthquakes which were magnitude 4.0 or above from 1980 to 1996
International Seismological Centre
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
The Number of Deaths and Missing in Natural Disasters in JapanTonankai
quakeHanshin-Awaji
earthquakeFukui quake Typhoon
Ise-wan
Weather Related Disasters
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Amount of Damage of Facilities due to Disasters
Annual Dam
age
Percentage in the GD
P
Percentage in the GDP
Amount of Damage of Facilities
(billion Yen)
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Disaster Relief Act (1947)
1943 Tottori Earthquake 1,083
1944 Tohnankai Earthquake 1,223
1945 Mikawa Earthquake 2,306
1945 Typhoon Makurazaki 3,756
1946 Nankai Earthquake 1,443
Large Earthquakes struck Japan during 1940s.
Government’s relief policy was established
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Large scale flood disasters frequently happened from 1930s to 1950s.
YearYear--Mon.Mon. CauseCause DeathDeath MissingMissing CausalityCausality
1934.91934.9 MurotoMurotoTyphoonTyphoon
27022702 334334 1499414994
1945.91945.9 MakurazakiMakurazakiTyphoonTyphoon
24732473 12831283 24522452
1947.91947.9 Catharine Catharine TyphoonTyphoon
10771077 853853 15471547
1954.91954.9 ToyamaruToyamaruTyphoonTyphoon
13611361 400400 16011601
1959.91959.9 IsewanIsewan TyphoonTyphoon 46974697 401401 3892138921
http://www.ffortune.net/social/seso/nihon-mei/muroto-taihu.htm
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
High Tide Disaster by Isewan Typhoon in 1959
http://www12.freeweb.ne.jp/photo/ajapskwn/saigai/p02.htmlhttp://www12.freeweb.ne.jp/photo/ajapskwn/saigai/p02.html
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Disaster Management Policy
Needs for change of the policy from reactive to proactive approach.In 1961, the Disaster Countermeasure Basic Act was legislated.
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Disaster Countermeasure Basic Act (1961)
The immense damage caused by the Typhoon Ise-wan in 1959 was a turning point for disaster management, giving rise to a movement to plan and prepare a comprehensive disaster management system, and in 1961, the Disaster Countermeasures Basic Act was enacted. Thereafter, the disaster management system has been improved and strengthened following the occurrence of large natural disasters and accidents.
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Change in Disaster Management Related Budget
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Changes in Disaster Management Budget by Category Classification
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Regional Disaster Prevention Plan
Triggered by Isewan disaster and enforced. Every level of public sectors shall have a plan by disaster prevention basic act (legal duty).A plan shall include long-term establishment plan on (1) forecasting system, (2) facilities for flood fighting, (3) warning criteria, (4) rescue system, and (5) communications in emergency.
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
The Great Hanshin-Awaji Earthquake, 1995
Effective Disaster Response is required.
Rapid Response, Information systems, Crisis Management, etc
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Disaster Management SystemsOrganizational Change in the National Government
At the time of the reorganization of the Central Government in 2001, the Cabinet Office undertook the administrative duties for disaster management. The Director-General for Disaster Management is mandated to undertake basic policy making and planning, coordinate the activities of all ministries and agencies and respond to large-scale disasters. In addition, the position“Minister of State for Disaster Management” was newly established as the Minister State for Special Missions.
Disaster Information SystemsDisaster Management Related Communication Network
Etc.
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Disaster ManagementRadio Communications System
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Trend of Natural Disaster in the worldLarger catastrophic disaster is more likely to occur.
Number of Disaster for which International Aid is executed. 60‘s:90’s=1:3
Economic losses glowed in high rate60‘s:90’s= 1:9
Insured losses increased in higher rateAnti-catastrophe insurance available in advanced countries60‘s:90’s =1:16
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
What is happening?Increase in exposure : Population and assets are concentrating to hazardous area
Vulnerability : Population and assets have not enough resistance against natural hazards
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Natural Hazard →DisasterConsequences ofHuman Behavior
Hazard: Flood, Earthquakes,,etc
Population & AssetExposure:population and asset
exposed to the threat of natural hazards
Vulnerability: degree of resistance of the asset & population against disaster
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
CounterCounter MeasuresMeasures ofofDisasterDisaster RiskRisk ManagementManagement
Risk ControlRisk Control
Risk FinanceRisk Finance
Risk Avoidance/Prevention
Land use Regulation
Risk Avoidance/Prevention
Land use Regulation
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
Risk TransferInsuranceART, Cat-Bond
Risk TransferInsuranceART, Cat-Bond
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Actions taken before catastrophic events as to prevent/reduce (direct) losses
Actions taken before catastrophic events as to prepare funds for recovery process
Risk FinanceRisk Finance
Risk Avoidance/Prevention
Land use Regulation
Risk Avoidance/Prevention
Land use Regulation
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
Risk TransferInsuranceART, Cat-Bond
Risk TransferInsuranceART, Cat-Bond
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Actions taken before catastrophic events as to prevent/reduce (direct) losses
Actions taken before catastrophic events as to prepare funds for recovery process
Risk ControlRisk Control
Risk FinanceRisk Finance
Risk Avoidance/Prevention
Land use Regulation
Risk Avoidance/Prevention
Land use Regulation
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
Risk TransferInsuranceART, Cat-Bond
Risk TransferInsuranceART, Cat-Bond
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Actions taken before catastrophic events as to prevent/reduce (direct) losses
Actions taken before catastrophic events as to prepare funds for recovery process
Risk ControlRisk Control
Risk FinanceRisk Finance
Risk Avoidance/Prevention
Land use Regulation
Risk Avoidance/Prevention
Land use Regulation
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
Risk TransferInsuranceART, Cat-Bond
Risk TransferInsuranceART, Cat-Bond
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Actions taken before catastrophic events as to prevent/reduce (direct) losses
Actions taken before catastrophic events as to prepare funds for recovery process
Risk FinanceRisk Finance
Risk Avoidance/Prevention
Land use Regulation
Risk Avoidance/Prevention
Land use Regulation
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
MitigationsBuilding codeHigh-Tech. Instruments:
(Actuator, dumper, etc)
Risk TransferInsuranceART, Cat-Bond
Risk TransferInsuranceART, Cat-Bond
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Risk AcceptanceBuilding Risk ReserveSelf-Insurance, CaptiveFinite, etc
Actions taken before catastrophic events as to prevent/reduce (direct) losses
Actions taken before catastrophic events as to prepare funds for recovery process
Benefit of Mitigation can be different. It depends on the possibility of risk transfer [ Kobayashi & Yokomastu 2000].
Combination of Risk control and financing measure is important!
Needs for integration
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
時間
Log
Y
復旧期間
レベル効果2次的被害(フロー被害)
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
防災投資ミチゲーション
時間
Log
Y
復旧期間
レベル効果2次的被害(フロー被害)
復旧政策(ファイナンス)
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Economics of Natural Disaster, April 16, 2008Disaster Prevention Research Institute Kyoto University
Hirokazu Tatano
Low Frequency ⇒ difficulty in learning from the past experience⇒ existence of perception bias⇒ unknowns & uncertainties, ambiguities
High Impact (correlation in space and time)⇒ Importance of pro-active preparation: RISK MANAGEMENT⇒ Low insurability⇒ Long-term effects and Spill-over effects in space
Changes in Disaster Environment⇒ Urbanization, Globalization ⇒ Sustainable Development
Features of Contemporary Disaster Risk