  Economics for Disaster Prevention and Preparedness

          Investment in
    Disaster Risk Management
in Europe Makes Economic Sense
              BACKGROUND REPORT
© 2021 International Bank for Reconstruction and Development / The World Bank

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reflect the views of the European Union.

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and Development concerning the Part II Europe 2020 Programmatic Single-Donor Trust Fund (No.TF073473)
(EC Contract No. ECHOSUB/IBRD/2020/827615).

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                                                                                                                  2
ACKNOWLEDGEMENTS

This report forms part of deliverables under the technical assistance Economic Analysis of Prevention and
Preparedness in European Union Member States and Countries under EU Civil Protection Mechanism. This
activity is funded by the European Commission’s Directorate General for European Civil Protection and
Humanitarian Aid Operations (DG ECHO) through the Annual Work Program of 2020. This report corresponds to
the output “Report on the retrospective analysis of the cost and benefits of selected investments aimed at
building resilience in the Participating States”.

This report was prepared under the guidance and supervision of Christoph Pusch (Practice Manager, Urban,
Disaster Risk Management, Resilience and Land, Europe and Central Asia) and Gallina Vincelette (Country
Director for the European Union Countries).

The report was prepared under leadership of Alanna Simpson (Lead Disaster Risk Management Specialist),
Samantha Cook (Senior Financial Sector Specialist) and Zuzana Stanton-Geddes (Disaster Risk Management
Specialist). Drafting of the report was coordinated by Solene Dengler (Disaster Risk Management Analyst), and
expert inputs were provided by Shaikh Eskander (Senior Environmental Economist), Stuart Fraser (Senior
Disaster Risk Management Consultant), Mattia Amadio (Disaster Risk Management Consultant), Daniel Johnson
(Heatwave Expert), Zahraa Saiyed (Senior Earthquake Engineer), Josh Macabuag (Senior Disaster Risk Engineer),
and Maryia Markhvida (Senior Disaster Risk Management Consultant). Research and analytics support came
from Tianyu Zhang (Data Analyst) and Jayne Hoagbin (Research Assistant), with modelling from Domingos
Viegas (Professor and Senior Wildfire Expert, Department of Mechanical Engineering, University of Coimbra),
Miguel Almeida (Wildfire Expert), the Global Earthquake Model Foundation, and JBA Risk Management. The
report was edited by Anne Himmelfarb and designed by Ariane Kascha.

The report benefitted from comments and guidance received from Reinhard Mechler (Acting Program Director,
Risk and Resilience Department, International Institute for Applied Systems Analysis) and Adam Rose (Research
Professor, University of Southern California); Justine Morven Sylvester (Land and Urban Analyst) and from peer
review comments from received from Julie Rozenberg, Artessa Saldivar-Sali, and Jun Rentschler.

The team would like to express its gratitude for the cooperation and guidance of the representatives of the
European Commission and all the stakeholders consulted during the report’s preparation.


STATEMENT ON COVID-19 PANDEMIC

The COVID-19 pandemic has led to substantial restrictions on travelling and the organization of workshops and
face-to face meetings. Despite these limitations, the World Bank team in collaboration with the European
Commission and stakeholders has managed to effectively undertake extensive consultations online to collect
data and information as a basis for this work.




                                                                                                            3
Contents

1. About this Background Report���������������������������������������������������������������������������������������������������������������17
                             Applied in the Literature and This Report���������������������������������� 18
2. Overview of Methodologies 
   2.1. The Triple Dividend of Resilience Approach                                                                                          18
   2.2. Methodology applied to analyse case studies                                                                                         20
        2.2.1. Summary of methodological approach                                                                                           20
   2.3. Approach for the identification of case studies and overall analysis                                                                21
        2.3.1. Approach for the identification of case studies                                                                              21
        2.3.2. Summarized results from analysis and case studies                                                                            22

3. Case StudiesResults and Analyses by Investments������������������������������������������������������������������������ 28
   3.1. Flooding                                                                                                                           29
        3.1.1. Summary of findings for floods                                                                                              29
        3.1.2. Structural protection against floods                                                                                        35
        3.1.3. Nature-based solutions for flood protection                                                                                 45
        3.1.4. Flood early warning systems                                                                                                 61
        3.1.5. Property-level protection (PLP)                                                                                             68
        3.1.6. Overview of BCA for flood risk reduction                                                                                    72
   3.2. Earthquakes                                                                                                                        73
        3.2.1. Summary of findings for earthquakes                                                                                         73
        3.2.2. Seismic strengthening of buildings and infrastructure                                                                       79
        3.2.3. Earthquake Early Warning Systems                                                                                           108
        3.2.4. Responder capacity building                                                                                                111
   3.3. Extreme Heat                                                                                                                      121
        3.3.1. Summary of findings for extreme heat                                                                                       121
        3.3.2. UHI effects                                                                                                                125
        3.3.3. Heat early warning systems                                                                                                 130
   3.4. Droughts                                                                                                                          135
        3.4.1. Summary of findings for droughts                                                                                           135
        3.4.2. Irrigation and water provision systems against droughts                                                                    138
        3.4.3. Early warning and capacity building for drought preparedness                                                               140
   3.5. Wildfires                                                                                                                         142
        3.5.1. Summary of findings for wildfires                                                                                          142
        3.5.2. Wildland-urban interfaces                                                                                                  149
        3.5.3. Fuel Management for Wildfire Risk Reduction in forests                                                                     161
        3.5.4. Decision support tools for climate change adaptation and alerting for wildfire risk reduction                              167
        3.5.5. Cross-border support, coordination mechanisms, and capacity building for wildfires                                         178
   3.6. Mass movement / landslides                                                                                                        182
        3.6.1. Summary of findings for mass movement (landslides)                                                                         182
        3.6.2. Preventive investments in the resilience of roads                                                                          184
        3.6.3. Land use planning investments                                                                                              186
        3.6.4. Information and cooperation systems for landslide prevention                                                               187
   3.7. Volcanic Eruption                                                                                                                 189
        3.7.1. Summary of findings for volcanoes                                                                                          189
        3.7.2. Decision making for evacuation in the case of eruptions                                                                    190
        3.7.3. Infrastructure for evacuation and response                                                                                 191




                                                                                                                                               4
    3.8. Epidemic and Disaster Health Preparedness                                                                                                           192
         3.8.1. Summary of findings for epidemic/pandemic risks                                                                                              192
         3.8.2. Return on Investment of National Public Health Programs                                                                                      194
         3.8.3. Equipment for health-related disasters                                                                                                       199
    3.9. Oil spills                                                                                                                                          202
         3.9.1. Summary of findings for oil spills                                                                                                           202
         3.9.2. Preventive investments in vessels and equipment in coastal areas                                                                             203
    3.10. Nuclear                                                                                                                                            207
         3.10.1. Summary of findings 	 for nuclear risks                                                                                                     207
         3.10.2. Security of nuclear power plants                                                                                                            208
         3.10.3. Cleaning up uranium                                                                                                                         209
    3.11. Chemical                                                                                                                                           210
         3.11.1. Summary of findings for chemical risks                                                                                                      210
         3.11.2. Cleaning up hazardous waste                                                                                                                 213
    3.12. Multi-hazard                                                                                                                                       217
         3.12.1. Summary of findings for multi-hazard risks                                                                                                  217
         3.12.2. Rescue and emergency response equipment                                                                                                     218
         3.12.3. Multi-hazard early warning systems                                                                                                          219
         3.12.4. Participatory methodologies for climate change adaptation                                                                                   220
         3.12.5. Local multi-purpose green investments                                                                                                       221
4. Bibliography��������������������������������������������������������������������������������������������������������������������������������������������� 223
5. Annexes ����������������������������������������������������������������������������������������������������������������������������������������������������� 240
    5.1. Annex 1: Key terms and definitions related to methodologies to the estimation
    	    of costs and benefits of DRM investments                                                                                                            240
    5.2. Annex 2: A step-by-step practitioner report on applying the Triple Dividend BCA                                                                     241
    5.3. Annex 3: Additional Information on the Methodological Approach                                                                                      245
    5.4. Annex 4: Background Information on case studies                                                                                                     248
    5.5. Annex 5: Netherlands results from national assessments and BCAs over a century                                                                      254
    5.6. Annex 6: Consultations table for case studies                                                                                                       256
    5.7. Annex 7: Full overview of final case studies by hazards, sectors, countries and funding                                                             261




                                                                                                                                                                   5
Figures
Figure 1:	 Triple Dividend of Resilience	       	                                                      20
Figure 2: 	 Process for the selection of case studies	                                                 21
Figure 4: 	 Economic loss (€, billions) from considered hazards and climate impact at warming
            levels for the EU and the United Kingdom (for macro regions)	                              27
Figure 5: 	 Findings of BCA for floods (BCRs)	                                                         31
Figure 6: 	 Findings of BCA for floods (NPVs)	                                                         31
Figure 7: 	 Findings of BCA for floods (ERRs)	                                                         32
Figure 8: 	 Location of case study and areas estimated to be protected by each project unit of the
            Machlandamm, with SoP denoted for each unit	                                               37
Figure 9: 	 Simulated reduction in risk per level 3 Administrative unit (AAL) due to protection
            by the Machlandamm flood protection	                                                       38
Figure 10: Elbe River basin districts and potentials for green infrastructures	                        50
Figure 11: Areas covered by FEWS in Flanders showing ‘flood-prone’ areas (red—susceptible
            to frequent floods) and ‘floodable’ areas (pink—at risk of less frequent floods)	          62
Figure 12: Map of flood-prone areas in Flanders, Belgium in terms of frequency of occurrence	 64
Figure 13: Case studies location for modelling of PLP measures: Lignano and Rimini are small
            towns in Italy located on the North-Adriatic coast	                                        69
Figure 14: Findings of BCA for earthquakes (BCRs)	                                                     76
Figure 15: Findings of BCA for earthquakes (NPVs)	                                                     76
Figure 16: Findings of BCA for earthquakes (IRRs)	                                                     77
Figure 17: Number of buildings per region in Italy	                                                    86
Figure 18: Map of seismic countries in the EU by the exposed value of education facilities	            92
Figure 19: Percentage reduction in average annual direct losses due to damage
            for the retrofitted case	                                                                  93
Figure 20: Costs (investments) and benefits considered for quantitative analysis to provide the BCR.
            Note that additional costs/benefits are analysed both quantitatively and qualitatively and
            discussed in the text	                                                                    112
Figure 21: Costs and benefits further broken down and ranked for each actor.
            Note that costs and benefits are often associated with different actors	                  115
Figure 22: Findings of benefit-cost analysis for extreme heat (B/C ratios)	                           123
Figure 23: Findings of benefit-cost analysis for extreme heat (NPVs)	                                 124
Figure 24: Findings of BCA for extreme heat (ERRs)	                                                   124
Figure 25: Conceptual framework of the impacts of drought events and approaches to drought
            risk prevention	                                                                          136
Figure 26: Share of drought losses by economic sector (agriculture, energy, water supply, subsidence,
            and transport) for EU + UK and the four IPCC AR5 European subregions in the baseline
            (1981–2010) and in 2100	                                                                  137
Figure 27: Forest fire danger in the present, and under two climate change scenarios, according
            to two different climate models (1.5°C, 2 °C, and 3°C)	                                   143
Figure 28: Findings of BCA for wildfires (BCRs)	                                                      146
Figure 29: Image of a fuel break for WUIs	                                                            149
Figure 30: Assessment of housing in Pedrógão Grande for destruction assessment and
            WUI distances	                                                                            151
Figure 31: Variation of potential damage (%) as a function of fuel proximity to homes in
            Pedrógão Grande	                                                                          151
Figure 32: Fuel management investments and corresponding economic losses to homes in WUI	 152
Figure 33: Variation of potential damage (%) as a function of fuel proximity to industries
            in Oliveira do Hospital	                                                                  157




                                                                                                        6
Figure 34: Fuel management investments and corresponding economic losses to industries
           in Oliveira do Hospital	                                                                    158
Figure 35: Fuel-reduced fringes (firebreaks and fuel breaks) provide a fixed safety distance	          161
Figure 36: View of a fuel break in a pine stand in Central Portugal (photo of ADAI)	                   162
Figure 37: Findings CA for mass movement/landslides (BCRs)	                                            183
Figure 38: Map showing the primary network under consideration of this project 	                       185
Figure 39: Findings of BCA for epidemics/pandemics (BCRs)	                                             193
Figure 40: Hospital beds per 1,000 inhabitants by region, 2018	                                        195
Figure 41: Schematic phases of natural hazards’ effects on public health resources	                    196
Figure 42: Estimated direct and indirect costs related to mental health problems across the
           EU as a % of GDP, 2015	                                                                     197
Figure 43: Findings of BCA for Oil Spills (BCR)	                                                       203
Figure 44: EMSA’s Operational Oil Spill Response Services	                                             204
Figure 45: Findings of BCA for chemical risk (BCR)	                                                    211
Figure 46: Findings of BCA for chemical risk (NPV)	                                                    212
Figure 47: Findings of BCA for chemical risk (IRR)	                                                    212
Figure 48: Benefits of NBS in urban environments	                                                      222
Figure 49: Overall cumulative association between temperature and mortality	                           251
Figure 50: Flow chart showing Albania’s climate-resilient roads’ project approach for parts 1 and 2	   253


Tables
Table 1: 	 Overview of Case studies Reviewed as part of Background Research23
Table 2: 	 Overview of data and information sources for flood analysis30
Table 3: 	 Risk reduction represented by change in AAL due to the Machlandamm flood protection
           at key settlements in the case study area38
Table 4: 	 BCR for Machlandamm per dividend, assuming a 30-year period of operation39
Table 5: 	 Detailed breakdown of benefits for Machlanddamm by dividend39
Table 6: 	 BCR for river flood protection for Poland’s Odra river basin per dividend
           (all values in 2006 Euro values at the exchange rate of 1€ = 4 PLN).41
Table 7: 	 Detailed breakdown of Odra River benefits by dividend41
Table 8: 	 Comparison of costs for major investment projects in storm surge barriers in Europe44
Table 9: 	 Estimated costs and benefits from the first economic appraisal of Eddleston Water NFM47
Table 10: Impact of NFM measures in the Eddleston Water catchment, on property damage
           in Eddleston village and Peebles town47
Table 11: Estimated benefits and costs for INTERREG project in Eddleston, Scotland per dividend,
           based on a 30-year timescale 48
Table 12: Estimated benefits and costs for INTERREG project in Eddleston, Scotland per dividend,
           based on a 100-year timescale49
Table 13: Green, Grey and Hybrid measures for flood prevention in Elbe, Germany 51
Table 14: Cost-effectiveness of infrastructure options for the Elbe: NPV of options52
Table 15: Benefits and costs from Chimney Meadows floodplain restoration over a 30 years period
           (2023-2052) applying a discount rate of 1.5% 54
Table 16: Overview of costs and benefits of all plan alternatives (€, millions in 2004 prices) for
           optimal Sigma Plan up to 210058
Table 17: People and households affected by EWS benefits (model estimates)63
Table 18: Overall risk reduction (AAL) thanks to EWS for 3 key assumptions (in millions €)63
Table 19: BCR of implementing EWS in Flanders by dividend, over 30 years (Future benefits and
           costs discounted by 3.5%/year)64
Table 20: Unitary costs of PLP measures as estimated for the Umbria case study.
           Adapted from ECHO-SUB-2014-69446970


                                                                                                          7
Table 21: Summary of results for PLP scenario simulation compared to baseline.
          Both locations show a reduction in annual expected losses close to 3.5 percent
          for PLP measure implementation with percent uptake70
Table 22: BCR for PLP in NE Italy per dividend (30 years lifespan, benefits discount rate 3.5%)71
Table 23: Overview of data and information sources for earthquake analysis74
Table 24: Types of buildings included in Italy’s seismic retrofitting by sector84
Table 25: Methodologies of benefit estimations85
Table 26: Number of building interventions conducted by sector and type of interventions87
Table 27: Investment into public buildings87
Table 28: Investment into private mixed-use buildings89
Table 29: Number of schools and universities considered in the case study with associated
          national database websites 91
Table 30: Estimated retrofitting cost ratios from multiple sources93
Table 31: Key parameters of existing educational buildings94
Table 32: Energy efficiency measures description95
Table 33: Primary energy savings95
Table 34: CO2 savings96
Table 35: Energy costs and conversion factors96
Table 36: ‘Light/medium’ renovation monetary results 97
Table 37: ‘Deep’ renovation monetary results	  97
Table 38: BCA for schools98
Table 39: BCA for universities100
Table 40: BCR of strengthening disaster risk management in Romania (in million €)104
Table 41: BCR of improving resilience and emergency response in Romania (in million €)104
Table 42: BCR of strengthening preparedness and critical emergency infrastructure105
Table 43: Comparison of BCA outputs for case studies in Romania105
Table 44: BCR of Turkey school infrastructure investment per dividend107
Table 45: BCR of implementing EEWS in Bucharest, Romania (in million €)110
Table 46: Detailed breakdown of implementing EEWS in Bucharest, Romania (in million €)110
Table 47: Capacity-building BCA for November 2019 Albania Earthquake116
Table 48: Detailed breakdown of BCA items for case study: November 2019 Albania Earthquake116
Table 49: Capacity-Building BCA for March 2020 Croatia Earthquake 118
Table 50: Breakdown of BCA items for the case study: March 2020 Croatia Earthquake118
Table 51: Overview of data and information sources for extreme heat analysis122
Table 52: Costs and benefits of green and white solutions to reduce UHI effect (in hundred millions €)129
Table 53: BCR for HEWS by dividends133
Table 54: Ranges of parameters used in Monte Carlo simulation following triangular distributions134
Table 55: Overview of data and information sources for droughts analysis138
Table 56: Fitted impact model to determine economic efficiency of emergency drought wells140
Table 57: Overview of data and information sources for wildfires analysis144
Table 58: CBR of WUIs in Pedrógão Grande (in million €)154
Table 59: Expanded triple dividend BCR calculation of WUIs in Pedrógão Grande (in million €)154
Table 60: Industrial facilities affected by industry156
Table 61: BCR of WUI management to industries in Oliveira do Hospital (in million €)160
Table 62: Expanded Triple Dividend Cost Benefit Ratio Calculation of WUI management to industries
          in Oliveira do Hospital (in million €)160
Table 63: Estimation of effectiveness of fuel breaks with regard to the hazard level and
          degree of effective fire suppression163
Table 64: BCR of fuel management for wildfire risk reduction in the Central Region, Portugal (in million €)166
Table 65: Expanded triple dividend BCR calculation of fuel management for wildfire risk reduction in the
          Central Region, Portugal (in 100000 €)166
Table 66: BCR of climate change adaptation decision support tool in Austria (in 100000 €)169


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Table 67: Expanded triple dividend BCR calculation for the climate change adaptation decision
          support tool in Austria (in 100000 €)169
Table 68: Probabilities of injuries with risk reduction actions taken in moderate to extreme hazard fires172
Table 69: Probabilities of fatalities with risk reduction actions taken in moderate to extreme hazard fires172
Table 70: BCR calculation of alerting and preparedness for fires in Portugal (in million €)173
Table 71: Expanded triple dividend BCR calculation for alerting and preparedness for fires in Portugal
          (in million €)173
Table 72: Probabilities of injuries with risk reduction actions taken in moderate to extreme hazard fires176
Table 73: Probabilities of fatalities with risk reduction actions taken in moderate to extreme hazard fires176
Table 74: BCR calculation of alerting and preparedness for fires in Greece (in million €)177
Table 75: Expanded triple dividend BCR calculation of alerting and preparedness in Greece (in million €)177
Table 76: BCR calculation of the SPITFIRE project (in million €)180
Table 77: Expanded triple dividend BCR calculation for the SPITFIRE project (in million €)180
Table 78: Overview of data and information sources for mass movement / landslides analysis182
Table 79: BCR for landslide measures implemented by corridor186
Table 80: Overview of data and information sources for epidemics/pandemics analysis193
Table 81: Cost of PPE supplies in the United States pre-COVID19 and during COVID-19199
Table 83: Socioeconomic and Environmental Base Per-Gallon Costs for Oil Spills205
Table 84: Overview of data and information sources for chemical analysis211
Table 85: BCR of cleaning up hazardous waste in Latvia (in million €)215
Table 86: Expanded triple dividend BCR calculation for cleaning up hazardous waste in Latvia
          (in million €)216
Table 87: Overview of data and information sources for multi-hazard analysis217
Table 88: Value of various participatory climate adaption measures221
Table 89: Highlights of one century of BCAs for Dutch flood risk management:
          conclusions and applications254
Table 90: Highlights of one century of BCA’s for Dutch flood risk management:
          benefits and uncertainty estimations255




Boxes
Box 1: Overview of other investments in structural flood protection across Europe45
Box 2: Structural protection for specific assets in the transport sector46
Box 3: Additional examples of investments in Floodplain and Wetland restoration58
Box 4: NBS for flood risk reduction in coastal and tidal areas62
Box 5: Investments in urban infrastructure to reduce flood risks63
Box 6: Varied investments in EWS and capacity building for flood response across Europe70
Box 7: Cultural heritage protection and seismic strengthening in Italy83
Box 8: Climate-proofing social housing126
Box 9: Investing in improving water security infrastructure and supply system139
Box 10: Investing in Early Warning and preparedness for Droughts141
Box 11: Investments in capacity for enhanced wildfire response across Europe181
Box 12: Cost-effectiveness of landslide prevention vs. response investments187
Box 13: Investments in information systems and cooperation mechanisms for landslide prevention188
Box 14: Investments in preparedness for volcanic eruptions191
Box 15: Evacuation routes in volcanic areas191
Box 16: Investments in the security of nuclear power plants across Europe208
Box 17: The use of digital tools in the early warning of disasters219
Box 18: Examples of investments in urban blue green infrastructure222


                                                                                                             9
GLOSSARY OF KEY TERMS                                       human, material, economic, or environmental effects
                                                            that require immediate emergency response to satisfy
adaptation: Adjustments or changes in economic,             critical human needs and that may require external
social, or environmental approaches in response to the      support for recovery.
effect of present or future climate change.
                                                            disaster risk management (DRM): Processes for
avoided losses (first dividend of the triple dividend       designing, implementing, and evaluating strategies,
approach): The short- and long-term damages and             policies, and measures to improve the understanding
losses prevented or reduced by a DRM investment             of disaster risk, foster disaster risk reduction and
when a disaster occurs.                                     transfer, and promote continuous improvement in
                                                            disaster preparedness, response, and recovery
co-benefits (third dividend of the triple dividend          practices, all with the explicit purpose of increasing
approach): The social, environmental, and economic          human security, well-being, quality of life, and
benefits generated by a DRM investment, which is            sustainable development.
independent of the occurrence of disasters.
                                                            disaster risk reduction (DRR): Both a policy goal and
benefit-cost analysis (BCA): Process used to identify,      the strategic and instrumental measures employed for
measure, and analyse the benefits of a project,             anticipating future disaster risk. DRR reduces existing
programme, or decision versus the costs associated          exposure, hazard, or vulnerability and improves
with it.                                                    resilience.

benefit-cost ratio (BCR): Ratio used in BCA to              discount rate: Rate of return used to discount future
summarize the relationship between overall relative         cash flows back to their present value. Financial
benefits and costs of a project. A BCR lower than 1         discount rates are the interest rates used to calculate
means that the project’s net benefits could be negative,    the present value of future cash flows from a project or
i.e., benefits are lower than costs.                        investment. Social discount rates indicate a society’s
                                                            average valuation of future versus present impacts of
damage: Total or partial destruction of physical assets     interventions (benefits and costs). A high discount rate
existing in the affected area. Damage occurs during         indicates a lower valuation of the future and a
and after the disasters and is measured in physical         preference for the present, which particularly in the
units (that is, square meters of housing, kilometres of     context of climate change also has implications for
roads, and so on).                                          intergenerational equity.

direct and indirect benefits/costs: Benefits/costs          early warning system (EWS): An integrated tool of
either directly or indirectly associated with the impact    hazard monitoring, forecasting and alert, that enables
of the project/program/decision. An example of a            individuals, communities, governments, businesses
direct benefit is the prevention of asset losses or         and others to take timely actions to reduce disaster
enhancement of environmental value due to a flood           risks in advance of and during hazardous events. In
prevention measure; a direct cost is the cost of the        terms of flood interventions, EWS refers to interventions
flood prevention measure. An example of an indirect         that rely on meteorological forecasts of intense or
benefit is the productivity losses prevented given the      sustained rainfall to identify locations with forecast
flood measure, while an indirect cost is the increase in    flooding. EWS comprise technical components to
prices in the area leading to displacement and loss of      detect rainfall in advance and estimate flood
welfare/well-being of certain populations.                  conditions, and to disseminate warnings to affected
                                                            communities, but also human/behavioural components
disaster risk: The combination of the probability of an     to take decisions to activate warnings and to respond
event and its negative consequences. The likelihood         to warnings.
over a specified time period of severe alterations in the
normal functioning of a community or a society due to       exposure: The situation of people, infrastructure,
hazardous physical events interacting with vulnerable       housing, production capacities and other tangible
social conditions, leading to widespread adverse            human assets located in hazard-prone areas. Exposure



                                                                                                                  10
includes the number of people or types of assets in an       and outflows associated with a project/program/
area. These can be combined with the specific                decision, discount all these flows to the present day,
vulnerability and capacity of the exposed elements to        and add them together. A positive NPV means that,
any particular hazard to estimate the quantitative risks     after accounting for the time value of monetary flows,
associated with that hazard in the area of interest.         the project/program/decision could yield net benefits.

green infrastructure: Sustainable, nature-based              losses: Quantifiable damages of disasters that can be
Infrastructure that makes use of natural processes           translated into monetary terms. A distinction can be
and ecosystem services for functional purposes, such         made between direct disaster losses, which refer to
as disaster risk reduction. Such infrastructure usually      directly quantifiable losses (number of people killed,
yields risk reduction benefits as well as social and         damages to buildings, infrastructure or natural
environmental effects.                                       resources) and indirect losses, which refer to indirectly
                                                             quantifiable losses (declines in output or revenue,
grey infrastructure: Structural, human-engineered            impact on wellbeing, disruptions to flow of goods and
infrastructure for flood or other disaster risk              services in an economy).
management, which includes both static and active
elements and which is usually built with materials like      property level protection (PLP): A type of flood
steel and concrete.                                          intervention, which comprises protection of individual
                                                             properties through small-scale interventions such as
hazard: The potential occurrence of a natural or             demountable flood walls and gates at doorways, raising
human-induced physical event that may cause loss of          the ground floor level or elevation of door thresholds.
life, injury, or other health impacts, as well as damage
and loss to property, infrastructure, livelihoods, service   resilience: The ability of a system and its component
provision, and environmental resources.                      parts to anticipate, absorb, accommodate, or recover
                                                             from the effects of a hazardous event in a timely and
moral hazard: Refers to a situation when rational            efficient manner, including through ensuring the
individuals have incentives to change their exposure to      preservation, restoration, or improvement of its
risk when they do not bear the full cost of that risk        essential basic structures and functions.
exposure. For example, a full health insurance
coverage may discourage an individual to take care of        sensitivity analysis: analysis that determines and
her physical state since the monetary burden of any          showcases how results change when assumptions,
healthcare services will be borne by the insurance           parameters, or variables of an analysis are changed.
company.
                                                             structural protection: A type of flood intervention,
nature-based solutions (NBS) or natural floodplain           which comprises engineered or ‘hard’ defences with
management (NFM): A type of flood intervention,              are further classified as permanent engineered
which include interventions such as floodplain, dune,        structures: levees, dikes, walls, dams flood gates and
or wetland restoration; planting of green infrastructure,    temporary or de-mountable infrastructure such as
for example, hedgerows, woodlands, and natural               temporary barriers.
grasslands; and blue elements such as pools, ponds
buffer basins or water courses. Commonly, several            triple dividend benefit-cost analysis: A systematic
elements are combined in a management plan and are           approach that evaluate different project alternatives to
often considered as blue-green infrastructure, with the      determine the best option that generates the most
selection determined by the local environment and            welfare for the society by comparing the alternatives’
prevalent flood mechanisms.                                  social and economic costs to the benefits, which
                                                             consist of three dividends: 1) avoided losses and saved
net present value (NPV): Difference between the              lives, 2) unlocked economic potentials, and 3) the
present value of monetary inflows and the present            social, environmental, and economic co-benefits of
value of cash outflows over a period time. The idea          the project.
behind the NPV is to project all future monetary inflows




                                                                                                                   11
unlocked economic potentials (second dividend of            value of statistical life (VSL): The marginal rate of
the triple dividend approach): Innovations, entre-          substitution between income (wealth) and mortality
preneurship, investments, and other economic                risk, i.e., how much individuals are willing to pay on
activities stimulated due to the reduction in background    average to reduce the risk of death. It therefore
risks related to disasters through DRM investments.         indicates not the value of an actual life but the value of
This economic development potential is independent          marginal changes in the likelihood of death.
of the occurrence of disasters.
                                                            vulnerability: The characteristics and circumstances
value of a life year: A concept derived from the            of the built environment and communities that make
willingness to pay for increasing life expectancy by one    them susceptible to damaging impacts (or human
additional year. This measure is considered more            vulnerability). Vulnerability factors include building
appropriate for disasters that mostly displace mortality    construction type, socio-economic context, and so on.
(i.e., affect certain age groups) rather than mostly
causing       premature       deaths.      Theoretically,
measurements of actual changes in life expectancy
would be the exact measure to consider.




                                                                                                                   12
ACRONYMS AND ABBREVIATIONS


AAL          Average Annual Loss
ADAI         Association for the Development of Industrial Aerodynamics
AEP          Annual Exceedance Probability
AGIF         Agency for the Integrated Management of Wildfires
ARA          Albanian Road Authority
BAP          Biodiversity Action Plan
BASE         Bottom-Up Climate Adaptation Strategies Towards a Sustainable Europe
BCA          Benefit-Cost Analysis
BCR          Benefit-Cost Ratio
C3S          Copernicus Climate Change Service
CCDR-C       Central Regional Coordination and Development Commission
CFA          Country Fire Authority
CTCN         Climate Technology Centre and Network
DACC         Damage Assessment Coordination Centre
DACEA        Danube Cross-border System for Earthquake Alerts
DALY         Disability-adjusted Life Year
DEFRA        Department for Environment, Food, and Rural Affairs
DG           Directorate-General
DG ECHO      Directorate-General for European Civil Protection and Humanitarian Aid Operations
DiD          Difference-in-Difference
DPPI         Disaster Preparedness and Prevention Initiative
DRM          Disaster Risk Management
DRR          Disaster Risk Reduction
DSS          Decision Support Systems
EAEE         European Association for Earthquake Engineering
EC           European Commission
EDO          European Drought Observatory
EEA          European Environment Agency
EEWS         Earthquake Early Warning System(s)
EFAS         European Flood Awareness System
EFFIS        European Forest Fire Information System
EMS          Emergency Medical Services
EMSA         European Maritime Safety Agency
EPB          earthquake-prone buildings
ERCC         Emergency Response Coordination Centre
ERDF         European Regional Development Fund



                                                                                                 13
ESHM13        2013 European Seismic Hazard Model
ESPON         European Spatial Planning Observation Network
EU            European Union
EUCPT         European Union Civil Protection Team
EWS           Early Warning System(s)
FEMA          Federal Emergency Management Authority
FEWS          Flood Early Warning System(s)
GDACS         Global Disaster Alert and Coordination System
GDP           Gross Domestic Product
GFDRR         Global Facility for Disaster Reduction and Recovery
GHRF          Commission on a Global Health Risk Framework for the Future
Commission
GNI           Gross National Income
GPSS          Global Program for Safer Schools
GRP           Gross Regional Product
GRT           Gross Register Tonnage
HEWS          Heat Early Warning System(s)
HWWS          Heatwave Warning Systems
IAEA          International Atomic Energy Agency
ICT           Information and Communication Technology
IMPRESSIONS   Impacts and Risks from High-End Scenarios: Strategies for Innovative Solutions
IPCC          Intergovernmental Panel on Climate Change
IRR           Internal Rate of Return
ISMEP         Istanbul Seismic Risk Mitigation and Emergency Preparedness
JPA           Joint Procurement Agreement
JRC           Joint Research Centre
LCE           Limit Condition for Emergency
LSM           Landslide Susceptibility Mapping
MATRIX        Multi-Hazard and Multi-risk Assessment Methods for Europe
MCA           Multi-criteria Analysis
MCE           Multi-criteria Evaluation
MoNE          Ministry of National Education
MS            Member State(s)
MSP           Multisector Partnership
NBS           Nature-based Solution(s)
NIBS          National Institute of Building Sciences
NIEP          National Institute for Earth Physics
NPV           Net Present Value



                                                                                               14
    OCC      Opportunity Cost of Capital
    OECD     Organisation for Economic Co-operation and Development
    ONERC    National Observatory for the Impacts of Global Warming (Observatoire National sur les Effets du
             Réchauffement Climatique)
    OSD      Office of the Secretary of Defence
    PAD      Project Appraisal Document
    PBCA     Participatory BCA
    PDC      Permanent Drought Commission
    PESETA   Projection of Economic Impacts of Climate Change in Sectors of the European Union-based on
             Bottom-up Analysis
    PFAS     Per- and Polyfluoroalkyl Substances
    PGA      Peak Ground Acceleration
    PLP      Property-level Protection
    PML      Probable Maximum Loss
    PPE      Personal Protective Equipment
    PS       Participating State(s)
    PTSD     Post-traumatic Stress Disorder
    PWWS     Philadelphia Hot Weather-Health Watch/Warning System
    QALY     Quality-adjusted Life Years
    R&D      Research and Development
    RDNA     Rapid Disaster Needs Assessment
    RESIN    Climate Resilient Cities and Infrastructures
    RISE     Real-time Earthquake Risk Reduction for a Resilient Europe
    ROI      Return on Investment
    SDG      Sustainable Development Goal
    SEA      System of Earthquakes Alert
    SEAP     Sustainable Energy Action Plan
    SEPA     Scottish Environment Protection Agency
    SERA     Seismology and Earthquake Engineering Research Infrastructure Alliance for Europe
    SHARE    Seismic Hazard Harmonization in Europe
    SHOPP    Society for Healthcare Organization Procurement Professionals
    SoP      Standard of Protection
    SuDS     Sustainable Urban Drainage System
    TD BCA   Triple Dividend Benefit-Cost Analysis
    UCC      USAR Coordination Cell
    UCPM     Union Civil Protection Mechanism
    UHI      Urban Heat Island
    UN       United Nations




﻿                                                                                                              15
     UNDAC                 UN Disaster Assessment and Coordination
     UNFCC                 United Nations Framework Convention on Climate Change
     USAR                  Urban Search and Rescue
     USGS                  United States Geological Survey
     VAT                   Value Added Tax
     VOLY                  Value of Life Year
     VOSOCC                Virtual On-site Operations and Coordination Centre
     VSL                   Value of a Statistical Life
     WFD                   Water Framework Directive
     WTA                   Willingness to Accept
     WTP                   Willingness to Pay
     WUI                   Wildland-Urban Interface



    Note: Currencies have been converted throughout the document to euro values. Wherever the original values were in other currencies, this
    has been indicated in footnotes. The currency exchange rates used in this document come from the Eurostat database (European Union,
    2021). All dollar amounts are US dollars unless otherwise indicated. As the results are based on analysis that is based on inherent uncer-
    tainty, results from new analysis under this study or detailed results from external case studies are presented as rounded numbers (i.e., to
    a maximum of two decimal places) and/or as ranges.




﻿                                                                                                                                            16
1. About this Background Report
This Background Report accompanies a summary             Climate Change and (b) summaries of all the case
report, which forms part of the World Bank’s technical   studies featured in this report. It first provides a
assistance project undertaken with the European          detailed description of the approaches for the selection
Commission’s Directorate-General for European Civil      of case studies and an overview of all the case studies
Protection and Humanitarian Aid Operations (DG           featured in the report, which can be categorized into
ECHO) and financed under the Union Civil Protection      three types based on the analysis undertaken: full
Mechanism (UCPM) Annual Work Programme 2020.             quantitative analysis, partial quantitative analysis
This report is the output produced under Component 1     based on the literature, and qualitative analysis.
“Retrospective analysis of the costs and benefits of     Then it presents selected results from the analysis,
selected disaster risk management (DRM)                  focusing on main pieces of analysis and comparing
investments”, with the aim to showcase the benefits of   results in light of the literature. Sections start with an
investing in the prevention of disaster risks. This      introduction to hazard risks worldwide in the EU,
background paper covers (a) methodological               include a summary of findings and then present
approaches for the economic assessment of                selected detailed analysis for illustration.
investments for Disaster Risk Management and




About this Background Report                                                                              ﻿     17
2. Overview of Methodologies  Applied
   in the Literature and This Report
This section provides an overview of the                    Bank and Overseas Development Institute (ODI)
methodological approaches and applications to               Triple Dividend of Resilience approach for DRM
calculate benefits and costs of investments used in         investments. An overview of important technical terms
this report. The objective is to show the usefulness of     is defined in Annex 1, while alternative methodologies
using typical BCA procedures and applying the World         that can be used is included in Annex 3.



2.1. The Triple Dividend of Resilience Approach

The ‘triple dividend of resilience’ approach (Tanner, et    Dividend 1, saving lives and reducing losses, relies on
al., 2015) is a comprehensive methodology for               quantifying the impact of resilience measures through
analysing the net benefits of DRM investments. It           risk analysis with and without the resilience measures
identifies three types of benefits (see Figure 1): (1)      (Mechler, 2016). Risk analysis provides the estimate of
avoiding losses and saving lives during a disaster; (2)     severity and frequency of impacts on people,
unlocking economic potentials as a result of stimulated     communities, and their structural and infrastructure
innovations and bolstered economic activities due to        assets (Ghesquiere, et al., 2006) and the reduction in
the reduction in background risks related to disasters;     those impacts due to a particular set of resilience
and (3) generating social, environmental, and               measures being implemented. Disaster risk (or
economic co-benefits of DRM investments even in the         catastrophe) modelling approaches estimate risk in
absence of a disaster.                                      terms of casualties and direct and indirect economic
                                                            losses by modelling the interaction of hazard, exposure,
World Bank-financed projects must include a BCA,            and vulnerability (World Bank, GFDRR, 2014). For
which includes a sensitivity analysis and calculation of    example, they can be used to adjust the vulnerability of
return on investments (ROIs), among others                  building stock to represent the impact on the risk of
(Independent Evaluation Group, 2010). Due to the            improved building codes or retrofit programmes. The
broader benefits that the ‘triple dividend of resilience’   dividend can be estimated using scenario events or
approach considers, there has been an increase in           probabilistically to estimate the impact of the
projects that include this methodology, such as a           intervention on risk metrics such as AAL or extreme
series of investment projects supported in Romania          events.
(World Bank, 2018a; 2019a; 2019c) and Turkey’s
Disaster Risk Management in Schools Project, as a           In terms of dividend 2, a number of research projects
part of the Global Safe School Program (World Bank,         have attempted to estimate in practice the wider
2019d), for example.                                        economic benefits from DRM investments. Two studies
                                                            (Erma, et al., 2020) showed the wider economic
An advantage of the triple dividend approach is that it     impacts of investments or policies in DRR from
reconciles perspectives from the humanitarian,              different perspectives. The first report (Madajewicz, et
environmental, and economic fields. However,                al., 2013) analysed a rural program to provide risk
estimations of the second dividend have generally           management support to farmers in Ethiopia and
been complicated, due to a combination of factors           showed that risk management tools such as weather-
such as missing data, lack of appropriate and feasible      indexed insurance increased farmers’ savings (an
methodologies particularly within short analytical time     important reserve in case of floods or droughts) and
frames for project preparation and appraisal, and lack      their investments in productive assets. These reports
of expertise to undertake that part of the economic         show that complementary soft investments for
analysis (Mechler & Hochrainer-Stigler, 2019).              preparedness alongside hard infrastructure measures
                                                            can have a substantial impact on the realization of a




Overview of Methodologies                                                                                        18
positive second dividend.                                   broadening the range of substitution possibilities,
                                                            relocating businesses, or effecting technological
Other factors are essential to consider when aiming to      change. Moreover, all these resilience tactics can have
measure benefits in terms of reduced flow losses. A         lasting effects through learning or improvements in the
significant reduction in flow losses - such as losses in    functioning of businesses, households, or other
GDP and employment, as opposed to property                  institutions to increase the capacity to cope with future
damage - can be obtained after disaster strikes by          disasters. All of these are short-run tactics that differ
various types of resilience tactics related to coping       from long-run climate adaptation. An example of the
with a disruption of critical inputs such as utility        difference relates to population movements with
lifelines, critical materials, and workers. Rose (2007)     regard to disasters and climate change: short-run
refers to the use of such tactics as “resilience” to        tactics include population evacuation either before or
distinguish them from ex-ante risk reduction                once the disaster has struck, which is typically
measures, typically referred to as “mitigation”. Inherent   temporary; for climate adaptation, as in the response
resilience refers to the capabilities intrinsic to an       to sea-level rise, the tactic would likely be permanent
individual business, household, or institution, or the      population migration. In short, informing economic
economy as a whole; it can also refer to the build-up of    actors of the risk may lead to them individually investing
resilience capacity by pre-positioning this capability      in enhanced preparedness, which will have additional
for implementation after a disaster strikes. Examples       positive economic effects regardless of whether a
of intrinsic capabilities include resilience “tactics”      disaster will strike.
such as substitution (use of dual-fired boilers for
electricity generation, the ability to substitute bottled   In terms of dividend 3, a few studies attempted to
or trucked water for piped water at the micro level, or     quantify some environmental or ecosystem co-
the workings of the price system to provide signals of      benefits. Ideal methodology in such quantification
changes in resource values for optimal allocation at        requires adopting a production function method of
the market or macroeconomic level) or the ability to        valuing ecosystem good and services (Barbier, 2009).
bring excess capacity online when regular capacity is       (Barbier, 2007) considered three broad categories of
damaged. Examples of pre-positioning include the            benefits of ecosystem services: ‘goods’ (for example,
purchase of portable electricity generators or              products obtained from ecosystems, such as resource
stockpiling of critical materials.                          harvests, water, and genetic material); ‘services’ (for
                                                            example, recreational and tourism benefits or certain
The concept of adaptive resilience (Rose, 2016) is also     ecological regulatory functions, such as water
essential to consider for estimating dividend 2.            purification, climate regulation, and erosion control);
Adaptive resilience refers to improvisations after the      and cultural benefits (for example, spiritual and
disaster has struck, such as identifying conservation       religious and heritage). A table in Annex 3 lists
opportunities not previously thought possible,              potential economic benefits of ecosystem services.




Overview of Methodologies                                                                                          19
Figure 1: Triple Dividend of Resilience	


                                                                              nd
                                                                                   and 3rd




                   Disaster risk
                   management
                                              Avoiding damages and losses from disasters, by:                    Beneﬁts when
                                              • Saving lives and reducing people affected
                                                                                                                 disaster strikes
                   (DRM)                      • Reducing damages to infrastructure and other assets
                                              • Reducing losses to economic ﬂows
                   investments




                                              Economic Potential
                                              Stimulating economic activity due to reduced disaster risk,
                                              by increasing:
                                              • Business and capital investment
                                              • Household and agricultural productivity
                                              • Land value from protective infrastructure
                                              • Fiscal stability and access to credit                            Beneﬁts
                                                                                                                 Regardless of
                                                                                                                 disasters

                                              DRM investments can serve multiple uses which can be captured as
                                              co-beneﬁts such as:
                   Costs and                  • Eco-system services
                   potential                  • Transportation uses




                                                                                                                                    15
                                              • Agricultural productivity gains
                   adverse
                   effects of
                   DRM measures



Source: (Tanner, et al., 2015)



2.2. Methodology applied to analyse case studies
This report contains quantitative and qualitative                    2.2.1. SUMMARY OF METHODOLOGICAL
analyses of 74 case studies for floods, earthquakes,                        APPROACH
wildfires, extreme heat, droughts, wildfires, landslides,
volcanoes, storms, epidemics, oil spills, nuclear,                   The World Bank has applied the ‘triple dividend of
chemical, and biological hazards. These case studies                 resilience’ approach while keeping a certain
represent DRM efforts across 24 countries as well as                 flexibility. The specific methodologies and modelling
regional and continent-wide efforts. Furthermore,                    approaches were adapted to various types of disaster
these cases touch on at least one of these important                 risk investments and existing results of various BCAs
sectors: housing, emergency response and                             have also been presented.
equipment, early warning, health, education,
transportation, agriculture and forestry, cultural                   Although there have been variabilities in analysis of
heritage and recreation, commerce and industry                       investments, a similar process has generally been
lifeline, and utility systems (for example, water and                undertaken that has the following features:
utility). With the information collected online, through
phone interviews with leading experts and                            •	 Considered the risk profile across UCPM countries.
practitioners as well as questionnaires sent via email,                 This was undertaken to better understand benefits
our team applied the World Bank’s triple dividend of                    and costs and the limitation and comparability of
resilience approach as much as possible to analyse                      available data.
the well-rounded economic and non-economic costs
and benefits of DRM investments and policy
implementations.




Overview of Methodologies                                                                                                                20
•	 Collected and summarized data on selected                      lifelines, communications, energy and water.
   investments. Information was collected on
   investments in prevention and preparedness as               •	 Applied the triple dividend approach to
   well as DRR, including among others broad figures              demonstrate the benefits of DRR investments. The
   on national funds and EU programs, intervention                first dividend was estimated by conducting
   type and description, anticipated or actual cost,              scenario impact models for cases with detailed
   number of beneficiaries, feasibility studies, any BCA          data being available to simulate the interventions
   that was undertaken, and how risk is considered                and their impacts. Examples where this might be
   (availability of data for future scenarios and so on).         simulated include the construction of coastal and
   Further information was collected through extensive            inland flood protection, relocation of assets and
   consultations.                                                 population, restriction of land use, and
                                                                  strengthening/hardening of existing buildings and
•	 Reviewed case studies related to specific hazards              infrastructure. The calculation of the second and
   and sectors. These encompassed hazards such as                 third dividend depended on the availability of data.
   flooding, earthquake, extreme heat, droughts,                  “The analysis has built on a number of parameters,
   wildfires, landslides, volcanoes, storms, epidemics,           specific methodologies and assumptions. The
   oil spills, nuclear, chemical and biological as well as        process of calculation of the BCAs is described in
   sectors such as housing, transport, education,                 detail in Annex 2.
   health, emergency response, early warning and



2.3. Approach for the identification of case studies
and overall analysis
2.3.1. APPROACH FOR THE                                        stakeholders) and methodological feasibility to
       IDENTIFICATION OF CASE STUDIES                          undertake at least a partial triple dividend BCA in a
                                                               quantitative manner or qualitatively describing the
The identification and selection of case studies was           benefits and costs, and (c) quantitative analysis with
undertaken through a three-step approach (Figure 2).           risk modelling for a selected number of case studies
The three steps were (a) identification of case studies        and partial or qualitative analysis for the others as well
for the focus of the analysis, (b) categorization of case      as presenting of results from the literature and World
studies based on data availability (collected through          Bank projects.
online research and extensive consultations with
Figure 2: Process for the selection of case studies

                     • 100 case studies


                         General                  • 74 case studies
                     Identification of
                       case studies
                                                   Final selection of
                                                      case studies                   • 17 case studies
                    (via online research and
                    discussions with the                                            Analysis with quantitative
                    European Commission)                                                own analysis (17),
                                                  (via data research, extensive    (partial) quantitative based
                                                 consultations, and                   on the literature (13),
                                                 consideration of methodologies)   and qualitative analysis (44)



Source: World Bank analysis


Overview of Methodologies                                                                                             21
Following an initial research and review of existing                         to be interesting investments that could be suitable for
case studies, approximately 100 case studies from a                          further analysis. An overview of case studies with
European context have been selected. These case                              detailed information and an illustration of coverage by
studies were considered for a preliminary analysis and                       hazards, countries, sectors, and type of methodology
presented in the inception report delivered in June                          is included in Annex 7.
2020. The case studies included a mix of relevant
sectors (housing, education, transport, health,                              In a third step, analysis was undertaken for the case
emergency response, early warning and lifelines,                             studies and relevant international best practices were
communication/ICT, energy, and water) and hazards                            presented. A summary of results of the case studies
that are either natural (floods, droughts, earthquake,                       and analysis is included in Part 3 of the report,
wildfires, landslides, and volcanic eruptions) or                            according to various European Commission priorities,
technological (oil spills, chemical pollution, biological,                   by hazards and types of investments. The international
radiological, or nuclear disasters). The case studies                        case studies (among others New Zealand, Japan, the
focused on MS/PS of the UCPM; were funded from                               United States, and Australia) were mostly selected as
national funds, at least partly by EU funds or by                            per their suitability for transferability of experiences to
international financial institutions; and were major                         the EU context and lessons learned from making the
projects1 that were aimed predominantly at reducing                          economic case for investing in DRR.
disaster risk, increasing prevention and preparedness.
These case studies were categorized into thematic                            Determining an average value on a hazard- or sector-
areas and hazards and the depth of data and                                  specific BCA was not possible due to non-repre­
information available for BCA assessed, including                            sentative samples of investments and non-uniform
through extensive consultations (see Annex 6). For all                       methods. An important consideration for the analysis
case studies, background information on disaster                             has been the variety of methodologies and levels of
vulnerability of the country or area, the project funding,                   modelling or risk assessments applied given the
achieved or expected impacts as well as cost-                                multitude of hazards, sectors and information/data
effectiveness, and/or triple dividend BCA were                               availabilities. For example, some of the case studies are
presented.                                                                   analysed on a scenario basis and others on the basis of
                                                                             AALs. For some of the case studies where a concrete
In a second step, case studies were categorized and                          investment could not be found (that is, retrofitting of
reviewed according to their suitability for further                          schools at European scale), a hypo­    thetical scenario
analysis, and 74 were included in the final selection.2                      was modelled. Moreover, an insufficient number of
These case studies were reorganized by types of                              case studies to have a representative sample
investments covering various hazards and sectors and                         undermined the possibility of inferring representative
17 case studies were considered for full quantitative                        average BCRs for investments.
analysis including own risk modelling and/or
assessment (3 on floods, 4 on earthquakes, 2 on                              2.3.2. SUMMARIZED RESULTS FROM
extreme heat, 7 on wildfires and 1 on chemical;                                     ANALYSIS AND CASE STUDIES
included in those are 3 on early warning). Another 13
case studies were presented based on at least partial                        A brief summary of the typology, coverage and main
quantitative analysis undertaken in the literature,                          information on the case studies is included below
including for World Bank project appraisal or                                (see Table 1). A considerable effort has been
evaluations (5 on floods, 2 on earthquakes, 1 on                             undertaken to achieve a balanced coverage of hazards,
droughts, 1 on landslides, 2 on epidemics, 1 on oil                          types of investments and countries. However, the lack
spills and 1 on multi-hazard). The remaining 44 case                         of data and information, available methodologies to
studies were described qualitatively as insufficient                         undertake risk assessments and BCA, or possibility to
information and data were found to be able to present                        present qualitative information conforming to the
results according to triple dividend BCA or at least                         Triple Dividend Framework constrained the depth and
somehow quantitatively, but these were still considered                      breadth of coverage. This was expected, as a major

1 Major projects in the programming period 2014–2020 are defined as operations where eligible costs exceed €50 million or €75 million in the case
where they contribute to the thematic objective under Article 9(7) (Article 100, Regulation 1303/2013 from the European Commission).
2 The number is higher than just based on the original list of case studies considered, as some case studies were added in the process based on further
recommendations from stakeholders.


Overview of Methodologies                                                                                                                          22
focus of key EU investments in the past decade has                            Danube region - emergency response and
been, for example, on flood risk prevention.                                  equipment - drought - qualitative analysis.

In terms of coverage of countries, a good balance has                     •	 ‘Union civil protection knowledge network in
been achieved in terms of development/income                                 earthquake’: Albania and Croatia - emergency
levels3, geographical locations, and disaster risks                          response and equipment - earthquake -
commonly faced in subregions. Figure 3 shows                                 quantitative own analysis.
countries in Europe and beyond as well as the
coverage of case studies by hazards, sectors, and                         •	 ‘The case of pandemic preparedness’: Across
type of analysis as well as information on countries                         Europe - epidemic - health - partial quantitative/
status of participation to the UCPM. Figure 4 also                           literature.
shows that the case studies include close to all
countries that are expected to suffer from high                           •	 ‘Rate of return on health investments’: Across
welfare losses due to climate change (Feyen, et al.,                         Europe - epidemic - health - partial quantitative/
2020).                                                                       literature.

The following case studies are not included in the map                    •	 ‘Schools in seismic countries across Europe’:
(Figure 3) because they were regional investments                            Across Europe - earthquake - education -
across Europe or undertaken in two or more non-                              quantitative own analysis.
neighbouring countries involved.
                                                                          •	 ‘European flood awareness system’: Across Europe
•	 ‘Mapping landslide hazards’: Croatia/Bosnia and                           - flood - early warning - qualitative.
   Herzegovina/Montenegro - emergency response
   and equipment - landslide - qualitative.                               •	 ‘URBAN GreenUP’: Across Europe - all hazards -
                                                                             housing and public buildings; recreation -
•	 ‘Early warning and preparedness for droughts’:                            qualitative.


Table 1: Overview of Case studies Reviewed as part of Background Research

                                                          NATURAL HAZARDS
                     # CASE             COUNTRIES (INCL. CROSS-           TYPES OF
 HAZARD                                                                                                      SECTORS COVERED
                     STUDIES            BORDER AND AREAS)                 INVESTMENTS

                     28                 United Kingdom, Portugal,         Structural protection (8);         Industry, early warning, water,
                                        Spain, Greece, Cyprus,            NBS (14); early warning (5);       agriculture, housing and public
                                        Poland, Netherlands,              PLP (1)                            buildings, response and
                                        Austria, Croatia, Serbia,                                            equipment, recreation
                                        Malta, Spain, Bulgaria,
                                        Denmark, Belgium,
                                        Germany, Italy, Europe
 FLOODS
                     TOTAL VALUE
                     OF PROJECTS        FUNDING SOURCES                   IMPLEMENTATION PERIOD              TYPE OF ANALYSIS 
                     (EUR)

                     8.965 billion      EU, World Bank, National          2006 - 2023                        Quantitative, own analysis (3);
                                                                                                             Partial Quantitative / literature
                                                                                                             (5); Qualitative (20)



3 The case studies cover six upper-middle-income countries and 28 higher-income-countries according to World Bank definition as of 2021. According
to the categorization of the World Bank, for FY2021, low-income economies are defined as countries with a gross national income (GNI) per capita
of €925 (that is, US$1,035) or less in 2019; lower-middle-income economies are countries with a GNI per capita between €925 and €3,613 (that is,
between US$1,036 and US$4,045); upper-middle-income economies are countries with a GNI per capita between €3,614 and €11,197 (US$4,046 and
US$12,535); and high-income economies are countries with a GNI per capita of €11,198 (US$12,536) or more.


Overview of Methodologies                                                                                                                        23
                                                NATURAL HAZARDS
                # CASE           COUNTRIES (INCL. CROSS-    TYPES OF
 HAZARD                                                                                    SECTORS COVERED
                STUDIES          BORDER AND AREAS)          INVESTMENTS

                6                United Kingdom, France,    UHI effects (2); early         Housing and public buildings,
                                 Spain, Portugal, Austria   warning (1); irrigation and    early warning, water, agriculture
                                                            water provision system (2);
                                                            early warning and capacity
                                                            building for droughts
 DROUGHTS
                                                            preparedness (1)
 AND
 EXTREME        TOTAL VALUE
 HEAT           OF PROJECTS      FUNDING SOURCES            IMPLEMENTATION PERIOD          TYPE OF ANALYSIS 
                (EUR)

                100.18 million   EU, National               2013 - 2022                    Quantitative, own analysis (2);
                                                                                           partial quantitative/literature
                                                                                           (1); Qualitative (3)

                # CASE           COUNTRIES (INCL. CROSS-
 HAZARD                                                     TYPES OF INVESTMENTS           SECTORS COVERED
                STUDIES          BORDER AND AREAS)

                7                Italy, Romania, Turkey,    Seismic retrofitting (5);      Housing and public buildings,
                                 Albania, Croatia, Europe   early warning (1); capacity    education, health, early
                                                            building (2)                   warning, emergency response,
                                                                                           cultural heritage
 EARTH-         TOTAL VALUE
 QUAKE          OF PROJECTS      FUNDING SOURCES            IMPLEMENTATION PERIOD          TYPE OF ANALYSIS 
                (EUR)

                59.22 billion    EIB, National, EU, World   2015 - 2025                    Quantitative, own analysis (4);
                                 Bank                                                      partial quantitative/literature
                                                                                           (2); Qualitative (1)


                # CASE           COUNTRIES (INCL. CROSS-
 HAZARD                                                     TYPES OF INVESTMENTS           SECTORS COVERED
                STUDIES          BORDER AND AREAS)

                10               Czech Republic, Poland,    WUIs (2); fuel management      Emergency response, early
                                 Spain, Portugal, Greece    for wildfire prevention (1);   warning, forestry
                                                            early warning (3); cross-
                                                            border support,
                                                            coordination mechanisms
                                                            and capacity building (4)
 WILDFIRES
                TOTAL VALUE
                OF PROJECTS      FUNDING SOURCES            IMPLEMENTATION PERIOD          TYPE OF ANALYSIS 
                (EUR)

                149.24 million   EU, National               2013 - 2022                    Quantitative, own analysis (7);
                                                                                           Qualitative (3)




Overview of Methodologies                                                                                                    24
                                                  NATURAL HAZARDS
                # CASE            COUNTRIES (INCL. CROSS-
 HAZARD                                                          TYPES OF INVESTMENTS            SECTORS COVERED
                STUDIES           BORDER AND AREAS)

                6                 Switzerland, Croatia, Bosnia   Information system and          Agriculture, recreation,
                                  and Herzegovina,               cooperation mechanism (3);      Transportation, early warning
                                  Montenegro, France, Spain,     resilient road (1); landslide
                                  Albania, Italy                 prevention and response
 MASS
                                                                 investments (2)
 MOVEMENT /
 LANDSLIDES /   TOTAL VALUE
 AVALANCHES     OF PROJECTS       FUNDING SOURCES                IMPLEMENTATION PERIOD           TYPE OF ANALYSIS 
                (EUR)

                20.60 million     EU, National, World Bank       2019 - 2020                     Partial Quantitative / literature
                                                                                                 (1); Qualitative (5)


                # CASE            COUNTRIES (INCL. CROSS-
 HAZARD                                                          TYPES OF INVESTMENTS            SECTORS COVERED
                STUDIES           BORDER AND AREAS)

                2                 Italy, Spain                   Preventive Investment (2)       Transport, early warning

                TOTAL VALUE
 VOLCANIC       OF PROJECTS       FUNDING SOURCES                IMPLEMENTATION PERIOD           TYPE OF ANALYSIS 
                (EUR)

                55.00 million     EU, National                   2013 - 2020                     Qualitative (2)




                                TECHNOLOGICAL HAZARDS AND CROSS-CUTTING
                # CASE           COUNTRIES (INCL. CROSS-
 HAZARD                                                          TYPES OF INVESTMENTS            SECTORS COVERED
                STUDIES          BORDER AND AREAS)

                1                Estonia                         Oil spills prevention (1)       Water, fishery

                TOTAL VALUE
                                                                 IMPLE-MENTATION
                OF PROJECTS      FUNDING SOURCES                                                 TYPE OF ANALYSIS 
 OIL SPILLS                                                      PERIOD 
                (EUR)

                33.00 million    EU, National                    2013                            Partial quantitative/literature
                                                                                                 (1)

                # CASE           COUNTRIES (INCL. CROSS-
 HAZARD                                                          TYPES OF INVESTMENTS            SECTORS COVERED
                STUDIES          BORDER AND AREAS)

                1                Latvia                          Cleaning up hazardous           Water
                                                                 waste (1)
 CHEMICAL       TOTAL VALUE
                                                                 IMPLE-MENTATION
                OF PROJECTS      FUNDING SOURCES                                                 TYPE OF ANALYSIS 
                                                                 PERIOD 
                (EUR)

                29.00 million     EU, National                   2013                            Quantitative, own analysis (1)




Overview of Methodologies                                                                                                            25
                                   TECHNOLOGICAL HAZARDS AND CROSS-CUTTING
                   # CASE           COUNTRIES (INCL. CROSS-
 HAZARD                                                            TYPES OF INVESTMENTS           SECTORS COVERED
                   STUDIES          BORDER AND AREAS)

                   2                Italy, United Kingdom,         Return on investment of        Health
                                    Sweden, Netherlands,           National Public Health
                                    Europe                         Program (1); equipment for
                                                                   health-related disasters (1)

 EPIDEMIC          TOTAL VALUE
                                                                   IMPLE-MENTATION
                   OF PROJECTS      FUNDING SOURCES                                               TYPE OF ANALYSIS 
                                                                   PERIOD 
                   (EUR)

                   4.50 billion     EU, National                   2021                           Partial quantitative/literature
                                                                                                  (2)


                   # CASE           COUNTRIES (INCL. CROSS-
 HAZARD                                                            TYPES OF INVESTMENTS           SECTORS COVERED
                   STUDIES          BORDER AND AREAS)

                   3                Czech Republic, France         Security of nuclear power      Energy, emergency response
                                                                   plant (2); cleaning up         and equipment, water
                                                                   uranium (1)
 NUCLEAR/
 RADIO-            TOTAL VALUE
                                                                   IMPLE-MENTATION
 LOGICAL           OF PROJECTS      FUNDING SOURCES                                               TYPE OF ANALYSIS 
                                                                   PERIOD 
                   (EUR)

                   24.34 billion    EU, National                   2018 and on-going              Qualitive (3)



                   # CASE           COUNTRIES (INCL. CROSS-
 HAZARD                                                            TYPES OF INVESTMENTS           SECTORS COVERED
                   STUDIES          BORDER AND AREAS)

                   8                Croatia, Serbia, Romania,      Rescue and emergency           Education, transport,
                                    Europe and Central Asia,       response equipment (1);        emergency response, early
                                    Finland, Poland, Italy,        Early Warning (4); climate     warning, communication/ICT,
                                    Latvia, France, Europe and     change adaptation (3)          recreation, houses and public
                                    Central Asia, Greece, Malta,                                  buildings
                                    Switzerland, United
 ALL
                                    Kingdom, Hungary
 DISASTERS
                   TOTAL VALUE
                                                                   IMPLE-MENTATION
                   OF PROJECTS      FUNDING SOURCES                                               TYPE OF ANALYSIS 
                                                                   PERIOD 
                   (EUR)

                   730.93           World Bank, EU, National       2006 - 2020                    Partial Quantitative / literature
                   million                                                                        (1); Qualitative (7)

Source: World Bank analysis




Overview of Methodologies                                                                                                             26
Figure 3: Overview of case studies analysed under this report




Source: World Bank analysis


Figure 4: Economic loss (€, billions) from considered hazards and climate impact at warming levels for the
EU and the United Kingdom (for macro regions)




Source: Szewczyk, et al. (2020)



Overview of Methodologies                                                                                    27
3. Case StudiesResults and Analyses
   by Investments
   This section presents selected results from the analysis, focusing on
   main pieces of analysis and comparing results in light of the literature.
   Subsections start with an introduction to hazard risks worldwide in the
   EU, include a summary of findings, and then present selected detailed
   analyses for illustration.
3.1. Flooding
3.1.1. SUMMARY OF FINDINGS FOR                              seen in continental and Mediterranean Europe
       FLOODS                                               (Guerreiro, et al., 2017). Surface water maps, used in
                                                            conjunction with existing flood data, can provide a
Floods are the most frequent natural disasters and the      fuller picture of these pluvial flooding risks and equip
most common disaster regionally, and they can cause         stakeholders with information on areas at risk beyond
widespread devastation that results in loss of life and/    river floodplains.
or damages to personal property and public
infrastructure. More than 2 billion people worldwide        A range of interventions designed to deal with
were affected by floods between 1998 and 2017               inundation triggered by river flooding, flash flooding,
(WHO, 2021). Floods can be classified in three broad        and storm-surge coastal flooding are covered in this
categories: (1) pluvial floods, which are caused by         section. The understanding of hazard and risk
rapid and excessive rainfall that quickly cause water to    distribution is the first step in the development of an
cumulate outside of water bodies; (2) river floods,         appropriate defence strategy. The impacts of river
which are caused when consistent rain or snow melt          floods, flash floods, and coastal floods can be
forces a river to exceed its capacity, causing water to     addressed with different risk reduction strategies.
overflow from its course; and (3) coastal floods, which
are caused by extreme sea levels associated with            In this section, we have demonstrated benefit-cost
storm surge, strong wind, high waves, or exceptional        assessments for four types of flood interventions,
tides.                                                      which can be categorized as (1) structural flood
                                                            protection (for example, levees and walls), (2) nature-
Over the past 30 years, the number of devastating           based solutions (for example, NFM and floodplain
flood events in Europe has more than doubled, and           restoration), (3) property-level protection (for example,
there has been a proportionally higher increase in the      small-scale demountable door barriers), and (4) flood
frequency of flooding events caused by surface water        early-warning systems. BCRs for the different types of
flooding due to overwhelmed drainage systems,               interventions are shown by a combination of
although investments in flood protection seem to have       conducting detailed case study analysis and reviewing
been effective in reducing flood risk (Paprotny, et al.,    past BCAs, including both prospective and
2018). JBA Risk Management also cites projections,          retrospective types of assessments. The flood
suggesting that this trend will continue, and the effects   mechanism in most case studies considered is fluvial
of these flooding events will be exacerbated by climate     flood originating from one or more major rivers. A few
change. A study conducted by Selma Guerreiro and            other examples consider coastal flood risk from
co-authors in 2017 was the first attempt at continental     extreme storm surge events, alone or (for delta regions)
city flooding modelling of European cities, and they        in combination with river floods. Pluvial flood (flash
found that, generally, cities with a lower percentage of    flood) is also included in some analyses presented.
flooding are located in the north and west coastal          Table 2 summarizes main data and information
areas of Europe, while higher percentage areas are          sources.



Case Studies                                                                                        Flooding      29
Table 2: Overview of data and information sources for flood analysis

 INVESTMENT        CASE STUDY        DATA SOURCE NAME AND REFERENCE

 Structural        Machlanddamm      • Total investment information from OECD report on a draft case study of disaster
 protection                            risk prevention and mitigation policies in Austria

                                     • Residential buildings exposure data, developed under the Seismology and
                                       Earthquake Engineering Research Infrastructure Alliance for Europe (SERA)
                                       project
 NBS               INTERREG          • External economic assessment, published by Tweed Forum (Eddleston Water
                   project             Project Summary Report and Integrating natural capital into flood risk
                   Eddleston Water     management appraisal Study Report)
 NBS               Sigma Plan        • Costs, risk reduction benefits, and co-benefits obtained from ‘Sigma Plan Social-
                                       cultural Benefit-Cost Analysis, Synthesis Report (Sigmaplan Maatschappelijke
                                       Kosten-Baten Analyse)’
 EWS               The Flandres      • FEWS anticipation capacity, warning coverage and losses reduction assumptions
                   Flood Early         based on the national report on flooding published by Flemish Environment
                   Warning System      Agency

                                     • JBA Global Flood Model and residential exposure
 PLP               Property Level    • Implement cost and the simulation of PLP effectiveness based on the ECHO
                   Protection in       study ‘Prevention and Preparedness in Civil Protection: Cost-benefit Analysis
                   Northern Italy      of Mitigation Measures to Pilot Firms/Infrastructures in Italy’

Source: World Bank analysis



Flood hazard models need to be adapted to test the           and exposure intersection is crucial when
effect of different investment types analysed on             considering the difference in BCR between case
fatalities and economic losses. For the detailed case        studies and is illustrated in the regional-scale PESETA
studies presented, we have applied a global flood            analysis, which demonstrates the different BCRs
model to assess flood impact with and without                possible in each country when common defence
protection (as a basis to estimate dividend 1), based        assumptions and costs are applied.
on stochastic modelling of flood inundation
intersected with buildings distribution, construction,       Results of the analysis of investments are generally
and replacement costs. Estimation of dividends 2             positive in terms of net benefits (BCRs higher than 1,
and 3 due to flood risk reduction strategies also varies     positive NPVs and IRRs higher than defined
by type of investment and requires data from sources         thresholds), although consistent with research
other than the flood inundation model. More details          findings (Dottori, et al., 2020) some hard infra­
on the methodologies, models, and types of impacts           structure investments, in some contexts, tend to have
considered are included in the relevant section on           BCRs close or lower than 1. Complementary
floods in the report.                                        investments and comprehensive analysis to inform
                                                             designs (including considering climate change
BCRs for flood protection can be extremely variable,         scenarios) could therefore be highly beneficial for
as they depend on the scale and type of investment,          investments to maximize benefits across sustaina­
the intersection of localized hazard and exposed             bility goals. More details are included in Figure 5,
assets, and the factors captured in the analysis. This       Figure 6 and Figure 7.
variability is demonstrated by the specific cases
analysed here and broader regional-scale analysis            Figure 5 shows the distribution of benefit-cost ratios
such as conducted under PESETA IV (Dottori, et al.,          (BCRs) for flood investments, based on a five-number
2020). The Eddleston Water case study, as it                 summary: minimum (shown in orange), first quartile,
includes multiple analyses with different factors,           median (shown in red), third quartile, and maximum
demonstrates the latter. The influence of hazard             (shown in orange).

Case Studies                                                                                           Flooding       30
Figure 5: Findings of BCA for floods (BCRs)




Source: World Bank analysis; based on external data and information; presenting in part results from literature based on World Bank &
external reports (1 structural protection result from World Bank (2007), 3 nature-based solution results from Spray (2016), Hölzinger &
Haysom (2017) and Gauderis, et al. (2005))




Figure 6 presents boxplots that display the distribution             quartile, median (shown in red), third quartile, and
of NPVs (in millions of euro) for different types of                 maximum (shown in yellow). The outliers are shown as
investments in flood prevention based on a five-                     dots. Extreme values are excluded from the first
number summary: minimum (shown in yellow), first                     graph and included in the second one.




Figure 6: Findings of BCA for floods (NPVs)




Case Studies                                                                                                       Flooding         31
Source: World Bank analysis; based on external data and information; presenting in part results from literature based on World Bank &
external reports (1 structural protection result from World Bank (2007), 4 nature-based solution results from Spray (2016), Grossmann &
Hartje (2012), Hölzinger & Haysom (2017) and Gauderis, et al. (2005))




Figure 7 below shows the distribution of ERRs for                     quartile, median (shown in red), third quartile, and
different types of investments in flood based on a five-              maximum (shown in orange). The outliers are shown
number summary: minimum (shown in orange), first                      as dots.


Figure 7: Findings of BCA for floods (ERRs)




Source: World Bank analysis; based on external data and information; presenting in part results from literature based on World Bank &
external reports (1 structural protection result from World Bank (2007), 3 nature-based solution results from Spray (2016), Hölzinger &
Haysom (2017) and Gauderis, et al. (2005))




Case Studies                                                                                                         Flooding         32
Overall, the results and qualitative research on             low but considers only benefits of avoided damage.
structural protection showed that hard infrastructure        The lack of flood-related fatalities in any case in
solutions are not necessarily always an option that has      Austria meant they were not considered, land/
a BCR higher than 1. However, the BCR is dependent           property values were not expected to be affected
on the modelling assumptions and the availability of         (due to additional regional development
data to enable the quantification of all dividends           restrictions), and dividends 2 and 3 could not be
(particularly intangible impacts over health and             estimated due to a lack of data on additional
environment), which were not included in some case           amenities and even official information on the exact
study analyses. Given increasing multi-hazard risks          number of protected houses.
and the need for integrated investments, it is im­
perative to collect sufficient baseline information        •	 Case study 2 (World Bank Project Appraisal
across all dividends when designing investments, to           Document [PAD] analysis (World Bank, 2007), ex
assess hard infrastructure solutions with the Triple          ante and ex post): The analysis of a major river flood
Dividend Framework; this would promote designing              protection project in Poland derived a high BCR
investments that maximize co-benefits alongside               (5.14, NPV of about €2 million, IRR/ERR of 81
reducing losses and saving lives. Evaluating the costs        percent), which was mainly due to the consideration
and benefits of complementary or other investments            of intangible benefits (that is, reduced mental
(soft investments, NBS) with the Triple Dividend              health and health impacts) and the consideration of
Framework when considering hard infrastructure can            economic benefits from future gravel production in
reveal added ecosystem benefits and any impact                the reservoir area, which became available due to
(positive or negative) in terms of cost or protecting         the flood strategy including construction in a gravel-
lives and assets. Another result emerging from                rich area. The case study estimated substantial
qualitative case studies is that citizen and stakeholder      physical and mental health benefits from the risk
engagement and extensive consultations and                    reduction investments.
cooperation mechanisms can support an enhanced
decision-making of designs informed by evaluation          •	 NBS make use of natural processes to decrease
(the Netherlands, Malta) as well as implementation            flood risk while also providing ecosystem services,
(Greece/Bulgaria cross-border and Greece). More               they can be implemented alone or in combination
details on the utilization of BCA and participatory           with traditional engineering approaches. The EU
decision making in the Netherlands for flood risk             has been building evidence of the cost-effectiveness
management are highlighted in Table 89, Table 90              of NBS through various programs. While NBS can
and Table 91 in Annex 5. Moreover, prioritization             be more cost-effective than structural (grey)
models and methodologies such as criticality                  infrastructure, they can provide lower safety
analysis (Vukanovic, 2018; Rozenberg, et al., 2019),          benefits in some cases compared to hard
can support the better targeting of specific assets           infrastructure (although costs generally also
and infrastructure considering the asset-specific             decrease). It can be most beneficial to consider
vulnerability and cost-effectiveness, which have been         NBS as complementary solutions, forming hybrid
applied in countries such as Serbia or Romania                green-grey infrastructures, and they can maximize
(European Commission, 2018).                                  a range of benefits including improving water
                                                              storage/absorption capacity, ecosystem services,
•	 Case study 1 (new analysis under this project              recreational use, protection around coastal risks,
   (Heidrich, 2016; JBA Risk Management, 2021), ex            and so on. They can also allow for longer-term
   post): Analysis of Central Europe’s largest flood          flexibility under projected climatic changes,
   control protection project, the Machlanddamm in            whereas a firm standard of protection (SoP) of hard
   Austria, showed that the protective structures had         defences may not easily be adapted to address
   variable effects on reducing risk in each of the           more extreme risks. NBS can provide educational
   protected communities. On average, the reduction           opportunity (Eddleston Water, United Kingdom),
   of risk in residential properties was 12 percent           create habitat networks (Ijsselpoort, the
   compared to the undefended scenario. BCR of <1,            Netherlands), and have co-benefits in terms of
   NPV of about −€146 million, and IRR/ERR of −80             climate and erosion regulation (Yorkshire, the
   percent was estimated, which is considered to be           United Kingdom). Landscape preservation such as



Case Studies                                                                                       Flooding      33
   dunes has also been shown to support the                    •	 Case study 5 (external analysis (Hölzinger &
   restoration of habitats and protect from flood and             Haysom, 2017) ex post): The analysis of the
   storm risks (Barcelona, Spain) and flood risk                  floodplain restoration project in Chimney Meadows,
   reduction in coastal/tidal areas seems to generally            the United Kingdom, demonstrates the high value
   work well with integrated ecosystem presentation/              (BCR of 1.5–4.8, NPV €1,665–€11,528,
   upgrading measures (Sandwich, the United                       IRR/ERR 35.1–79.18 percent) that restoration
   Kingdom, and Alkborough, the United Kingdom). In               from intensive farmland can have on flood risk as
   urban settings, measures combining natural                     well as co-benefits. The study measured many
   building materials and shaping park and recreation             ecosystem benefits affecting the second and third
   areas as well as neighbourhoods with green                     dividend and could be improved by exploring the
   solutions can have positive impacts on flood risk              effects on agricultural supply chains and impact on
   reduction and liveability of the areas (Benicassim,            broader communities.
   Spain; Mayes Brook River, the United Kingdom; and
   Malmö, Sweden).                                                Æ	 Nature-based coastal and tidal protection:

    Æ	 Natural Floodplain Management:                          •	 Case study 6 (external analysis by Sigma Plan
                                                                  contractors (Gauderis, et al., 2005), ex ante): The
•	 Case study 3 (External analysis by Scottish                    analysis of the Sigma Plan, an integrated flood
   Environment Protection Agency [SEPA] and                       protection plan combining grey and green
   contractors (Spray, 2016), ex ante and ex post):               infrastructure, yielded BCRs higher than 1 for all
   The analysis of the Eddleston Water project that               solutions including just implementing a storm surge
   involved landscape restoration yielded high BCRs               barrier. The BCR increases from an estimated 1.87
   at economic appraisal (BCR of 9–17). A second                  to 4.97 (NPV until 2100 of €346–593 million, IRR/
   estimation of ecosystem services, which applied a              ERR of 46.57–79.89 percent), and the relative
   different set of services and valuations, showed that          cost-effectiveness increases when integrating grey
   BCRs are lower and only higher than 1 when a 100-              measures with NBS or using a work-with-nature
   year timescale is considered. Depending on the                 approach. Although safety benefits tend to
   assessment and combination of options, the BCR                 decrease slightly, costs also decrease while co-
   was estimated at 1.71-2.42 (NPV up to €9,512 and               benefits (especially environmental ones) tend to
   IRR/ERR of 41–59 percent). This indicates that                 increase.
   these interventions tend to take longer to yield
   economically valuable benefits and that longer time         Flood Early Warning Systems (FEWS): provide
   horizons for policy recommendations should be               integrated hazard monitoring, forecasting, and alerts
   considered and even potentially lower discount              that enable various stakeholders to take timely actions
   rates. Moreover, in such wide-ranging analyses, the         to reduce disaster risks in advance and during
   selection and valuation of benefits can lead to             hazardous events. Economic assessments of EWS
   different outcomes.                                         impacts in quantitative terms are prone to several
                                                               uncertainties, relying on many assumptions and
•	 Case study 4 (external analysis (EEA, 2017;                 generalizations and the results should be considered
   Grossmann & Hartje, 2012), ex post): The analysis           with caution as they may capture impacts from other
   of the green, hybrid, and grey infrastructure               investments as well. The literature reviewed for this
   solutions implemented along the Elbe River in               report shows that FEWS tend to have positive benefits
   Germany showed highest net benefits for an                  (for example, European Flood Awareness System
   integrated floodplain management investment with            [EFAS] (Pappenberger, et al., 2015) and Grimma,
   green infrastructure compared to hybrid or grey             Germany). Moreover, risk information systems related
   investments (NPV of €429,746 compared to                    to EWS can also have numerous benefits (Greece/
   196,337 and 72,707, respectively) while showing             Cyprus Environmental Risk Management Information
   negative NPV for grey infrastructure where only             Service, Poland PANDA).
   avoided loss benefits are included. This case study
   is specific as it looks at options of replacing old flood   •	 Case study 7 (new analysis under this project, ex
   protection infrastructure and used a cost-                     post) (JBA Risk Management 2021, Perera et al.,
   effectiveness methodology.                                     2019): The analysis of the advanced FEWS in

Case Studies                                                                                         Flooding      34
  Flandres, Belgium, yielded a range of BCRs for            3.1.2. STRUCTURAL PROTECTION
  various scenarios to test sensitivity of losses                  AGAINST FLOODS
  to uptake of the warnings issued (5 percent,
  25 percent, and 50 percent assumed loss                   Risk reduction strategies using structural protection
  reduction). BCRs ranged from 0.5 to 5.2 (NPV of           focus on the control of floodwaters that result from
  -€1.5 million to €12.5 million, IRR/ERR of −100 to        intense rainfall and/or overflow of river channels. Most
  80.65 percent) suggesting that the strategy requires      flood risk management involved engineering measures
  a minimum level of uptake to provide a BCR                to control flooding, avoiding as much as possible the
  greater than 1. Benefits may have been                    change of hazard where vulnerable elements are
  underestimated given the difficulties to capture          located. These are also known as ‘grey’ or ‘hard’
  dividend 2 and 3 benefits, which may include              measures and can include both static elements (such
  actions of households after flood warning and             as embankments, dams, levees, and channels) and
  reductions in emissions and were not quantified           active elements (such as water gates, pumps, and
  due to unavailable data.                                  mobile barriers).

PLP involves the installation and deployment of             The design of protection measures relies on the
flood resistance measures (retrofitting or by design)       assessment of risk probabilities to elaborate
to prevent water from entering individual properties        appropriate protection standards. A design flood is
and resilience measures to limit the damage caused          defined by its probability of occurrence, for example,
once it has entered. There is limited information           ‘1 percent annual exceedance probability (AEP) or 1 in
available on examples of PLP being applied in EU MS,        100 return period’ defines a flood which has 1 chance
but benefits can be substantial given potential             in 100 of occurring in any one year. Structural
increases in property values as well as energy efficiency   protection measures are designed and built to meet
when substantial PLP measures are implemented. A            with a certain SoP. It is important to note that protection
prospective analysis of PLP was conducted to explore        standards need to be updated over time, in line with
the levels of benefits, but there were great difficulties   the changes in hazard frequency brought by climate
in quantifying uptake or buy-in of PLP strategies and       change.
co-benefits at the individual property level.
                                                            Models can account for the risk reduction due to flood
•	 Case study 8 (new analysis under this project, ex        protection by explicitly modelling protective structures
   ante/hypothetical): The analysis of a hypothetical       of by delineating area protected by those structures.
   comprehensive PLP program over two towns in              Site-specific models built for a particular location can
   Northern Italy based on previous research on PLP         explicitly include the structure in the model and
   cost estimates (ECHO, 2014) yields BCRs of less          estimate the chance of the protection being overtopped
   than 1, lower than examples found in the literature.     or breached, resulting in a flood. Probabilistic models
   This can be explained by three factors: (a) the          over a large area tend to assume a level of flood
   difficulty in estimating a realistic PLP investment in   protection in terms of the return period (that is, a
   relation to the hazard probability and standard of       defence designed to protect up to a 1-in-50-year
   defence; (b) the transferring of assumptions from        event) and floods are assumed to not cause loss below
   different contexts (for example, rural settlements       that return period. A hybrid approach - defining the
   exposed to intense river floods compared to high-        areas protected, as informed by the locations of the
   density urban areas exposed to moderate pluvial          protection system, and applying the design level of
   floods); and (c) the uncertainty in risk modelling for   protection in only those areas - can also be applied
   specific locations (building level), affecting the       and assumes that those protected areas only
   scale of risks to be taken into account and thus the     experience flooding when an event is above the design-
   scale of costs.                                          level return period. These approaches can be applied
                                                            to a scenario-based analysis of probabilistic analysis
                                                            and can simulate the benefit for a single protective
                                                            structure or commonly a series or combination of
                                                            multiple structures and types of structure.




Case Studies                                                                                         Flooding       35
       RIVER FLOOD PROTECTION: THE MACHLANDAMM, OBERÖSTERREICH, AUSTRIA

 This case study is a new ex-post analysis under this      river flooding on the relevant section of the Danube
 project that involved modelling of hazards.               without and with the effect of flood protection by the
                                                           Machlandamm. The simulated difference in number of
   Æ	 Description                                          buildings flooded and resulting economic damage,
                                                           represented as AAL and return period losses, is the
The Machlandamm is Central Europe’s largest flood          expected benefit of protection. The analysis uses
control protection project and the largest one in the      exposure data.
history of the Oberösterreich region. Construction
began in 2008 and was completed in 2012. It consists       The analysis of this case study uses a methodology
of about 30 km of earth dams, 4 km of mobile flood         and data consistent with the accompanying EU
protection elements, and a few hundred meters of           regional flood analysis. The exposure data applied are
flood protection walls, in addition to pumping stations,   a disaggregated version of residential buildings
gate valves, and an 8.4 km flood basin running parallel    data developed under the SERA project (Crowley, et
to the Danube River (Heidrich, 2016). The project          al., 2020). The communities in the study area are
includes eight project units on the left bank of the       largely residential buildings; damage to these buildings
Danube and protects seven municipalities (Ecker &          is modelled with a residential property and contents
Hrebik, 2012). Each unit is protected by earthen dams      vulnerability curve developed by JBA. The
with an SoP of 1-in-100-year return period, except for     accompanying project report on Component 2
one area with 1-in-30-year SoP (Weingraber, 2020), as      (regional analysis) contains more details on all aspects
indicated in Figure 8. The dam has been designed with      of the risk analysis method.
spillways such that they cannot protect against larger
floods; else the flood risk of other communities would     Flood protection is accounted for in the model by
be increased. The total cost of the project was €182.6     identifying the communities protected by the
million     (€150,000       per    house     protected)    protective structure in each of the eight project units
(GOV/PGC/HLRF, 2015). The project was supported            (Figure 8). Only the effect of the earth dam is included;
financially by the Oberösterreich region and by other      no demountable barrier defences have been modelled
institutions. In 2013, a severe flood hit the region       due to a lack of information on their operation and
(IBS, 2013), but available estimates of impact are         location. Where the return period of a simulated flood
subject to significant uncertainties about what they       event in the model is below the SoP, the defence is
include and are only available at much broader             modelled as being fully effective and no flooding
geographic scales than this case study’s domain.           occurs in the delineated area (JBA Risk Management ,
Therefore, we estimate damage to the case study            2021). Where the severity of a simulated flood event
areas using a proprietary flood model.                     exceeds the capacity of the defence, a defence
                                                           overtopping calculation is applied to reduce the impact
   Æ	 Methodology                                          of the flooding based on the volume of water
                                                           overtopping the defence. The change in flood return
Dividend 1 (avoided fatalities and economic damage)        period is applied to all exposure points located within a
is estimated by applying the JBA probabilistic global      defended area, thus reducing the risk estimate (AAL)
flood model to estimate the frequency and severity of      and return period losses in that area.




Case Studies                                                                                       Flooding      36
Figure 8: Location of case study and areas estimated to be protected by each project unit of the
Machlandamm, with SoP denoted for each unit




Source: World Bank analysis; elaboration based on information from interview and reports




In attempting to quantify the effects of protection on                   Æ	 Results of the analysis, by dividends
Dividends 2 and 3 of the Triple Dividend Framework,                      	 and overall
we encountered an absence of data. This prevented
the quantification of some potential benefits, which for             The analysis showed variable influence of the
an investment of this size would be expected to include              protective structures on reducing risk in the protected
stimulus of the local or regional economy due to the                 communities. Figure 9 shows the estimated risk
construction project, and change in land value or                    reduction (AAL in euros) per level 3 administrative
property prices due to enhanced flood protection. In                 unit, with Grein showing the greatest potential
Oberösterreich there is a law prohibiting new                        reduction. The risk reduction is a factor of flood
development in high-risk flood zones, so we assume no                inundation with and without the protection and the
broad change in land value due to new development                    concentration and value of exposure within the
potential (since none can be constructed). However,                  protected area. The overall reduction in risk to
property values and domestic land value could be                     residential properties due to Machlandamm protection
expected to increase due to higher level of flood                    is 12 percent compared to the undefended scenario.
protection afforded by the dam. No analysis on this
aspect had been previously conducted for the
Machlandamm and the age of the project prevented
thorough analysis of these aspects here.




Case Studies                                                                                               Flooding      37
Figure 9: Simulated reduction in risk per level 3 Administrative unit (AAL) due to protection by the
Machlandamm flood protection




Source: World Bank analysis; elaboration based on the results from the analysis


Table 3: Risk reduction represented by change in AAL due to the Machlandamm flood protection at key
settlements in the case study area

 ADM2                          ADM3                          BASELINE LOSS         DEFENDED LOSS     REDUCTION %

 Perg                          Baumgartenberg                            100,244            88,201                  −12
 Perg                          Saxen                                     355,017           354,445                  −0
 Perg                          Naarn im Machlande                      1,385,847         1,185,831                  −14
                               Mitterkirchen im
 Perg                                                                    799,441           619,618                  −22
                               Machland
 Perg                          Mauthausen                              1,757,207         1,757,110                  −0
 LinzLand                      Enns                                    4,707,258         4,707,247                  −0
 Amstetten                     Grein                                     891,294            57,187                  −94
 Total                                                                 9,996,308         8,769,639                  −12
 Risk reduction
                                                                                        −1,226,669
 (reduction in AAL)

Source: World Bank analysis; based on external data and information




Case Studies                                                                                             Flooding     38
Table 4: BCR for Machlandamm per dividend, assuming a 30-year period of operation

                                 BENEFITS (€, MILLIONS)                                   COSTS (€, MILLIONS)

 Dividend 1                                                 36.8
 Dividend 2                                       Not quantified
 Dividend 3                                       Not quantified
 Total                                                      36.8                                                               182.6
 BCR = 0.2

Source: World Bank analysis; based on external data and information



Table 5: Detailed breakdown of benefits for Machlanddamm by dividend

 FIRST DIVIDEND                                                       BENEFIT/COST
 Lives saved                                                          Not quantified (no evidence of fatalities without the
                                                                      protection)
 Injuries avoided                                                     Not quantified (as above)
 Property damage avoided (reduction in AAL for each                   €36.8 M
 year of 30 years of the assumed operation period)
 Total first dividend                                                 €36.8 M
 SECOND DIVIDEND
 Change in property value                                             €0
 Value added to broader economy from construction                     Not quantified (lack of available evidence)
 sector
 Total second dividend                                                €0
 THIRD DIVIDEND
 Transportation uses                                                  Not quantified (lack of available evidence)
 Total third dividend                                                 n.a.
 Cost of construction                                                 €182.6 M
 Second cost item
 Maintenance costs                                                    Not known
 TOTAL DIVIDEND                                                       €36.8 M
 BCR                                                                  0.2
 NPV                                                                  −€145.8 M
 IRR/ERR                                                              −79.85%

Source: World Bank analysis; based on external data and information




Case Studies                                                                                                        Flooding       39
     Æ	 Challenges faced and lessons learned                                  construction firms normally have their own workers
                                                                              who may not be locally hired. In addition, if there are
This case study demonstrates that the impact of some                          any locally hired workers involved in dam construction,
structural protection infrastructure can be simulated                         it is uncertain where they find their next employment
with relatively little detailed information on the                            once the dam construction has been completed.
structure. No official data were available to describe                        Consequently, local realization of economic benefits
the location, length or height of the earth dam or                            becomes difficult to quantify.
delineate the areas protected. Publicly available
satellite imagery was used to digitize the dam position                       In fact, other studies have found positive net benefits
in GIS software and to estimate the areas protected by                        of investments through ex ante economic analysis as
each section of the dam. Official information describing                      well as ex post when considering increases in property
the prescribed level of protection was then sufficient to                     values in upgraded areas, among others. Analysis has
estimate the frequency of flooding, up to which the                           been undertaken for a major infrastructural investment
dam is effective. However, uncertainty around the                             in Poland in the Odra river basin. Moreover, other
protected area and protected number of houses may                             analysis showed some of the challenges for large-scale
underestimate the overall reduction in AAL.                                   structural protection programs in terms of costs
                                                                              incurred as well as interesting solutions that can
The case study also demonstrates the need to assess                           support better decision-making, development, and
prospective large risk reduction investments according                        implementation of these projects to achieve higher net
to the Triple Dividend of Resilience Framework in the                         benefits. These include risk-based prioritization of
project appraisal stage. Despite the size of investment                       investments such as strengthening road infra-
and potential benefits under dividends 2 and 3, there                         structure, soft measures enhancing capacity,
was little information available so long after the                            management of water resources and participatory
investment was implemented, with which to confirm or                          decision making. Examples are projects implemented
quantify those benefits, including after extensive                            in Serbia, the Netherlands, Bulgaria, Greece and Malta
consultations and additional research.4 The main                              that provided some useful lessons learned.
challenge for analysing this case study was the lack
of information on the co-benefits of the dam                                  Possible avenues for further research could be
construction, primarily benefits to the construction                          considered. Considering some of the factors below
sector and impact of increased flood protection on                            could potentially be expected to increase the
property values in the protected areas. This has                              assessed net benefits of this investment:
hampered the full evaluation of such a significant
investment and potentially underestimates the BCR.                            •	 Benefits of reduced stress (mental health)
With more comprehensive analysis, a possible
distributional effect is that this structure can prevent                      •	 Reduction of traffic and economic activity disruption
risk or harm to those who are near rivers, including
people with low incomes or who are homeless.                                  •	 Property value increases linked to the enhanced
Moreover, it is uncertain who benefits from the                                  liveability of the area
increased job opportunities in the locality since large


          RIVER FLOOD PROTECTION ON THE ODRA RIVER BASIN, POLAND

     Æ	 Description of the case study                                         economic analyses comprised a comparison between
                                                                              the incremental capital and operating costs of the
Major infrastructural investments in a dam and                                project scenarios with the incremental economic
improved conductivity of Odra river (World Bank,                              benefits resulting from their implementation. The
2007) in the area of Wroclaw, Poland, were undertaken                         parameters for the economic evaluation include a 30-
in a World Bank project in 2006, which included a                             year period of operation and a 90 percent economic
prospective economic analysis for Wroclaw. The                                conversion factor. The economic analysis considered

4 For example, information about prices would have been costly to retrieve as the extraction is complex and therefore undertaken by private companies.


Case Studies                                                                                                                       Flooding          40
both tangible and intangible benefits, making the                This is above the 10 percent opportunity cost of capital
methodology closer to the triple dividend approach.              (OCC); before the 2008 financial crisis 10 percent was
                                                                 a threshold above which projects were considered
    Æ	 Methodology                                               worthwhile (today this threshold is lower).

The BCA of this project estimated annual average                 Total direct flood damage was estimated €4.01 billion
damages with and without flood protection,                       (PLN 12.035 billion), and intangible damages at €0.5
considering multiple flood probabilities and severity.           billion (PLN 1.965 billion), with the project projected to
Avoided damages, that is, the difference between                 reduce damages to 72 percent of these estimates
damages with and without the project, were the main              (€2,166.3 billion and €353.7 billion, or PLN 8665.2
benefits considered with the specific components of:             billion and PLN 1414.8 billion, respectively). In
property and contents flood damage; damage to public             addition, the project was expected to generate €5
infrastructure and facilities; agricultural production           million (PLN 20 million) equivalent annual extraction
losses; damage to trees; and damage to environment,              of gravel from the Raciborz reservoir area. Gravel stock
land and livestock. Secondary benefits included the              can last for a total duration of 20 years. At a discount
benefits from the exploitation of gravel in the                  rate of 3.5 percent, present value of this 20-year
Raciborz reservoir area. While many intangible benefits          stream of future incomes is calculated at €73.55
were considered in the project appraisal, the ERR was            million (PLN 294.2 million).
based on these quantified primary and secondary
benefits.                                                        The following tables list these benefits according to
                                                                 the triple dividend framework and results from analysis
    Æ	 Results of the analysis by Dividends                      (Table 6 and Table 7). Reduction in the direct flood
    	 and overall                                                damages forms the first dividend, economic benefits
                                                                 of the project are included as the second dividend, and
The estimated ERR for the project was 17.4 percent.              finally the intangible benefits are included as the third
That is, the Polish economy would realize a 17.4                 dividend.
percent rate of return from implementing the project.


Table 6: BCR for river flood protection for Poland’s Odra river basin per dividend (all values in 2006 Euro values
at the exchange rate of 1€ = 4 PLN).

                                                           BCR: 5.14

                                                            BENEFITS                                 COSTS
                 Dividend 1                                     2.17 B
                 Dividend 2                                     73.6 M
                 Dividend 3                                   353.7 M
                 Total                                          2.59 B                                505 M

Source: World Bank compilation based on extracted data from the World Bank documents


Table 7: Detailed breakdown of Odra River benefits by dividend

 FIRST DIVIDEND                                                                                            BENEFIT / COST
 Lives saved                                                                                                   Not quantified
                                                                           (no evidence of fatalities without the protection)
 Injuries avoided                                                                                 Not quantified (as above)
 Avoided direct damages                                                                                             €2.17 B
 Total first dividend                                                                                               €2.17 B


Case Studies                                                                                                Flooding       41
 SECOND DIVIDEND
 Change in property value, productivity, capital investment                                                Not quantified
 Value added to broader economy from construction sector                                                   Not quantified
 Present value of all future gravel production, assuming                                                        €73.6 M
 duration of 20 years and discount rate 3.5% (EURO)
 Total second dividend                                                                                          €73.6 M
 THIRD DIVIDEND
 Transportation Uses, agricultural productivity, ecosystem                                                 Not quantified
 benefits
 Reduction in intangible losses due to project (reduced stress,                                                €353.7 M
 alcoholism, suicide rates, fear of floods, loss of control over
 situation, loss of memorabilia, and health problems)
 Total third dividend                                                                                          €353.7 M
 First cost item
 Cost of construction                                                                                            €505 M
 Second cost item
 Maintenance costs                                                                                         Not quantified
 TOTAL DIVIDEND                                                                                                  €2.59 B
 Total cost                                                                                                      €505 M
 COST-BENEFIT RATIO (RATIO)                                                                                          5.14
 NPV                                                                                                                €2.1 B
 IRR/ERR (%)                                                                                                        80.53

Source: World Bank analysis; based on results from World Bank Odra River PAD



    Æ	 Challenges faced and lessons learned

In addition to quantifying many tangible benefits, this            ADDITIONAL EXAMPLES OF STRUCTURAL
appraisal used robust methods to quantify many                     PROTECTION INVESTMENTS AGAINST
intangible benefits with considerable longer-term                  FLOOD RISK
impacts. This includes increasing stress, fear of further
floods, loss of control over the situation, loss of                Several additional investments in structural flood
memorabilia and health problems. Inclusion of these                protection were found that could provide lessons
additional benefits is important to justify the overall            learned and inspirations. These investments cover
economic viability of the project. However, several                technical solutions such as barriers (dams, sluices and
potential benefits and costs have not been quantified,             dykes) and reclaiming land from the sea in the
which would likely adjust the BCR presented above                  Netherlands; enhanced capacity for response across
from the project documents. A distributional impact                borders of Bulgaria and Greece; construction of a
that we should be wary of is the ability for this                  network of storm water management infrastructure in
development to displace local residents who may no                 Malta; and building of flood prevention structures in
longer be able to afford living in the area. An increase           Greece. Highlights and main lessons learned of these
in property value could lead to real estate price                  investments are presented in Box 1 below.
increases, and this may catalyse gentrification in the
area.




Case Studies                                                                                             Flooding       42
  Box 1: Overview of other investments in structural flood protection across Europe

A review of investments in structural flood protection across    project is expected to reduce flood risk for residents and
Europe provided several lessons learned and inspiring            increase safety for business owners to locate and operate in
achievements outlined below. A common theme is that a            this area.
combination of structural protection and soft factors such
as improvements of water management or support of citizen        A flash floods resilience project in Malta has achieved some
engagement in the design and evaluation of programs              benefits in terms of protecting residents. Between
contributed to the success and net positive benefits of the      September and January in Malta, severe flash floods occur
projects.                                                        frequently resulting in economic loss and disruption. The
                                                                 €62.5 million (€44.9 million EU-funded) project “National
A large-scale program implemented in the Netherlands             Flood Relief Project” supported by EU funds 2007-2013
showcases some of the challenges faced with massive              aimed to build an effective storm water management system
projects in terms of costs, but also solutions that can be       through the construction of a network of underground
found in collaboration with civil society. The battle of the     tunnels, canals and bridges (European Commission,
Dutch in reclaiming land from the sea provides one of the        2013a). The project aimed for Malta to meet the
most ambitious and successful examples of flood protection       requirements of the European Floods Directive, while
engineering. The Zuiderzee Works and the Delta Works are         helping to reduce the negative impacts of flood on human
two massive flood protection works, which required               health, the environment, cultural heritage and economic
consistent public investments (6–7 percent of Dutch annual       activity, and improve sustainability by reusing storm water
GDP at that time) and were a challenge for political decision-   from both urban and rural areas. The project was expected
making. After a storm in 1953 where 1836 people lost their       to benefit an estimation of 165,000 Maltese residents
lives, a large-scale project (“Delta works”) was implemented     directly and indirectly. Subsequent EU funding (€54 million
that consisted of a series of dams, sluices and dike             2013-2015) under the second River Basin Management
reinforcement that was completed 1958-1997, including            Plan of the country supported continued works on the storm
the Maeslant storm surge barrier in the port of Rotterdam        water management system and the collection and reuse of
(Bos & Zwaneveld, 2017). Overall costs for the Delta works       rainwater via reservoirs (European Commission, 2019). As
were €5 billion and €450 million for the Maeslant barrier        water management systems and impacts from floods are
(Dutch Water Management, 2020)(Maeslantkering). This             still massively impacting the country and criticisms were
compares to around €5.5 billion investments for the Venice       made for the effectiveness of the programs implemented,
lagoon barrier (see Table 8 below that shows the cost of         the Energy and Water Agency of Malta undertook extensive
eight different storm surge barriers built in Europe since       consultations and developed a menu of measures for the
1958). The final design of the Maeslant barrier was selected     third RBMP (The Energy and Water Agency, 2020)
based on a cost-effectiveness analysis and standards for         comprehensively addressing the water sector and its
flood protection according to land use and assets (Kind,         management.
2014). The ex-ante cost-effectiveness analysis showed that
the solution was best compared to alternatives such as           In Athens, Greece, flood protection has been combined with
raising dikes in the whole area of Dordrecht, representing       efforts to enhance the liveability of the city while promoting
savings of around 200 million EUR.                               economic activity (European Commission, 2013b; EPRS,
                                                                 2020). The most damaging recent floods in Greece, in 1994
A cross-border program in a common area of Bulgaria and          and in 2003, caused over €623 Million (US$700, 1994
Greece has achieved successes in terms of reducing               ROE) and €707 Million (US$800, 2003 ROE) of damage,
negative impacts of floods (Interreg Greece-Bulgaria, 2021).     respectively. The €84 million project “Stopping Athens
The cross-border area of Greece and Bulgaria, especially         floods” (€71.4 million funded by the EU) 2007-2013 was
the areas across the two international river basins of Struma/   launched to reduce the impacts of flood while encouraging
Strymon and Evros/Maritsa, is highly vulnerable to floods.       employment and city rejuvenation. The project invested in
“Cross Border Planning and Infrastructure Measures for           new flood prevention structures, which was aimed to protect
Flood Protection” is an EU-financed €11.5 million (€9.8          about 116,000 residents flood. In addition, the
million ERDF-funded) INTERREG project implemented from           implementation of the project itself was expected to create
2017 to 2020 that protects the area from floods. The main        712 jobs and thus generate co-benefits for Greece’s
objective of the project is to reduce the risk of floods by      economy. Moreover, recent continued investments in the
improving existing flood protection infrastructure along the     region of Attica north of Athens included ambitious aims to
river flow and reducing obstructions in the narrow areas of      enhance the flood prevention network across municipalities
the river basin. It also invests in early response equipment,    where over 500,000 people live and commute every day
which can reduce negative social and economic impacts on         combined with a €150 million loan from the EIB for disaster
the surrounding area and raise public awareness. The             risk prevention and climate change adaptation programs



Case Studies                                                                                                Flooding        43
across Greece (The National Herald, 2019). Given general          specific commitments connected to procurement
challenges of procurement, land management and planning           (Transparency International EU, 2017). Moreover, a Horizon
of such complex investments, the project was selected by          2020 program supported the engagement of citizens in
Transparency International Greece and the European                environmental monitoring, particularly flood and water
Commission to be part of an Integrity Pact to monitor             management issues (Alice Accelerate Innovation, 2018).




Table 8: Comparison of costs for major investment projects in storm surge barriers in Europe

 NAME                         TYPE                                     LOCATION                          COST (M €)

 Maeslant barrier             Sector gate – y axis                     Hoek van Holland (NL)                              450
 Hollandse IJssel barrier     Vertical lift gate                       Capelle aan den IJssel (NL)                         20
 Eastern Scheldt barrier      Vertical lift gate                       Vrouwenpolder (NL)                               2400
 Haringvliet sluices          Sector gate – x axis                     Hellevoetsluis (NL)                                600
 Ramspol barrier              Inflatable tube                          Kampen (NL)                                         48
 Hartel barrier               Vertical lift gate                       Spijkenisse (NL)                                    98
 Venice barrier               Flap gate                                Venice (IT)                                      5500
 Thames barrier               Rotary segment and gate (x axis)         London (UK)                                        600

Source: Noguiera & Walvaren (2018)


The structural flood protection projects described above          assessment. Modelling multiple individual segments as
focus on protecting multiple properties/infrastructure            inactive (representing a damaged or blocked segment),
and areas of land from a source of flood hazard. This can         the impact on disruption across the network can be
explain the somewhat broad estimated number of                    measured to assess the criticality of each segment and to
beneficiaries and is related to substantial potential             measure overall redundancy in the transport network.
benefits but also costs.                                          Analysis of the vulnerability of segments against risk of
                                                                  damage should enable a prioritization of DRM
Structural protection may also be implemented for asset-          interventions including protective structures and inform
specific protection, such as sections of road or railway          BCA or cost-effectiveness analysis of the potential
including bridges and tunnels, to improve the resilience          interventions. Box 2 below outlines a few examples of
of the transport infrastructure. A method used to prioritize      projects implemented for protecting specific assets
the protection of transport infrastructure is criticality         mainly in the transport sector.

  Box 2: Structural protection for specific assets in the transport sector

Two projects have showcased theoretically and in practice         more proactive and resilient investments in Serbia.
the application of cost-effectiveness analysis for the            The CFR-SA railway project at Simeria, Romania, is one EC-
prioritization of targeted structural protection interventions.   funded project that focused on specific assets. Costing €2
Undertaken by the World Bank, a modelling exercise ranked         billion and financed through the Large Infrastructure
roads in different countries including Serbia according to        Operational Programme (LIOP) 2014-2020, the project
their criticality (Vukanovic, 2018; Rozenberg, et al., 2019).     comprises rehabilitation and modernization works to
The criticality was assessed based on vulnerability (therefore    develop a high-speed rail link at the town and railway
priority for intervention) and the cost-effectiveness of          junction of Simeria. Crucially, the project considered climate
interventions based on the impact costs avoided and               change adaptations and protection of the rail and bridge
implementation costs. Though based on limited information,        infrastructure due to extreme flows and extreme storms. It
the model undertook an economic analysis that examined            also developed structures to protect the infrastructure from
the cost-effectiveness of the roads, which can help to inform     rockfalls (European Commission, 2018).




Case Studies                                                                                                 Flooding        44
3.1.3. NATURE-BASED SOLUTIONS FOR                                      flooding to a particular level, yet they can reduce flood
       FLOOD PROTECTION                                                risk potential to a large degree. The EEA (2017)
                                                                       analysed the cost-effectiveness of green and grey
The concept of ‘nature-based solutions’, ‘ecosystem-                   infrastructure investments for flood protection in
based adaptation’, ‘eco-DRR’, or ‘green infrastructure’                Germany, finding that the green measures can be
has emerged as a good alternative or complement to                     superior to grey solutions and cost-efficient even when
traditional engineering approaches. NBS make use of                    their indirect benefits were not considered.
natural processes and ecosystem services for
functional purposes, such as decreasing flood risk.                    While green infrastructure can take various forms and,
These interventions can be implemented alone or in                     in principle, can be applied to address fluvial, pluvial,
combination with “hard” engineering approaches                         and coastal flood in isolation or in combination, the
(grey infrastructure). They can help mitigate flood and                local environment and risk context dictates which
decrease vulnerability to climate change while also                    solutions are applicable. For instance, floodplain
creating multiple other benefits to the environment                    restoration can only occur where there is a fluvial
and local communities. These include sustaining                        floodplain, not in steep-sided catchments, and dune
livelihoods, improving food production and in turn                     restoration/stabilization is only possible in coastal
food security, sequestering carbon, and providing                      areas with sand dunes. The following sections all
recreation.5 Such solutions can be applied to river                    present short examples of NBS risk-reduction
basins (for example, reforestation and natural flood                   initiatives. Due to the multi-faceted approaches typical
control areas), coastal zones (dunes and wetlands),                    of NBS, some components of these cases are
and cities (urban parks).                                              applicable to more than a single section, but they are
                                                                       broadly presented here according to their primary
NBS for risk management were supported by the EU                       focus. Smart green solutions can be particularly
agenda first by FP7 projects and more recently by the                  important in urban contexts, as shown for investments
H2020 programme and several Interreg projects,                         in Spain, the UK or Sweden to reduce flood risks and
aimed at providing evidence of NBS cost-effectiveness,                 maximize co-benefits.
covering risk reduction benefits as well as social and
environmental effects. As with conventional                            3.1.3.1. Natural floodplain management
engineering solutions, the effective application of NBS
requires a comprehensive risk assessment comparing                     This section highlights cases which aim to improve the
the risk under baseline and defended scenario.                         condition of the floodplain to enhance ecosystem
                                                                       services and reduce flood risk by increasing capacity
Although traditional risk assessment methods can be                    of the floodplain or wetland areas to retain runoff and
applied to evaluate NBS, they hardly incorporate the                   reduce peak flows in the river. We present BCA
full range of benefits generated by nature-based                       performed in NFM projects in the catchment of
projects (European Union, 2019). NBS are emerging                      Eddleston Water, Scotland, which demonstrate the
approaches that still need to develop standards and                    myriad ecosystem services benefits of NBS. Further
guidance to facilitate a common understanding of                       examples such as a comparison of green versus grey
their effectiveness and the risk reduction outcomes. It                versus hybrid solutions for flood protection on the Elbe
is also difficult to apply the concept of ‘protection                  River, Germany, and other investments from England
standard’ to NBS, because they do not protect from                     and the Netherlands.




5 For ecosystem services associated with floodplains, see EEA (2019)


Case Studies                                                                                                   Flooding      45
        INTERREG PROJECT EDDLESTON WATER (SCOTLAND)

 This case study is an external analysis that was             from previous reports and adds the actual outturn cost
 undertaken with ex-ante and ex-post analysis that            data for the implementation of NFM in the Eddleston
 involved partially modelling of hazards.                     catchment. Benefits in terms of avoided flood damage
                                                              are compared for the NFM already implemented
   Æ	 Description                                             (Tweed Forum, 2020) additional NFM investment
                                                              (increasing the area changed from improved
The Eddleston Water project, ongoing since 2009,              grassland to native woodland and wet reed beds, and
aims to reduce flood risk and restore the Eddleston           increasing the number of flow restrictors and ponds),
Water for the benefit of the local community and              and traditional in-town engineered flood defences
wildlife. It is funded by the Scottish government,            (Burgess-Gamble, et al., 2018) and PLP. In addition, it
Interreg, and the SEPA. The project involves river re-        estimates the impact of a range of hybrid options.
meandering, the planting of over 200,000 trees and            Four options for in-town defences and three sub-
the creation of new wetlands within the catchment (70         options for different levels of NFM were tested; for
km2). This should slow the speed and impact of                clarity here the report presents only two options:
floodwaters affecting the village of Eddleston                current NFM measures and the application of two
(population 550) and town of Peebles (about 8,400) as         different in-town standards of protection. The report
well as creating new wildlife habitat, such as improved       used updated definition of costs and took flood and ES
spawning for salmon. The project partnership, led by          benefits from analysis. The breadth of components
the Tweed Forum, is closely monitoring the project            included in the study was made possible by the
results, including any reduction in flood risk for            availability of GIS data on the location and
downstream communities. The study was undertaken              characteristics of the different interventions, project
by the project consortium (see below) rather than in          reporting of cost data, detailed simulation of avoided
this project; it is included here as it is a rare case that   damages from traditional structural protection in the
demonstrates the high level of detail considered in a         settlements and for NFM measures. The reduction in
study of costs and benefits of NBS over several years.        flood peak by slowing the catchment response is
                                                              demonstrated, although it is noted that the potential
   Æ	 Methodology                                             impacts of climate change by 2050 would more than
                                                              counteract the considerable improvement.
Spray (2016) analysed the Eddleston project including
flood regulation to assess wider ecosystem benefits as           Æ	 Results of the analysis, by dividends
well as costs of afforestation and riparian woodland             	 and overall
planting. By far the greatest benefit of afforestation
was in climate regulation—using a value transfer              The impact of re-meandering, creation of ponds,
approach this yielded up to four times the cost of            introduction of woody flow restrictors and forest planting
afforestation. Flood regulation in the catchment              each have shown flood reduction and ecological
contributed a minor proportion of the benefits, as did        benefits, according to the SEPA study. The study
biodiversity, education, aesthetics, water quality, and       focused on the benefits delivered from planting riparian
recreation.                                                   woodland, which returns a positive NPV and average
                                                              BCR of 12.5 across low, central and high scenarios
Another study (MacDonald, 2020) of this catchment             (Table 9) - primarily from improvements to ecosystems
tested the application of combining avoided damages           in this catchment, with benefits of flood regulation in
and natural capital in an economic appraisal of options,      Eddleston village still positive under most current floods
using the B£ST model (Horton, et al., 2019), which            and under all climate scenarios. Benefit transfer values
was selected after a review of available models in the        for ecosystem studies were applied from other studies.
same study. This study uses a slightly different benefit
estimation framework and returns different results
compared to the previous BCA. It considers the results




Case Studies                                                                                          Flooding       46
Table 9: Estimated costs and benefits from the first economic appraisal of Eddleston Water NFM
(lower and upper bound results in parenthesis)

 ALL VALUES GIVEN IN 2012
                                                               2016                           2040                        2080
 THOUSAND EURO PER YEAR

 Total cost                                                     7.81                         7.81                         7.81
                                                           (6.36 –9)                    (6.36 –9)                    (6.36 –9)
 Total benefits (flood                                      110.37                         106.9                       106.82
 reduction and ecosystem                            (60.94–157.96)                (58.32–156.35)               (58.03–158.15)
 benefits)
 Net benefits (total benefits                               102.56                          99.1                        99.01
 minus total cost)                                  (54.58–148.94)                (51.96–147.32)               (51.66–149.13)
 BCR                                                14.1 (9.6–17.5)               13.7 (9.2–17.3)              13.7 (9.1–17.5)

Source: Spray (2016); Original values in pound converted using 2012 currency rate £1 =€1.26


According to the analysis, the total NPV of ecosystem                   contribution of NFM not associated activities), the
benefits scaled over 100 years was reported at €1.25                    triple dividend BCR is presented in Table 11. The
million (with lower and upper bounds of €1 million                      original project reports provide longer timescales and
and €1.3 million). This is additional to the benefit of                 value ranges. The reduction in property damage in
avoided property damages of €680,000. The                               Eddleston and Peebles is shown in Table 10, with the
summary of total costs and benefits in the Triple                       annual reduction in damage estimated at €35,473,
Dividend Framework, based on central estimates for a                    equating to the NPV of €680,000 over 30 years.6
30-year timescale (and accounting only for the
Table 10: Impact of NFM measures in the Eddleston Water catchment, on property damage in
Eddleston village and Peebles town

 RETURN           PRE-NFM          POST-NFM               AVOIDED            PRE-NFM NO.      POST-NFM NO.         SPARED
 PERIOD           DAMAGES          DAMAGES                DAMAGE             OF HOUSES        OF HOUSES            HOUSES
                                                                             AFFECTED         AFFECTED

              (€, thousands)
 AAL                       1.05                    1.01                35              n.a.             n.a.                n.a.
 10                        2.96                    2.88                87               75               73                   2
 50                         3.4                     3.2                207              98               86                  12
 100                        3.7                    3.48                228             109              100                   9
 200                       4.06                    3.79                267             115              109                   6

Note: MacDonald (2020); Original values in pound converted using 2020 currency rate £1 = €1.12.


The Mott Macdonald study assessed 12 options for                        with 75-year return period SoP versus defences with
managing flood risk in Eddleston Water catchment to                     200–year return period SoP versus PLP) over an
assess value for money and BCR of each – this is a                      appraisal period of 100 years. The flood damages
combination of retrospective and prospective analysis                   avoided and ecosystem benefits of NFM already
using the B£ST model. A matrix of costs and benefits                    implemented and additional NFM are shown in
was created showing the variation in BCR of three NFM                    Table 12.
options (no catchment NFM versus NFM already
implemented versus additional NFM) and four in-town                     Comparing the in-town defence options also showed
protection options (legal minimum versus defences                       the various BCRs of changing the SoP of defences, and

6 Converted from Pounds using £1 = €1.12 (2020).


Case Studies                                                                                                   Flooding       47
applying PLP. The baseline of NFM and no change to                 and PLP to €6,124,000. However, the BCR remained
in-town defences yielded damages avoided of                        at 0.48 for 75-year defences, 0.45 for 200-year SoP
€1,064,000 at a BCR of 0.45, when ecosystem services               defences, and only increased significantly for PLP,
are not considered. The addition of 75-year SoP                    returning a BCR of 1.34. Corresponding estimates
defences increased the damages avoided to                          were also developed in that study for a case with no
€5,497,000, 200-year SoP defences to €6,485,000                    NFM, and with the additional NFM options.
Table 11: Estimated benefits and costs for INTERREG project in Eddleston, Scotland per dividend,
based on a 30-year timescale

                                              (€, THOUSANDS AT PRESENT VALUE)

 FIRST DIVIDEND
 Property damage avoided                                                                                                      680
 Total first dividend                                                                                                         680
 SECOND DIVIDEND
 Total second dividend                                                                                                          0
 THIRD DIVIDEND
 Recreational benefits                                                                                                      391.2
 Carbon benefits                                                                                                            897.9
 Non-use biodiversity benefits                                                                                               71.7
 Benefits to anglers (NFM contribution), assuming ecological condition change ‘bad’ to                                       45.7
 ‘moderate’ (change to ‘good’ may result in three times this value)
 Ecological status change (NFM contribution; ‘bad’ to ‘moderate’ (change to ‘good’ may                                   0.7–1.9
 result in two to four times this value)
 Timber                                                                                                                     452.8
 Agricultural income foregone (lost income)                                                                               −340.5
 Health benefits                                                                                                             95.1
 Education                                                                                                                    160
 Total third dividend (central estimate, for NFM contribution only)                                                      1,253.3
 Costs - NFM
 Enabling costs                                                                                                               779
 Capital costs                                                                                                              1,072
 Operation and maintenance costs                                                                                              831
 Other costs                                                                                                                   13
 TOTAL DIVIDEND
 Total benefits                                                                                                          1,933.3
 Total cost                                                                                                                 2,694
 BCR                                                                                                                          0.7
 IRR/ERR (%)                                                                                                              −39.35

Source: World Bank compilation; based on extracted data from the sources mentioned above; Original values in pounds and converted
using 2020 currency rate £1 = €1.12.




Case Studies                                                                                                     Flooding           48
Table 12: Estimated benefits and costs for INTERREG project in Eddleston, Scotland per dividend, based on a
100-year timescale

                                                  NFM ALREADY IMPLEMENTED                   ADDITIONAL NFM (€, THOUSANDS
                                                  (€, THOUSANDS AT PRESENT VALUE)           AT PRESENT VALUE)

 FIRST DIVIDEND
 Property damage avoided                                                              1.1                                     3.2
 Total first dividend                                                                 1.1                                     3.2
 SECOND DIVIDEND
 Total second dividend                                                                  0                                         0
 THIRD DIVIDEND
 Amenity
 Carbon benefits                                                                    1.67                                     8.65
 Non-use biodiversity benefits                                                        0.8                                    5.44
 Education                                                                            0.7                                    5.15
 Flows in watercourse                                                               0.43                                     0.43
 Water quality and pollution                                                        0.41                                          3
 Agricultural income foregone (lost
                                                                           Not assessed                            Not assessed
 income)
 Timber production                                                         Not assessed                            Not assessed
 Total third dividend (central estimate,
                                                                                      4.7                                   19.78
 for NFM contribution only)
 Costs - NFM
 Total cost                                                                         2.34                                    13.46
 TOTAL DIVIDEND
 Total benefits                                                                     5.77                                    22.97
 Total cost                                                                         2.34                                    13.46
 BCR                                                                                2.42                                     1.71
 NPV                                                                                3.38                                     9.51
 IRR/ERR (%)                                                                     58.62%                                  41.41%

Source: Macdonald (2020) assessment of current NFM measures and prospective analysis of additional measures; original values in
pounds and converted using 2020 currency rate £1 = €1.12

    Æ	 Challenges faced and lessons learned                        differences include addition/omission of amenity,
                                                                   timber, and agricultural production foregone).
This case study demonstrates the value in undertaking              Potential distributional effects could include
a multi-year study of benefits from flood interventions,           maintaining the area’s biodiversity, preventing damage
being able to incorporate ecosystem benefits that                  and injury to households living along the river, and
are realized over time. This particularly concerns                 ensuring that the river continues to be a source for
ecological responses to modifying the channel and                  clean water for the rest of the community.
habitat (Spray, 2016), which can result in multiple
ecosystem services benefits from water quality to                  Other studies have shown the comparative benefits of
amenity value. It also demonstrates the different BCRs             NFM. Green infrastructure solutions appear to have
that are possible when ecosystem services are valued               the highest net benefits and be most cost-efficient
differently, or different services are included (here              when these are compared to structural protection

Case Studies                                                                                                     Flooding         49
measures such as on the Elbe River in Germany, even        the potential range and magnitude of benefits of NFM
without consideration of indirect benefits. Moreover,      investments but that prospective appraisals can
indirect benefits can be substantial, as shown in the      demonstrate optimal additions to NFM options. Here,
Chimney Meadows or other case studies in the United        with a fourfold increase in benefit but over 5.5 times
Kingdom and the Netherlands. It would therefore be         the original cost, the BCR reduces with the potential
interesting to undertake more such multiyear case          addition of NFM measures. The analysis also
studies with high-quality, site-specific information, to   demonstrated the multidimensional appraisal required
compare various infrastructure solutions to analyse        to consider the optimal in-town structural defences
the advantages of combining grey and green                 and optimal level of NFM in the catchment, but note
infrastructure.                                            that the negative impact of structural options on some
                                                           ecosystem services such as amenity benefits are not
The various analyses on this NFM project demonstrate       included here.


         GREEN, HYBRID, AND GREY INFRASTRUCTURE SOLUTIONS ON THE ELBE RIVER, GERMANY


 This case study is an external analysis that was          Elde is in the middle of the Elbe river basin region and
 undertaken with ex-post analysis. Introduction            is at high risk of flooding. Magdeburg is the most
 and background                                            vulnerable region and was frequently hit by floods in
                                                           2002, 2003, 2006, and 2013. In order to reduce flood
    Æ	 Introduction and background                         risk for the region, dikes were built in the 19th and
                                                           20th centuries, which effectively protect about 85
A high-probability flood scenario in the Mittlere Elbe/    percent of the floodplains and decrease losses due to
Elde region of Germany on the Elbe River would be          flooding. In recent years, proposals that suggest a shift
expected to impact 3,500 residents and four industrial     from traditional grey infrastructures to nature-based
facilities in the region, while an extreme catastrophe     green measures have been made, as the green
would affect 210,000 residents and up to 289 industrial    measures are expected to be more adaptable to
facilities (EEA, 2017). Starting in the Czech Republic,    climate changes, support ecosystems and unlock
the Elbe is a 1,100 km waterway that crosses 10 states     social and environmental benefits beyond flood risk
and many important cities in Germany ,Mittlere Elbe/       reduction (see Figure 10).


Figure 10: Elbe River basin districts and potentials for green infrastructures




Source: EEA (2017)


Case Studies                                                                                       Flooding      50
    Æ	 Description                                                solution, several grey solutions, and a mix of the two
                                                                  (see Table 13). The green solution refers to the
In order to examine the effectiveness and efficiency of           restoration and preservation of floodplain wetland,
grey and green solutions and find the optimal solution,           while the traditional grey solution aims at the relocation
seven approaches are considered, including a green                or enclosure of dikes and dam.
Table 13: Green, Grey and Hybrid measures for flood prevention in Elbe, Germany

 TYPE       NAME OF MEASURES                          SHORT DESCRIPTION

 Green      Controlled retention polders with         Restoring a wetland in a floodplain (3.2 K ha) and preserving it.
            ecological flooding                       This will increase the area for the river to flood.
 Hybrid     Combination of polders with               Restoring a wetland in a floodplain (4.1 K ha), preserve it and
            ecological flooding and dike              relocate a dike (3.4 K ha).
            relocation
 Grey       Large scale dike relocation               Relocate a dike in large parts of the river (35 K ha)
            Small scale dike relocation               Relocate a dike in chosen parts of the river (9.4 K ha)
            Large scale controlled retention          Enclose areas (25.6 K ha) with a dike and a dam, flooding during
            polder                                    overcharge.
            Small scale controlled retention          Enclose areas (3.2 K ha) with a dike and a dam, flooding during
            polder                                    overcharge.
            Combination of polders and dike           Enclose an area (4.1 K ha) and relocate a dike (3.4 K ha).
            relocation

Source: World Bank compilation; based on information extracted from external documents, notably Grossmann & Hartje (2012)




    Æ	 Methodology                                                     Æ	 Results of the analysis by Dividends
                                                                       	 and overall
Grossman & Hartje (2012) calculated the BCA and
notably the NPVs of the seven measures and                        The study finds that the green infrastructure solution
determined the effectiveness of the solutions based               provides the highest net benefit and is the most cost-
on the expected lifetime of a dike of 100 years and a             efficient measure, even without the consideration of
social discount rate of 3 percent. The costs of the               the indirect benefits. The NPV of the green solution is
measures included construction and maintenance                    around €108 thousand per ha in the scenario when
costs as well as the economic losses from activities in           only taking into consideration flood risk management
agriculture and forestry due to wetland restoration or            benefits. If the indirect benefits are included, the
dike enclosure. The benefits are considered under two             number will rise to around €430 thousand per ha,
scenarios: the first scenario only considers the direct           which is significantly higher than the NPVs of the
benefit of flood risk reduction, while the second                 alternative solutions (see Table 14). This indicates that
scenario includes indirect benefits from nutrition                green solution yields substantial co-benefits in terms
retention and biodiversity conservation.                          of nutrition and biodiversity preservation.




Case Studies                                                                                                   Flooding     51
Table 14: Cost-effectiveness of infrastructure options for the Elbe: NPV of options

                                      DIRECT        INDIRECT                        NPV
                                      EFFECTS       EFFECTS                         (IN 2012 PRICES)

                                      Flood-risk    Nutrient        Biodiversity    Only flood risk     Integrated
                                      reduction     retention       conservation    management          floodplain
                                      Benefits                                      — Scenario 1        management
                                      [ EUR/ha/y]                                                       — Scenario 2
 Green         Controlled retention
               polders with                  4.12          +++               +++              108.26               429.75
               ecologicalFlooding
 Hybrid        Combination of
               polders with
                                             1.83           ++                ++               43.23               196.34
               ecological flooding
               and dike relocation
 Grey          Large scale dike
                                           0.165                +               +               -3.71               72.71
               relocation
               Small scale dike
                                             0.07               +               +               -7.37              155.34
               relocation
               Large scale
               controlled retention          1.02                                              13.84                13.84
               polder
               Small scale
               controlled retention          4.12                                             101.99               101.99
               polder
               Combination of
               polders and dike              1.83               +               +              43.23                182.2
               relocation

Source: Grossmann & Hartje (2012)

    Æ	 Challenges faced and lessons learned                     85 percent) by green protections, we should only be
                                                                accounting for environmental/ecological benefits. It
This is an example of replacing old flood protection            could benefit from providing an analysis of different
infrastructures. Alternatives considered include both           alternatives. By investing in green infrastructure
traditional and eco-friendly options, with the green or         options for integrated floodplain management, the
eco-friendly restoration producing the highest net              communities near the Elbe can used the saved money
benefits allowing for environmental/ecological                  to invest in other climate-resilient projects. Moreover,
sustainability. While this is not a conventional case of        members of local communities will also be able to
building new flood protection infrastructures, wider            increase their private allocations on other important
range of alternatives made this case study an                   things. For example, reduced private burden of flood
interesting one for future references – both in the             due to public investment in DRM projects will allow
cases of restoration or new constructions.                      them to invest more on their children’s human capital
                                                                development. Such longer term indirect benefits may
This study had to use a cost-effectiveness methodology          be regressive to income, that is, poorer households
as it was aimed to assess the replacing of traditional          may benefit more through their increased allocations
protections (that were reducing the flood damages by            to daily essentials.




Case Studies                                                                                            Flooding       52
       CHIMNEY MEADOWS, OXFORD, ENGLAND, FLOODPLAIN RESTORATION

 This case study is an external analysis that was          food production based on agricultural statistics and
 undertaken with ex-post analysis.                         previous yield records; and flood regulation based on
                                                           avoided damages.
   Æ	 Description of the case study
                                                              Æ	 Results of the analysis by Dividends
The Chimney Meadows case study demonstrates the               	 and overall
effect that restoration of floodplains from intensive
farmland can have on flood risk. Chimney Meadows is a      A BCR greater than 1 was determined under both a
260-hectare farm with 50 hectares protected as natural     business-as-usual scenario (BCR 1.5; total net benefits
reserve to 2003, and the rest as farmland in intensive     of €1.7 million) and an aspirational scenario (BCR 4.8;
management. In 2003 the land was purchased by a            total net benefits of €11.5 million) over a 30-year period
wildlife trust, with the goal to covert the agricultural   Table 15 below. If we interpreted the results in terms of
production land into nature reserves so that the entire    Triple Dividend, we could notice the following benefits:
land is protected. The goal was achieved by extending
the area of floodplain hay meadows and reinstating         •	 Dividend 1: Avoided losses through conversion of
wetland features, which not only protect wading birds,        agricultural land into wetlands reducing flood
but also reduce the danger of flooding.                       potential; the resulting reduction in food production
                                                              due to land reversion is reflected in the aspirational
   Æ	 Methodology                                             assessment. Social benefits for flood regulation were
                                                              estimated under the project to be €3.2 million
An ecosystem services assessment (Hölzinger &                 compared to €1.2 million in the ‘business as usual’
Haysom, 2017) for the site lists benefits as flood            (BAU) scenario (although food production private
protection, food, health (walking), recreation and            value decreased by half).
aesthetics, water quality regulation, and wild species
diversity. The assessment considered a business-as-        •	 Dividend 2: The health benefits (walking) as well as
usual scenario (intensive farming continues) and              recreation & aesthetics have substantial economic
aspirational scenario which comprises the ’reversion          benefits in terms of attracting tourism. Recreation &
of arable land to species-rich grassland, restoration of      aesthetics alone was estimated to increase from a
wet grassland and swamp, extension of woodland and            social value of around €134 thousand to €1.9 million
planting and restoration of hedgerows’. Benefits of           and health (walking) benefits from around €192
ecosystem services and costs of site maintenance              thousand to €987 thousand.
were quantified as far as possible to a monetary benefit
using the benefit transfer approach, over a 30-year        •	 Dividend 3: The wild species diversity, water quality
timescale and discount rate of 1.5 percent, though            regulation and global climate regulation can be
limitations on scientific evidence prevented full             considered as co-benefits as they would occur
quantification of all services. Outside of the change in      regardless of the disaster occurring (or not influenced
land management, all other conditions are assumed to          by reduced perceptions of risks). The global climate
remain unchanged over the 30-year period.                     and water quality regulation are major benefits items,
                                                              as they respectively increase the social value from 0 to
The assessment report details the approach to                 €2.8 million and from €15 thousand to €1.5 million.
quantify each benefit; in summary health benefits are         Wild species diversity also increases from €1.9 million
estimated using the WHO Health Economic                       to €3.4 million of social value.
Assessment Tool (HEAT) for cycling and walking;
Global Climate Regulation benefits by estimating the       •	 The costs only increase slightly, as the capital and
change in greenhouse gas emissions due to land use            equipment costs are considerably reduced and
change; wild species benefits using the WTP method;           labour or site management costs increase slightly.




Case Studies                                                                                        Flooding       53
Table 15: Benefits and costs from Chimney Meadows floodplain restoration over a 30 years period
(2023-2052) applying a discount rate of 1.5%

                                                                                  TOTAL CAPITALISED VALUE
                              BENEFIT SPLIT (PRIVATE
                              VS SOCIAL)                     BAU -THOUSAND € 2015           ASPIRATIONAL (ASP) -THOUSAND €
                                                             (THOUSAND £ 2015)              2015 (THOUSAND £ 2015)

 FIRST DIVIDEND
 Flood Regulation             100% social                                    1.18 (0.84)                              3.23 (2.29)
 Food                         100% private                                   1.16 (0.82)                              0.63 (0.45)
 SECOND DIVIDEND
 Global Climate
                              100% social                                                                             2.84 (2.02)
 Regulation (only AMB)
 Health (Walking)             100% social                                    0.19 (0.14)                               0.99 (0.7)
 Recreation &                 BAU: 47% private, 53%
 Aesthetics                   social
                                                                             0.25 (0.18)                              1.94 (1.38)
                              Aspirational: 1% private,
                              99% social
 Water Quality
                              100% social                                 0.015 (0.010)                            1,477 (1,049)
 Regulation
 Wild Species Diversity       100% social                                    1.94 (1.38)                              3.44 (2.44)
 Total Benefits                                                              4.74 (3.37)                           14.56 (10.34)
 COSTS
 Capital & Equipment          100% private                                   1.59 (1.13)                              1.04 (0.74)
 Labour                       100% social                                    1.39 (0.99)                              1.54 (1.09)
 Site & Livestock
                              100% social                                 0.097 (0.069)                               0.46 (0.32)
 Management
 TOTAL DIVIDEND
 Total Costs                                                                 3.08 (2.19)                              3.03 (2.15)
 Total Net Benefits                                                          1.67 (1.18)                            11.53 (8.18)
 BCR                                                                        1.5 (RATIO)                              4.8 (RATIO)
 NPV                                                                         1.67 (1.18)                            11.53 (8.18)
 IRR/ERR                                                                        35.10%                                    79.18%

Source: Hölzinger & Haysom (2017). Original values in GBP shown in brackets, converted using the currency rate 2015: £1 = €1.41




    Æ	 Challenges faced and lessons learned                        assessment would require collecting and analysing
                                                                   primary data, which is not possible in this study. Given
Full valuation of the ecosystem services is presented in           the opportunity for further analysis, exploring the effects
the assessment report, but these depend on the site’s              on agricultural supply chains could help to quantify the
environment and climate, so while assessments such as              impact to food supply for the broader community to
this one can be taken as a guide, specific assessments             account for distributional effects.
must be conducted for each project. Such a dedicated




Case Studies                                                                                                     Flooding         54
        ADDITIONAL EXAMPLES OF INVESTMENTS IN FLOODPLAIN AND WETLAND RESTORATION FOR
        FLOOD RISK REDUCTION

Additional investments in floodplain and wetland                  river systems, a floodplain development and habitat
restoration have been made in Europe, which provide               restoration project in the Netherlands, and the
effective ways to reduce flood risk while unlocking               establishment of woody barriers and woodlands in
ecological and environmental benefits. Such                       Yorkshire, UK. Outcomes and main lessons learned of
investments include two British flood prevention                  these investments are presented in Box 3 below.
schemes that created new wetland habitats or natural



  Box 3: Additional examples of investments in Floodplain and Wetland restoration

A review of investments in floodplain and wetland restoration     and generates aesthetic value. The benefit-cost ratio for the
across Europe provided inspiring outcomes and lessons             project is 18.
learned outlined below. A common theme is that these
investments reduce the negative impact of floods and              The floodplain development project of the Ijsselpoort area,
climate change and also generate substantial benefits in          Netherlands supported the enhancing of the habitats for
terms of ecosystem and biodiversity conservation.                 species, reduced flood risks and water storage capacity
                                                                  (Natuurmonumenten, 2020). Formed by the upper
The village of Tattenhall in Yorkshire, UK is a community at      floodplains of the river Ijssel, the Ijsselpoort area is included
flood risk with 14 properties flooded during the 2000             in the Natura 2000 network of protected sites due to the
flooding season (JBA, 2013). In this context, the Mill Brook      presence of large areas of threatened habitats and
Scheme (RRC, 2013) was established, which aims at                 endangered species. The LIFE Floodplain development
reducing flood risk for the village through creation of wetland   project was launched to tackle the negative impacts of
habitats. When the project was completed in 2016, 1.5ha of        climate change on the safety of the river and its surrounding
reedbed and wet grassland habitats were created, which            area, including increasing the floodplain water storage
increase floodwater storage and reduces flood peaks. It is        capacity to reduce flood risk.
estimated that the project will benefit a main road and 22
properties in terms of flood risk reduction. The benefit of the   Investment in constructing woody barriers and land
creation of the habitat outweighs the project’s overall cost      management for flood risk reduction in Pickering, Yorkshire,
of €19 thousand, with an outcome Measure of 4a:                   UK, aimed to reduce flood risk for the town. The project
€21 thousand per ha. (Revell, 2018). In addition, the habitat     (Nisbet, 2018) was established in 2009 by the Forest
also generates environmental benefits by reducing                 Research and the Environment Agency with a total funding
agricultural pollution, improving water quality, and              of €4.5 million. The goal was accomplished through the
enhancing biodiversity and wildlife protection.                   construction of low-level bunds and woody dams and the
                                                                  planting of 29 ha of riparian and 15 ha of farm woodlands.
As part of the Warrington Flood Risk Management Scheme,           The project is effective in terms of flood protection as it
the Padgate Brook River Restoration project (McIlwrath,           reduces the chance of flooding in a year from 25 percent to
2018) reduces flood risks through the creation of a natural       4 percent for the town of Pickering. During the 2015 Boxing
river system and the restoration of a 5 ha reedbed. Aiming at     Day storm event, the project protected properties in the
sustainability and climate change adaptation, the project         local community from being impacted by the flood through
was completed without using heavy engineering and                 a 15-20 percent reduction in the flood peak. At the same
provides access to a green space. The project was completed       time, it also yields benefits in terms of climate and erosion
in 2015 with a total cost of £0.25 million, and it includes a     regulation. The benefit-cost ratio for the project ranges from
self-cleansing channel that hugely decreases its                  5.6 (for the woodland measures), 3.8 (for the combination
maintenance costs. The project is expected to protect 226         of woodland, moorland and farm measures), to 1.5 (for the
properties from flood during its design life of 100 years. At     combination measures plus the large flood storage bund).
the same time, it also increases water quality and quantity




Case Studies                                                                                                   Flooding         55
3.1.3.2. Nature-based coastal and tidal protection         dikes show high spatial variability between different
                                                           coastal locations, but overall, benefits exceed costs
Considering sea level rise projections, extreme sea        for about 20 percent of the European coastline
levels in Europe could rise by as much as 1 m or more      segments under a moderate-mitigation and high-
by the end of this century. According to the last          emission scenario, respectively. Thus, the present
PESETA IV report (Vousdoukas, et al., 2020), around        natural or hard shoreline protection is economically
one-third of the EU population lives within 50 km of       optimal for about 80 percent of the European
the coast. In the absence of further investments in        coastline, under a moderate-mitigation and high-
coastal adaptation, annual coastal flood losses for        emission scenario, respectively. In urbanized and
the EU and UK are projected to grow from €1.4 billion      economically important areas, the benefits tend to
per year (0.01 percent EU + UK GDP) to €10.9 billion       surpass the costs several times.
(0.05 percent EU + UK GDP of 2050) and €14.1
billion (0.06 percent GDP) by mid-century for a            The examples below showcase several BCAs
moderate-mitigation and high-emission scenario,            including combinations of grey and green
respectively. In the second half of this century, the      infrastructure to protect against coastal floods in
rise in coastal flood risk further accelerates and by      isolation at the coast, and combined risk of coastal
2100 annual coastal flood losses are projected to          and fluvial flood in the tidal reaches of rivers. In the
reach €110.6 billion (0.24 percent EU + UK GDP in          absence of ecosystems such as mangroves and coral
2100) and €239.4 billion (0.52 percent GDP),               reefs in Europe, restoration and stabilization of dune
respectively. The total number of people exposed to        systems represent the main option for nature-based
coastal flooding in Europe is projected to rise from       coastal risk reduction at European shorelines.
€0.1 million to €0.47 million and €0.58 per year by        However, coastal protection also considers the effect
2050 under a moderate-mitigation and high-emission         of extreme water levels from high tides or storm
scenario, respectively, which further climbs to 1.4        surges on the tidal zone or in estuaries where coastal
and 2.2 million people per year by the end of the          waters can interact with high fluvial flows from inland;
century.                                                   in such cases restoration of wetlands and the
                                                           floodplain can also be applied. The section comprises
Around 95 percent of these impacts could be                a detailed case study from Belgium and other
avoided through moderate mitigation and by raising         examples from England or Spain (see Box 4). The
dikes where human settlements and economically             examples also show that coastal measures can in
important areas exist along the coastline. The report      some cases apply to major urban areas, as well as rural
includes a BCA. The costs and benefits of raising          coastal settings.


       SIGMA PLAN - COASTAL PROTECTION OF THE SCHELDT ESTUARY, BELGIUM

 This case study is an external analysis that was          protection, the plan combines engineered or ‘grey’
 undertaken with ex-ante analysis that involved            infrastructure measures (mainly strengthened dike
 modelling of hazards and consideration of climate         protection and a storm surge barrier) and ‘green’
 change scenarios.                                         measures in the form of a network of controlled flood
                                                           areas (Sigmaplan.be, 2021). The Sigma Plan has not
   Æ	 Description                                          been fully implemented yet and some components
                                                           remain to be realized. In 2015, 1,200 ha of controlled
The Sigma Plan is an integrated flood protection plan      flood areas were operational and ongoing work was
that was first established in 1977 after a major storm     expected to continue this area. In a recent report, the
surge in the previous year. The Sigma Plan (inspired by    alternatives for the update of the Sigma Plan from the
the Dutch Delta Plan) offers protection against coastal    current situation have been compared through BCA -
storm surges as well as floods caused by excessive         providing a case of retrospective analysis of an
rainfall, protecting 20,000 ha of land bordering the       existing project while also being a prospective analysis
Scheldt River and its tributaries such as the Rupel, the   for changes to that project. The baseline alternative is
Nete, and the Durme Rivers. To achieve adequate            represented by the measures already implemented



Case Studies                                                                                      Flooding      56
plus the completion of the original Sigma Plan, except           businesses, infrastructure, and agricultural land. In
for the storm surge barriers. In the plan alternatives, a        addition to economic damage, the number of
higher safety level (lower flood risk) is aimed for by           victims is also estimated and valued.
implementing additional measures: storm surge
barriers at Oosterweel and in the Rupel basin, dike           •	 Effects for agriculture. In some cases, agricultural
raising, flood control areas and a retention basin.              activities may remain in the flood zone but are
                                                                 subject to restrictions and damage when used as
   Æ	 Methodology                                                flood control areas; in other cases, they are not
                                                                 compatible with the function of the inundation area
All proposed protection measures are evaluated with              and thus are permanently lost.
ex ante BCA including discount rates and climate
change scenarios up to 2100 (Gauderis, et al., 2005)          •	 Costs for forestry. The potential flooding areas
Complete ex-post evaluation is done on those areas               contain more than 2,000 ha of poplar forests. If
where measures are already completed. Simulations                these areas are designed as flood control areas,
of hazard scenarios were produced in 2005. The BCA               there is no significant impact. Poplars like wet soils
is carried out in two phases. First, 10 basic alternatives       and can withstand occasional flooding.
are evaluated and compared with each other. They
include all types of possible measures (storm surge           •	 Costs for shipping. Possible nuisance to shipping
barrier, dike raising, room for the river), including            can be expected during the construction of a storm
plausible combinations of different solution types in            surge barrier at Oosterweel. The effects of the small
relation to a range of security levels achieved. The             storm surge barriers on the Rupel, Nete, and Dijle
solution with the best BCR represents the best basic             are smaller and not accounted.
alternative. A sensitivity analysis is also carried out. In
the second phase, the best solution direction is              •	 Ecosystem benefits. NBS generate natural
optimized by fine-tuning all the variables within that           benefits, split as effects on uses (production
solution. The study area is subdivided into five zones           functions, regulation functions, and recreation) and
and an optimal solution is sought for each zone. The             non-use value (including option value, inheritance
optimal Sigma Plan is equal to the combination of                value, and existence value).
optimal solutions of the five separate zones. Costs and
benefits accounted in the analysis include the                •	 Recreational value estimated on the basis of an
following:                                                       estimate of the number of expected holiday-makers
                                                                 on the dikes and their experiential value.
•	 Implementation costs of initial investments plus
   the maintenance and management costs. A                    •	 Visual nuisance for local residents estimated on
   surcharge of 15 percent was charged for                       the basis of a key figure for the potential loss of
   ‘unforeseen’ costs. Value added tax (VAT) is not              value of houses and included as a one-off cost in the
   included. It assumes an annual investment amount              construction of the flood zone.
   of €50 million starting in 2010. Costs for land
   expropriation are accounted separately (see                The alternatives are compared according to three
   agriculture).                                              evaluation criteria: the net current benefits in the base
                                                              scenario, the payback period in the baseline scenario,
•	 Risk reduction benefits that consist of avoided            and the payback period in the ‘worst case’ scenario.
   risks and avoided costs. The avoided risks are the         The base scenario assumes a discount rate of 4
   difference in damage during flooding between the           percent and a sea level rise of 60 cm over the next
   plant alternative and the zero alternative. Customary      100 years. In the worst-case scenario, future benefits
   hydraulic modelling approach is used to estimate           are discounted more strongly and therefore less valued
   flood areas with a certain probability of occurrence.      (discount rate of 7 percent) and the expected sea level
   Both overtopping and dike breach scenarios are             rise is 30 cm. In this scenario, the benefits of the Sigma
   accounted. The damage for all these floods is              Plan will be lower. In both scenarios, average economic
   estimated as function of the flood extent and depth        growth is assumed.
   over the total number of flooded houses,



Case Studies                                                                                          Flooding       57
    Æ	 Results of the analysis by dividends                          sensitivity analyses.
    	 and overall
                                                                     The optimal Sigma Plan consists of a combination of
The analysis includes a set of measures for the short                flooding areas and local dike elevations. The solution
term (always profitable in the short term) as well as                found to have the highest NPV and the shortest
additional measures for the longer term (will likely                 payback period consists of a combination of flooding
become profitable by 2050). The measures that best                   areas and local dike elevations (‘Optimal A’, see
meet the various criteria discussed above were                       Table 16). In ‘Optimal B’, those flooding areas are set
included in the definition of an optimal Sigma Plan                  up as ‘controlled reduced tidal areas’, rather than
with measures for both the short term (construction                  simple flood control zones, while ‘Optimal C’ includes
2010) and longer term (for example, 2050). From four                 additional measures to be built in 2050, including
possible plans meeting the criteria, one was selected                various configurations of additional flood areas. Full
as the optimal solution, subjected to a more detailed                engineering details of each solution are given in the full
analysis, such as the evaluation of design variants, the             report (Gauderis, et al., 2005).
search for additional measures for the long term and


Table 16: Overview of costs and benefits of all plan alternatives (€, millions in 2004 prices) for optimal Sigma
Plan up to 2100

                                                         STORM SURGE BARRIER           OPTIMAL A       OPTIMAL B       OPTIMAL C

 FIRST DIVIDEND
 Risk reduction benefits until 2100 (€, millions)                              748             737              730             752
 SECOND DIVIDEND
 Net benefits until 2100                                                         −5              −8              33             −11
 (agriculture, forestry, shipping, ecosystem
 services, recreational) (€, millions)
 Costs
 Implementation costs (€, millions)                                            397             132              139             149
 TOTAL DIVIDEND
 Total dividend (€, millions)                                                  743             729              763             741
 NPV until 2100 (€, millions)                                                  346             596              622             593
 BCR                                                                          1.87             5.52            5.49            4.97
 Payback period baseline (years)                                                 40              16              13           16/51
 Payback period worst case (years)                                    No payback                 45              33            N.A.
 IRR/ERR (%)                                                                 46.57           81.89           81.78            79.89

Source: World Bank compilation; based on data and information from external sources mentioned above; Baseline scenario: discount rate
of 4%, average economic growth, sea level rises 60 cm in 100 years. Worst case: discount rate of 7%, average economic growth, sea level
rises 30 cm in 100 years.

Compared to the Oosterweel storm surge barrier                       possible, instead of structural ones. It has slightly higher
alternative (complemented with control flooding areas),              costs but also generates additional natural benefits, so
Optimal A has lower safety benefit; however, the storm               the NPV is higher and the payback period is lower. Sub-
surge barrier has also much higher implementation                    alternative C accounts for additional flood control areas
costs, realisation time, and no effect on risk upstream.             built in 2050 and shows better BCR than the storm
The NPV until 2100 is therefore much lower. Sub-                     surge barrier. The investments in the first period pay for
alternative B is similar to A but emphasises the use of              themselves in 16 years, and the investments in the
natural measures to create flood control areas where                 second period in 51 years.

Case Studies                                                                                                       Flooding         58
    Æ	 Challenges faced and lessons learned                      through the analysis, the Sigma Plan project symbolizes
                                                                 the future of integrating green and grey solutions to
The analysis shows that a combination of grey and                create environmentally conscious infrastructure and
green measures represents the optimal alternative in             therefore enhance conditions for future generations.
terms of realisation costs over avoided flood damage             Considering maintenance or improvement costs can
and natural ecosystem services benefits. This is                 be important as well as to carefully consider options to
especially true when considering the costs of updating           enhance co-benefits, as shown in other cases in the
the defence solutions to cope with the effects of                United Kingdom or Spain.
climate change in the long-term. As exemplified


        ADDITIONAL EXAMPLES OF NBS FOR COASTAL AND TIDAL PROTECTION

Additional investments were made in the coastal and              Plan (BAP) habitat in Alkborough, UK; and construction
tidal areas of Europe to reduce flood risk. These                of dunes that protected the beaches and coastline of
investments include improvement of tidal river defences          Barcelona, Spain. Highlights of the investments and the
and creation of tidal flood relief area in Sandwich, UK;         main lessons learned are showcased in Box 4 below.
creation of flood storage area and Biodiversity Action

  Box 4: NBS for flood risk reduction in coastal and tidal areas

A review of NBS that reduce risks in coastal or tidal flooding   agriculture and wildfire, Alkborough Flats and the area
provides insightful results outline below. A common theme        surrounding it often face flood under high tides, with
is that the investments all include maintenance or               increasing intensity due to sea level rise and sediment
improvements over the existing measures and yield                movements. In this context, a massive flood storage area
substantial co-benefits in recreational value and ecosystem      was constructed, which reduced tidal flooding risk for over
preservation.                                                    600 properties. It is estimated that without the Alkborough
                                                                 Flats Scheme, the volume of the flood would be 7 percent
Located on the right bank of the River Stour, Sandwich is a      more during the 2013 tidal surge. The scheme also created
historical town with upstream urban areas vulnerable to          370 ha of a BAP habitat, which provides various ecosystem
extensive flooding. To reduce flood risk for the local           services benefits. The total cost of the project is €16.3
community, the Sandwich Tidal Defence Scheme (Bishop &           million (£11.1 million), while its benefits in flood defence
Burgess-Gamble, 2018) was established in 2015, with the          and ecosystem protection is estimated to be €34.6 million
goal to improve the existing tidal river defences and create a   (£23.6 million). The BCR of the project is 2.72.
240ha tidal flood relief area. It is estimated that 486
residential and 94 commercial properties are protected by        In Barcelona, Spain, coastal dunes are disappearing due to
the scheme, with a sea level rise of 50 years included in the    erosion and rapid urbanization, which increases the
design. At the same time, the scheme also yields social and      beaches’ vulnerability to storms, tidal floods, and sea level
ecological benefits, as 20 ha of new wetland habitats were       rise. The five-year EU project OPERAs (OPERAs, 2020)
created for recreational uses and bird protection. With a        addresses the issue by constructing and maintaining semi-
total cost of 21.7 million pounds, the scheme yields a BCR       fixed dunes along Barcelona’s coastline. The project
of 10.5.                                                         enhances the coastal area’s resilience to storms and floods,
                                                                 which reduce the hazards’ negative economic impacts on
The Alkborough Flats Managed Realignment scheme                  the real-estate and tourism. The construction of the dunes
(Manson, 2018) is one of the largest managed realignment         is also crucial in terms of preserving the beach and the
sites and flood storage scheme in Europe, completed in           coast’s ecosystem, which yields substantial ecological co-
2006. Though greatly valued for commerce, industry,              benefits.




Case Studies                                                                                                Flooding       59
3.1.3.3. NBS for urban flood risk reduction                     The European Commission has made investments
                                                                to reduce flood risks in the urban environment
In Europe, many cities are vulnerable to flood risks as a       through the use of NBS. These investments include
result of rapidly growing urbanization and land                 enhancements to buildings (for example, green roofs
consumption, and increasingly variable hydro-                   and rainwater harvesting), diverting run-off to
meteorological extremes. Urban areas located in                 bioswales or planter boxes, and increasing the area of
floodplains along rivers have a higher risk of exposing         permeable surfaces through green parking and
assets and properties to river floods (EEA, 2017). In           permeable pavements (EPA, 2020; Soz, et al., 2016).
addition, sudden increase in the volume of water                Some examples of investments are highlighted
caused by heavy precipitation can lead to overflow in           in Box 5 below.
the urban drainage system, causing flash floods
(Climate Change Post, 2021).

  Box 5: Investments in urban infrastructure to reduce flood risks

Investments in green infrastructures have made                  storage improvements. The project presents how a public
achievements in reducing flood risks in the urban areas and     greenspace can help reduce the negative effect of climate
provided inspirations. The investments showcased below          change for the local community. Modelling shows that the
include investments in green infrastructure to reduce           project reduces flood risks within the park and in the
surface water flooding in Spain and a climate change park in    neighbouring residential areas. In addition, the park also
the United Kingdom.                                             generates recreational value and enhances wildlife
                                                                protection, which increases the project’s social and
In the municipality of Benicassim in Spain, green               environmental benefits. It was estimated that the project
infrastructure helped to reduce surface water flooding and      yields a total benefit of £27 million, which produces a BCR
yielded a number of co-benefits. Supported by the EU, LIFE      of 7 comparing to its total cost of £3.8 million (Burgess-
CERSUDS (Climate-ADAPT, 2018) is a €1.8 million                 Gamble, et al., 2018).
(€0.99 million EU-funded) project with the goal to promote
the use of green infrastructure in urban planning to manage     An example presented by World Bank (Soz, et al., 2016)
surface water flooding and also improve the resilience of the   highlights the experience of Malmö, Sweden, where since
Spanish city of Benicassim (European Commission, 2021).         1998 the Augustenborg District underwent an urban
The project developed a low-carbon Sustainable Urban            renovation program (‘Ekostaden’, or econeighborhood),
Drainage System (SuDS), comprising an innovative                which transform it into an ecologically, socially, and
permeable ceramic tiled pavement surface with a low cost        economically sustainable city district. While developing new
and a small impact on the environment. The surface reduces      community spaces, green roofs were developed to reduce
diffuse pollution by preventing water reaching the sewage       flood risk. They have been highly effective in capturing
system and delays run-off by 45 minutes - reducing peak         runoff, and on average intercept half of the annual total
flow downstream by at least 72 percent. Co-benefits include     runoff from a 9,000 m2 botanical roof garden in the
the reduction of manufacturing/installation emissions           industrial area. An evaluation (Kibirige & Tan, 2013)
through the use of ceramic tiles and improving the quality of   concluded that the “open stormwater system in
the rainwater stored, but further quantified results are not    Augustenborg is well suited to handle current climatic
yet available.                                                  conditions and a 10 year extreme event. The 100 year
                                                                extreme event posed the most risk to the area and flooding
Completed in 2012, the Mayes Brook River Restoration            was evident” (iv). The project has reduced runoff, created
project (Restorerivers.eu, 2014) in east London was the first   energy savings for residents, improved biodiversity in the
climate change park in the UK that reduces flood risks          region, and led to socioeconomic benefits such as a drop in
through the restoration of a 1.6 km river and flood plain       the unemployment rate.




Case Studies                                                                                              Flooding       60
3.1.4. FLOOD EARLY WARNING SYSTEMS                           terms is prone to many uncertainties—the few studies
                                                             which include a quantitative assessment of EWS
An EWS is an integrated tool of hazard monitoring,           benefits necessarily rely on assumptions and
forecasting, and alert that enables individuals,             generalisations due to scarcity of observations. Further,
communities, governments, businesses, and others to          assessments may take place over different scales—
take timely actions to reduce disaster risks in advance      from a single urban area to national scope (for example,
of and during hazardous events. An FEWS requires             (Priest, et al., 2011)). Schroter et al. (2008) estimate
hydrometeorological observations and forecasts,              the effectiveness of EWS as a function of warning lead
monitoring of hazard and risk indicators in relation to      time (which however is not the only factor in EWS
predefined thresholds, effective channels to                 effectiveness). Pappenberger et al (2015) estimates
disseminate the warning signals, and predesigned             the potential monetary benefits of early flood warnings
response measures by institutions and communities.           based on the continental-scale forecasts produced by
Accessibility to remote sensing and local meteoro-           EFAS using existing flood damage cost information
logical data is key to producing the relevant information,   and calculations of potential avoided flood damages.
and cooperation among institutions is a critical part of     The evaluation is at the EU scale and it is based on
the process.                                                 theoretical assumptions and global disaster datasets
                                                             (EM-DAT). The results suggest that there is likely a
The engagement of local communities also plays an            substantial monetary benefit in this cross-border
essential role during the design and operational phases      continental-scale flood EWS—about €400 for every
of an EWS. Most EU countries have some form of               €1 invested. Another study from the International
national EWS linked to disaster management                   Commission for the Protection of the Rhine (2002)
operations. At the level of country or region, there are     estimates that flood warnings can help businesses
both dedicated local systems, such as the advanced           avoid 50–75 percent of flood losses. Damage
Flandres waterinfo service (run by VMM Belgium), and         reduction factors for different response actions were
cross-national services, such as the EFAS, launched in       estimated from another study (Parker, et al., 2007;
2003. EFAS produces alerts bulletin for all member           Parker, et al., 2008), ranging from 6 percent by
countries, providing complementary pan-European              evacuating property content up to 30 percent
medium-range streamflow forecasts and early flood            reduction obtained by operating (flexible) flood
warning information in direct support to the national        defences. At the European level, the factor is estimated
forecasting services, with a focus on large transnational    around 25 percent, saving an estimated €30 billion
river basins.                                                over the next 20 years. In comparison, results from
                                                             local studies such as the case of Grimma in Germany
Assessing EWS costs and benefits in quantitative             (described later) show much smaller benefits.


        THE FLANDRES FEWS (VMM BELGIUM)

 This case study is a new ex-post analysis under this        can identify extreme river flood events with 32-26
 project that involved modelling of hazards.                 hours lead time, though a warning is only released
                                                             after two runs of the model confirm that the threshold
   Æ	 Description                                            for issuing a warning will be surpassed (12 h). This
                                                             means, in practice, that the effective minimum lead
The FEWS of Flandres represents the advanced                 time is around 20-14 hours. The EWS warning is issued
integrated systems running on real-time observations         if the flood intensity is expected to exceed the flood
(Perera, et al., 2019). The service produces forecasts       depth of a 1-in-5-year event. Information from the
every 6 hours for the five provinces of West and East        service is published through the website waterinfo.be.
Flandres, Antwerp, Flemish Brabant and Limburg,              The system is not able to forecast pluvial flash floods,
shown as green-shaded area in Figure 11 (Brussels is         which can develop in just 2 hours. The error on water
not included). Red and pink areas on the map are             level forecast is 0.3 m on average but can grow to 0.6
susceptible to flooding (more details on flood prone         m in some locations; an expert validation is always
areas also included in Figure 12). The EWS forecast          required before releasing the warning.



Case Studies                                                                                         Flooding      61
Figure 11: Areas covered by FEWS in Flanders showing ‘flood-prone’ areas (red—susceptible to frequent
floods) and ‘floodable’ areas (pink—at risk of less frequent floods)




Source: World Bank analysis; based on flood-prone extents from waterinfo.be


There is no official estimate of economic risk of river             consistently with the approach described by Priest,
flood to Flanders, and no BCA has been produced for                 Parker, and Tapsel (2011). Hazard forecasting capacity
the warning system, though insurance statistics                     includes monitoring of meteorological variables,
suggest €50-€60 million of damage annually due to                   modelling rainfall runoff, identifying hazard thresholds
floods in this region, increasing to €100 million for               and evaluation of risk; it can be measured in terms of
catastrophic events. For events of higher frequency                 anticipation and reliability (confidence level
(return period of 5–10 years), the combination of EWS,              approaching the event). Warning broadcasting refers
public communication, and training, including to                    to the communication between institutional actors
conduct maintenance of flood control reservoirs,                    and dissemination media and is measured in terms of
gates, and other infrastructure ahead of flooding,                  coverage (exposed area or population). Emergency
could reduce risk. For larger events, it is less easy to            response includes the actions taken by institutions
reduce damage. The cost of deploying the service is                 and communities to reduce or avoid the damage in
about €0.3-€0.5 million per year for each province, but             exposed areas, such as setting mobile barriers and
these estimates are a bit outdated (2010). There are                relocating properties, and is measured in terms of
many other factors affecting the final price, such as               avoided damage.
costs IT (website maintenance), therefore it is difficult
to give one final measure. As a reference, insurance                Assumptions on FEWS anticipation capacity, warning
costs consider each house worth €50 thousand in                     coverage, and loss reduction are developed on the
damage.                                                             base of evidence from the location of study. According
                                                                    to the national report on flooding (VMM, 2011) people
    Æ	 Methodology                                                  located within flood-prone areas tend to be more
                                                                    responsive to EWS and to take measures to mitigate
To estimate the effect of the EWS on flood risk we                  the impacts. To reflect this, areas at risk of flooding are
apply the JBA Global Flood Model and residential                    classified with different warning uptake/risk reduction
exposure, per the analysis of structural defences, with             classes according to the flood probability. In areas
the potential damage reduction due to EWS                           exposed to frequent floods (here termed ’flood-prone’),
services estimated using assumptions based on the                   we assume 90 percent of households act on a
information provided by the service providers (VMM),                warning received. In areas affected less often (here,
literature review and empirical information from real               ’floodable’), we assume a 30 percent of households
cases. The effectiveness of FEWS implementation                     act. The specific households modelled as acting on
relies on the combination of hazard forecasting,                    the warning (therefore subject to reduced risk) is
warning broadcasting, and emergency response,                       applied using a stochastic approach, being selected




Case Studies                                                                                                 Flooding       62
at random.                                                         The estimate of total loss for the baseline modelled
                                                                   scenario are consistent with the losses recorded after
Based on these assumptions, the benefits are                       the event of November 2010, before the EWS was
measured as reduction in direct losses to assets                   set up, which caused a loss of approximately €120
compared to the baseline flood risk, where no EWS is               million. Based on the above rates of expected action,
implemented. A damage reduction factor is applied to               it is expected that of 617,314 households
the loss model for the properties expected to act, by              (approximately 1.4 million people) in Flanders, 7
reducing the maximum possible damage sustained.                    percent would act on receiving a warning (Table 17).
An equal reduction is applied to all properties acting,            This leads to an expected loss reduction of between
but due to the uncertainty in levels of damage reduction           €1.5 million (1 percent of the baseline loss) and €15
due to EWS three options are considered, namely 5                  million (10 percent), depending on the assumption of
percent, 25 percent, and 50 percent for the reduction              damage reduction rate (Table 18). The avoided
in maximum damage.                                                 damages supply the Dividend 1 estimate; we do not
                                                                   quantify fatalities avoided because the rate of
    Æ	 Results of the analysis by Dividends                        flood fatalities in Belgium is less than 1 per million
    	 and overall                                                  (EEA, 2020) regardless of EWS. Overall results are
                                                                   presented in Table 19.




Table 17: People and households affected by EWS benefits (model estimates)

                                                PEOPLE PER          NO. OF
 TOTAL NO. OF             TOTAL NO. OF                                                NO. OF PEOPLE     PROPORTION
                                                HOUSEHOLD           HOUSEHOLDS
 HOUSEHOLDS               PEOPLE                                                      BENEFITTING       BENEFITTING
                                                ASSUMPTION          BENEFITTING

 617,314                         1,481,554                   2.4            40,592            97,426                  7%

Source: World Bank analysis; based on external data




Table 18: Overall risk reduction (AAL) thanks to EWS for 3 key assumptions (in millions €)

                                                      EWS SCENARIO,         EWS SCENARIO, 25%      EWS SCENARIO, 50%
                         BASELINE SCENARIO
                                                      5% LOSS REDUCTION     LOSS REDUCTION         LOSS REDUCTION

 Total loss, €                            161.16                    159.6                  153.4                145.64
 Change, €                                     —                    −1.55                  −7.76                −15.51
 % change                                      —                       −1                     −5                    −10

Source: World Bank analysis; based on external data




Case Studies                                                                                             Flooding      63
Figure 12: Map of flood-prone areas in Flanders, Belgium in terms of frequency of occurrence




Source: World Bank analysis; elaboration based on results from the analysis

Dividends 2 and 3 for many soft investments such as                   and storms, indirect benefits of such programs are not
EWS are difficult to quantify. While the socioeconomic                well documented, and may not be possible to quantify
benefits of reduced damage from using EWS are multi-                  without investigation involving primary data.
faceted, such investments are often part of larger
DRM projects. Therefore, it becomes difficult to                      Costs are calculated as annual costs of €0.5 million
identify specific benefits that can be unambiguously                  per province plus an additional €0.5 million estimated
attributed to EWS only. Moreover, as has been                         for the maintenance of the EWS. In total, the total
discussed by Tanner, et al. (2015) for Bangladesh,                    annual cost of service implementation and operation
variability in direct benefits (that is, dividend 1)                  for the five provinces is estimated at around
from cyclone EWS comes from timing – maximum                          €3 million. Compared to the cost of implementing the
reduction in damage can be possible if the citizens                   EWS, the benefits are likely much higher (€1.5-€15.5
receive sufficient time to evacuate and relocate                      million).
themselves and their properties. Especially for floods


Table 19: BCR of implementing EWS in Flanders by dividend, over 30 years (Future benefits and
costs discounted by 3.5%/year)

                                                    EWS SCENARIO,              EWS SCENARIO,           EWS SCENARIO,
                                                    5% LOSS REDUCTION          25% LOSS REDUCTION      50% LOSS REDUCTION

 FIRST DIVIDEND
 Fatalities avoided                                               Negligible              Negligible             Negligible
 Annual average property damage avoided                         €1.5 million            €7.8 million          €15.5 million
 (€, millions)
 Total first dividend (30 years) (€, millions)                €29.1 million           €151.3 million         €300.6 million
 COSTS (€, millions)
 First time capital cost of                                     €2.5 million            €2.5 million           €2.5 million
 sensors and monitoring system
 Maintenance cost                                               €0.5 million            €0.5 million           €0.5 million
 Total costs (30 years)                                       €58.2 million            €58.2 million          €58.2 million
 BCR                                                                     0.5                    2.6                      5.2
 NPV (€, millions)                                           -€29.1 million            €93.1 million          €42.4 million
 IRR/ERR                                                              -100.0                  61.54                    80.65

Source: World Bank analysis; based on external data and information

Case Studies                                                                                                Flooding       64
   Æ	 Challenges faced and lessons learned                  investments may lead to wrong estimates of benefits in
                                                            the absence of data and information. We therefore
Many benefits, especially under dividends 2 and 3,          have not calculated such benefits for this case study.
were not quantified due to the unavailability of data.      Moreover, the distributional impacts are unclear and
Capturing more details on the proportion of households      would be interesting to analyse in terms for example of
taking different actions in response to a flood warning     last mile communication to ensure reaching most
and the effect of those actions and households’ private     vulnerable people in remote areas.
adaptation investments requires further research to
make a more complete triple dividend analysis. The          There are interesting studies considering additional
sensitivity testing undertaken shows that there is likely   aspects to improve the analysis of FEWS. These include
to be a minimum uptake required for EWS to show a           the implementation and maintenance costs for the
BCR greater than 1, especially in areas of Europe           investment in FEWS in Grimma, Germany, perfor­
where avoided fatalities are not included due to low        mance of the forecast system, and uncertainties in
rates of flood-related deaths, and where other              damage data for the EFAS. Nevertheless, all analysis
dividends cannot be quantified.                             show substantial benefits of FEWS under different
                                                            specifications, with various methodologies and for
There are additional benefits from EWS that may             different types of investments, with considerable
belong to dividends 2 and 3. However, calculating           benefits found for cross-border floods early warning.
those indirect and/or co-benefits to society can be         Moreover, complementary investments in public
complex and requires sufficient data in a classic DiD       awareness or last-mile communication and education
framework. For example, there can be social benefits        are essential to ensure that benefits from EWS can
from reductions in emissions. However, there are many       arise and investments in this sense have been
confounding factors that contribute towards emissions       undertaken, for example, in Poland or as a collaboration
reduction and separating the contributions of EWS           of Greece and Cyprus.


       EARLY WARNING SYSTEMS IN THE TOWN OF GRIMMA, SAXONY, GERMANY

 This case study is an external ex-ante analysis that          Æ	 Methodology
 involved modelling of hazards.
                                                            The study of EWS in the town of Grimma, Saxony
   Æ	 Description of the case study                         (Priest, et al., 2011; Meyer, et al., 2012) offers an
                                                            interesting example of BCA with clear implementation
Grimma is a small town of 28,000 people located on          and maintenance costs in addition to estimating the
the Mulde river, a tributary of the Elbe. In August 2002    benefits of the system. Quantification of EWS costs
regionally severe flooding occurred on the Elbe and         and benefits is complex, due to the value chain and
Danube Rivers, estimated to be at least a 1-in-200-         often-shared costs of establishing or improving an
year event. Grimma suffered significant damages of          EWS, but in this case the scale of the system has
€220 million from flooding as deep as 4m as existing        enabled this. The system cost €148,000 (one-off) for
dike protection was insufficient for this event. Soon       setting the EWS and €4,200 (annual) to run the
after the experience of 2002, the town council decided      service. Assuming a lifetime of 100 years and using a
to install an autonomous local warning system, in           discount rate of 3 percent, the present value of costs is
addition to the Saxon regional one, consisting of many      €291,000. Assuming a lifetime of 100 years and using
components including: a central flood announcement          a discount rate of 3 percent, the present value of costs
system including sirens, autonomous SMS information         is €291,000.
network and 24-h flood information to the television
media. From 2010, structural protection with a design       The model used to estimate the benefits is a specific
level of 1-in-100-years were also installed. A study        one developed for the study and considers eight
from 2012 compares costs and benefits for both              parallel response actions to characterize the
measures, individually and combined (Meyer, et al.,         theoretical range of damage-reducing responses to
2012). We are in the following analysis focusing on the     flood warnings. Two of these actions relate to human
EWS measure alone.                                          elements (search and rescue, evacuation of people),

Case Studies                                                                                        Flooding      65
not evaluated in economic terms. The other six are        thousand).
related to reduction in flood economic damages and
producing flood warning benefits:                            Æ	 Results of the analysis by Dividends
                                                             	 and overall
•	 Flood Defence Operation: integrity of flood defences
   are monitored and maintained                           The FEWS is estimated to reduce the total 100-year
                                                          event damage only between 2.1 percent and 19.5
•	 Community-based measures: water prevented from         percent, but its cost efficiency in terms of NPV is most
   reaching buildings where effective                     likely positive in the long run. Total annual expected
                                                          damage saved of €408,585 are estimated, which is 73
•	 Contingent resilience measures: water prevented        percent of the estimated total average annual damage
   from reaching buildings where effective                potential (without any flood damage reduction
                                                          measures). The majority of this (€386,000, 69 percent
•	 Relocation or evacuation of belongings: property       of total) are generated by the operation of flood
   moved away from flood waters                           defences, and the remaining €22,585 contributed by
                                                          a combination of business continuity planning,
•	 Watercourse capacity maintenance: freer from           evacuation of house contents, contingent resilience
   debris, less change of flooding                        measures, community-based operations, and
                                                          maintenance of watercourse capacity. These measures
•	 Business continuity plan: minimises business           however become less effective for more severe floods.
   interruption losses
                                                             Æ	 Challenges faced and lessons learned
An estimate of €0.56 million annual average damages
has been used as a basis for the application of the       The results of this study are valuable as an example of
model for Grimma, based on a previous meso-scale          a well quantified implementation of EWS integrated
flood damage estimation when there were no structural     with structural protection. This is in part made possible
defences. This total EAD has been calculated for return   by the small scale of the system and target area –
periods greater than 1 in 50 years as for events below    which in turn provides a challenge in scaling the
this level no properties are affected, and damage is      findings to larger areas and other locations. Potential
assumed to be zero. Following the construction of         distribution effects of this EWS with integrated
structural protection infrastructure, the mean EAD for    structural protection include a reduction in damages
the town are estimated to be reduced by about 69          to homes and settlements near the river, which can
percent to approximately €0.174 million. On average,      include people with lower incomes or who are
35 percent is suffered by residential properties (€60.9   experiencing homelessness.


       EUROPEAN FLOOD AWARENESS SYSTEM

 This case study is an external ex-ante analysis             Æ	 Methodology
 that involved modelling of hazards
                                                          Pappenberger, et al. (2015) performed sensitivity
   Æ	 Description of the case study                       assessments of the potential monetary benefits of
                                                          EFAS early warnings, considering the avoided damage
EFAS was launched in 2003 and produces alerts             factors, the performance of the forecast system, the
bulletins for all EU member countries, providing          discount factors and the uncertainties in the damage
complementary        pan-European        medium-range     data. Avoided damage due to early warning is set at
forecasts and early flood warning information in direct   32.85 percent when flood defence operation,
support to the national forecasting services, with a      watercourse capacity maintenance and community-
focus on large transnational river basins. The reported   based operations are considered together. This
cost to establish four EFAS operational centres was       increases to a total of 36.68 percent damages avoided
€21.8 million, with additional development costs over     when      temporary      resistance   measured    are
10 years of €20 million (Emerton, et al., 2016).          implemented and contents are moved. The study tests

Case Studies                                                                                      Flooding      66
warning system performance improvements of 10               property contents. JRC (Thielen Del Pozo, 2015)
percent, 20 percent, and 30 percent while assuming          averages the damage reduction factor of EFAS at the
the forecast model skill remains stationary over the        EU level (around 25 percent) over the next 20 years.
20-year period. An EU wide discount factor of 5 percent     Indirect losses avoided, counting towards Dividend 1,
is applied, with some variation for UK (3.5 percent)        and Dividend 2 and 3 benefits were not included in
and France (4 percent). An uplift factor of 2.54 and        JRC’s analysis of EFAS due to difficulties quantifying
1.75 were applied to account for indirect costs, applied    indirect losses avoided and the potential provision of
as an uplift to EUSF and EM-DAT reported direct costs       earlier aid to at risk people.
to estimate event damages.
                                                                Æ	 Challenges faced and lessons learned
Benefits of EFAS warnings are estimated by: 1)
calculating correctly warned events and missed events       This example highlights the challenges in estimating
against an EU flood damage map, and 2) against EUSF         the costs and benefits of EWS, which derive from
and EM-DAT damage estimates. These benefits were            several complex factors - especially in this large-scale
compared against the installation and running costs of      case. These include whether a forecasting system
the EFAS system. No assessment of a single event is         already existed and in what form, the scale of
carried out by Pappenberger et al. (2015).                  forecasting region, temporal lead time required and
                                                            enabled, in addition to human and resource factors
   Æ	 Results of the analysis by Dividends                  which, in an event, can limit the efficacy of response
   	 and overall                                            actions even in cases of effective warnings being
                                                            issued. The sensitivity study of Pappenberger et al.
The results show that there is likely a substantial         (2015) shows the significant uncertainty associated
monetary benefit in this cross-border continental-          with assessing benefits and costs of FEWS –
scale flood EWS. The conservative base scenario             uncertainty in the percentage of damages avoided due
applied suggests that a BCR of 159 is generated after       to actions following a warning can change the relative
20 years of operating EFAS. With improvements in            monetary benefit of EFAS by over 100 percent,
forecast performance this ratio could reach 202, and        assumptions on forecast performance by up to around
even up to 400 (400 Euro return for every 1 Euro            70 percent, and uncertainty in estimated event
invested). The analysis suggests that 37 percent of         damage by over 150 percent. Moreover, the
damages could be avoided due to the operation of the        distributional impacts are unclear and would be
EWS, resulting mainly from a 32 percent reduction           interesting to analyse in terms for example of last mile
thanks to avoided damages by warning dependent              communication to ensure reaching most vulnerable
flood defences, and 5.7 percent reduction thanks to         people in remote areas.
residual damages avoided by moving and evacuating


       ADDITIONAL EXAMPLES OF EWS BUILDING AND TRAINING FOR IMPROVED FLOOD RESPONSE

A number of additional investments sought to improve        warning systems. Projects include investments in a
awareness and capacity for preparedness that could          cross-border EWS system in Greece-Cyprus with
provide lessons learned and inspirations. In fact,          educational tools and a comprehensive mapping
building risk awareness and capacity of governments,        system PANDA in Poland. Highlights and main
emergency services and the public to respond to             lessons learned of these investments are presented
floods is an important component of increasing              in Box 6 below.
resilience and support the operation of effective

 Box 6: Varied investments in EWS and capacity building for flood response across Europe

A review of investments in EWS and capacity building for    reach the last mile can be very beneficial for disaster risk
flood response across Europe provided a number of lessons   prevention and preparedness.
learned and inspiring achievements outlined below. A        A Greece-Cyprus Interreg-funded project implemented
common theme is that individualized early warnings to       2017-2020 aimed to bridge the gap between scientific


Case Studies                                                                                          Flooding       67
knowledge and public action (European Commission, 2020;          online, digital and comprehensive rainfall mapping system
World Bank, 2021). It developed an online Environmental          in Poland. It is designed to help develop urban stormwater
Risk Management Information Service that provides tools          and drainage systems that better protect Polish towns,
and information on flooding to business owners, policy and       cities and their residents against the effects of heavy rainfall.
scientific communities, and the general public. By offering      Based on three decades of data, the project developed an
EWS, crowdsource photos, flood-risk maps, entertaining           online rainfall intensity calculator, making it easier to assess
videos and education games for families, the project enables     potential threats in any area of the country. The data is
the public to have access to scientific information on natural   accessible through a personal PANDA account, which any
disasters and thus increase their chances of survival when a     interested party can open online. The data allows local
disaster strikes.                                                governments and companies to plan preventive actions and
                                                                 better equip infrastructure works and buildings against
The Polish Atlas of Rains Intensities (PANDA) is the first       heavy rainfall or flooding.




3.1.5. PROPERTY-LEVEL PROTECTION (PLP)
                                                                 coordinated effort to mitigate flood risk at the property
Property-level flood protection is the installation and          level over many properties and to represent the
deployment of flood resistance measures to prevent               potential impact of such a large-scale investment in
water from entering individual properties and resilience         PLP measures.
measures to limit the damage caused once it has
entered (White, et al., 2018). Resistance or dry proofing        PLP measures were implemented from 2008 to 2011
measures include door barriers, nonreturn valves, and            under a government grant scheme in England to
airbrick covers, while resilience or wet proofing                evaluate the effectiveness of PLP (Peter, et al., 2014).
measures include waterproof plaster. Pumps can also              Total funding of £5.2 million (€6.55 million in 2008
be considered to remove water from properties to                 prices) was awarded to 63 individual PLP schemes,
reduce the amount of time they are flooded, which in             offering practical flood protection solutions to 1,100
turn reduces the amount of drying time and overall               properties. Based on a sample of 115 properties which
damage. Other retrofit actions include moving ground             had deployed their measures since installation, PLP
floors electrical circuits higher to avoid damage at low         measures had a positive impact (prevented ingress or
flood levels, or changing floors and wall coverings to be        allowed only limited ingress of water) at 79 percent
more resilient when submerged.                                   properties while 21 percent experienced no positive
                                                                 impact. Potential co-benefits of PLP can include
There is limited information available on examples of            increased property value for those properties with
PLP being applied in EU MS. To present the potential             improved defences, the potential to increase energy
costs and benefits of another form of flood risk                 efficiency, but these are more likely when more
reduction and compare the BCR, the decision was                  substantial PLP or retrofit works are implemented (for
taken to simulate the hypothetical application of PLP            example, relocating electrics circuits above the
in a prospective analysis. This is applied to a selected         potential flood level, water-resistant plastering, and
flood-prone urban area, which would represent a                  flooring, or perimeter protection).




        THE SIMULATED EFFECT OF PLP IN NORTHERN ITALY

 This case study is a new ex-ante / hypothetical                 is often prone to both surface floods and river floods.
 analysis under this project that involved modelling             We chose two locations on the Adriatic coast where
 of hazards.                                                     recent flash flood events caused severe impacts:
                                                                 Lignano Sabbiadoro and Rimini (two seaside towns
    Æ	 Description                                               with strong touristic vocation). Lignano Sabbiadoro
                                                                 was hit in September 2017 by a severe urban flooding
North-Eastern Italy consist of a large floodplain limited        caused by two intense rainstorms that produced a
by the Adriatic Sea. It is a heavily urbanised area,             cumulative rainfall depth of 280 mm, estimated to
showing some of the highest rates of soil sealing, and it        correspond to a return period of 50–100 years. The

Case Studies                                                                                                  Flooding         68
rainstorms caused the flooding of large portions of the         would be required to reduce the change of hazard
urbanized area (Samela, et al., 2020). Rimini was hit in        occurring in this context. While there are ongoing
June 2013 by intense precipitation (148 mm in 4                 efforts in this direction, PLP could be the most easily
hours), generating torrential floods on urban roads             and quickly implemented risk reduction measure in
which caused 2 deaths and widespread economic                   some locations (see case studies location for modelling
damage. Major structural and infrastructural changes            PLP measures in Figure 13).


Figure 13: Case studies location for modelling of PLP measures: Lignano and Rimini are small towns in Italy
located on the North-Adriatic coast




Source: World Bank analysis; based on OpenStreetMaptopographic map



    Æ	 Methodology                                              would encompass floodproofing components such as
                                                                raising electrical sockets and installing waterproof
A study was conducted by ECHO (2014), with support              doors/barriers and boards to deploy in advance of a
from Politecnico di Milano about the cost-effectiveness         flood. Above 1.67 m, there is no adjustment to the
of PLP in Italy to prevent pluvial flood damage,                curve. No adjustment was made to the frequency or
accounting for different types of measures (flood               severity of flooding for the study area, as no change in
proofing of components, flood walls, and relocation)            large-scale flood protection (for example, flood banks
over three classes of buildings. We use the results from        or barriers) was included. We consider a period of 30
this study in a simulation of PLP effectiveness in the          years to sum up the total benefits of PLP
context of selected flood locations. The same global            implementation.
flood model as applied for previous flood case study
analyses was applied. To represent the impact on AAL            The total cost of PLP measure implementation is
and the exceedance probability curve, property                  calculated based on the unitary prices estimated for
vulnerability curves were adjusted to represent the             Italy by the study mentioned, expressed as euro per
higher level of flood required before inundation would          m2 per year (see Table 20).The annual cost of each
occur.                                                          measure is obtained by dividing the one-off cost by
                                                                the expected lifespan of the intervention. The unitary
It is expected that PLP measures are effective at lower         costs are first multiplied by the number of years (30)
flood depths and less effective as flood depth increases.       chosen to compare the benefits. Then they are
It was assumed that measures where flooding is less             multiplied by the total exposed area, identified as the
than around 1 m would encompass floodproofing                   sum of buildings’ footprint areas. Only residential
components such as raising electrical sockets and               buildings are accounted. Rimini has about 1 km2 of
installing waterproof doors/barriers and boards to              built-up area located in areas prone to flood depth
deploy in advance of a flood. It was assumed that               between 0.5 and 1 m, while Lignano has 0.33 km2
measures where flooding is less than around 1 m                 (see Table 21).




Case Studies                                                                                           Flooding      69
Table 20: Unitary costs of PLP measures as estimated for the Umbria case study. Adapted from
ECHO-SUB-2014-694469

                                                        UNIT COST OF MEASURES (€/M2) OVER 30 YEARS
 BUILDING CLASS                FLOOD PROOFING TO
                                                                  FLOOD WALL MEASURE                  RELOCATION OF BUILDINGS
                               COMPONENTS

 Class ‘A’                                                  75                                  112                        5,401
 Class ‘B’                                               1163                                   909                     47,240
 Class ‘C’                                                525                                   398                     17,458

Source: World Bank analysis; Adapted from ECHO 2014




 TYPE OF MEASURE (CONDOMINIUM APARTMENT)                                         COST (30-YEAR LIFE SPAN) (€/M2/YEAR)

 Electrical measure                                                                                                         8.57
 Interior plaster measure                                                                                                   16.5
 Plumbing/sanitary measure                                                                                                   6.5
 Floor measure                                                                                                              3.47

Source: ECHO (2014)



    Æ	 Results of the analysis, by dividends                          reduction, though the relationship is not linear given
    	 and overall                                                     differences in flood depth at individual properties. The
                                                                      lower value is compatible with the percentage
Dividend 1 comprised avoided damages, calculated                      reduction estimated in a detailed analysis by property
according to the reduction in vulnerability applied                   type in the Umbria example Politecnico di Milano
across all property types with an assumption of 100                   study, which estimates an average damage reduction
percent uptake of measures at properties affected by                  as 1.3–3.4 percent for ‘flood proofing to components’
flood. Across all Admin 3 sub-district boundaries of                  and 2.9–4.6 percent where ‘flood walls’ were included.
Rimini and Lignano, the damage reduction was                          Fatalities are not quantified due to the low rate of flood
approximately 7.2 percent. Assuming 50 percent                        fatalities regardless of PLP.
uptake, this might be closer to 3.6 percent risk


Table 21: Summary of results for PLP scenario simulation compared to baseline. Both locations show a reduction
in annual expected losses close to 3.5 percent for PLP measure implementation with percent uptake

 LOCATION (MUNICIPALITY)                                                RIMINI                              LIGNANO

 Residential buildings footprint area (km )  2
                                                                                         1.00                               0.33
 Baseline damage (€, millions)                                                         10.30                                0.62
 Damage with PLP if 100% uptake (€, millions)                                            9.60                               0.58
 Difference with 100% uptake (€, millions)                                               0.76                              0.035

Source: World Bank analysis; based on external data and information




Case Studies                                                                                                    Flooding        70
Dividends 2 and 3 for PLP measures may include the           not able to calculate dividends 2 and 3. However,
benefit of reduced displacement of residents from            under certain assumptions, we can reflect on the
affected households (therefore reduced cost of               potential sources of those dividends. For example,
shelter) and reduced business interruption to                there can be lower displacement which can be a
commercial properties (due to services being able to         source of benefits. Appropriate interventions can
restart earlier after a flood than would be possible         reduce their stay in temporary shelters and this
without PLP). There may also be a reduced volume of          dividend arises from their shorter stay in shelters
bulky waste due to reduced damage and replacement            (that is, the difference in the durations of shelter stay
of contents and decoration/furnishings (though this is       without and with interventions). While this structure
quite a micro impact, likely not quantifiable) and           follows the classical DiD framework, its calculation is
reduced displacement of homeowners (in terms of              heavily contingent on the availability of data or
both number of people and duration of being                  appropriate proxies, absence of which restricted our
displaced). Due to lack of available data and                calculation of such benefits. Overall results are
information on indirect and/or co-benefits, we were          presented in Table 22.



Table 22: BCR for PLP in NE Italy per dividend (30 years lifespan, benefits discount rate 3.5%)

                                                      RIMINI                          LIGNANO
                                                      100% UPTAKE                     100% UPTAKE

 FIRST DIVIDEND
 Fatalities avoided                                                      Negligible                       Negligible
 Annual average property damage avoided                                        0.7                              0.035
 (€, millions)
 Total first dividend over 30 years (€, millions)                               21                                1.0
 First cost item
 Annual cost of PLP measures (€, millions)                                    12.9                                4.0
 Total dividend over 30 years (NPV) (€, millions)                             13.4                                0.7
 Total cost over 30 years (€, millions)                                       387                                120
 BCR                                                                         0.035                              0.006

Source: World Bank analysis, based on external data


    Æ	 Challenges faced and lessons learned                  specific range of hazard intensities. Moreover, both
                                                             case study areas have a relatively high density of units
The BCR from this case study is smaller than expected        in exposed areas, which means the total floodproofing
and overall discouraging the implementation of PLP           costs are much larger compared to small-density
for flood loss mitigation in the two case study areas.       settlements along the river network. These observations
Interestingly, the BCR for individual PLP measures was       highlight the need for caution when transferring the
estimated as always greater than 1 in the reference          results of BCA from one specific measure and location
study; however, those estimates are produced                 to different contexts. Investing in PLP for flood loss
accounting for river floods and dam failure scenarios        mitigation is important because it provides a sense of
that would generate higher hazard intensities and thus       financial security for these densely populated areas in
larger amounts of losses, compared to pluvial floods. In     a disaster. Such private initiatives can enhance the
our assessment, we account for damage triggered by           property value and reduce the regular maintenance
pluvial floods only, because the two locations do not        costs of the properties with such protections.
present significant river flood hazard, and only for a




Case Studies                                                                                         Flooding       71
3.1.6. OVERVIEW OF BCA FOR FLOOD RISK                       dividends are recognised and described in the text,
       REDUCTION                                            the generalisations and assumptions that would be
                                                            required in the absence of data resulted in a decision
This section has demonstrated the variety of flood          to not quantify those. However, additional examples
protection investments and introduced several               from the literature where detailed prospective or
examples of BCA. The BCAs have been presented for           retrospective economic analyses have been
structural and nature-based risk reduction measures,        undertaken are used to demonstrate the additional
EWS, and catchment scale to property level.                 benefits of these dividends in the context of flood risk
                                                            reduction.
Quantified benefits of structural schemes focus on
avoided property damage (dividend 1), though                The range of BCRs presented for the included studies
additional dividend 2 benefits may comprise stimulus        strongly demonstrates the range of possible estimates
of local/regional economy and supply of materials (for      between different types of flood risk reduction and
example, gravel production in the Odra River example).      within the same type as well as the strong influence on
The examples of NBS demonstrate the broad range of          BCRs of the assumptions and values applied to
benefits including impact on carbon storage, amenity,       develop costs and benefit value estimates and the
and recreation value and therefore health benefits,         variable inclusion of individual benefits. The structural
water quality, and timber production, though                defence cases here provide a range of BCRs <1–5,
conversion of grassland to other habitats can also          though the lower estimates are subject to a lack of
result in a negative benefit of lost agricultural           dividend 2 and 3 information. The NBS examples, with
production. The NBS examples also tend to include           their quantification of myriad additional ecosystem
assessment of multiple options for the NBS component        benefits provide estimates of BCR generally <1–5,
as well as combination with structural options, resulting   but in one case up to 10. The examples of FEWS
in comparison of NPVs for those different options.          provide BCR ranging from <1 to 15 depending on the
                                                            estimated proportion of people acting upon
Unfortunately, in the examples identified for detailed      receiving a warning, but due to the large component
assessment of avoided damages in this study                 of human behaviour in reacting to a warning and
(Machlandamm, Flandres FEWS, and PLP in NE Italy),          the various actions people might take, there is
there was insufficient information to support               significant uncertainty around these estimates.
quantification of dividends 2 and 3. While the potential




Case Studies                                                                                        Flooding      72
3.2. Earthquakes
3.2.1. SUMMARY OF FINDINGS FOR                             There are several options for governments to effectively
       EARTHQUAKES                                         reduce earthquake risk and enhance their earthquake
                                                           resilience. These include targeted investments into
                                                           buildings     and     infrastructure    strengthening,
Earthquakes are extremely common across the globe.         development of EEWS, and improvement of emergency
The National Earthquake Information Centre of the          response capacity and recovery efforts, among others.
United States Geological Survey (USGS) locates about       The European Commission has made investments that
20,000 earthquakes each year, which is equivalent to       aim at reducing human and economic losses caused
roughly 55 earthquakes recorded per day (USGS,             by earthquakes. The European Association for
2021). In many locations, seismic hazards pose serious     Earthquake Engineering (EAEE) was established to
intermediate-term risks to a society’s health, safety,     promote cooperation between regions in the field of
and economic viability. For example, structural            earthquake engineering, which serves a crucial role in
damage to buildings, fires, damage to bridges and          mitigating the impacts of earthquakes in Europe
highways, initiation of slope factors, liquefaction, and   (European Union, 2021). Financed by the Horizon
tsunami are common impacts caused by an                    2020 programme of the European Commission, the
earthquake. In 2011, FEMA initiated a four-phase           Real-time earthquake rIsk reduction for a reSilient
study (FEMA, 2020), which was aimed at informing           Europe (RISE) project is a three-year program with the
community officials and the public about the value of      objective to enhance the scientific understanding of
adopting the International Codes (I-Codes) to increase     earthquakes and Europe’s capabilities in future
resilience against natural hazard events. To simulate      earthquake prevention (RISE, 2021).
the losses avoided due to prevention of physical
damage to buildings and contents, the Building Codes       Several different economic approaches have been
Save Study comprehensively examined records of             used to quantify the social and economic losses
buildings constructed from 2000 to 2016, including         caused by earthquakes and the benefits of earthquake
the business parcels, mapped hazard exposure, and          risk reduction investment, yet the infrequent
building code histories nationwide, notwithstanding        occurrence of earthquakes requires careful
data limitations. Results from the study show that total   interpretation of the results of an earthquake-related
losses avoided amounted to an average of €439              BCA. A recent report by NIBS (2019) showcases a
million7 (US$484 million) for floods, €54.2 million        comprehensive BCA of natural hazard mitigation in the
(US$60 million) for earthquakes, and €1 billion            United States and included BCRs of retrofit measures,
(US$1.1 billion) per year for the whole country.           which varied widely depending on the measure and
Reduction in property losses associated with use of        hazard level but averaged between 2 and 24. Some
modern building codes for 2000–2040 was estimated          studies (Pohoryles, et al., 2020) have shown that
to be around €119 billion (US$132 billion).                combined energy and seismic retrofit investment is
                                                           economically efficient, as the combined method will

7 Original values were in US dollar.



Case studies                                                                                   Earthquakes      73
result in a significant reduction in the payback periods    In this section, we demonstrate benefit-cost
in moderate to high seismicity region compare to            assessments for seismic retrofitting, EEWS, and
separate investments. Investments in Earthquake             increased responder capacity. BCRs for the different
Early Warning System have also proven to be                 types of interventions are shown by a combination of
economically beneficial, yet for systems that depends       detailed case study analysis and review of past BCA,
on eyewitness accounts of earthquake shaking,               including both prospective and retrospective types of
socioeconomic and literacy factors can have a strong        assessments. Table 23 summarizes main data and
influence on the effectiveness and accuracy of the          information sources.
system (Seismological Society of America, 2021).


Table 23: Overview of data and information sources for earthquake analysis

 INVESTMENT       CASE STUDY      DATA SOURCE NAME AND REFERENCE

 Seismic          Seismic risk    •	 Hazard model based on ESHM13
 strengthening    prevention in   •	 Exposure and vulnerability models based on GEM Foundation’s 2018 Global Risk
 of buildings     Italy              Model
 and
                                  •	 Information on the intervention type obtained from the report ‘The Italian National
 infrastructure
                                     Seismic Prevention Program’
                                  •	 Data provided by the Civil Protection Department
 Seismic          Improvement     •	 Hazard model based on ESHM13
 strengthening    of education    •	 Aggregated national counts and occupants based on Global Program for Safer
 of buildings     facilities in      Schools (GPSS) GLOSI statistics
 and              Europe
                                  •	 Average area and replacement value of buildings obtained from the construction
 infrastructure
                                     costs from the SERA project
                                  •	 Risk analyses for the baseline and retrofitting case performed with the OpenQuake
                                     engine
                                  •	 Primary energy consumption based on the comprehensive study of building
                                     energy renovation activities and the uptake prepared for the European Commission
                                  •	 Data for educational facilities obtained from the European Commission -Energy:
                                     Long-term renovation strategies
                                  •	 National and European emission factors for consumed electricity and fuels for
                                     heating and hot water taken from Covenant of Mayors Technical annex to the
                                     Sustainable Energy Action Plan (SEAP) template instructions document
                                  •	 Data from EU buildings database, EU countries’ 2013 cost-optimal reports, and
                                     EU countries’ 2018 cost-optimal reports - Energy, obtained from the European
                                     Commission -
 EWS              Earthquake      •	 Total investment information from the ‘Danube Cross Border System’ project for
                  early warning      EEWS cost, half of which is assumed to be applied to Bucharest
                  in Bucharest    •	 Data from the United States (Strauss and Allen methodology) for cost of one train
                                     car and cost of maintenance of EEWS, adjusted to Romanian consumer price
                                     indexes
                                  •	 Eurostat symmetric input-output tables for construction sector macroeconomic
                                     benefits. The EU estimation for construction sector input of every €1 yields €0.47
                                     of value added to other industries. This is an indirect and direct economic value
                                     added from the construction or installation of sensors and other infrastructure for
                                     EEWS




Case studies                                                                                        Earthquakes       74
 Responder             Benefits of           •	 Modex and European Union Civil Protection Team (EUCPT) training costs,
 capacity              knowledge                supplied by DG ECHO and course organisers
 building              network               •	 Post-disaster needs assessment (PDNA)/rapid disaster needs assessment
                       investments              (RDNA): reports and interviews with PDNA leaders
                       during
                                             •	 Further data requested of Albania and Croatia governments but not received.
                       earthquake
                                                Uncertainty on certain assumptions can be further reduced with this information
                       (Albania and
                       Croatia)              •	 Interviews with Croatia civil protection personnel and the Zagreb damage
                                                assessment leads
                                             •	 EUCPT final reports for Albania deployments (September and Novovember
                                                2019). Obtainable, as the author of this section was deployed as an EUCPT
                                                member on both deployments (Josh Macabuag)
                                             •	 Further references
                                                	GRADE reports (Global Rapid post-disaster Damage Estimates, World Bank
                                                   Group internal documents) for both case study events.
                                                	CSES (Centre for Strategy & Evaluation Services), Resilience Advisors
                                                   Network, Evaluation Study of Definitions, Gaps, and Costs of Response
                                                   Capacities for the Union Civil Protection Mechanism.
                                                	Goretti A., Molina Hutt C., Hedelund L., 2017. “Post-earthquake Safety
                                                   Evaluation of Buildings in Portoviejo, Manabí Province Following the Mw7.8
                                                   Ecuador Earthquake of April 16, 2016.” International Journal for Disaster Risk
                                                   Reduction March 2017.
                                                	Woo, G. 2019. “Downward Counterfactual Search for Extreme Events.”
                                                   Frontiers in Earth Science December 2019.
                                                	Other references for specific figures assumptions, as provided in the
                                                   calculation spreadsheet

Source: World Bank analysis; based on external information

Most models can be used to assess infrastructure                              considers all possible earthquake but often ’averages
investments. The common platform that is used to                              out’ extreme consequences caused by rare events.
evaluate earthquake hazard and earthquake risk in
Europe is OpenQuake—Global Earthquake Model’s                                 Earthquakes can cause widespread societal and
computational engine. Other analysis frameworks that                          economic losses in a single event, but their infrequent
are used to quantify earthquake consequences to                               occurrence poses challenges when conducting BCA
building stock and infrastructure are HAZUS (Kircher,                         and interpreting the results. There are several different
et al., 2006) and FEMA P-58 (Hamburger, et al., 2012).                        approaches that have been used to quantify the
For the Italy and schools across Europe analysis, the                         benefits of earthquake risk reduction investment and
OpenQuake platform and ESHM138 were used.                                     care must be taken when selecting and interpreting
Moreover, the European Commission has purposed a                              the results of an earthquake-related BCA. A recent
methodology (European Commission, 2020d) to                                   report by the NIBS (2019) showcases a comprehensive
evaluate the combined approach of both seismic                                BCA of natural hazard mitigation in the United States
improvement and energy efficiency of a building. The                          and included BCRs of retrofit measures, which varied
common metrics used for quantification of benefits                            widely depending on the measure and hazard level but
are the decrease in losses for a particular earthquake                        averaged between 2 and 24. Some studies have shown
scenario and decrease in AALs, that is, reduction in                          that combined energy and seismic retrofit investment
losses from all possible earthquakes that can occur in                        is economically efficient, as the combined method will
a given year weighted by their probability of occurrence.                     result in a significant reduction in the payback periods
While the first approach illustrates benefits for one                         in moderate to high seismicity region compare to
plausible earthquake scenario without accounting for                          separate investments.
its probability of occurrence, the second approach


8 While the ESHM13 model was used for this analysis, it is not consistent with the procedures and the criteria used by the Italian seismic prevention
program to identify the areas where the program is applicable, define the initial and the final safety conditions, and so on. The prevention program used
the official 2004 seismic hazard model since 2004.



Case studies                                                                                                                  Earthquakes            75
BCA generally yields net benefits, although this varies               in Figure 14, Figure 15, and Figure 16.
based on various considerations. In fact, a lack of
quantitative data to calculate dividends 2 and 3 as                   Figure 14 shows the distribution of benefit-cost ratios
well as lack of prioritized assets to consider may lead               (BCRs) for earthquake investments, based on a five-
to some results where BCRs are smaller than 1. A                      number summary: minimum (shown in orange), first
general message is that detailed risk assessments and                 quartile, median (shown in red), third quartile, and
consideration of different types of assets are essential              maximum (shown in orange). The outliers are shown
to consider in the analysis. More details are included                as dots.


Figure 14: Findings of BCA for earthquakes (BCRs)




Source: World Bank analysis; based on external data and information; presenting in part results from literature based on external and
World Bank reports (2 Seismic strengthening results from World Bank (2018a; 2019c; 2019a; 2019d))



Figure 15 presents boxplots that display the distribution             median (shown in red), third quartile, and maximum
of NPVs (in millions of euros) for different types of                 (shown in orange). Extreme values are excluded from
investments in earthquake based on a five-number                      the top graph and included in the bottom one.
summary: minimum (shown in orange), first quartile,
Figure 15: Findings of BCA for earthquakes (NPVs)




Case studies                                                                                                     Earthquakes            76
Source: World Bank analysis based; on external data and information; presenting in part results from literature based on external and
World Bank reports (2 Seismic strengthening results from World Bank (2018a; 2019c; 2019a; 2019d))



Figure 16 presents boxplots that display the                          minimum (shown in orange), first quartile, median
distribution of ERRs for different types of investments               (shown in red), third quartile, and maximum (shown
in earthquake based on a five-number summary:                         in orange). The outliers are shown as dots.


Figure 16: Findings of BCA for earthquakes (IRRs)




Source: World Bank analysis based on external data and information; presenting in part results from literature based on external and
World Bank reports (2 Seismic strengthening results from World Bank (2018a; 2019c; 2019a; 2019d))

Seismic strengthening of buildings and infrastructure                 usually require large capital investments and are
is intended to improve the safety of buildings (or                    therefore generally undertaken only when there are
infrastructure) and its occupants in an earthquake.                   legal obligations or allocated funds. This is the case
Physical earthquake risk reduction can vary in scale                  particularly for cultural buildings and governments in
and cost, from small works such as securing                           certain countries such as Italy that have implemented
bookshelves and equipment against improving the                       large programs for retrofitting of infrastructure and
structural safety of the entire building by retrofitting              safeguarding cultural heritage.
structural or non-structural elements. Major retrofits


Case studies                                                                                                     Earthquakes            77
•	 Case study 9 (new analysis under this project, ex       •	 Case study 11 (new analysis under this project, ex
   post (Dolce, 2012; JBA Risk Management, 2021)):            ante9): The analysis of hypothetical investments
   The analysis of the National Plan for Seismic Risk         into seismic strengthening and energy efficiency in
   Prevention implemented by the Government of                education facilities in European earthquake-prone
   Italy 2010–2016, focusing on investments                   countries shows mixed results. However, the
   strengthening private residential and mixed-use            analysis overall supports the message like on the
   buildings and retrofitting of public buildings,            analysis for Italy that investments become
   zyielded mixed results. The analysis considering           particularly economically viable when considering
   AALs found BCR > 1 for local strengthening                 the potential impact of rare events (that is, PML
   interventions and BCRs less than 1 for other               versus AAL), that investments in school buildings
   intervention types, while the probable maximum             should be prioritized based on spatial vulnerability,
   loss (PML) analysis (475-year return period, rare          and that energy efficiency measures combined with
   event) found BCRs higher than 1 for all inter-             earthquake risk reduction can allow for substantially
   vention types for public buildings (BCRs of 1.65,          higher net benefits than when investments are
   1.66, and 3.5 for, respectively, seismic upgrading,        undertaken separately (BCRs range of 0.93–1.46
   demolition and reconstruction, and local                   depending on countries and type of analysis,
   strengthening; NPVs of €268.6 million, €13 million,        NPVs of −€63.3 to €422 million, IRR/ERR of −7.19
   and €65 million, respectively; IRR/ERR of 64.68,           percent to 46.11 percent). For certain countries
   65.66, and 250 percent, respectively). Results             such as Greece, Romania, Bulgaria, and Slovenia,
   differed between interventions considered and              the investments would be economically viable
   between public and private buildings. Overall, the         based on PML and AAL analyses. Interestingly,
   analysis shows that (1) policy objective (rare event       interventions are economically beneficial across
   versus average building lifetime) and related              the board, with only some exceptions, for
   methodology affect possible results, (2)                   comprehensive investments in universities. Given
   interventions focusing on certain types of buildings       the nature of the results from the regional
   and choice of certain interventions (considering           analysis, it is recommended that future BCAs are
   broader economic benefits) can yield higher net            conducted at an asset level to more precisely
   benefits, and (3) interventions in private buildings       identify education facilities that are economically
   were mostly found to be economically viable.               viable to retrofit.

•	 Case study 10 (World Bank PAD analysis (World           •	 Case study 12 (World Bank PAD analysis (World
   Bank, 2018a; 2019a; 2019c), ex ante): The                  Bank, 2019d), ex ante): The analysis of the World
   analysis of three projects in Romania, financed by         Bank project in Turkey focusing on the
   the World Bank, focus on the upgrade of critical           reconstructionand retrofitting of around 350
   disaster and emergency response buildings yielded          schools yielded a BCR of 1.53 (NPV €120.4
   variable net benefits given different interventions        million). The calculations of energy efficiency
   and projects and varied among earthquake                   benefits could be quite specific given recent
   scenarios (BCRs in the range of 1–2; NPVs from             benchmark data on characteristics of buildings that
   negative to €27 million, IRR/ERR from negative to          the analysis could base itself on.
   73 percent), with a likely underestimation due to
   the lack of quantitative measurement of second          EEWS consist of physical infrastructure and software
   and third dividends (energy audits would be             that can alert stakeholders about an incoming
   necessary to have quantitative assessments of the       earthquake seconds to minutes before they
   latter). These second and third dividends would         experience the resulting strong shaking, which allows
   comprise, for example, wider benefits in terms of       for actions (moving to a safer location, shutting off gas
   economic activity due to adapted investments from       pipelines, switching signals to avoid entering a risky
   the private sector linked to expectations of better     area, and so on) to decrease detrimental impacts from
   emergency response buildings and capacity or            shaking. The Euro-Mediterranean area has a strong
   energy efficiency and linked climate benefits of        need for effective EWS: only a few countries have
   improved buildings, among others.                       operational systems in place (Romania and Turkey)

9 Data on schools and modelling across Europe, GEM 2021.



Case studies                                                                                   Earthquakes       78
and one study found that only 44 percent of examined                        softer investments. Although the case studies had to
target sites (Cremen, et al., 2020) benefit from warning                    make a number of assumptions, overall, the intellectual
times long enough to accommodate effective actions                          thinking on how to account for the various potential
from stakeholders. This is being addressed by projects                      dividends of softer investments is a great contribution
such as Horizon 2020 TURNkey10 but country-specific                         to the literature.
actions would likely have to be highly beneficial to find
adapted measures.                                                           •	 Case study 14 (new analysis under this project, ex
                                                                               post (Perry, 2004)): The analysis of investments in
•	 Case study 13 (new analysis under this project, ex                          training for emergency responders and response
   post (European Union, 2020)): The analysis of the                           coordination through the UCPM Knowledge Network,
   EEWS in Bucharest as part of the DACEA program                              with focus on two disaster interventions during disaster
   partially funded by the EU aims at providing                                events (Albania November 2019, Croatia March 2020)
   warning to authorities to shut down critical                                showed net benefits of impact realized on the ground
   infrastructure (nuclear power plants, trains, and                           and additional softer benefits. The events were
   so on). Due to the lack of data for critical                                different in magnitude, assets, and lives lost, as well as
   infrastructure, the analysis for the EEWS investigates                      international assistance (in Albania damage
   incremental and conservative losses avoided.                                assessments were supported and UCPM-trained
   These include the value of one life loss avoided due                        rescuers helped on the ground whereas in Croatia
   to appropriate warning and the cost avoided of one                          there were no international rescuers, but local staff
   train being derailed. In addition, the value of                             had been trained under the UCPM). However, in both
   construction to the broader economy is included as                          cases, the BCRs are greater than 1 (1.9 in Albania, 1.1
   an additional benefit. This conservative analysis of                        in Croatia) as well as NPVs (€5 million and €0.3 million)
   the existing EEWS yielded a BCR greater than 1.                             and ERRs/IRRs (88.33 percent and 8.82 percent). All
   It has to be noted, however, that few methodologies                         three dividends have been considered and it has to be
   exist for economic valuation of EEWS and therefore                          noted that in the case of Albania the first dividend was
   this study should be considered as exploratory                              highest given the benefits that could be reaped owing
   research. With the conservative assumptions,                                to rapid damage assessments (such as saved costs of
   the study found a BCR in the range of 3.4–11.1                              temporary shelter/accommodations) and in the case
   (NPV of around €19 million linked to BCR of 7,                              of Croatia where such benefits could not be linked to
   IRR/ERR of 617 percent). Although the benefits                              international assistance, the third dividend was found
   are likely to be underestimated given the lack of                           to be highest (job security and salary increases for
   information/data, the issues of needed com­                                 qualified staff).
   plementary investments and therefore potential
   double counting still remain in general                                  3.2.2. SEISMIC STRENGTHENING OF
   for EWS investments.                                                            BUILDINGS AND INFRASTRUCTURE

Responder capacity building affects the effectiveness                       Seismic strengthening of vulnerable buildings and
of disaster response, as the latter is directly associated                  infrastructure is one of the main ways to reduce
with the skills of the responders at a disaster site, as                    existing earthquake risk. Seismic strengthening is
well as their effective coordination with other resources                   intended to improve the safety of buildings (or
deployed (Sinclair, et al., 2012). It is therefore essential                infrastructure) and its occupants in an earthquake.
for authorities to establish emergency management                           Physical earthquake risk reduction can vary in scale
training and live exercise programs to build capacity of                    and cost, from small works such as securing
responders and response coordinators. DG ECHO                               bookshelves and equipment against falling to
funds capacity building through the Union Civil                             improving the structural safety of the entire building by
Protection Knowledge Network. No methodologies                              retrofitting structural elements (for example,
have been developed, so this represents an exploratory                      foundation, structural walls, beams, and columns) and
systematic attempt at measuring the benefits of these                       non-structural elements (for example, partition walls,

10 TURNkey = Towards more Earthquake-resilient urban Societies through a Multi-sensor-based Information System enabling Earthquake Forecasting, Early
Warning and Rapid Response actions.




Case studies                                                                                                               Earthquakes           79
staircases, facades, and HVAC elements). Seismic             To quantify earthquake consequences with and
strengthening can range from local strengthening of          without      strengthening     interventions, analysis
select vulnerable elements to more major retrofits           frameworks such as HAZUS (Kircher, et al., 2006) and
involving the entire structure. In some cases, buildings     FEMA P-58 (Hamburger, et al., 2012) are commonly
can be deemed not cost-effective to retrofit where too       used. In addition to direct property damage,
large of an investment is required and buildings need        frameworks like HAZUS provide a methodology for
to be demolished and reconstructed. Given the large          calculating reduction in direct business interruption
capital investments required for seismic strengthening,      loss (for example, factory shutdown from direct
they are seldom undertaken on a voluntary basis by           damage or lifeline interruption), indirect business
owners, where strengthening is more commonly                 interruption loss (for example, ordinary economic
carried out when required by the building code or an         ‘ripple’ effects), societal losses (deaths, injuries, and
ordinance, is triggered by a change of use, or is part of    homelessness), emergency response services (for
a seismic risk reduction investment program.                 example, ambulance service, fire protection), and
                                                             other non-market damages (for example, historic
Seismic strengthening programs at scale require large        sites). A study which evaluated BCRs of the US Federal
capital investments, risk assessment, and planning.          Emergency Management Agency’s mitigation grants
While large-scale seismic strengthening programs are         used an adaptation of the HAZUS methodology to
not widespread in EU MS, there are several examples          show that the average BCR of earthquake mitigation
of successful programs. Seismic strengthening                grants involving physical strengthening works was 1.4
programs are typically designed to prioritize vulnerable     (Rose, et al., 2007). The study concluded that
buildings and infrastructure that are at high risk, are      considering the reduction in property loss reduction
critical, or are of strategic importance. Therefore, risk    alone was not sufficient for the average BCR from
assessment and BCA are key tools in helping prioritize       mitigation measures to exceed 1.0, and the largest
and plan for seismic risk reduction investments.             component of benefits (62 percent) came from the
                                                             reduction of casualties.
The benefits of seismic strengthening are commonly
determined by considering the difference in social and       A recent report by (NIBS, 2019) showcases a
economic losses caused by earthquake damage with             comprehensive BCA of natural hazard mitigation in the
and without the intervention (Cardone, et al., 2019;         United States, considering riverine floods, hurricane
Liel & Deierlein, 2013; Yi, et al., 2020). This is done by   surge, wind, earthquake, and WUI fire. The mitigation
conducting risk analysis, simulating damage to               measures that were evaluated ranged from adaptation
buildings and infrastructure, which in turn is used to       and exceedance of up-to-date building codes to
quantify losses. Seismic retrofit BCAs commonly              retrofit of existing buildings and utility and
analyse the effect of several retrofit solutions on a        transportation infrastructure. In terms of seismic
specific type of building (for example, unreinforced         strengthening strategies, the study examined BCRs for
masonry, reinforced concrete frames, and soft-story          seven earthquake retrofit measures: strengthening
wood structures), where probabilistic earthquake             the first story of soft-story dwellings, adding engineered
engineering analysis is used to quantify the reduction       tie-down systems to manufactured homes that are not
in post-earthquake repair costs - the main considered        anchored to the ground, strapping water heaters to the
benefits. Studies point out that considering reduction       building frame, adding child safety latches to kitchen
in repair cost as the sole benefit does not typically        cabinets, securing tall bookcases to the wall, strapping
result in a positive return rate of a retrofit investment    computer monitors and televisions to desks or shelves,
(Liel & Deierlein, 2013). For this reason, other benefits    and securing fragile objects to their shelves with
commonly considered in seismic BCAs are reduction            museum putty. The BCRs of retrofit measures varied
in fatalities (Yi, et al., 2020) and injuries (Cardone, et   widely depending on the measure and hazard level but
al., 2019). Similar approaches are used to assess the        averaged between 2 and 24. The two most cost-
benefits of investment in infrastructure such as             effective measures across geographies were soft-story
bridges, where a study that used risk-based seismic          retrofit and strapping water heaters to the building
life-cycle BCA found that depending on the location,         frame. However, the building codes have the potential
type of bridge, and type of retrofit, the BCRs range         to reduce the most overall damage.
from less than 1.0 (not cost-effective) to 9.8.



Case studies                                                                                      Earthquakes       80
        SEISMIC STRENGTHENING IN THE CONTEXT OF TRIPLE DIVIDEND BCA

 The following is a brief description of the                 same time, the EU’s Energy Efficiency Directive also
 seismic strengthening benefits considering                  set a target of reaching 20 percent energy efficiency
 the triple dividend framework:                              by 2020 (European Commission, 2021). Retrofitting
                                                             existing buildings so that they are both seismically
•	 Dividend 1: The benefits related to reduced               resistant and energy efficient usually requires high
   earthquake consequences include, but are not              costs (European Commission, 2019). These conditions
   limited to, reduction in losses related to direct and     lead to a growing need for combined retrofitting and
   indirect asset damages (caused by secondary               energy efficiency, and this is reflected in the EU’s focus
   hazards), direct and indirect business and service        on integrating energy efficiency and seismic upgrading
   interruption losses, social losses including              into one agency (European Commission, 2020d).
   casualties and psychological trauma, natural capital
   losses, historical asset damages, and emergency           In this context, the European Commission has
   response costs.                                           purposed a methodology (European Commission,
                                                             2020d) to evaluate the combined approach of both
•	 Dividend 2: Investment into earthquake risk               seismic improvement and energy efficiency of a
   reduction contributes to economic stability and           building. The methodology suggests three important
   reduced uncertainty. In terms of benefits, these can      aspects that needed to be considered: (1) reduction of
   translate into improved government/business               CO2 emissions, (2) energy efficiency of the building,
   image and credit rating associated with business          and (3) the building‘s resilience to natural hazards.
   continuity (Rose, 2016). Strengthened assets and          However, there are limits and barriers to the
   infrastructure can provide better access to               combination of seismic safety and energy efficiency
   insurance markets and reduced insurance                   retrofits, which include technical difficulties for seismic
   premiums. Investment into seismic strengthening           retrofits, owners’ insufficient awareness of the seismic
   can also support engineering innovation and               vulnerability and energy performance of their building,
   technology development.                                   and bureaucratic obstacles (Sigmund, 2019). As a
                                                             result, many of the evaluations of European buildings
•	 Dividend 3: The third dividend relates to co-benefits     only consider the reduction of CO2 emissions and
   of DRM investment. Seismic strengthening that             energy efficiency as important criteria and hardly
   involves significant capital works is often               address the buildings’ vulnerability to natural disasters
   accompanied by renovation and functional                  and hazards (European Commission, 2020d).
   improvements, which can result in improved
   working/living conditions, higher asset valuation,        Therefore, it is essential to include benefits from co-
   and increased revenue in case of commercial real          investments in the integration of energy efficiency and
   estate.                                                   seismic retrofitting of buildings into the BCAs so that
                                                             such investments can be further promoted. A study
Co-investment into seismic strengthening and energy          has shown that combined energy and seismic retrofit
efficiency improvements can be a significant co-             investment is economically efficient, as the combined
benefit for EU countries. A large portion of European        method will result in a significant reduction in the
cities comprise aging building stock, which often            payback periods in moderate to high seismicity region
present high social, financial, recreational, and cultural   compared to separate investments. The study also
values. Currently, 80 percent of the existing EU             suggests a 3 percent renovation rate for buildings,
buildings were built before the 1990s, of which 40           which will lead to a 30 percent reduction in CO2
percent were built before the 1960s (European                emissions across all cities by 2030s. An energy retrofit
Commission, 2019). These structures tend to be more          and seismic upgrading project for a school building in
susceptible to seismically induced damage and are            Italy has proved such a benefit. An analysis (Mora, et
candidates for seismic retrofitting, as many of them         al., 2018) of the project addresses the efficacy and
need to be maintained as cultural heritages. At the          cost of the project and the results suggest that by



Case studies                                                                                       Earthquakes       81
combining energy and seismic retrofit, there is a 53        which may not occur in the investment lifetime. This
percent in cost saving and a 96 percent reduction in        analysis is often used when the beneficiary is
energy consumption. Therefore, it is concluded that         concerned with managing the adverse consequences
the combined intervention is economically preferable        of rare event and wants results that are easy to
and generates less cost compared to the cost of two         communicate. In such cases, there needs to be
different interventions.                                    acknowledgement that the benefits might not realize
                                                            during the investment time.
BCA MODELLING CHOICES AND IMPLICATIONS
ON THE RESULTS                                              The second approach that is commonly adopted in
                                                            earthquake investment BCAs is based on assessing all
Earthquakes can cause widespread societal and               possible damaging events considering their probability
economic losses in a single event, but their infrequent     of occurrence. For example, seismic strengthening
occurrence poses challenges when conducting BCA             can lead to significant benefits in a large earthquake,
and interpreting the results. Several different             but the low probability of that will result in a ‘lower’
approaches have been used to quantify the benefits of       weight compared to a more frequent/less damaging
earthquake risk reduction investment and care must          event. A common metric that is used in such an
be taken when selecting and interpreting the results of     analysis is the reduction in AALs, that is, reduction in
an earthquake-related BCA.                                  losses from all damaging earthquakes that can occur
                                                            in a given year weighted by the probability of
Dividend 1 benefits are only realized when an               earthquakes’ occurrence. The BCRs are then
earthquake occurs, whose timing and magnitude are           calculated by dividing the NPV of the benefits
characterized by large uncertainty. The impacts of          (considering the design life of the asset) by the cost of
earthquakes are nonlinear; small and frequent               seismic strengthening. Another metric that is
earthquakes may produce little to no damage, where          sometimes considered is the payback period of the
earthquakes with shaking above a certain threshold          investment (Cardone, et al., 2019; Yi, et al., 2020),
can cause buildings to suddenly collapse. There are         which indicates how many years on average it will take
two common approaches to conducting a seismic               to pay back the investment. The advantage of using
strengthening BCA: single-scenario assessment and           this type of analysis is that it considers the likelihood of
stochastic-event assessment (often referred to as           earthquake events; the downside is that it often results
probabilistic seismic risk assessment).                     in lower BCRs since extreme consequences are
                                                            ‘averaged out’. Therefore, it might not be a suitable
In the first approach, a single earthquake scenario of a    analysis method if the beneficiary is concerned with
specified magnitude is chosen and the consequences          the consequences of infrequent, large-consequence
with and without strengthening are evaluated. The           events which pose a large risk to society. One option to
earthquake scenario is typically chosen based on a          account for infrequent losses is to consider benefits
significant historic earthquake or a large potential        associated with a lower probability of occurrence—
earthquake based on seismologic studies. This               another by-product of the probabilistic seismic risk
approach can be thought of as a ‘what if’ analysis          analysis. As an example, benefits associated with a 10
that does not explicitly consider the likelihood of         percent probability of exceedance in 50 years can be
occurrence of that event. Given that the chosen             considered, which is similar to the philosophy of
scenario is typically a large earthquake, the potentially   earthquake-resistant design which is based on ‘rare’
realized benefits from strengthening are often              earthquake shaking with 10 percent probability of
significant and result in relatively large BCRs. They,      exceedance in 50 years (or 475-year return period).
however, do not reflect the likelihood of this scenarios




Case studies                                                                                      Earthquakes        82
          EVALUATING THE BENEFITS OF SELECTED INVESTMENTS OF THE 2010-2016 NATIONAL PLAN
          FOR SEISMIC RISK PREVENTION IN ITALY

  This case study is a new ex post analysis under this                         This case study aims to evaluate the benefits of the
  project that involved modelling of hazards.                                  investments made by the Government of Italy under
                                                                               the 2010–2016 National Plan for Seismic Risk
     Æ	 Description                                                            Prevention (more details on programs for cultural
                                                                               heritage protection are included in Box 7 below).

  Box 7: Cultural heritage protection and seismic strengthening in Italy

Due to Italy’s geodynamics, developmental dynamics, and                        squads” to retrieve, categorize, store, and restore cultural
architecture and wealth of cultural heritage, the country is                   assets in case of an emergency.
more susceptible to earthquake devastation than other
European countries. In 2016, a 6.2 magnitude earthquake                        Moreover, several projects have specifically supported the
(Povoledo, 2016) in Central Italy killed 296 people and                        reconstruction or rebuilding of specific buildings. The
severely damaged over 50 historic sites in seismically                         Basilica of St. Benedict in Norcia, for example, is an
active areas. Moreover, €541 million out of €23,53 billion                     important religious emblem of European monasticism that
in earthquake-induced damages that same year were                              was heavily destroyed in the earthquake of 30 October
caused by direct seismic impacts on cultural heritage                          2016. With a €10 million budget, of which half is financed
sites. Despite Italy’s progressive approach to improving                       by the EU, the Basilica will be rebuilt using an earthquake-
earthquake resilience, reversible intervention techniques                      resistant structure, energy-saving air conditioning and
are greatly preferred for cultural sites due to the deeply felt                lighting, and a continuous data-acquiring remote
historical connections to assets. As a result, the Italian                     monitoring system between 2017 and 2023 (European
government has been an involved partner in the ResCult                         Commission, 2019c). Despite these upgrades, the
platform (“Increasing Resilience of Cultural Heritage”)                        structure’s reconstruction is aimed at ultimately restoring
(ResCult, 2021). Italy has also developed a risk map using                     the Basilica’s historic, cultural, and social role of fostering
comprehensive alphanumeric and cartographic database                           social and economic activity for the local community.
of cultural assets throughout the country and trained “art



Italy is exposed to high seismic hazard, where in the                          Plan for Seismic Risk Prevention allocated financial
last two decades it saw numerous damaging                                      resources to higher-risk municipalities, whose 475-
earthquakes throughout its territory. Following the                            year return period peak ground acceleration12 on stiff
2009 Abruzzo (L’Aquila) earthquake, under this                                 soil exceeds 0.125 g. The program’s activities focused
program, €963.5 million (Dolce, 2012) was allocated                            on three main areas (Dolce, et al., 2019):
to various activities, which were implemented by the
Civil Protection Department over seven years. The                              1.	 Seismic microzonation studies and analysis of
program’s primary objective was to reduce the human                                the Limit Condition for Emergency (LCE), to
losses during earthquakes and incentivize private                                  support territorial governance and emergency
owners and administrators to take actions to reduce                                planning
seismic risk. This includes building an understanding
on the vulnerability of buildings, the importance of                           2.	 Seismic retrofit and reconstruction of public
local amplification, and the use of microzonation11                                buildings and infrastructure of strategic interest
studies (Dolce, et al., 2019a; Moscatelli, et al., 2020)                           or infrastructure critical for the consequence of
to improve urban and emergency planning, as well as                                their collapse
ensuring correct implementation of civil protection
plans considering the vulnerability of the strategic                           3.	 Seismic upgrading and reconstruction of private
elements and the interconnection routes. The National                              buildings.

11 Microzonation studies are aimed at understanding the geological, geotechnical, geophysical, and geometrical characteristics of areas to provide reliable
maps of seismic ground shaking parameters and induced hazards, such as liquefaction and landslides.
12 PGA is the largest ground acceleration recorded during an earthquake event.




Case studies                                                                                                                    Earthquakes            83
This case study evaluates the efficiency of selected        a subset of buildings from the overall investment were
investments under the National Plan for Seismic Risk        considered for the BCA.
Prevention using a Triple Dividend BCA Framework. In
particular, it focuses on select assets under the           Investments and prioritization of public buildings were
following two investment streams: (a) strengthening of      made based on the potentially devastating
private residential and mixed-use buildings and (b)         consequences in case of collapse and strategic
retrofitting of public buildings. Given the data            importance of facilities for civil protection purposes.
availability, the BCA focuses on evaluation of dividend     The following categories of buildings were included in
1, or avoided disaster losses, by using probabilistic       the analysed investments as outlined in Table 24.
earthquake risk modelling. It should be noted that only


Table 24: Types of buildings included in Italy’s seismic retrofitting by sector

 SECTOR                                               TYPES OF BUILDINGS

 Public administration buildings                      Administrative buildings, city hall, post office, and so on
 Civil protection headquarters                        Municipal civil protection centres, regional civil protection
                                                      headquarters, and so on
 Health care facilities                               Hospitals, health care facilities, nursing homes
 Military and firefighting facilities                 Carabinieri and public security, firefighters, state forestry
                                                      corps
 Places of social or sporting activity                Gymnasiums, stadiums, paces of social or sporting activity
 Education facilities                                 Schools

Source: Dolce (2012)


Given that the number of private buildings that require     quantified the decrease in losses associated with asset
seismic strengthening far exceeds the available             damage, fatalities, injuries, and the number of days the
resources, the investments were prioritized in              building function is interrupted. It should be noted that
municipalities with the highest seismic hazard in the       the estimation on the number of interruption days is a
region, where the buildings were assigned a score           conservative estimate where certain functions can
(Dolce, 2012) based on the year of construction and         continue through temporary arrangements or in other
the construction material. For private buildings,           buildings. The benefits were evaluated based on two
government investment was intended to be an                 analyses: (1) a decrease in AALs (that is , annual loss
incentive rather than a total refund of the expenses,       averaged over a very large number of years) assuming
where co-financing by private owners was expected           a 50-year building design working life following the
and the government refunded only the costs of the           investment and (2) a decrease in losses from an
structural intervention up to a certain maximum.            infrequent large event corresponding to a 475-year
Information of private owners’ co-financing amounts         return period, hereinafter referred to as PML analysis.
was not available.                                          While the 50-year design life period is chosen in line
                                                            with the Eurocode, in reality many buildings may
    Æ	 Methodology                                          function beyond that time frame, which would further
                                                            increase the benefits of the seismic strengthening.
The benefits derived from the investment were               The earthquake risk model that was used to evaluate
evaluated by modelling the consequences of numerous         the losses consisted of three major components of
earthquake scenarios with and without earthquake            earthquake risk analysis: hazard, exposure, and
strengthening interventions. The results of the model       vulnerability.




Case studies                                                                                        Earthquakes       84
Hazard model: ESHM1313, also known as the ‘Seismic                                GEM taxonomy (Brzev, et al., 2013), and therefore a
Hazard Harmonization in Europe’ (SHARE) project,                                  mapping scheme between the provided exposure data
was used to conduct the risk analysis (Woessner, et al.,                          and the GEM taxonomy building classes was required.
2015). ESHM13 provides a consistent seismic hazard                                As part of the ongoing European Seismic Risk Model
model for all of Europe, whose creation involved several                          2020 (ESRM20) study, Crowley et. al. (2020) reviewed
institutions and experts throughout the region, and it                            the seismic design regulations throughout Europe and
was built upon several national and regional seismic                              proposed a mapping between design year and code
hazard models. Within the SHARE project, three                                    quality. These benchmark code years (that is, no code
alternate seismic source models were developed using                              before 1908, low code before 1996, moderate code
historical and instrumental earthquake catalogues, a                              before 2010, and high code afterwards for the case of
database of seismic faults, and tectonic regionalization                          Italy) were used to infer a mapping between the design
with associated ground motion models. The seismic                                 year provided and their associated ductility levels
source models and associated ground motion models                                 (indicative of seismic vulnerability)14, which are a
were used to perform an event-based risk analysis,                                fundamental component of the GEM taxonomy.
which considered all plausible damaging earthquakes                               Information regarding the intervention type (for
and their probability of occurrence. In this process, a                           example, local strengthening) was also used to infer a
stochastic event set is generated, which is indicative of                         code or ductility level and construction type for both
the seismicity of the region over a given period. Each of                         the baseline and retrofitted case, based on background
these rupture events produces a ground-shaking field,                             information of the retrofit program provided by Dolce
which is then used to estimate associated impacts and                             (2012) . For example, any intervention type would lead
losses from the modelled exposure.                                                to an increase in code quality or ductility, but only
                                                                                  demolition and reconstruction would ensure high code
Exposure and vulnerability models: To estimate the                                quality or ductility (whereas the lesser intervention
risk, information regarding the exposure (for example,                            types might lead to only a moderate code quality or
location, building typology, and value) and vulnerability                         ductility). Additionally, buildings that only required
(for example, damageability) is required. The provided                            local strengthening were assumed to overall be less
exposure data from the 2010–2016 National Plan for                                vulnerable compared with buildings that required
Seismic Risk Prevention in Italy denote the location,                             seismic upgrading or demolition and reconstruction,
size, use category, material type, design year for public                         as there were specific criteria to ensure that those
buildings or construction period for private ones,                                buildings did not have notable seismic deficiencies,
intervention type, and cost of intervention. The                                  damage, or irregularities.
vulnerability models associated with GEM Foundation’s
2018 Global Risk Model (as documented in Martins                                  Benefit estimation: Given the data availability, the
and Silva 2020) have been used as a starting point to                             BCA explicitly quantified the benefits associated with
relate the ground shaking (for example, peak group                                dividend 1: reduction of losses associated with avoided
acceleration) to a damage level (for example, slight)                             injuries, avoided fatalities, reduced damage, and
and loss (for example, repair cost, fatalities, and                               reduced disruption associated with building closure.
disruption time). These vulnerability models follow the                           Each of the benefits was quantified as per Table 25.


Table 25: Methodologies of benefit estimations

 BENEFIT                                                                           METHODOLOGY

 Avoided injuries           The benefit from the reduction in injuries was evaluated using a method from the US Department
                            of Transportation that estimates the value of preventing injuries as a fraction of VSL. Injuries with
                            and without interventions were estimated using the HAZUS methodology, where Severity 2 and 3
                            injuries were considered.



13 While ESHM13 was used for this analysis, it is not consistent with the procedures and the criteria used by the Italian seismic prevention program to identify
the areas where the program is applicable, define the initial and the final safety conditions, and so on. The prevention program used the official 2004 seismic
hazard model since 2004.
14 This is a simplification, where in reality fundamental design standards were issued at different times throughout the territory



Case studies                                                                                                                        Earthquakes             85
 Avoided fatalities   The benefit associated with the reduction in fatalities was evaluated based on the VSL.
 Decrease in          The difference between repair cost with and without intervention was evaluated for each of the
 repair cost          buildings depending on the level of damage.
 Decrease in          First, a decrease in non-functional days was estimated by taking the difference in disruption days
 losses due to        without and with the intervention. Then, the benefits associated with decrease in service disruption
 interruption of      were calculated using the buildings’ area, an assumed employee density, the decrease in disruption
 services             days, and the average GDP per employee in a relevant industry. Furthermore, the benefits associated
                      with decrease in disruption of residential buildings were calculated using the number of occupants,
                      the decrease in disruption days, and the average rental price per person. This assumes that the
                      displaced will have to find alternate accommodations while their residences are inaccessible.


Source: World Bank analysis

The benefits were calculated considering a 50-year             and other common structures), a discount rate of 3
investment lifetime (building design working life, as          percent, and a VSL of €6 million.
prescribed in Eurocode, Category 4 building structures


DATA
                                                               were analysed. Figure 17 shows the distribution of
The data on select investments of the National Plan for        buildings across the 17 regions of Italy, with the color
Seismic Risk Prevention were provided by the Civil             showing the number of assets per region. Various types
Protection Department. In total, 3,796 residential and         of building interventions were undertaken as presented
mixed-use private buildings and 694 public buildings           in Table 26.


Figure 17: Number of buildings per region in Italy (private buildings on left, public buildings on right)




Source: World Bank



‘Local strengthening’ refers to less involved                  failures. Local strengthening is typically done in beam-
intervention, where single structural elements or              column joints of reinforced concrete framed structures
portions of a structure are strengthened without               or in the connections of orthogonal walls and walls with
varying the global structural behaviour. In the seismic        slabs in masonry buildings. The median intervention
case, they can be aimed at reducing or eliminating             cost of such an investment among public buildings is
those unfavourable behaviours of single elements or            approximately 10 percent of the building replacement
structural parts that, due to inadequate local strength        cost.
and/or ductility, can produce anticipated brittle




Case studies                                                                                          Earthquakes       86
‘Seismic upgrading’ is a more global intervention that                                     ‘Demolition and reconstruction’ is an intervention type
alters the overall structural behaviour of the building                                    that is undertaken when a building is considered to be
and therefore requires more investment than local                                          too costly to retrofit to acceptable safety standards or
strengthening. Such an intervention is aimed at                                            is functionally obsolete and requires reconstruction.
producing immediate reduction of the seismic risk of                                       The required investment for such an intervention
vulnerable buildings. The median cost of intervention                                      strategy is the replacement costs plus the demolition
of ‘seismic upgrading’ for public buildings is                                             cost.
approximately 26 percent of the building replacement
cost.


Table 26: Number of building interventions conducted by sector and type of interventions

                                                    NO. OF PUBLIC BUILDINGS WITH                            NO. OF PRIVATE BUILDINGS WITH
 TYPE OF INTERVENTION NEEDED
                                                    INTERVENTION                                            INTERVENTION

 Local strengthening interventions                                                                   70                                                                2,400
 Seismic upgrading                                                                                   606                                                               1,263
 Demolition and reconstruction                                                                       18                                                                       133

Source: World Bank analysis; based on official data from the Italian Civil Protection Department


    Æ	 Results of the analysis

The following is a summary of results of the BCA for public and private buildings (see Table 27 and Table 28).


Table 27: Investment into public buildings

                     PUBLIC BUILDINGS DESIGN LIFE ANALYSIS                                                             PML ANALYSIS
                                  (50 YEARS)                                                                     (475-YEAR RETURN PERIOD)
                       All                          By intervention type                                   All                       By intervention type
                                                                                and reconstruction




                                                                                                                                                                 and reconstruction
                                                            Seismic upgrading




                                                                                                                                             Seismic upgrading
                                    strengthening




                                                                                                                     strengthening
                                                                                Demolition




                                                                                                                                                                 Demolition
                                    Local




                                                                                                                     Local




 DIVIDEND 1 (€, millions)
 Avoided
                         26.6                  3.4                      21.9                   1.3           66.1               8.5                      54.4                   3.1
 injuries
 Avoided
                        127.2               14.6                105.8                          6.8         298.7             32.3                248.2                      18.2
 fatalities
 Decrease in
                         30.2                  3.3                      26.0                   0.8         123.1             13.9                105.7                          3.4
 repair cost
 Decrease
 in losses
 due to                  67.7                  7.6                      58.4                   1.7         319.9             36.3                275.6                          8.0
 interruption
 of services



Case studies                                                                                                                                     Earthquakes                          87
 Total
                       251.8         29.0        212.2           10.6          807.7           91.0       683.9           32.8
 dividend 1
 Total
                       251.8         29.0        212.2           10.6          807.7           91.0       683.9           32.8
 benefits
 Total costs           461.1         26.0        415.3           19.8          461.1           26.0       415.3           19.8
 BCR                    0.55         1.11         0.51           0.54           1.75            3.5           1.65        1.66
 NPV
                      −209.3           3.0      −203.1           −9.2         −46.63           65.0       268.6           13.0
 (€, millions)
 ERR (%)              −45.39        11.54       −48.90         −46.46          75.17          250.0       64.68         65.66




                           PUBLIC BUILDINGS DESIGN LIFE ANALYSIS (50 YEARS) BY FACILITY TYPE

                               Civil           Education        Health        Military and     Recreation       Public
                               protection                       care          firefighting     and sporting     administration
                               headquarters                                                                     and civic

 DIVIDEND 1 (€, millions)
 Avoided injuries                        0.8          10.6           2.4                1.5             1.7                9.5
 Avoided fatalities                      3.4          51.1          14.6                7.0             7.9               43.3
 Decrease in repair cost                 0.9             6.6         3.9                1.9             0.7               16.3
 Decrease in losses due
 to interruption of                      2.0          11.0          13.2                4.7             2.0               34.9
 services
 Total dividend 1                        7.0          79.3          34.1               15.0           12.3              104.0
 Total benefits                          7.0          79.3          34.1               15.0           12.3              104.0
 Total costs                           10.8          119.0          73.9               22.8           11.3              223.3
 BCR                                   0.65           0.67          0.46               0.66           1.09                0.47
 NPV (€, millions)                     −3.8          −39.7        −39.8                −7.8             1.0            −119.3
 ERR (%)                            −35.19          −33.36       −53.86            −34.21             8.85             −53.43




                       PUBLIC BUILDINGS - PML ANALYSIS (475-YEAR RETURN PERIOD) BY FACILITY TYPE

                           Civil protection    Education       Health         Military and     Recreation       Public
                           headquarters                        care           firefighting     and sporting     administration
                                                                                                                and civic
 DIVIDEND 1 (€, millions)
 Avoided injuries                        2.0          25.9              6.3             3.7             4.3               24.0
 Avoided fatalities                      8.6         113.1          35.5               17.8            20.6             103.2
 Decrease in repair
                                         3.7          27.4          14.9                7.5             3.1               66.5
 cost
 Decrease in losses
 due to interruption                     9.2          52.3          60.9               21.0             9.2             167.2
 of services



Case studies                                                                                              Earthquakes        88
 Total dividend 1                                            23.5                         218.7                           117.6            49.9                           37.2                         360.9
 Total benefits                                              23.5                         218.7                           117.6            49.9                           37.2                         360.9
 Total costs                                                 10.8                         119.0                            73.9            22.8                           11.3                         223.3
 BCR                                                         2.17                             1.84                         1.59            2.19                           3.29                              1.62
 NPV (€, millions)                                           12.7                             99.7                         43.7            27.1                           25.9                         137.6
 ERR (%)                                          117.59                                  83.78                           59.13         118.86                         229.20                          61.62

Source: World Bank analysis; based on external data and information
Note: a. Service interruption in education does not include the social losses and childcare costs due to interruption of education; service
interruption in the health care sector does not include casualties associated with loss of hospital functionality but only casualties caused
by damage.




Several observations can be made from the public                                                                   •	 The PML analysis results show that the projected
buildings BCR results:                                                                                                fatalities decrease by 84 percent, injuries by 87
                                                                                                                      percent, days of service interruption by 59 percent,
•	 The BCRs are higher for the PML analysis since it                                                                  and repair costs by 53 percent, as a result of the
   considers the benefits realized in a more damaging                                                                 investment into public buildings.
   event that can cause large losses. The results show
   that in the case of a large earthquake, the benefits                                                            •	 Local strengthening seems to be the most effective
   exceed strengthening costs for all types of                                                                        investment; however, the benefits from demolition
   intervention across all the sectors.                                                                               and reconstruction are likely underestimated since
                                                                                                                      the analysis does not account for the benefits
•	 The design life analysis results show that the                                                                     associated with functional improvements, including
   projected fatalities decrease by 73 percent, injuries                                                              improved use of space and energy efficiency.
   by 80 percent, days of service interruption by 55
   percent, and repair costs by 52 percent, as a result                                                            •	 Greatest benefits are derived from decrease in
   of the investment into public buildings.                                                                           avoided fatalities and service interruption, followed
                                                                                                                      by decrease in avoided repair costs and injuries.


Table 28: Investment into private mixed-use buildings

                    PRIVATE BUILDINGS DESIGN LIFE ANALYSIS                                                                      PML ANALYSIS
                    (50 YEARS)                                                                                                  (475-YEAR RETURN PERIOD)

                        All                                  By intervention type                                                 All                               By intervention type
                                      Local strengthening




                                                                                                                                              Local strengthening
                                                                                                     and reconstruction




                                                                                                                                                                                                and reconstruction
                                                                    Seismic upgrading




                                                                                                                                                                            Seismic upgrading
                                                                                                     Demolition




                                                                                                                                                                                                Demolition




 DIVIDEND 1 (€, millions)
 Avoided
                         18.4                               9.9                         8.1                               0.5       48.3                       25.8                  21.1                        1.3
 injuries
 Avoided
                         82.5                       44.4                     35.9                                         2.2     212.0               114.9                          91.2                        5.8
 fatalities



Case studies                                                                                                                                                                      Earthquakes                        89
 Decrease in
                        45.3           25.2         19.0               1.1        210.0           117.1       87.6           5.3
 repair cost
 Decrease in
 losses due to
                        13.9            5.4           8.3              0.2         69.5            26.7       41.7           1.1
 interruption
 of services
 Total
                      160.2            84.9         71.2               4.1        539.7           284.6      241.7          13.5
 dividend 1
 Total benefits       160.2            84.9         71.2               4.1        539.7           284.6      241.7          13.5
 Total costs          113.1            62.4         46.2               4.5        113.1            62.4       46.2           4.5
 BCR                    1.42           1.36         1.54               0.9         4.77            4.56       5.23          2.99
 NPV
                        47.1           22.5         25.0              −0.4        426.6           222.2      195.5           9.0
 (€, millions)
 ERR (%)              41.64          36.06         54.11            −8.89       377.19          356.09      423.16         200.0

Source: World Bank analysis; based on external data and information
Note: The total costs reflect the government investment and do not consider private owners’ co-financing.

Several observations can be made from the private                        decrease in repair cost, and then avoided injuries
buildings BCR results:                                                   and decrease in service interruption. Since the
                                                                         occupancy per building of private buildings is less
•	 The design life analysis results show that the                        than that of public buildings (that is, lower
   projected fatalities decrease by 85 percent, injuries                 concentration of risk), a larger benefit is derived
   by 85 percent, days of service interruption by 58                     from reduction of repair costs.
   percent, and repair costs by 53 percent, as a result
   of the investments in private buildings.                               Æ	 Challenges and lessons learned

•	 PML analysis results show that the projected                       The earthquake analysis could be completed by
   fatalities decrease by 90 percent, injuries by 89                  inclusion of further aspects as outlined above. Other
   percent, days of service interruption by 62 percent,               studies have shown substantial benefits with ex ante
   and repair costs by 55 percent, as a result of the                 analysis for retrofitting of a variety of buildings, for
   investments in private buildings.                                  example, in Romania, as well as considerable
                                                                      variability of results depending on types of damages
•	 In majority of the cases, the greatest benefits are                and breadth of benefits considered or VSL assumed.
   derived from avoided fatalities, closely followed by a


         CO-INVESTMENT INTO SEISMIC STRENGTHENING AND ENERGY EFFICIENCY IMPROVEMENT OF
         EDUCATION FACILITIES IN EUROPE’S EARTHQUAKE PRONE COUNTRIES

 This case study is a new ex ante / hypothetical                      services to the local community, and can also function
 analysis under this project that involved modelling                  as a place for shelter and resources in emergency
 of hazards.                                                          response. Eight EU MS with moderate to high seismicity
                                                                      were considered: Austria, Bulgaria, Cyprus, Greece,
The objective of this study is to evaluate the benefits               Croatia, Italy, Romania, and Slovenia.
and costs of investing in improved education facilities,
particularly the returns on capital works intended to                 The study considers education facilities in higher
make schools and universities safe in earthquakes and                 hazard areas (475-year peak ground acceleration
improve their energy efficiency. Investment in the                    > 0.2g) and uses a representative school and university
safety of education facilities is critical because these              building for each of the countries to conduct the
facilities house students, provide vital education                    analysis (see Table 29). A representative building


Case studies                                                                                                 Earthquakes       90
considers the average number of students per facility
and building materials that are commonly used in
each of the countries.
Table 29: Number of schools and universities considered in the case study with associated
national database websites

                                                                       MODELLED COUNTS
 COUNTRY
                                                  SCHOOLS                                          UNIVERSITIES

 Austria                                                                  275                                                    3
 Bulgaria                                                               4,486                                                   21
 Croatia                                                                  795                                                   70
 Cyprus                                                                   326                                                   20
 Greece                                                               15,083                                                  237
 Italy                                                                35,506                                                  266
 Romania                                                                7,370                                               1,076
 Slovenia                                                                 415                                                    5

Source: World Bank analysis; based on statistics from national databases (Database AT, 2021; Database CY, 2021; Database IT, 2021;
Database RO, 2021; Database SK, 2021; Database SL, 2021)

    Æ	 Modelling methodology and data inputs                        evaluate the decrease in losses is similar to that in
                                                                    consisting of three major components of earthquake
The benefits derived from the investment were                       risk analysis: hazard, exposure, and vulnerability.
evaluated by modelling the consequences of numerous
earthquake scenarios with and without interventions                 Hazard model: ESHM13, also known as the SHARE
and quantifying the decrease in energy consumption                  project, was used to conduct the risk analysis
from energy efficiency improvements. The quantified                 (Woessner, et al., 2015). ESHM13 provides a
benefits include decrease in losses due to asset                    consistent seismic hazard model for all of Europe,
damage, fatalities, and injuries from earthquakes                   whose creation involved several institutions and
(dividend 1) and reduction in energy consumption and                experts throughout the region, and it was built upon
CO2 emissions due to improved energy efficiency                     several national and regional seismic hazard models
(dividend 3). Dividend 1 benefits were evaluated based              (see map of seismic countries in Figure 18, with the
on two analyses: (1) a decrease in AALs (that is,                   colors in map showing the exposed value of education
annual loss averaged over a very large number of                    facilities in the countries).
years) assuming a 50-year building design life following
the investment period (that is, building design working             Exposure model and vulnerability model: For the
life according to Eurocode, Category 4 building                     eight countries, an exposure model for school and
structures) and (2) a decrease in losses from an                    university buildings was derived. Aggregated national
infrequent large event corresponding to a 475-year                  counts and occupants were based on GPSS GLOSI
return period, herein referred to as PML analysis. In               statistics, while the average area and replacement
addition, energy savings and reduction in CO2 emission              value of buildings came from the construction costs
for a 50-year building design life were considered in               developed in the ongoing SERA project. The spatial
both analyses. The following two sections briefly                   distribution of education buildings within each country
describe the modelling procedures for earthquake                    leveraged national data (where available) and existing
consequences and energy efficiency.                                 OpenStreetMap data, and remaining buildings were
                                                                    distributed to the NUTS 3 areas proportional to the
EARTHQUAKE CONSEQUENCE MODELLING                                    population (as per Eurostat). To identify the proportion
                                                                    of buildings that would be retrofit candidates within this
The earthquake consequence model that was used to                   hypothetical retrofit program, the exposure was


Case studies                                                                                                  Earthquakes        91
reduced further to consider (1) regions of relatively                 were not considered to be candidates for retrofit and
high seismic hazard and (2) building classes with                     therefore removed from the study. Additionally,
relatively high vulnerability. The seismic hazard                     buildings classes that are known to have better
threshold was set at a minimum PGA of 0.2 g on soil for               performance (that is, moderate to high ductility levels,
the 475-year average return period earthquake -                       reinforced masonry) were not considered as candidates
assets in locations that did not meet this threshold                  for retrofit and therefore removed from the study.


Figure 18: Map of seismic countries in the EU by the exposed value of education facilities




Source: World Bank analysis; based on external data and information


Construction typologies for the school and university                 was required (see Figure 19 for percentage reduction
buildings were inferred based on construction data for                in AAL). The anticipated decrease in seismic losses is
the residential and commercial buildings from the                     due to a decrease in the overall vulnerability of
SERA project. Given the absence of building-specific                  education buildings, which was approximated by
information regarding construction type, vulnerability                considering a step change increase in the level of
models that considered the range of possible                          ductility offered by each building class. For example, if
construction types were derived. This approach                        a building was constructed to a ‘low’ code level for a
involved the construction of weighted vulnerability                   given country, it was assumed the retrofitted building
curves, where the weight was equal to the proportion                  would now achieve a performance level equivalent to
of value of each construction type relative to the overall            the ‘moderate’ code level of that country. This
exposed value from the SERA Project (minus the                        improvement would be reflected by an increase in the
better-performing building classes discussed in the                   capacity of that building to resist earthquake shaking
previous paragraph). The better-performing building                   but not necessarily ensure that the building would be
classes (that is, moderate to high ductility and                      able to achieve the performance level associated with
reinforced masonry classes) were not considered as                    the latest (or ‘high’) code level of that country. The
candidate buildings, as a hypothetical retrofit program               retrofit cost was assumed to be 5 percent, 10 percent,
is likely to target building classes known to have poor               and 15 percent of the replacement cost, according to
performance (that is, no to low ductility and                         the building’s risk level, which captures a range of
unreinforced masonry classes).                                        interventions from local strengthening to more
                                                                      substantial capital works in accordance with the
To inform the BCA, an estimate of the decrease in                     literature review (see Table 30).
anticipated losses and the associated retrofitting cost




Case studies                                                                                              Earthquakes       92
Table 30: Estimated retrofitting cost ratios from multiple sources

 SOURCE                            DESCRIPTION                                            RETROFITTING COST RATIO (%)

 Italy case study                  Seismic upgrading of schools                                                            25
                                   Strengthening with jacketing methods (that is,
 Calvi 2013                        FRP, RC, and steel) applied to 50% of the                                               16
                                   elements
 Calvi 2013                        Adding new elements (for example, RC walls)                                             24
 Kappos and
                                   Conventional retrofitting methods                                                       12
 Dimitrakopoulos 2008
 Garcia, Hajirasouliha, and        FRP retrofitting methods in Mediterranean
                                                                                                                        5–15
 Pilakoutas 2010                   countries (partial - full)
 Liel and Deierlein 2013           FRP retrofitting, RC jacketing, RC walls                                      10, 40, 30
                                   Added shear walls to a multi-story RC frame
 Smyth et al. 2004                                                                                                      32–54
                                   building retrofitted (partial - full)

Source: World Bank analysis; based on information and data included in sources reviewed
Note: FRP = Fibre-reinforced polymer; RC = Reinforced concrete.




The risk analyses for the baseline and retrofitting case              probabilistic risk assessment of spatially distributed
were performed using the OpenQuake-engine, a free                     assets. The analysis was performed at the NUTS 3
and open-source software that conducts seismic                        level. Three risk metrics were considered: direct
hazard and risk analyses. An event-based (or time-                    financial loss due to damage, injuries, and fatalities.
based) analysis was conducted, which allows for a


Figure 19: Percentage reduction in average annual direct losses due to damage for the retrofitted case




Source: World Bank analysis; based on external data and information




Case studies                                                                                             Earthquakes        93
ENERGY EFFICIENCY IMPROVEMENT MODELLING                        Key parameters of existing educational buildings.:
                                                               It should be noted that most of the educational
The objective of this analysis is to provide inputs into       buildings do not correspond to the current energy
BCA for evaluating the costs and benefits of energy            efficiency requirements for buildings thermal
efficiency improvement investments in school                   transmittance U-value (lower value means better
buildings. The following sections describe the                 performance, see Table 31 for more details). Better
assumptions made, data sources used, and analysis              energy performance of building elements observed in
results for energy efficiency improvement benefit              Austria and Slovenia could be related to the fact that
estimation. Estimates were first made on per m2 annual         part of the buildings were renovated in those countries
basis for the reference education buildings in each            including replacement of windows and exterior doors
country, and then multiplied by the total area of the          and insulation of whole or part of the building envelope.
schools in the country.                                        In other countries, most of the education buildings
                                                               were still not upgraded.


Table 31: Key parameters of existing educational buildings

                                                             AVERAGE                AVERAGE            AVERAGE
                FABRIC OF EXTERNAL WALLS FOR A               U-VALUE OF             U-VALUE            U-VALUE
 COUNTRY
                REPRESENTATIVE EDUCATION BUILDING            EXTERNAL WALLS         OF ROOFS           OF WINDOWS
                                                             (W/M2K)                (W/M2K)            (W/M2K)

 Austria        Reinforced concreate, masonry                               0.53               0.49                 2.06

 Bulgaria       Reinforced concreate, masonry,                                1.1              0.77                 2.64
                confined masonry
 Croatia        Reinforced concreate, masonry,                              1.12               0.93                 3.58
                confined masonry
 Cyprus         Reinforced concreate, masonry                                 1.7               2.1                 4.19
 Greece         Reinforced concreate, masonry                               1.61               1.49                 4.18
 Italy          Reinforced concreate, masonry                                 0.6              0.87                 4.11
 Romania        Confined masonry, masonry                                   1.34               0.89                 2.27
 Slovenia       Reinforced concreate, confined                                0.6              0.53                 1.71
                masonry, masonry

Sources: European Commission (2020); European Union (2013a; 2013b; 2018)



Energy efficiency measures description. Energy                 presents expected parameters of building elements
efficiency measures required to improve energy                 after implementation of energy efficiency measures
performance of the buildings are presented in Table 32         normalized for all 9 countries. Compared with the
and expressed in thermal transmittance U-values. The           U-values of existing buildings in Table 31, there is a
normative requirements for energy performance of               large gap in terms of achieving energy efficiency levels
building elements vary among the countries. Table 31           presented in Table 32 below.




Case studies                                                                                          Earthquakes      94
Table 32: Energy efficiency measures description

                           ROOF                  WINDOWS              HEATING, COOLING,                             EXTERNAL
 WALLS INSULATION                                                                              LIGHTING
                           INSULATION            REPLACEMENT          VENTILATION                                   SHADING

 7–20 cm thermal           20–30 cm              Double glass         Heating/cooling          Lamps less           External
 insulation on             insulation            with thermal         device replacement;      than 10 W/           moving shades
 exterior walls,           (U < 0.2 W/m²K)       break (U < 1.5       installed systems,       m2                   installing where
 beams, and                                      W/m²K)               cleaning optimization    installation         relevant
 columns (U < 0.35
 W/m2K)

Sources: Thermal transmittance U-values normalized for all countries based on the estimates from European Commission (2020);
European Union (2013a; 2013b; 2018)

Primary energy savings: Heat energy savings,                         savings would reach from 99 to 188 kWh/m2 per year.
expressed in kilowatt hours (kWh) per m2 of building                 Electricity savings are estimated based on the
useful area, estimated from 64 to 94 kWh/m2 per year                 electricity share used in each country for heating/
for ‘light/medium’ renovation with two to three energy               cooling and lighting of educational buildings. More
efficiency measures from Table 33 would be                           electricity is consumed in southern countries like
implemented. For ‘deep’ renovation, four to six                      Greece and Cyprus, which use electricity as the main
measures would be implemented, and primary energy                    source for cooling of buildings.
Table 33: Primary energy savings

                NON-                  TOTAL PRIMARY ENERGY         ‘LIGHT/MEDIUM’     TOTAL PRIMARY ENERGY            ‘DEEP’
                RENEWABLE             SAVINGS FROM ‘LIGHT/         RENOVATION         SAVINGS                         RENOVATION
                ELECTRICITY           MEDIUM’ RENOVATION           ELECTRICITY        ‘DEEP’ RENOVATION (4            ELECTRICITY
 COUNTRY
                SHARE IN SAVED        (2–3 EE MEASURES             SAVINGS            OR MORE EE MEASURES             SAVINGS
                PRIMARY               IMPLEMENTED) (KWH/           (KWH/M2/YEAR)      IMPLEMENTED)                    (KWH/M2/
                ENERGY (%)            M2/YEAR)                                        (KWH/M2/YEAR)                   YEAR)

 Austria                         5                           88                   4                           127                  6
 Bulgaria                       15                           60                   9                           116                  17
 Croatia                        25                           94                 24                            169                  42
 Cyprus                         90                           64                 57                            110                  99
 Greece                         90                           72                 65                            113               102
 Italy                          30                           49                 15                            99                   30
 Romania                        20                           94                 19                            188                  38
 Slovenia                       15                           85                 13                            131                  20

Sources: Primary energy consumption were estimated based on the comprehensive study of building energy renovation activities and
the uptake prepared for the European Commission (European Commission, 2019b)
Primary consumption for heat and electricity were reviewed and adjusted according to European Commission (2020); European Union
(2013a; 2013b; 2018)
Data for educational facilities is from the (European Commission, 2017)
Note: EE = Energy efficiency.


CO2 savings: Primary energy savings from Table 33                    values of US$60 per tonne in 2020 and US$117 per
were converted to tonnes of CO2 reduction using CO2                  tonne in 2050 were used (World Bank, 2017b), which
conversion factors for fossil fuels and electricity used             were further extrapolated to the lifetime of the
in buildings. CO2 reduction estimations were made for                building. CO2-related reduction and CO2 economic
‘light/medium’ and ‘deep’ energy efficiency measures                 price values are presented in Table 34.
packages. For the CO2 monetary benefits, reference



Case studies                                                                                                  Earthquakes          95
Table 34: CO2 savings

               CO2 CONVERSION FACTORS FOR               CO2 CONVERSION                CO2 SAVINGS ‘LIGHT/            CO2 ‘DEEP’
               FOSSIL FUELS (NATURAL GAS, OIL           FACTORS FOR                   MEDIUM’ EE                     RENOVATION
 COUNTRY
               USED ON-SITE OR DISTRICT                 ELECTRICITY                   RENOVATION                     (KG CO2/M2/
               HEATING (KG CO2/KWH)                     (KG CO2/KWH)                  (KG CO2/M2/YEAR)               YEAR)

 Austria                                      0.236                         0.276                              21                   30
 Bulgaria                                      0.29                         0.819                              22                   43
 Croatia                                       0.22                         0.236                              21                   38
 Cyprus                                        0.20                         0.874                              51                   89
 Greece                                        0.24                         1.149                              76                 120
 Italy                                         0.24                         0.483                              15                   31
 Romania                                       0.42                         0.701                              45                   90
 Slovenia                                      0.24                         0.557                              24                   38

Source: World Bank analysis; based on data from Covenant of Mayors (2021)
Note: EE = Energy efficiency.



Energy costs and conversion factors: For the monetary                 savings are reduced energy from the primary energy
estimation of energy savings of consumed heat and                     supply using less of primary fuels. Final energy
electricity for each country’s education buildings,                   consumption covers energy supplied to the final
respective energy prices and energy conversion                        consumer at the building level. Final energy supplied
factors were used (see Table 35). While CO2 savings                   from the distribution network does not include losses
assessment uses primary energy savings, the                           of the primary fuel conversion and supply, and thus it is
assessment of monetary savings associated with                        usually lower quantity than primary energy. Final
reduction in use of consumer energy used the final                    energy savings refer to the saved energy by the final
energy savings at the building level. Primary energy                  consumer at the building level from the reduced
refers to the energy that is converted directly from                  energy consumption or by using energy more efficiently
natural resources (primary fuels). Primary energy                     after implementation of energy saving measures.


Table 35: Energy costs and conversion factors

                        HEAT ENERGY            ELECTRICITY            FINAL ENERGY TO PRIMARY           FINAL ENERGY TO PRIMARY
 COUNTRY                PRICE                  PRICE                  ENERGY CONVERSION                 ENERGY CONVERSION
                        (€/KWH)                (€/KWH)                FACTORS (HEAT)                    FACTORS (ELECTRICITY)

 Austria                               0.11                  0.20                              1.17                               1.91
 Bulgaria                              0.06                  0.11                              1.30                               3.00
 Croatia                               0.05                  0.14                              1.10                               1.61
 Cyprus                                0.09                  0.19                              1.10                               2.70
 Greece                                0.07                  0.12                              1.10                               2.20
 Italy                                 0.08                  0.23                              1.10                               2.20
 Romania                               0.06                  0.12                              1.10                               2.20
 Slovenia                              0.12                  0.18                              1.10                               2.50

Sources: Conversion factors for heat and electricity were used according to European Commission (2020); European Union (2013a;
2013b; 2018). In case data in cost-optimal reports were not available, 1.1 primary energy conversion factor was used for heat and 2.2 for
electricity conversion



Case studies                                                                                                     Earthquakes          96
Final annual benefit estimation: The investment costs               uptake prepared for the European Commission as well
of the ‘light/medium’ and ‘deep’ renovation options                 as the cost-optimal reports of each analysed country.
were determined on the basis of a comprehensive                     Results of monetary benefits are presented in Table 36
study of building energy renovation activities and the              and Table 37.


Table 36: ‘Light/medium’ renovation monetary results

                INVESTMENTS        ENERGY                      CO2 MONETARY       CO2 MONETARY           CO2 MONETARY
 COUNTRY        (€/M2)             EXPENDITURE                 BENEFITS MIN       BENEFITS MEDIUM        BENEFITS MAX VALUE
                                   SAVINGS (€/M2)              VALUE (€/M2)       VALUE (€/M2)           (€/M2)

 Austria                    240                        8.21               0.70                   1.05                       1.40
 Bulgaria                   100                        2.50               0.74                   1.12                       1.49
 Croatia                    192                        5.24               0.71                   1.06                       1.42
 Cyprus                     160                        4.55               1.73                   2.59                       3.45
 Greece                     126                        3.93               2.56                   3.84                       5.12
 Italy                      151                        4.18               0.52                   0.77                       1.03
 Romania                    127                        5.38               1.50                   2.26                       3.01
 Slovenia                   153                        8.80               0.82                   1.23                       1.64

Sources: Costs for energy efficiency measures implementation were estimated based on the comprehensive study of building energy
renovation activities and the uptake prepared for European Commission (European Commission, 2019b). Energy efficiency measures
costs were reviewed and adjusted according to European Commission (2020); European Union (2013a; 2013b; 2018)


Table 37: ‘Deep’ renovation monetary results	  

                INVESTMENTS       ENERGY                      CO2 MONETARY       CO2 MONETARY            CO2 MONETARY
                (€/M2)            EXPENDITURE                 BENEFITS           BENEFITS VALUE          BENEFITS MAXIMUM
 COUNTRY
                                  SAVINGS (€/M2)              MINIMUM VALUE      (€/M2)                  VALUE (€M2)
                                                              (€/M2)

 Austria                   294                    11.86                 1.01                     1.52                       2.03
 Bulgaria                  180                        4.83              1.44                     2.16                       2.88
 Croatia                   288                        9.45              1.27                     1.91                       2.55
 Cyprus                    227                        7.86              2.98                     4.47                       5.96
 Greece                    182                        6.17              4.02                     6.03                       8.04
 Italy                     265                        8.48              1.04                     1.57                       2.09
 Romania                   246                    10.76                 3.01                     4.51                       6.02
 Slovenia                  225                    13.52                 1.26                     1.89                       2.53

Source: World Bank analysis; based on external data




Case studies                                                                                                Earthquakes           97
RESULTS

The results of the building design life analysis and PML analysis for schools
and universities are presented in the following tables (Table 38 and Table 39).

Schools:
Table 38: BCA for schools

                        AUSTRIA                 BULGARIA                 CROATIA                     CYPRUS

                 Building      PML         Building   PML         Building    PML          Building       PML
                 design life   analysis    design     analysis    design      analysis     design life    analysis
                 analysis      (475-year   life       (475-year   life        (475-year    analysis       (475-year
                               return      analysis   return      analysis    return                      return
                               period)                period)                 period)                     period)
 DIVIDEND 1 (€, millions)
 Avoided
                        0.5          1.5      19.3         43.2         2.1          5.2           10.7           27.7
 injuries
 Avoided
                        5.4        16.7      182.7       486.6        18.6          50.6           87.0          235.0
 fatalities
 Decrease in
                        2.4        12.3       11.1         27.6         2.2          6.1           52.9          141.6
 repair cost
 Total
                        8.2        30.5      213.1       557.5        22.9          62.0         150.6           404.3
 dividend 1
 DIVIDEND 3 (€, millions)
 Energy
                     227.7        227.7      445.3       445.3       139.9         139.9         464.5           464.5
 savings
 CO2
                       49.0        49.0      334.4       334.4        47.6          47.6         444.0           444.0
 savings
 Total
                     276.7        276.7      779.7       779.7       187.5         187.5         908.6           908.6
 dividend 3
 Total
                     285.0        307.2      992.8      1,337.2      210.4         249.5       1,059.2        1,312.9
 benefits
 COSTS (€, millions)
 Seismic
 retrofit              78.0        78.0      270.2       270.2        60.9          60.9         600.9           600.9
 costs
 Energy
 efficiency
                     219.5        219.5      645.0       645.0       165.8         165.8         521.6           521.6
 improve-
 ment costs
 Total costs         297.5        297.5      915.2       915.2       226.7         226.7       1,122.5        1,122.5
 BCR                   0.96        1.03       1.08         1.46       0.93          1.10           0.94           1.17
 NPV
                     −12.5           9.7      77.6       422.0       −16.3          22.8         −63.3           190.4
 (€, millions)
 ERR (%)             −4.20         3.26       8.48       46.11       −7.19         10.06         −5.64           16.96




Case studies                                                                                       Earthquakes        98
                            GREECE                          ITALY                    ROMANIA                 SLOVENIA

                   Building      PML             Building        PML           Building   PML          Building   PML
                   design        analysis        design          analysis      design     analysis     design     analysis
                   life          (475-year       life            (475-year     life       (475-year    life       (475-year
                   analysis      return          analysis        return        analysis   return       analysis   return
                                 period)                         period)                  period)                 period)
 DIVIDEND 1 (€, millions)
 Avoided
                         77.8          105.5            139.1         150.2        35.7         35.7        6.0          13.7
 injuries
 Avoided
                       859.1         1,247.3           1,366.8       1,781.8      136.8        188.2       55.1         161.7
 fatalities
 Decrease in
                       403.0           478.1            609.7         590.0        46.8         56.0       25.7          67.0
 repair cost
 Total
                     1,339.9         1,830.9           2,115.6       2,522.0      219.3        280.0       86.8         242.4
 dividend 1
 DIVIDEND 3 (€, millions)
 Energy
                     4,440.3         4,440.3          13,510.6      13,510.6    1,418.1     1,418.1     1,616.8     1,616.8
 savings
 CO2 savings         7,278.6         7,278.6           4,191.8       4,191.8      998.6        998.6      380.3         380.3
 Total
                    11,718.9        11,718.9          17,702.4      17,702.4    2,416.7     2,416.7     1,997.2     1,997.2
 dividend 3
 Total benefits     13,058.8        13,549.7          19,818.0      20,224.4    2,636.0     2,696.7     2,084.0     2,239.5
 COSTS (€, millions)
 Seismic
                     4,791.2         4,791.2          15,548.2      15,548.2      811.8        811.8      459.8         459.8
 retrofit costs
 Energy
 efficiency
                     5,087.3         5,087.3          16,410.3      16,410.3    1,259.9     1,259.9     1,045.7     1,045.7
 improvement
 costs
 Total costs         9,878.4         9,878.4          31,958.5      31,958.5    2,071.7     2,071.7     1,505.6     1,505.6
 BCR                     1.32            1.37            0.62          0.63        1.27         1.30       1.38          1.49
 NPV
                     3,180.4         3,671.3      −12,140.5      −11,734.1        564.3        625.0      578.4         733.9
 (€, millions)
 ERR (%)               32.20           37.16           −37.99        −36.72       27.24        30.17      38.42         48.74

Source: World Bank analysis; based on external data




Case studies                                                                                              Earthquakes      99
Universities:
Table 39: BCA for universities
                        AUSTRIA                BULGARIA                 CROATIA                        CYPRUS

                  Building    PML         Building   PML         Building   PML             Building      PML
                  design      analysis    design     analysis    design     analysis        design        analysis
                  life        (475-year   life       (475-year   life       (475-year       life          (475-year
                  analysis    return      analysis   return      analysis   return          analysis      return
                              period)                period)                period)                       period)
 DIVIDEND 1 (€, millions)
 Avoided
                        0.1         0.4        7.3        20.5       13.5           33.9           2.0            5.3
 injuries
 Avoided
                        1.5         5.1       77.5      241.5       129.1          360.6          24.4           69.9
 fatalities
 Decrease in
                        0.5         2.7        3.8        14.2       13.4           33.1           7.5           20.3
 repair cost
 Total
                        2.1         8.2       88.5      276.2       156.0          427.7          33.9           95.6
 dividend 1
 DIVIDEND 3 (€, millions)
 Energy
                       34.9        34.9     104.8       104.8       431.6          431.6          92.9           92.9
 savings
 CO2 savings            7.5         7.5       78.7        78.7      146.7          146.7          88.8           88.8
 Total
                       42.4        42.4     183.5       183.5       578.4          578.4        181.7           181.7
 dividend 3
 Total benefits        44.5        50.6     272.1       459.7       734.3         1,006.0       215.6           277.3
 COSTS (€, millions)
 Seismic
                       11.9        11.9       59.5        59.5      183.2          183.2          86.5           86.5
 retrofit costs
 Energy
 efficiency
                       33.6        33.6     151.8       151.8       511.5          511.5        104.3           104.3
 improvement
 costs
 Total costs           45.6        45.6     211.4       211.4       694.7          694.7        190.8           190.8
 BCR                   0.98        1.11       1.29        2.18       1.06           1.45          1.13           1.45
 NPV
                       −1.1         5.0       60.7      248.3        39.6          311.3          24.8           86.5
 (€, millions)
 ERR (%)             −2.41        10.96     28.71      117.46        5.70          44.81          13.0          45.34




Case studies                                                                                      Earthquakes      100
                            GREECE                         ITALY                   ROMANIA                 SLOVENIA

                    Building     PML            Building      PML           Building    PML          Building    PML
                    design       analysis       design        analysis      design      analysis     design      analysis
                    life         (475-year      life          (475-year     life        (475-year    life        (475-year
                    analysis     return         analysis      return        analysis    return       analysis    return
                                 period)                      period)                   period)                  period)
 DIVIDEND 1 (€, millions)
 Avoided
                       0.018          0.026           0.045         0.066      0.064          0.07      0.0007     0.0003
 injuries
 Avoided
                         0.14           0.23           0.27          0.41         0.4         0.53       0.001         0.004
 fatalities
 Decrease in
                       0.006          0.009            0.21          0.28      0.058         0.068      0.0004     0.0013
 repair cost
 Total
                         0.22           0.35           0.52          0.76       0.53          0.67      0.0001         0.005
 dividend 1
 DIVIDEND 3 (€, millions)
 Energy
                         0.67           0.67           2.25           2.2       1.84          1.84        0.21          0.21
 savings
 CO2 savings             1.09           1.09            0.7           0.7       1.29          1.29       0.005         0.005
 Total
                         1.76           1.76           2.95          2.95       3.13          3.13        0.26          0.26
 dividend 3
 Total benefits          1.98           2.11           3.47          3.71       3.65           3.8        0.27          0.31
 COSTS (€, millions)
 Seismic
                         0.61           0.61            2.2           2.2       0.62          0.62       0.005         0.005
 retrofit costs
 Energy
 efficiency
                         0.74           0.74           2.74          2.74       1.63          1.63        0.13          0.13
 improvement
 costs
 Total costs             1.37           1.37           4.94          4.94       2.25          2.25        0.18          0.18
 BCR                     1.44           1.53           0.70          0.75       1.62          1.69        1.49          1.70
 NPV
                         0.61           0.73          −1.47         −1.22         1.4         1.55       0.089          0.13
 (€, millions)
 ERR (%)               44.42          53.29       −29.77           −24.80      62.18         68.68       49.06         70.54

Source: World Bank analysis; based on external data




Case studies                                                                                             Earthquakes      101
Several observations can be made from the BCR                 •	 The relative importance of different benefits differs
results:                                                         across countries depending on their seismic risk,
                                                                 climate, and energy profile. In general, dividend 3
•	 Investment into strengthening and energy efficiency           benefits tend to be high along with the avoided
   improvement of education facilities yields positive           fatalities from seismic retrofit.
   returns in the majority of the considered countries,
   considering both design life and PML benefits.                Æ	 Challenges and lessons learned

•	 Co-investment into energy efficiency yields large          The earthquake analysis could be completed by
   benefits and should therefore be considered in             inclusion of further aspects as outlined above. Other
   tandem with seismic strengthening for higher               studies have shown substantial benefits of investing in
   efficiency of investments and lower disruption to          upgrading of school infrastructure in Turkey or
   facilities. The use of innovative combined                 Romania, which also benefitted from previous
   technologies is being widely investigated with a lot       assessments that calculated benchmark data on
   of research in this area (for example, a European          characteristics of buildings that allowed for precise
   pilot project on integrated techniques for the             calculations of energy efficiency improvement
   seismic strengthening and energy efficiency of             benefits.
   existing buildings).


        BENEFITS OF INVESTING IN RETROFITTING OF BUILDINGS IN ROMANIA

 This case study is an external analysis that was             country’s emergency response system a national
 undertaken with ex-ante analysis that involved               priority. And In the last few years, Romania has
 modelling of hazards.                                        substantially invested in retrofitting buildings,
                                                              strengthening the country’s preparedness and critical
    Æ	 Introduction and background                            emergency infrastructure, and improving its resilience
                                                              and emergency response. Below, we will examine
Romania is one of the fastest growing economies in the        these investments using the Triple Dividend BCA.
EU, with growth of 7 percent in 2017 (World Bank,
2018a). Yet, Romania’s vulnerability to geophysical              Æ	 Description
and climate-related natural disasters, which will be
further exacerbated by climate change, stands in the          The World Bank is supporting a series of three types
way of the country’s growth trajectory. Romania is one        of investment programs in Romania since 2018.
of the most at-risk countries from earthquakes in the         These investments are all aiming to support the
EU, with hundreds of lives lost and tens of thousands of      resilience against disaster risks by focusing on the
buildings damaged in earthquakes in the last 200              retrofitting and reconstruction of selected public
years. In addition to seismic risk, the country is also       buildings while promoting sustainability aspects such
one of the most flood-prone countries in Europe, and it       as energy efficiency. In the aftermath of disaster, it is
is susceptible to significant damage from                     critical that emergency coordination centres and
hydrometeorological events occurring several times            rescue facilities are undamaged and fully operational,
per decade. Lastly, Romania is also experiencing              with staff uninjured, equipment undamaged, and
increased frequency and intensity of landslides,              energy, water, and communication systems
wildfires, drought, and extreme heat/cold events. Not         functional. It is also critical that expected coverage of
only is Bucharest one of the most earthquake-prone            emergency operations is not compromised by
capital cities in the EU, but it is also ranked fifth among   damage to one or more buildings.
the fastest-warming cities in the world. With the
country’s unique natural hazard risks realized,               The three investment programs are focusing in a first
Romania is committed to improving their disaster risk         phase on critical disaster and emergency response
management and making improvements to their                   buildings:



Case studies                                                                                      Earthquakes      102
           Strengthening Disaster Risk Management            AEP of earthquake hazard at 10 percent in 50 years,
           (World Bank, 2018a)15                             and a corresponding earthquake with magnitude of
                                                             approximately 7.9. The standard discount rate used
The project that started in 2018 amounting to more           was 5 percent and the VSL used €559,488 for the
than €50.8 million is aiming to enhance the resilience       first project (and €575,723 for the other two
of critical disaster and emergency response                  projects).
infrastructure and to strengthen the Borrower’s
institutional capacities in disaster risk reduction and      For the overall BCR, only the results from the first
climate change adaptation. This is being achieved by         Dividend were considered that were calculated
enhancing the resilience of critical disaster and            quantitatively and based on modelling scenarios. The
emergency response infrastructure and to strengthen          other results were presented qualitatively based in
the Borrower’s institutional capacities in disaster risk     parts on partial quantitative analysis to allow an
reduction and climate change adaptation. The project         approximation of possible benefits.
focuses on around 35 buildings such as emergency
coordination centres as well as fire and SMURD               For the second Dividend, the Hallegatte framework
(Emergency Rescue Service) ambulance services.               was used as a benchmark (Hallegatte, 2012). This
                                                             approach estimates the value of concurrent economic
           Improving Resilience and          Emergency       development being equivalent to 8 times the value of
           Response (World Bank, 2019a)                      avoided asset losses at the lower end of the spectrum,
                                                             and 15 times at the higher end. Since, emergency
The project that started in 2019 and amounting to            response facilities constitute only a small part of an
more than €50.92 million is aiming to enhance the            overall earthquake hazard mitigation program; it is
resilience of Romanian Police Facilities that are critical   assumed that the economic development benefits
to respond to Emergency Situations and disasters and         associated with response building investments would
to strengthen the institutional capacities for emergency     be approximately equal to the value of the avoided
preparedness and response. The project focuses on            assets losses at the lower end, and three times as high
around 37 buildings of the Romanian police.                  at the higher end. This logic allows the use a weighted
                                                             factor of 2 to multiply the avoided asset losses (and
           Strengthening preparedness and critical           related benefits) and to infer benefits due to triggered
           emergency infrastructure project (World           economic development.
           Bank, 2019b)
                                                             For the third Dividend, data constraints required an
The project that started in 2019 amounting to more           approximate calculation of possible benefits. Factors
than €41.09 million is aiming to enhance the resilience      taken into consideration were the square meters of
of Romanian Gendarmerie Facilities that are critical to      facilities being rebuild or retrofitted (including the
respond to Emergency Situations and disasters and to         share of types of interventions), energy efficiency
strengthen the institutional capacities for emergency        standards by shares of buildings (1/3 of buildings 2020
preparedness and response. The project focuses on            targets, rest with moderate energy efficiency targets),
around 27 buildings of the Romanian gendarmerie.             monthly energy costs per square meter of €1.2 and a
                                                             20 (or 30 in two last case studies) year planning
     Æ	 Methodology                                          horizon.

The BCA for the three investment programs were                  Æ	 Results of the analysis by Dividends
undertaken in a similar manner using the Triple                 	 and overall
Dividend framework. Although the components slightly
varied between the projects, the BCAs generally              The results of the three projects are summarized in the
included analysis based on two earthquake scenarios.         tables below (Table 40 , Table 41 and Table 42). Overall,
The first, EQ scenario 1, has a higher probability with      we can see that the BCRs were greater than 1.
an AEP of earthquake hazard at 39 percent in 50 years,
and a corresponding earthquake with magnitude of
approximately 7.5. The second, EQ scenario 2, has an

15 Original values in US dollars.

Case studies                                                                                     Earthquakes      103
Strengthening Disaster Risk Management
Table 40: BCR of strengthening disaster risk management in Romania (in million €)

                                                         BCR: 1.7316/1.317

                                                                                       EQ1                     EQ2
                                  Dividend 1 benefits                                 €64.5                   €48.3
                                  Dividend 1 costs                               € 37.33                  € 37.33
                                  Dividend 2
                                  Dividend 3
                                  Total Benefits                                      €64.5                   €48.3
                                  Total Costs                                        €37.33               €37.33
                                  BCR                                                  1.73                    1.30
                                  NPV                                                €27.17               €11.02
                                  IRR                                                14.6%                     9.1%

Source: World Bank analysis; based on data and information from World Bank (2018a)




Improving resilience and emergency response
Table 41: BCR of improving resilience and emergency response in Romania (in million €)

                                                         BCR: 1.5718/1.0519

                                                                                          EQ1                  EQ2
                                   Dividend 1 benefits                                  €64.5             €48.35
                                   Dividend 1 costs                                       €44                  €44
                                   Dividend 2
                                   Dividend 3
                                   Total Benefits                                       €64.5             €48.35
                                   Total Costs                                            €44                  €44
                                   BCR                                                   1.57                  1.05
                                   NPV                                                 €22.26                 €2.01
                                   IRR                                                 10.26%                 5.50%

Source: World Bank analysis; based on data and information from World Bank (2019a)




16 Earthquake scenario 1 (EQ1).
17 Earthquake scenario 2 (EQ2).
18 Earthquake scenario 1 (EQ1).
19 Earthquake scenario 2 (EQ2).



Case studies                                                                                    Earthquakes      104
Strengthening preparedness and critical emergency infrastructure project
Table 42: BCR of strengthening preparedness and critical emergency infrastructure

                                                                BCR: 1.1620

                                                                                          BENEFITS                           COSTS
                                      Dividend 1                                             €33.9                           €29.1
                                      Dividend 2
                                      Dividend 3
                                      NPV                                                      €4.8
                                      IRR                                                      6.58

Source: World Bank analysis; based on data and information from World Bank (2019b)



This Table 43 compares the cost benefit analysis outputs for all three case studies in Romania considered,
giving ranges corresponding to the two earthquake scenarios.



Table 43: Comparison of BCA outputs for case studies in Romania

                                                                                                  STRENGTHENING
                                                                   IMPROVING RESILIENCE AND       PREPAREDNESS AND
                                 STRENGTHENING DRM
                                                                   EMERGENCY RESPONSE             CRITICAL EMERGENCY
                                                                                                  INFRASTRUCTURE PROJECT

 FIRST DIVIDEND
 Lives saved                      2900 people (1700 building       1009-2491 (building staff      3636 (building staff and
                                 staff and 1200 community          and community members);        community members);
                                 member); €671 million             €581 million                   €251 million


 Avoided direct stock            €25.4 - 54 million                €11.3 – 19.3 million           €11.3
 losses 
                                 (including direct damages to      (including direct damages to   (including direct damages to
                                 buildings 12.4-23.9, to           buildings 10.1-17.5 and to     buildings 10.7 and to
                                 equipment 2.2-4.1 and fire        equipment 1.2-1.8)             equipment 0.6)
                                 suppression to surrounding
                                 buildings 10.8-26)
 SECOND DIVIDEND
 Economic                        €44-94 million                    €22.6 million                  €22.6 million
 development
 multiplier effects due
 to avoided asset
 losses
 THIRD DIVIDEND
 Energy                          €8 million                        €7 million                     €8 million
 efficiency (energy
 costs savings)

Source: World Bank analysis; based on data and information from World Bank reports cited above


20 Earthquake scenario 1 (EQ1)

Case studies                                                                                                   Earthquakes      105
     Æ	 Challenges faced and lessons learned                 Data constraints on buildings specifically are major,
                                                             which are preventing more precise calculations on
It is noteworthy that the project’s efficiency parameters    energy efficiency. Ideally energy audits on buildings
in both earthquake scenarios are highly sensitive to         would be necessary before the project, which would
the VSL estimate and the number of lives saved, which        necessitate an advance precise definition of which
play a vital role in rendering the project feasible in       buildings would be intervened in and this was not the
economic terms. However, when the aspect of lives            approach taken in these investments projects but may
saved was eliminated from the analysis, the resulting        also constrain estimations for other similar large
IRR declined to below zero, indicating an infeasible         investment programs led by the public sector. The
investment prospect. Thus, an important feature of           second dividend benefits are an approximation and
this analysis is that the project will not be able to meet   are constrained by methodological constraints on
efficiency criteria unless the value of lives saved is       what can reasonably be accounted for. Additional
explicitly considered. In one of the projects for one of     empirical literature (ideally global comparative
the earthquake scenarios, a negative BCR has been            estimates) would support future precise calculations
found and this is likely to be due to an underestimation     for dividend 2.
to the lives saved by the personnel of the gendarmerie.


           THE BENEFITS OF INVESTMENT IN SCHOOL INFRASTRUCTURE IN TURKEY
           (WORLD BANK, 2019D)21

     Æ	 Introduction and background                             Æ	 Description of the case study

Turkey is vulnerable to a wide variety of natural hazards,   With this €276.6 million investment (US$300 million),
including earthquakes, landslides, and floods. Among         50 schools can be reconstructed and about 300
these, earthquakes have caused the greatest amount           schools can be retrofitted over a 5-year investment
of human and economic losses, with 90,000 fatalities         period. As a result, this would correspond to 1,122,500
and direct losses of €22.3 billion spanning 76               square meters of floor space, providing protection to
earthquakes since 1900. In 2005, the Government of           approximately 280,000 students at full capacity.
Turkey, with support from the Bank, initiated a
comprehensive risk reduction program and launched               Æ	 Methodology
the Istanbul Seismic Risk Mitigation and Emergency
Preparedness (ISMEP) project aimed at improving the          Using the triple dividend framework as basis, a BCA
resilience of the city’s public building stock and its       was performed to inform the Project design. This
capacity to respond to disasters. Within this ambitious      analysis aims to estimate ERR, NPV and cost-benefit
long-term disaster resilience plan, the government is        ratios under a set of assumptions. It is conjectured
focusing on scaling up risk reduction interventions in       that one or more earthquakes (EQ) are expected to
the education sector to substantially and systematically     hit the targeted provinces in the order of Mw = 6.5 or
reduce the risk that students and teachers face from         higher leading to similar consequences as that of the
earthquakes. Improving education infrastructure is an        Marmara EQ, with an expected probability of 5
important strategic priority for the Turkish Government,     percent. Human life has been valued as part of the
and budget allocations toward such projects have             analysis and the concept of VSL was used (VSL of
increased in years. The Ministry of National Education       €731,440 or US$820,000).
(MoNE) is entrusted to oversee the retrofitting and
maintenance of public education infrastructure, and             Æ	 Results of the analysis by Dividends
between 2003 and 2018, MoNE has invested                        	 and overall
approximately €14.3 billion in the construction of new
schools, reconstruction and retrofitting of existing         Assuming that the current asset value is equal to
schools, and the acquisition of sites.                       €133.8 million, the market value of the complete
                                                             buildings that have been reconstructed, retrofitted,

21 Original values in US dollars.



Case studies                                                                                    Earthquakes     106
and fully equipped ultimately results in an increment             use a factor of 2 to multiply the avoided asset losses,
of €160.6 million for the value of the property                   yielding some €321 million in benefits due to economic
enhanced and saved as a result of project intervention.           development even when the disaster never strikes
Moreover, it expected that the improved buildings                 (see Table 44).
will provide a safer school environment for some
280,000 students, 0.6 percent of whom risk losing                 Despite data paucity being a problem in this category
their lives in the event of an earthquake without this            of benefits as well, energy efficiency improvements in
intervention. Consequently, this corresponds to a child           existing public buildings are in the positive list of co-
mortality estimate of 1680 for daytime and 910 for an             benefits related to mitigation of climate change and
average number after adjustments.                                 yield savings on lighting, water and heating investments.
                                                                  The recent ISMEP Economic Impact Assessment
As a possible benchmark we have used the Hallegatte               (World Bank, 2018b) has calculated some benchmark
framework (Hallegatte, 2012), which deals with hydro-             data which have been imported for use. According to
met related hazards, investments and benefits, where              ISMEP, the monetary values of saving in lightening,
the author estimates the value of concurrent economic             water consumption, and heating per square meter are
development being equivalent to 8 times the value of              €0.0021, €0.020, and €2.418, respectively. It is
avoided asset losses at the lower end, and 15 times at            expected that 350 schools with 1.122.500 square
the higher end. Since safe schools constitute only a              meters of surface areas are to be intervened within the
small part of an overall earthquake hazard mitigation             Project, which would result in savings of about €2.68
program, we assume that the economic development                  million per annum and €41 million over the planning
benefits associated with safe schools investments                 horizon with or without an earthquake occurring. This
would be approximately equal to the value of the                  analysis is being extended to deal with the question of
avoided assets losses at the lower end, and be perhaps            social value of carbon.
twice as high at the higher end. This logic allows us to


Table 44: BCR of Turkey school infrastructure investment per dividend

                                                           BCR: 1.53

                                                                                  BENEFITS                        COSTS
                              Dividend 1                                 €660 million (gross)       €267.6 million (gross)
                              Dividend 2                               €160.6 million (gross)
                              Dividend 3
                              Total benefits                           €820.6 million (gross)
                              Total costs                              €267.6 million (gross)
                              BCR                                                       1.53
                              NPV                                             €120.4 million
                              ERR

Source: World Bank analysis; based on data and information from World Bank PADs




    Æ	 Challenges faced and lessons learned                       calculated benchmark data on characteristics in
                                                                  buildings (lightning, water consumption, heating per
In addition to the sensitivity of results to the choice of        square meter) that allowed for a more precise
VSL, it can be said that the economic analysis under              calculation of energy efficiency improvements
this project benefitted from previous assessments that            benefits.




Case studies                                                                                          Earthquakes      107
3.2.3. EARTHQUAKE EARLY                                       2011) and Turkey (Alcik, et al., 2009).
       WARNING SYSTEMS
                                                              The study by Cremen examines the feasibility of EEWS
An EEWS is an effective measure for reducing risks            for Europe. The initial analysis examines the density of
from European earthquakes, which consists of                  station coverage across the continent and finds that
physical infrastructure and software that can alert           over half of the interdistance ranges between 0 km
stakeholders (for example, the public and civil               and 20 km are optimal for EEWS performance (Cremen,
protection offices) to an incoming earthquake seconds         et al., 2020). This is a preliminary signal that there is
to minutes before they experience the resulting strong        significant potential for operational EEWS across the
shaking. During this time, actions can be taken to            content. The report also finds that 44 percent of the
significantly decrease detrimental impacts from               examined target sites benefit from warning times that
shaking (Cremen, et al., 2020). These actions include,        are long enough to accommodate major risk
but are not limited to, performing drop, cover, and           intervention actions, such as shutting down of
hold on (Porter, 2016) to avoid lives lost and injuries;      industrial equipment or the removal of vehicles from
moving to a safer location either within a building or        garages. The longest lead times are found in Greece,
outside to avoid injuries; slowing down high-speed            Turkey, and Iceland, while the shortest lead times are
trains (Fabozzi, et al., 2018); shutting off gas pipelines    in north-western Georgia and southern Russia. The
to prevent fires; and switching signals to stop vehicles      work provides strong evidence that an operational
from entering vulnerable infrastructure components            EEWS could be an effective tool for supporting
(Le Guenan, et al., 2016).                                    earthquake-related DRR across a significant portion of
                                                              Europe. This benefits the new three-year Horizon 2020
The Euro-Mediterranean area has a strong need for             European project called TURNkey (European
effective EEWS and measures for mitigating seismic            Commission, 2021). The project seeks to develop a
risk (Crowley, et al., 2018). This is due to the estimation   holistic earthquake information system that
of annual European GDP affected by earthquakes                incorporates seismic risk mitigation tools for both
which exceeds €17.7 billion (World Bank, 2017a). In           operational forecasting and EEWS in real and near-real
addition, the only European countries with current            time, with selected testbeds in Italy and Greece to be
operational EEWS are Romania (Mărmureanu, et al.,             the focus of more detailed analysis.


        EARTHQUAKE EARLY WARNING IN BUCHAREST

 This case study is a new ex-post analysis under this         of people with a view to releasing a set of mobile
 project that involved modelling of hazards.                  applications that will be freely available for general
                                                              users (Clinton, 2016).
    Æ	 Introduction and background
                                                                 Æ	 Description
Currently, the Romanian Seismic Network consists of
73 digital seismic stations that have been installed          This case study is an appraisal of the EEWS in
since 1995 for warning critical facilities. Bucharest is      Bucharest as part of the DACEA program 2007–2013
situated 140–170 km from the Vrancea epicentre                that was partially funded by the EU (Dimitrova, et al.,
zone and encountered great damage and casualties              2015; European Union, 2021; European Commission,
from the high energy Vrancea earthquake in 1977 and           2015). The DACEA program seeks to prevent natural
other events on the same subduction zone. The lead            disasters generated by earthquakes in the cross-
time is predicted to be 25–27 seconds for an EEWS to          border area of Romania and Bulgaria through early
issue preventive actions at the warned facility. Key          warning integrated communication networks. Due to
facilities that trigger action upon receipt of alerts         the high seismicity in the cross-border area, the
include the Nuclear Research Institute in Bucharest,          nuclear power plants and chemical plants located
the Basarab Bridge, and the Vidaru Dam. The National          along the Danube are particularly vulnerable to
Institute for Earth Physics (NIEP) that operates the          earthquakes. The project provides a response system
real-time national network is currently testing the           that can alert authorities to help avoid natural disasters
communication performance with a restricted group             caused by earthquakes by promptly shutting down


Case studies                                                                                       Earthquakes      108
critical infrastructure like nuclear power plants,                          included in the BCA.
elevators, and trains, as well as reducing negative
impacts to the environment. The case study                                  Data used for the case study were as follows:
undertaken is a hypothetical appraisal of the EEWS
operationalized to reduce losses, focusing on the                           •	 Total investment information from the project for
defined investment of the DACEA program for nuclear                            EEWS cost, half of which is assumed to be applied
and infrastructure alerting. The program included the                          to Bucharest (European Union, 2020)
installation of 16 earthquake sensors in the cross
border area.22                                                              •	 Data from the United States (Strauss and Allen
                                                                               methodology) for cost of one train car and cost of
     Æ	 Methodology                                                            maintenance of EEWS, adjusted to Romanian
                                                                               consumer price indexes (Strauss & Allen, 2016)
As few methodologies exist for systematically
evaluating the costs and benefits of the EEWS, this                         •	 Eurostat symmetric input-output tables for
study employs a recent methodology by Strauss and                              construction sector macroeconomic benefits. The
Allen (2016) that estimates the costs and benefits of                          EU estimation for construction sector input of every
the ShakeAlert system in the Western United States.                            €1 yields €0.47 of value added to other industries
Quantifying the benefits of the EEWS will include                              (European Commission, 2021). This is an indirect
assessing the annual costs of creating and maintaining                         and direct economic value added from the
an EEWS compared to the costs and savings from                                 construction or installation of sensors and other
annual avoided losses. In the methodology applied to                           infrastructure for EEWS.
Bucharest, benefits are hypothetical and conservative
losses avoided are estimated based on infrastructure                           Æ	 Results of the analysis by Dividends
alerting to the train/transportation sector.                                   	 and overall

Due to the challenges and variability in predicting the                     The overall benefit is greater than 1 compared to the
full benefits of earthquake early warnings, the case                        annualized cost including up-front investment for the
study intends to compare the expected first-time start-                     EEWS in Bucharest (see Table 45). The benefits
up cost of installation and maintenance to a highly                         computed are those of direct losses avoided and value
conservative set of benefits. The costs are compared                        added to the greater economy by investment in
to the avoidance of one fatality avoided and the                            construction projects. The true BCR is likely much
physical asset loss avoided of one train being derailed.                    larger but difficult to capture in the life span of use
The objective is to compare the incremental losses                          considering the return periods of low-frequency, high-
avoided to the start-up cost and maintenance of the                         consequence earthquake impacts. However, the
EEWS. Due to a lack of available data, the losses                           inclusion of loss of life avoided when comparing the
avoided from nuclear and chemical earthquake early                          full costs of implementation will typically yield high
warning are not included in the study.                                      BCR values as indicated below. In addition, the losses
                                                                            avoided from environmental pollution due to the
As earthquake early warning has a short lead time                           reduction and prevention of natural and technical risks
(up to 27 seconds in Bucharest) (Neagoe, 2016), its                         will likely increase the BCR. There are also co-benefits
main purpose is to prevent loss of life and injuries.                       such as increased awareness by alerting for EEWS
There are also other immediate organizational actions                       that have positive social consequences but are difficult
that can be taken (both automatically or procedurally),                     to capture in a quantitative BCA. High and low values
such as turning off gas pipes to avoid conflagration,                       based on upper and lower bound limits of the cost of
or slowing down trains to avoid derailment—and hence                        train derailment (low of €3.2 million per train car and
lowering the likelihood of causalities and asset loss.                      high of €26.8 million) results in a BCR range of
Therefore, while other co-benefits may exist, these are                     3.4–11.1 (see Table 46).
largely unexplored in literature and therefore not




22 The team assumed that half of the sensors were installed in Bucharest.



Case studies                                                                                                    Earthquakes     109
Table 45: BCR of implementing EEWS in Bucharest, Romania (in million €)

                                                               BCR: 7.0

                                                               BENEFITS (€)                 COSTS
                         Dividend 1                                     20.64
                         Dividend 2                                       1.34
                         Dividend 3                                        n.a.
                         Total benefits                                 21.98
                         Total costs                                                         3.06
                         BCR                                              7.17
                         NPV                                            18.92
                         ERR (%)                                       617.33

Source: World Bank analysis; based on external data and information


Table 46: Detailed breakdown of implementing EEWS in Bucharest, Romania (in million €)

 FIRST DIVIDEND (€)
 Life saved                                                                                                        5.91
 Train derailment avoided                                                                                         14.18
 Total first dividend                                                                                             20.09
 SECOND DIVIDEND (€)
 Value-added to broader economy from construction of EEWS                                                          1.34
 infrastructure
 Total second dividend                                                                                             1.34
 First cost item
 First time capital cost of sensors and monitoring system                                                          2.85
 SECOND COST ITEM (€)
 Maintenance cost                                                                                                  0.21
 TOTAL DIVIDEND                                                                                                   21.43
 Total cost                                                                                                        3.06
 BCR                                                                                                                7.0
 NPV (€)                                                                                                          18.36
 ERR (%)                                                                                                      599.27

Source: World Bank analysis; based on external data and information
Note: All values are in 2013 euros as this was the end of the programming year for funds.




Case studies                                                                                        Earthquakes      110
    Æ	 Challenges faced and lessons learned                  •	 Including fire following earthquake damage
                                                                avoided with manual and/or automated gas shut
Very little data exist on the full benefits of an EEWS in       offs;
Europe, particularly in Bucharest. It is challenging to
disaggregate a multi-alert system like the one found in      •	 Assessing the costs and benefits over a reasonable
France, and some judgements must be made to                     time horizon, capturing the longevity of such a
estimate a cost per incremental sensor installation             system as well as longer-return-period earthquakes
and maintenance over time to constitute a meaningful            and their consequences;
BCA. For future studies with additional data available,
the BCA could expand on                                      •	 Evaluating the losses avoided of environmental
                                                                damage from natural and technical disasters in the
•	 Accurately estimating alerting system as well as             cross-border area; and
   monitoring and evaluation costs;
                                                             •	 Quantifying the benefits of increased awareness
•	 Determining the efficiency of alerting dissemination         and use of EEWS by personnel operating critical
   of EEWS;                                                     infrastructure to further reduce losses. This also
                                                                includes quantifying the level of effective awareness
•	 Providing specific information on costs like nuclear         building that should be included as a regular cost to
   damage, chemical, industrial, and other critical             implementing any EEWS (Becker, et al., 2020).
   infrastructure damage;




3.2.4. RESPONDER CAPACITY BUILDING
 The case studies described in this section are new ex post analyses under this project that involved an
 innovative quantification of benefits from soft investments.


        INTRODUCTION TO THE ASSESSMENT OF ECONOMIC BENEFITS OF
        CAPACITY BUILDING IN DISASTER RISK PREVENTION

 The case studies described in this section are new          initiatives are shown in Figure 20 and see Annex 4 for
 ex post analyses under this project that involved           further details). Personnel and modules (self-sufficient
 an innovative quantification of benefits from soft          civil protection capacities capable of overseas
 investments.                                                deployment) are trained in many aspects of the
                                                             international response context. Benefits are numerous,
    Æ	 Introduction and background                           ranging from improved coordination between
                                                             international resources from different countries and
The effectiveness of disaster response is directly           the Host Nation to improved effectiveness of on-the-
associated with the skills of the responders at a disaster   ground personnel in this international response
site as well as their effective coordination with other      context (Perry, 2004).
resources deployed (Sinclair 2012). Therefore, it is
essential for authorities to establish emergency                Æ	 Description
management training and live exercise programs to
build capacity of responders and response                    A BCA is conducted of DG ECHO investments in
coordinators.                                                emergency responders and response coordinators
                                                             through the UCPM/Union Civil Protection Knowledge
DG ECHO funds capacity building of civil protection          Network. Two specific events are considered: the
personnel through what is now called the Union Civil         November 2019 Albania Earthquake and the March
Protection Knowledge Network (capacity-building              2020 Croatia Earthquake. The Albania earthquake


Case studies                                                                                     Earthquakes     111
was magnitude 6.3; killed 51 people; damaged                                     response had received international training. See
39,000 residential buildings; required 17,000 people                             Annex 4 for a more detailed description of the
to be housed in temporary accommodation; and led to                              Knowledge Network23 and the two case study events.
a significant international response including
personnel on-the-ground, in-kind assistance, and                                      Æ	 Methodology
international pledges from multiple donors. The
Croatia earthquake was of magnitude 5.5, killed one                              The costs and benefits assessed quantitatively for
person, damaged 26,000 buildings, and displaced                                  these events are shown in Figure 20. The calculation
30,000, and although there were no EU personnel                                  methodology, the additional costs/benefits assessed
deployed internationally (due to COVID) many of those                            qualitatively, and key results are described in more
responsible for the national coordination of the                                 detail for each case study in the next sections.


Figure 20: Costs (investments) and benefits considered for quantitative analysis to provide the BCR.
Note that additional costs/benefits are analysed both quantitatively and qualitatively and discussed in the text




Source: World Bank analysis
Note: Additional costs/benefits are analysed both quantitatively and qualitatively and discussed in the main report. CP = civil protection;
EUCPT = European Union Civil Protection Team; MODEX = module exercises; UCPM = Union Civil Protection Mechanism.



The analysis for both case studies is conducted in four                                questionnaires to targeted experts in coordination
stages:                                                                                roles in both case-study events

1.	 Calculate costs of training and deployment of                                Costs and benefits are calculated only for the events
    EUCPT, modules, and other capacities that                                    considered. This means that benefits that may occur
    responded to the case study events, either                                   for future events are not expressly calculated (for
    internationally (Albania earthquake) or nationally                           example, trained personnel may deploy to multiple
    (Croatia earthquake).                                                        events). that is, calculations are deterministic, based
                                                                                 on specific real events, not a probabilistic calculation
2.	 Calculate benefits associated with (a) urban                                 based on possible future scenarios.
    search and rescue (USAR) and (b) post-disaster
    damage assessment.                                                           Qualitative analysis of these additional costs and
                                                                                 benefits is conducted through questionnaires, which
3.	 Outline costs and benefits that have not been                                aim to determine whether international training or
    included in the BCR calculation above.                                       experience of previous deployments improved
                                                                                 response to the case study events. The questionnaire
4.	 Evaluate these additional costs/benefits using                               was sent to:

23 Note that the term ‘Knowledge Network’ is used throughout to refer to the training activities shown in Figure 20. This also refers to these activities, even
before the term was formalized in 2019.

Case studies                                                                                                                       Earthquakes            112
1.	 International teams and EUCPT members who                with peers to create synergies in respective work areas,
    deployed to the case study event (Albania) and           and (f) intrinsic value of knowledge networks and
                                                             trainings for people to feel as part of a community of
2.	 National civil protection staff who have received        practitioners and contribute to a greater cause. The
    international training and were in a coordination        advantages of WTP to capture some of these more
    role during the case study event (Croatia).              intangible benefits may also be a disadvantage, given
                                                             that it may be difficult to disentangle the various
3.	 Alternative methods considered.                          benefits and therefore to describe what kind of
                                                             monetary benefits specifically these knowledge
In a theoretical case, we would be able to either            networks would have, for example, in terms of actual
directly compare the effectiveness of interventions of       disaster response. More details on WTP methodologies
international teams in comparable disaster situations        can be found in Annex 4. Although the team was not
before and after a training, and thereby reduced             using a full WTP methodology, it aimed to create
negative impacts or increased benefits, or compare           questionnaires and distributed to relevant teams to
the performance of teams with and without training           pilot possible approaches that could approximate
during the same disaster in geographically separated         WTP methodologies, would collect more qualitative
areas but with similar characteristics. However, as          information on benefits of knowledge networks, and
these theoretical scenarios are not available, we            would collate subjective estimates from expert
instead examine the real emergency responses to the          practitioners on what they would perceive the share of
Albania and Croatia earthquakes to create possible           benefits from knowledge networks and trainings to be
counterfactual scenarios (‘what-if’ analysis) and            in terms of actual disaster response on the ground.
thereby estimate the possible added value of these           More details and results from the pilot surveys can
teams.                                                       be found below as well as information on the
                                                             questionnaires sent is provided in Annex 4.
The first approach is to create logical links between
coordination mechanisms and training, improved                  Æ	 Results of the analysis by Dividends
rescue and coordination or provision of damage                  	 and overall
assessments during a disaster, and lives saved or
reduced losses in productivity, for example. As the          The analysis finds positive net benefits for capacity-
latter have a monetary value, it is then possible overall    building investments related to disaster risk reduction
to estimate monetary benefits from the original              and response. Overall, for both case studies, the
provision of training and coordination mechanisms.           following can be further noticed:
However, this is only possible in the case of disasters
where these logical links can somehow be created (for        •	 Effective coordination of USAR and post-disaster
example, in the case of the quantitative calculation for        damage assessments are significant contributors
Albania outlined below).                                        to lives saved and to saved costs of temporary
                                                                accommodation and GDP-per-capita loss of
Another method often used to estimate more intangible           displaced people, by facilitating a rapid return
investments such as training or upgrading of natural            to work and to medium-term/permanent
spaces is to apply a willingness to pay (WTP) method            accommodation.
to be able to estimate the perceived benefits of the
investment in monetary terms. This method would              •	 Coordination effectiveness is improved through
have the advantage of capturing several benefits of             international training (such as that through the
trainings, including (a) better response capacity of            knowledge network).
teams and individuals during their deployment, (b)
improved ‘peace of mind’ to those displaced by               •	 A BCR greater than 1 has been found, even where
damage assessments providing certainty on damage                there is no deployment of personnel through the
to their homes and businesses, (c) enhanced potential           UCPM, in cases where national resources
earnings or career opportunities, (d) enhanced human            coordinating response have received international
capital and knowledge that they can transmit to others          training.
(positive spillover effects), (e) networking opportunities



Case studies                                                                                     Earthquakes     113
•	 This BCR greater than 1 is found even when making                             accurate evidence-based damage assessments.
   the conservative assumptions to ignore (a) co-
   benefits (dividend 3) of career benefits for                              These results make a quantitative case for DG ECHO’s
   international rescuers, coordinators, and assessors                       investments in capacity building through the
   who have received international training/                                 knowledge network, even in cases where the trained
   deployments and (b) economic impacts (dividend                            personnel are not deployed internationally.
   2) of international finance made available due to


          BENEFITS OF KNOWLEDGE NETWORK INVESTMENTS DURING THE ALBANIA EARTHQUAKE

    Æ	 Description                                                           international assistance is calculated based on data
                                                                             from the November 2019 earthquake, and
During the Albania earthquake in November 2019 in                            observations in the September 2019 Albania
Durres, the EU response to the event included                                Earthquake for which damage assessments were
deployment of an EUCPT, and several modules, other                           conducted without international assistance. These
capacities, and in-kind assistance were deployed both                        observations were made directly by the author of
through UCPM and on a bilateral basis. International                         this section, who was an EUCPT member in both the
assistance facilitated both live rescues and damage                          September and November 2019 events.
assessments. See Annex 4 for further description of
event and international response.                                            Co-benefits (dividend 3) are calculated as improved
                                                                             job prospects for those who have received international
    Æ	 Methodology                                                           training. This also encompasses capacity-building of
                                                                             local assessors, who received training through
Costs of deployment are calculated for the EUCPT,                            knowledge-exchange with international assessors.
modules, and other capacities. Both capacities that                          The benefit is quantified as a small estimated uplift of
are deployed through the mechanism and bilaterally                           final salary at retirement, with an assumed linear
are considered (but only those registered on the                             increase in annual salary from current to final salary.
VOSOCC24 or with the Damage Assessment
Coordination Centre [DACC]). Costs are separated by                          Benefits of USAR are calculated from the number of
those borne by DG ECHO or the sending country.                               lives saved:
Figure 21 ranks the various costs and benefits,
showing that the cost of training outweighs the                              1.	 Direct rescues               by     internationally       trained
costs of deployment, and that modules are a higher                               personnel;
cost than the EUCPT. The total of these costs is less
than the combined benefits of lives saved and reduced                        2.	 Rescues achieved after international coordination
costs of temporary accommodation and production                                  established, established through the USAR
loss for those displaced.                                                        Coordination Cell (UCC).

Benefits of damage assessment are calculated based                           Benefits of post-disaster damage assessment are
on the time saved due to international assistance/                           calculated through a counterfactual analysis (Woo G. ,
training. The approach assumes that people are able                          2019) that is, an estimate of the time taken for
to return to medium-term/permanent accommodation                             assessments to be completed with no international
and work sooner, with faster and more effective                              assistance/training. The bases for these estimations
damage assessments. This time is then associated                             are described in the case studies below. Benefits
with cost savings due to reduced time in temporary                           considered are shown in Figure 21 and Table 47, and
accommodation and the associated reduction in GDP                            these benefits are achieved through both:
per capita. The difference in time with/without




24 VOSOCC = Virtual On-Site Operations and Coordination Centre, part of the Global Disaster Alert and Coordination System (GDACS).



Case studies                                                                                                                 Earthquakes      114
1.	 Direct assessments by international assessors                         Æ	 Results of the analysis by dividends
    and                                                                   	 and overall

2.	 Improvements in the overall damage assessment                     The results of the quantitative analysis (Table 47) show
    coordination system due to international                          that the benefits of saving lives, getting people back to
    assistance (Albania earthquake) or national staff                 work, and providing certainty on the status of damaged
    with international training/deployments (Croatia                  buildings outweigh the costs of training and deploying
    earthquake).                                                      personnel through the UCPM, even without considering
                                                                      private co-benefits for individuals (Dividend 3). For
Data are gathered and summarized for other costs and                  context, the PDNA-estimated losses (not physical
benefits that have not been included in the BCR                       damages) from the event were €141 million (€116
calculation. These are listed in the text beneath                     million for housing and productive sectors).
Table 48.
                                                                      It can be noted that the BCR does not include dividend
                                                                      3, which includes some private benefits for individuals
                                                                      (see description below). If dividend 3 is included, then
                                                                      the BCR rises to 2.7.


Figure 21: Costs and benefits further broken down and ranked for each actor.
Note that costs and benefits are often associated with different actors




Source: World Bank analysis
Note: Costs and benefits are often associated to different actors. DG ECHO = Directorate General for European Civil Protection and
Humanitarian Aid Operations; EUCPT = European Union Civil Protection Team.



Case studies                                                                                                     Earthquakes         115
Table 47: Capacity-building BCA for November 2019 Albania Earthquake

                                                              BCR: 1.9

                                                                      BENEFITS                  COSTS
 Dividend 1 (€, millions)                                                 7.10
 Dividend 2 (€, millions)                                                 3.00
 Dividend 3 (€, millions)                                               6.00
                                  (1.10 within Albania, 4.90 internationally)
 Total (dividends 1 and 2)                                               11.30                       6.0
 Total costs                                                              6.00
 BCR                                                                      1.88
 NPV (€, millions)                                                        5.00
 ERR (%)                                                                 88.33

Source: World Bank analysis; based on external data and information



Table 48: Detailed breakdown of BCA items for case study: November 2019 Albania Earthquake

                                                       COSTS (€, MILLIONS)

 FIRST COST ITEM (€, millions)
 Deployment of modules and EUCPT personnel                                                           2.8
 Second cost item
 Training of modules and EUCPT personnel that deployed to                                            3.2
 Albania
 DIVIDENDS
 DIVIDEND 1 (€, millions)
 Lives saved due to improved emergency response/coordination                                        2.80
 Saved costs of temporary shelter/accommodations                                                    4.30
 Reduced costs of managing national assessors                                                       0.03
 Total first dividend                                                                               7.10
 DIVIDEND 2 (€, millions)
 Reduced loss in productivity or income of those displaced                                          3.00
 Total second dividend                                                                              3.00
 DIVIDEND 3 (€, millions)
 Improved job security and final salary for deployed Albanian                                       1.10
 assessors (capacity building of local engineers)
 (not included in BCR) Improved job security and final salary for                                   1.40
 trained international rescuers
 (not included in BCR) Improved job security and final salary for                                   3.50
 deployed international assessors
 Total second dividend                                                                              3.00
 Total cost                                                                                         6.00



Case studies                                                                          Earthquakes     116
 Total benefits                                                                                                        11.30
 (not including dividend 3 benefits to international individuals)
 BCA                                                                                                                    1.90
 (not including dividend 3 benefits to international individuals)
 NPV (€, millions)                                                                                                     50.00
 ERR (%)                                                                                                               88.33

Source: World Bank analysis; based on external data and information




         BENEFITS OF KNOWLEDGE NETWORK INVESTMENTS DURING THE CROATIA EARTHQUAKE

Many of the assumptions and methods used are as per                   time with/without international training is estimated
the Albania case study and are therefore not repeated                 based on comparison with other events and responses
here for brevity. A brief description of the Croatia                  during interview with the Zagreb damage assessment
Earthquake case-study is provided here.                               leads, many of whom had received international
                                                                      training and experience including
    Æ	 Description of the case study
                                                                      •	 PDNA Training ( DPPI SEE, 2020)
Due to COVID-19 and the smaller size of the Croatia                   •	 MATILDA Structural Assessment Training,
earthquake in March 2020 (no national state of                        •	 Previous deployment to the November 2019
emergency, no USAR undertaken), no EUCPT or                              Albania Earthquake for damage assessment, and
modules were deployed to Zagreb. However, in-kind                     •	 PhD incorporating Damage Assessment in Croatian
and financial assistance was provided, and many of                       (ROSE School, University of Pavia).
those responsible for the national coordination of the
response had received international training (through                 Co-benefits (dividend 3) are calculated as improved
the knowledge network or otherwise). International                    job prospects for those who have received international
training facilitated a successful damage assessment                   training/experience. See the Albania description
programme, which in turn facilitated a faster return to               above for the assumptions/method.
work and to medium-term/permanent accommodation
for those immediately displaced. See Annex 4 for                      Note that the recent earthquake in Croatia is another
further description of the event and international                    example where capacity-building benefits accrued
response.                                                             and it could potentially be assessed using the same
                                                                      methodology but adapting it to a different scenario in
    Æ	 Methodology                                                    terms of assessors, location, and hazard impact.

Costs of training are calculated for Croatia civil                    Co-benefits (dividend 3) are calculated as improved
protection personnel. Only costs borne by DG ECHO                     job-prospects for those that have received inter­
are considered, that is, costs of the activities now part             national training/experience. See Albania description
of the knowledge network (Table 50).                                  above for assumptions/method.

Benefits of damage assessment are calculated based                    Note: The recent earthquake in Croatia is another
on the time saved due to international training. See the              example where capacity building benefits accrued
Albania description above for assumptions/method.                     and it could potentially be assessed using the same
The counterfactual assessment is based on the ‘what-                  methodology, but adapting it to the different scenario
if scenario’ of assessments without the expertise of the              in terms of assessors, location and hazard impact.
Zagreb damage assessment leads. The difference in




Case studies                                                                                             Earthquakes      117
    Æ	 Results of the analysis by dividends                              Results also show that benefits of capacity building
    	 and overall                                                        accrue over several events, as those who led the
                                                                         Zagreb damage assessment had received inter­
The results of the quantitative analysis (Table 49) show                 national training and applied that training to both the
that the costs of training personnel through the UCPM                    Albania earthquake and Croatia earthquake.
are outweighed by the benefits of providing certainty                    Furthermore, the experience of the recent Albania
on the status of damaged buildings (facilitating                         earthquake aided the rapidity of the response for the
getting people back to work and into medium-term/                        damage assessment leads.
permanent accommodation), even when trained
personnel do not deploy internationally.


Table 49: Capacity-Building BCA for March 2020 Croatia Earthquake.
                                                BCR: 1.1

                                                           BENEFITS                             COSTS
 Dividend 1 (€, millions)                                          0.9
 Dividend 2 (€, millions)                                          1.3
 Dividend 3 (€, millions)                                          1.5
 Total benefits (€, millions)                                      3.7                               3.4
 Total costs (€, millions)                                         3.4
 BCR                                                             1.09
 NPV (€, millions)                                                 0.3
 ERR (%)                                                         8.82

Source: World Bank analysis; based on external data and information;
Note that this is a conservative estimate as costs include all civil protection personnel (who contributed to all aspects of the response),
but the benefits are only calculated for the damage assessments.


Table 50: Breakdown of BCA items for the case study: March 2020 Croatia Earthquake

                                                           COSTS (€, MILLIONS)

 FIRST COST ITEM (€, millions)
 Training of national civil protection (civil protection staff and modules)                                                             3.4
 through the knowledge network
 BENEFITS (€, millions)
 DIVIDEND 1
 Saved costs of temporary shelter/accommodations (due to more                                                                           0.8
 effective damage assessment)
 Total first dividend                                                                                                                   0.8
 DIVIDEND 2
 Reduced loss in productivity or income of those displaced (due to                                                                      1.3
 more effective damage assessment)
 Total second dividend                                                                                                                  1.3
 DIVIDEND 3




Case studies                                                                                                          Earthquakes         118
 Improved job security and final salary for deployed Croatian assessors                                                     1.1
 (valuable experience for local engineers)
 Improved job security and final salary for trained CP personnel                                                            0.4
 Total third dividend                                                                                                       1.5
 Total cost (€, millions)                                                                                                   3.4
 Total benefits (€, millions)                                                                                               3.7
 BCA                                                                                                                        1.1
 NPV (€, millions)                                                                                                          0.3
 ERR (%)                                                                                                                  8.82

Source: World Bank analysis; based on external data and information


    Æ	 Challenges faced and lessons learned                              events, without including the added uncertainty
                                                                         of probabilistic calculations for possible events.
Benefits not considered include (not exhaustive) the
following:                                                            •	 Diplomatic and political benefits. International
                                                                         responses fall within a range of diplomatic tools
•	 PDNA supported by damage assessment data. For                         used to boost international standing and relations
   example, in Albania, the joint EU/World Bank/UN                       (besides the prime goal of saving lives and
   PDNA relied on damage data collected through                          livelihoods). The benefits of this would be difficult to
   damage assessment coordinated by the EUCPT                            quantify and have not been considered.
   and UN Disaster Assessment and Coordination
   (UNDAC).                                                           •	 Mental health costs of displacement and ‘peace of
                                                                         mind’ of international assessments/assistance.
•	 International finance made available due to                           This is evident from experience on the ground but
   accurate evidence-based damage assessments.                           difficult to quantify.
   For example, in Albania, the PDNA led to a donor
   conference resulting in €1.15 billion of pledges. In               •	 Inspection of critical infrastructure (bridges,
   Croatia, the RDNA supported the EU’s provision of                     hospitals, and so on). The cost-benefit calculations
   €683.7 million through the EU Solidarity Fund.                        only consider assessment of residential buildings,
   These are omitted in the BCR calculation as it is                     as it is assumed that critical infrastructure would be
   difficult to define which pledges would not have                      prioritized and assessed by local competent
   been made without the internationally supported                       engineers regardless of international assistance.
   damage assessments.
                                                                      Costs not considered include (not exhaustive) the
•	 In-kind assistance. While the monetary value of the                following:
   donated goods may be estimated, the benefits from
   their use would require more detailed data and                     •	 Training personnel who do not deploy
   analysis. This could perhaps be addressed in future                   internationally. Not all persons trained through the
   BCAs, with sufficient data.                                           knowledge network will deploy internationally. The
                                                                         costs of training these additional personnel are not
•	 Benefits accrued over multiple events (national and                   considered, as it is shown in this study through
   international). All costs and benefits are for the                    interview and questionnaires that the skills learned
   specific case study event. Benefits from training                     are also valuable for national deployments (which
   being applied to multiple events (past or possible                    trained personnel are assumed to partake in). This
   future events) have not been considered. This is to                   is demonstrated clearly with the Croatia case study.
   maintain a consistent focus on the known case study




Case studies                                                                                                Earthquakes      119
•	 Staff and overheads outside of the deployed              (and costs) occur regardless of international
   teams. For example, the time and overheads for the       deployment/training.
   Emergency Response Coordination Centre (ERCC),
   EU Delegation, and Copernicus Satellite activation     •	 Costs due to non-EU training. This may include
   are not considered.                                       training from the UN, Disaster Preparedness and
                                                             Prevention Initiative (DPPI), PDNA, International
•	 Costs of module upkeep/salaries (outside of               Federation of Red Cross and Red Crescent
   deployment). These are not considered, as                 Societies (IFRC), and so on. This is omitted as the
   deployed modules fulfill more ‘day-to-day’ functions      focus of this study is on benefits from DG ECHO
   than when they are not deployed. These functions          investments.




Case studies                                                                                Earthquakes     120
3.3. Extreme Heat
3.3.1. SUMMARY OF FINDINGS FOR                                                on the health of European citizens and have saved
       EXTREME HEAT                                                           thousands of lives during the summertime. With EU
                                                                              funding, the Municipality of Cascais, Portugal was able
A significant number of studies have been undertaken                          to transform the Ribeira das Vinhas valley into a natural
to analyse heat risk and its social and economic                              green wind corridor that provides a cool place for local
impacts, yet these analyses were usually conducted                            residents when heatwaves strike. In Bologna, Italy, EU-
with the goal of understanding the effects of climate                         funded satellite data was used in city-planning, with
change. As a result, these studies usually exhibit                            the goal to install 10 green roofs on public buildings
limitations and cannot present the burden of heatwaves                        and create more green spaces in the city centre
entirely (Schmitt, et al., 2016). The Intergovernmental                       (European Union, 2020). In addition, the European
Panel on Climate Change (IPCC) (Murray & Ebi, 2012)                           Copernicus Climate Change Service (C3S)
also pointed out that many existing studies emphasize                         (Copernicus, 2021) have provided information
the impacts on infrastructures and assets in                                  about the temperature and climate in European
comparison to those on human health and the                                   countries as well as useful climate indicator tools that
ecosystem. Also, there were studies on the costs and                          can be accessed by the public, which enhance
benefits of investments in heat risk reduction being                          authorities’ preparedness and response to heatwaves.
conducted across Europe. For instance, an economic
assessment has been undertaken to examine the                                 In this section, we demonstrate benefit-cost
effectiveness of heatwave warning systems (HWWS) in                           assessments for green and white measures25 to
Europe. BCAs were undertaken under several                                    mitigate the UHI effect and heatwave EWS for overall
scenarios that represent long-term climate changes                            heatwave impacts. BCAs for different types of
and weather variabilities, and the result shows positive                      interventions are undertaken with detailed quantitative
outcomes for most of the analyses (Hunt, et al., 2017).                       analysis including modelling, with both prospective
                                                                              and retrospective assessments, and qualitative reviews
The European Union has supported national and local                           of other examples. Table 51 summarizes main data
investments in natural solutions that deal with extreme                       and information sources.
heat, which reduce the negative impacts of heatwaves




25 Green measures here refer to green roofs, whereas white measures refer to highly reflective surfaces such as walls, roofs and streets.



Case studies                                                                                                                Extreme Heat    121
Table 51: Overview of data and information sources for extreme heat analysis

 INVESTMENT         CASE STUDY        DATA SOURCE NAME AND REFERENCE

 UHI effects        Green and         •	 An estimation of the attributable number of deaths according to the methodology
                    white                of Gasparrini and Leone, published in Attributable Risk From Distributed Lag
                    solutions to         Models
                    the UHI effect
                    in Vienna         •	 Urban climate model for Vienna, published in Modelling Reduction of Urban Heat
                                         Load in Vienna by Modifying Surface Properties of Roofs

                                      •	 Daily climate variables obtained from the Central Institutions of Meteorology and
                                         Geodynamics, Vienna Austria

                                      •	 Daily air pollution obtained from the Environment Agency Austria

                                      •	 Daily mortality obtained from Statistik Austria

                                      •	 Reduction in labour productivity estimated with the approach used in Costs of
                                         Climate Change: The Effects of Rising Temperatures on Health and Productivity in
                                         Germany

                                      •	 Heating and cooling savings estimated according to Green Roof Valuation: a
                                         Probabilistic Economic Analysis of Environmental Benefits
                                      •	 World Bank’s Guidance Note on Shadow Price of Carbon in Economic Analysis
 Heat early         HEWS for          •	 Reduction of heat-related morbidity based on estimations performed by Dé
 warning            reducing             Donato et al. in the article Changes in the Effect of Heat on Mortality in the Last
 system(s)          health               20 Years in Nine European Cities: Results from the PHASE Project
 (HEWS)             impacts of
                    heat in Paris     •	 Reduction in heat-attributable deaths based on assumptions from ‘Climate and
                                         Weather Service Provision: Economic Appraisal of Adaptation to Health Impacts
                                         and Valuing Deaths or Years of Life Lost? Economic Benefits of Avoided Mortality
                                         from Early Heat Warning Systems’

                                      •	 Information on cost of HEWS obtained from the National Observatory for the
                                         Impacts of Global Warming (Observatoire National sur les Effets du
                                         Réchauffement Climatique, ONERC) report ‘Climate Change: Costs of Impacts
                                         and Lines of Adaptation’

Source: World Bank analysis; based on external data and information


Models need to be adapted to the type of investment                   attributable mortality is made.
analysed. To estimate the impacts of extreme heat,
epidemiological models are used to determine the                      Although significant research has been put into the
temperature-mortality and temperature-morbidity                       understanding of the health-related impacts of
relationships, which indicates the vulnerability of the               extreme heat, it is also important to consider costs and
population. Adequate data on hospital admissions are                  benefits, as citywide implementation efforts can incur
often not available, and linear approximations are                    significant sums. BCRs of HEWS tend to be high even if
made from the temperature-mortality response. For                     using a VOLY or a VSL approach. Recent studies from
UHI effects, urban climate modelling is incorporated                  academic literature indicate BCRs to range between
to estimate reductions in extreme heat (for example,                  23 (London) to 1,375 (Madrid) (Hunt, et al., 2017)
the number of hot days) given a scenario of green or                  depending on the climate of the city, effects of climate
white solutions implementation, which is then                         change, socio-demographic change, and how reduced
combined with spatially explicit population data to                   mortality is valued (that is, premature versus displaced
estimate the exposure of the population to these                      deaths) (Chiabai, et al., 2018). For mitigating the
extreme temperature reductions. For the HEWS, a                       UHI effect, complete cost-benefit analyses of
comparison of the temperature-mortality relationship                  citywide application of green and white solutions
before and after the implementation is assessed,                      are still lacking in the literature, with only one study
and an approximation of the reduction in heat-                        finding BCRs of combined green and white solutions

Case studies                                                                                             Extreme Heat          122
to range between 1.3 and 2.7 for small and medium-                    Figure 22 presents boxplots that display the
size cities in Austria (Johnson, et al., 2020).                       distribution of BCRs for different types of investments
                                                                      in extreme heat based on a five-number summary:
Results of the analysis are generally showcasing net                  minimum (shown in orange), first quartile, median
benefits of interventions. This is consistent with                    (shown in red), third quartile, and maximum (shown in
findings in the literature for heatwaves prevention,                  orange). The outliers are shown as dots. Extreme
although it has to be noted that the case studies                     values are excluded from the top graph and included
considered are also different in terms of scales of                   in the bottom one.
investments. More details are included in Figure 22,
Figure 23 and Figure 24.


Figure 22: Findings of benefit-cost analysis for extreme heat (B/C ratios)




Source: World Bank analysis; based on external data and information




Figure 23 below presents boxplots that display the                    number summary: minimum (shown in orange), first
distribution of NPVs (in millions of EUR) for different               quartile, median (shown in red), third quartile,
types of investments in extreme heat based on a five                  maximum (shown in orange).




Case studies                                                                                            Extreme Heat     123
Figure 23: Findings of benefit-cost analysis for extreme heat (NPVs)




Source: World Bank analysis; based on external data and information



Figure 24 below presents boxplots that display the                    (shown in red), third quartile, and maximum (shown in
distribution of ERRs for different types of investments               orange). Extreme values are excluded from the top
in extreme heat based on a five number summary:                       graph and included in the bottom one.
minimum (shown in orange), first quartile, median


Figure 24: Findings of BCA for extreme heat (ERRs)




Source: World Bank analysis; based on external data and information



Case studies                                                                                           Extreme Heat    124
The UHI effect is a result of a high coverage of              consistent with findings in the literature. This is
impermeable surfaces, a lack of vegetation, and dense         despite the fact that adapted methodologies and
concentration of structures that absorb and re-emit           conservative assumptions were used to assess this
the sun’s heat slower than natural landscapes such as         type of disaster (such as using VOLY instead of VSL.
forests (Oke, 1982). The UHI effect can have                  This type of research could be improved by having
detrimental consequences for urban populations such           more detailed hospital data to empirically assess
as increased heat-related mortality (Dang, et al., 2018)      the temperature-morbidity relationship and surveys
Several EU initiatives such as LifeMedGreenRoof               on behavioural changes due to the HEWS to
(EU+Life) and the Urban GreenUP Project                       understand third dividend benefits better. As
(Horizon 2020) have promoted the R&D of solutions             outlined above, a general intellectual discussion of
to the UHI effect. Mitigating the impacts of UHI              the high BCRs found when assessing EWS could
includes solutions such as the greening of roofs (green       improve the understanding of whether impacts of
solutions), to increase vegetation and modifying              other complementary investments are captured to
buildings to have higher reflectivity of sealed surfaces      ensure how these synergies can be enhanced.
(white solutions) or enhance the coverage of water for        Moreover, it has to be noted that the scale of analysis
cooling effects (blue solutions). It is important to          is different from other case studies presented in this
consider costs and benefits, as citywide implementation       report as national-scale programmes.
efforts can incur significant sums. Other solutions
however can be implemented that are more integrated         3.3.2. UHI EFFECTS
in other interventions and can therefore yield
substantial co-benefits, such as the EU co-funded           GENERAL INTRODUCTION TO MEASURES TO
Life+ Programme (LIFE, 2020).                               MITIGATE UHI EFFECTS

•	 Case study 15 (new analysis under this project, ex       Cities are increasingly affected by increasing
   ante (Schwaiger, et al., 2015)): The analysis of         temperatures due to climate change as well as the UHI
   hypothetical citywide interventions in Vienna to         effect in which urban temperatures are higher than
   dampen UHI effects such as green roofs and               surrounding areas (Oke, 1973). The UHI effect can
   reflective surfaces yielded BCRs higher than 1 for       have detrimental consequences for urban populations
   green solutions (depending on intervention choice:       such as increased heat-related mortality (Dang, et al.,
   BCR 1.78–1.79, NPV €1.6–3.2 billion, and ERR             2018). Two examples of mitigating the impacts of UHI
   78–79 percent) but no net benefits for combined          are the greening of roofs (green solutions) to increase
   green-white interventions with smaller coverage of       vegetation and modifying buildings to have higher
   green roofs (BCR 0.82, NPV −€2 billion, ERR −18.49       reflectivity of sealed surfaces (white solutions) (World
   percent) or small BCR for green roofs with white         Bank, 2020a).
   solutions (BCR 1.03, NPV €300 million, ERR 2.90
   percent). This can be explained by the relatively        Several EU initiatives have promoted the R&D of
   higher cost of white solution and environmental co-      solutions to the UHI effect. The EU Life+ funded project
   benefits of green solutions, although it has to be       LifeMedGreenRoof investigated the properties and
   considered that this is specific to the case of Vienna   feasibility of green roofs for Malta and Italy and
   (costs may be more affordable in lower-income            supported the development of guidelines for improved
   cities, for example). The analysis could be improved     uptake of green roofs in reduce energy consumption
   by considering a spatial disaggregation of the age       due to the UHI effect. The URBAN GreenUP project,
   composition and considering targeted placement           funded through the EU Horizon 2020 program, is an
   of measures rather than overall cover, likely to         ongoing project aiming to increase the understanding
   reduce in higher BCRs.                                   and awareness of the benefits of NBS for urban areas
                                                            with a focus on the mitigation of UHI. Moreover, the
•	 Case study 16 (new analysis under this project, ex       EEA has highlighted the development of numerous
   post (Rey, et al., 2007)): The analysis of a national    research projects that showcase the UHI mitigating
   program implementing a heatwave EWS (HEWS) in            potential of green and white solutions (EEA, 2020b).
   France after 2003 has yielded high net benefits          Numerous initiatives have also supported the climate
   (BCR 130.67, NPV €1.87 billion, and ERR 12,966.7         proofing of social housing such as in the United
   percent) and a thorough sensitivity analysis has         Kingdom (see Box 8 below).
   shown that the lowest BCR would be 48, which is

Case studies                                                                                   Extreme Heat      125
  Box 8: Climate-proofing social housing

Climate change is expected to cause more extreme weather         founded the Climate Proofing Social Housing Landscapes
events across Europe, such as winter flooding and summer         project (LIFE, 2020), which had a total budget of
heatwaves, and the impacts of these events will be               €1,615,636, to demonstrate water-sensitive urban design
particularly exacerbated in urban areas, as high soil sealings   measures and other climate adaptive actions can transform
and drainage systems are already at or near capacity. This       urban housing estates into a vital entity for acclimatizing
means that metropolitans are susceptible to increased            cities to climate change. This project implemented a
threat of surface water flooding. Not to mention, the mass of    package of climate change adaptation measures in three
construction material and reduction in vegetated surfaces        social housing estates in the West London borough of
in urban areas signify a higher risk of overheating in the       Hammersmith & Fulham. This mix of SuDS, rain gardens,
summertime.                                                      and drought resilient planting and micro green roofs
                                                                 supported by rainwater harvesting tackled the whole
It is important to specifically target climate adaptation        housing management cycle while providing effective and
interventions towards social housing because these               affordable low-technology solutions for social housing
residents are typically more vulnerable to the effects of        estates to meet heightened environmental and economic
climate change and are the least likely to afford necessary      targets. For example, the University of East London
measures that could help them mitigate this risk. Existing       monitored the effectiveness of these solutions using
housing structures are not designed to withstand future          technical software and found that green roofs absorbed 89
climate scenarios; therefore, it is important to maximize the    percent of rainfall and diverted 100 percent of rainfall from
limited outdoor space and adopt climate adaptation               storm drain systems. As a result, these climate change
solutions that minimize the local effects of urban               adaptation measures implemented during this project
development. Green and white solutions can be low-cost           demonstrated that these strategies have the ability to
and low-technology solutions that enable cities to achieve       reduce water run-off and local flooding, improve water
their environmental and economic goals.                          quality, and help mitigate the UHI effect to create wildlife
                                                                 habitats and improve biodiversity, despite limited resources.
Between 2013 and 2016, the EU Life+ Programme co-


Although significant research has been put into the              Belgium, and just over 3.3 for green facades in Italy
understanding of the UHI mitigating effects of green             (EEA, 2020b) . However, less is known about the costs
and white solutions, it is also important to consider            and benefits of citywide adaption to the UHI effect,
costs and benefits, as citywide implementation efforts           with only one study on small and medium-size cities in
can incur significant sums. To address these concerns,           Austria finding BCRs to range between 1.3 and 2.7 for
the EU Horizon 2020-funded Climate Resilient Cities              combined white and green solutions (Johnson et al.
and Infrastructures (RESIN) project created tools to             2020). Although some studies estimate the health
support the development and implementation of                    benefits of UHI mitigation strategies (Chen et al. 2014),
various strategies in addressing multiple urban risks.           and some even quantify the benefits monetarily (Mills
This effort led to the creation of an adaptation option          & Kalkstein, 2012), complete BCAs of such strategies
library, which identifies several BCA cases and                  are lacking. Therefore, the current case study analyses
scientific papers that address heatwaves. The BCRs               the costs and benefits of green and white solutions to
for green roofs may be as high as 2.4, for example, in           mitigating UHI effects.


        GREEN AND WHITE SOLUTIONS TO THE UHI EFFECT– VIENNA, AUSTRIA

 This case study is a new ex ante / hypothetical                 solutions) helps decrease the UHI impacts, such as
 analysis under this project that involved modelling             increased mortality, morbidity, and labour productivity
 of hazards.                                                     loss (EEA, 2020b) . By converting typically dark and
                                                                 heat-absorbing surfaces (that is, roofs, streets, and
    Æ	 Introduction and background                               facades) to highly reflective surfaces, more of the solar
                                                                 radiation is transmitted back into the atmosphere due
Creating and/or expanding urban green infrastructure             to higher albedo factors. Implementing green
(green solutions), such as green roofs, as well as               infrastructure in planning against UHIs not only
implementing highly reflective surfaces (white                   addresses the first dividend but also provides for

Case studies                                                                                           Extreme Heat      126
numerous other economic and environmental benefits           165 of 95 percent confidence intervals). The
that are addressed through the second and third              temperature-mortality relationship is then combined
dividends of the triple dividend of resilience approach.     with results from an existing urban climate model for
                                                             the case study site of Vienna, Austria.
    Æ	 Description
                                                             The results of the urban climate model indicate the
In 2018, the Vienna Environmental Protection                 spatially explicit distribution of the current average
Department released the ‘Urban Heat Island                   number of hot days in the city. Furthermore, several
Strategy - City of Vienna’ to implement a strategy for       scenarios of the implementation of green solutions
reducing the UHI effect to minimize health and               and white solutions demonstrate the reduction of the
other impacts. Protecting and increasing the                 number of hot days. Two scenarios indicate the
implementation of green infrastructure is one of the         changes in the urban climate for a 50 percent green
core aims of the strategy as well as increasing the          roof implementation of all technically feasible roofs
albedo of surfaces such as roofs, facades, and               in Vienna as well as a 100 percent implementation.
streets. The framework lays the foundation for               Two further scenarios include the 50 percent and
consideration of UHI mitigating measures that can            100 percent implementation of green roofs while
be incorporated in the planning of urban areas.              converting the remaining potential roof areas to
Currently, of the total amount of roof space (5,184          highly reflective roofing materials and converting
ha), Vienna has green roofs on only 2 percent (104           potential wall and street space to highly reflective
ha), although the potential for implementing green           materials. The analysis further incorporates the
roofs is estimated at 45 percent of the total roof space     exposure of the population to the heat hazard with a
(Schwaiger, et al., 2015). Moreover, most roofs,             map of the population distribution across the city and
streets, and facades do not currently exhibit high solar     considers the application of these strategies.
reflectance. The strategy also maintains the
importance of financial incentives to improve the            To estimate the societal value of reducing mortality
uptake of green roofs. For example, the city of Vienna       risk, we employ the VOLY approach, as extreme heat
supports investments in green roofs with €8–25 per           tends to disproportionately affect older individuals,
m2 of the roof. Given the financial and policy-relevant      and valuing complete statistical lives would likely
aspects of the Vienna strategy, we have chosen this          overestimate the economic impact of this hazard
as the case study of interest for an appraisal analysis      (Chiabai, et al., 2018). We estimate the VOLY
for addressing UHI risks.                                    according to a €7,286,000 value of a statistical life
                                                             (VSL) for Austria (Viscusi & Masterman, 2017) and an
    Æ	 Methodology and results of the analysis by 	          average life expectancy of 80.7 years (Statistik Austria,
    	 dividends and overall                                  2020).

Detailed descriptions of the methodology, analysis,          Due to a lack of available hospitalization data at the
and calculations can be found in Annex 4.                    proper scale, we estimate the heat-attributable
                                                             morbidity by linear approximating from the number of
Dividend 1: Health-related impacts of extreme heat           heat-related mortality counts saved by the
                                                             implementation scenarios. Donaldson et al. (2001)
To understand the effects on the first dividend tier, this   demonstrated a significant relationship between the
case study models the impact of temperature on               number of heat-related deaths and heat-related
human mortality. Mortality counts are regressed with         hospital admissions. In line with Hunt et al. (2017) , we
daily maximum temperature to understand the relative         assume 102 patient days avoided per reduced heat-
risk of temperature on mortality and estimate the            related death. We use the average daily cost of hospital
number of heat-attributable deaths on hot days (days         stays (2008–2017) for the city of Vienna to estimate
with a maximum temperature greater than 30°C) - the          the value of reduced hospital admissions.
baseline scenario approach for this case study. With         Furthermore, the avoided time spent in the hospital is
this approach, we calculated an annual number of             also valued by taking the VOLY as an estimate of the
heat attributable deaths above a daily maximum               quality of a life year and reducing this down to 75
temperature of 30°C to be 106 deaths (ranging 39–            percent (Karlsson & Ziebarth, 2018).



Case studies                                                                                    Extreme Heat      127
Dividend 2: Property values and building longevity            surfaces and value this change according to a
                                                              stormwater charge for sealed surfaces.
Green infrastructure, such as green roofs, offers
numerous additional benefits besides the reduction of         Heating savings from the second dividend also incur
the UHI effect that can be economically valued.               saved pollution and carbon dioxide as negative
The benefits either fall under the second or third            externalities that society bears as a third dividend
dividend. Green roofs have been cited to increase             benefit. Therefore, we value the reduction of this
property values in a range of 2–5 percent (Bianchini &        externality to society at the EU-wide rate of €12/MWh
Hewage, 2012; Perini & Rosasco, 2016). Assuming a             for reduced heating with combined heat and power
3 percent increase in the average property values of          with natural gas (Alberici, et al., 2014).
several sizes in Vienna (PWIB Wohnungs-Infobörse
GmbH, 2020), we take a conservative approach in               Furthermore, green roofs provide habitats in urban
this valuation.                                               areas for organisms, which was otherwise nonexistent
                                                              (Currie & Bass, 2010). Since the quality of the green
For the second dividend, we also assess the                   roof is only a fraction of a completely natural space, we
improvement of the building longevity with the                value the improvement to urban habitats with 15
installation of green roofs. Green roofs extend the           percent of the cost (Bianchini & Hewage, 2012) for
working life of a roof to an average of 50 years (Clark, et   restoring land (MacMullan, et al., 2009). Lastly, green
al., 2008). Taking the average cost of major repairs and      roofs support urban areas in pollution mitigation and
maintenance that would typically accrue in the 25th           carbon dioxide sequestration. We take removal rates
year of a conventional roof, we value the building            of pollutants, including nitrous oxide, ozone, sulphur
longevity improvements of installing green roofs as a         dioxide, and particulate matter (Yang, et al., 2008),
saved replacement cost.                                       and carbon sequestration rates of green roofs
                                                              (Getter, et al., 2009) to estimate the reduction of these
Dividend 3: Economic and environmental co-benefits            negative externalities to society. The valuations
                                                              incorporate the average of the high and low shadow
Several economic and environmental benefits are               prices of carbon (World Bank, 2017b), which are
assessed for green infrastructure under the third             increasing into the future, as well as the shadow prices
dividend. Energy efficiency improvements are valued           of the air pollutants according to EU-wide damage
given the additional insulating layer of green roofs          costs (Holland, et al., 2014).
(Berardi, et al., 2014). We compare the differences in
the thermal properties of green and conventional roofs           Æ	 Costs of green and white solutions
according to Clark, et al. (2008) to estimate heating
and cooling savings.                                          For the cost estimates of green roof, we used the
                                                              median estimates of retrofitting roofs from a large
Extreme heat can have significant impacts on both             sample of actual costs from the literature (Strehl &
indoor and outdoor labour productivity in Europe,             Offermann, 2017). We also take the estimates of
leading to large economic losses (Naumann, et al.,            Bretz, et al. (1998) for high albedo measures on roofs,
2020). Given time and data constraints, we employ the         streets, and facades. These are meant to be guiding
approach of Hübler, et al. (2018) to estimate the             values of the installation and operation and
reductions in labour productivity loss with scenarios of      maintenance costs.
implementation that would otherwise occur on hot
days, assuming an average reduced worker productivity            Æ	 Results of the analysis by Dividends
loss of 7 percent (Vöhringer, et al., 2017).                     	 and overall

Green infrastructure, such as green roofs, offers             Overall, the analysis finds positive net benefits for
numerous environmental benefits alongside the                 three types of interventions but not for the
abovementioned economic benefits. Green roofs                 intervention with smaller green roof coverage and
improve stormwater management in urban areas by               white solutions (see Table 52). This could be
reducing the amount of stormwater run-off being               explained by the relatively high cost of white
conveyed in municipal sewer systems. We assume a              solutions and the higher co-benefits of green roofs in
50 percent decrease in the run-off from greened roof          terms of environmental benefits, for example.

Case studies                                                                                     Extreme Heat      128
Table 52: Costs and benefits of green and white solutions to reduce UHI effect (in hundred millions €)

                                                                                                     GREEN ROOFS
                                   GREEN ROOFS             GREEN ROOFS           GREEN ROOFS (50%)
                                                                                                     (100%) + WHITE
                                   (50%)                   (100%)                + WHITE SOLUTIONS
                                                                                                     SOLUTIONS

 FIRST DIVIDEND (€)
 Reduced heat-related
                                                   4.25                   8.65              39.76                   40.84
 mortality
 Reduced heat-related
                                                     0.1                   0.2                0.91                    0.93
 hospitalizations
 Reduced time spent in the
                                                   0.04                   0.09                 0.4                    0.41
 hospital
 Total first dividend                              4.39                   8.93              41.08                   42.18
 SECOND DIVIDEND
 Increase in property values                      16.12                  32.25              16.12                   32.25
 Total second dividend                            16.12                  32.25              16.12                   32.25
 THIRD DIVIDEND (€)
 Economic co-benefits
 Improved energy efficiency
 (savings on heating and                           4.92                   9.84                4.92                    9.84
 cooling)
 Reduced labour
                                                   2.39                   3.88              10.46                   10.76
 productivity loss
 Building longevity increase                         4.3                  8.59                 4.3                    8.59
 Environmental co-benefits
 Stormwater runoff
                                                   2.52                   5.04                2.52                    5.04
 reduction
 Reduced externalities of
                                                   0.51                   1.03                0.51                    1.03
 energy production
 Habitat creation                                    1.3                   2.6                 1.3                     2.6
 Air quality improvements                            0.4                  0.79                 0.4                    0.79
 Carbon sequestration                              0.18                   0.36                0.18                    0.36
 Total third dividend                             16.52                  32.15              24.59                   39.02
 TOTAL DIVIDEND                                   37.04                  73.33              81.79               113.45
 Total cost                                       20.64                  41.29             100.34               110.25
 BCR                                               1.79                   1.78                0.82                    1.03
 NPV (€)                                           16.4                  32.04              -18.55                    3.19
 ERR (%)                                          79.43                  77.61              -18.49                    2.90

Source: World Bank analysis; based on external data and information




Case studies                                                                                         Extreme Heat       129
    Æ	 Challenges faced and lessons learned               of heat-related mortality show rising rates in many
                                                          cities across the globe (Gasparrini, et al., 2017).
Future studies should disaggregate benefits of reduced
productivity loss according to the sector of the          The PESETA IV project of the JRC of the European
economy. A spatially explicit representation of the age   Commission alluded to high benefits in terms of
composition of the population across cities could         reduced mortality, morbidity, and productivity loss if
further improve the accuracy of the benefit estimations   HEWS were implemented for EU regions (Paci, 2014).
of reduced mortality.                                     Furthermore, a study under the EC-funded EUPORIAS
                                                          project found that improving current warning systems
Including white solutions into the scenarios greatly      with better forecasts can further improve the heat-
increases the costs and results in lower BCRs than the    related mortality (Lowe, et al., 2016). Current EU-
green solutions on their own. However, it should be       funded work is under way to implement a Europe-wide
maintained that the scenarios assumed complete            heat-warning system that addresses workers and
application of technically feasible areas across the      productivity loss and is researched under the EU
city. However, it may not be necessary to obtain such a   Horizon 2020 HEAT-SHIELD project (Casanueva, et
level of application across the city, and a strategic     al., 2019). Moreover, these systems can complement
placement of measures could improve the balance           other efforts in mainstreaming the use of NBS. For
between the costs and benefits.                           example, to achieve the goals set in France’s second
                                                          national climate adaptation plan and future plans, the
3.3.3. HEAT EARLY WARNING SYSTEMS                         €16.6 million Life IP Artisan project (Coreau, 2020)
                                                          (with an EU contribution of €10 million) attempts to
GENERAL INTRODUCTION TO BENEFITS OF                       increase the country’s resilience to climate change.
EARLY WARNING FOR HEATWAVES                               Its main objective is to generalize the implementation
                                                          of NBS and good practices to the extent possible by
Extreme heat can have detrimental impacts on human        2030, which creates a good framework for the
health and well-being. The 2003 heatwave that swept       emergence of local projects that emphasize climate
across Europe was estimated to have claimed the           adaptation and the ecosystem.
lives of around 30,000 people (UNEP, 2004). In just
one hospital in Paris, 2,400 additional emergency         Several BCAs have demonstrated that the benefits of
care visits and 1,900 excess hospital emissions were      such systems strongly outweigh the costs. Ebi et al.
recorded during the heatwave (Åström, et al., 2013),      (2004) estimated net benefits of €417 million
and the number of excess deaths that occurred due to      (US$468 million) for 1995–1998 for the HEWS in
the 2003 heatwave in France is estimated at 14,800        Philadelphia. Hunt et al. (2017) also showed positive
(Bouchama, 2004). Given that numerous heatwaves           results with BCRs of median scenarios of climate
in the past have led to considerable excess mortality     change greater than 1 and ranging from 23 for London
in France (Rey, et al., 2007), there is significant       to 1,375 for Madrid. In a study by Chiabai, Spadaro,
concern for the human health-related impacts of           and Neumann (2018), BCRs ranged from 42 to 1,350
extreme heat. These concerns are further                  for the HEWS of Madrid, depending on whether the
compounded when considering the future impact of          VSL or VOLY was used and whether displaced versus
climate change on temperatures and how projections        premature deaths were considered.




Case studies                                                                               Extreme Heat     130
        HEWS FOR REDUCING HEALTH IMPACTS OF HEAT IN PARIS, FRANCE

 This case study is a new ex-post analysis under            this HEWS has been studied for its effectiveness, we
 this project that involved modelling of hazards.           have chosen this HEWS as the case study because no
                                                            BCA has been performed for it thus far.
    Æ	 Introduction and background
                                                               Æ	 Methodology and results of the analysis by 	
HEWS can provide important health benefits in terms            	 dividends and overall
of avoided heat-related mortality and morbidity. It
supports emergency managers and countries to                To assess the reduction in heat-related mortality and
implement preparedness measures like cooling                morbidity through the implementation of the HEWS,
stations and targeted messaging as well as informing        we rely on empirical modelling carried out in academic
energy providers ahead of time of increased cooling         health literature. This method has been proposed due
load demand.                                                to time and data constraints, especially given the
                                                            extensive data needs to quantify the heat-related
    Æ	 Description                                          mortality before and after the initiation of the HEWS.
                                                            We take a city-level approach for calculating the costs
Due to the high societal losses in the 2003 heatwave,       and benefits, as the heat-related mortality relationships
France put forward a plan to help prevent further high      are usually quantified in such a manner.
excess mortality during heatwaves. The core of the
plan was the implementation of HEWS to alert                The approach of this analysis is to estimate baseline
vulnerable groups of the ensuing high temperatures to       costs and benefits of the HEWS and to perpetuate
have better preparedness. Studies have shown positive       these into the following 50 years. Climate change and
effects of HEWS in reducing heat-related mortality          demographic change are not considered in this
(Bassil & Cole, 2010). Given indications that the HEWS      analysis. However, given the strongly positive results of
of France has improved the heat-mortality responses         the analysis, it can be assumed that the BCRs that are
to extreme heat (Fouillet, et al., 2008), this case study   greater than 1 will not worsen over time due to these
analyses the costs and benefits of the system.              factors. With the progression of climate change on the
                                                            one hand, the costs of the system will increase since
The French HEWS was implemented following the               the system is triggered more often (ECONADAPT,
disastrous 2003 heatwave that resulted in tens of           2015). On the other hand, the benefits will also
thousands of deaths. The aim was to provide a system        greatly increase as more vulnerable portions of the
of alerting authorities of ensuing extreme heat events      populations are increasingly addressed to prevent
to set up preventive measures that address                  health consequences, which was demonstrated in the
vulnerable groups. The system is based on threshold         analysis by Hunt et al. (2017). Furthermore, given
temperatures that lead to an excess of mortality            demographic changes trending towards increased
when reached and is active between June 1 and               portions of the vulnerable population in older age
August 31. If the three-day averaged minimum and            groups, these groups would also be addressed by the
maximum forecasted temperatures are likely to reach         HEWS, which would further increase the benefits.
predefined thresholds, warnings are issued, and             Therefore, the changes arising in socio-climatic
information is disseminated to the media and general        scenarios can generally be negligible since both the
population. If high levels of the system are activated,     benefits and costs are proportional to the number of
specific advice is provided to vulnerable groups (for       extreme heat events (Chiabai, et al., 2018).
example, schools, hospitals, and businesses). Although




Case studies                                                                                   Extreme Heat      131
Dividend 1: Valuing reduced health-related impacts            deaths saved, we differentiate between the 0–74 age
of extreme heat                                               group and the 75+ years age group, given that 80
                                                              percent of the heatwave deaths in the 2003 heatwave
Heat-related mortality is modelled by means of a              occurred in this age group (EEA, 2004). We value the
distributed lag nonlinear model that includes the             saved years of life in the 75+ age group by subtracting
lagged effects of heat on mortality. With this modelling      from the life expectancy and multiplying in by the
procedure, the main effects of heat on mortality are          VOLY, whereas the average age is used for the 0–74
captured, and the additional effect of a heatwave may         age group.
only be insignificant (Gasparrini & Armstrong, 2011).
Fouillet et al. (2008) already indicated the significant      Empirical evidence suggests that the number of
positive effect of the HEWS on the temperature-               hospital admissions rises with extreme heat. Using
mortality relationship of France with a modelling             hospital climate data from 1991 to 1995, Michelozzi et
procedure using projections of the number of expected         al. (2009) demonstrated that daily hospital admissions
deaths that would have occurred in the 2006 heatwave          rose by 1.3 percent on days with a maximum apparent
given the number of deaths in the 2003 heatwave.              temperature above 27.8°C. To value the reduced heat-
Their analysis predicted a much higher expected               related morbidity, we take a linear approximation of
number of deaths for the 2006 heatwave than what              the number of hospitalizations given the number of
did occur with a resulting 4,400 deaths saved.                reduced heat-related deaths. We assume 102 patient
However, we rely on the estimations performed by Dé           days per heat-related death as found by Donaldson et
Donato et al. (2015) since their analysis empirically         al. (2001) and a central cost value of €750 per patient
estimates the heat-related mortality for several years        days in line with the analysis by Hunt et al. (2017).
before and after the implementation of the HEWS. Dé           Given that prevented hospitalizations results in less
Donato et al. (2015) regressed daily all-cause mortality      time spent in the hospital, we further adopt the
with daily mean temperature while controlling for             approach in Karlsson and Ziebarth (2018) to value the
potential confounders, such as air pollution, relative        prevented time spent in the hospital. A 25 percent
humidity, barometric pressure, and wind speed, to             fraction of the quality of a life year for France (Téhard,
estimate the heat-related risk and attributable deaths.       et al., 2020) is estimated while scaling down to the
Their analysis concluded a significantly reduced              number of saved patient days.
relative risk of extreme heat following the
implementation of the HEWS by comparing the relative          The former benefits all address the first dividend of
risks between 1997–2002 and 2004–2009.                        the Triple Dividend Framework of resilience. This
                                                              analysis demonstrates the significant societal value
The number of heat-attributable deaths was reduced            provided by valuing the impacts of this dividend,
by 787 over the six-year period. For the current              although some qualitative impacts in the other
analysis, we take this figure and divide by the six years     dividends are also deemed noteworthy. HEWS are
to arrive at an assumed annual reduced heat-related           increasingly important to improve the awareness of
mortality. Given the possibility that many other factors      the population of the health-related impacts of extreme
might have reduced the relative risk to heat, we assume       heat, and the implementation of such systems can be
an effectiveness of the HEWS of 38 percent considering        of great value to the policy and planning to ensure the
the assumptions of Hunt et al. (2017). Furthermore,           safety of workers (Kjellstrom, et al., 2019).
we rely on some assumptions of the analysis by
Chiabai, Spadaro, and Neumann (2018) in that a                Dividend 3: improved awareness and preparation for
portion of the deaths may have been displaced deaths          the workforce
as opposed to premature deaths. Premature deaths
would entail a loss of life at some period in the otherwise   The effectiveness of the HEWS relies on the be­
healthy individual, whereas a displaced death relies on       havioural changes adapted by the population. Given
the harvesting hypothesis that the death occurred for         the apparent effectiveness of the system in moderating
an individual who would have otherwise passed away            the temperature-mortality relationship at the extreme
in a short time afterwards (Hajat, et al., 2005). For the     heat end, it appears that behavioural adaptations are
baseline scenario, we assume that 35 percent of the           happening at some scale within the population.
heat-related deaths are displaced deaths, which are           Moreover, this study has only quantitatively considered
valued at 16 days of the VOLY. For the remaining              impacts to the population in terms of mortality and

Case studies                                                                                      Extreme Heat      132
morbidity, which excludes the benefits accruing to the                can help prevent extended health consequences in
population arising from general pressures of extreme                  the workforce by providing timely warnings of extreme
temperatures and the decrease of personal comfort. A                  heat events. Therefore, we have addressed these
study in Arizona concerning the awareness and                         under the social co-benefits of the third dividend.
perceived risk of heat given the introduction of HEWS
showed that although not all surveyed individuals 65                  The costs of EWS are generally low compared to other
years and older adjusted their behaviour during alert                 forms of adaptation. The estimated cost of the initial
events, almost 50 percent of all respondents actually                 implementation considering preparations was
altered their behaviour having been aware of the alerts               €286,933, and the estimated operational cost from
(Kalkstein & Sheridan, 2007). Such behavioural                        June 1 to the end of August was €454,006 (ONERC,
changes as a result of HEWS likely provided some                      2009). These costs are similar to the ranges seen for
benefits in improved thermal comfort for individuals,                 other systems in London, Madrid, and Prague (Hunt, et
and these benefits were not captured quantitively in                  al., 2017).
this analysis. Furthermore, heat-related worker
productivity loss is an increasing concern given climate                 Æ	 Results of the analysis by dividends
change-related temperature increases. However, the                       	 and overall
introduction of HEWS sets the stage for future warning
systems that also specifically address the health of the              The BCR is high for this type of intervention, which is
workforce, such as the current work in the HEAT-                      likely due to the high share of benefits from lives saved,
SHIELD project on a European-wide occupational                        even though this study has used the VOLY approach
warning system (Morabito, et al., 2019). Given these                  and assumed 35 percent of the deaths were displaced
concerns, it can be assumed that HEWS as in France                    deaths rather than premature deaths (see Table 53).


Table 53: BCR for HEWS by dividends

                                                               HEWS

 FIRST DIVIDEND 1 (€)
 Reduced heat-related mortality                                                                                          €1.8 B
 Reduced heat-related hospitalizations                                                                                €63.8 M
 Reduced time spent in the hospital                                                                                   €25.7 M
 Total first dividend                                                                                                    €1.9 B
 THIRD DIVIDEND 3 (€)
 Economic co-benefits
 Improved productivity of outdoor labourers through knowledge of heat-related
                                                                                                                  (qualitative)
 health effects
 Social co-benefits
 Improved awareness of heat-related health effects and potential for individual
                                                                                                                  (qualitative)
 adaptation to increase heat stress
 TOTAL DIVIDEND                                                                                                          €1.9 B
 Total cost                                                                                                         €14.45 M
 BCR                                                                                                                   130.67
 NPV (€)                                                                                                                 €1.9 B
 ERR (%)                                                                                                               12,967

Source: World Bank analysis; based on external data and information




Case studies                                                                                              Extreme Heat      133
To test these results given the assumptions made, we                  values as the minimum and maximum, respectively.
account for the sensitivity of the BCR parameters of                  With 10,000 iterations in the Monte Carlo analysis, we
the cost-benefit model in a Monte Carlo simulation.                   arrived at a mean BCR of 131, a median BCR of 119,
The ranges of the parameters are given in Table 54,                   and BCRs at the 5th and 95th percentiles of 48 and
and all parameters follow triangular distributions with               246, respectively. Furthermore, in all iterations, the
the baseline values as the mode and low and high                      BCR remained greater than 1.


Table 54: Ranges of parameters used in Monte Carlo simulation following triangular distributions

                                                   LOW                           BASE                       HIGH

 Installation cost (€)                                    277,095                       346,369                    415,642
 Operation cost(€)                                        438,439                       548,049                    657,659
 Discount rate (%)                                              1.5                            3                          5
 Effectiveness (%)                                                9                           38                         68
 Deaths in the 75+ age group
                                                                 60                           80                       100
 (%)
 Displaced deaths ratio (%)                                       0                           35                         75
 Attributable deaths (number)                                  630                          787                        944

Source: World Bank analysis; based on external data and information




    Æ	 Challenges faced and lessons learned                           VOLY, which has been done in this study. Recent
                                                                      studies have found BCRs for Madrid to range from 42
There is generally a lack of publicly available hospital              to 1,350 depending on whether the VSL or VOLY is
data that could be used to empirically assess the                     used and whether displaced and premature mortality
temperature-morbidity relationship. Surveys on the                    is valued using VSL or VOLY. In the current case study,
awareness of and behavioural changes due to the                       we have adopted the VOLY for both premature and
HEWS in France could provide insights into the                        displaced mortality (which could provide a
understanding of the third dividend benefits.                         conservative estimate) while furthermore assuming
                                                                      that only 38 percent of effectiveness is achieved with
BCRs are generally high for HEWS. For these reasons,                  the HEWS (that is, only 38 percent of the saved lives
it is preferred to value reduced mortality according to               could be attributed to the HEWS).




Case studies                                                                                            Extreme Heat     134
3.4. Droughts
3.4.1. SUMMARY OF FINDINGS                                   water use model LISFLOOD is used, with high-
       FOR DROUGHTS                                          resolution regional climate projections for RCP4.5 and
                                                             RCP8.5 being applied. The result of the study shows
In terms of DDR investments in droughts, the EU has          that in southern Europe, extreme low river flows will
taken massive strides to transform their approach to         become more severe and persistent, especially in the
water scarcity and drought from being crisis oriented        context of global warming. At the same time, most of
to preventative directed within the last two decades         western Europe will become more vulnerable to
(Stein, et al., 2016). These actions include developing      frequent and intense droughts (Cammalleri, et al.,
irrigation and water provision systems, EWS, such as         2020).
the European Drought Observatory (EDO), and
multisector partnerships (MSPs) with various                 Minimum river streamflow is an important indicator
stakeholders of a specific region.                           when conducting economic analysis and research on
                                                             droughts because it is a reflection of the spatially
In 2000, the Water Framework Directive (WFD)                 integrated shortage in water supply over river basins,
established the EU-wide framework for water                  which is a great concern to water managers, according
management. The occurrence of major drought events           to the study conducted by PESETA IV (Cammalleri, et
between 2000 and 2006, mainly the widespread                 al., 2020). When conducting drought assessments
drought in 2003, catalysed policy conversation on how        with streamflow simulations, the hydrological and
the Environment Council should address the                   water use model LISFLOOD is used, with high-
environmental, social, and economic impacts of water         resolution regional climate projections for RCP4.5 and
scarcity and drought at a political and a technical level.   RCP8.5 being applied. The result of the study shows
After several analyses, they found that drought affects      that in southern Europe, extreme low river flows will
all EU countries. Under former European Parliament           become more severe and persistent, especially in the
Environment Commissioner Potočnik, the European              context of global warming. At the same time, most of
Commission’s JRC helped establish the EDO as part of         western Europe will become more vulnerable to
ongoing efforts to integrate drought into policy. Since      frequent and intense droughts (Cammalleri, et al.,
2011, the EDO has been the leading communicator on           2020).
drought-relevant information and maps.
                                                             Though undertaking economic analysis of investments
Minimum river streamflow is an important indicator           in drought prevention is difficult, some reports have
when conducting economic analysis and research on            shown the logical links that can support the analysis
droughts because it is a reflection of the spatially         and research on drought impacts (see Figure 25
integrated shortage in water supply over river basins,       below as well as page 29 of the report from the Global
which is a great concern to water managers, according        Water Partnership and Central and Eastern Europe
to the study conducted by PESETA IV (Cammalleri, et          (2015)). The literature has mainly focused on
al., 2020). When conducting drought assessments              estimating the costs of droughts (Pulwarty & Sivakumar,
with streamflow simulations, the hydrological and            2014) and the benefits of approaches to drought risk

Case studies                                                                                       Droughts     135
management. Research on economic impact would                  fore their consequences to ecosystems, such
                                                          there­
benefit from improved drought risk assessments and        as limited public water supplies, agricultural losses,
comparison of scenarios with and without interventions    and damage to buildings and infrastructure due to
(Pulwarty & Sivakumar, 2014) . The damage caused by       soil subsidence, are not monetized. Figure 25
droughts in the EU at a 95 percent confidence interval    demonstrates the framework for assessing the impact
is estimated to be between €7.4 billion and €14.2         of droughts and the approaches and benefits of
billion per year, assuming an annual loss of €9 billion   drought risk management and Figure 26 shows the
for the baseline conditions (1981–2010) (Cammalleri,      share of drought losses by economic sector under
et al., 2020). Drought conditions remain unnoticed        the baseline (1981 -2010) and climate projection for
until water shortages become severe and their adverse     2100.
impacts on the environment are severe, and


Figure 25: Conceptual framework of the impacts of drought events and approaches to drought risk prevention




Case studies                                                                                   Droughts     136
Source: Gerber & Mirzabaev (2017)


Figure 26: Share of drought losses by economic sector (agriculture, energy, water supply, subsidence, and
transport) for EU + UK and the four IPCC AR5 European subregions in the baseline (1981–2010) and in 2100




Source: Cammalleri, et al. (2020)



In this section, we have presented benefit-cost             shown qualitatively. Drought-related risks in most case
assessments for irrigation and water provision systems      studies are mitigated through the improvement of water
against droughts as well as early warning and capacity      systems. Some examples also show the effectiveness of
building for drought preparedness. Results from one BCA     monitoring and enhancing preparedness and public
for an investment in drought management are presented       awareness in terms of drought risk reduction. A table
for an external analysis that was undertaken with ex-post   summarizing main data and information sources can be
assessments, while the benefit of other interventions are   found below (see Table 55).




Case studies                                                                                      Droughts     137
Table 55: Overview of data and information sources for droughts analysis

 INVESTMENT                CASE STUDY            DATA SOURCE NAME AND REFERENCE

 Irrigation and     Drought planned              External econometric assessment from the study Assessing the
 water provision    management in the            Effectiveness of Multi-Sector Partnerships to Manage Droughts:
 systems            Jucar River Basin            The Case of the Jucar River Basin

Source: World Bank based on external data and information


BCRs have generally not been calculated for this type            •	 Case study 17 (external research analysis, ex post
of disaster. Droughts are among the most damaging                   (Carmona, et al., 2017; European Commission,
and least understood of all natural hazards and their               2011)): The analysis of a comprehensive program
onset is slow, which makes the economic analysis of                 for drought prevention in the Jucar River Basin in
preventive investments inherently difficult (Pulwarty &             Eastern Spain, including institutional frameworks,
Sivakumar, 2014). Also, models need to be adapted to                environmental protection measures and water
the type of investment analysed. Generally, estimation              saving plans yielded high net benefits. The economic
of (predicted) ‘average’ soil moisture is essential to be           analysis focused on the impact of emergency
able to conduct economic analysis and research on                   drought wells, but the study also provides an
droughts.                                                           overview of economic assessments methodologies
                                                                    for droughts, including how to estimate benefits or
BCAs generally show net benefits of interventions,                  effectiveness from softer interventions such as
although generally in a qualitative manner. Given the               governance arrangements (polycentric risk
lack of understanding of this hazard, there is little               management governance) at least qualitatively.
comparison possible with the literature, but the case
study presented can provide interesting insights into            3.4.2. IRRIGATION AND WATER PROVISION
how to consider governance of DRR investments in                        SYSTEMS AGAINST DROUGHTS
economic efficiency analysis.
                                                                    Æ	 Introduction and background
Irrigation and water provision systems constitute
preventive investments against droughts. These                   Investments in structural improvements and
include investments in structural improvements and               interventions of water supplies as well as irrigation
interventions of water supplies as well as irrigation            systems provide civilians with access to improved
systems providing civilians with access to improved              water resources and enhanced water and food
water resources and enhanced water and food                      security. Preventive investments, such as drought
security. Preventive investments, such as drought                wells, dams, and efficient irrigation have a variety of
wells, dams, and efficient irrigation, have a variety of         environmental, economic, and social benefits. Not
benefits as they reduce the need for high-cost post-             only are these areas better prepared for drought
drought rehabilitation and relief efforts, beyond                occurrences, but they are also able to supply residents
benefits of lives saved, health, and productivity, such          with water during these times without hesitation or
as the large-scale water project ‘Ligação Pisão-Roxo’            worries of scarcity. This preparedness reduces the
(European Commission, 2011) in South Portugal that               need for high-cost post-drought rehabilitation and
systematically improved the water supply system or               relief efforts. Moreover, the construction of these
EWS such as the DriDanube project (Interreg Danube,              structural investments creates jobs for residents,
2020).                                                           which helps stimulate the economy further. Box 9
                                                                 below provides an illustration of the aforementioned
                                                                 benefits obtained from the structural investments.




Case studies                                                                                             Droughts   138
  Box 9: Investing in improving water security infrastructure and supply system

The following example showcases how structural                 of a larger water network with a canal extension of 23.13
improvements to the water security systems directly benefit    km. The project was implemented with a total cost of €65.2
civilians and lead to positive economic impacts. In Southern   million, and it is expected to provide greater supplies of
Portugal, a large-scale water project called “Ligação Pisão-   water for the region and its residents. An analysis of the
Roxo” (European Commission, 2011) was launched with            benefits and impacts of the project was conducted, which
the objective to improve the water supply system of the        shows that the improved water system benefits an estimation
Guadiana River. As a part of the Alqueva Dam Project,          of 44,486 people and also generates economic benefits
investments were made to build a new dam, which is a part      through the creation of 40 new jobs.




        ECONOMIC BENEFITS OF DROUGHT PLANNED MANAGEMENT IN THE JUCAR RIVER BASIN

 This case study is an external analysis that was                  through the use of stochastic forecasting models
 undertaken with ex post assessments.                              to estimate future volume stored in reservoirs and
                                                                   use of forecasted scenarios to estimate the
    Æ	 Description                                                 evolution of the systems

Jucar River Basin, located in Eastern Spain, has               3.	 Water saving plans improving the efficiency of
suffered many historical droughts with significant                 water distribution systems and the establishment
socio-economic impacts due to the region’s semiarid                of irrigation turns adopted by urban and
climate, high water exploitation indexes, and high                 agricultural users
spatial and temporal variability of precipitation which
causes highly seasonal and inter-annual variability in         4.	 Alternative water sources and generation of
river flows. Future climate change-related impacts can             additional including the use of drought wells,
create future hydrological problems, such as increased             recirculation of irrigation returns back to the head
salinity in coastal aquifers and higher water turbidity,           of the system, and reuse of treated wastewater
which can have severe social and economic                          from the urban areas.
implications. Throughout history, there have been
different governance structures established in the             The objective of this case study is to demonstrate the
Jucar River Basin to tackle the multi-faceted risks            positive economic impacts effective water
associated with droughts and other climate change              management can have on mitigating droughts and the
scenarios. Some of these structures have taken shape           broader metropolitan communities the basin serves.
as MSPs, and currently, the Jucar River Basin                  To do so, we will look at the economic impacts of
Partnership’s Water Council and the Permanent                  groundwater pumping from drought wells and how it
Drought Commission (PDC) are in action to address              maintains crop production and production value.
every officially declared drought. The PDC, which was
established in December 2005 after the start of the               Æ	 Methodology
2005–2008 Drought Event in the Jucar River Basin,
approved measures to address the following goals:              Two methodologies were used to evaluate how
                                                               effective the creation and institutionalization of MSPs
1.	 Environmental protection ensuring the continuity           are in supporting the development of an efficient
    of streamflow and protecting drought-vulnerable            drought management system. However, for this case
    wetlands                                                   study, we will examine the econometric approach in
                                                               detail to analyse the economic efficiency of emergency
2.	 Management and control of water resources                  drought wells, a key drought mitigation measure
    supporting the decision making in the PDC                  suggested and implemented by the PDC.




Case studies                                                                                            Droughts      139
    Æ	 Results of the analysis by dividends
    	 and overall
Table 56: Fitted impact model to determine economic efficiency of emergency drought wells




                                     Pv=283.84*W+1484.98*G+275,923*lp
Source: Carmona, et al. (2017)



From Table 56 we see that the dependent variables are      3.4.3. EARLY WARNING AND CAPACITY
statistically significant with a p-value less than 0.05.          BUILDING FOR DROUGHT
Therefore, the fitted model is able to simulate the               PREPAREDNESS
production value, while considering the historic time
series of water deliveries (surface and groundwater)       Accurate monitoring and effective early warnings are
[W], index of crop prices [G], and production value of     important as they allow people to be better prepared
irrigated agriculture [lp], with a R^2 value of 99         when a disaster strikes. EWS technology is especially
percent. During 2006, 2007, and 2008, the additional       important for agriculture and water resource
groundwater pumping for drought was estimated at 40        management because it helps decrease risk associated
mm3, 40 mm3, and 25 mm3, respectively. As a result,        with crop and food loss. According to the Climate
according to this model, the additional drought            Technology Centre and Network (CTCN) (2020), the
pumping reduced drought losses by €59 million, 59          operational arm of the United Nations Framework
million, and 37 million during those respective years,     Convention on Climate Change (UNFCC) Technology
compared to a scenario in which this mitigation            Mechanism, effective drought monitoring warning
measure was not implemented. There were no                 systems must include appropriate drought indicators,
additional costs to the stakeholders for the drought       meteorological data and forecasts, a warning signal,
pumping, since the pumping cost was supported by           public awareness and education, institutional
other Jucar River Basin users receiving surface water      cooperation, and data sharing arrangements. Some
deliveries, in agreement with the conditions of the        environmental and socio-economic benefits of drought
Alarcon treatment.                                         monitoring EWS are improved land use practices
                                                           which decrease soil and land degradation; mitigation
    Æ	 Challenges faced and lessons learned                of human fatalities caused by health risks, poor water,
                                                           and food security; a reduction of high costs related to
The analysis focused on one drought period and a           post-drought rehabilitation and relief efforts; and
single risk mitigation measure (emergency wells) to        refined network connectivity between and within local
analyse the economic benefits of the intervention and      communities.
comment on the effectiveness of drought/disaster
governance measures. The focus of the analysis is on       Integrated and comprehensive approaches are
polycentric risk management governance, and                essential for effective drought monitoring and early
methodologies may also be applied to other drought         warning given the complexity of the hazard, including
management interventions with sufficient data              the combination of connected local and international
available.                                                 capacity and systems (Hayes, et al., 2005; Pulwarty &
                                                           Sivakumar, 2014). While there have been significant




Case studies                                                                                     Droughts     140
efforts made to understand the value of early hydro-            economic benefits of climatic and meteorological
meteorological warning systems, it remains that the             information: direct valuations, indirect valuations,
valuations of information may vary by sector since              market approaches, and non-market approaches. A
there is no standardized approach. As a result, Liu et          project in the Danube regions (see Box 10) reveals
al. (2019) narrowed down their literature review to             how an early warning and monitoring system reduces
explore four methods and tools used to examine the              the negative impact of droughts.



  Box 10: Investing in Early Warning and preparedness for Droughts

The following example shows the benefit early warning and       involved in drought management to be better prepared and
monitoring systems yield in terms of disaster risk reduction.   more efficient when they are responding to drought
With the objective of increasing the capacity to manage         emergencies. With a cost of €1.97 million, the project
drought-related risks, the DriDanube project (Interreg          accomplished its goal with the output “Drought User
Danube, 2020) in the Danube region was launched in 2017.        Service”, which allows efficient and accurate monitoring
The Danube is a river region that experiences droughts          and early warnings of droughts. This enables better
frequently, which leads to water scarcity and negative          cooperation between agencies and emergency responses
impacts on the economy and welfare of the people.               to droughts, which decreases the losses in lives and
Therefore, the DriDanube project helps all stakeholders         damages when a drought occurs.




Case studies                                                                                           Droughts     141
3.5. Wildfires
3.5.1. SUMMARY OF FINDINGS FOR                            of Europe near the Mediterranean, moisture levels of
       WILDFIRES                                          forests are the lowest. As a result, the countries with
                                                          the highest danger of wildfires are Spain, Portugal, and
Across Europe, forests cover approximately 215            Turkey. Greece, parts of central and southern Italy,
million ha and other wooded lands cover an additional     Mediterranean France, and the coastal region of the
36 million ha, which amount to over one-third of the      Balkans are also susceptible to increased danger.
continent’s total land area (De Rigo, et al., 2017).
More European countries suffered from large forest        There are initiatives and studies conducted at the
fires in 2018 than ever before, and Sweden                European supranational level to understand the
experienced the worst fire season in reporting history.   impacts of forest fires. For instance, collaboration
The unprecedented forest fires in several European        between European countries and the European
countries in 2017 and 2018 coincided with record          Commission developed the European Fire Database,
droughts and heatwaves in these years (EEA, 2020). In     the largest repository of information on individual fire
2010 alone, wildfires were responsible for the            events and forest fires in Europe. Furthermore, the
damage of 0.5 million ha forests in Europe. Factors       PESETA IV report analysed how fire danger in most of
that contribute to forest fire occurrence include the     Europe would increase under different global
moisture content of the forest surface and climate        warming scenarios (1.5°C, 2 °C, and 3°C) and how the
variables, such as wind speed. A wetter surface can       severity, frequency, and damage of forest fires
decrease potential spreading of a fire and the ease of    throughout Europe will be affected by climate change
ignition, while wind speed can affect the rate a fire     (see Figure 27), (Costa, et al., 2020).
might spread following ignition. In the southern parts




Case studies                                                                                     Wildfires    142
Figure 27: Forest fire danger in the present, and under two climate change scenarios, according
to two different climate models (1.5°C, 2 °C, and 3°C)




Source: (Costa, et al., 2020)
Note: The climate models were selected to demonstrate the effects of the different models.



In this section, we have demonstrated benefit-cost                   mitigation at a forest level as well as a property level
assessments for a variety of wildfire prevention                     with creation of fuel and firebreaks as well as clearing
investments. These include structural wildfire                       for defensible space, respectively. The decision
protection to homes and industries (for example,                     support tools for wildfire risk inform cross-border fire
creation of defensible space, firebreaks, and fuel                   service organizations on coordinated efforts for
breaks), decision support tools (for example, cross-                 enhanced fire suppression. Climate change adaptation
border emergent fire information and climate change                  through improved silviculture as a decision support
adaptation information for small forest owners), and                 tool also informs small forest owners how to best
wildfire preparedness (for example, EWS, property-                   manage their own forestlands against future fires.
level defensible space, and development of evacuation                Alerting and preparedness case studies with both
plans). BCRs for the different types of interventions are            government-funded         and       homeowner-enacted
shown by a combination of detailed case study                        preparedness measures are assessed as priority
analyses including both prospective and retrospective                actions for stakeholders in wildfire-prone areas.
types of assessments. The majority of wildfire                       Table 57 summarizes main data and information
management case studies considered use structural                    sources.




Case studies                                                                                                Wildfires    143
Table 57: Overview of data and information sources for wildfires analysis

 INVESTMENT     CASE STUDY               DATA SOURCE NAME AND REFERENCE

 WUIs           Wildland-urban           •	 Housing damage based on data from the Association for the Development
                interfaces:                 of Industrial Aerodynamics (ADAI) at the University of Coimbra in Portugal
                Improvements to
                                         •	 Data for housing cost referenced the Portuguese National Institute of
                homes in Portugal
                                            Statistics
                                         •	 Loss reduction interpreted from the impacts calculated in the Technical
                                            Specifications for the Use and Occupational Charter of Continental Portugal
                                            for 2018 (COS2018)
                                         •	 Reduction in death and cost for treatment derived from the October 2017
                                            fires in Portugal in the study Population exposure to particulate-matter and
                                            related mortality due to the Portuguese wildfires in October 2017 driven by
                                            storm Ophelia as well as consultations with the Regional Tourism Office for
                                            the Centre of Portugal
                                         •	 Potential burnt area based on COS2018 data and the emission factors
                                            provided in Estimativa de Emissões Atmosféricas Originadas por Fogos
                                            Rurais em Portuga
                                         •	 Avoided property value losses estimated from COS2018 data as well as
                                            through the database on land value through PORDATA
                                         •	 Avoided lost tourism based on values from the 2017 fires and information
                                            provided by the Regional Tourism Office for the Centre of Portugal
                                         •	 Fire suppression costs based on information provided by the Agency for the
                                            Integrated Management of Wildfires (AGIF)
 WUIs           Wildland-urban           •	 Industry damage calculated as a percent of total destruction using data
                interfaces:                 from ADAI at the University of Coimbra in Coimbra, Portugal
                Improvements to
                                         •	 Loss information based on data provided by the Central Regional
                industries in Portugal
                                            Coordination and Development Commission (CCDR-C) in Portugal in June
                                            2018
                                         •	 Average cost of the intervention based on the Manual of Fuel Management
                                            for operations with bush cutters
                                         •	 Loss reduction interpreted from the impacts calculated in the Technical
                                            Specifications for the Use and Occupational Charter of Continental Portugal
                                            for 2018 (COS2018)
                                         •	 Reduction in death and cost for treatment derived from the October 2017
                                            fires in Portugal in the study Population exposure to particulate-matter and
                                            related mortality due to the Portuguese wildfires in October 2017 driven by
                                            storm Ophelia
                                         •	 Potential burnt area based on COS2018 data and the emission factors
                                            provided in Estimativa de Emissões Atmosféricas Originadas por Fogos
                                            Rurais em Portuga
                                         •	 Avoided property value losses estimated from COS2018 data as well as
                                            through the database on land value through PORDATA
                                         •	 Fire suppression costs based on information provided by the AGIF
                                         •	 Data on the co-benefit from the sale of biomass obtained through
                                            conversations with biomass producers




Case studies                                                                                           Wildfires     144
 Fuel               Fuel Management for       •	 Losses estimated by ex post analysis of the 2017 fires in Pedrógão Grande
 Management         forests in Poturgal
                                              •	 Reduction of losses to forestry calculated from previous fires in Technical
 for Wildfire
                                                 Specifications for the Use and Occupational Charter of Continental Portugal
 Risk
                                                 for 2018 (COS2018)
 Reduction in
 forests                                      •	 Reduction in death and cost for treatment derived from the October 2017
                                                 fires in Portugal in the study Population exposure to particulate-matter and
                                                 related mortality due to the Portuguese wildfires in October 2017 driven by
                                                 storm Ophelia
                                              •	 Avoided lost tourism based on values from the 2017 fires and information
                                                 provided by the Regional Tourism Office for the Centre of Portugal
                                              •	 Fire suppression costs based on information provided by the AGIF
                                              •	 The co-benefit from sale of cork trees calculated based on data from the
                                                 Portuguese Industry of Cork
 Decision           Decision Support          •	 Avoided direct and indirect forest fire costs obtained from the 2020 white
 Support Tools      Tools for Climate            paper on Forest Fires in the Alps
 for Climate        Change Adaptation
                                              •	 The co-benefit from improved silviculture calculation based on information
 Change
                                                 on the economy of Finland
 Adaptation
 and Alerting                                 •	 Information on the cost of the tool and the estimated users obtained from
 for Wildfire                                    consultations and coordination with a senior researcher who developed the
 Risk                                            decision support tool
 Reduction
 Decision           Alerting and              •	 Data on potential injuries and lives lost obtained from assessment of the
 Support Tools      Preparedness for             past fires in Portugal and validated with ex post data on nonexistent DRM
 for Climate        Wildfires in Portugal        measures for extreme hazard events in Pedrógão Grande, Mati, and Rafina
 Change                                          cities in Greece
 Adaptation
                                              •	 Cost of injuries based on the Portugal Health Regulatory Authority
 and Alerting
 for Wildfire                                 •	 The cost of alerting obtained by telephone company data interpolated for
 Risk                                            Pedrógão Grande
 Reduction
 Decision           Alerting and              •	 Data on potential injuries and lives lost obtained from assessment of the
 Support Tools      Preparedness in              past fires in Portugal and validated with ex post data on nonexistent DRM
 for Climate        Greece                       measures for extreme hazard events in Pedrógão Grande, Mati, and Rafina
 Change                                          cities in Greece
 Adaptation
                                              •	 Costs of injuries in Mati obtained with data from consultations with Greek
 and Alerting
                                                 fire specialists and on the ground estimations following deployments to
 for Wildfire
                                                 Greece
 Risk
 Reduction
 Cross-border       Cross-border support      •	 Cost of the tool obtained from the project manager and developer of
 support,           and coordination             SPITFIREa
 coordination       mechanisms for
                                              •	 Direct costs obtained from data provided by the Portuguese Institute for
 mechanisms         wildfires
                                                 Nature and Forest Conservation and by the Polytechnic University of
 and capacity
                                                 Valencia
 building for
 wildfires

Source: World Bank analysis; based on external data and information




Case studies                                                                                                Wildfires     145
Models need to be adapted to type of investment.                      lessening reductions in biomass and biodiversity. The
When modelling hypothetical prevention investments,                   ratios also help decision-makers determine what
such as WUI management and fuel management for                        future climate adaptation strategies should be
wildfire risk reduction, the BCA is assessed over a                   considered.
certain time horizon and includes a sensitivity analysis
of low-to-high hazard impacts and discount rates. For                 Results of wildfire risk reduction investments benefit-
the modelling of decision support tools, the start-up                 cost assessments yield net benefits. However,
and assumed maintenance cost is measured in                           consistent with research findings, some regional and
comparison to forest fire direct and indirect costs                   forest-level infrastructure investments tend to have
avoided in the region as well as improved GDP with                    relatively smaller BCRs. Comprehensive analysis to
efficient silviculture. This model is based on a study                inform mitigation projects (including considering
from Ireland that was used to estimate the overall GDP                climate change scenarios) and data on second and
improvement as well as studies on Austrian forest                     third dividend costs avoided could therefore be highly
management.                                                           beneficial for investments to maximize benefits
                                                                      temporally and across sustainability goals. More
Economic analysis and research on wildfires are                       details are included in Figure 28 below.
extremely important because, even with climate
change mitigation, the danger of forest fires is imminent             Figure 28 presents boxplots that display the dis-
unless effective adaptation strategies are adopted.                   tribution BCRs for different types of investments in
BCRs for investments in wildfire prevention in the                    wildfire based on a five number summary: minimum,
context of climate change adaptation reveal how such                  first quartile, median (shown in red), third quartile, and
investments address the detrimental impacts of                        maximum. Extreme values are excluded from the top
climate change on forest fires and yield co-benefits in               graph and included in the bottom one.
Figure 28: Findings of BCA for wildfires (BCRs)




Source: World Bank analysis; based on external data and information

Case studies                                                                                                   Wildfires    146
WUI is a transition zone where wildlands interact with        vegetation meant to stop or control fire around
humans and their activities (Stein, et al., 2018), an         buildings, farms, and residential properties as they
area where communities and economic activity can              provide a fixed safety distance that protects the
therefore particularly be directly affected by wildfires.     civilians (Natural Resources Conservation Services,
Studies have shown that there is a lack of standardized       2011; WUIVIEW, 2019). Fuel breaks are strips or
building codes and interventions related to                   blocks of vegetation that have been altered to slow or
development and protection of houses and buildings            control a fire and slow the spread of fire because they
in WUI areas. These codes and interventions are               are managed to provide far less fuels to carry the
essential for the reduction of risks and losses to            flames. These adaptation measures are typically
communities. However, the reality is that the                 implemented by forest managers and have shown to
development of these standards is complex and                 substantially reduce fire risks but are not evenly
implementation non-uniform (Pastor, et al., 2020).            applied in fire-prone areas.
Moreover, wildland-industry interfaces are areas of
considerable risks as they can lead to large amounts of       •	 Case study 20 (new analysis under this project, ex
industrial damages and even follow-up disasters. It is           post (Bennett, et al., 2010)): The analysis of an
therefore essential for homes and industries in WUI              investment in fuel management using fuel breaks in
areas to invest in prevention by use of the creation of          the Central Region of Portugal yields positive net
defensible space. Government-led preparedness and                benefits (BCR 11.9 greater than 1). This case study
regulations should be undertaken and implemented,                uses a novel methodology to evaluate losses
such as minimum safety distance or vegetation straps,            avoided, the additional benefits of implementing
around homes and industrial facilities. In Europe,               fuel breaks as a preventive investment. In addition
research, laws, and monitoring of industrial facilities in       to limitations of research in terms of data and
or near the forest or wildland perimeters tend to be             information like for case studies 18 and 19, general
limited, except fire research projects such as SPREAD            research on effectiveness of fuel breaks would be
(2020).                                                          important as assumptions for this analysis were
                                                                 based on expert judgement. As for other case
•	 Case study 18 (new analysis under this project, ex            studies, transferability of this analysis and
   ante (Augusto, et al., 2020)): The analysis of a              assumptions is low given that it is a technical
   hypothetical investment of managing WUI in                    management and service-related solution.
   Pedrógão Grande, Portugal, yields positive net
   benefits (BCR 3.1 greater than 1). This is possibly        Decision support tools can support climate change
   underestimated given lack of data and information          adaptation and alerting for wildfire risk reduction.
   on longer-term impacts such as soil erosion impacts        Decision support tools are tools based on computers
   from fires or land and property value increase in          and data that people use during the process of
   areas.                                                     decision-making for various objectives. There has
                                                              been an increase in the use of decision support tools
•	 Case study 19 (new analysis under this project, ex         for climate change planning and adaptation to promote
   ante (WUIVIEW, 2019)): The analysis of a                   effective investment decisions and sustainable
   hypothetical investment of managing WUI in                 management of areas. These tools have been assessed
   Oliveira do Hospital, Portugal, yields positive net        by EU projects like Impacts and Risks from High-End
   benefits (BCR 2.1 greater than 1). Limitations of the      Scenarios: Strategies for Innovative Solutions
   research are similar to case study 18.                     (IMPRESSIONS) and it is important that they are
                                                              tailored to local conditions to produce most efficient
Fuel management interventions can support wildfire            outcomes, particularly for decisions on green
risk reduction. The increase in fire danger is projected      infrastructure. Early warning and monitoring systems
to increase in Western-Central Europe, but the absolute       can support preparedness for wildfire risks. An
fire danger remains highest in Southern Europe. Fuel          example is the European Forest Fire Information
management interventions such as firebreaks and fuel          System (EFFIS) developed by JRC that provides
breaks have been used for fire prevention and fire            warnings and damage assessments (EFFIS, 2021).
spread mitigation within forest areas and on their            Alerting for wildfire emergencies can consist of days to
peripheries where buildings and other assets may              minutes of notification to residents in a region or area
exist. Firebreaks are strips of bare soil or fire retarding   that has imminent fire danger. Alerting systems are

Case studies                                                                                         Wildfires    147
typically meant to save lives and reduce injuries and         investment in alerting, evacuation planning, and
are most effective as part of an emergency plan that          independent fuel management of homes by
includes evacuation routes and stationing of victims in       homeowners in the Attica region of Greece yields
safe zones.                                                   positive net benefits (BCR 39.3 greater than 1).
                                                              Developing incentives for homeowners to manage
•	 Case study 21 (new analysis under this project, ex         their fuel loads surrounding personal property
   post (Bennett, et al., 2010)): The analysis of an          requires consistent education and awareness
   investment in a Forest DSS (2013) implemented in           raising as well as developing capacity-building
   the forest regions of Carinthia in Austria that was        campaigns to encourage informed responses to
   developed for forestry extension services for small-       alerts and executing emergency/evacuation plans.
   scale private landowners. The intention of the tool is     The impact of softer investments such as alerting
   to provide information for owners to improve               and community sensibilization to wildfire hazards is
   silviculture in a sustainable manner and                   understudied in the literature and therefore benefits
   simultaneously reduce the chance for forest fires          may not or insufficiently be captured, particularly
   due to climate change. The analysis of the                 impacts of behavioural changes. The high BCR of
   hypothetical future benefits yielded positive net          this case study can be explained by the scenario on
   benefits (BCR 5.8, NPV of around €0.99 million). It        which it is based, namely, the second deadliest fire
   has to be noted however that this analysis was             in the 21st century (Mati fire from 2018). Results of
   based on numerous assumptions given lack of data           both case studies 22 and 23 would support low-
   for this project and further research would be             cost investments with potential to save many lives
   needed to understand relationships between                 and assets.
   improved silviculture and GDP, as this was a main
   factor assumed that affected the BCR to be higher        Cross-border support, coordination mechanisms, and
   than 1. Micro- and macro-studies could generally         capacity building can reduce wildfires risks. Disasters
   improve the understanding on multiple benefits of        and hazards are not bound by the borders of countries
   improved silviculture in a region, including, for        and it is essential for European countries to work
   example, socio-psychological factors to private          collaboratively and share their resources and good
   forest owners.                                           practices when a disaster strikes, especially in cross-
                                                            border areas that are vulnerable to disasters such as
•	 Case study 22 (new analysis under this project, ex       forest fire and floods. Several EU projects have been
   ante): The analysis of a hypothetical investment in      launched to enhance cooperation across borders in
   alerting, evacuation planning, and independent fuel      terms of responses to disasters and emergencies.
   management of homes by homeowners in the                 The project INTER’RED (European Commission, 2020)
   Central Region of Portugal is undertaken to assess       is an ongoing project that improves rescue services
   the benefits of both government-initiated alerting       in the cross-border Grande Région, which covers
   and preparedness as well as citizen-driven fuel          Luxembourg, France, Germany, and Belgium.
   management on private homes. This case study             Capacity-building investments in the Czech Republic,
   yields positive net benefits (BCR 11 greater than 1).    Poland, or Spain have shown qualitatively high
   Developing incentives for homeowners to manage           impacts and benefits of training for the effectiveness
   their fuel loads surrounding personal property           of response.
   requires consistent education and awareness
   raising as well as developing capacity-building          •	 Case study 24 (new analysis under this project, ex
   campaigns to encourage informed responses to                ante (FEU Fire Officer Associations, 2020): The
   alerts and executing emergency/evacuation plans.            analysis of an investment in creating and deploying
   The impact of softer investments such as alerting           the SPITFIRE tool (European Commission, 2017)
   and community sensibilization to wildfire hazards is        found net benefits (BCR 1.6). This decision support
   understudied in the literature and therefore benefits       tool offers high resolution meteorological and
   may not or insufficiently be captured, particularly         forest weather forecasts presented in a GIS
   impacts of behavioural changes.                             environment to allow its joint management with
                                                               other information needed by end users, such as
•	 Case study 23 (new analysis under this project, ex          forest managers and firefighters. This information
   ante (BBC, 2018)): The analysis of a hypothetical           includes protected spaces, surveillance posts,

Case studies                                                                                      Wildfires    148
   roads, water points, distribution of material and              Future deployments should investigate actual
   human resources, and so on). The results must be               deployments and benefits of information platforms
   considered with caution given lack of research on              as well as analyse the benefits of tools with a longer
   impacts of this type of investment and lack of data.           lifetime than SPITFIRE.



3.5.2. WILDLAND-URBAN INTERFACES


         WILDLAND-URBAN INTERFACES: IMPROVEMENTS TO HOMES IN PORTUGAL

 This case study is a new ex-ante analysis under               led to the evacuation of more than 2,000 people in the
 this project that involved modelling of hazards.              city of Valencia (Pastor, et al., 2020). Moreover,
                                                               because of climate changes, global warming and the
    Æ	 Introduction and background                             increase in heatwaves have increased the number and
                                                               duration of forest fires in recent years, which has
The WUI is a transition zone where wildlands interact          resulted in an increase of fire risks in European
with humans and their activities (Stein, et al., 2018).        countries (EEA, 2020). In addition, due to housing
As a result, forest fires occurring in WUI areas               demands and lack of management, more development
negatively affect urban and rural communities. WUI             is occurring in the WUI without appropriate forest
fires are prevalent in Northern and Southern Europe,           management and those homes and industries near
which leads to destruction and generates great social          the wildland are increasingly susceptible to fire when
and economic losses. The 2017 fire in Portugal                 interventions to reduce fuel in surrounding areas is not
resulted in more than 110 deaths and thousands of              undertaken (see Figure 29 for an illustration of a fuel
destroyed buildings, while the two WUI fires in Spain          break for WUIs).
Figure 29: Image of a fuel break for WUIs




Source: (Portugal Wildfire, 2018)

Studies have shown that there is a lack of standardized        damage exceed far beyond property and lives.
building codes and interventions regarding the houses
and buildings in WUI areas. An analysis of forest fire            Æ	 Description
prevention and WUI protection systems in Spain suggests
that it is essential to establish housing and urban planning   This case study is an appraisal of the hypothetical
standards and regulations in WUI areas. Also, the              investment of managing WUI in the municipality of
establishment of such standards requires the                   Pedrógão Grande in Portugal to study the fire impacts
coordination of multiple agencies, which includes              to homes with and without WUI management. The
architects, forest and social scientists, and engineers        case study considers the necessary actions taken by
specializing in landscape, civil, and fire (Pastor, et al.,    regional authorities, whether by incentives, code
2020). These regulations are essential for the reduction       changes, or direct management, that aid to create
of risks and losses for the WUI communities. To better         defensible spaces surrounding homes to reduce the
understand the factors leading to the vulnerability of         risk of fire to homes in the WUI. The June 2017 Portugal
people, infrastructure, assets, and the outcomes of loss,      fires in central Portugal saw the greatest loss of life in
it is essential to assess cost benefit analyses since          Pedrógão Grande, where 66 lives were lost in the area,
wildfires are ever increasing in the EU region and loss and    254 people faced injuries, and nearly 1,000 homes

Case studies                                                                                            Wildfires    149
were affected by the wildfires. The hypothetical                (see Figure 30). The risk of damage related to the fuel
investment is an ex post appraisal of the homes that            management distance represents the probability of a
were burned in 2017 in the municipality of Pedrógão             house being damaged as a function of fuel
Grande. This study seeks to analyse the advantages of           management distance (University of Coimbra, 2020).
having an acceptable fuel management 10–50 m
around dwellings in the area to minimize fire ignition        •	 Determination of the potential damage related to the
and spread. The approach of this study is to use                 fuel management distance considering the probability
existing research on losses from fires in Portugal and           of damage and the potential of destruction (risk of
estimate the triple dividend benefits that could have            damage and the percentage of loss: 100 percent, 75
been realized had there been an investment in the                percent, 40 percent, 20 percent, 0 percent). See
Pedrógão Grande region for WUI management for                    Figure 31.
dwelling fire risk reduction.
                                                              •	 Next, the cost elements are calculated for economic
    Æ	 Methodology                                               loss from damage to housing. The estimated area of a
                                                                 typical home in Pedrógão Grande is 10 m × 10 m =
The BCA is over a 30-year time horizon and undertakes a          100 m2 and the cost of a house in Pedrógão Grande is
sensitivity analysis of low-to-high hazard impacts and           €600 per m2. The data used for housing costs
discount rates. A 30-year time horizon was chosen as the         referenced the Portuguese National Institute of
Institute for Nature Conservation and Forests in Portugal        Statistics (Instituto Nacional De Estatistica, 2020).
describes the 2017 fire as the one-in-29-year fire (ICNF,        The average costs of each fuel management strip
2020). The discount rates used in the study vary from 3.5        (0–2 m, 2–10 m, 10–50 m, and >50 m) is estimated
percent to 5 percent based on uncertainty of triple              to be €1,078 per ha based on the Manual of Fuel
dividend factors calculated during the 30-year period.           Management for operations with bush cutters
                                                                 (Guiomar & Fernandes, 2011). See Figure 32.
    Æ	 The methodology is as follows:
                                                              •	 The cost of fuel management around the typical
•	 Analysis in the field of 963 houses affected by the fire      house in the area as well as the potential damage is
   event with focus on the fuel management distance              determined in euros. The costs include the use of
   and its impacts on damage (and damage avoided with            bush cutters, which are normally used in this type of
   intervention). The distances studied are 0–2 m, 2–10          fuel management. Cost figures also include
   m, 10–50 m, and >50 m.                                        employees, taxes, fuel, equipment, and so on. The
                                                                 discount rate used when evaluating the cost is 3.5
•	 Characterization of housing damage from 2017 as a             percent over 30 years. The potential damage
   percentage of total destruction using data from ADAI          reduction in euros per home is driven by each fuel
   at the University of Coimbra in Portugal. Houses that         management strip option. Therefore, the investment
   are totally destroyed are considered 100 percent              in fuel management in addition to the cost of
   destruction, severely damaged are those with 75               damage (costs avoided with interventions) is
   percent destruction, moderately damaged homes are             estimated per house per year for each fuel
   those with 40 percent destruction, and light damage           management option. The counterfactual investment
   are those with 20 percent destruction.                        compared in the BCA is the difference in losses
                                                                 between a no fuel management case and fuel
•	 Analysis through spatial images of houses undamaged           management of approximately 30 m surrounding
   in 2017 (0 percent destruction) by the fire event is          the home.
   undertaken to determine fuel management distances




Case studies                                                                                          Wildfires    150
Figure 30: Assessment of housing in Pedrógão Grande for destruction assessment and WUI distances




Source: World Bank analysis; based on external data and information



Figure 31: Variation of potential damage (%) as a function of fuel proximity to homes in Pedrógão Grande




Source: World Bank analysis; based on external data and information
Note: the x-axis represents the different types fuel management strip (by length).




Case studies                                                                                  Wildfires    151
Figure 32: Fuel management investments and corresponding economic losses to homes in WUI




Source: World Bank analysis; based on external data and information




The Triple Dividend Framework includes the following                     impacts calculated in the Technical Specifications
benefits described.                                                      for the Use and Occupational Charter of Continental
                                                                         Portugal for 2018 (COS2018) (Caetano, et al.,
Triple dividend 1 (costs avoided):                                       2010).

•	 Reduction of lives lost was calculated using 2017                  •	 The reduction in deaths related to cardiorespiratory
   fatalities within the municipality of Pedrógão Grande                 problems as well as the costs for treatment are
   corresponding with fuel management distances.                         calculated as direct losses avoided, referring to the
                                                                         COS2018 data. The values are derived from the
•	 Reduction of injuries using 2017 injuries in Pedrógão                 October 2017 fires in Portugal in a paper by Augusto
   Grande. The Portugal Health Regulatory Authority                      et al. (2020). Based on the actual values of losses of
   (Direção Geral de Saúde) provides the cost per day                    lives and injuries, the ratio of injury to life lost is
   of injuries based on severity of injury, using which                  approximately 4:1. Therefore, the number of injuries
   the team estimated that 40 percent of cases were                      is arrived at by the number of deaths multiplied by 4
   light injuries, 40 percent were medium injuries, and                  with the same distribution of injury severity as
   20 percent were severe injuries (INFARMED, 2020).                     described above but focused on cardiorespiratory
   The total number of injuries is proportional to the                   problems.
   deaths during the 2017 event (approximately 4
   injuries to 1 life lost) and calculated from the deaths            •	 The cost of CO2 avoided from the reduction of
   avoided in TD1. The 4:1 injuries-to-fatalities ratio is               wildfires is estimated to be €13 per tonne, the area
   based on the actual losses and injuries from the                      that could be burned based on COS2018 data, and
   Pedrogão Grande fire (June 17, 2017) and the                          the emission factors provided in Silva et al. (2006).
   region around Oliveira do Hospital (October 15,
   2017) in Portugal as well as in Mati fires in Greece.              •	 Avoided property value losses are estimated using
   The discount rate for the cost of treating injuries                   COS2018 data as well as through the database on
   during the time horizon is 3.5 percent.                               land value through PORDATA following the 2017
                                                                         fire land and property value decline (PORDATA,
•	 Fire damage prevented to housing is explained                         2020b).
   above in methodology.
                                                                      •	 Avoided lost tourism income is based on actual
•	 Reduction of losses to agriculture, forestry, and                     values from the 2017 fires. Results are based on the
   grazing is considered a direct cost to losses in the                  information provided by the Regional Tourism Office
   region. These values were interpreted from the                        for the Centre of Portugal (PORDATA, 2020a).



Case studies                                                                                                   Wildfires    152
•	 Cost of sheltering and displacement avoided is           •	 Increased security from lessened impacts and less
   estimated by the cost of rental per day per person          volatility due to wildfire management is assumed to
   (approximately €15 per day per person), the number          be 1 percent of GDP for the region—this figure was
   of people requiring shelter (based on damaged               estimated based on the Portuguese economic
   housing), and the average time sheltering was               growth of 1.8 percent forecasted by the Bank of
   needed after the 2017 fires. It is assumed that 50          Portugal, which will be lower in inland areas such as
   percent of people stayed with relatives and therefore       Pedrógão Grande. A discount rate of 3.5 percent is
   no additional cost was borne, and the remaining 50          used when calculating this dividend over the period.
   percent stayed in rentals. The average time to
   recovery is estimated at 6 months. In addition, the      •	 Increase in land purchases estimates the value of
   loss to productivity by displaced persons is                land that is increased due to a decrease in wildfire
   calculated as a GDP per capita reduction per                risk due to WUI management. A 1 percent increase
   working person per day and assuming that persons            in land value (approximated as housing value) in
   staying in rentals/hotels or with family have 50            fire-prone areas is assumed. Also considered in this
   percent productivity.                                       conservative estimate is the possibility that people
                                                               tend not to buy land at typical market value in areas
•	 Soil erosion due to the wildfires is estimated based        where tragic accidents have occurred, such as lives
   on the cost of soil lost in 2008 at €5.82 per ha            lost in the 2017 fires, especially in a short time
   (US$7.03 per ha) over 12 years (Pinheiro, 2015).            following the event.
   Hectares burned in Pedrógão Grande are quantified
   in COS2018. A discount rate of 5 percent is used         Triple dividend 3 (co-benefits)
   over the period.
                                                            •	 Fixed fire suppression costs are those that are
•	 Fire suppression costs avoided are operational              related to the existing fire service structure
   costs based on the AGIF that provides national cost         regardless of whether there is a fire or not. It includes
   values. These costs have been scaled to the                 fire brigade costs, administration, aerial rentals with
   Pedrógão Grande region to estimate the reduction            basic contracts, and so on. Fire suppression costs
   in yearly operation costs due to enhanced WUI               are evaluated using data from the AGIF that have
   management (AGIF, 2020). The operational costs              been scaled to the Pedrógão Grande region to
   are those resulting from service needs during fire          estimate the reduction in yearly fixed costs due to
   suppression, including equipment, hourly payment            enhanced WUI management (AGIF, 2020). The
   to firefighters, overtime payment for aerial means,         justification is that with yearly reductions in fire
   meals in the field of operations, and so on. Over the       losses due to improved fuel management, fixed
   period of study, a discount rate of 5 percent has           costs could be reduced to a reasonable degree
   been used.                                                  without compromising fire services. A discount rate
                                                               of 5 percent is used over the period.
Triple dividend 2 (unlocking economic potential):
                                                            •	 The sale of biomass is considered a co-benefit of
•	 The economic value added to the Portuguese                  WUI fuel management due to increased biomass
   economy from biomass production (TD3) activities            production from clearing forest fuel. It is estimated
   is a multiplier of 1.77 based on existing data of           as 30EUR/ton plus the cost of operations. The data
   biomass production in California (2020) and scaled          was obtained through conversations with biomass
   to Portuguese consumer price indices (University of         producers.
   California, 2020). This multiplier captures the
   indirect and induced economic contribution from              Æ	 Results of the analysis by dividends
   wood biomass production based on the purchasing              	 and overall
   of materials and services directly within the forestry
   supply chain (indirect) and the purchasing of goods      Overall, the analysis shows a high BCR greater than 1,
   and services by workers in the industries (induced       which indicates a positive economic rationale for
   effects). The economic ripple effects are accounted      undertaking this preventive investment (see Table 58).
   for in TD2 as they offer additional economic             The highest benefits appear to be those from avoided
   potential regardless of a wildfire occurring.            losses, but the second order economic effects

Case studies                                                                                          Wildfires     153
(dividend 2) as well as co-benefits (dividend 3) are                 protecting over the 30-year time horizon (see
likely to be underestimated due to lack of data for                  Table 59).
Table 58: CBR of WUIs in Pedrógão Grande (in million €)

                                                             BCR: 3.1

                                                             BENEFITS (€)                COSTS (€)
                        Dividend 1                                   140.68
                        Dividend 2                                      1.45
                        Dividend 3                                      2.17
                        Total                                        144.29                  46.75

Source: World Bank analysis based on external data and information


Table 59: Expanded triple dividend BCR calculation of WUIs in Pedrógão Grande (in million €)

                                                   WUI MANAGEMENT - HOMES

 FIRST DIVIDEND (€)
 Reduction of lives                                                                                          107.25
 Reduction of injuries                                                                                              4
 Fire Damage prevented (houses)                                                                                   22.7
 Reduction of losses to agriculture                                                                               0.84
 Reduction of losses to forestry                                                                                  1.51
 Reduction of losses to grazing                                                                                  0.003
 Reduction in deaths related to cardiorespiratory problems                                                        1.14
 Reduction in treatment costs related to cardiorespiratory problems                                               0.01
 Cost of CO2 avoided                                                                                              0.16
 Avoided loss of property values                                                                                  1.03
 Avoided loss of tourism income                                                                                   0.24
 Cost of sheltering/displacement avoided - lodging                                                                0.55
 Cost of sheltering/displacement avoided - productivity                                                           0.69
 Soil erosion costs avoided                                                                                       0.01
 Fire suppression, operational costs, lowered with WUI management                                                 0.54
 Total first dividend                                                                                        140.68
 SECOND DIVIDEND (€)
 Longer-term economic add from biomass production (induced/indirect)                                              0.73
 Security/reduced volatility from mitigation/risk perception                                                      0.71
 Increase in land purchases                                                                                      0.005
 Total second dividend                                                                                            1.45
 THIRD DIVIDEND (€)
 Economic co-benefits



Case studies                                                                                         Wildfires      154
 Fire suppression, fixed costs, lowered with WUI management                                                               0.02
 Sale of biomass for energy production                                                                                    2.15
 Social co-benefits
 Improved awareness of WUI management by homeowners                                                             (qualitative)
 Total third dividend                                                                                                     2.17
 TOTAL DIVIDEND                                                                                                      144.29
 Total cost                                                                                                              46.75
 BCR                                                                                                                       3.1

Source: World Bank analysis based on external data and information

    Æ	 Challenges faced and lessons learned                          benefits factors could be valuable to an expansion of
                                                                     this study. Distributional impacts of the creation of
Data that could not be ascertained from Portuguese                   defensible space for appropriate WUIs are that these
sources, including soil erosion from fires, should be                zones enable homeowners to avoid property value
investigated for the Portuguese and/or European                      losses and for tourism in the area to remain
context since fires are becoming more prevalent and                  uninterrupted in the case of future wildfires. Moreover,
long-term costs are not always evaluated. In addition,               the property value of homes and land in the sur-
accurate estimations of land and property value                      rounding area is expected to increase with the
increase from reduced volatility in the area due to                  establishment of appropriate defences in WUI, which
lessened fire starts, direct and indirect fire suppression           benefit home and landowners in the area.
costs avoided, and other triple dividend 2 and 3


         WILDLAND-URBAN INTERFACES: IMPROVEMENTS TO INDUSTRIES IN PORTUGAL

 This case study is a new ex-ante analysis under this                distance is 50 m for isolated infrastructures and 100 m
 project that involved modelling of hazards.                         for industrial parks) (Caballero, et al., 2007).

    Æ	 Introduction and background                                   However, there is still progress that is needed regarding
                                                                     industries in WUI areas. European countries face a
While forest fires cause fatalities, injuries, and property          lack of standardized laws and monitoring of industrial
losses for residents living in the WUI areas, they also              facilities located in or near the wildlands. Fire and
cause industrial damage that can lead to accidents                   safety measures in Europe are usually categorized
and natural-technological (Natech) emergencies                       based on established activity such as nuclear and
(WUIVIEW, 2019). Wildland-industry interface is a                    chemical, while measures related to WUI scenarios
branch of WUI and looks particularly at the impacts of               are usually limited to fuel-reduced fringes (WUIVIEW,
fires on industries and cascading consequences that                  2019). Though there are forest fire research projects
may arise from fire hazards. Fires near industrial areas             like SPREAD that produced fire risk maps and analysed
can cause accidents where large amounts of toxic or                  fire spread patterns in Europe (CORDIS, 2020), more
flammable materials are accumulated. Therefore, it is                investments and studies should be undertaken with a
particularly important for industries in WUI areas to be             focus on WUI improvements to industries to reduce
well prepared for the occurrence of forest fires to avoid            damages and economic losses in the industrial sector.
economic and social losses during fire seasons by the                To better understand the factors leading to the
creation of appropriate defensible space surrounding                 vulnerability of people, infrastructure, and assets and
properties. To date, some regulations have been made                 the outcomes of loss, it is essential to assess cost
for WUI improvements to industries. For instance, in                 benefit analyses since wildfires are ever increasing in
Spain, it is required to have a low-density vegetation               the EU region and loss and damage exceed far beyond
strap around the industrial infrastructures with a                   property and lives.
minimum safety distance of 30 m (in Portugal this

Case studies                                                                                                 Wildfires      155
    Æ	 Description                                                       Æ	 Methodology

This case study investigates the hypothetical                        The BCA is an appraisal of wildland-industry interface
investment of managing WUI in the municipality of                    over a 40-year time horizon and undertakes a sensitivity
Oliveira do Hospital in Portugal to study the impacts to             analysis of low-to-high hazard impacts and discount
industries with and without WUI management. The                      rates. A 40-year time horizon was chosen as the Institute
case study considers the necessary actions taken by                  for Nature Conservation and Forests in Portugal describes
regional authorities, whether by incentives, code                    the 2017 fire as the one-in-39-year fire (ICNF, 2020). The
changes, or direct management, that aid to create                    discount rates used in the study vary from 3.5 percent to
defensible spaces surrounding industries to reduce                   5 percent based on uncertainty of factors calculated
the risk of fire to industries in the WUI. The October               during the 40-year period.
2017 Portugal fires in Oliveira do Hospital in Portugal’s
interior led to casualties, losses in industrial facilities,         The methodology is as follows:
as well as affected other industries in the area. The
hypothetical investment studies the industries that                  •	 Analysis in the field of 65 industrial facilities affected
were damaged in 2017 and analyses the advantages                        by the fire event with focus on the fuel management
of having acceptable fuel management around                             distance and its impacts on damages with and
industrial buildings to minimize fire ignition and                      without WUI risk reduction interventions. The
spread. The approach of this study is to use existing                   distances studied are 0–2 m, 2–10 m, 10–50 m,
research on losses from fires in Portugal and estimate                  and >50 m. Table 60 below includes information on
the triple-dividend benefits that could have been                       the industrial facilities that were totally or partially
realized had there been an investment in the Oliveira                   destroyed by the fire and not the distribution of all
do Hospital region for WUI management of industrial                     95 industries analysed. Data on the industry types
fire risk reduction.                                                    of the 30 facilities that were not affected by the fires
                                                                        were not available. Industries and number of each
                                                                        type are Table 60:

Table 60: Industrial facilities affected by industry

 CONSTRUCTION AND BUILDING MATERIALS                                                                                         20
 Timber and cork                                                                                                              8
 Vehicles, machinery, and equipment                                                                                           9
 Metal products                                                                                                               3
 Agriculture, forestry, ranching, and hunting                                                                                 2
 Food and beverage industry                                                                                                   6
 Furniture and mattresses                                                                                                     1
 Transports                                                                                                                   5
 Water, gas, and electricity supply                                                                                           5
 Manufacture of textiles                                                                                                      1
 Other                                                                                                                        5
 Total                                                                                                                       65

Source: World Bank analysis based on external data and information




Case studies                                                                                                    Wildfires    156
•	 Characterization of industry damage from 2017 is a                          represents the probability of an industry being
   percentage of total destruction using data from                             damaged as a function of the fuel management
   ADAI at the University of Coimbra in Coimbra,                               distance.
   Portugal (2020).
                                                                          •	 Determination of the potential damage related to
•	 Assessment of fuel management from spatial                                the fuel management distance which considers the
   images26 of 30 industrial facilities undamaged in                         probability of damage and the potential of
   2017 (0 percent destruction) by the fire event to                         destruction (risk of damage and the percentage of
   determine fuel management distances. The risk                             loss: 100 percent, 75 percent, 40 percent, 20
   damage related to the fuel management distance                            percent, 0 percent). See Figure 33.

Figure 33: Variation of potential damage (%) as a function of fuel proximity to industries in Oliveira do Hospital




Source: World Bank analysis based on external data and information
Note: the x-axis represents the different types fuel management strip (by length).


•	 Next, the cost elements are calculated to determine                         surrounding the industrial property). Therefore,
   the economic loss from damage to industrial                                 the investment in fuel management along with the
   facilities. The estimated average cost of                                   costs of damage (costs avoided with interventions)
   infrastructure, equipment, and raw materials of an                          was estimated per industrial facility per year for
   industrial facility in Oliveira do Hospital is around                       each fuel management option. The discount rate
   €0.83 million. Data from the CCDRC (CCDRC, 2020)                            used when evaluating the cost is 3.5 percent over
   in Portugal provide loss information to industrial                          40 years. The potential damage reduction in euro
   facilities from the 2017 October fire from which the                        per industry is driven by each fuel management
   number above is derived based on data available                             strip option. Therefore, the investment in fuel
   for affected facilities that requested support from                         management along with the costs of damage
   the government. In addition, based on the image-                            (costs avoided with interventions) was estimated
   based analysis, the estimated area of each industrial                       per industry per year for each fuel management
   facility is approximately 50 m × 20 m = 1,000 m2. In                        option. The counterfactual investment compared
   addition, based on the image-based analysis, the                            in the BCA is the difference in losses between a no
   estimated area of each industrial facility is                               fuel management case and fuel management of
   approximately 50 m × 20 m = 1,000 m2.                                       approximately 30 m surrounding the industrial
                                                                               facility. The average costs of each fuel management
•	 The cost of fuel management around the typical                              strip (0–2 m, 2–10 m, 10–50 m, and >50 m)
   industrial facilities in the area as well as the                            around the industrial facilities were estimated to
   potential damage was determined in euros. The                               be €1,078 per ha based on the Manual of Fuel
   potential damage reduction in euro per industrial                           Management for operations with bush cutters
   facility is driven by each fuel management strip                            (Guiomar & Fernandes, 2011). The creation and
   option (that is, creation of defensible space                               maintenance of defensible space is considered at

26 These images were taken in August 2017, two months before the fire event.



Case studies                                                                                                      Wildfires   157
   a frequency of every two years within the time                       facilities as related to a decrease in economic
   horizon Figure 34 shows increased fuel                               impacts from wildfire losses.
   management investment costs of industrial

Figure 34: Fuel management investments and corresponding economic losses to industries in
Oliveira do Hospital




Source: World Bank analysis based on external data and information



The Triple Dividend Framework includes the following benefits:

Triple dividend 1 (costs avoided):                                   •	 Reduction of losses to agriculture, forestry, and
                                                                        grazing is considered a direct cost to losses in the
•	 Reduction of lives lost was calculated using 2017                    region. These values were interpreted from the
   fatalities corresponding with fuel management                        impacts calculated in the Technical Specifications
   distances.                                                           for the Use and Occupational Charter of Continental
                                                                        Portugal for 2018 (COS2018) (Caetano, Igreja, and
•	 Reduction of injuries using 2017 injuries in Oliveira                Marcelino 2010).
   do Hospital. The Portugal Health Regulatory
   Authority (Direção Geral de Saúde) provides the                   •	 The reduction in deaths related to cardiorespiratory
   cost per day of injuries based on severity of injury,                problems and the costs for treatment are calculated
   using which the team estimated that 40 percent of                    as direct losses avoided, referring to the COS2018
   cases were light injuries, 40 percent were medium                    data. The values are derived from the October 2017
   injuries, and 20 percent were severe injuries                        fires in Portugal (Augusto et al. 2020). Based on the
   (INFARMED, 2020). The number of injuries is                          actual values of losses of lives and injuries, the ratio
   proportional to the deaths during the 2017 event                     of injury to life lost is approximately 4:1. Therefore,
   (approximately 4 injuries to 1 life lost) and                        the number of injuries is arrived at by a multiple of
   calculated from the deaths avoided in TD1. The 4:1                   four to the number of deaths with the same
   injuries to fatalities ratio is based on the actual                  distribution of injury severity as described above
   losses and injuries from the Pedrogão Grande fire                    but focused on cardiorespiratory problems.
   (June 17, 2017) and the region around Oliveira do
   Hospital (October 2017) in Portugal as well as in                 •	 The cost of CO2 avoided from the reduction of
   Mati fires in Greece. The discount rate for cost of                  wildfires is estimated to be €13 per tonne, the area
   treatment of injuries during the time horizon is 3.5                 that could be burned based on COS2018 data, and
   percent.                                                             the emission factors provided in Silva et al. (2006).

•	 Fire damage prevented to industries is explained                  •	 Avoided property value losses are estimated using
   above in methodology.                                                COS2018 data as well as through the database on



Case studies                                                                                                  Wildfires     158
   land value through PORDATA (2020b) following the           for in TD2 as they offer additional economic
   2017 fire land and property value decline.                 potential regardless of a wildfire occurring.

•	 Avoided productivity due to lost jobs from damage       •	 Increased security from lessened impacts and less
   to industries as the number of labour days reduced         volatility due to wildfire management is assumed to
   (PORDATA, 2020b) is estimated at €104 per labour           be 1 percent of GDP for the region - this figure was
   day per worker.                                            estimated based on the Portuguese economic
                                                              growth of 1.8 percent forecasted by the Bank of
•	 Avoided lost tourism income is based on actual             Portugal, which will be lower in inland areas such as
   values from the 2017 fires based on consultations          Oliveira do Hospital. A discount rate of 3.5 percent
   with the Regional Tourism Office for the Centre of         is used when calculating this dividend over the
   Portugal.                                                  period.

•	 Soil erosion due to the wildfires is estimated based    Triple dividend 3 (co-benefits)
   on the cost of soil lost in 2008 at €5.82 per ha over
   12 years (Pinheiro 2015). Hectares burned in            •	 Fixed fire suppression costs are related to the existing
   Oliveira do Hospital are quantified in COS2018. A          fire service structure regardless of whether there is a
   discount rate of 5 percent is used over the period.        fire or not. It includes fire brigade costs, administration,
                                                              aerial rentals with basic contracts, and so on. Fire
•	 Fire suppression costs avoided are operational             suppression costs are evaluated using data from the
   costs based on the AGIF that provides national cost        AGIF. These costs have been scaled to the Oliveira do
   values. These costs have been scaled to the Oliveira       Hospital (AGIF 2020). The justification is that with
   do Hospital region to estimate that reduction in           yearly reduction in fire losses due to improved fuel
   yearly operation costs due to enhanced WUI                 management, fixed costs could be reduced to a
   management (AGIF 2020). The operational costs              reasonable degree without compromising fire services.
   are those resulting from service needs during fire         A discount rate of 5 percent is used over the period.
   suppression, including equipment, hourly payment
   to firefighters, overtime payment for aerial means,     •	 The sale of biomass is considered a co-benefit of WUI
   meals in the field of operations, and so on. Over the      fuel management due to increased biomass
   period of study, a discount rate of 5 percent has          production from clearing. It is estimated at €30 per
   been used.                                                 tonne plus the cost of operations. The data were
                                                              obtained through conversations with biomass
Triple dividend 2 (unlocking economic potential):             producers and are referred to 2020.

•	 The economic value added to Portuguese economy              Æ	 Results of the analysis by Dividends
   from biomass production (TD3) is a multiplier of            	 and overall
   1.77 based on existing data of biomass production
   in California (2020) and scaled to Portuguese           Overall, the analysis shows a high BCR greater than 1,
   consumer price indices (University of California        which indicates a positive economic rationale for
   2020). This multiplier captures the indirect and        undertaking this preventive investment (see Table 61).
   induced economic contribution from wood biomass         The highest benefits appear to be those from avoided
   production based on the purchasing of materials         losses, but the second order economic effects
   and services directly within the forestry supply        (dividend 2) and economic co-benefits (dividend 3)
   chain (indirect) and the purchasing of goods and        are likely to be underestimated due to lack of data (see
   services by workers in the industries (induced          Table 62).
   effects). The economic ripple effects are accounted




Case studies                                                                                           Wildfires     159
Table 61: BCR of WUI management to industries in Oliveira do Hospital (in million €)

                                                              BCR: 2.1

                                                          BENEFITS (€)         COSTS (€)
                            Dividend 1                                86.44
                            Dividend 2                                 4.49
                            Dividend 3                                  2.1
                            Total                                     93.04       44.48

Source: World Bank analysis; based on external data and information


Table 62: Expanded Triple Dividend Cost Benefit Ratio Calculation of WUI management to industries in
Oliveira do Hospital (in million €)

                                                 WUI MANAGEMENT - INDUSTRIES

 FIRST DIVIDEND (€)
 Reduction of lives                                                                                      33.02
 Reduction of injuries                                                                                    0.12
 Fire Damage prevented (industries)                                                                       7.04
 Reduction of losses to agriculture                                                                        2.5
 Reduction of losses to forestry                                                                          1.58
 Reduction of losses to grazing                                                                           0.01
 Reduction in deaths related to cardiorespiratory problems                                                2.76
 Reduction in treatment costs related to cardiorespiratory problems                                       0.03
 Cost of CO2 avoided                                                                                      0.27
 Avoided loss of property values                                                                         33.81
 Avoided productivity loss                                                                                0.35
 Avoided loss of tourism income                                                                           3.61
 Soil erosion costs avoided                                                                               0.02
 Fire suppression, operational costs, lowered with WUI management                                         1.32
 Total first dividend                                                                                    85.44
 SECOND DIVIDEND (€)
 Longer-term economic add from biomass production (induced/indirect)                                       0.7
 Security/reduced volatility from mitigation/risk perception                                               3.8
 Total second dividend                                                                                    4.49
 THIRD DIVIDEND (€)
 Economic co-benefits
 Fire suppression, fixed costs, lowered with WUI management                                               2.05
 Sale of biomass for energy production                                                                    0.06
 Social co-benefits
 Improved awareness of WUI management by industry operators                                     (qualitative)


Case studies                                                                                 Wildfires      160
 Total third dividend                                                                                                       2.1
 TOTAL DIVIDEND                                                                                                           93.04
 Total cost                                                                                                               44.48
 BCR                                                                                                                        2.1

Source: World Bank analysis; based on external data and information


    Æ	 Challenges faced and lessons learned                           increase in fire danger is projected to increase in
                                                                      Western-Central Europe, but the absolute fire danger
Data that could not be ascertained from Portuguese                    remains highest in Southern Europe. Fuel
sources, including soil erosion from fires, should be                 management interventions such as firebreaks and
investigated for the Portuguese and/or European                       fuel breaks (see Figure 35 and Figure 36) have been
context since fires are becoming more prevalent and                   used for fire prevention and fire spread mitigation
the long-term costs are not always evaluated. In                      within forest areas and on their peripheries where
addition, accurate estimations of land and property                   buildings and other assets may exist. Firebreaks are
value increase from reduced volatility in the area due                strips of bare soil or fire retarding vegetation meant to
to lessened fire starts, direct and indirect fire                     stop or control fire around buildings, farms, and
suppression costs avoided, and other triple dividend 2                residential properties as they provide a fixed safety
and 3 benefits factors could be valuable to an                        distance that protects the civilians (Natural Resources
expansion of this study.                                              Conservation Services, 2011; WUIVIEW, 2019). Fuel
                                                                      breaks are strips or blocks of vegetation that have
3.5.3. FUEL MANAGEMENT FOR WILDFIRE                                   been altered to slow or control a fire and slow the
       RISK REDUCTION IN FORESTS                                      spread of fire because they are managed to provide
                                                                      far less fuels to carry the flames. These adaptation
    Æ	 Introduction and background                                    measures are typically implemented by forest
                                                                      managers and have shown to substantially reduce
More severe fire weather in Europe and substantial                    fire risks but are not evenly applied in fire-prone
expansion of the fire-prone area and longer fire                      areas. The countries with the highest absolute
seasons are projected in most regions of Europe,                      danger to wildfire remain Portugal, Spain, and Turkey
particularly for high-emissions scenarios. The                        (De Rigo, et al., 2017).

Figure 35: Fuel-reduced fringes (firebreaks and fuel breaks) provide a fixed safety distance




Source: Bennett, et al. (2010)




Case studies                                                                                                  Wildfires      161
Figure 36: View of a fuel break in a pine stand in Central Portugal (photo of ADAI)




Source: ADAI (2020)


Climate change projections suggest substantial              of the 2017 fires in Pedrógão Grande, as well as other
warming and increases in the number of heat waves,          countries that have faced large fires, to develop
droughts and dry spells across most of the                  relationships between fire hectares burned and
Mediterranean area and Southern Europe, which               casualties. Portuguese legislation requires the
would increase the length and severity of the fire          existence of fuel breaks around a maximum non-urban
season. For these reasons as well as the densification      area of 100 km2. These are called primary fuel breaks
of lived areas near forests, the need to understand the     as other narrower fuel breaks may exist in the
impacts of interventions to reduce and alleviate fire       interspatial areas. The primary fuel break can have
hazards is of paramount importance (EEA, 2020).             some vegetation that is less combustible, like cork
BCAs such as the one performed for this and other           trees, which are also examined for co-benefits in this
studies attempt to comprehensively quantify the triple      study. A novel methodology is employed to evaluate
dividend benefits that are often not included in wildfire   the benefit of fuel breaks as a priority fuel management
intervention BCAs. More such studies should be              investment. Based on past fires and literature review
undertaken in fire-prone parts of Europe, and this case     of the outcomes, interpolations have been made for
study can provide a sample methodology on how to            the fuel break economic effectiveness for industry,
capture triple dividend benefits.                           housing, and other asset losses avoided.

    Æ	 Description                                             Æ	 Methodology

The case study analyses pine tree forest plots in the       The BCA is over a 30-year time horizon and undertakes
Central Region of Portugal to appraise the cost of fuel     a sensitivity analysis of low-to-high hazard impacts
management using fuel breaks and comparing them             and discount rates. A 30-year time horizon was chosen
to losses avoided, including lives saved, injuries          as an analysis carried out using data from the Institute
avoided, and losses avoided to homes, forestry, and         for Nature Conservation and Forests in Portugal shows
tourism. Such an intervention would be undertaken by        that this is a median value for the occurrence of very
forest managers by direction of the regional                large fires in central Portugal (ICNF, 2020). Lives lost
government or appropriate ministry. Losses included         are estimated with an investigation of 22 case studies
in this study have been estimated by ex post analysis       of large fires with fatalities in different countries that



Case studies                                                                                         Wildfires    162
shows that there is an increase of fatalities with the                         management operations over 30 years with a discount
extension of the fire.27 Excluding five cases of                               rate of 5 percent over that period. The cost also
relatively small fires with many fatalities as outliers, an                    includes the fuel break development costs of €3,000
approximate linear relationship between number of                              per ha and plantation of cork at €1,000 per ha.
fatalities and burned area in large fires can be found.
This amounts to a 0.339 fatalities per 1000 ha burned                          It is important to note that the effectiveness of a fuel
in very large fires.28 It should be noted that not all large                   break is not 100 percent as it depends on the hazard
fires cause causalities, as there are other factors that                       conditions and the level of firefighting presence. The
may cause or avoid casualties. Conversely, we can see                          percentages in Table 63 are based on expert
that there are fire events that create a large number of                       assessment of the capacity of a fire crew stopping a
victims with relatively small burned areas. From the                           fire in a well-managed firebreak (also a designated fuel
analysis, it is found that any effort to reduce the area of                    break) in a 10 × 10 km2 forest plot. In the case of an
a large fire will contribute to saving lives at an average                     approaching fire of a very high hazard, it is assumed
rate of 2,950 ha per life.                                                     that in 30 percent of the cases, fire crews will be
                                                                               successful in stopping the fire. The 30 percent also
The cost of fuel management considers an extension                             relate to the area of forest that is preserved from fire
of forestland covered by a single species (either Pine                         damage. However, in the case of spot fires or very high
or Eucalyptus) in a plot of land 10 × 10 km2 with a fuel                       winds, the fire suppression efforts by crews might not
break 125 m wide in the case of a very high hazard                             be as efficacious, and it is assumed that this occurs in
condition. The fuel break assisted by fire suppression                         70 percent of cases (70 percent unsuccessful and 30
forces will reduce the probability of a fire burning that                      percent successful fire suppression). The effectiveness
plot to 70 percent, in comparison to not having a fuel                         of firebreaks is dependent on the fire hazard
break. The estimated cost of creating a fuel break and                         (extreme to medium in this study), which is a function
converting the species to cork trees is €1 million to                          of weather conditions, fuel loads, topography, and
protect a plot of 10 kHa. The maintenance of the fuel                          other elements, and its characterization is based on
break using machinery will cost an average of €500                             historical data and events in Portugal. The values
per ha every three years. The total cost of the fuel                           shown in Table 63 are used in the study to evaluate
management intervention in the 250 ha of fuel break is                          the effectiveness of fire break.
approximately €1.2 million and includes nine fuel


Table 63: Estimation of effectiveness of fuel breaks with regard to the hazard level and degree of effective
fire suppression

                                                 Effective or Low Suppression              Level ofFire Hazard
           Existence of Fuel Break
                                                             Services              Extreme V. High      High   Medium
                                               Effective fire suppression services    5%     30%        60%     80%
                        Yes
                                              Low fire suppression services           1%      5%        30%     50%
                                               Effective fire suppression services    1%      5%        30%     60%
                        No
                                              Low fire suppression services           0%      1%         5%     30%
Source: World Bank analysis; based on external data and information




27 The countries studied include Portugal, Greece, the United States, France, and Australia.
28 From large fire events in various countries, a linear relationship was made between fatalities per area to determine this value.



Case studies                                                                                                                          Wildfires   163
The following scenarios on investment in fuel break         •	 Injuries avoided estimates the number of injured
and fire suppression are considered:                           people as four times the number of fatalities based
                                                               on actual ratios from past fires in Portugal. Therefore,
1.	 No fuel break and effective fire suppression under         an investment in creating and maintaining a fuel
    extreme fire hazard: 1 percent effectiveness               break would avoid about 33.9 injuries per 10 kHa
                                                               of intervention based on relationships shown in
2.	 No fuel break and effective fire suppression under         Table 63 The discount rate of the cost of treatment
    very high fire hazard: 5 percent effectiveness             for injuries over the period analysed is 3.5 percent.

3.	 Fuel break and effective fire suppression under         •	 Fire damage prevented to houses is based on the
    extreme fire hazard: 5 percent effectiveness               analysis of 31 cases of fires with an area larger than
                                                               10 kHa up to 2 MHa that yielded an average rate of
4.	 Fuel break and effective fire suppression under            0.65 houses per kHa. Comparing scenarios 2 and 4
    very high fire hazard: 30 percent effectiveness.           above, the investment in fuel breaks would
                                                               correspond to an avoided loss of 0.65 × 3 = 1.95
The BCA compares the difference in losses avoided              houses for each plot of 100 kHa of intervention. The
between scenarios 2 and 4. The expected burned area            discount rate for fire damage over the time horizon
in a very high fire hazard within a 30-year time horizon       is 3.5 percent. Using data on the average value of
comparing no fuel break and fuel break cases. This             houses in central Portugal, provided by the National
results in avoided losses of protected areas of 25 kHa         Institute of Statistics (PORDATA, 2020b), these
within every 100 kHa of forest managed in the case of          avoided losses amount to €0.23 million.
an effective fuel break with effective fire suppression.
Based on the success rates of fire suppression              •	 Reduction of losses to forestry considers the
described previously, on average, 30 percent of the            impacts calculated from previous fires in Technical
area will be saved from fire burn. On the other hand, if       Specifications for the Use and Occupational Charter
there is no investment in fuel breaks, the probability of      of Continental Portugal for 2018 (COS, 2018;
protecting the forest from fires will be decreased to 5        Caetano, et al., 2010).
percent (considering factors that may contribute to
the success of operations, such as the lack of spot fires   •	 The reduction in deaths related to cardiorespiratory
and crown fires). The difference between the two               problems as well as the costs for treatment are
scenarios (with and without firebreaks but both with           calculated as direct losses avoided, referring to the
effective fire suppression services) amounts to avoided        COS2018 data. The values are derived from the
losses of 25 percent (= 30 − 5 percent). As the unit of        October 2017 fires in Portugal in a paper by Augusto
land used for the calculations is 100,000 ha, the              et al. (2020). Based on the actual values of losses of
avoided loss is estimated as 25,000 ha of managed              lives and injuries, the ratio of injury to life lost is
forest area.                                                   approximately 4:1. Therefore, the number of injuries
                                                               is arrived at by a multiple of four to the number of
The Triple Dividend Framework includes the following           deaths with the same distribution of injury severity
benefits:                                                      as described above but focused on cardiorespiratory
                                                               problems.
Triple dividend 1 (costs avoided):
                                                            •	 A stand of pine (Pinus pinaster) emits 26 tonnes of
•	 Considering the two cases of with and without fuel          CO2 per each hectare burned (Silva, 2006). The
   break interventions in a plot of 100 kHa the avoided        investment in fuel management in creating a fuel
   loss of burned area is 25 kHa/100 kHa. According            breakin plots of 100 kHa would correspond to an
   to the present analysis of lives lost explained above,      avoided loss of 25 kHa after a period of 30 years in
   this corresponds to avoided fatalities of about 8.48        an area with a return period of 30 years. This is
   lives per 100 kHa of intervention in the case of a          equivalent to an amount of 650,000 tonnes of CO2
   major conflagration. A discount rate of 3.5 percent         emissions avoided per 100 kHa with intervention.
   is used for fire damage avoided to housing plots for
   the time horizon.



Case studies                                                                                         Wildfires     164
•	 Property value decrease assumes a 5 percent             •	 Increased security from lessened impacts/less
   decrease avoided with fuel breaks (PORDATA,                volatility due to wildfire management is assumed to
   2020b).                                                    be 1 percent of GDP for the region. A discount rate
                                                              of 5 percent is used over the time horizon for this
•	 Avoided lost tourism income is based on actual             factor.
   values from the 2017 fires. Data were obtained from
   the Regional Tourism Office for the Centre of           •	 Increase in land purchases estimates the value of
   Portugal.                                                  the reduction by the increase in land purchases. A 1
                                                              percent increase in land value (approximated as
•	 Cost of sheltering and displacement avoided is             housing value) in fire-prone areas is assumed. Also
   estimated by the cost of rental per day, the number        considered in this conservative estimate is the
   of people requiring shelter is based on damaged            likelihood that people tend not to buy land at typical
   housing at a rate of 0.65 houses per kHa. It is            market value in areas where tragic accidents have
   assumed that 50 percent of people stayed with              occurred, such as lives lost in the 2017 fires,
   relatives and therefore no additional cost was borne,      especially in a short time following the event.
   and the remaining 50 percent stayed in rentals. The
   average time to recovery is estimated at six months.    Triple dividend 3 (co-benefits):
   In addition, the loss to productivity by displaced
   persons is calculated as a GDP per capita reduction     •	 Fixed fire suppression costs are those that are
   per working person per day and assuming that               related to the existing fire service structure
   persons staying in rentals/hotels or with family have      regardless of whether there is a fire or not. It
   50 percent productivity.                                   includes fire brigade costs, administration, aerial
                                                              rentals with basic contracts, and so on. Fire
•	 Soil erosion due to the wildfires is estimated based       suppression costs are evaluated using data from
   on the cost of soil lost in 2008 at €5.82 per ha           the AGIF. These costs have been scaled to the
   (US$7.03 per ha) over 12 years (Pinheiro, 2015).           Central Region of Portugal to estimate the reduction
   Hectares burned in Pedrógão Grande are quantified          in yearly fixed costs due to enhanced fuel
   in COS2018. The discount rate of soil erosion losses       management (AGIF, 2020). The justification is that
   over the time horizon is 5 percent.                        with yearly reduction in fire losses due to improved
                                                              fuel management, fixed costs could be reduced to
•	 Fire suppression costs avoided are operational             a reasonable degree without compromising fire
   costs based on the AGIF that provides national cost        services. The implementation of DRM measures
   values. These costs have been scaled to the Central        will reduce the costs of suppression over time.
   Region of Portugal to estimate that reduction in           Initially, it will reduce variable costs such as flight
   yearly operation costs due to enhanced WUI                 hours, fuel consumed by vehicles, and meals for
   management (AGIF, 2020). The operational costs             fire services, and later, it may also reduce the fixed
   are those resulting from service needs during fire         costs (less contracts with aerial means). Over the
   suppression, including equipment, hourly payment           period of study, a discount rate of 5 percent has
   to firefighters, overtime payment for aerial means,        been used.
   meals in the field of operations, and so on. Over the
   period of study, a discount rate of 5 percent has       •	 In the area of the fuel break, the planting of other
   been used.                                                 trees can profit without impairing the risk reduction.
                                                              For example, olive trees (olive oil), arbutus unedo
Triple dividend 2 (unlocking economic potential):             (alcoholic beverage), oak trees (cork), and
                                                              paulownia biomass can all be planted in fuel breaks
•	 The economic value added to Portuguese economy             areas. The study considers the use of oak trees in
   from the sale of cork from (TD3) the fuel break areas      the fuel break. Carbon sequestration is from the
   is multiplier of 2.032 based on solid wood product         plantation of cork trees in the fuel break area that
   production in California (2020) and scaled to              will promote carbon sequestration at a rate of 0.1
   Portuguese consumer price indices (University of           kg carbon per ha. This will correspond to 25 kg of
   California, 2020).                                         carbon sequestration per year.



Case studies                                                                                        Wildfires    165
                                                                         Æ	 Results of the analysis by Dividends
                                                                         	 and overall

•	 Sale of cork trees is calculated with data from the                   Overall, the analysis shows a high BCR greater than
   Portuguese Industry of Cork, one hectare of cork                      1, which indicates a positive economic rationale
   plantation can produce a revenue of €388 every                        for undertaking this preventive investment (see
   nine years, with the required tree separation on a                    Table 64). The highest benefits appear to be those
   fuel. Given the area of the fuel break of 250 Ha and                  from avoided losses, but the second order economic
   the period of 30 years, this corresponds to a                         effects (dividend 2) and economic co-benefits
   revenue of €0.291 million. It is considered that the                  (dividend 3) are likely to be underestimated due to
   cost of plantation and maintenance of the stand is                    lack of data. Direct losses are likely higher due to
   40 percent of this value, so the net income would                     the losses avoided to infrastructure (roads, bridges,
   be €0.194 million.                                                    and so on) for which the study did not have data to
                                                                         capture (see Table 65).


Table 64: BCR of fuel management for wildfire risk reduction in the Central Region, Portugal (in million €)

                                                             BCR: 12.3

                                                                 BENEFITS (€)                  COSTS (€)
                       Dividend 1                                         23.32
                       Dividend 2                                          2.63
                       Dividend 3                                          0.35
                       Total                                              26.31                     2.21

Source: World Bank analysis based on external data and information


Table 65: Expanded triple dividend BCR calculation of fuel management for wildfire risk reduction in the
Central Region, Portugal (in 100000 €)

                                                       FUEL MANAGEMENT

 FIRST DIVIDEND (€)
 Reduction of lives                                                                                                        50
 Reduction of injuries                                                                                                    5.51
 Fire damage prevented (industries)                                                                                       2.26
 Losses of timber production (trees not planted in the fuel break)                                                       -8.75
 Reduction of losses to forestry                                                                                          87.5
 Reduction in deaths related to cardiorespiratory problems                                                               25.79
 Reduction in treatment costs related to cardiorespiratory problems                                                       0.32
 Cost of CO2 avoided                                                                                                      8.68
 Avoided loss of property values                                                                                          6.25
 Avoided loss of tourism income                                                                                          27.88
 Cost of sheltering/displacement avoided - lodging                                                                        0.03
 Cost of sheltering/displacement avoided - productivity                                                                   0.04
 Soil erosion costs avoided                                                                                               0.35



Case studies                                                                                                 Wildfires      166
 Fire suppression, operational costs, lowered with fuel breaks                                                           27.37
 Total first dividend                                                                                                233.23
 SECOND DIVIDEND (€)
 Economic value add from sale of cork (indirect/induced)                                                                  0.88
 Security/reduced volatility from mitigation/risk perception                                                             24.18
 Increase in land purchases                                                                                               1.25
 Total second dividend                                                                                                   26.31
 THIRD DIVIDEND (€)
 Economic co-benefits
 Fire suppression, fixed costs, lowered with WUI management                                                               0.49
 Carbon sequestration                                                                                                     1.08
 Sale of cork                                                                                                             1.94
 Total third dividend                                                                                                     3.51
 TOTAL DIVIDEND                                                                                                      263.06
 Total cost                                                                                                              22.12
 BCR                                                                                                                      11.9

Source: World Bank analysis based on external data and information




    Æ	 Challenges faced and lessons learned                          and indirect fire suppression costs avoided, and other
                                                                     triple dividend 2 and 3 benefits factors could be
Data that could not be ascertained from Portuguese                   valuable to an expansion of this study. More research
sources, including soil erosion from fires, should be                is needed on the effectiveness of fuel breaks in general.
investigated for the Portuguese and/or European                      While the data used in this case study is based on
context since fires are becoming more prevalent and                  expert judgement from Portugal fires, it is important
broader understanding of long-term costs are not                     to note that this may not be translatable to other
always evaluated. In addition, accurate estimations of               countries because it is both a technical management
land and property value increase from reduced                        and a service-related (fire crews) solution.
volatility in the area due to lessened fire starts, direct


3.5.4. DECISION SUPPORT TOOLS FOR CLIMATE CHANGE
       ADAPTATION AND ALERTING FOR WILDFIRE
       RISK REDUCTION


         DECISION SUPPORT TOOLS FOR CLIMATE CHANGE ADAPTATION

 This case study is a new ex post analysis under this                  making for various objectives. Existing decision
 project that involves innovative ways to quantify                     support tools usually take the forms of web based,
 impacts.                                                              software, or customized for specific regions or
                                                                       countries (Ernst & Blaha, 2015).In recent years, there
    Æ	 Introduction and background                                     has been an increase in decision support tools for
                                                                       climate change planning and adaptation, which
•	 Decision support tools are based on computers and                   allows authorities and scientists to make decisions
   data that are used during the process of decision-                  that address both short-term risks and long-term


Case studies                                                                                                 Wildfires      167
   effects of climate change. These tools promote            Major assumptions and factors include the following:
   effective and efficient adaptations and resilience to
   climate changes, allow better decision-making for         •	 Value added to broader economy of Austria for
   risk reduction, and promote sustainable management           forestry from R&D is 10 percent of total forestry
   in areas such as land and forestry.                          output based on initial investment. This is the value
                                                                of information to the economy, which has been
•	 In recent years, web-based decision support tools are        found in a simulation by Khabarov, Moltchanova,
   becoming the most popular and frequently used in             and Obersteiner (2008), analysing the benefit of
   the context of climate change adaptation and                 information that resulted in avoided costs from
   communication. To examine the efficiency and                 forest burns of up to 21 percent (Khabarov, et al.,
   effectiveness of these tools, EU projects like               2008).
   IMPRESSIONS         were     launched     (European
   Commission, 2020). These projects enable the              •	 Maintenance cost of the decision support tool is 5
   decision makers to see to what extent decision               percent of total cost, annually.
   support tools help them in modelling and dealing with
   climate change scenarios and their uncertainties and      •	 A 50–90 percent uptake of the tool by private
   impacts (Lourenço, et al., 2019).                            owners is gradually realized in the last 10 years of
                                                                the 30-year horizon. This is an uptake value
•	 When using decision support tools, it is essential to        considering the time it would take for a forest to
   have specific, locally relevant data for the tools to        grow and the buy-in of the tool users.
   produce the most accurate and efficient outcomes. It
   is also important to consider and analyse the costs       •	 A 1–1.5 percent increase in GDP from forestry in
   and benefits of such resilience strategies, especially       the area is realized within the last 10 years of the
   for green infrastructures (Ernst & Blaha, 2015).             30-year horizon. This is considering the time it
                                                                would take for efficient and sustainable forestry to
    Æ	 Description                                              grow and for benefits to be realized. This is a
                                                                conservative estimate.
Forest DSS (2013) organizes knowledge about the
construction and use of forest DSS for promoting             •	 Discount rate of 3 percent is used.
sustainable forest management. The collaborative
developed a decision support tool for forestry extension        Æ	 Results of the analysis by dividends
services for small-scale private landowners to improve          	 and overall
silviculture in southern forest areas in Austria, not only
to reduce the impacts of climate change leading to           Triple dividend 1 (costs avoided):
forest fires in the region but also for efficient and
productive ecosystem services from forestry.                 •	 Avoided direct and indirect forest fire costs are
                                                                obtained from the 2020 white paper on forest fires
The methodology includes the start-up and assumed               in the Alps (Mayer, et al., 2020)
maintenance cost of the decision-support tool over the
horizon of 30 years and compares to forest fire direct       Triple dividend 3 (co-benefits):
and indirect costs to the region as well as improved
GDP with efficient silviculture. The methodology             •	 The value of improved silviculture that includes an
references a study from Ireland that was used to                increasing uptake by small forest owners and
estimate the overall GDP improvement (Dhubháin,                 provides more efficient harvests for forestry over
2009) as well as studies on Austria forest management           time. This is estimated as a 1.5 percent increase in
that were used to estimate the costs and benefits of            the last 10 years of the horizon studied (years 20 to
the decision support tool (Lexer, et al., 2005). The data       30), after the new growths are ready for harvest.
gathered for the cost of the tool and the estimated
users were provided by a senior researcher who               In the long term, informed decision-making by private
developed the decision support tool.                         forest owners for improved silviculture shows a great
                                                             benefit compared to the cost of creating the decision



Case studies                                                                                          Wildfires   168
support tool (see Table 66 and Table 67). This implies                broader economic costs. The higher limit includes
that with effective information and communication,                    greater GDP per year from improved silviculture (up to
along with incentives to apply the tool in evaluation of              3 percent based on information on the economy of
economic output of silviculture, more fire-resilient                  Finland showing 3 percent improved harvest per year
forests could be created and provide better economic                  (Wikipedia, 2020)). The low- and high-range BCR is
output through forestry.                                              3.3 and 10.6, respectively, with a median BCR of 5.8,
                                                                      as detailed below. The NPV for the median case is
In performing sensitivity analyses for this study, the                €994,000, which is positive, indicating that this is a
lower bound of BCRs are based on higher annual costs                  good investment.
over time (10 percent of total cost) with no inclusion of


Table 66: BCR of climate change adaptation decision support tool in Austria (in 100000 €)

                                                             BCR: 5.8

                                                                     BENEFITS (€)                  COSTS (€)
                 Dividend 1                                                  1.85
                 Dividend 2
                 Dividend 3                                                  9.01
                 Total                                                     10.86                         1.88

Source: World Bank analysis based on external data and information



Table 67: Expanded triple dividend BCR calculation for the climate change adaptation decision support tool
in Austria (in 100000 €)
                                            DECISION-SUPPORT TOOL FOR FORESTRY

 FIRST DIVIDEND (€)
 Direct and indirect cost of fires avoided                                                                               1.85
 Total first dividend                                                                                                    1.85
 THIRD DIVIDEND (€)
 GDP increase due to improved silviculture                                                                               9.01
 Total third dividend                                                                                                    9.01
 TOTAL DIVIDEND                                                                                                         10.86
 Total cost                                                                                                              1.88
 NPV (30-year time horizon)                                                                                              9.94
 BCR                                                                                                                      5.8

Source: World Bank analysis based on external data and information




Case studies                                                                                                Wildfires      169
    Æ	 Challenges faced and lessons learned                                  increase over time due to improved silviculture must
                                                                             be further researched and validated based on existing
Many estimations, assumptions, and simplifications                           data of this retrospective project.
were made for this study, largely because of a lack of
data for this project. Because the tool was developed                        The study could also be enhanced by analysing
in 2005, it would be of value to explore the monitoring                      specifically the economic benefit of improved
and evaluation of the forest owners who employed the                         silviculture can have on the economy, both micro- and
tool. The data might be held by the Carinthia                                macro in the Carinthia region of Austria, which can be
government agency that employed the tool.                                    extended to the whole country. More research on the
                                                                             socio-psychological factors and incentives to private
It is important to note that without the inclusion of                        forest owners should be explored to enhance and
GDP benefits as part of this study, the BCR would be                         further specify values for this BCA, which is currently
less than 1. This means that the assumptions on GDP                          conservative.


          ALERTING AND PREPAREDNESS FOR WILDFIRES IN PORTUGAL

  This case study is a new ex ante analysis under                                 Æ	 Description
  this project that involves innovative ways to quantify
  impacts.                                                                   A hypothetical investment for alerting and
                                                                             preparedness along with local fuel management
    Æ	 Introduction and background                                           surrounding homes in the Central Region of Portugal
                                                                             is appraised in this case study. The composite costs of
As a recurrent hazard in Europe, wildfires cause                             developing an alerting system, undertaking evacuation
fatalities, injuries, and displacements of civilians and                     planning, as well as localized fuel management near
generate great social and economic losses. Therefore, it                     homes in the greater region (approximately 50,000
is important to provide alerting with emergency planning                     homes) are compared to the benefits of such
and increase preparedness before the actual occurrence                       interventions to the municipality of Pedrógão Grande.
of a fire to reduce its negative impacts.                                    This kind of intervention requires first step planning
                                                                             and preparedness by the government through the
Some alerting and monitoring systems have been                               creation of evacuation plans and alerting systems for
created in Europe to improve wildfire prevention and risk                    the fire-prone region as well as independent fuel
reduction. The EFFIS29 developed by JRC is an online                         management by homeowners as a minimum to
geographic system that provides a database of real-time                      creating defensible space. Pedrógão Grande faced
information on fire events in Europe, early warnings,                        immense damage and loss during the 2017 fire season
active fire detections, and damage assessments after                         and has therefore been selected for analysis using
the occurrence of a fire (EFFIS, 2021). Studies for                          actual loss values. See Wildland-urban interface:
hydrometeorological alerting systems have averaged                           Improvements to homes in Portugal case study for
BCR between 5:1 and 10:1 but have seen BCRs of up to                         more information.
2,500:1. Tiesberg and Weiher (2009) find that examples
do not suggest that an overall factor indicates that there                   The alerting and evacuation would require regional
is a great deal of uncertainty about the true (weighted                      government investment, while fuel management
average) ratio of benefits to costs. Therefore, studies                      could be a combination of private financing and
such as the below attempt to enumerate fire alerting                         government funding or subsidy. These actions present
benefits which are considered mostly for life safety and                     the minimum that would significantly reduce the loss
injury avoidance, especially in rapidly spreading fires.                     of life and the chance for injuries and are therefore
                                                                             focused on in this case study.




29 These examples do not suggest that an overall factor of 5:1 or 10:1 is unreasonable, but they do indicate that there is a great deal of uncertainty
about the true (weighted average) ratio of benefits to costs. (Tiesberg and Weiher 2009).



Case studies                                                                                                                     Wildfires        170
    Æ	 Methodology                                                           on reducing deaths rather than injuries. On the other
                                                                             hand, it is assumed that life protection measures could
Considering the fire risk mitigation activities mainly as                    save lives but not so much for the occurrence of
contributing to reduce the number of causalities, three                      injuries. For the high hazard cases, it is assumed that
scenarios are assessed for fire risk outcomes: extreme,                      the probabilities are half of extreme hazard. For the
very high, or moderate. Based on existing outcomes                           moderate hazard cases, it is assumed that the
from fires in Portugal as well as expert judgement and                       probabilities are one-sixth of the extreme hazard
evaluation, a set of probabilities for casualties are                        scenario. As mentioned earlier, these values are based
determined given the level of implementation of the                          on expert judgement and study of consequences of
following activities:                                                        fire hazards in Portugal. The recurrence period for
                                                                             extreme hazard is about 29 years while the return
•	 Fire danger assessment                                                    period for very high hazard is about 10 years based on
•	 Alerting                                                                  historical events. In practice, the most relevant
•	 Evacuation or shelter plans                                               scenario is that of extreme or very high Hazard, as
•	 Fuel management                                                           normally in the average hazard condition fatalities are
                                                                             not expected but injuries may be.
Table 68 and Table 69 indicate estimated probabilities
of injuries and lives lost as a function of fire hazard and                  In this retrospective study, the benefits are assumed to
investment in various DRM activities. The tables are                         accrue over the period of one year and are not
developed based on assessment of the past fires in                           discounted, whereas the costs are incurred each year
Portugal and validated with ex post data on non-                             and are therefore discounted.
existent DRM measures for extreme hazard events in
Pedrógão Grande, Mati, and Rafina cities in Greece                           Expanded DRM activities for wildfire risk reduction are
(see Alerting and preparedness in Greece). For all risk                      described as follows:30
management and risk reduction activities, it is
assumed that if no action is taken by the government                         •	 Community work: Training community members to
and authorities, 20 percent of the people affected will,                        avoid behaviours that could cause ignition
on average, have the capacity to overcome situations                         •	 Education  and    sensibilization:   Educating
to avoid injuries and mortality. This assessment was                            community members on fire risk management
evaluated in fire events in which the team observed                          •	 Fire danger assessment: Daily fire risk assessment
that the probability of having fatalities or injured                            by authorities
persons was lower than the estimated maximum value.                          •	 Alerting: Informing community when fire activity is
This means that more than 20 percent of the persons                             occurring in the vicinity and actions to take
have the capacity to avoid injuries and mortalities
                                                                             •	 Evacuation and/or shelter plans: Advanced planning
without any DRM activities taking place. However, for
                                                                                of evacuation or stay-in-place
reasons of conservativism, a value of 20 percent is
maintained for people who could successfully protect                         •	 House planning: Land use planning to avoid building
themselves even without any DRM measures being                                  homes near WUI
implemented.                                                                 •	 House construction: Building with non-flammable
                                                                                materials and avoiding weak spots in homes
The probability for each DRM activity described is                           •	 Fuel management: Clearing of fuel around homes
based on expert judgement of the impact of the activity                      •	 Fire protection: Presence and capacity of firefighter
and the relevance in reducing fatalities or injuries in                         services
varying degrees of investment in DRM activities. It is
                                                                             •	 Life protection: Medical protection, ambulances,
considered that the existence of evacuation and
                                                                                and medical support.
shelter plans, for example, would have a higher effect




30 Note that these are comprehensive DRM activities for wildfire risk reduction; only four of these activities have been included and analysed in this
case study.



Case studies                                                                                                                    Wildfires        171
Considering that all mitigation activities are independent           the implementation of the set of activities will be given
of each other, the probability of having an accident given           by the product of the probabilities of each activity.


Table 68: Probabilities of injuries with risk reduction actions taken in moderate to extreme hazard fires




Source: World Bank analysis based on external data and information

Table 69: Probabilities of fatalities with risk reduction actions taken in moderate to extreme hazard fires




Source: World Bank analysis based on external data and information



The study estimates the cost of alerting and evacuation              Portugal Health Regulatory Authority (INFARMED,
planning in the Central Region of Portugal as well as                2020). The cost of alerting has been obtained by
private home preparedness through creation of                        telephone company data interpolated for Pedrógão
defensible space and evaluates the benefits of                       Grande. The cost of fuel management in the Central
casualties avoided in the municipality of Pedrógão                   Region is an average of €300 per home with 50,000
Grande in the extreme hazard case. Pedrógão Grande                   homes. It is assumed that all homeowners will
is approximately one-fifth of the Central Region by                  undertake fuel management in this case study, but the
area. Since alerting would not occur at a city level but             reality is that this will be a slow-onset preparedness
rather a regional level, the benefits of such a system               measure. This is because the quality and quantity of
would be larger than what are stated here. Any                       defensible space created by homeowners surrounding
municipality within the Central Region with fire risk                their property is not guaranteed if not mandated and
would be a potential beneficiary from alerting and                   could be non-uniform.
preparedness. However, since loss estimates are
based on Pedrógão Grande from the 2017 fires and for                 The study looks at a one-year horizon for BCA but
sake of this hypothetical investment to be constrained               computes the five-year costs of communication
to real values as much as possible, the analysts have                activities with a 5 percent discount rate.
only looked at the triple dividend 1 benefits to Pedrógão
Grande.                                                              The Triple Dividend Framework includes the following
                                                                     benefits:
Costs of injuries to Pedrógão Grande are based on the




Case studies                                                                                                 Wildfires    172
Triple dividend 1 (costs avoided):                                   Table 70 and Table 71). This can be expected as the
                                                                     costs of alerting are generally much lower than the
As this assessment largely evaluates loss of lives and               cost of lives lost or injured. Note also that the benefits
injuries avoided due to fire danger assessment,                      are likely underestimated as we are comparing the
alerting, evacuation plans, and fuel management, the                 benefits to the municipality of Pedrógão Grande to the
benefits are classified as triple dividend 1. The alerting           costs of alerting, evacuation, and fuel management of
and evacuation planning does not necessarily intend                  homes to the Central Region of Portugal. There are not
to reduce damage to homes and other assets, as some                  enough data to quantify unlocked economic potential
evacuation plans also encourage sheltering in place if               or co-benefits in this case study, but they may exist
housing is qualified appropriate to do so.                           and could be included in future studies. Importantly,
                                                                     the cost of frequent and effective education of alert
    Æ	 Results of the analysis by dividends                          receivers is not included due to data limitations. This
    	 and overall                                                    would be an added cost of intervention which would
                                                                     reduce the BCR. Overall, however, the BCR would be
The benefits are high when comparing the cost of                     greater than 1 which would make this investment a
alerting in the Centro Region of Portugal to the losses              positive ROI.
avoided from casualties in Pedrógão Grande (see


Table 70: BCR calculation of alerting and preparedness for fires in Portugal (in million €)

                                                              BCR: 11

                                                              BENEFITS (€)                        COSTS (€)
                    Dividend 1                                        200.29
                    Dividend 2
                    Dividend 3
                    Total                                             200.29                              19

Source: World Bank analysis based on external data and information


Table 71: Expanded triple dividend BCR calculation for alerting and preparedness for fires in Portugal
(in million €)

                                                 ALERTING AND PREPAREDNESS

                    FIRST DIVIDEND (€, million)
                    Reduction of lives                                                                  198
                    Reduction of injuries                                                              2.29
                    Total first dividend                                                             200.29
                    TOTAL DIVIDEND                                                                   200.29
                    Total cost                                                                           19
                    BCR                                                                                  11

Source: World Bank analysis based on external data and information




Case studies                                                                                                   Wildfires   173
    Æ	 Challenges faced and lessons learned                    that may unlock additional investment in the area
                                                               (Dividend 2) or co-benefits like awareness of fire risk
Future studies should further assess the realizable            and tools available to homeowners and residents to
benefits of employing any or all of the DRM activities in      reduce their risk (Dividend 3), which could be
other municipalities in the Centro region. Often, ‘soft’       qualitatively captured in further studies. In addition,
investments like capacity building and awareness are           frequent, uniform, and effective communication to the
understudied but a large factor in emergency and               community on understanding alerts and actions to
recovery contexts and should be included in future             take is essential but was not included in this study due
BCA analyses. In general, sparse literature exists on          to lack of data. Future studies must consider the
the value of awareness for fire and other hazards, and         element of education and behaviour related to
should be evaluated more thoroughly as often they are          receiving and understanding alerting and fuel
‘no regret’ options in risk communication and risk             management to fully capture the costs of employing
reduction capacity building. There may be other triple         this intervention.
dividend benefits of alerting, like the sense of safety


        ALERTING AND PREPAREDNESS IN GREECE

 This case study is a new ex ante analysis under               systems for the fire-prone region as well as independent
 this project that involves innovative ways to                 fuel management by homeowners as a minimum to
 quantify impacts.                                             creating defensible space. Mati and Rafina faced great
                                                               damage and loss during the 2018 fires in Attica caused
    Æ	 Introduction and background                             by heatwave and have therefore been selected for
                                                               analysis using actual loss values.
In 2018, the seaside village of Mati in the Attica region of
Greece faced fires that caused tremendous loss to life         The alerting and evacuation would require regional
and property. These fires were considered the second-          government investment, while the fuel management
deadliest event in the 21st century. Over 700 residents        could be a combination of private financing and
were evacuated or rescued. Over 100 people lost their          government funding or subsidy. These actions present
lives and more than 1,000 buildings were damaged or            the minimum that would significantly reduce the loss
destroyed (BBC, 2018). While multiple factors led to the       of life and the chance for injuries and are therefore
outcome of this event, this case study aims to                 focused on in this case study.
enumerate potential benefits from fire alerting,
emergency planning, and basic fuel management by                  Æ	 Methodology
homeowners to their properties, which are considered
primary mitigation and preparedness measures for life          Considering the above fire risk mitigation activities
safety and injury avoidance, especially in rapidly             mainly as contributing to reduce the number of
spreading fires like in Mati.                                  causalities, three scenarios are assessed for fire risk
                                                               outcomes: extreme, very high, or moderate. Based on
    Æ	 Description                                             existing outcomes from fires in Greece as well as expert
                                                               judgement and evaluation, a set of probabilities for
A hypothetical investment for alerting and                     casualties are determined given the level of
preparedness along with fuel management in the                 implementation of the following activities undertaken:
Attica region of Greece is appraised in this case study.
The composite costs of developing an alerting system,          •	 Fire danger assessment
undertaking evacuation planning, as well as localized          •	 Alert
fuel management near homes in the villages of Mati             •	 Evacuation or shelter plans
and Rafina (approximately 20,000 homes) are                    •	 Fuel management
compared to the benefits of such interventions to the
Attica region. This kind of intervention requires first        Table 72 and Table 73 include estimated probabilities
step planning and preparedness by the government               of injuries and lives lost as a function of fire hazard and
through the creation of evacuation plans and alerting          investment in various DRM activities. The tables are

Case studies                                                                                            Wildfires     174
developed based on assessment of the past fires in                           In this retrospective study, the benefits are assumed to
Portugal and validated with ex post data on non-                             accrue over the time period of one year and are not
existent DRM measures for extreme hazard events in                           discounted, whereas the costs are incurred each year
Pedrógão Grande, Mati, and Rafina. For all risk                              and are therefore discounted.
management and risk reduction activities, it is
assumed that if no action is taken by the government                         Expanded DRM activities for wildfire risk reduction are
and authorities, 20 percent of the people affected will,                     described as follows:31
on average, have the capacity to overcome situations
to avoid injuries and mortality. This assessment was                         1.	 Community work: Training community members
evaluated in fire events in which the team observed                              to avoid behaviours that could cause ignition
that the probability of having fatalities or injured
persons was lower than the estimated maximum value.                          2.	 Education and sensibilization: Educating
This means that more than 20 percent of the persons                              community members on fire risk management
have the capacity to avoid injuries and mortalities
without any DRM activities taking place. However, for                        3.	 Fire danger assessment: Daily fire risk assessment
reasons of conservativism, a value of 20 percent is                              by authorities
maintained for people who could successfully protect
themselves even without any DRM measures being                               4.	 Alerting: Informing community when fire activity
implemented.                                                                     is occurring in the vicinity and actions to take

The probability for each DRM activity described is                           5.	 Evacuation and/or shelter plans: Advanced
based on expert judgement of the impact of the activity                          planning of evacuation or stay-in-place
and the relevance in reducing fatalities or injuries in
varying degrees of investment in DRM activities. It is                       6.	 House planning: Land use planning to avoid
considered that the existence of evacuation and                                  building homes near WUI
shelter plans, for example, would have a higher effect
on reducing deaths rather than injuries. On the other                        7.	 House construction: Building with non-flammable
hand, it is assumed that life protection measures could                          materials and avoiding weak spots in home
save lives but not so much for the occurrence of
injuries. For the high hazard cases, it is assumed that                      8.	 Fuel management: Clearing of fuel around homes
the probabilities are half of extreme hazard. For the
moderate hazard cases, it is assumed that the                                9.	 Fire protection: Presence and capacity of
probabilities are one-sixth of the Extreme Hazard                                firefighter services
scenario. As mentioned earlier, these values are based
on expert judgement and study of consequences of                             10.	Life protection: Medical protection, ambulances,
fire hazards in Portugal. The recurrence period for                              and medical support.
Extreme Hazard is about 29 years while the return
period for very high hazard is about 10 years based on                       Considering that all mitigation activities are
historical events. In practice, the most relevant                            independent of each other, the probability of having an
scenario is that of extreme or very high hazard, as                          accident given the implementation of the set of
normally in the average hazard condition fatalities are                      activities will be given by the product of the probabilities
not expected but injuries may be.                                            of each activity.




31 Note that these are comprehensive DRM activities for wildfire risk reduction; only four of these activities have been included and analysed in this
case study.



Case studies                                                                                                                    Wildfires        175
Table 72: Probabilities of injuries with risk reduction actions taken in moderate to extreme hazard fires




Source: World Bank analysis based on external data and information


Table 73: Probabilities of fatalities with risk reduction actions taken in moderate to extreme hazard fires




Source: World Bank analysis based on external data and information


The study estimates the cost of alerting in the Attica               population of Greece (2019 Eurostat), and the
region of Greece and evaluates the benefits of                       estimated €2 million for the case study is
casualties avoided in villages of Mati and Rafina.                   approximately 40 percent of the budget line item.
These villages are approximately one-third of the                    Therefore, it is reasonable to estimate a cost of €2
Attica region by area. Since alerting would not occur                million including maintenance costs for alerting and
at a city level but rather a regional level, the benefits            evacuation in the Attica region. Sensitivity analysis of
of such a system would be larger than what are stated                the costs between €1 million and €5 million yields
here. Any municipality within the Attica region with                 similar BCRs.
fire risk would be a potential benefactor from alerting
and preparedness. However, since loss estimates are                  Costs of injuries in Mati are obtained with data from
based on the 2018 fires and for sake of this                         consultations with Greek fire specialists and on the
hypothetical investment to be constrained to real                    ground estimations following deployments to Greece.
values as much as possible, the analysts have only                   Costs included are compensation for the deceased
looked at the triple dividend 1 benefits to Mati and                 and injured, along with emergency health costs.[1]
Rafina. The cost of alerting and development of                      The cost of alerting has been estimated as €250,000
evacuation plans in the region of Attica is estimated                per year based on the calculations made for Portugal,
to be €2 million, including €1 million for maintenance               assuming similar costs for the regions affected that
for five years. Information from the Greece Civil                    have areas of similar size. The cost of fuel management
Protection Agency has apportioned €5 million for a                   in the Attica region is an average of €300 per home
national-level multi-hazard forest monitoring and                    with 20,000 homes. The same cost in relation to that
EWS (fires, floods, landslides, and so on) with a fire               of Portugal was adopted to estimate the cost of fuel
detection and alerting via SMS to surveillance centres               management per house in the Attica region. It is
and eventually to vulnerable populations. The Attica                 assumed that all homeowners will undertake fuel
region is approximately 35 percent of the total                      management in this case study, but the reality is that

Case studies                                                                                                Wildfires    176
this will be a slow-onset preparedness measure. This                     Æ	 Results of the analysis by dividends
is because the quality and quantity of defensible                        	 and overall
space created by homeowners surrounding their
property is not guaranteed if not mandated and could                     The benefits are high when comparing the cost of
be non-uniform.                                                          alerting in the Attica region of Greece to the losses
                                                                         avoided from casualties in Mati and Rafina (see
The study looks at a one-year horizon for BCA but                        Table 74 and Table 75). This can be expected as
computes the five-year costs of communication                            the costs of alerting are generally much lower than
activities with a 5 percent discount rate.                               the cost of lives lost or injured. In this tragic event,
                                                                         many lives were lost than could have been
The Triple Dividend Framework includes the following                     expected given the fire hazard, resulting in a large
benefits:                                                                BCR. Note again that the benefits are likely
                                                                         underestimated as we are comparing the benefits
Triple dividend 1 (costs avoided):                                       to the villages of Mati and Rafina to the costs of
                                                                         alerting, evacuation, and fuel management of
•	 As this assessment largely evaluates loss of lives                    homes to the Attica region of Greece. There are not
   and costs borne from casualties avoided due to                        enough data to quantify unlocked economic
   alerting, evacuation plans, and fuel management,                      potential or co-benefits in this case study. However,
   the benefits are classified as triple dividend 1. The                 they may exist and could be included in future
   alerting and evacuation planning does not                             studies. Importantly, the cost of frequent and
   necessarily intend to reduce damage to homes                          effective education of alert receivers is not included
   and other assets, as some evacuation plans also                       due to data limitations. This would be an added
   encourage sheltering in place if housing is qualified                 cost of intervention which would reduce the BCR.
   appropriate to do so.                                                 Overall, however, the BCR would be greater than 1
                                                                         which would make this investment a positive ROI.
Table 74: BCR calculation of alerting and preparedness for fires in Greece (in million €)

                                                             BCR: 39.3

                                                          BENEFITS (€)                                COSTS (€)
                Dividend 1                                       314.04
                Dividend 2
                Dividend 3
                Total                                            314.04                                        8

Source: World Bank analysis based on external data and information

Table 75: Expanded triple dividend BCR calculation of alerting and preparedness in Greece (in million €)

                                                 ALERTING AND PREPAREDNESS

 FIRST DIVIDEND (€)
 Reduction of lives                                                                                                        312
 Compensation for the deceased                                                                                             0.52
 Compensation for the injured                                                                                              0.09
 Emergency health costs                                                                                                    1.43
 Total first dividend                                                                                                  314.04
 TOTAL DIVIDEND                                                                                                        314.04
 Total cost                                                                                                                   8
 BCR                                                                                                                       39.3

Source: World Bank analysis based on external data and information

Case studies                                                                                                   Wildfires     177
    Æ	 Challenges faced and lessons learned                 unlock additional investment in the area (dividend 2)
                                                            or co-benefits like awareness of fire risk and tools
The high BCR is mainly due to the tragic events of the      available to homeowners and residents to reduce
2018 Mati fires, considered the second-deadliest fire       their risk (dividend 3), which could be qualitatively
in the 21st century and upon which this scenario is         captured in further studies. In addition, frequent,
based. For a relatively small population affected in        uniform, and effective communication to the
Greece, a large number of injuries and high number of       community on understanding alerts and actions to
fatalities created one of the worst fire disasters in the   take is essential but was not included in this study due
country that was extremely politicized and sensitive for    to lack of data. Future studies must consider the
the Greek population. The BCRs for both Greece and          element of education and behaviour related to
Portugal exemplify the opportunity to save lives with       receiving and understanding alerting and fuel
relatively low-cost investments in alerting and             management to fully capture the costs of employing
evacuation planning.                                        this intervention.

Future studies should further assess the realizable         3.5.5. CROSS-BORDER SUPPORT,
benefits of employing any or all of the DRM activities in          COORDINATION MECHANISMS,
other municipalities in the Attica region. Often, ‘soft’           AND CAPACITY BUILDING FOR
investments like capacity building and awareness are               WILDFIRES
understudied but a large factor in emergency and
recovery contexts and should be included in future          The following analysis will focus on a specific
BCAs. In general, sparse literature exists on the value     investment SPITFIRE in Portugal as a hypothetical
of awareness for fire and other hazards and should be       investment, but numerous other investments have
evaluated more thoroughly as often they are ‘no-regret’     been undertaken in capacity building for wildfire
options in risk communication and risk reduction            prevention in countries such as in the Czech Republic,
capacity building. There may be other triple dividend       Poland, or Spain.
benefits of alerting, like the sense of safety that may


        CROSS-BORDER SUPPORT AND COORDINATION MECHANISMS FOR WILDFIRES

 This case study is a new ex ante analysis under            2020). The project aims at increasing cooperation
 this project that involves innovative ways to              among nations so that resources such as rescuing
 quantify impacts.                                          equipment and tools can be shared and utilized
                                                            efficiently if disasters such as a large-scale fire occur.
    Æ	 Introduction and background                          The Federation of European Union Fire Officer
                                                            Associations also offers a proposal (FEU Fire Officer
Disasters and hazards are not bound by the borders of       Associations, 2020) that encourages European
countries. The impacts of disasters are consistent          countries to increase communications and
throughout Europe and generate negative social and          collaborations, enhance shared legislative frameworks
economic consequences for all countries affected. In        in terms of infrastructure and community safety, and
this context, it is essential for European countries to     improve rescue equipment as well as the security and
work collaboratively and share their resources and          safety of firefighters. These efforts ensure the safety of
good practices when a disaster strikes, especially in       European citizens and reduce damages and economic
cross-border areas that are vulnerable to disasters         costs due to the occurrences of fires.
such as forest fire and floods.
                                                            When doing an economic analysis of cross-border
Several EU projects have been launched to enhance           services and coordination mechanisms, one must fully
cooperation across borders in terms of responses to         address the needs and demands as well as the cost
disasters and emergencies. INTER’RED is an ongoing          and benefits of such services. This is suggested by a
project that improves rescue services in the cross-         study (Tinholt, et al., 2013) for the European
border Grande Région, which covers Luxembourg,              Commission DG Communications Networks, Content,
France, Germany and Belgium (European Commission,           and Technology, which also indicates that

Case studies                                                                                         Wildfires    178
interoperability is an essential factor that needs to be                    enhanced coordination and cooperation facilitated by
considered.                                                                 SPITFIRE. This is from anecdotal evidence by the
                                                                            principal investigator of the project receiving positive
    Æ	 Description                                                          responses from emergency services about the utility of
                                                                            the tool. It also provides conservativism as little data
SPITFIRE is a project that was partially co-funded by                       exist in terms of cross-border fire consequence
the European Commission (European Commission,                               reconciliation. Since there was no continued funding
2017). The main objective of this project was the                           in the platform, the life span of the tool was just over a
improvement of information exchange on meteorology                          year, so only a one-year estimation of the BCA was
and forest fire risk in the border area between Portugal                    undertaken.
and Spain through the identification, design, and
implementation of data interchange protocols and the                        Many relevant studies were considered for the
development of a cross-border service on weather and                        evaluation of the BCA. Research shows that sparse
fire-risk forecast (SPITFIRE platform). The tool offers                     literature is available in terms of overall benefits that a
high-resolution meteorological and forest weather                           decision support or emergency coordination tool can
forecasts. The information is presented in a GIS                            provide during its lifetime of utility.
environment, to allow its joint management with other
information used daily by users of the service like fire                    The cost of the tool was provided by the project
managers and firefighters. Information presented                            manager and developer of SPITFIRE. The losses
includes protected spaces, surveillance posts, roads,                       avoided (direct and indirect forest fire losses) were
water points, distribution of material and human                            estimated from an existing report on the 2017 fires
resources, and so on). The tool is not only applied in                      (Comissao Tecnica Independente, 2017). Direct costs
cases of urgent response but also in planning and                           are losses from burned areas (forests and shrublands).
preparation activities. Consequently, not only the                          The direct costs were obtained from data provided by
firefighters but the entire fire management structure                       the Portuguese Institute for Nature and Forest
benefit. Besides the immediate positive effects of the                      Conservation and by the Polytechnic University of
tool for Portugal and Spain, this approach can be                           Valencia (ICNF, 2017; Gomez, 2014). Indirect costs
replicated to other cross-border regions in Europe                          are related to fire prevention, firefighting, recovery,
which are at high risk and suffer greatly from forest fire.                 and losses in services and goods due to the fire.
                                                                            Indirect costs were calculated through a ratio between
This case study evaluates the cost of developing a                          direct and indirect costs based on a report providing
cross-border information tool for emergency fire                            historical data on wildfire costs. The direct and indirect
services and firefighters at the Portugal-Spain border                      costs were scaled to the cross-border area covered by
and the estimated losses avoided from improved                              the SPITFIRE project.
information and coordination of countries and
agencies.                                                                   Due to the limited data on expanded benefits, this
                                                                            study estimates the costs of forest fire management
    Æ	 Methodology                                                          and suppression in the cross-border regions of Spain
                                                                            and Portugal.
The methodology considers the cost of creating the
SPITFIRE tool by the consortium coordinated by ADAI                         Triple dividend 1 (costs avoided):
at the University of Coimbra in Portugal32 and the
avoided direct and indirect losses from forest fires. The                   Based on actual annual costs to Portugal and Spain,
study is focused on triple dividend 1 losses avoided in                     the ratio of cross-border forests to total forests in the
the cross-border region of Spain and Portugal. The                          respective countries to determine scaled costs of
major assumption in this study is that only 0.5 percent                     forest fires.
of direct and indirect fire losses would be avoided with




32 Note that four other partner organizations supported development of the tool, with coordination from ADAI. Only the costs from ADAI are considered
in this case study.



Case studies                                                                                                                   Wildfires        179
    Æ	 Results of the analysis by dividends                          focused on the first dividend of direct and indirect
    	 and overall                                                    costs avoided, the full benefits are likely
                                                                     underestimated as dividends 2 and 3 could not be
The overall BCR is greater than 1 over the period of a               included due to lack of data.
year in which this evaluation is considered (see
Table 76 and Table 77). The direct and indirect costs                In addition, the costs of the SPITFIRE platform tend to
of fire damage losses avoided considering a                          be diluted over time, while the benefits tend to
conservative value of penetration and utility of tool                increase. Thus, one would expect that a longer
still offers a high benefit compared to the cost and                 platform lifetime should drive to a much more
maintenance of the tool. While the assessment                        significant BCR.


Table 76: BCR calculation of the SPITFIRE project (in million €)

                                                             BCR: 1.6

                                                                        BENEFITS (€)           COSTS (€)
                        Dividend 1                                               1.15
                        Dividend 2
                        Dividend 3
                        Total                                                    1.15                0.7

Source: World Bank analysis based on external data and information


Table 77: Expanded triple dividend BCR calculation for the SPITFIRE project (in million €)

                                                 CROSS-BORDER COORDINATION

 FIRST DIVIDEND (€)
 Direct costs of forest fires avoided, Spain                                                                           0.06
 Indirect costs of forest fires avoided, Spain                                                                         0.08
 Direct costs of forest fires avoided, Portugal                                                                        0.44
 Indirect costs of forest fires avoided, Portugal                                                                      0.57
 Total first dividend                                                                                                  1.15
 TOTAL DIVIDEND                                                                                                        1.15
 Total cost                                                                                                             0.7
 BCR                                                                                                                    1.6

Source: World Bank analysis based on external data and information




Case studies                                                                                               Wildfires     180
    Æ	 Challenges faced and lessons learned                     decision support tools with a longer lifetime than the
                                                                SPITFIRE platform is evident in this case study.
Lack of data for this particular case and lack of
research generally on the topic of cross-border                 CAPACITY BUILDING FOR WILDFIRE PREVENTION
collaboration for fire suppression and emergency
services limited the opportunity to expand to a triple          In addition to coordination mechanisms, a number of
dividend analysis. Future studies should investigate            initiatives have aimed to enhance capacity and
the actual deployments, fire response rates, enhanced           provide training for enhanced preparedness of
coordination, and improved containment afforded by              populations and emergency response units across
the platform. In addition, more research and evaluation         Europe. These initiatives, in combination with EWS,
on the benefits to the entire fire service structure            aim to shorten response times and ensure that
should be explored. This type of study could greatly            effective disaster response can be support with
inform other such information platforms, especially in          human and material resources. A number of initiatives
cross-border areas where cooperation between fire               are presented in Box 11 below.
services is critical. Moreover, the advantage of having

  Box 11: Investments in capacity for enhanced wildfire response across Europe

A review of investments in capacity building for wildfire       countries’ emergency response service providers. This
prevention and response across Europe provided several          helps to ensure that there is cohesion between the different
lessons learned and inspiring achievements outlined below.      countries during fires, floods, and other disasters, especially
A common theme is that a combination of equipment,              given the possibility for these to occur more frequently due
coordinated trainings and peer learning as well as centres to   to climate change.
combine human resources to address a number of different
disasters, including fires, seem to ensure the greatest         The EU supported the establishment of a defence centre
benefits in terms of effectiveness of response during           against forest fires in Andalusia, Spain (European
disasters.                                                      Commission, 2016b), a region with high fire risk. This centre
                                                                now covers 11 municipalities and 150,000 residents and
In the Czech Republic, wildfires caused 155 injuries and 12     has resulted in improved equipment and cooperation in
fatalities for the past decade (Velinger, 2015) and economic    projects that improve forest management, training, and
costs could be substantial given that 34 percent of the         awareness raising. Moreover, the Interreg España-Portugal
country is covered by forests (Baranovskiy, 2019). An EU-       project (Interreg España-Portugal, 2019) represents
financed project of €58 million total investment (€50 million   collaboration between the cross-border regions of Spain
financed by the EU) from 2007 to 2013, “Fire and rescue         and Portugal, along with over 15 institutions, through
services receive major investments in equipment”, aimed at      exchanges of knowledge and good practices. Both Spain
enhancing the capacity of the Fire Services so it can also      and Portugal are highly vulnerable to wildlife hazards, and
engage in overlapping activities for flooding situations –      there is a long history of institutions fighting forest fires
intervention management, rescue operations, emergency           along the cross-border area. Therefore, the implement of
survival for the population, and salvage operations –           the project leads to effective training and execution of
identically throughout all of the country’s regions.            infrastructures and technological innovation for the
                                                                extinction and prevention of forest fires. One result of the
Moreover, a project Safe Borderlands aimed to strengthen        project is the establishment of the “Iberian Centre for
the cooperation between fire and rescue services or other       Research and Fight Against Forest Fires” (CLIFO), which
emergency response units (police, medical rescue, public        aims to serve as a regional and international benchmark in
health authorities, and so on) on the shared border of Czech    the fight against forest fires, increase response capacity to
Republic and Poland with more than 7 million inhabitants        forest fires, and reduce the economic cost of fires. While it
(European Union, 2020). Firefighters and other emergency        may be difficult to measure the impacts of this investment
response personnel hold organized conferences and               using a BCA, it’s important to reference qualitatively
trainings, take language-learning courses, purchase special     because this case study exemplifies the impacts of
equipment, and exchange data with each other in order to        improving capacity.
maintain smooth lines of communication between the two




Case studies                                                                                                Wildfires     181
3.6. Mass movement / landslides
3.6.1. SUMMARY OF FINDINGS FOR MASS                             of landslide prevention efforts against the cost of post-
       MOVEMENT (LANDSLIDES)                                    event emergency actions. They found that it was more
                                                                economically convenient to carry out a drainage trench,
Investments in landslide risk reduction can take                a form of water removal intervention, to improve slope
various forms, such as engineered and natural slope             stability before the landslide event, and if this was done,
stabilization, control of flooding or run-off that              there would be a savings of 30 percent in relation to the
destabilizes slopes, and debris capture or diversion.           remedial works’ total costs (Salbego, et al., 2015a).
Engineered retaining structures may include gabion
walls, reinforced concrete wall, and retention nets.            In this section, we have presented benefit-cost
Modification of slope geometry may be achieved by               assessments for interventions for landslide prevention
introducing a stepped-slope embankment. Internal                through enhancing the resilience of roads, land use
slope reinforcement requires rock bolts, micro piles,           planning investments (for example, drainage trench),
soil nailing, and grouting. Drainage can be improved,           and information and cooperation systems (for example,
or slopes can be re-vegetated to provide soil stability.        meteorological forecasting system). Benefits for the
                                                                different types of interventions are presented, including
Investing in landslide prevention is socio-economically         a World Bank ex-ante quantitative analysis, past
beneficial because it is far cheaper to implement               benefit-cost analysis undertaken in Europe, and
proactive remedial investments versus undertaking an            qualitative reviews of existing EU projects. The
array of reactive projects in response to a landslide           landslide risk in most case studies is earth or debris
disaster. For example, after torrential rain provoked a         flow resulting from erosion or heavy rainfalls. The risk
landslide in the northeastern Italian pre-Alps, researchers     of avalanches is also considered in some of the
at the University of Padova conducted a series of               examples. Table 78 summarizes main data and
quantitative modelling to compare the economic benefits         information sources.
Table 78: Overview of data and information sources for mass movement / landslides analysis

 INVESTMENT                        CASE STUDY                           DATA SOURCE NAME AND REFERENCE

 Preventive investments in         Resilient road assets in Albania     World Bank ex-ante report Climate Resilient
 the resilience of roads                                                Road Assets in Albania

Source: World Bank based on external data and information

Models need to be adapted to type of investment.                adaptation, assessment consists of both risk analysis
BCAs are effective when examining traditional                   and mitigation measures and BCA is necessary to fully
landslide management and remediation approaches                 present its benefit in both climate and seismic
and can help identify the most cost-effective measure           improvements.
in terms of landslide risk reduction. However, for
landslide prevention investments with climate change            BCRs can be used to reflect the cost-effectiveness of

Case studies                                                                          Mass movement / landslides       182
investments in landslides preventions and prove that                  seem to be quite effective. Although BCRs found were
these preventive investments with relatively low costs                small or close to 1, societal benefits may have been
can have considerable net benefits. Therefore, it is                  underestimated, and this could also explain why
considered socio-economically beneficial to invest in                 landslide preventive investments are often undertaken
landslide prevention as it is far cheaper to implement                in combination with flood preventive investments to
proactive remedial investments versus undertaking an                  ensure efficiency of interventions. More details are
array of reactive projects in response to a landslide                 included in Figure 37.
disaster.
                                                                      Figure 37 presents a boxplot that displays the
Results of the BCA indicate possible benefits from                    distribution of BCRs for investments in landslides
preventive investments. Prioritization of infrastructure              based on a five-number summary: minimum (shown in
such as roads assets seems to be crucial for those to                 orange), first quartile, median (shown in red), third
arise, but low-cost land management solutions also                    quartile, and maximum (shown in orange).


Figure 37: Findings CA for mass movement/landslides (BCRs)




Source: World Bank analysis based on external data and information; presenting results from literature based on external reports
(1 preventive investments in the resilience of roads result from (Xiong & Alegre, 2019)



One example of a preventive investment against                        technical expertise on road resilience of the country
landslides is upgrading infrastructure to enhance the                 and promote the resilient transport agenda on a
resilience of roads. Enhancing the resilience of roads is             national and global scale.
viewed as a crucial way to reduce the impact of
landslides on the transportation network, as landslides               •	 Case study 25 (World Bank analysis (Xiong &
can cause severe damage to roads and highways that                       Alegre, 2019), ex ante): The analysis of im-
can be either direct (a road or part of a road being                     plementing retrofitting landslide risk mitigation
destroyed) or indirect (closure or traffic restriction in                measures on the road network in Albania yielded
the affected area) (Bordoni, et al., 2018). Projects                     positive net benefits only for one section. It would
have been launched in the EU to enhance resilience of                    be important to do the analysis if preventive
roads against landslides. A World Bank project (World                    measures had been implemented, that is, integrated
Bank, 2020c) in Serbia has made accomplishment in                        into the design of roads, as this may potentially have
terms of improving the physical infrastructure and                       yielded higher net benefits for more road sections.




Case studies                                                                                   Mass movement / landslides          183
3.6.2. PREVENTIVE INVESTMENTS IN THE                            indirect consequential economic impacts on the
       RESILIENCE OF ROADS                                      nearby area and its transport-dependent activities.
                                                                The study examines four Scottish landslide events and
Landslides cause severe damage to roads and                     presents the huge economic losses associated with
highways, which can be either direct (a road or part of         these events: the direct repairmen of the infrastructure
a road being destroyed) or indirect (closure or traffic         costs between €295,000 and €1,253,000, while direct
restriction in the affected area) (Bordoni, et al., 2018).      consequential costs in the transportation sector range
Such damage disturbs the transportation network and             from €133,000 to €1,032,000.
negatively affects the safety of vehicles and passengers.
                                                                Enhancing the resilience of roads is viewed as a crucial
Economic assessments have been undertaken to                    way to reduce the impact of landslides on the
examine and quantify the socio-economic impact of               transportation network. In Serbia, a World Bank project
landslides on the road network. A study (Winter, et al.,        (World Bank, 2020c) was launched with the goal of
2016) conducted in Scotland divides such impacts                increasing resilience against landslides and other
into three categories: (1) direct economic impacts              climate risks in the country’s roads and transportation
resulted from clean-up and repairmen costs of the               sector. The project is designed to improve physical
damaged infrastructure, (2) direct consequential                infrastructure and technical expertise on road
economic impacts due to disturbance or decreased                resilience and promote the resilient transport agenda
efficiency in the transportation network, and (3)               at a national and a global scale.


        RESILIENT ROAD ASSETS IN ALBANIA – PROTECTION AGAINST LANDSLIDES

 This case study is an external analysis that was               Roads are crucial to the functioning of any society, and
 undertaken with ex ante quantitative for                       transportation plays a vital role in building climate-
 prioritization of interventions                                resilient communities. With roads being unavailable
                                                                and/or unreliable, Albania will experience significant
    Æ	 Introduction and background                              negative effects to their economic growth. Already,
                                                                natural hazards pose a great risk to the roads and the
Albania is the most threatened country in Europe from           roads’ users, and therefore it is important to understand
multiple hazards (Xiong & Alegre, 2019), being prone            how hydro-meteorological and geological hazards
to a flurry of hydro-meteorological hazards (for                affect the national road network of Albania. This will
example, floods, drought, heavy snowfalls, and extreme          enable the country to build roads that are able to
temperatures) and geological hazards (that is,                  weather the coming effects of climate change, further
earthquakes and landslides). About 88.5 percent of              helping Albania achieve sustainable, economic growth
generated GDP, 86.4 percent of the total area, and              (see also Figure 50 in Annex 3).
88.6 percent of the population are exposed to two or
more types of hazards. The results of a major natural              Æ	 Description
hazard can have catastrophic consequences. In
December 2017, a major flood event in Albania caused            The main objective of this prospective study is to assist
1,575 people to be evacuated, 3,500 houses to flood,            Albanian stakeholders in the prioritization of current
65 bridges to collapse, 56 public schools to be                 and future climate and seismic resilient investments
damaged, and 15,000 ha of land to submerge (Xiong &             in road assets. The road network under consideration
Alegre, 2019). With the possibility of climate change           for this study (see Figure 38) encompasses 1,494 km
leading to more intense and more frequent natural               of roads - 1,370 km are primary roads with some
hazards in the future, coupled with Albania’s risks for         extensions to the remaining secondary roads on
river flooding (that is, fluvial flooding), coastal flooding,   request of the Albanian Road Authority (ARA).
landslides, and earthquakes already rated high, there           Researchers analysed the value of roads, bridges,
has been more attention shifted to investigating the            culverts, and tunnels. While the potential effects of
possibilities for DRM in Albania and the broader                flooding (both pluvial and coastal) and seismic events
Western Balkan area.                                            were examined, for the scope of this case study, we
                                                                will primarily focus on how landslides, specifically

Case studies                                                                         Mass movement / landslides      184
precipitation and seismic-induced landslides, affect                  five Albanian road corridors: 01 Milot - Morine New; 05
roads in the primary road network. During this project,               Durres – Vlore; 06 Tirana - Elbasan – Pogradec; 13
a BCA on landslide measures was implemented for                       Milot - Peshkopi; and 14 Vlore - Sarande.
Figure 38: Map showing the primary network under consideration of this project




Source: Xiong & Alegre, (2019)
Note: The colours indicate the various corridors within the primary road network.



    Æ	 Methodology                                                    Retrofitting mitigation measures to protect against
                                                                      landslides come at a relatively high cost compared to
To achieve the case study’s objective, a climate and                  their effectiveness levels, but there are economic and
seismic vulnerability assessment was applied to the                   social impact reasons as to why these measures are
Albanian national road network and mitigation                         essential (see Table 79). In high-volume road sections,
measures to improve climate and seismic resilience of                 such as Corridor 5 Durres to Vlore and Corridor 6
national roads were proposed to stakeholders. Thus,                   Tirana to Pogradec, these mitigation measures
the project can be divided into two parts: risk analysis              become economically viable. Implementing stabilizing
and mitigation measures and BCA. There were 13                        measures in these areas, such as retaining walls,
actions taken among the two parts that were illustrated               gabions, and soil nailing, would cost €13.8 million. Yet,
in a flowchart (see Annex 4).                                         mitigation measures are still necessary in low-volume
                                                                      road sections because villages may become isolated
    Æ	 Results of the analysis by Dividends                           from the outside world without intervention. The
    	 and overall                                                     benefits reported would all be considered dividend 1
                                                                      in the Triple Dividend Framework.




Case studies                                                                               Mass movement / landslides      185
Table 79: BCR for landslide measures implemented by corridor

 CORRIDOR                         INVESTMENT (€, MILLIONS)          BENEFITS (€, MILLIONS)              BCR

 01 Milot - Morine New                                 15.0                                  4.2                  0.3
 05 Durres - Vlore                                       6.3                                 6.7                  1.1
 06 Tirana - Elbasan - Pogradec                          7.4                                 6.0                  0.8
 13 Milot - Peshkopi                                   32.1                                  2.6                  0.1
 14 Vlore - Sarande                                    11.0                                  2.3                  0.2

Source: Xiong & Alegre (2019)



The analysis yields a BCR ranging between 0.1 and              who use that roadway. Also, it is still important to
1.1. For the road corridor between Durres and Vlore            implement these measures for roads with a lower
(05), there was evidence that the protective landslide         volume of users, even if it is not as economically
measures were economically beneficial (that is,                beneficial because the demolition of this stretch of
BCR >1) over a period of 25 years with a net discount          roadway could physically and socially disconnect a
rate of 4 percent. Per 10 m of road, it costs €11              specific area from the rest of country.
thousand for retaining walls, €14 thousand for
shotcrete and drainage, €42 thousand for steeped-              3.6.3. LAND USE PLANNING INVESTMENTS
slope embankment, and €121 thousand for rock
anchors and wire mesh. While the BCRs of the other             Implementing prevention and preparedness measures
corridors was under 1, protective landslide measures           during land use planning is considered as a crucial
are still socially important because regions of the            way to reduce the negative impact of landslides. Many
country can become disconnected and isolated in                naturally occurred landslides are recurrent and thus
case of a landslide disaster.                                  can be easily observed or forecasted by experts.
                                                               Therefore, preventive measures can be implemented
    Æ	 Challenges faced and lessons learned                    in the areas at risk after their geological and land use
                                                               characteristics as well as the type and location of
The analysis of implementing retrofitting landslide risk       landslide that may potentially occur have been
mitigation measures on the road network in Albania             carefully identified. Such measures can be effective in
yielded positive net benefits only for one section. It         terms of avoiding human and economic losses. In
would be important to do the analysis if preventive            2000, the Stoze landslide and the Predelica torrent
measures had been implemented, that is, integrated             debris flow of Slovenia caused seven deaths and an
into the design of roads, as this may potentially have         economic loss of €36 million. Lessons learned from
yielded higher net benefits for more road sections. For        the event suggest a need for reviewing Slovenia’s land
this study’s BCA, a number of measures, including              use plans and adopting hazard zoning as the best
preventative measures, reforestation of slopes, erosion        prevention measure for future landslide risk reduction
protection, and more, were not taken into account due          (JRC, 2003).
to a lack of information and/or a lack of the required
information to determine the amount of the measure             BCAs have been undertaken to examine the
needed. However, these measures should be further              effectiveness of several European investments in
investigated, especially when examining the road               landslide prevention and remediation and identify the
profiles, geomorphological conditions of the areas             most cost-effective measure in terms of landslide risk
adjacent to the road, and specific characteristics of          reduction. Outcomes and inspirations from two studies
the catchment areas draining to road assets, such as           include a BCA of landslide management approaches
culverts and bridges. Given the connectivity of Albania’s      in Vicenza, Italy and an economic analysis of avalanche
road system, applying landslide mitigation measures to         risk reduction interventions in Switzerland are
even one segment of road would have a distributional           showcased in Box 12 below.
effect because it will benefit both the people who live in
that community and others outside of that community

Case studies                                                                       Mass movement / landslides      186
  Box 12: Cost-effectiveness of landslide prevention vs. response investments

A number of studies have analysed the cost-effectiveness of     years would have saved 30 percent of the remediation cost,
landslides prevention investments compared to remediation       leading to a benefit of €17 thousand (Salbego, et al., 2015).
investments or also other types of investments. These
studies show that some low cost interventions can have          As a country in the Alpine region, Switzerland is highly
considerable net benefits and therefore provide arguments       vulnerable to avalanches and landslides due to climate
for enhanced investments in prevention for these disasters.     change and other factors, such as geology and rainfall
In the case of the Italy case study, the authors also provide   persistence (Climate Change Post, 2020). Since 1936, 24
methodologies that can be utilized for local governments to     people on average have died in avalanches annually (WSL
assess the net benefits of preventive vs. remediation           Institute for Snow and Avalanche Research SLF, 2020). In
investments without having to undertake a full probabilistic/   this context, Several cost-effectiveness analysis on landslide
risk-based assessment.                                          prevention have been conducted, with the best interventions
                                                                in terms of net benefits being identified. In Davos, an
A study on the cost-benefit of landslide management             economic analysis was carried out for different mainstream
approaches was conducted at detailed-scale and large-           interventions that attempt to reduce the risk of avalanches
scale for a case of rotational/translational slides and earth   in Switzerland, such as technical, organizational, and land
ﬂows that occurred in Vicenza, Veneto Region, Italy in 2010     use planning measures (Fuchs, et al., 2007). The study
(Salbego, et al., 2015a). A detailed numerical model found      shows that the most cost-effective risk reduction measures
that incorporating a drainage trench (aiming to reduce the      are interventions with snow fences and land use planning, in
water table, therefore slope instability) prior to 2010 would   terms of direct costs - though for avalanche mitigation the
have been effective in preventing the landslide. BCA showed     scale of benefit is highly dependent on the amount of snow
that compared to €57 thousand in remediation costs,             fences deployed.
installing a drainage channel and maintaining it over 20




3.6.4. INFORMATION AND COOPERATION
                                                                Bulgarian project “riverbanks and seashores protection
       SYSTEMS FOR LANDSLIDE
                                                                from water abrasion and erosion and from the landslide
       PREVENTION
                                                                processes resulted from them” with the British
Information sharing and cooperation between nations             engineering company “Atkins” as the advisor. Such
play an essential role in terms of improving the                efforts allow these countries to adopt innovative
effectiveness and efficiency of landslide prevention.           measures for landslide prevention and mitigation that are
International cooperation enables EU members to share           both effective and cost-efficient (JRC, 2003). There are
knowledge and expertise on landslide prevention, which          several examples of European Commission funding
allows them to plan, set up, and improve anti-landslide         aimed at managing the impacts of slope instability.
activities within nations and across borders. Some              Although no assessment of benefits could be obtained
countries have launched landslide prevention projects           to compare against project costs, the investments
with guidance and support from international experts            presented in more detail in below can provide interesting
and companies specializing in the field, such as the            insights (see Box 13 below).




Case studies                                                                           Mass movement / landslides         187
  Box 13: Investments in information systems and cooperation mechanisms for landslide prevention

A review of investments in information systems and           Pyrenees. PyrMove addresses: 1) Large landslides involving
cooperation mechanisms across Europe provided several        complete slopes that can include towns, infrastructures and
lessons learned and inspiring achievements outlined below.   activities on their surface and that are susceptible to
A common theme is that alongside information and             accelerate and end into catastrophic failures; 2) Multiple
forecasting systems, all the projects also supported         landslides caused by episodes of intense rainfalls that
equipment and investments in road conditions to protect      simultaneously affect large areas of the territory (MORLEs
assets.                                                      crisis). It seeks to better assess, forecast and manage these
                                                             risks, presently hindered by a lack of knowledge on the
On the French-Spain border, a project co-financed by the     temporal and spatial occurrence and their evolution, and
EU supported enhanced preparedness. Co-financed by the       aims to install alerts systems and scenarios simulators for
ERDF, the SECURUS project (Bielsa-aragnouet, 2018)           Civil Protection activities.
‘Safety from natural risks on the Bielsa-Aragnouet and
Espacio Portalet road links’ on the France-Spain border      Co-financed by Interreg, the main objective of the cross-
(budget €4.22 million) combines investment in information    border project safEarth (European Commission, 2019) is to
sharing on road conditions and technical support for         identify areas vulnerable to landslide hazards in parts of
improved local meteorological forecasting, with              Croatia, Bosnia and Herzegovina and Montenegro. The goal
implementing measures to protect roads from landslide and    is accomplished through the development of by an online
erosion risk.                                                landslide susceptibility mapping (LSM) system, which
                                                             enables the mapping of any potential or ongoing disasters in
Another project supported mapping and forecasting of         real time, and development of guidelines for susceptibility
landslides in the Pyrenees in France. Also 65 percent co-    mapping. As a part of the project, rehabilitation of
financed by ERDF, PyrMove (Institut Cartogràfic i Geològic   infrastructures and equipment in reducing landslide risks
de Catalunya, 2020) focuses on the prevention and            have also been undertaken to decrease the negative impact
management of risks associated with landslides, that cause   of landslides in the area.
most damage on roads, dams, towns and activities in the




Case studies                                                                       Mass movement / landslides         188
3.7. Volcanic Eruption
3.7.1. SUMMARY OF FINDINGS FOR                                such as time to eruption onset, time required for
       VOLCANOES                                              evacuation, spontaneous evacuation or return, the
                                                              possible eruption size, and political pressures.
Volcanic eruptions, which occur when magma and other
volcanic materials reach the surface of the Earth, are one    BCRs from economic assessments have been used as
of the devastating natural disasters that cause losses of     a quantitative and auditable method to assist
life and massive destructions. There are two common           authorities to make key decisions that reduce the risks
types of volcanic eruptions: (1) explosive eruption, which    and impact of volcanic eruptions. BCA serves an
expels fragmented materials (such as volcanic ash,            important role in decision-making for volcanic crisis
pyroclastic deposits, and assorted gases) into the air; and   management, specifically taking decisions on when to
(2) effusive eruption, which involves the production of       order evacuation of a population or not, given the
flowing lava (Self, 2006).                                    threat of eruption—balancing the cost of evacuation
                                                              with the inherently uncertain likelihood of eruption
In this section, we have demonstrated economic                even when there are signs of volcanic unrest. Such
assessments of decision-making tools for evacuation           assessment can be used to ‘segment’ populations and
during a volcanic eruption (for example, enhancing            assess their BCR of an evacuation, which may vary
preparedness through early warning and monitoring             depending on their circumstances (Woo, 2015).
systems) and infrastructure for evacuation and
response (for example, evacuation and escape routes).         Benefits of preventive investments can be substantial
Benefits of the investments are presented by a                in terms of decision-making mechanisms for
qualitative review of the cost-effectiveness of existing      evacuation in the case of eruption. An example is the
EU projects. In these case studies, volcanic eruptions        EWS for volcanic eruptions and earthquakes
often pose a risk on urban areas as well as national          undertaken in the Canary Islands, Spain (VOLRISKMAC
roads, which thus presents a challenge for large-scale        project (European Commission, 2018)). Moreover,
evacuations.                                                  infrastructure for evacuation and response can
                                                              substantially reduce negative impacts from volcanic
Models need to be adapted to the type of                      eruptions. For examples, investments in resilient
investment. For volcanic activities, BCA has been             escape routes that were undertaken in Italy (project
focusing on the substantial net benefits of investments       financed by the EU ‘Redeveloped road to upgrade
in volcano monitoring and eruption forecasting and            volcano escape route’) achieved benefits in terms of
evacuation. When an economic assessment is                    enhanced connectivity and at the same time disaster
undertaken, it is necessary to include uncertain factors      risk reduction.
that depend on the type of eruption and investment,




Case studies                                                                                Volcanic Eruption    189
3.7.2. DECISION MAKING FOR EVACUATION                     approach, Marzocchi & Wood (2009) determined a
       IN THE CASE OF ERUPTIONS                           probability threshold of 0.01 per month at which point
                                                          an evacuation should be declared for a defined
BCA for volcanic risk is focused on informing volcanic    1kmx1km area, for Campi Flegrei; Sandri et al. (Sandri,
crisis management, specifically taking decisions on       et al., 2012) using the same methods determined the
when to order evacuation of a population or not, given    threshold to be 0.014 per month for the Auckland
the threat of eruption—balancing the cost of              Volcanic Field, New Zealand. The modelled cost of
evacuation with the inherently uncertain likelihood of    eruption depends on the probability of eruption given
eruption even when there are signs of volcanic unrest.    the volcanic unrest (higher probability of eruption
Several approaches have been proposed for this.           yields higher expected cost) and is also influenced by
Marzocchi & Woo (2007; 2009) and Woo (2008) use           the time people would be required to evacuate for
static parameters of number of evacuees average           (longer period, higher costs), value assigned to a
socio-economic loss per capita due to the evacuation,     human life, and value of socio-economic activity in
and the product of avoided fatalities social WTP to       the area (for example, GDP per capita). Using dynamic
save a human life (Woo, 2015) suggests BCA can be         factors, Bebbington & Zitikis (2015) show a probability
used to ‘segment’ populations and assess their BCR        threshold is much lower for a case of Vesuvius erupting
of an evacuation, which may vary depending on their       (0.035 for a 30-day evacuation and 0.055 for 90-day
circumstances. Bebbington & Zitikis (2015) note the       evacuation) than using a static model (0.1 for a 90-
need to account for dynamic and uncertain factors in      day evacuation), with absolute costs of evacuation
using BCA in, considering volcanic evacuation             estimated at €8,000 per capita for a 90-day period in
decisions.                                                their case study. At eruptive probabilities greater than
                                                          the thresholds, the cost of not declaring evacuation is
Uncertain factors include time to eruption onset, time    higher than €8,000 per capita.
required for evacuation, spontaneous evacuation or
return, the possible eruption size, and political         In terms of international experience, preventive
pressures. In the evacuation context, costs may be        investments have been proven to yield substantial net
the direct costs of evacuation (for example, opening      benefits. The 2018 lava flow in Puna, Hawaii, that led
shelters and transport to evacuate people), economic      to the closure of one of the region’s major highways
costs of evacuation (due to daily productive activities   and disturbed the local transportation system reveals
being disrupted), political cost to decision-makers of    that there is a need for effective responses and timely
evacuation being declared if no eruption occurs, and      sharing of information between authorities, scientists,
potential loss of life to people who do not evacuate.     and community organizations after a volcanic hazard
Benefits are the avoided loss of life due to successful   occurs (Kim, et al., 2018). In addition, monitoring,
evacuation. In addition to uncertainty around people’s    forecasting, and response in advance of the 1991
behaviour (decision to evacuate or not and the time       Pinatubo eruption in the Philippines is said to have
taken to evacuate), uncertainty exists in the eventual    saved at least €202 million of damage to property
magnitude of eruption and the area affected by            (including substantial amounts of moveable US
eruptive material (lava, tephra, and so on) - therefore   military equipment) and at least 5,000 lives. The total
in the definition of area to be evacuated. Bebbington     costs of forecasting and responding in this eruption
& Zitikis (2015) propose a stochastic approach to         are estimated at US$45.2 million—a BCR of around 4
account for these factors, whereas previously             (USGS, 2005). There are several examples of
proposed approaches treated this as a static analysis.    European Commission and national funding aimed at
                                                          enhancing preparedness and response in the case of
By comparing the incurred costs of eruption with no       volcanic eruptions. Some of these investments are
evacuation, against those incurred when evacuation        presented in more detail in Box 14 below.
is declared, decision-makers can be given a
probability-of-eruption threshold, above which an
evacuation should be declared. Using the static




Case studies                                                                             Volcanic Eruption    190
  Box 14: Investments in preparedness for volcanic eruptions

A review of investments in early warning or general               detrimental given its dense population. Therefore, the EU
preparedness for volcanic eruptions in Spain provided             VOLRISKMAC project (European Commission, 2018),
several lessons learned and inspiring achievements outlined       implemented from 2017 to 2019, aimed at strengthening
below. A main lesson is that preventive investments in terms      research, development, and innovation in the islands to
of volcanoes can have a number of co-benefits and therefore       bolster EWS for eruptions and earthquakes and design
be relatively cost-efficient.                                     enhanced crisis management capabilities using simulations
                                                                  and drills that help quantify the susceptibility of areas to
An investment was undertaken in Spain that focused on             direct and secondary environmental consequences. As a
EWS both for volcanic eruptions and earthquakes.                  result of the project, the monitoring networks for 10 active
Macaronesia, which is comprised of Portugal’s Azores and          Macaronesian volcanoes were strengthened, 37 permanent
Madeira archipelagos, the Canary Islands in Spain, and the        volcano monitoring stations were being set up, and 5 new
African nation of Cape Verde, is facing increased vulnerability   portable volcano monitoring instruments have been
to volcanic eruptions and earthquakes that can be extremely       acquired.




3.7.3. INFRASTRUCTURE FOR EVACUATION
                                                                  et al., 2017). Hence, investments in road resilience
       AND RESPONSE                                               improvement and escape routes planning in advance
                                                                  can enhance the efficiency of evacuation when an
During a volcanic eruption, effective roads and                   eruption occurs, leading to less fatalities and injuries. In
transportation network are crucial for rescuing and               Europe, economic assessments have been undertaken
evacuation. However, transportation networks are                  to quantify the impacts and losses due to volcanic
vulnerable to volcanic activity, as they can be damaged           eruptions and present the direct and indirect benefits of
or blocked during eruptions and disturbed by the impact           investing in evacuation and escape routes. An example of
of volcanic ash, which includes road marking coverage             such assessments with its inspiring outcome is presented
and reduction in visibility and skid resistance (Blake,           in Box 15 below:



  Box 15: Evacuation routes in volcanic areas

A review of infrastructure investments in evacuation routes       proximity with an estimated likelihood of medium-term
in the case of volcanic eruptions in Italy provided interesting   eruption. Because of the imminent -- and unpredictable --
messages in terms of potential large co-benefits as outlined      threat, the Italian government has devised a plan to
below. It also showed that engagement of the population for       evacuation a defined ’red zone’ 72 hours ahead of an
buy-in of solutions that can provide economic benefits can        impending eruption and has proposed compensation for
enhance effectiveness of interventions.                           people to relocate and creating a national park around the
In Italy, investments have been made to establish resilient/      volcano to avoid illegal building (Pasha-Robinson, 2016).
escape routes in the case of volcanic eruptions. Though           However, this has received slow uptake and enthusiasm
volcanic eruptions rarely occur, some Italian urban areas         given that the region is a considerable touristic attraction
are highly vulnerable to these destructive natural disasters      with related economic opportunities. The project (European
(European Commission, 2007). In the past few decades,             Commission, 2007) financed by the EU “Redeveloped road
vulnerability of populations has increased because of rising      to upgrade volcano escape route” during the programming
population density in cities and related complex                  period 2007-2013 aimed to undergo works on the national
infrastructure. Scientists warn that the impacts of a Vesuvius    road north of Mount Vesuvius to improve regional
eruption could be catastrophic given the proximity of             accessibility and create a better escape route for local
Naples, with its population of 3 million people. A 2010           people in the event of a big volcanic eruption or earthquake.
analysis estimated that €55 billion of residential property is    Total investment was €53.4 million, of which €26.7 million
exposed to the potential impacts of a Vesuvius eruption           was financed by the EU. This could be seen as a “no regret
(Hofmann, 2010). The highly active and dangerous volcano          investment” as it both enhances connectivity and disaster
Campi Flegrei (De Natale, et al., 2017) is also in close          prevention.


Case studies                                                                                        Volcanic Eruption     191
3.8. Epidemic and Disaster Health Preparedness
3.8.1. SUMMARY OF FINDINGS FOR                             threats. The lack of medical countermeasure
       EPIDEMIC/PANDEMIC RISKS                             stockpiles at the EU and MS levels and the vulnerability
                                                           of EU supply chains for critical medical
The COVID-19 pandemic has shown the                        countermeasures have been one of the main
consequences of systematically underinvesting in           challenges faced during the pandemic (European
resilience. Climate change, DRR, and pandemic              Commission, 2020c). The EU lacked effective
impacts underline the systemic, cascading, and             mechanisms and structures to have an overview of
compounding nature of risks and the need to                demand and supply of critical medical countermeasures
strengthen resilience of societal systems (UNDRR,          to monitor and support MS in addressing shortages.
2020). To strengthen the preparedness for infectious
disease, it is important to learn from the experiences     The Joint Procurement Agreement (JPA) for medical
regarding preparedness for natural disasters               countermeasures was approved by the European
accumulated over the years (Wilson, et al., 2020).         Commission, and as of April 2020, it has been signed
                                                           by 37 countries (European Commission, 2020d). The
Epidemic and disaster health should be considered in       agreement provides a voluntary mechanism enabling
tandem when developing, updating, strengthening,           participating EU countries and the EU institutions to
and funding preparedness planning for the health and       jointly purchase medical countermeasures for different
well-being of communities. Natural disasters are           categories of cross-border health threats including
increasing in their frequency and complexity.              vaccines, antivirals, and other treatments. It lays down
Understanding the cascading effects of disasters and       common rules for practical organization and joint
how they may lead to infectious disease outbreaks          procurement procedures. While such agreements
underscores the importance of developing cross-            during the pandemic can help change the trajectory of
sectoral preparedness strategies. Suk et al. (2020)        supply shortages and unequal distribution of goods,
found that the cascading effect of disasters, such as      mechanisms could and should be strengthened before
earthquakes and floods in the EU, has led to the           the onset of health or other natural hazard crises.
outbreak of infectious disease. The projection that
climate change-related extreme weather events will         In this section, we have presented benefit-cost
increase in Europe in the coming century highlights        assessments for the return on investment of national
the importance of strengthening preparedness               public health programs and equipment for health-
planning and measures to mitigate and control              related disasters (for example, PPE). BCRs for the
outbreaks in post-disaster settings (Suk, et al., 2020).   investments are obtained from a review of external
                                                           BCA undertaken with ex post assessments. Other
The COVID-19 public health crisis has highlighted that     examples focus on risks from real and hypothetical
all countries, including the EU MS, have to increase       pandemics as well as the current COVID-19 crisis.
efforts regarding preparedness and response planning       Table 80 summarizes main data and information
for epidemics and other serious cross-border health        sources.



Case studies                                                     Epidemic and Disaster Health Preparedness     192
Table 80: Overview of data and information sources for epidemics/pandemics analysis

 INVESTMENT                    CASE STUDY                        DATA SOURCE NAME AND REFERENCE

 Return on investment          Return on investment of           Ex post assessments based on the external study Return on
 of national public            national public health            Investment of Public Health Interventions: A Systematic Review
 health programs               programs
 Equipment for health-         Equipment for health-             Ex-post assessments based on the US study The Case for
 related disasters             related disasters                 Investing in Pandemic Preparedness, published in book The
                                                                 Neglected Dimension of Global Security: A Framework to
                                                                 Counter Infectious Disease Crises

Source: World Bank based on external data and information



Models need to be adapted to the types of                             The investments generally yield high positive results.
investment. When modelling the impact of epidemic                     Local and national public health interventions in
and disasters, it is necessary to include not only the                Europe are highly cost saving, though the specific
immediate impact on public health and the needs of                    BCRs vary according to the regions and the types
the health system but also long-term impacts to mental                of investments. The BCR for investments for
health and well-being. For assessments that examine                   preparedness against pandemics is extremely high,
the effectiveness of governance related to pandemic                   which reveal the benefits of enhancing the world’s
preparedness, a conservative model is used to                         medical equipment and defense against epidemic
estimate the risk of pandemic events, which suggests                  risks. More details are included in Figure 39.
that the true risk may be underestimated (GHRF
Commission 2016).                                                     Figure 39 presents boxplots that display the
                                                                      distribution of BCRs for different types of investments
BCRs for investments in public health system and                      in epidemics/pandemics based on a five-number
preparedness planning at local and national levels                    summary: minimum (shown in orange), first quartile,
reveal that such investments are highly cost saving in                median (shown in red), third quartile, and maximum
reducing the negative outcomes of epidemic and                        (shown in orange). The outliers are shown as dots.
natural hazards to health and well-being.


Figure 39: Findings of BCA for epidemics/pandemics (BCRs)




Source: World Bank analysis based on external data and information; presenting results from literature based on external reports
(1 Equipment for health-related disaster result from (Masters, et al., 2017), 1 Return on investment of national public health programs
result from (GHRF Commission, 2016))




Case studies                                                                  Epidemic and Disaster Health Preparedness              193
The effectiveness of health prevention activities can      undertaken to understand supply-chain mechanisms
be assessed among others by a return on investment         and constraints of PPE or other equipment for
of national public health programs. As has been            preparedness as well as benefits of pre-positioning
evidenced during the COVID-19 crisis, epidemics and        equipment.
pandemics are inherently related to health and reliant
on the robustness of public health systems. The OECD       3.8.2. RETURN ON INVESTMENT OF
has found that most countries, regions, and cities were           NATIONAL PUBLIC HEALTH
not prepared well for this pandemic for several reasons,          PROGRAMS
including lack of crisis management plans for
pandemics or lack of basic equipment (OECD, 2020).          This case study is an external analysis that was
Moreover, long-term impacts such as on mental health        undertaken with ex-post assessments
also have to be alleviated with the help from public
services.                                                     Æ	 Introduction and background

•	 Case study 25 (External analysis (Masters, et al.,      As has been evidenced during the COVID-19 crisis,
   2017), ex post): A review of around 3,000 studies       epidemics and pandemics are inherently related to
   (Masters et al. 2017) to determine the return on        health and reliant on the robustness of public health
   investment of public health interventions in high-      systems. Resilient health systems can meet the surge
   income countries as well as mental health impacts       and demands of patient loads if planned in advance.
   (Tanielian & Jaycox, 2008) yielded interesting          Additionally, disasters tend to have considerable
   insights into the benefits of public health             impacts on health and the resilience of public health
   interventions (BCR of 8.3, ROI of 1–14.3) or            systems can be a crucial factor to mitigate the costs
   preventive mental health care. Further research on      and losses in the case of disasters. As described in the
   mental health impacts under a disaster could            introduction, health programs and DRM must be
   provide relevant insights for this type of analysis.    considered together when preparing for resilient
                                                           societies, as they are highly interdependent.
Sufficient investment in equipment is essential as part
of preventive activities for health-related disasters.     The OECD (2020) has found that most countries,
Due to the demand surge and global supply-chain            regions, and cities were not prepared well for this
disruptions, panic buying has become a headline of         pandemic for several reasons:
the COVID-19 pandemic. Panic buying threatens the
health systems’ ability to prevent and treat the           a.	 They underestimated the risk when the outbreak
coronavirus with shortages of hand sanitizers, masks,          emerged.
and pain relievers. Panic buying also depletes
medicines for patients with chronic diseases. In           b.	 Many did not have the crisis management plans
addition, to understand the longer-term impacts of             for pandemics (with the exception of Asian
preparing or pre-positioning of equipment for                  countries that battled the SARs pandemic and
pandemics, it is also important to consider the near-          some others, such as the Nordic countries, where
term implications of not pre-positioning, as in the case       crisis management plans are required).
of price surges for health equipment. Better
preparedness can result in more streamlined efforts to     c.	 They lacked basic, essential equipment, such as
protect individuals and the EU has started to stockpile        masks.
medical equipment since March 2020 as part of the
rescEU program (European Commission, 2020e),               d.	 They absorbed reduced public expenditure and
which provides support to member countries as part of          investment in health care and hospitals. Since
the EU Civil Protection Mechanism.                             the start of the ‘Great Recession’ launched by the
                                                               2008 financial crisis and up until 2018, the
Case study 26 (External analysis (GHRF Commission,             number of hospital beds per capita decreased in
2016), ex post): An analysis of preparedness                   almost all OECD countries, declining 0.7 percent
investments compared to the negative consequences              per year, on average (see Figure 40, with the color
of a pandemic would indicate highly positive net               representing the number of hospital beds per
benefits. However, more research would have to be              1,000 inhabitants).

Case studies                                                     Epidemic and Disaster Health Preparedness     194
Figure 40: Hospital beds per 1,000 inhabitants by region, 2018




Source: OECD (2021)



The impact of natural hazards on the public’s health     surgery and care above the baseline of medical
can be divided into four categories: (a) direct impact   emergency. After a week or so (phase 2), emergency
on the health of the population; (b) direct impact on    needs subside but the hospital deals with handling
the health care system; (c) indirect effects on the      trauma complications. Simultaneously (phase 3)
populations health; and (d) indirect effects on the      non-trauma emergencies (for example, infectious
health care system (Shoaf & Rotiman, 2000).              disease and treatment of chronic diseases) increase;
                                                         they are related to destruction of infrastructure or
Figure 41 provides a schematic of these impacts as       disruption of health care system. Finally in phase 4,
well as need and use of hospital resources after a       there is an increase of elective care needs that have
time-point disaster such as an earthquake.               been postponed due to the disaster (Louis, et al.,
  Immediately after the event (phase 1), there is        2008).
immediate and high demand for trauma-related




Case studies                                                     Epidemic and Disaster Health Preparedness   195
Figure 41: Schematic phases of natural hazards’ effects on public health resources




Source: Louis, et al. (2008)

It is necessary to address not only the immediate                            natural disasters as a chronic mental issue stressor.
needs of the health system required for epidemics and                        The most common disaster-induced mental health
disasters but also long-term impacts to mental health                        issues are post-traumatic stress disorder (PTSD),
and well-being. There is a correlation between the                           depression, and anxiety (Public Health Emergency,
occurrence of a disaster and a decrease in mental                            2020). The total costs of mental health problems are
health shortly after someone has experienced it                              more than 4 percent of the GDP across EU countries,
(Makwana, 2019). This is because the unpredictable                           and more than one in six people in EU countries have a
nature of disasters disrupts a victim’s fully functioning                    mental health problem in any given year (OECD,
life, leaving them disoriented from a loss of identity, a                    2018b). Mental health issues affect the unemployed
daily routine, and a lack of control over their own                          and elderly disproportionately and have been found to
possessions. Psychological symptoms associated with                          reduce worker productivity by 6 percent, amounting to
these feelings include severe and uncontrollable                             €600 billion throughout Europe per year (OCED,
stress, prolonged feelings of grief or sadness, and                          2019a) (see also Figure 42).33 The WHO has reported
substance dependency, which can translate into                               that the COVID-19 pandemic has caused elevated
maladaptive physiological reactions. A study of a 2018                       rates of stress or anxiety, and as levels of quarantine
Camp Fire in Northern California reveal that many                            are introduced, levels of loneliness, depression,
victims to the fire presented symptoms of mental                             harmful alcohol and drug use, and self-harm or
health disorders, especially PTSD and depression                             suicidal behaviour are also expected to rise (WHO,
(LaFee, 2021). This presents climate change and                              2020).




33 The €600 billion value in the EU or more than 4 percent of the GDP includes direct care cost, social security programs, and indirect public expenses
related to unemployment and the reduced productivity of people affected by mental illness.



Case studies                                                                          Epidemic and Disaster Health Preparedness                   196
Figure 42: Estimated direct and indirect costs related to mental health problems across the
EU as a % of GDP, 2015




Source: OECD (2018b)


It is imperative for investments in resilient health care   servicemembers, family members, and society in
systems to be coordinated with DRR efforts. Evaluation      general. All three conditions affect mood, thoughts,
of existing health systems in the EU during the short       and behaviour; yet these wounds often go un­
and long term is required as more natural and climate-      recognized and unacknowledged (Tanielian & Jaycox,
related disasters disrupt communities, further              2008). The mental health implications of disasters
burdening the health care system. This is made              often include war and natural disasters and can cause
evermore necessary due to the current pandemic.             horror, anger, fear, sleep problems, increased
Studies on existing systems can offer insight into          substance abuse, and social isolation along with PTSD
systemic gaps of health services and infrastructure         (Hamaoka, et al., 2010).
with and without disasters influencing needs and
demands, better preparing nations for health                   Æ	 Methodology
emergencies and natural disasters.
                                                            This is a literature review on existing studies regarding
    Æ	 Description                                          pandemic preparedness and health-related needs
                                                            following disasters. Masters et al. (2017) undertook
In a study conducted by Masters et al. (2017) , the         systematic searches on all relevant databases
authors reviewed nearly 3,000 studies to determine          (including MEDLINE; EMBASE; CINAHL; AMED;
the return on investment of public health interventions     PubMed, Cochrane and Scopus) to identify studies
in high-income countries. The study conducted a             that calculated an ROI or BCR for public health
literature review and undertook a qualitative               interventions in high-income countries.
assessment on the return of investment in European
countries on public health programs.                        Data collection for the study on mental health by RAND
                                                            began in April 2007 and concluded in January 2008.
In another study in 2008, Tanielian & Jaycox (2008)         Specific activities included a critical review of the
conducted a comprehensive analysis of the post-             extant literature on the prevalence of PTSD, major
deployment health-related needs associated with the         depression, and traumatic brain injury and their short-
three conditions among veterans: the health care            and long-term consequences; a population-based
system in place to meet those needs, gaps in the care       survey of servicemembers and veterans who served in
system, and the costs associated with these conditions      Afghanistan or Iraq to assess health status and
and with providing quality health care to all those in      symptoms, as well as utilization of and barriers to care;
need. The study focuses on PTSD, major depression,          a review of existing programs to treat servicemembers
and traumatic brain injury, not only because of current     and veterans with PTSD, major depression, and
high-level policy interest but also because, unlike the     traumatic brain injury; focus groups with military
physical wounds of war, these conditions are often          servicemembers and their spouses; and the
invisible to the eye, remaining invisible to other          development of a microsimulation model to forecast

Case studies                                                      Epidemic and Disaster Health Preparedness      197
the economic costs of these conditions over time.          productivity, and pain and suffering). After a two-year
Interviews with senior Office of the Secretary of          study, RAND found that, in 2008, it cost between
Defence (OSD) and Service (Army, Navy, Air Force,          €4,450 and €7,837 to treat PTSD in military
Marine Corps) staff within the Department of Defence       personnel.34 However, with co-morbidities like
and within the Veterans Health Administration              depression, this cost can increase as high as €12,740.
informed efforts to document the treatment and             The National Hazard Mitigation Saves Report uses the
support programs available to this population. Note,       RAND study and estimates €6,789 to indicate direct
however, that while the focus on mental health on this     treatment costs, and because direct treatment costs
particular population is not related to pandemics or       are only 10 percent of the total cost of mental health
epidemics, it does highlight the impacts of prolonged      treatment, it would take €67,889 of treatment over
chronic stresses and catalogues experiences through        one’s life to avoid a statistical incidence of PTSD
interviews that can be applicable to health emergency      (Tanielian & Jaycox, 2008; Multi-Hazard Mitigation
and disaster health impacts on populations.                Council, 2019).

     Æ	 Results of the studies                             In populations heavily affected by COVID-19, such as
                                                           Lombardy in Italy, the issues of service access and
Masters et al. (2017) concluded that local and national    continuity for people with developing or existing mental
public health interventions are highly cost-saving, and    health conditions are also a current major concern,
cuts to public health budgets in high income countries     along with the mental health and well-being of frontline
are likely to generate billions of pounds of additional    workers (WHO, 2020). Often, mental health issues are
costs to health services and the wider economy.            considered secondary to physiological impacts on
Quantitatively speaking, the research found that the       humans but can have prolonged or generational
median ROI for public health interventions was 14.3 to     impacts. It is pertinent to consider the BCAs of both
1 and median BCR was 8.3.                                  existing public health interventions and long-duration,
                                                           mental health illnesses for holistic public health and
For interventions in Europe, the study found the           test the systems that can provide the needed services.
following BCRs:
                                                              Æ	 Challenges faced and lessons learned
•	 Development of 20 mph zones in London, United
   Kingdom, resulted in a BCR of 0.66–2.19.                Future studies should employ similar studies on the
                                                           costs of physical health and mental health following
•	 UK parenting programs for the prevention of             small- and large- scale disasters. Mental health
   persistent conduct disorders in the resulted in a       following disasters is understudied and underreported
   7.89 BCR.                                               but can have lifelong implications. Therefore, the focus
                                                           on young persons affected by large-scale or frequency
•	 HIB vaccination program in Sweden resulted in a         disasters should be carefully studied for all-hazards
   1.59 BCR.                                               throughout Europe.

•	 Family planning services in the United Kingdom          In addition, investing in preparedness for detecting
   resulted in a BCR of between 11.09 and 29.39.           and treating cases, reinforcing governance and
                                                           oversight, building local diagnostic capacity, and
There is a clear advantage of having health intervention   strengthening systems for treatment and infection
programs in overall public health, which could serve as    control are needed. Designing public health measures
a litmus test of robust health systems in a country        to prevent the spread of disease in the community
when faced with epidemics or natural disasters.            (quarantining, social distancing, handwashing, limiting
                                                           travel and trade, and eventually vaccinating) and
According to the study measuring the costs of mental       establishing contingency plans to maintain essential
health treatment for military personnel, researchers       services and supplies are all areas of evaluation for
found that the direct cost of mental health treatment is   COVID-19 or any future health emergencies (World
10 percent of the overall incidence cost and other         Bank, 2020b).
costs incurred (for example, lost wages, lost household

34 Original values in US dollars.

Case studies                                                     Epidemic and Disaster Health Preparedness     198
3.8.3. EQUIPMENT FOR HEALTH-RELATED                                   and pain relievers. Panic buying also depletes
       DISASTERS                                                      medicines for patients with chronic diseases. The
                                                                      suppliers’ market that has been created has allowed
  This case study is an external analysis that was                    suppliers and distributors to establish new terms and
  undertaken with ex-post analysis.                                   conditions for buyers. The 2014 West Africa Ebola
                                                                      outbreak was exacerbated by the lack of medical
     Æ	 Introduction and background                                   supplies and PPE which led to an increased rate of
                                                                      infections and poor control of the epidemic. Panic
The global community has greatly underestimated the                   buying also leads to health scams. For example, in
risks that pandemics present to human life and                        early March, Europol law enforcement confiscated
livelihoods which have affected the policies needed to                34,000 counterfeit surgical masks in one coordinated
safeguard lives. At the time of writing, there were more              operation.
than 59 million confirmed cases in 190 countries and
more than 1.4 million deaths (BBC News, The Visual                    In addition, to understand the longer-term impacts of
and Data Journalism Team, 2020). To combat the                        preparing or pre-positioning of equipment for
spread of the COVID-19 by vaccinating and assisting                   pandemics, it is also important to consider the near-
those who have been severely stricken with the                        term implications of not pre-positioning, as in the case
disease, medical equipment like masks and ventilators                 of price surges for health equipment. The information
is extremely important to have on hand at all times.                  below lists the market prices and markups of essential
                                                                      PPE and equipment following the COVID-19 pandemic.
Due to the demand surge and global supply-chain                       It is found that the cost of PPE supplies increased by
disruptions, panic buying has become a headline of                    over 1,000 percent, according to the Society for
the COVID-19 pandemic. Panic buying threatens the                     Healthcare Organization Procurement Professionals
health systems’ ability to prevent and treat the                      (SHOPP) (2020).35
coronavirus with shortages of hand sanitizers, masks


Table 81: Cost of PPE supplies in the United States pre-COVID19 and during COVID-19

 ITEM                               PRE                     COST DURING            PRICE MARKUP           PERCENTAGE
                                    COVID-19 COST           COVID-19                                      MARKUP

 Vinyl exam gloves (€)                              €0.02                 €0.05                   €0.04                   300%
 Latex gloves (US$)                                  0.03                   0.07                   0.05                   267%
 Nitryl gloves (US$)                                 0.05                   0.09                   0.05                   200%
 3ply masks (US$)                                    0.05                   0.68                   0.63                1500%
 K95 masks (US$)                         Not applicable                     3.60         Not applicable        Not applicable
 N95 masks (US$)                                     0.34                   5.18                   4.83                1513%
 3M N95 masks (US$)                                  0.10                   6.08                   5.98                6136%
 Hand sanitizer (US$)                                0.23                   0.50                   0.27                   215%
 Isolation gowns (US$)                               0.23                   4.50                   4.28                2000%
 Face shields (US$)                                  0.45                   4.05                   3.60                   900%
 Soap (US$)                                          0.17                   0.32                   0.14                   188%

Source: SHOPP (2020), values as of April 7, 2020. Original values in US dollars




35 Original values in US dollars.



Case studies                                                                  Epidemic and Disaster Health Preparedness     199
For these reasons and more, the EU has started to         The study by Turabi & Saynisch (2016)simulates the
stockpile medical equipment since March 2020 as           distribution of expected pandemic events per century.
part of the rescEU program (European Commission,          The study is referred to in the Case of Pandemic
2020e),36 which provides support to member                Preparedness and runs 10,000 simulations of random
countries as part of the EU Civil Protection Mechanism.   draws from a binomial distribution to simulate the
Medical equipment as part of the stockpile will include   losses that might occur in 10,000 centuries and
intensive care medical equipment such as ventilators,     aggregating the results to show how likely it is that we
PPE such as reusable masks, vaccines and                  see different numbers of events per century, on
therapeutics, and laboratory supplies. In addition        average. The model represents a conservative estimate
under the JPA, MS are in the process of purchasing        of the risk of pandemic events, which is to say that the
PPE, respiratory ventilators, and items necessary for     true risk could be higher.
coronavirus testing. This coordinated approach gives
MS a strong position when negotiating with the industry      Æ	 Results of the analysis by dividends
on availability and price of medical products.               	 and overall

While efforts are being made to obtain and distribute     The following findings have been noted by the GHRF
pandemic equipment to those countries that require it     Commission (2016)37 in its study of investments for
most, it is clear that better preparedness could have     preparedness against the negative consequences of a
resulted in more streamlined efforts to protect           pandemic:
individuals from the novel coronavirus through unified
mechanisms.                                               •	 The Commission on a Global Health Risk Framework
                                                             for the Future (GHRF Commission) believes that
     Æ	 Description                                          commitment of an incremental US$4.5 billion
                                                             (€4.07 billion in 2016) per year would make the
  This case study is an external analysis that was           world much safer and better prepared for
  undertaken with ex-post assessments.                       pandemics. €4.07 billion equates to 65 cents per
                                                             person in the world.38 This figure includes
This study on the Case of Pandemic Preparedness              expenditures for strengthening national public
(GHRF Commission, 2016) assesses the mechanisms              health systems, funding R&D, and financing global
and governance related to pandemic preparedness. It          coordination and contingency efforts.
aims to analyse the resources devoted to preventing
and responding to threat of pandemics. The study          •	 The 1918 influenza killed 50 million people and
compares various diseases in the world and the               arguably as high as 100 million in 1918–1920. The
national policy, preparedness through pre-positioning,       consensus among leading epidemiologists and
and affording time for procurement that influenced           public health experts is that the threat from infection
the management of pandemics. Given the large scale           diseases is growing. Emerging infections disease
of risk for human and economic losses associated with        events are increasingly significantly over time, with
the COVID-19 pandemic, it is easy to demonstrate a           an ever-increasing global population.
compelling case for greater investment. Understanding
the importance of supply and distribution of medical      •	 The World Bank has estimated the economic impact
equipment and the costs of developing preparedness           of a severe pandemic (that is, one on the scale of
plans can situate the EU to better prepare for another       the influenza pandemic of 1918–1919) at nearly 5
pandemic or health emergency by promoting greater            percent of global GDP or roughly €2.26 trillion
investment in PPE and other medical necessities,             (Jonas, 2014), but according to some recent
which will in turn prevent potential supply chain            estimates, the current coronavirus pandemic could
interruptions and surge pricing.                             mean economic costs in the order of €2.6–4.4
                                                             trillion (US$3–5 trillion)39 in the United States alone
     Æ	 Methodology                                          (Walmsley, et al., 2020). Some might see this as an

36 Original values in US dollars.
37 Original values in US dollars.
38 Original values in US dollars.
39 Original values in US dollars.



Case studies                                                    Epidemic and Disaster Health Preparedness       200
   exaggeration, but it could also be an underestimate.       Æ	 Challenges faced and lessons learned
   Aggregate cumulative GDP losses for Guinea,
   Liberia, and Sierra Leone in 2014 and 2015 are          In the future, more research relevant to the COVID-19
   estimated to amount to more than 10 percent             pandemic must be undertaken to understand the
   (UNDP, 2015; World Bank, 2014). This huge cost is       supply-chain mechanisms and constraints of PPE and
   the result of an epidemic that, for all its horror,     other COVID-19-related equipment to inform
   infected only about 0.25 percent of the population      pandemic and health emergency preparedness. In
   of Liberia, roughly 0.25 percent of the population of   addition, analysing the costs and benefits of pandemic
   Sierra Leone, and less than 0.05 percent of the         pre-positioning in terms of ready use equipment
   population of Guinea (WHO, 2016), with                  reserved for crisis situations will be important in future
   approximately 11,300 total deaths in these              studies. Potential case studies for investigation can
   countries (CDC, 2016). The Commission’s own             include:
   scenario modelling, based on the World Bank
   parameters, suggests that during the 21st-century       •	 Analysing the impacts to public health when
   global pandemics could cost in excess of €4.52             equipment is single sourced versus multi-sourced,
   trillion, with an expected loss of more than €45.2
   billion per year.40                                     •	 Evaluating outcomes on export bans for equipment
                                                              and the impact on health,
•	 The BCR that can be estimated from the report is
   €45.2 billion/€3.39 billion = 13.3                      •	 Assessing the outcomes on repurposing facilities
                                                              for PPE and other equipment development,
Overall, there is a clear case for the benefits of
significantly upgrading the world’s defences against       •	 Quantifying the benefit of preidentified health
pandemics. While they may be substantial, they are            facilities versus no centralized information on
not out of reach. The flaws in defences costs thousands       hospital/pharmacy/health clinic equipment and
of lives, and the ultimate cost of a pandemic is always       capacities, and
higher than what could be projected. The study finds
how relatively little countries are investing to protect   •	 Examining the COVID-19 impacts based on
the world from the threat of infectious diseases. It is       countries that have emergency plans and
also found that prevention is far more cost-effective         distribution arrangements versus those that do not.
than response and that the most effective response is
a well-prepared response.




40 Original values in US dollars.



Case studies                                                     Epidemic and Disaster Health Preparedness       201
3.9. Oil spills
3.9.1. SUMMARY OF FINDINGS                                      as it depends on many factors, such as the type of oil
       FOR OIL SPILLS                                           spilled and the type of environment and ecosystem
                                                                involved (Holleman, 2004).
An oil spill is a technical incident that causes
tremendous damages to the environment and the                   In this section, we have presented a benefit-cost
ecosystem, especially in marine and coastal areas as            assessment for preventive investments in vessels and
an oil spill often occurs on the sea. Oil spills lead to the    equipment in coastal areas. BCR for the case study is
immediate consequence of fire hazards and negatively            shown by a review of external ex ante BCA of the
affect wildlife by disturbing the habitats and threating        preventive investment. The impacts mostly considered
the lives of the species, especially for those living in        in the case study is the damages from vessel-source oil
these ecosystems (Bautista & Rahman, 2016). Clean-              spills and marine pollution. Table 82 summarizes
ups and assessments after an oil spill are challenging,         main data and information sources.
Table 82: Overview of data and information sources for oil spills analysis

 INVESTMENT        CASE STUDY        DATA SOURCE NAME AND REFERENCE

 Preventive        A multi-          Ex-ante assessment Commission Staff Working Document Evaluation: Ex Post
 investments       functional        Evaluation of Major Projects in Environment Financed by the European Regional
 in vessels and    ship to           Development Fund and the Cohesion Fund between 2000 and 2013, published by
 equipment in      tackle            Secretary-General of the European Commission
 coastal areas     marine
                   pollution         Consultation with the Ministry of the Environment of Estonia (Head of Marine
                                     Environment Department), Police and Border Guard Board (Police Captain)

Source: World Bank based on external data and information

Modelling of the effect of a catastrophic oil spill is          not have common standards and thus difficult to
useful in terms of revealing the benefits of oil spill          quantify (BOEM, 2016).
preventions. In an economic assessment, the
frequency and spill size volume of a hypothesized oil           The result of the investment shows a small BCR higher
spill are viewed as essential factors that can affect the       than 1 due to a conservative estimation of the net
modelling and the result.                                       benefits. Nevertheless, preventive investments are still
                                                                considered as highly beneficial as such investments,
When calculating BCRs for investments that prevent or           among       others,    require    significantly    lower
mitigate the impact of oil spills, the quantification of        implementation costs and thus yield higher net
the avoided costs is crucial yet challenging. While it is       benefits compared to post-disaster remediation. More
easy to calculate the response and clean-up costs, the          details are included in Figure 43. The figure presents a
risked social and environmental costs such as the               graph that displays the BCR for investments in oil spills.
losses in commercial fishing and ecosystem usually do

Case studies                                                                                             Oil spills   202
Figure 43: Findings of BCA for Oil Spills (BCR)




Source: World Bank analysis based on external data and information; presenting results from literature based on external reports
(1 Preventive investment result from (European Commission, 2020a))



Preventive investments against oil spills can constitute,             3.9.2. PREVENTIVE INVESTMENTS IN
among others, the deployment of vessels and                                  VESSELS AND EQUIPMENT IN
equipment in coastal areas. In recent decades, the EU                        COASTAL AREAS
has become more proactive in preventing vessel-
source pollution through the adoption of new,                         It is far less expensive to prevent an oil spill than to
prevention-oriented regulations. The European                         clean one up. That is why preventive investments, such
Commission has provided a range of services and tools                 as spill prevention programs and legislation, play an
to support coastal countries in prevention, such as a                 important role in reducing the frequency of major
toolbox for effectiveness of response (EMSA, 2021b),                  spills. An international example of robust oil spill
focusing on equipped oil spill response vessels. Also,                prevention, preparedness, and response is in
the European Maritime Safety Agency (EMSA) was                        Washington, United States. In the wake of the 1988
established to provide technical and scientific advice                Washington State ‘Netsucca’ and 1989 Alaskan ‘Exxon
on maritime safety and the prevention of pollution by                 Valdez’ oil spills, the state of Washington established a
ship (EMSA, 2021a).                                                   comprehensive spill preparedness and response
                                                                      program in July 1990 and a spill prevention program in
•	 Case study 27 (external analysis (European                         1991. Actions for these programs include 24-hour oil
   Commission, 2011b), ex ante): An analysis of a                     and hazardous material spill response capability
   preventive investment against oil spills in Estonia,               statewide; oil spill contingency plans drafted for
   namely, a multi-functional ship to deal with incidents             vessels over 300 gross register tonnage (GRT);
   of marine pollution, yielded a BCR of 1, although net              required tank vessel spill prevention plans, cargo and
   benefits were not estimated, particularly the                      passenger vessel inspections, and vessel bunkering
   quantification of benefits of potential oil spills being           checklists and inspections that were enforced; and a
   reduced. These benefits could be substantial as oil                natural resource damage assessment. These proactive
   spills have impacts beyond borders and can cause                   efforts put Washington significantly ahead of the rest
   considerable disruptions to ecosystems.                            of the United States in terms of the reduction of the
                                                                      number of oil spills and rates of oil spills by tonnage
                                                                      transport and transit.




Case studies                                                                                                         Oil spills    203
For the EU, the prevention of vessel-source pollution is      Regulation 724/2004 considerably expanded EMSA’s
a cross-sectoral issue that involves the protection of        role to include an increased emphasis on maritime
the marine environment and maritime transport. After          security alongside the response to pollution by ships
the ‘Erika’ oil spill disaster off the coast of France in     (Liu & Maes, 2010).
1999 and the ‘Prestige’ oil spill off the coast of Galicia,
Spain, in 2002, the EU became more proactive in               The European Commission has provided a range of
preventing vessel-source pollution through the                services and tools to help coastal countries to prevent
adoption of new, prevention-oriented regulations. This        or reduce oil spills and marine pollution incidents.
is mainly dealt with by the Directorate General of            EMSA offered a ‘toolbox’ that can respond to oil spill
Energy and Transport. Moreover, EMSA was established          incidents at the request of EU MS quickly and
by Regulation (EC) 1406/2002 as part of the Erika II          effectively (see Figure 44 for EMSA’s network of Oil
package (EMSA, 2021a). EMSA provides the European             Spill Response Vessels) (EMSA, 2021b). The service is
Commission with technical and scientific advice on            accomplished by the operation of fully equipped oil
maritime safety and the prevention of pollution by            spill response vessels, which has to respond to an
ships to develop new legislation and evaluate the             incident and set sail within a limitation of 24 hours.
effectiveness of already-implemented measures.


Figure 44: EMSA’s Operational Oil Spill Response Services




Source: EMSA (2021b)




Case studies                                                                                        Oil spills   204
        PREVENTION OF OIL SPILL IMPACTS IN ESTONIA: A MULTI-FUNCTIONAL SHIP
        TO TACKLE MARINE POLLUTION

 This case study is an external analysis that was           Estonian authorities have stated that an oil spill can be
 undertaken with ex ante assessments that included          considered as an environmental emergency that is
 quantitative estimations of benefits.                      the most expensive and most probable to happen. A
                                                            study based on historical spill data found that the
    Æ	 Introduction and background                          average per-unit clean-up cost of marine oil spill in
                                                            Estonia is €7,616 (US$6,820.62) per tonne (Dagmar,
The Gulf of Finland and the Baltic Sea are at high risk     2001). Also, because fish eggs and larvae are
of marine pollution and oil spills as they are frequently   vulnerable to high oil concentration in water, oil spills
involved in the shipping of oil and oil products. Every     negatively affect the marine and coastal ecosystem
year, over 160 million tonnes of chemicals are              and thus generate economic losses in commercial
transported across the Gulf of Finland (European            fishing, tourism, and local recreation (Dagmar, 2004).
Commission, 2020a). As a result, the Baltic Sea             The per-unit socio-economic and environmental cost
receives 30–60 metric tonnes of oil annually, and it is     of an oil spill is shown in Table 83 below, according to
estimated that 2.87 oil spill accidents take place in the   the EPA Basic Oil Spill Cost Estimation Model.
Baltic Sea every year (Elin, et al., 2001).


Table 83: Socioeconomic and Environmental Base Per-Gallon Costs for Oil Spills




Source: Dagmar (2004)




Case studies                                                                                        Oil spills   205
    Æ	 Description                                             Æ	 Methodology

During an EU project (European Commission, 2011b),          A BCA has been carried out for the project, based on
a multifunctional ship has been procured for Estonia to     guidance materials developed by the European
deal with incidents of marine pollution in Estonian         Commission, such as the ‘Guide to Benefit-Cost
waters and other parts of Baltic Sea. During the            Analysis Investments Projects’ and ‘Guidelines for
programming period from 2007 to 2013, the EU                Benefit-Cost Analysis Methodology’ (European
contributed €29.8 million to the total investment of        Commission, 2014; European Commission, 2007).
€33.1 million.                                              The analysis is based on the cash flow analysis method,
                                                            while a uniform discount rate of 6 percent (real rate)
Expected results are that in the event of an alert, the     (Flood, 2014) was used for determining the present
ship will be ready to leave from the harbour to the         value of long-term receivables and liabilities when
marine pollution area within 2 hours, be at the pollution   assessing the financial profitability of the investment.
area within six hours, and start remediation works
within 12 hours. This means that under normal                  Æ	 Results of the analysis by Dividends
conditions the marine pollution should be removed              	 and overall
within 48 hours. As the ship is multi-functional, it can
also take a ‘supervisory’ role, carrying out prevention     The result of the analysis (European Commission,
and monitoring duties at sea. The mere sight of this        2020a) shows a BCR of 1 for the project, with the low
highly visible ship will encourage vessels to adhere to     ratio due to a conservative estimation of the net
environmental regulations and wilful marine pollution       benefits. Because of the unavailability of data, the
will decrease. The purchase of the ship will see            ship’s impact in terms of the number of deliberate oil
Estonia’s capacity to tackle marine pollution rise to 26    spills being reduced is not quantified. The analysis
percent of HELCOM requirements.                             shows that the ship achieved its goal of reducing
                                                            damages from marine pollution and oil spills. The ship
The ship will help also prevent and respond rapidly to      supports an effective response to pollution
pollution incidents to avoid contamination and              emergencies, which helps reduce the spread of marine
disturbance of habitats and maintain their favourable       contamination and decreases the risk of marine
status, ensure functioning of critical areas, and reduce    pollution to the environment and human health. Such
risk to human health and life. The project achieved the     reduction in oil pollution and marine contamination
objectives based on HELCOM recommendations                  benefits not only Estonia but also all the countries
(removing marine pollution within 48 hours). It             surrounding the Baltic Sea, including non-EU countries
achieved its main target of improving offshore sea          such as Russia.
pollution control capacity and reduced the risk of
damage from maritime pollution. This is a great                Æ	 Challenges faced and lessons learned
improvement as at the time of the project application,
the Police and Border Guard Board had only one              The project itself is not an ordinary direct investment
pollution control ship, which had been donated by           for profit but a preventive one that helps reduce
Sweden in 2002 and accounted for only 13 percent of         environmental pollutions. As a result, it does not have
the HELCOM recommendation.                                  a direct investment effect. Therefore, no ex post
                                                            analysis has been done for the project, and the impact
                                                            of the ship in terms of the number of oil spills being
                                                            reduced has not been quantified (European
                                                            Commission, 2011b; European Commission, 2020a).




Case studies                                                                                       Oil spills   206
3.10. Nuclear
3.10.1. SUMMARY OF FINDINGS                                  improving the sustainability and safety of nuclear
       	 FOR NUCLEAR RISKS                                   power plants in Europe, no studies could be found
                                                             undertaking a full BCA for such projects. This is
In this section, we have presented the benefits of           probably because impacts of nuclear can be sustained
investments in nuclear security and remediation              over millennia, which would indicate precautionary
programmes for uranium production. Most investments          criteria rather than analysis based on mostly economic
focus on preventing risks from potential nuclear             efficiency criteria.
disasters in the future while enhancing sustainable
energy production. One example considers the long-           A number of countries have been investing in the
lasting risk from chemical leaching of uranium.              security of their nuclear power plants. Examples are
                                                             the large-scale long-term investment in France that
When conducting analysis for nuclear accident                aimed to enhance the safety and security of plants or
prevention, it is essential to carefully quantify the risk   the comprehensive research programme centre in the
of nuclear accidents by addressing the frequency for a       Czech Republic (SUSEN sustainable energy project)
nuclear disaster to occur. One of the standard tools to      (European Commission, 2012; European Commission,
quantify such accidents is the Farmer Curve, which           2011) that aims to enhance the sustainability of energy
defines the risk of a nuclear power plant as ‘probability    production. Moreover, the Czech Republic, as one of
× consequences’ (Wheatley, et al., 2016). A Farmer           the top uranium-producing countries in the world
plot shows the annual frequency of fatalities or             since the 1960s, has been implementing a large-scale
damages from a nuclear accident, which can be used           environmental programme for the past 30 years to
in an economic analysis that determines the avoided          close the uranium mines and a specific project co-
losses of investments in nuclear risk reduction.             funded by the EU supported the decontamination of
Moreover, the decommissioning of chemical leaching           sites (European Commission, 2011).
of uranium to prevent environmental disasters and
health hazards is a complex process that needs to be         Although no formal BCA was conducted for the
constantly evaluated and specified to achieve the            investments, qualitative analyses have shown benefits
environmentally and economically most effective              in nuclear risk prevention and remediation of risks
measures in a step-by-step process.                          related to uranium leakage. Investments in nuclear
                                                             safety tend to be highly beneficial from a long-term
BCRs analysis is rare for nuclear investments. While         perspective as the potential impacts of unsafe nuclear
costs on installation, maintenance, and waste                plants can be major.
management can be quantified for investments in




Case studies                                                                                        Nuclear     207
3.10.2. SECURITY OF NUCLEAR POWER 	                             sources of electrical power and supplies of water,
       	 PLANTS                                                 strengthening the protection of plants against extreme
                                                                external events, and devising changes and reforms of
Because the possibility of a nuclear accident can never         organizational and regulatory systems (Jawerth,
be ruled out, there is no room for complacency in the           2016).
implementation of nuclear safety practices and
concepts (Nuclear Energy Agency & Organisation for              To improve the safety level of nuclear power plants, the
Economic Co-operation and Development, 2013). The               European Commission requires the establishment of
nuclear power plant accident at the Fukushima Daiichi           general standards of nuclear safety monitoring
Power Plant, which was catalysed by a 9.0 magnitude             mechanisms. This allows the public and workers to be
earthquake off the coast of Tōhoku, Japan, is                   protected from radiations from nuclear installations
considered to be the worst nuclear disaster since               and nuclear accidents. At the same time, the JRC
Chernobyl in 1986. The Japanese government                      conducted research that ensures safe operations of
estimated clean-up costs to be €64.1 billion of the             Western and Russian type nuclear power plants, and it
overall Fukushima disaster price tag of €171.5 billion.         also analyses the effectiveness of existing mitigation
However, the Japan Centre for Economic Research                 mechanisms based on models of hypothetical nuclear
claims that the clean-up costs can intensify anywhere           accidents (EU Science Hub, 2016). Countries also
between €398 billion and €559 billion (Hornyak,                 invest in the safety of their nuclear facilities. For
2018). This event demonstrated the need for safety              instance, in France, the Nuclear Safety Authority is
precautions for nuclear power plants in technologically         established to regulate and monitor nuclear safety and
advanced countries, especially in the context of                protect workers and the public from potential radiation
multiple hazards. In September 2011, three months               risks.
after the accident, the MS of the International Atomic
Energy Agency (IAEA) unanimously endorsed the IAEA              A number of investments were found that provide
Action Plan on Nuclear Safety, which intends to foster          insights on how European countries manage nuclear
international collaboration towards strengthening               power plants in a safe and sustainable way. The
global nuclear safety. Moreover, IAEA MS have also              examples include France’s investment in nuclear
comprehensively analysed its causes and con-                    plants security and the Czech Republic’s sustainable
sequences by carrying out ‘stress tests’ to reassess the        energy projects. Highlights of the projects are
design of nuclear power plants against site-specific            presented in Box 16 below.
extreme natural hazards, installing additional backup

  Box 16: Investments in the security of nuclear power plants across Europe

The two cases reveal in practice investments in improving       nuclear power reactors to 50-60 years beyond 40 years of
nuclear power plants generate potential co-benefits for the     operation and improve security of nuclear operations.
society and sustainability for the future.
                                                                As the second phase of the SUSEN sustainable energy
A large-scale long-term investment program in France has        project (European Commission, 2012) , Czech Republic has
achieved success in terms of improving safety and extending     conducted research and analysis on the sustainability of
the lifetime of nuclear power. France (IAEA, 2020; World        nuclear energy. The project emphasizes on installing
Nuclear Association, 2021) derives around 75 percent of its     technological instruments in a sustainable energy R&D
electricity from nuclear plants, so it is essential to ensure   centre, which is used for the study of materials and
the safety of the country’s nuclear plants. From 2014 and       components used in energy production, construction, and
onwards (OCED, 2019a), the EDF (France’s state-backed           the operation of energy facilities, and research into methods
power utility) launched an investment project aimed at          for the safe disposal of nuclear waste. The cost of the
improving the safety of the country’s nuclear power plants.     project is over €100 million, and the positive impact of the
The overall cost of the project includes maintenance cost of    project includes improving sustainability in energy
roughly €4.2 billion per year and decommissioning and           production for the future and enhancing employment as
long-term waste management cost of €75 billion (Tillement,      185 new jobs were created.
2018). The project is expected to extend the lifetime of




Case studies                                                                                                Nuclear      208
3.10.3. CLEANING UP URANIUM                                  have invested systematically in decommissioning and
                                                             environmental cleaning.
Remediation programmes for uranium production
facilities aim to establish long-term, stable conditions     The Czech Republic has been one of the top uranium
that enable the affected areas to return to previously       producing countries in the world since 1960s, and
existing environmental conditions or to a land use with      their extensive production of uranium led to the
long-standing      sustainability.   These      activities   contamination of groundwaters and widespread
encompass the restoration of mines, mills, waste             environmental impacts. After 1990, a large scale
management facilities, tailings containment, and land        environmental programme was set up to shut down
and water resources (OECD, 2019b). By cleaning up            these uranium mines, and the last mine in Europe,
uranium through remediation programmes, there is             located in Rožná, Czech Republic, was closed in 2017.
peace of mind ensuring that both current and future          The cost of all remediation activities are expected to
generations will be able to use the site and its             be in excess of €25 billion (IAFA, 2005).
surrounding areas safely. Therefore, at all stages of the
remediation process, it is crucial to consider the           During the 2007 to 2013 programming period, the EU
principles of environmental protection, sustainable          invested €20,311,400 into a €23,895,700 project
development, and intergenerational equity.                   aimed at decontaminating, sanitizing, and re-
                                                             cultivating the former MAPE Mydlovary uranium
Decommissioning of the chemical leaching in uranium          processing site (European Commission, 2011). As a
is a long-lasting and complex process that needs to be       result of mining out 24,936 m3 of contaminated
constantly evaluated and specified. This overall             material and removing another 24,265 m3 of
process is divided into five consecutive stages to           demolished and decontaminated building structures
accommodate the remediation’s long time frame and            and technological equipment, the region was able to
stringent technical and economic requirements.               reduce radiation levels and contamination risks in
Therefore, the process of decommissioning may not            drinking water and surface water, allow for vegetation
be standardized for each site. Yet, this stage-by-stage      to be re-established, and meadows and pastures to
progression allows researchers to verify the steps           exist again. It is important to investigate these types of
individually and ensure that the process is achieving        investment because water contamination and other
the environmentally and economically best solutions          environmental risks can become cross-border issues if
possible. Some countries such as the Czech Republic          not treated promptly and correctly.




Case studies                                                                                           Nuclear     209
3.11. Chemical
3.11.1. SUMMARY OF FINDINGS FOR 		                            Flagship actions of this strategy include banning the
       	 CHEMICAL RISKS                                       most harmful chemicals in consumer products,
                                                              phasing out the use of per- and polyfluoroalkyl
Chemical incidents, especially those that are an act of       substances (PFAS) in the EU unless they are for
terrorism, can directly cause injury from fire, explosion,    essential use, boosting the investment and innovation
or toxicity and indirectly create fear and anxiety in         capacity for production and the use of chemicals that
populations. The WHO (2020) states that the adverse           are safe and sustainable by design and throughout
health outcomes to toxic chemical exposure may be             their life cycle, establishing a simpler ‘one substance
effects that are local or arise at the site of contact with   one assessment’ process for the risk and hazard
the chemical (for example, bronchoconstriction from           assessment of chemicals, and playing a global climate
respiratory irritants or irritation of the skin and eyes by   leader role in championing the continent’s high
gases, liquids, and solids); effects that are systemic or     standards and not exporting chemicals banned in the
affect organ systems remote from the site of absorption       EU. This is in addition to the European Commission’s
(for example, depression of the central nervous system        Seveso Directive (European Commission, 2020g) and
from inhalation of solvents or necrosis of the liver from     international cooperation efforts, like the UNECE’s
the inhalation of carbon tetrachloride); and effects on       Convention on the Transboundary Effects of Industrial
mental health arising from real or perceived realness,        Accidents and the OECD’s Programme on Chemical
which depends on psychosocial stress associated with          Accidents.
an incident. The development of symptoms can vary
greatly, ranging from within a day to months or even          In this section, we have demonstrated a benefit-cost
years.                                                        assessment for chemical risk prevention and
                                                              remediation. A BCA for the investment is undertaken
In October 2020, the European Commission adopted              with a detailed ex post case study analysis. The
the EU Chemicals Strategy for Sustainability, which is        chemical risk identified in the case study is the
considered to be the first step towards the European          sulphuric acid tar waste and other toxic pollutants
Green Deal’s ambition for zero pollution and a toxic-         from waste dumpsites. Table 84 summarizes main
free environment (European Commission, 2020f).                data and information sources.




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Table 84: Overview of data and information sources for chemical analysis

 INVESTMENT         CASE STUDY        DATA SOURCE NAME AND REFERENCE

 Cleaning up        Cleaning of       Costs of the investment found from the EU programming funds and description
 hazardous          hazardous
 waste              waste in          Cost of temporary treatment between Phase I and Phase II provided by Latvia’s
                    Latvia            State Environmental Services

                                      Assumption for lives saved based on data from a WHO report for the Slovak
                                      Republic

                                      Health costs avoided based on data from the European Public Health Alliance

                                      Cost of sick/affected livestock avoided based on a study for Ethiopia (Environmental
                                      and Health Impacts of Effluents from Textile Industries in Ethiopia: The Case of
                                      Gelan and Dukem, Oromia Regional State)

                                      Information on jobs created provided by Latvia’s State Environmental Services

Source: World Bank based on external data and information



Models need to be adapted to type of investment.                     be found undertaking a BCA that examines the
When modelling the effectiveness of remediation                      remediation of chemical incidents and the cost-
strategies of chemical incidents, it is crucial to consider          effectiveness of it.
the direct economic consequences such as property
damage as well as costs of mitigating the health risks               Results from BCA of remediation investments tend to
related to the incident. For some investments, the                   yield net benefits. Complementary investments
modelling can be non-time-sensitive and focus on the                 and comprehensive analysis to better understand
overall costs and benefits in the lifetime of the capital            historic losses due to chemical spills and other
investment, while future costs or benefits per year are              environmental hazards as well as land value
not included.                                                        appreciation can be highly informative for investments
                                                                     to comprehensively address remediation as well as
BCRs are essential for analysing the impact of chemical              target socio-economic improvements. More details
incidents, as such incidents often lead to a multitude               are included in Figure 45, Figure 46 and Figure 47. The
of domino effects and may spawn serious                              figures present graphs that display the BCR, NPV, and
consequences of mass casualties, property losses,                    ERR for investments in chemical risks (shown in red).
and environmental pollution. However, few studies can
Figure 45: Findings of BCA for chemical risk (BCR)




Source: World Bank analysis based on external data and information

Case studies                                                                                               Chemical     211
Figure 46: Findings of BCA for chemical risk (NPV)




Source: World Bank analysis based on external data and information



Figure 47: Findings of BCA for chemical risk (IRR)




Source: World Bank analysis based on external data and information



Cleaning up hazardous waste is a preventive                          contaminated commercial site (Gamper-Rabindran &
investment that can prevent chemical risks. Hazardous                Timmins, 2013; Taylor, 2016).
waste can permeate through and contaminate all
types of environmental mediums—atmosphere,                           •	 Case study 28 (new analysis under this project, ex
groundwater, surface waters, and soil—to cause                          post (European Commission, 2020g)): An analysis
harmful or even fatal effects on human health. Such                     of a remediation investment in Latvia to clean up
health effects includes narcosis, skin irritation, and                  sulphuric acid tar lagoons, once operated as waste
respiratory diseases, or even chronic health effects,                   dumpsites, yielded positive net benefits (BCR 5.8,
such as leukaemia, liver tumours, lymphomas, and                        NPV €151 million, ERR 480.17 percent). The
birth defects. Hence, cleaning up hazardous waste is                    analysis included direct impacts (particularly on the
crucial in terms of removing toxins that negatively                     environment) and economic potential unlocked
impacts human health, while it also yields co-benefits                  that can increase land value, construction
in increasing property value of homes near the                          investments, as well as linked jobs created. Future

Case studies                                                                                                Chemical     212
   case studies could further consider further, among        Cleaning up hazardous waste can have positive
   others, the long-term impacts on human health,            environmental, economic, health, and social benefits
   productivity losses from agriculture avoided, or CO2      for the community. Not only do communities benefit
   emissions avoided.                                        from the lack of toxins in the air once ‘brownfield’ sites
                                                             are remediated, but studies have shown that the
3.11.2. CLEANING UP HAZARDOUS WASTE                          property value of homes near the contaminated
                                                             commercial site appreciates (Gamper-Rabindran &
Hazardous waste can permeate through and                     Timmins, 2013; Taylor, 2016). For instance, using a
contaminate all types of environmental mediums—              hedonic method to estimate the residents’ WTP to
atmosphere, groundwater, surface waters, and soil—           clean up a Superfund site, Kiel and Zabel (Kiel & Zabel,
to cause harmful or even fatal effects on human health.      2012) found that the economic benefits of cleaning up
Prolonged exposure to toxic pollutants can instigate         two Superfund sites in Woburn, Massachusetts, range
acute health effects, such as narcosis, skin irritation,     from €55.47 million to €94 million.
and respiratory diseases, or even chronic health
effects, such as leukaemia, liver tumours, lymphomas,
and birth defects.




        REMEDIATION BY CLEANING OF HAZARDOUS WASTE IN LATVIA

 This case study is a new ex post analysis under this        to compare the cost of the remediation project in each
 project that involved innovation of quantitative            phase of this two-part remediation and foresting
 impacts.                                                    investment along with the temporary treatment
                                                             between Phases I and II. Collectively, this project is the
    Æ	 Introduction and background                           only major environmental project occurring in Latvia
                                                             and the other Baltic states.
From the 1950s through the 1980s, the Southern and
Northern sulphuric acid tar lagoons within the               It is important to evaluate the remediating interventions
Inčukalns civil parish in Latvia were established and        and their holistic benefits to communities near toxic
operated as waste dumpsites. Although the landfill           areas. Health issues from such toxic can arise
was closed in 1986, the pollution already infiltrated        immediately but more often, they are exhibited over
into the near-surface groundwater and artesian water         time and unfortunately through generations. For this
up to a depth of 70–90 m. The pollution has migrated         reason, remediation impacts should be forward looking
northwards towards the River Gauga, and currently,           as in the below case study (losses avoided) and
the polluted groundwater extends to 148 ha                   consider the morbidity and mortality as
around the Northern lagoon and 149 ha around the             comprehensively as possible. These BCAs could also
Southern lagoon.                                             inform health care services that might be needed in
                                                             the areas with caustic sites such as the acid tar lagoons
    Æ	 Description                                           in Latvia. Cascading impacts to land, assets, livestock,
                                                             and livelihoods are inevitable from such environmental
The objective of the project, ‘Historically contaminated     hazards but often underreported.
sites ‘Incukalns acid tar ponds’ remediation works’, is
to prevent the further discharge and dispersal of            The aim of the project is to prevent further discharge of
sulphuric acid tar waste and other pollutants into           the pollutants, especially the sulphuric acid tar waste,
groundwater, near-surface ground water, surface              into groundwater, as well as to prevent the further
water (in ditches), and soil and subsoil that is adjacent    dispersal of the pollutants into near-surface
to polluted sites. Since this project is being implemented   groundwater, surface water (in ditches), and soil and
over two EU programming periods (EU Structural               subsoil adjacent to the polluted site. This will happen
Funds programming periods 2007–2013 and 2014–                in two phases. Phase I uses EU Structural Funds for
2020), this project is also divided into two phases (that    the programming period of 2007–2013 and the
is, Phase I and Phase II). Our approach for this BCA is      Phase II programming period is 2014–2020.

Case studies                                                                                         Chemical      213
Remediation works started in Phase I included the               emission impacts of sulphur also comprise the
removal of two deep boreholes that were used for acid           same harmful chemicals. Therefore, we found it
tar and a temporary coverage of the pond was also               sound to include the value in our analysis. An
installed before the commencing of Phase II. As Phase           additional assumption made is that 50 percent of
II is currently under way and data for the results was          the people in the region of Vidzeme will have health
not available, this case study focuses on Phase I costs         impacts (conservative as there is a lack of data).
and benefits of the intervention. The approach for this
BCA is to compare the cost of the remediation project        •	 Cost of sick/affected livestock avoided is based on
in Phase along with the temporary treatment between             information in Ethiopia on the impacts of effluents
Phase 1 and 2 of this EU-funded (European                       to cattle—price adjusted to Latvia (Dadi, et al.,
Commission, 2011b).                                             2017). The assumption is that the context in
                                                                Ethiopia will be applicable to cattle in Latvia. In
    Æ	 Methodology                                              addition, information on the number of livestock in
                                                                Latvia is scaled to the regional level to obtain values
The methodology evaluates the cost of remediation to            for this factor (USDA, 2016).
the tar lagoons in Phase 1 as well as the pre-treatment
of contaminated water and deposit or utilization of          •	 Environmental costs avoided due to the temporary
sludge derived from the treatment between Phase 1               coverage installed between Phase I and Phase II
and 2 to the overall estimated benefit of remediation           prevent leachate concentration in the ponds and
and environmental clean-up. The methodology is not              surrounding areas. The amount of polluted water
time sensitive and does not include future costs or             would increase the amount of contaminated water
benefits per year but overall costs and benefits in the         in the pond and gradually infiltrate through the
lifetime of the capital investment with the data                sides of the pond to increase groundwater pollution
currently available.                                            if the coverage is not undertaken. The estimated
                                                                costs of pollution avoided are provided by the State
The costs of the investment are found from the EU               Environmental Agency and amount to approximately
programming funds and description, and the cost of              €384,000 per year.
temporary treatment between Phase I and Phase II are
provided by Latvia’s State Environmental Services. All       Triple dividend 2 (unlocking economic potential):
costs and benefits are in 2013 euros because this was
the final year of the programming period.                    •	 Cost of land value reduction avoided is based on
                                                                existing and estimated housing and value of housing
The Triple Dividend Framework includes the following            in the Vidzeme region in Latvia with the assumption
benefits:                                                       that 31 percent of the land value of housing will
                                                                decrease due to proximity to the toxic site. The data
Triple dividend 1 (costs avoided):                              are from a study in the United States on Assessing
                                                                the True Costs of Landfills (Hirshfeld, et al., 1992).
•	 Lives saved from exposure to PM10 and NO2 from               The assumption is that the percentage decrease in
   landfills and incinerators over individuals’ lifetimes.      land value would be constant in the Latvian case.
   The assumption is that data from the WHO for the             The value used is adjusted for the Latvian consumer
   Slovak Republic over a 20-year period of exposure            price index from the United States.
   to landfills/incinerators could be applied to Latvia as
   they are similar countries in GDP (Forastiere, et al.,    •	 Jobs added are considered a benefit to the economy
   2011).                                                       over the project period. The information on the
                                                                number and types of jobs was provided to the
•	 Health costs avoided are based on data from the              members of the team by Latvia’s State Environmental
   European Public Health Alliance that estimates the           Services. Jobs added included the assumption that
   cost per capita per country of pollution exposure.           there is full employment in the country.
   For Riga City (capital of Latvia) where the toxic site
   is near, the approximate cost per person is €1,384        •	 Value added in construction is the macro-economic
   per person (De Bruyn & De Vries, 2020) While this            benefit of construction works in remediation over
   cost is due to transportation-related pollutants, the        Phase 1 of the project. The multiplier for each euro

Case studies                                                                                         Chemical      214
   of input in the investment to the macro-economic                  Table 86). While co-benefits likely exist in this case and
   output is taken from Eurostat symmetric input-                    others of environmental clean-up, data were
   output tables for Latvia. This is the EU-level €0.47              unavailable to appropriately quantify for this study.
   to the broader economy for €1 of investment into                  Therefore, the true triple dividend is likely
   the construction sector.                                          underestimated in the per-year context in which the
                                                                     values are assessed and especially in a longer horizon
    Æ	 Results of the analysis by dividends                          where health costs avoided along with other direct
    	 and overall                                                    costs would contribute to the triple dividend cumulative
                                                                     value. Sensitivity analyses of low and high values of
Environmental clean-up of the acid tar lagoon in Phase               losses avoided, including rates of health costs, lives
1 of the EU investment to Latvia yields a high BCR                   lost, affected land value, and cattle/livestock affected,
when considering the unlocked economic potential as                  result in a range of BCRs of 2.8–10.5 with the median
well as direct losses avoided. (see Table 85 and                     BCR of 5.8.




Table 85: BCR of cleaning up hazardous waste in Latvia (in million €)

                                                             BCR: 5.8

                                                                       BENEFITS                      COSTS
                    Dividend 1 (€)                                        119.75
                    Dividend 2 (€)                                         62.45
                    Dividend 3 (€)
                    Total benefits                                        182.19
                    Total costs                                                                         31.4
                    BCR                                                     5.80
                    NPV (€)                                               150.79
                    ERR (%)                                               480.17

Source: World Bank analysis based on external data and information




Case studies                                                                                                   Chemical    215
Table 86: Expanded triple dividend BCR calculation for cleaning up hazardous waste in Latvia (in million €)

                                                   ACID TAR LAGOON CLEAN-UP

 FIRST DIVIDEND (€)
 Lives saved due to remediation of site (long-term estimation)                                                    €114.1 M
 Health costs avoided                                                                                              €5.54 M
 Livestock lost avoided                                                                                            €0.12 M
 Total first dividend                                                                                           €119.75 M
 SECOND DIVIDEND (€)
 Land value reduced                                                                                               €48.43 M
 Input-output to economy from construction investment                                                             €12.17 M
 Jobs added                                                                                                        €1.46 M
 Environmental damage avoided                                                                                      €0.38 M
 Total second dividend                                                                                            €62.45 M
 TOTAL DIVIDEND                                                                                                   €182.2 M
 Total cost                                                                                                        €31.4 M
 BCR                                                                                                                    5.8
 NPV                                                                                                            €150.79 M
 ERR (%)                                                                                                          480.17%

Source: World Bank analysis based on external data and information


    Æ	 Challenges faced and lessons learned

Much data were extrapolated from other countries                     •	 Understanding productivity losses from agriculture
with research and study on topics of toxic site impacts                 and other ecosystem services near area,
to the Latvian case. In the future, the study could
expand on the following:                                             •	 Studying and including the actual cost of real estate
                                                                        value losses,
•	 Determining Phase 1 and Phase 2 costs over a time
   horizon,                                                          •	 Including the cost of CO2 or other emissions and
                                                                        costs due to tar lagoons,
•	 Evaluating actual impacts on health of communities
   living near tar lagoons for decades,                              •	 Evaluating current and future benefits of forestry in
                                                                        the area (Phase 2).




Case studies                                                                                                Chemical     216
3.12. Multi-hazard
3.12.1. SUMMARY OF FINDINGS FOR 		
                                                                MethodS for Europe (MATRIX) project (Scolobig, et al.,
       	 MULTI-HAZARD RISKS
                                                                2014) suggests creating forums at the local level to
In terms of multi-hazard risks, a cross-cutting approach        foster discussions with researchers, practitioners, and
encompassing disaster risk reduction and climate                local advisors.
change adaptation is vital to ensuring a comprehensive
and cohesive effort for early warning, rescue and               In this section, we have qualitatively and quantitatively
emergency response, and climate adaptation                      demonstrated the benefits of multi-hazard investments
initiatives. By ensuring that these DRM strategies are          for enhancing rescue and emergency response and
capable of performing a wide variety of functions that          community-based mitigation approaches for climate
address a multitude of hazards and are able to be               change adaptation. The BCRs for the different types of
implemented across border territories, researchers              interventions are shown by a combination of
and front-line respondents are able to leverage this            conducting detailed case study analysis and reviewing
versatility to their advantage. To bridge the gap               past BCA, including both prospective and retrospective
between research and practice, a deliverable report             types of assessments. Table 87 summarizes main data
for the New Multi-HAzard and MulTi-RIsK Assessment              and information sources.
Table 87: Overview of data and information sources for multi-hazard analysis

 INVESTMENT                           CASE STUDY                        DATA SOURCE NAME AND REFERENCE

 Participatory Methodologies          Participatory Methodologies for   Ex post, semi-quantitative assessment based on
 for Climate Change Adaptation        Climate Change Adaptation in      the external study Benefit-Cost Analysis in
                                      Portugal                          Climate Change Adaptation: The Use of
                                                                        Participatory Methodologies

Source: World Bank based on external data and information


Quantification of the long-term benefits of investments         benefits of multi-hazard investments. However,
in multi-hazards prevention is essential to fully present       evidence tends to be scarce and BCA may not be the
the cost-effectiveness of such investments. No formal           right tool to assess these types of complex investments.
BCA can be conducted for the EU project ‘New vehicles           Conducting a comprehensive analysis of the effects of
for voluntary fire service units’ since available research      multi-hazard investments to determine how effective
and data are limited on the true benefits of adding new         these functional investments are for disaster response
vehicles. While it improves the demand and provides             could help inform policy.
upgraded equipment in the short term, it is difficult to
capture long-term benefits of the investment when               Enhancing rescue and emergency response
undertaking an economic assessment.                             equipment can support the effectiveness of response.
                                                                A project in Poland supported the provision of
Generally, there seems to be some indication of net             equipment (European Commission, 2020h), and

Case studies                                                                                        Multi-hazard     217
qualitative insights showed that they enhanced              construction norms, as well as surveillance systems
effectiveness of response, although an in-depth             (BCRs 4.755, 4.74, 4.34, respectively). This could
quantitative analysis would have to be undertaken.          serve as a model for other cases analysing
Moreover, digital databases and tools can support           investments yielding mostly intangible benefits and
early warning and effectiveness of response. A number       to differentiate while combining short- and long-
of investments were undertaken in Poland (European          term benefits.
Commission, 2015), Greece (European Commission,
2020i), Malta (European Commission, 2020j), and           3.12.2. RESCUE AND EMERGENCY 		
Spain (European Commission, 2020k) that supported                	 RESPONSE EQUIPMENT
better decision-making, coordination platforms for
enhanced response and minimized impacts, and were         Purchasing advanced equipment and technology for
even qualitatively stated to have wider social and        rescue and emergency response allows emergency
economic impacts by creating jobs or enhancing well-      respondents to be adequately prepared to protect
being. Multi-purpose green investments, particularly      human lives, property, and the environment. Investing
in urban areas, have been shown to yield positive net     in multi-purpose equipment that can be used when
benefits including improved resource efficiency,          responding to a multitude of hazards is not only cost-
increased aesthetic values, enhanced recreational         effective but also convenient for municipalities
values improved physical and mental health and job        because the versatility of its utility can be easily
creation, as exemplified in an EU Horizon 2020            maximized by emergency authorities and responders.
research project URBAN GreenUP (UrbanGreenUp,             Several countries have invested in equipment for
2020), or the development of the Budapest City Park       improved preparedness and response, such as in
(Maksimovic, 2017).                                       Poland.

In the context of sustainability and climate change       Between 2016 and 2018, a project called “New
adaptation,    participatory    methodologies     and     Vehicles for voluntary fire service units” was launched
community-based mitigation approaches serve               in Poland’s Lubelskie region (European Commission,
essential roles, as individuals and communities are       2020h). The EU supported the purchase of 43
vulnerable to the effect of climate change. Innovative    firefighting and rescue vehicles for voluntary fire
participatory methods assist communities to               services and other equipment necessary for emergency
understand the causes and impact of climate change,       rescue and post-disaster clean-up operations in
enhance local capacity, and enable the application of     Poland. These vehicles provide a high level of technical
adaptation measures at community levels (Reid, et al.,    support for 1,753 voluntary fire services spanning
2019). As a part of the EU research project ‘Bottom-      60,000 firefighters, which consequently improves the
Up Climate Adaptation Strategies Towards a                speed and efficiency of local rescue and firefighting
Sustainable Europe’ (BASE) (2016), a study was            operations in municipalities throughout Lubelskie. As
undertaken to examine the effectiveness of                a result, it is possible to significantly mitigate many
participatory methods for 22 European cities, and it      adverse effects related to fires, forest fires, floods,
concludes that participation can enhance the process      serious industrial accidents, and other incidents that
of climate adaptation by improving economic               threaten life and health. Such efforts bolster protection
efficiency, community unity, and environmental            of human life and property while enhancing safety and
integration and evaluation (Clemmensen, et al., 2015).    preventing the degradation of the natural environment,
                                                          thus benefitting all 2.14 million inhabitants in the
•	 Case study 29 (external analysis, ex post (Alves F.,   region. The total investment of the project is €7.51
   2015)): An analysis of an urban-focused climate        million, and €4.28 million was funded by EU. As a
   adaptation program in Cascais, Portugal, showed        result of this investment, a population of 36,750 people
   interesting results from a study using participatory   are benefitting from increased forest fire protection
   BCA (PBCA) methodologies. The emphasis of the          measures and 289,818 people are benefitting from
   method is more on the process than the results, as     other disaster recovery methods besides fire and
   it considers as beneficial the fact that populations   flooding.
   have been engaged in the analysis. Highest BCRs
   were found for reforestation (particularly due to      Since there is limited qualitative information provided
   long-term benefits), legislation towards bioclimatic   by department contacts regarding the improvement of

Case studies                                                                                  Multi-hazard     218
services due to the addition of the new vehicles, no                   no indication on how the 43 trucks were
formal BCA has been conducted for the project. In                      distributed to the various stations, which is an
general, research is limited on the true benefits of                   important aspect of the efficiency in reducing losses
adding new vehicles; while it improves the demand                      based on the vulnerability to fires in areas in
and provides upgraded equipment in the short-term, it                  Lubelskie region. 
is difficult to capture long-term benefits using the
triple-dividend methodology. To expand on this study             3.12.3. MULTI-HAZARD EARLY WARNING 	
in the future, the following should be considered:                      	SYSTEMS

•	 Assess the improved response time due to new fire             In the digital era, EWS often incorporate online databases
   vehicles,                                                     and digital tools that record available rescuing resources
                                                                 and provide real-time information on disasters. The use
•	 Assess the number of fire starts reduced, or fire             of digital tools increases the efficiency and effectiveness
   damage reduced along with casualties reduced                  of the authority’s response to disasters and public
   since the new vehicles were introduced in 2017,               awareness. Some examples include the IT system for
                                                                 hazard protection in Poland, the Aegis Intelligent System
•	 A more comprehensive solution would be to develop             that improves Greece’s responses to disasters, Malta’s
   a radial plan based on the spatial fabric of the              high-tech mapping equipment for disaster, and the cross-
   region. This includes identifying s emergency                 border early warning networks across Spain and Portugal.
   routes, critical facilities, dense and vulnerable             More information on the use of digital tools for multi-
   buildings, as well as critical infrastructure. There is       hazard EWS is included in Box 17 below.


  Box 17: The use of digital tools in the early warning of disasters

The following examples showcase how the mplementation            As a part of the country’s national digital strategy, an EU
of digital tools supports the effectiveness of EWS and           project (European Commission, 2020j) was implemented in
generates additional benefits to the society.                    Malta with an emphasis on data management and the use of
                                                                 hi-tech mapping equipment. The project creates 3D maps
Established in Poland, the project “IT system for protection     of the nation’s geography and infrastructure, which provide
against extraordinary hazards (ISOK)” (European                  not only valuable information on town planning to non-
Commission, 2015) is an innovative system that decreases         governmental, external users, but also important data for
losses from floods, improves land development, and               effective responses during a disaster, such as the strike of
increases the public’s sense of security and the efficiency of   an earthquake or tsunami. The project generates positive
crisis management responses. The system was built at a           social and economic impacts by boosting Malta’s economic
cost of €75.54 million, and it allows Poland to meet the EU’S    growth, creating new, specialized careers in the government
requirements on flood prevention. It provides valuable and       based on spatial qualifications, increasing sustainability,
useful IT and communication resources for decision-making        and improving the wellbeing of the citizens.
when disasters and hazards occurs and also 40 new and
permanent jobs.                                                  With the objective to manage and use resources efficiently
                                                                 during the occurrence of natural disasters such as forest
The Aegis Intelligent System (European Commission, 2020i)        fires, floods and erosion, the EU project ARIEM+ (European
is an innovative tool that enables Greece’s North Aegean         Commission, 2020k) was launched under the collaboration
Region and Cyprus to have more efficient and effective           between the Spanish regions of Galicia and Castile and Leon
responses when a natural disaster strikes. The system was        and those in northern Portugal. The project developed early
built with a total investment of €0.92 million It provides a     warning networks as part of its environmental monitoring
database that records available resources and equipment          systems that highlights risks in the region, which improves
such as disaster vehicles and medicine and first aid supplies    response coordination between nations and maintains
so that they can be mobilized immediately in a disaster. At      efficient communications in response to disasters. By doing
the same time, it also provides a platform that allows           so, they hope to shorten response times on both sides of the
authorities, first responders, and the public to visualize the   Portugal/Spain border to prevent forest fire or flood disasters
location and impacts of the disaster.                            and minimize their impact on human lives, property, and
                                                                 the environment.




Case studies                                                                                             Multi-hazard      219
3.12.4. PARTICIPATORY METHODOLOGIES 	
                                                             community, which helps policy making and actions in
       	 FOR CLIMATE CHANGE ADAPTATION
                                                             future climate adaptation (Ross, et al., 2015).
Individuals and communities are vulnerable to the
effect of climate change. As a result, it is crucial to      As a part of the EU research project BASE (2016), a
integrate participatory tools and community-based            study was undertaken to examine the participatory
mitigation approaches into DRR in the context of             and methods and process for 22 European BASE case
sustainability and climate change adaptation                 studies. The main goal of the study is to explore the
(Laukkonen, et al., 2009). Innovative participatory          significance and effectiveness of participation
methods assist communities to understand the causes          methods in the context of climate change adaptation.
and impact of climate change, enhance local capacity,        The study concludes that participation can
and enable the application of adaptation measures at         enhance the process of climate adaptation by
community levels (Reid, et al., 2019). In addition, a        improving economic efficiency, community unity, and
study from Australia has also shown that participatory       environmental      integration    and      evaluation
methods are effective and beneficial in terms of             (Clemmensen, et al., 2015).
creating shared knowledge and empathy in the


        PARTICIPATORY METHODOLOGIES FOR CLIMATE CHANGE ADAPTATION

 This case study is an external analysis that was            and training and awareness campaigns would support
 undertaken with ex-post assessments and semi-               the resilience of municipal staff and civil society.
 quantitative methods to estimate benefits from
 interventions.                                                 Æ	 Methodology

    Æ	 Introduction and background                           This is a literature review of an existing research
                                                             looking at the inclusion of participatory processes in
The municipality of Cascais in Portugal is highly            conducting BCA for appraising projects as an
dependent on climatic conditions for its economic            alternative or supplement to traditional BCAs. It uses
activities (particularly tourism) yet highly vulnerable to   the PBCA to evaluate the benefits of climate change
climate change impacts and disasters such as floods,         activities in Cascais, Portugal. This case reviews the
wildfires, droughts, and heatwaves (BASE, 2014). The         following study on the BCA in climate change
municipality became one of the first ones in the country     adaptation with the use of participatory methodologies
in 2010 to develop a local Strategic Plan for Climate        (Alves, 2015).
Change in consultation with experts that ranked
adaptation measures according to vulnerability, risk            Æ	 Results of the analysis by dividends
assessments, and potential benefits.                            	 and overall

    Æ	 Description                                           The study finds that climate change adaptation
                                                             planning and intervention requires a holistic review of
The BASE (2016) project from 2012 to 2016 focused            the complex interdependencies in time and space. A
on the development of ‘Green Corridors’ in the               PBCA is an economic appraisal tool which has been
municipality through the rehabilitation of the existing      developed and tested by the centre for climate impact,
riparian galleries and the unification of the parks,         modelling and adaptation (CCIAM) from the university
gardens, and florists, a connected and integrated            of Lisbon, under FP7 Project BASE. PBCA aims to
green infrastructure. This was supposed to reduce the        combine the advantages and strengths of MCA with
city vulnerability to floods as well as heatwaves while at   the rationality of BCA. The PBCA as applied to
the same time contributing to a greater quality of living    investment measures in Cascais, Portugal, being
and increased sustainability of the municipality.            explored for climate change adaptation is listed in
Moreover, the city wanted to enhance water savings in        Table 88.
distribution (water waste from 17 percent to 6 percent)

Case studies                                                                                    Multi-hazard    220
Table 88: Value of various participatory climate adaption measures




Source: Alves, et al. (2015)




After running the PBCA tool in three separate                represent a one-hour add-on to the program with
workshops with more than 40 participants, the key            minimum marginal costs.
findings regarding the methodology were as follows:
                                                           •	 It allows stakeholders to point in the right direction
•	 The emphasis of this method is more about the              regarding the most important effects of an action if
   process than the result itself as people engaged           deeper BCA is needed for quantitative valuation.
   seriously in technical and also ethical/moral debates
   with great sharing but then disregard the final            Æ	 Challenges faced and lessons learned
   present value.
                                                           This unique methodology could be employed in other
•	 It can lead to counter-literature, but intuitive,       case studies where a WTP approach is assessed for
   results, such as the selection of negative discount     long-term investments for mitigating the negative
   rates for some particular adaptation measures in        consequences of climate change. The PBCA tool could
   some groups.                                            be applied before a full data-based BCA to potentially
                                                           rule out investments that participants (stakeholders)
•	 Simple to use and understand, mainly if there is        may evaluate as non-starters. More research should
   good facilitation/focalization of the debate.           be conducted on the validity and usefulness of this
                                                           approach, evaluating the possible beneficial outcomes
•	 The introduction of the time factor and the inherent    to such a study in lieu of or as a supplement to a
   use of a discount rate enriches the debate and          traditional BCA.
   contributes significantly to the usefulness and
   maturation of the tool.                                 3.12.5. LOCAL MULTI-PURPOSE GREEN 	
                                                                  	INVESTMENTS
•	 The impact measurement scale (1 to 5) was
   considered too short to clearly distinguish between     In the past few decades, urbanization has taken place in
   adaptation measures and a (1 to 10) scale has been      Europe rapidly, causing environmental problems
   proposed for future workshops.                          including air and water pollutions and the loss of
                                                           biodiversity. At the same time, cities are negatively
•	 Inexpensive to use and implement as it can be           affected by the effect of climate change, which
   applied in the context of an existing workshop and      increases the severity and frequency of natural



Case studies                                                                                   Multi-hazard     221
hazards such as droughts, floods, and extreme heat.               climate change. Other benefits of such investments
In this context, implementing nature-based, blue green            include improving resource efficiency, increasing
solutions in cities is viewed as an effective and promising       aesthetic value for properties, creating areas for
approach to offset the negative impacts of urbanization           recreational purposes, and creating jobs (Maksimovic,
and enhance sustainability as well as urban resilience to         2017) (see Figure 48 below).


Figure 48: Benefits of NBS in urban environments




Source: Maksimovic (2017)


In Europe, investments in blue green measures have                examples of such investments are showcased in more
yielded promising results and inspirations. Some                  detail in Box 18 below.

  Box 18: Examples of investments in urban blue green infrastructure

A review of investments in blue green infrastructure in cities    Spain, Liverpool of the UK, and Izmir of Turkey) and will take
across Europe provided several lessons learned and                place across Europe, Latin America, and Asia in the future.
inspiring achievements outlined below. A common theme is          Covering about 100 hectares, the Budapest City Park of
that the two investments improve the cities’ adaptation to        Hungary is a multi-functional area redeveloped with the
climate change while enhance their sustainability.                goal to create a sustainable urban metabolism system
                                                                  (Maksimovic, 2017). To achieve the goal, a systematic
Funded under the EU’s Horizon 2020 research and                   analysis of the water, energy and waste flow was conducted
innovation programme, URBAN GreenUP (2020) is a project           for the park by the design team of the project. The park is
that promotes the use of NBS in urban areas to reduce the         expected to mitigate the effect of urban heat and heavy
negative impact of climate change and improve air and             participation and is estimated to yield a 35 percent saving in
water quality. It provides digital tools to assist policymakers   energy and 95 percent saving in water and reduce waste by
and city planners to choose the most effective NBS based          65 percent. The overall payback time of the project is less
on a city’s capacity and the expected outcomes. The project       than 6 years comparing to the cost of the infrastructure.
is currently on-going in three European cities (Valladolid of




Case studies                                                                                             Multi-hazard      222
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Bibliography                                                                                                              239
5. Annexes
5.1. Annex 1:
Key terms and definitions related to methodologies to the
estimation of costs and benefits of DRM investments
Benefit-cost analysis: Process used to identify,            investments. The IRR is a discount rate that would
measure, and analyse the benefits of a project,             make the NPV of all monetary flows equal to zero in a
program, or decision versus the costs associated with       discounted monetary flow analysis. The external rate
it.                                                         of return also considers inflation and costs of capital.

Benefit-cost ratio: Ratio used in BCA to summarize          Net present value: Difference between the present
the relationship between overall relative benefits and      value of monetary inflows and the present value of
costs of a project. A BCR lower than 1 means that the       cash outflows over a period. The idea behind the NPV
project net benefits could be negative—that is,             is to project all future monetary inflows and outflows
benefits are lower than costs.                              associated with a project/program/decision, discount
                                                            all these flows to the present day, and add them
Direct and indirect benefits/costs: Benefits/costs can      together. A positive NPV means that, after accounting
directly be associated with the impact of the project/      for the time value of monetary flows, the project/
program/decision, for example, asset losses prevented       program/decision could yield net benefits.
or environmental value enhanced due to a flood
prevention measure preventing a substantial impact          Sensitivity analysis: Determines and showcases how
on the asset as well as direct costs of the flood           results change when assumptions, particular
prevention measure. They can also be indirectly             parameters, or variables of an analysis are changed.
associated with the impact, for example, productivity
losses prevented given the measure as well as               Value of statistical life and value of a life year: The
increases of prices in the area leading to displacement     value of statistical life (VSL) is the marginal rate of
and loss of welfare/well-being of certain populations.      substitution between income (wealth) and mortality
                                                            risk, that is, how much individuals are willing to pay on
Discount rate: Rate of return used to discount future       average to reduce the risk of death. It does not
cash flows back to their present value. Financial           therefore indicate the value of an actual live but the
discount rates are the interest rates used to calculate     value of marginal changes in the likelihood of death.
the present value of future cash flows from a project or    The value of a life year (VOLY) is derived from the
investment. Social discount rates indicate a society’s      willingness to pay (WTP) for increasing life expectancy
average valuation of future versus present impacts of       by one additional year, which is considered more
interventions (benefits and costs). A high discount rate    appropriate for disasters that are mostly displacing
indicates a lower valuation of the future and a             mortality (that is, affecting certain age groups) rather
preference for the present, which particularly in the       than causing mostly premature deaths. Theoretically,
context of climate change also concerns                     measurements of actual changes in life expectancy
intergenerational equity aspects.                           would be the exact measure to consider.

Internal rate of return (external rate of return): Metric
used in analysis to estimate the benefits of potential




Annexes                                                                                                          240
5.2. Annex 2:
A step-by-step practitioner report on applying
the Triple Dividend BCA

This part includes a detailed description of methods       often overlapping, and the possibility of confounding
and approaches used at each step of the Triple             effects of other unrelated interventions made the
Dividend BCA as well as lessons learned. It can be         assessment particularly difficult.
used as a guide as it outlines many of the practical
difficulties that may be faced when undertaking Triple     Existing data and literature allowed us to directly
Dividend BCA with limited resources (time, budgets,        identify the first dividend (that is, lives saved) of a
data) and with the objective of covering a large number    project in most cases, but only in some cases or partly
of investments to review.                                  the second and third dividends. Although the third
                                                           dividend of investments can be multi-faceted, we were
1. DEFINING THE GOALS AND OBJECTIVES OF                    able to quantify only a handful of those benefits.
THE PROJECT                                                Therefore, our calculation of BCRs is necessarily a
                                                           lower bound estimate rather than overestimation.
For this particular analysis, the goals and objectives     Despite the limitations, we were able to identify
described for each investment were the ones described      benefits beyond the first dividend often using the best
in project documentation for EU and World Bank             available yet coarse data.
projects. The case studies that were mostly considered
for more in-depth analysis were those that had goals       2. LIST ALTERNATIVE PROJECTS
and objectives closely related to DRR investments.
Otherwise, additional objectives of the investments        Due to the unavailability of data, we mainly focused on
were outlined qualitatively and were considered as         a retroactive analysis of investments without using a
much as possible in the analysis as co-benefits to         DiD approach. A theoretical best practice approach
ensure that costs considered would be in line with the     with a perfect counterfactual was mostly not possible
scope of benefits.                                         in this analysis. However, some analysis was
                                                           undertaken with theoretical investments so that the
The overarching goal of each of the projects evaluated     counterfactual could reasonably be assumed, which
using the triple dividend BCA is disaster risk reduction   also served as theoretical synthetic controls.
and ultimately building resilience. This can occur
either directly (for example, building dams and EWS)       Unlike the private sector investment projects, DRM/
or indirectly (for example, school retrofit program).      DRR projects generally are managed and funded by
Examples of disasters include floods, earthquakes,         the public sector and therefore seldom have
heatwaves, wildfires, and storms. Investment in each       alternatives. Aimed at maximizing societal benefits,
of these projects is pre-defined, and the consequent       such investment projects often do not have alternatives,
objectives and benefits are well perceived. However,       meaning that we have to resort to BCA of a given
most of the benefits are often qualitative, and often      project instead of additionally identifying the cost-
range between direct financial and indirect societal       effectiveness of alternative projects with same goals
benefits. Under the triple dividend approach, we           and objectives (that is, with similar benefits) but with
capture and quantify as many of these benefits as          different benefits. Under this simplified scenario, we
possible using a combination of robust methodologies.      only considered specific projects undertaken for
                                                           disaster risk reduction in the EU and neighbouring
We identified DiDs as being theoretically the best         countries.
methodology to calculate the benefits of DRM/DRR
investments. However, identifying a suitable               3. LIST STAKEHOLDERS (THAT IS, BENEFICIARIES)
counterfactual in addition to the limitation of panel
data were challenges that limited our analysis to more     Difficulties were faced in defining the beneficiaries
fact-finding than sophisticated econometric or             that could be reasonably assumed for certain types of
statistical estimation. Second and third dividends are     investments with broader potential reach or high

Annexes                                                                                                        241
positive spillover effects. While all the economic             •	 Modelling future risks. This is the direct
subsectors are interconnected, separating out the                 approach – projecting the future risks will
impacts of an investment on all economic subsectors               allow us to identify how much damages and
across different regions requires detailed input-output           losses would have been avoided from DRM
data. In the absence of such an ideal set of data and             investments.
information, we rather took a conservative approach
and assumed beneficiaries would be those outlined as           •	 Existing case studies. Indirect approach.
direct beneficiaries of intervention. However, some               Especially case studies conducted by the WB
notable exceptions were made, for instance for EWS.               can be useful in this regard. Assuming all
                                                                  necessary data and information are available,
4. SELECT AND MEASURE ALL COST AND                                we can then extract them to calculate TD and
BENEFIT ELEMENTS                                                  conduct the BCA. Selection of case studies will
                                                                  be a tricky matter – we need a comparable
Overall, we only included what could be a certain                 DRM project for this purpose.
benefit and with sufficient evidence available in order
to avoid overestimation. The selection of possible costs       •	 Past disasters and DRM investments. This is
and benefits was based on a review of literature,                 another indirect approach to calculate the first
discussion with senior experts, consultations and                 dividend. If we have data on past investments,
brainstorming within the team. The major component                and also have a DiD set up (that is,, pre- and
of cost comes directly from project documents where               post-DRM data from treatment and control
direct investments are listed. In addition, we also               regions), then we can calculate the first
identified other operational costs associated with the            dividend using DiD econometric method.
implementation of the said project. Wherever possible,
we matched costs with each dividend. However, some         Risk analytics supported the estimation of avoided
costs such as direct investments are overlapping           losses and lives saved through comparing impacts
across dividends and we do not categorize them by          with and without interventions. The principle was to
dividends.                                                 assess the lives lost and losses incurred in a case study
                                                           location,  with and without the intervention being
In particular, first and third dividends are reasonably    studied, using a combination of recorded impacts and
outlined and quantified. For the first dividend,           simulated impacts. For instance, in areas where an
economic benefits stem from quantifying the value of       engineered structure is expected to have an impact on
lives saved due to interventions. On the other hand,       replicable physical processes (for example, flood
the third dividend, whenever identified, comes from        protection impact on flood extent), we would propose
quantifying the co-benefits of such interventions.         to model the effect of that protection adjusting the
                                                           frequency of flooding using a suitable model (for
However, the literature around the broader economic        example, a disaster risk model). In the case of non-
benefits of DRR investments (second dividend) is less      engineered interventions, other exposures or impact
established. In addition to the common challenges of       analysis on a scenario basis were considered, with
attribution and data for management, there were also       attention to how multiple factors might affect the
difficulties in determining the benefits that could be     impact beyond the limits of the intervention itself.
reasonably considered for disaster risk investments
under the second dividend.                                 5. PREDICT OUTCOME OF COSTS AND BENEFITS
                                                           OVER THE RELEVANT TIME PERIOD
The basis for the prediction of benefits and costs in
DRR investments (specifically Dividend 1) is based on      For the prediction of costs and benefits over a relevant
risk assessments. There are alternative approaches to      time period, two parameters are particularly important
calculating the direct benefits of DRM when disasters      to consider including i) lifespan of infrastructure/
strike outlined below. The report has aimed to model       measure considered and ii) valuation of lives saved.
future risk as much as possible as the other options
were not considered given lack of data, information        In this report, the selection of lifespan varied for various
and scope of the study.                                    types of investments given different lifetimes of
                                                           infrastructure, also dependent on the type of

Annexes                                                                                                            242
intervention (retrofitting, building, and so on). The time   •	 PESETA III report value with a VSL of €1.3 million
period used in the economic analysis of projects                per person
should reflect reasonable estimates of the full duration
of costs and benefits associated with the project,           •	 OECD VSL US$1.8–5.4 million (median of US$3.6
rather than be capped at 20 years or some arbitrary             million)
cut-off date.
                                                             •	 VSL of €400,000 per fatality and €65,000 per injury
World Bank’s investments in DRM consider that                   as per 2014 European Commission BCA guidelines
prevention saves lives, so that BCAs associate some
numerical estimate to the value of life, the so-called       •	 Adjusting the US VSL US$9.7 million with income
VSL. The literature (Braathen, et al., 2009; David,             elasticities (Viscusi and Masterson (2017) values)
2000) outlines problems with using VSL for valuation
of lives saved. In fact, high VSLs tend to bias impacts      •	 DALYs that can be used for health impact
and risks upwards, leading to leading to overestimation         assessments globally but are generally not used as
of benefits relative to costs. Moreover, country VSLs           an economic measure.
are relative to GDP, so that any analyses focusing at
different than country levels would need to consider         6. CONVERT ALL COSTS AND BENEFITS INTO A
how to resolve this/what value to apply (such as             COMMON CURRENCY
average/median EU GDP and so on).
                                                             For comparison purposes, it is important to convert all
After multiple considerations, this report has               costs and benefits into a common currency. Given the
undertaken a consistent approach to the calculation          regional focus of this analysis, we express all monetary
of the VSL. The choice of valuation of lives saved to        values in the Euro currency. For this purpose, we use
estimate the first dividend required an in-depth review      the official annual average exchange rates as reported
of the literature and approaches of different institutions   in the World Bank’s World Development Indicators.
(for example, EC, OECD, and the World Bank) as well
as discussions with the client and advisors to ensure        Since the BCR is unitless but sensitive to currency
an approach that would apply methodological best             year, we made sure to express both the costs and
practices, ensure the relevance of estimations to the        benefits in the same fiscal year. When necessary, we
EU context and ensure least possible controversy over        use consumer price index (2010 base year, that is,
estimated values.                                            2010 = 100) for converting monetary values from one
                                                             year to another. We employ the same strategy for all
This report has used country-specific BCAs based on          historical monetary data.
an average value for upper income countries
(considered suitable for EU countries). For non-EU           7. APPLY THE DISCOUNT RATE
countries under consideration, we have adjusted the
VSL for relative income (that is, the ratio of per capita    Standard economic analysis links social discount rates
GDP of the country of interest to the average per capita     to the long-term growth prospects of the country where
GDP in the EU) and income elasticity of VSL (set at 1        the project takes place. Higher (lower) growth
which is consistent with the suggestion that the income      prospects would normally imply a higher (lower)
elasticity of VSL is slightly above 1 for non-US             discount rate for a particular country. Given reasonable
countries). These values are all based on research by        parameters for the other variables in the standard
Viscusi and Masterman (2017) for VSL or Chiabai,             Ramsey formula linking discount rates to growth rates,
Spadaro, and Neumann (2018) for VOLY (Value Of Life          a 3 percent per capita growth rate translates into a 6
Years) approach would be used wherever applicable            percent discount rate, and per capita growth rates of
and possible with data available for assessing certain       1–5 percent yield discount rates of 2–10 percent
investments such as heatwaves. We will also be using         (World Bank, 2016).
QALYs, which is more common and used in BCAs as a
proxy for time spent in hospitals due to heat.               The literature (Gollier, et al., 2014) outlines challenges
                                                             associated with the choice of discount rates. This
Alternative approaches or values considered for              applies particularly for investments that are mainly
estimating the value of lives saved were as follows:         addressing future challenges with high uncertainty but

Annexes                                                                                                            243
substantial negative impacts (Weitzman, 2011). It was       (NPV) of an investment according to
even argued by some to apply a very low discount rate,
or close to zero. Considering the debate whether the
discount rate should be zero for environmental
investments, we resort a low value of social discount
rate.
                                                            NPV is the difference between the present values of
World Bank financed projects consider that economic         benefits (B_t) and costs (C_t) from all the future years.
analysis should link social discount rates to long-term     When all the economic benefits are accounted for, a
growth prospects of the country where the project           project is economically/socially beneficial if NPV>0.
takes place. Given reasonable parameters for the other
variables, the standard Ramsey discount rate formula        Finally, we calculate the ERR which provides the
is generally used. The discount rate is relative to GDP,    estimated rate of return equating the present values of
so that any analyses focusing at different than country     benefits and costs. That is, the rate of return at which
levels would need to consider what value to apply           the DRM project will be equally beneficial to a market-
(such as average/median EU GDP and so on). It is            based investment project. This is calculated as
noted that the JRC also applies specific discount rates,
and it is important to understand differences between
sectors as DRM investments are cross-sectoral.

This report applies varied discount rates aligned with
appropriate values for social DRR investments but also
market values. Given the controversy over discount          9. PERFORM SENSITIVITY ANALYSIS
rates but also the tendency for economists to apply
discount rates aligned with market values, the report       Regardless of the choice of different parameters, it is
includes country-specific discount rates ranging from       good practice to provide a sensitivity analysis. This
1.5 percent (which is suggested by the UK treasury for      analysis is undertaken with respect to model
health-related assessments) to 5 percent (which is          parameters that are based on judgement and expert
consistent with the Imperial College’s suggested 4          opinions instead of established practices. In this
percent discount rate). Specialized discount rates are      analysis, since the choice of discount rate is somewhat
used for example for environmental investments.             arbitrary, it is important to investigate how sensitive
                                                            the results of this analysis are to different discount
8. CALCULATE THE NPV OF THE PROJECT UNDER                   rates. In particular, we perform sensitivity analysis for
CONSIDERATION                                               the range of discount rates from 1.5 percent to 5
                                                            percent.
All the projects under consideration have streams of
future benefits. These needs, for the sake of               Generally, net benefits calculated tend to be quite
comparison, to be valued at current prices. That is, we     sensitive to the choice of valuation of lives in particular
converted all future monetary values to present             and lifespan (as related to different disaster scenarios).
monetary value using the appropriate discount rate.         This is also linked to the choice of disaster risk
For this purpose, we use the standard formula:              scenarios and therefore these parameters should
                                                            generally always be included in a sensitivity analysis.

                                                            10. OUTLINE POTENTIAL EQUITY ISSUES

                                                            It is widely recognized that most DRM projects have
                                                            positive net benefits, but the concrete distributional
where P and F denote present and future values, t           effects of such projects are mostly unknown. A known
denotes time and τ denotes time difference between          fact is that the impacts of disasters disproportionately
present and future. Finally, r denotes the discount rate.   affect poorer households (World Bank 2020a) and it
                                                            would therefore be of crucial importance to assess the
In addition, we calculate the net present benefits          differential impacts of DRR investments as the value of

Annexes                                                                                                            244
avoided losses in terms of developmental impacts and         missing,    these    equity,   environmental     and
reduced recovery times may differ depending on the           intergenerational factors could be considered and
characteristics of individuals or households benefitting     addressed through scoring/rating based on qualitative
from it. However, an investigation into the distributional   analysis.
effects of DRM investments will require quantile
regression analysis based on detailed household level        11. SUMMARY AND RECOMMENDATIONS
survey data, which is not available for our analysis.
                                                             The triple dividend approach to identifying additional
Equitable distribution of benefits intrinsically depends     societal benefits is becoming increasingly popular,
on the capacity of local communities to capitalize on        especially for environmental project appraisals in
the employment opportunities created in the process          recent years. While the multi-faceted benefits were
of project implementation. For example, construction         qualitatively justified, this analysis quantifies as many
of large DRM infrastructures requires labour, who can        of them as possible using the best possible approach.
be locally recruited. One potential way of ensuring this     In addition to the educational value of this analysis, we
could be to include local communities in the                 also identified important caveats in conducting a full-
implementation of the project, either through allocating     scale triple dividend BCA for DRM projects.
property rights or through legally binding contracts
with local authorities. However, such policies might         Available information enabled us to identify the first
have their own costs and benefits, and require more          dividend in all the cases, and the third dividend in most
focused analysis.                                            of the cases. However, the complicacy remains around
                                                             identifying and quantifying the second dividend. Most
Moreover, employment opportunities furthered by              of the benefit items under the second dividend may
large DRR investments may not be permanent. Local            arise from alternative sources, implying that a
workers with the experience of working in those              dedicated investigation with the scope of primary
projects will have to seek future employment elsewhere       survey is necessary for identifying those benefits,
instead of locally. It is possible that experienced          which is beyond the scope of this analysis.
workers may not be available locally, which will
complicate the project appraisal even further.               While the report has aimed to further as much as
                                                             possible comprehensive analysis, many caveats still
Environmental factors should be covered by Triple            remain. In addition to difficulties of estimating more
Dividend 3 considerations. However, those have not           intangible benefits included in the third dividend such
been estimated it is worth at least qualitatively            as environmental benefits or externalities, distributional
describing the potential impacts the investment could        impacts in terms of poverty and employment growth
have, positive and negative, in terms of environmental       could also not be estimated. This will remain as a
externalities or climate change. Whenever data is            limitation, and a potential future scope of investigation.



5.3. Annex 3:
Additional Information on the Methodological Approach

ALTERNATIVES TO TYPICAL BCA PROCEDURES                       historical data for probabilistic estimations of losses),
                                                             (b) consideration of potential impacts of climatic
Several studies have identified the limitations and          changes and high uncertainty or irreversibility, (c)
criticized the use of BCA to evaluate DRM investments.       evaluation of reasonable durations of benefits, and (d)
These studies (Mechler, 2016; Kull, et al., 2013;            broader considerations of processes of vulnerability
Shreve & Kelman, 2014) have argued for a shift in the        and technical limitations for the estimation of non-
emphasis on BCAs and proposed alternative economic           market goods. The studies have also highlighted
analysis tools. They have mainly criticized the lack of      potential negative externalities from DRR measures
(a) risk-based analysis and sensitivity analysis             such as environmental or health impacts and
undertaken as part of BCAs (due also to lack of              distributional considerations (given the emphasis on

Annexes                                                                                                            245
maximizing social welfare instead of optimizing the             the most significant challenges when incorporating
distribution). Discretionary discounting and ethical            climate change in BCA is the calculation of total
concerns over associating a monetary value to life              benefits when longer time horizons are considered
have been mentioned as additional challenges to use             and where there may be considerable uncertainty.
BCA. They also propose to shift from purely                     In particular, broad-scale climate changes
infrastructure-based/’hard’ solutions to more systemic          represented in coarse-resolution regional climate
interventions     emphasizing      preparedness/’soft’          models cannot be used with confidence to
solutions.                                                      determine local trends in precipitation at the scale
                                                                of a single case study without significant un-
There are several alternatives to BCA proposed in               certainty, added to which is the likely contribution
literature. These approaches can be valuable to                 of other environmental and socio-economic factors
determine under which conditions a particular                   (for example, catchment management and
investment might be considered economically viable              development of floodplains) affecting changes in
and to collect useful information (expert and                   flood hazard in the same time frame. This will imply
stakeholder judgment) on the possible consequences              that instead of taking an optimal decision, implying
of a project and opinions about parameters (river flows         reliable descriptions of the future, we may engage
or bridge span for floods for example). The approaches          in a process of robust decision-making that would
are particularly critical for consideration when                enable the best outcomes under a range of futures
investing in infrastructure that has a long life span.          and worldviews. Like the criticality model, this
                                                                approach enables us to look beyond the
•	 Cost-effectiveness analysis (CEA) is used to identify        infrastructure and consider the broader user and
   least-cost options to meet a specific, predefined            welfare perspective to investments with potential
   target or policy objective. Because project costs are        large impacts. Hallegatte et al. (2012) even
   the variable of consideration, CEA does not require          conclude that there should always be a discussion
   the quantification of benefits and can therefore also        of a menu of possible investments in various
   be applied with intangible or more qualitative               contexts and a variety of methodologies applied.
   benefits.
                                                              Robust decision-making approaches involve a process
•	 The MCA methodology emphasizes low cost and is             of dialogue given acceptance of uncertainty and are by
   organized around objectives, criteria, and indicators      nature iterative and adaptive. However, different
   that can be compared to the performance of                 approaches can be used, including ‘no-regret’
   different (policy) options over time in achieving          strategies (for example, controlling leakages in water
   one’s stated objectives (economic, social,                 pipes) or minimizing regrets (building larger reservoirs
   environmental, and fiscal criteria). A form of MCA is      when applicable), reversible and flexible strategies
   multi-criteria evaluation (MCE), also called criticality   (adjustable insurance and EWS), safety margin
   analysis.                                                  strategies (calibrating drainage infrastructure with
                                                              higher runoff figures), and strategies that reduce
Criticality analysis (Rozenberg, et al., 2019) has been       decision-making time horizons (stepwise investments
used in several contexts for the prioritization of            in infrastructure starting with lower cost options).
infrastructure projects and maintenance and to
combine social and economic assessments of critical           POTENTIAL ECONOMIC BENEFITS OF
interventions.                                                ECOSYSTEM SERVICES

•	 Differentmethodologies have been proposed for              Ecosystem services should be valued in a similar
   decision-making under deep uncertainty (Marchau,           manner to any other economic asset: their social value
   2019). These are BCA under uncertainty, BCA with           (that is, aggregate WTP) must equal the discounted
   a real options approach, robust decision-making,           NPV of these flows. However, the values attributed to
   and climate-informed decision analysis and all have        these services can only be measured indirectly, since
   different strengths for different applications. One of     they are derived from supporting and protecting




Annexes                                                                                                           246
activities (that is, strategically implemented DRM                            The production function approach involves a two-step
projects) that have directly measurable values.41                             procedure. The procedure includes assessing (i) the
Following Barbier (2007), a production function                               physical effects of changes in a biological resource or
approach42 can be used, which requires the                                    ecological service on an economic activity are
information on the change in an ecosystem – in terms                          determined; (ii) the impact of these environmental
of service that people care about – to place a value on                       changes is valued in terms of the corresponding
those services.43 This is particularly relevant for                           change in the marketed output of the relevant activity.
regulatory and habitat functions that support or protect                      Key features of this production function approach
economic activities. If the benefits of these services                        include: (i) an ecological function is effectively a direct
enhance the productivity of economic activities, or                           input into production, and the value marginal product
protect them from possible damages, the aggregate                             of changes in this function can be derived to determine
WTP for such services can be estimated as if they were                        its value; (ii) adopts either profit-maximizing or social
a factor input in these productive activities.                                welfare maximizing framework; (iii) can be applied in a
                                                                              static or a dynamic framework.


 ECOSYSTEM
                             ECOSYSTEM PROCESSES AND COMPONENTS                           ECONOMIC SERVICES (BENEFITS)
 FUNCTIONS

 Regulatory                  Role of ecosystems in biogeochemical                         Ultraviolet-B protection
 Functions                   processes
                                                                                          Maintenance of air quality
 Gas regulation              Influence of land cover and biologically
                             mediated processes                                           Influence of climate
 Climate regulation
                             Influence of system structure on dampening                   Maintenance of temperature, precipitation
 Disturbance                 environmental disturbance
 prevention                                                                               Storm protection
                             Role of land cover in regulating run-off and                 Flood risk reduction
 Water regulation            river discharge
 Soil retention                                                                           Drainage and natural irrigation
                             Role of vegetation root matrix and soil biota
 Soil formation              in soil structure                                            Maintenance of arable land

 Nutrient regulation         Weathering of rock, organic matter                           Prevention of damage from erosion and
                             accumulation                                                 siltation
 Waste treatment
                             Role of biota in storage and recycling of                    Maintenance of productivity on arable land
                             nutrients
                                                                                          Maintenance of productive ecosystems
                             Removal or breakdown of nutrients and
                             compounds                                                    Pollution control and detoxification

 Habitat Functions           Suitable living space for wild plants and                    Maintenance of biodiversity
                             animals
 Niche and refuge                                                                         Maintenance of beneficial species
                             Suitable reproductive habitat and nursery
 Nursery and                 grounds                                                      Maintenance of biodiversity
 breeding
                                                                                          Maintenance of beneficial species

Source: Barbier (2007, 2009)




41 For example, coastal and estuarine wetlands, such as tropical mangroves and temperate marshlands, act as “natural barriers” by preventing
disturbance of storm events, thus providing valuable storm prevention and flood mitigation services.
42 Such PF approaches are being increasingly employed for a diverse range of environmental quality impacts and ecosystem services, including the
effects of flood control, habitat-fishery linkages, storm protection functions, pollution mitigation and water purification.
43 On the other hand, stated preference studies (contingent valuation, conjoint analysis and choice experiments) additionally require that the change in
the ecosystem must be explained in the survey instrument in a manner that people will understand and not reject the valuation scenario.


Annexes                                                                                                                                            247
5.4. Annex 4:
Background Information on case studies
EARTHQUAKE                                                  behavioural economics found that individuals rarely
                                                            undertake measures that reduce risk partially, but they
Summary of WTP methodologies                                are willing to considerably invest in adaptation
                                                            measures that reduce risk to zero. This was shown for
A contingent valuation is a method of estimating the        example in a study by Botzen, Aerts, and van den
value that a person associates with a good or service.      Bergh (Botzen, et al., 2009) to determine households’
This can be measured in two ways: WTP and willingness       willingness to invest in flood insurance versus elevating
to accept (WTA). The first one seeks to comprehend an       newly built structures in order to adapt to the flood risk
individual’s willingness to obtain a good/service, while    that climate change imposes on the Netherlands. The
the latter focuses more on how much it would take for       results indicated that 52 percent of homeowners
someone to give up a good/service. WTP and WTA are          are willing to make a substantial investment of €10,000
most commonly used to place value on commodities            to elevate a new house to a level that is safe from
that are not exchanged in a hypothetical marketplace.       flooding. A household’s decision to invest in an
As a result, this methodology is most commonly              elevated home strongly stems from their expectations
applied to public goods and private non-market goods,       on the negative effects of climate change, perceptions
and in the context of the environment, this pertains to     of flood risks, individual risk attitudes, and how close
issues including, but not limited to, improvements to       they live to a main river.
water or air quality, national parks, and reducing the
risk of death.                                              As noted from the thought process Dutch citizens go
                                                            through when deciding to invest in elevating their
Researchers measure a person’s environmental WTP            house to avoid flood risk, expectations and perceptions
or WTA by conducting environmental valuation surveys        are critical to determining an individual’s WTP or WTA.
that measure both their stated preferences as well as       In fact, for people in developing countries, the WTP for
their revealed preferences. In “Aesthetic Value of          an environmental protection premium is determined
Lakes and Rivers” by Corrigan, Egan, and Downing            by a combination of beliefs and perceptions about
(2009), the co-authors found that people would be           one’s own knowledge rather than facts about climate
willing to visit Clear Lake (Iowa, USA) more often if the   change. This supports insights from other research
lake’s water quality was improved.                          that it is generally more effective to appeal to people’s
                                                            existing values and beliefs in order to communicate
There is some concern about how accurately                  the importance of investing in climate change or taking
hypothetical WTP overestimates a person’s real WTP.         actions to mitigate the effects of climate change.
To understand this, Blumenschein et al. (2008)
compared two methods of removing hypothetical bias:         In Song, Wang, and Li (2016) paper, “Residents’
cheap talk approach and certainty approach. A cheap         attitudes and WTP for solid waste management in
talk approach takes a survey respondent’s answer as         Macau,” researchers structured their survey in four
is, meanwhile the certainty approach further asks           parts: (1) general questions regarding the basic
participants how confident they are in their answer.        environmental issues, (2) questions measuring
They found that unprocessed contingent valuations           respondents’ knowledge and attitudes on solid waste
have a hypothetical bias, and that this could be easily     recycling, (3) a description of the WTP, and (4)
removed by implementing a follow-up question about          questions collecting socio-economic data on the
the certainty of their responses.                           respondents. By measuring residents’ insight on the
                                                            environment, the type of adaptation measure in
Another factor that impacts someone’s WTP is the            question, and their demographics, Song and his co-
framing of a hypothetical situation during a contingent     authors are able to paint a better picture of the types of
evaluation exercise. In order to limit the projected        people in the neighbourhood who more willing or less
increase in natural disaster risks caused by climate        willing to pay for solid waste management. They are
change, adaptation measures are recommended to              also able to test if there is a correlation between an
partially or fully eliminate this risk. Literature in       individual’s views and demographic factors or the

Annexes                                                                                                           248
degree to which they understand waste management         (both the human and material resources needed).
and/or broader environmental issues.                     Example modules defined under the 2014 or 2018
                                                         Implementing Decisions include, for example,
Civil Protection Capacity Building                       Advanced Medical Posts, BCRN capabilities,
                                                         Emergency Medical Teams, Emergency Temporary
The following descriptions of the UCPM Knowledge         Camp, Flood Containment, Forest Firefighting, Field
Network and the Albania Earthquake are useful as         Hospital, Flood Rescue, High Capacity Pumping,
background information for the work showcased in         Urban Search & Rescue, Medical Evacuation,
section 3.2.4.                                           Technical Assistance and Support, Water Purification
                                                         (most with several sub-categories within these
1. UCPM and Knowledge Network                            classes). In 2019, civil protection experts took part in
                                                         nearly 50 UCPM training courses. 14 MODEX exercises
UPCM/Union Civil Protection Knowledge Network -          and 2 full-scale exercises took place, and plug-in and
The 2019 revision to the UCPM created a Union Civil      host nation support exercises were introduced. 48
Protection Knowledge Network to bring together a         countries in and around Europe participate in the
number of existing civil protection and disaster         exchange of experts programme, with experts being
management programs under one umbrella to support        hosted by 36 countries.
experts, practitioners, policy-makers, researchers,
trainers and volunteers to increase DRM knowledge        2. Albania UCPM and EU/World Bank/UN response to
and its dissemination within the UCPM.                   major 2019 earthquakes

The various programs under the Knowledge Network         In 2019, Albania was struck by two major earthquakes:
include:                                                 a magnitude 5.6 struck on 21st September, and a
                                                         magnitude 6.4 on 26th November. The 21st September
UCPM Training - Offering both DRM coordination and       mainshock had an epicentre 5km Northwest of Durres
technical experts training from a programme of 11        (35km West of capital, Tirana) and, according to the
courses. These range from basic training to high-level   assessment of Albania’s General Directorate for Civil
sessions for future mission leaders, including           Emergencies (GDCE), 3329 residential buildings were
specialised courses such as security training and        damaged. The 26th November mainshock was 22 km
assessments.                                             Northeast of Durres (30km from Tirana) and, according
                                                         to the joint EU-World Bank-UN PDNA, damaged
Exchange of Experts in Civil Protection – Allows for     11,490 housing units, injured more than 913 people,
secondment of civil protection experts between UCPM      caused €843m in direct damages and tragically
MS, PS and eligible third countries. Through exchanges   caused 51 fatalities. 48 people were rescued from
on topics like firefighting, communication, search and   collapsed buildings by first responders.
rescue, or new and emerging threats, participants gain
practical experiences and knowledge of the different     The UCPM was activated for both events, and a joint
approaches of national systems.                          EU-WorldBank-UN PDNA was conducted after the
                                                         November event.
Civil Protection Exercises - Alongside full-scale
exercises, which are organised by civil protection       The September activation saw DG ECHO’s ERCC
authorities of countries and co-financed by the EU,      deploy an EUCPT of experts from 6 EU MS (NL, IT, UK,
modules field and table-top exercises (EU MODEX) are     FI, DE, EL) and Norway, an EU liaison officer, and a
organised under the supervision of the UCPM.             regional information officer of DG ECHO. The EUCPT
                                                         facilitated the coordination of incoming in-kind
EU MODEX exercises - test the self-sufficiency,          assistance from 13 countries, including 11 EU MS
interoperability, coordination and procedures of         (HU, HR, AT, EL, FI, SL, SK, IT, FR, BU, LV) and
participating experts, 'modules' and other Response      Montenegro and Norway. The EUCPT included a
Capacities. A 'module' is defined under Decision No      Structural Engineer who, in close exchanges with
1313/2013/EU as a self-sufficient and autonomous         national and local authorities and engineers, identified
predefined capability or a mobile operational team       areas for improvement in the damage assessment



Annexes                                                                                                      249
process and methodology. Working with the relevant         presents quantitative findings and recommendations
authorities and institutions, a unified damage             on the education, health, housing, infrastructure,
assessment method was proposed based on best               productive and DRR sectors, as well as findings on
Albanian practices supplemented by international           social protection.
standards.
                                                           EXTREME HEAT
In response to the 26th November activation, ERCC
deployed 2 EUCPTs (alpha and bravo), with Alpha            Detailed methodology for UHI analysis
deploying on 27th November, and handing over to
team Bravo on 4th December. A two-person UNDAC             Methodological aspects of the triple dividend approach
team was also embedded into the EU-led team. The           for green and white solutions in UHI mitigation.
teams facilitated the coordination of in-coming
modules and in-kind assistance. USAR coordination          Epidemiological models provide for the estimation of
was led by the Italian team, and other USAR teams          the level of risk associated with extreme temperatures.
included those from Greece, Romania, France, Israel,       These models are distributed lag nonlinear models
Turkey and others. Given the relatively small number of    which allows for the estimation of the relative risk of
active rescue sites, much of the USAR capacity was         extreme temperatures by accounting for lagged effects
not being engaged fully, and so EUCPT-alpha used the       on mortality and the nonlinear nature (Gasparrini, et
available USAR engineers to assist the Albanian            al., 2010). To estimate the heat-related excess
authorities with damage assessment.                        mortality in Vienna, Austria, this modelling procedure
                                                           was carried out along with an estimation of the
EUCPT-alpha established the DACC to assist the             attributable number of deaths according to the
Albanian authorities with damage assessment, utilizing     methodology of Gasparrini and Leone (2014). By
the available USAR Engineering capacity and building       pursuing such an approach, we also capture the main
on the recommendations of the September UCPM               effects of heatwaves (Gasparrini & Armstrong, 2011).
activation. The DACC was operated jointly by EUCPT,
UNDAC and USAID, and as the DACC proved effective,         Daily all-cause death counts for Vienna and daily
the Albanian government made further request for           maximum temperature for 2003-2009 were used for
international engineers, both bilaterally and through      modelling the temperature-mortality relationship
the UCPM, culminating in 185 international engineers       while controlling for the effects of daily air pollution
from 18 countries registering with the DACC and            levels (O3, NO2, PM10). To capture the exposure-
coordinated by them to assist ongoing damage               response and lag-response relationships, a cross-basis
assessment.                                                function [CB(Tempt)] is defined with a quadratic
                                                           B-spline (two internal knots of temperature with 4
The PDNA occurred during 18th December – 24th              degrees of freedom) for the exposure-response
January, encompassing partners from the EU, World          function and a natural cubic B-spline (three equally-
Bank and UN who provided financial and Technical           spaced knots on the log scale) for the lag-response for
support to conduct the assessment in addition to the       use in the quasi-Poisson regression model:
resources the government made available. The PDNA




where we controlled for seasonality and long-term          and mortality and the empirical estimates of the
trends with a natural spline of time [NS(Timet, 8 df/      confidence intervals obtained through Monte Carlo
year)], days of the week [DOWt], and air pollution [O3t,   simulations can be seen below (see Figure 49).
NO2t, PM10t]. The association between temperature




Annexes                                                                                                        250
Figure 49: Overall cumulative association between temperature and mortality




Source: Gasparrini and Leone (2014)
Note: the graph represents the association between mortality (in the scale of relative risk) and temperature distribution.
The association is represented in the scale of relative risks. The dotted and dashed vertical lines represent the centre point and
values for defining extreme heat and cold, respectively.



With this approach, we calculated an annual number                      of hot days in a cell (c), HDred,c is the reduced average
of heat attributable deaths above a daily maximum                       annual number of hot days given the scenario and
temperature of 30ºC to be 106 deaths (ranging 39-                       Popc is the population in the cell. In this spatially
165 of 95 percent confidence intervals). Given the                      explicit approach, we sum over the cells to estimate
spatial dimension of UHI effects, we include address                    the total reduced heat-related mortality counts given
exposure the heat hazard by employing the urban                         the scenario of measures and propagate this amount
climate models already produced for Vienna (Žuvela-                     for the following 50 years.
Aloise, et al., 2018), population distribution on a raster
of Vienna and the results of the temperature-mortality
regression. The results of the urban climate model                      Extreme heat can have significant impacts on both
show the current annual average number of hot days                      indoor and outdoor labour productivity in Europe,
in a year for each cell in the raster and the average                   leading to large losses economic losses (Gosling,
reduced number of hot days given the set of green                       Zaherpour, and Ibarreta 2018). Given time and data
measures or a combination of green and white                            constraints, we employ the approach of Hübler,
measures. Given the attributable fraction of deaths                     Klepper, and Peterson (Hübler, et al., 2018) to estimate
due to heat (AF), the total deaths (TD) and years (Y)                   the reductions in labour productivity loss with the
over the time period, and the total population (Poptot),                scenarios of implementation that would otherwise
we estimate the reduced heat-related mortality counts                   occur on hot days. Bux (2006) found that productivity
(Dred,c) in Vienna for a scenario of measures:                          losses can range between 3-12 percent for
                                                                        temperatures of 26-36ºC. For hot days, we assumed
                                                                        an averaged reduced worker productivity loss of 7
                                                                        percent (Vöhringer, et al., 2017). To estimate the
                                                                        reduced loss in productivity for the city of Vienna, we
                                                                        scale down to the city according to the population
where HDavg,c is the current average annual number                      (Pop).



Annexes                                                                                                                              251
                                                         Tourismus, 2018). Since Vienna does not currently
                                                         have a high uptake of air conditioning, we assume the
                                                         cooling savings are an estimate the value of lower
                                                         indoor temperatures to society.
We calculate the loss in GRP according to the average
number of reduced hot days per year (HD), the current    Green roofs also improve stormwater management in
GRP per capita, the average productivity loss on a hot   urban areas by reducing the amount of stormwater
day (p; 7 percent) and the wage share (w; 69 percent).   run-off being conveyed in municipal sewer systems.
                                                         We assume a 50 percent decrease in the run-off from
Several economic and environmental benefits are          greened roof surfaces. Although Vienna does not have
assessed for green infrastructure under the third        a specific stormwater charge per area of sealed
dividend. Energy efficiency improvements are valued      surfaces, many Austrian cities, such as Klagenfurt and
given the additional insulating layer of green roofs     Salzburg, charge annual rates of 2.2 €/m2 for sealed
(Berardi, GhaffarianHoseini, and GhaffarianHoseini       area. We estimate these benefits by multiplying the
2014). We compare the differences in the thermal         total greened area with a 50 percent reduction of the
properties of green and conventional roofs according     charge. Furthermore, green roofs provide habitats in
to Clark, Adriaens, and Talbot (2008) to estimate        urban areas for organisms, which was otherwise non-
heating and cooling savings as in the following.         existent (Currie & Bass, 2010). Since the quality of the
                                                         green roof is only a fraction of a completely natural
                                                         space, we value the improvement to urban habitats
                                                         with 15 percent of the cost (Bianchini & Hewage,
                                                         2012) for restoring land (MacMullan, et al., 2009).
                                                         Lastly, green roofs support urban areas in pollution
                                                         mitigation and carbon dioxide sequestration. We take
                                                         removal rates of pollutants, including nitrous oxide,
                                                         ozone, sulphur dioxide and particulate matter (Yang,
The heating (Hsav) and cooling (Csav) savings are        et al., 2008) and carbon sequestration rates of green
calculated given the thermal conductivities of           roofs (Getter, et al., 2009) to estimate the reduction
conventional (Rconv) and green roofs (RGR) and the       these negative externalities to society. The valuations
average heating (HDD15°C) and cooling (CDD18°C)          incorporate the average of the high and low shadow
degree days for the past five years of Vienna (BIZEE,    prices of carbon (World Bank, 2017b), which are
2020). To estimate the monetary amounts of savings,      increasing into the future, as well as the shadow prices
we use the average price of electricity of 0.196 €/kWh   of the air pollutants according to EU-wide damage
and the average price of natural gas heating at 0.068    costs (World Bank, 2017b).
€/kWh (Bundesministerium für Nachhaltigkeit und




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MASS MOVEMENT / LANDSLIDE

Flow chart for criticality analysis process of roads in Albania
Figure 50: Flow chart showing Albania’s climate-resilient roads’ project approach for parts 1 and 2




Source: Xiong & Alegre, 2019




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5.5. Annex 5:
Netherlands results from national assessments
and BCAs over a century
Table 89: Highlights of one century of BCAs for Dutch flood risk management: conclusions and applications




Source: Bos and Zwaneveld 2017




Annexes                                                                                                     254
Table 90: Highlights of one century of BCA’s for Dutch flood risk management: benefits and uncertainty
estimations




Source: Bos and Zwaneveld 2017


Table 91: The history of Dutch BCA




Source: Bos and Zwaneveld 2017



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5.6. Annex 6:
Consultations table for case studies
                                       INSTITUTIONS CONTACTED (WITH TITLE         NUMBER OF                                     TELEPHONE
                                                                                              EMAIL WITH      FOLLOW-UP EMAIL
 NUMBER   NAME OF CASE STUDY           OF THE CONTACT PERSON,                     PEOPLE                                        CONVERSATION &
                                                                                              QUESTIONNAIRE   EXCHANGE
                                       IF AVAILABLE)                              CONTACTED                                     DISCUSSION

 1        Strengthening of             Department of Civil Protection, Ministry   2           Yes             Yes               Yes
          residential buildings in
          Italy
 2        Building safer schools       World Bank                                 3           Yes             Yes               Yes
 3        Resilient transport          World Bank                                 1           Yes             Yes               No
          modelling
 4        Resilient roads and escape   POR FESR Campania                          2           Yes             No                No
          routes
 5        Climate resilient rail       World Bank                                 2           Yes             Yes               Yes
          transport
 6        Rate of Return on Health     National Institute for Health Research     3           Yes             Yes               No
          Investments
 7        Response capacity of fire    Mol-DG Fire Rescue Service of the          2           Yes             Yes               Yes
          and rescue services          Czech Republic
 8        New vehicles for voluntary   Marshall Office of Lublin, Voivodeship     1           Yes             No                No
          fire service units           executive board
 9        Strengthen firefighters to   Joint Secretariat Czech Republic -         1           Yes             No                No
          improve preparedness         Republic of Poland
 10       Civil protection and         Interreg V-A - Spain-Portugal European     1           Yes             Yes               Yes
          emergency response           Commission Programme (Manager)
          around the border
 11       Preparedness for             Hydromet agency in France (Météo           1           Yes             Yes               Yes
          heatwaves France             France)
 12       Flood protection and         World Bank                                 1           Yes             Yes               Yes
          liveability



Annexes                                                                                                                                          256
 13       Flood defence                  RIOCOM                                 4   Yes   Yes   Yes
          infrastructure Austria
          (Machland dam)
 14       Flood risk management on       International Sava River Basin         6   Yes   Yes   No
          the Sava river                 Commission, Interreg Europe
 15       Flood protection and job       Deputy Minister of Development and     2   Yes   Yes   No
          creation                       Investment
 16       Flash floods resilience        European Commission (Director          1   Yes   No    No
                                         General)
 17       Flood protection in cross-     Department of European Union           1   Yes   Yes   No
          border areas                   Projects, Regional Development Fund
                                         of Central Macedonia (MSc Civil
                                         Engineer)
 18       Green infrastructure to        European Commission                    1   Yes   Yes   Yes
          reduce surface water
          flooding
 19       Storm surge barriers           RWS (Economist)                        1   Yes   Yes   Yes
 20       Irrigation and resilience to   Spain Ministry of Environment and      1   Yes   No    No
          droughts                       Agriculture
 21       Water security                 APA - Agência Portuguesa do Ambiente   1   Yes   Yes   No
 22       Green roofs in Vienna          FFG/BMVIT, City of Vienna Austria      1   Yes   Yes   Yes
 23       Retrofitting buildings for     World Bank                             3   Yes   Yes   Yes
          safety
 24       Earthquake early warning       World Bank                             3   Yes   Yes   Yes
          in Bucharest
 25       Portugal managing              University of Coimbra in Coimbra,      3   Yes   Yes   Yes
          wildlife-urban interface:      Portugal; Agency for the Integrated
          Industries                     Management of Wildfires
 26       Portugal managing              University of Coimbra in Coimbra,      3   Yes   Yes   Yes
          wildlife-urban interface:      Portugal; Agency for the Integrated
          Homes                          Management of Wildfires




Annexes                                                                                               257
 27       Multifunctional ship to      Ministry of the Environment of Estonia    3   Yes   Yes   No
          tackle marine pollution      (Head of Marine Environment
                                       Department), Police and Border Guard
                                       Board (Police Captain)
 28       Dealing safely with          European Commission                       2   Yes   Yes   Yes
          hazardous waste
 29       Cleaning up uranium site     Ministry of Environment of Czech          2   Yes   Yes   No
                                       Republic, State Environmental Fund
 30       Security of nuclear plants   ISRN, Institut de Radioprotection et de   2   Yes   No    No
                                       Surete Nucleaire
 31       Flood early warning system   Belgium Environmental Agency              1   Yes   Yes   Yes
          Flanders
 32       INTERREG project             Tweed forum                               1   Yes   Yes   Yes
          Eddleston Water
 33       Sigma plan – coastal         vlaamsewaterweg                           1   Yes   Yes   Yes
          protection of the Scheldt
          Estuary
 34       Union Civil Protection       Disaster Preparedness and Prevention      3   Yes   Yes   Yes
          Knowledge Network in         Initiative for South-EasternEurope
          Albania Earthquake           (Head of the Secretariat); Knowledge
                                       Network
 35       Union Civil Protection       Disaster Preparedness and Prevention      3   Yes   Yes   Yes
          Knowledge Network in         Initiative for South-EasternEurope
          Croatia Earthquake           (Head of the Secretariat); Knowledge
                                       Network
 36       Fuel management in           University of Coimbra, Portugal,          2   Yes   Yes   Yes
          Europe                       Department of Mechanical Engineering;
                                       EFI group
 37       Alerting and Preparedness    Portugal Health Regulatory Authority      1   Yes   Yes   Yes
          in Portugal
 38       Alerting and Preparedness    Wildfire Management Consulting &          1   Yes   Yes   Yes
          in Greece                    Training (Founder)




Annexes                                                                                                258
 39       Forest management for         Austria Federal Ministry for             1   Yes   Yes   Yes
          wildfire prevention           Sustainability and Tourism
 40       River Climate Park for        Rivierklimaatpark project Team           1   Yes   Yes   No
          flood protection
 41       Value of meteorological       World Meteorological Organization        1   Yes   Yes   Yes
          services Finland
 42       Value of the Meteorological   Wea. Climate Soc (Economist)             1   Yes   Yes   Yes
          services for the transport
          sector
 43       Wetlands restoration          Danish implementing agency,              1   Yes   Yes   Yes
 44       Protection against erosion    Consultancy for Environmental            1   Yes   Yes   No
          and coastal flooding          Economics (CEEP) & Policy
 45       Restoration of coastal        LIFE/EU                                  1   Yes   Yes   No
          habitats
 46       Earthquake proof hospital     Assessorato Regionale della Salute       1   Yes   Yes   No
 47       Value of the Meteorological   London Economics                         1   Yes   Yes   Yes
          services
 48       Network of cities for         LIFE Veneto ADAPT                        1   Yes   Yes   No
          climate change adaptation
 49       Multiple resilience           European Commission                      1   Yes   No    No
          measures and economic
          opportunities
 50       Ecological water security     La Région Provence Alpes Côte d'Azur     1   Yes   Yes   No
 51       Flood Resilience              World Bank                               3   Yes   Yes   Yes
 52       Mutual assistance and         Interreg V-A - Spain-Portugal European   1   Yes   No    No
          managing cross-border         Commission Programme (Manager)
          risks
 53       Drought planning in water     Spanish National Research Council        1   Yes   No    No
          resource systems




Annexes                                                                                                259
 54       Protection of sea from         Parliamentary Secretary for EU Funds     1   Yes   No    No
          wastewater contamination       - Planning and Priorities Coordination
                                         Division
 55       Flood protection and           Hungary Ministry for Innovation and      1   Yes   Yes   No
          agriculture                    Technology
 56       Blue-green infrastructure      City of Dordrecht                        2   Yes   Yes   Yes
          for flood protection
 57       Investments in National        World Bank                               2   Yes   Yes   No
          Meteorological and
          Hydrological Services
 58       COVID19 Lessons Learned        World Bank (Former STC)                  1   Yes   Yes   Yes
 59       Drina Flood Protection         DPPI SEE Secretariat                     1   Yes   Yes   Yes
 60       Resilient rebuilding of        Regione Umbria- Servizio                 3   Yes   No    No
          cultural buildings following   Programmazione Comunitaria
          an earthquake
 61       Effective monitoring and       University College London, Earthquake    1   Yes   Yes   No
          early warning investments      Engineering
          of earthquake and nuclear
          risks
 62       Investments in National        World Bank                               2   Yes   No    No
          Meteorological and
          Hydrological Services
 63       Nature-based Solution          European Commission:                     1   Yes   Yes   Yes
          Investments in Flood Risk      DG ECHO
          Reduction
 64       Overall Report                 European Commission:                     8   Yes   Yes   Yes
                                         DG ECHO, DG ECFIN, DG CLIMA, DG
                                         ENV, DG REGIO; JRC




Annexes                                                                                                 260
5.7. Annex 7:
Full overview of final case studies by hazards, sectors, countries and funding
Note: This list is not including all case studies that were considered for this report,   be considered that some case studies were dropped, and others added since the
which were more than 100 (as included in the inception report), although it has to        inception report delivered in June 2020.

          NAME OF CASE                          TYPE OF                                                                    FUNDING        TOTAL FUNDING    CLOSING
 NBR                               COUNTRIES                         SECTOR               HAZARD        TYPE OF ANALYSIS
          STUDY                                 INVESTMENT                                                                 INSTITUTIONS   (EURO)           DATE

 1        Strengthening of         Italy        Seismic              Housing and          Earthquake    Quantitative,      National       1,000,000,000    On-going
          residential buildings                 Strenghtening        public buildings                   Own Analysis
          in Italy
 2        Cultural heritage        Italy        Seismic              Housing and          Earthquake    Qualitative        EU             10,000,000       On-going
          protection                            Strenghtening        public buildings;
                                                                     cultural heritage
 3        Climate-proofing         United       Urban Heat Island    Housing and          Heatwaves     Qualitative        EU and         1,615,636        2016
          social housing           Kingdom      Effects              public buildings                                      national
 4        Building safer           Turkey       Seismic              Education            Earthquake    (Partial)          World Bank     270,000,000      2024
          schools                               Strenghtening                                           Quantitative,
                                                                                                        based on the
                                                                                                        literature
 5        Schools in seismic       Across       Seismic              Education            Earthquake    Quantitative,      National       57,866,800,000   hypothetical
          countries across         Europe       Strenghtening                                           Own Analysis                                       scenario
          Europe
 6        Resilient transport      Serbia       Structural           Transport            Flood         Qualitative        World Bank     830,000          2018
          modelling                             protection
 7        Resilient roads and      Italy        Preventive           Transport            Volcano       Qualitative        EU and         53,415,000       2013
          escape routes                         Investment                                                                 national
 8        Climate resilient rail   Romania      Structural           Transport            Flood         Qualitative        EU             2,000,000,000    2020
          transport                             protection




Annexes                                                                                                                                                               261
          NAME OF CASE                              TYPE OF                                                              FUNDING        TOTAL FUNDING   CLOSING
 NBR                               COUNTRIES                            SECTOR          HAZARD        TYPE OF ANALYSIS
          STUDY                                     INVESTMENT                                                           INSTITUTIONS   (EURO)          DATE

 9        The Case of              EU               Equipment for       Health          Epidemic      (Partial)          EU             4,500,000,000   2021 (tbc)
          Pandemic                                  health-related                                    Quantitative,
          Preparedness                              disasters                                         based on the
                                                                                                      literature
 10       Rate of Return on        EU (Italy, UK,   Return on           Health          Epidemic      (Partial)          National       varies          2020
          Health Investments       Sweden,          Investment of                                     Quantitative,
                                   Netherlands)     National Public                                   based on the
                                                    Health Program                                    literature
 11       Response capacity        Czech            Cross-border        Emergency       Wildfires     Qualitative        EU and         58,377,714      2013
          of fire and rescue       Republic         support,            response                                         national
          services                                  coordination
                                                    mechanisms and
                                                    capacity building
 12       New vehicles for         Poland           Rescue and          Emergency       All hazards   Qualitative        EU and         7,510,000       2018
          voluntary fire service                    emergency           response                                         national
          units                                     response
                                                    equipment
 13       Strengthen               Czech            Cross-border        Emergency       Wildfires     Qualitative        EU and         7,936,284       2019
          firefighters to          Republic/        support,            response                                         national
          improve                  Poland           coordination
          preparedness                              mechanisms and
                                                    capacity building
 14       Civil protection and     Portugal/        Cross-border        Emergency       Wildfires     Quantitative,      EU and         3,856,250       2020
          emergency response       Spain            support,            response                      Own Analysis       national
          around the border                         coordination
                                                    mechanisms and
                                                    capacity building
 15       Early Warning and        Danube           early warning and   Early warning   Droughts      Qualitative        national       1,974,750       2019
          preparedness for         region           capacity building
          Droughts                                  for droughts
                                                    preparedness




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          NAME OF CASE                         TYPE OF                                                               FUNDING        TOTAL FUNDING   CLOSING
 NBR                             COUNTRIES                       SECTOR             HAZARD        TYPE OF ANALYSIS
          STUDY                                INVESTMENT                                                            INSTITUTIONS   (EURO)          DATE

 16       Preparedness for       France        Early warning     Early warning      Heatwaves     Quantitative,      National       286,933         2020
          heatwaves France                                                                        Own Analysis
 17       IT and                 Poland        Early warning     Early warning      All hazards   Qualitative        EU and         75,538,065      2013
          communication for                                                                                          national
          early warning
 18       Integrated flood       Greece/       Early warning     Early warning      Flood         Qualitative        EU and         1,159,248       2020
          services and climate   Cyprus                                                                              national
          change awareness
 19       Intelligent system     Greece        Early warning     Early warning      All hazards   Qualitative        EU and         922,631         2020
          for better disaster                                                                                        national
          response
 20       Early warning for      Spain         Decision making   Early warning      Volcano       Qualitative        EU and         1,590,032       2019
          volcanic activity                    for evacuation                                                        national
 21       Information and        Malta         Early Warning     Communication/     All hazards   Qualitative        EU and         7,000,000       2019
          early warning for                                      ICT                                                 national
          preparedness
 22       Flood protection       Poland        Structural        Industry           Flood         (Partial)          World Bank     505,000,000     2020; 2023
          and livability                       protection                                         Quantitative,      and national
                                                                                                  based on the
                                                                                                  literature
 23       Delta Works            Netherlands   Structural        Housing and        Flood         Qualitative        national       5,000,000,000   1997
                                               protection        Public Buildings
 24       Flood defense          Austria       Structural        Water; Housing     Flood         Quantitative,      National       182,600,000     2020 (tbc)
          infrastructure                       protection        and Public                       Own Analysis
          Austria (Machland                                      Buildings
          damm)
 25       Flood risk             Croatia/      Nature-based      Response &         Flood         Qualitative        EU and         1,626,842       2020
          management on the      Serbia        Solutions         Equipment                                           national
          Sava river
 26       Flood protection and   Greece        Structural        Housing and        Flood         Qualitative        EU and         84,000,000      2013
          job creation                         protection        Public Buildings                                    national



Annexes                                                                                                                                                       263
          NAME OF CASE                         TYPE OF                                                                  FUNDING        TOTAL FUNDING   CLOSING
 NBR                             COUNTRIES                         SECTOR               HAZARD       TYPE OF ANALYSIS
          STUDY                                INVESTMENT                                                               INSTITUTIONS   (EURO)          DATE

 27       Flash Flood            Malta         Structural          Housing and          Flood        Qualitative        EU and         62,505,662      2013
          resilience                           protection          Public Buildings                                     national
 28       Flood protection in    Bulgaria/     Structural          Housing and          Flood        Qualitative        EU and         9,902,960       2020
          cross-border areas     Greece        protection          Public Buildings                                     national
 29       Floodplain             United        Nature-based        Agriculture          Flood        (Partial)          National       3,079,000       2017
          Restoration            Kingdom       Solutions                                             Quantitative,
                                                                                                     based on the
                                                                                                     literature
 30       Green infrastructure   Spain         Nature-based        Housing and          Flood        Qualitative        EU and         1,817,972       2019
          to reduce surface                    Solutions           Public Buildings                                     national
          water Flood
 31       Storm surge barriers   Netherlands   Nature-based        Housing and          Flood        Qualitative        National       450,000,000     2007
                                               Solutions           Public Buildings
 32       Irrigation and         Spain         Irrigation and      Agriculture; water   Droughts     (Partial)          EU and         31,300,000      2013
          resilience to                        water provision                                       Quantitative,      national
          droughts                             system                                                based on the
                                                                                                     literature
 33       Water security         Portugal      Irrigation and      Agriculture; water   Droughts     Qualitative        EU and         65,000,000      2013
                                               water provision                                                          national
                                               system
 34       Green roofs in         Austria       Urban Heat Island   Buildings            Heatwaves    Quantitative,      National       varies          On-going
          Vienna                               Effects                                               Own Analysis
 35       Retrofitting           Romania       Seismic             Emergency            Earthquake   (Partial)          World Bank     54,432,000      2024
          buildings for safety                 Strenghtening       response; Public                  Quantitative,
                                                                   buildings                         based on the
                                                                                                     literature
 36       Earthquake early       Romania       Early Warning       Emergency            Earthquake   Quantitative,      EU and         3,064,328       2013
          warning in                                               response; Public                  Own Analysis       national
          Bucharest                                                buildings; Early
                                                                   Warning




Annexes                                                                                                                                                           264
          NAME OF CASE                           TYPE OF                                                                FUNDING        TOTAL FUNDING    CLOSING
 NBR                              COUNTRIES                        SECTOR             HAZARD         TYPE OF ANALYSIS
          STUDY                                  INVESTMENT                                                             INSTITUTIONS   (EURO)           DATE

 37       Portugal managing       Portugal       Wildland-urban    Industries         Wildfires      Quantitative,      EU and         44,482,550       hypothetical
          wildlife-urban                         interfaces                                          Own Analysis       national                        scenario
          interface: Industries                                                                                                                         （40-year
                                                                                                                                                        time
                                                                                                                                                        horizon）
 38       Portugal managing       Portugal       Wildland-urban    Housing and        Wildfires      Quantitative,      EU             2,000,000        hypothetical
          wildlife-urban                         interfaces        Public buildings                  Own Analysis                                       scenario
          interface: Homes                                                                                                                              （30-year
                                                                                                                                                        time
                                                                                                                                                        horizon）
 39       Avalanche               Switzerland    Landslide         Recreation         Landslides/    Qualitative        National       varies           2007
          mitigation strategies                  prevention and                       avalanches
                                                 response
                                                 investments
 40       Mapping landslide       Croatia/       Information       Response &         Landslides     Qualitative        EU             974,695          2019
          hazards                 Bosnia and     System and        Equipment
                                  Herzegovina/   cooperation
                                  Montenegro     mechanism
 41       Multifunctional ship    Estonia        Preventive        Fishing            Oil spills     (Partial)          EU and         33,100,000       2013
          to tackle marine                       investments in                                      Quantitative,      national
          pollution                              vessels and                                         based on the
                                                 equipment in                                        literature
                                                 coastal areas
 42       Dealing safely with     Latvia         Cleaning up       Water              Chemical       Quantitative,      EU and         29,000,000       2013
          hazardous waste                        hazardous waste                                     Own Analysis       national
 43       Cleaning up uranium     Czech          Cleaning up       Water              Radiological   Qualitative        EU             23,895,700       2013
          site                    Republic       Uranium
 44       Security of nuclear     France         Security of       Energy             Nuclear        Qualitative        National       24,000,000,000   On-going
          plants                                 nuclear power
                                                 plant
 45       Flood early warning     Belgium        Early Warning     Early Warning      Flood          Quantitative,      National       22,763,074       On-going
          system Flanders                                                                            Own Analysis




Annexes                                                                                                                                                            265
          NAME OF CASE                           TYPE OF                                                                  FUNDING        TOTAL FUNDING   CLOSING
 NBR                              COUNTRIES                            SECTOR             HAZARD       TYPE OF ANALYSIS
          STUDY                                  INVESTMENT                                                               INSTITUTIONS   (EURO)          DATE

 46       INTERREG project        Scotland       Nature-based          Agriculture &      Flood        (Partial)          EU and         2,387,000       2020
          Eddleston Water                        Solutions             forestry                        Quantitative,      National
                                                                                                       based on the
                                                                                                       literature
 47       Early Warning           Germany        Early Warning         Early Warning      Flood        Qualitative        National       148,000         2010
          System in Grimma
 48       Sigma plan –            Belgium        Nature-based          Agriculture &      Flood        (Partial)          National       397,000,000     On-going
          coastal protection of                  Solutions             forestry                        Quantitative,
          the Scheldt Estuary                                                                          based on the
                                                                                                       literature
 49       European Flood          Across         Early Warning         Early Warning      Flood        Qualitative        EU             21,800,000      2003
          Awareness System        Europe
 50       Property Level          Italy          Property Level        Housing and        Flood        Quantitative,      National       22,763,074      2016
          Protection                             Protection            Public Buildings                Own Analysis
 51       Union Civil             Albania &      Responder             Emergency          Earthquake   Quantitative,      EU             6,000,000 &     2019 &
          Protection              Croatia        Capacity –            response &                      Own Analysis                      3,700,000       2020
          Knowledge Network                      Building              equipment
          in Earthquake
 52       Safety from natural     France/Spain   Information           Early Warning      Landslides   Qualitative        EU             4,220,000       2020
          risks on the Bielsa-                   System and
          Aragnouet and                          cooperation
          Espacio Portalet                       mechanism
          road links
 53       PyrMove Landslide       France         Information           Early Warning      Landslides   Qualitative        EU             1,042,144.82    On-going
          Prevention                             System and
                                                 cooperation
                                                 mechanism
 54       Climate Resilient       Albania        Preventive            Transportation     Landslides   (Partial)          World Bank     13,800,000      2019
          Road Assets                            investments in the                                    Quantitative,
                                                 resilience of roads                                   based on the
                                                                                                       literature




Annexes                                                                                                                                                             266
          NAME OF CASE                      TYPE OF                                                                 FUNDING        TOTAL FUNDING   CLOSING
 NBR                            COUNTRIES                       SECTOR             HAZARD        TYPE OF ANALYSIS
          STUDY                             INVESTMENT                                                              INSTITUTIONS   (EURO)          DATE

 55       SUSEN sustainable     Czech       Security of         Emergency          Nuclear       Qualitative        National       100,219,918     On-going
          energy project        Republic    nuclear power       response &
                                            plant               equipment
 56       Atlas of Rains        Poland      Early Warning       Early Warning      Flood         Qualitative        National       1,154,517       2020
          Intensities (PANDA)
 57       fuel management in    Portugal    Fuel Management     Forestry           Wildfire      Quantitative,      EU             2,212,203       On-going
          Europe                            for Wildfire Risk                                    Own Analysis
                                            Reduction in
                                            forests
 58       Alerting and          Portugal    Decision Support    Early Warning      Wildfire      Quantitative,      National       19,264,600      On-going
          Preparedness in                   Tools for Climate                                    Own Analysis
          Portugal                          Change
                                            Adaptation and
                                            Alerting
 59       Alerting and          Greece      Decision Support    Early Warning      Wildfire      Quantitative,      National       8,000,000       On-going
          Preparedness in                   Tools for Climate                                    Own Analysis
          Greece                            Change
                                            Adaptation and
                                            Alerting
 60       Interreg España-      Spain/      Cross-border        Emergency          Wildfire      Qualitative        EU and         704,138         2014
          Portugal              Portugal    support,            response &                                          National
                                            coordination        equipment
                                            mechanisms and
                                            capacity building
 61       Landslide             Italy       Land use planning   Housing and        Landslide     Qualitative        National       57,000          2010
          management                        investments         Public Buildings
 62       ARIEM+                Spain/      Early Warning       Early Warning      All hazards   Qualitative        EU             4,193,521       2020
                                Portugal
 63       BASE Project for      Portugal    Participatory       Housing and        All hazards   (Partial)          National       7,555,674.25    2016
          Climate Change                    Methodologies for   Public Buildings                 Quantitative,
          Adaptation                        Climate Change                                       based on the
                                            Adaptation                                           literature




Annexes                                                                                                                                                       267
          NAME OF CASE                      TYPE OF                                                               FUNDING        TOTAL FUNDING     CLOSING
 NBR                            COUNTRIES                   SECTOR               HAZARD        TYPE OF ANALYSIS
          STUDY                             INVESTMENT                                                            INSTITUTIONS   (EURO)            DATE

 64       Forest management     Austria     Early Warning   Early Warning        Wildfire      Quantitative,      Regional       188,168           hypothetical
          for wildfire                                                                         Own Analysis                                        scenario
          prevention                                                                                                                               （30-year
                                                                                                                                                   time
                                                                                                                                                   horizon）
 65       Mill Brook Scheme     United      Nature-based    Recreational;        Flood         Qualitative        National       15,181            2016
                                Kingdom     Solutions       water
 66       Padgate River         United      Nature-based    Recreational;        Flood         Qualitative        National       281,125           2015
          Restoration           Kingdom     Solutions       water; Agriculture
                                                            & forestry
 67       Mayes Brook River     United      Nature-based    Recreational;        Flood         Qualitative        National       4,273,100         2012
          Restoration Project   Kingdom     Solutions       Agriculture &
                                                            forestry
 68       Slowing the Flow at   United      Structural      Agriculture &        Flood         Qualitative        National       4,500 ,000        2015
          Pickering             Kingdom     Protection      forestry; water
 69       Green and Grey        Germany     Nature-based    Agriculture &        Flood         (Partial)          National       10,250 (per ha)   2012
          solution in Elbe                  Solutions       forestry; water                    Quantitative,
          River flood                                                                          based on the
          protection                                                                           literature
 70       Sandwich Tidal        United      Nature-based    Agriculture &        Flood         Qualitative        National       24,400,000        2015
          Defence Scheme        Kingdom     Solutions       forestry; water
 71       Alkborough Flats      United      Nature-based    Agriculture &        Flood         Qualitative        National       12,480,000        2015
          Managed               Kingdom     Solutions       forestry; water
          Realignment
 72       FP7 OPERAs in         Spain       Nature-based    Recreation           Flood         Qualitative        EU and local   11,459,749        2017
          Barcelona                         Solutions
 73       URBAN GreenUP         Across      Local multi-    Housing and          All Hazards   Qualitative        EU             15,000,000        On-going
                                Europe      purpose green   Public Buildings;
                                            investments     recreation
 74       Budapest City Park    Hungary     Local multi-    Recreation           All Hazards   Qualitative        national       617,100,00        2017
                                            purpose green
                                            investments


Annexes                                                                                                                                                       268
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