From Damage and Loss Assessment (DaLa) To Post-Disaster Needs Assessment (PDNA) J. Roberto Jovel / Ricardo Zapata

Some things are easier to measure than others IT IS DIFFICULT TO DETERMINE The value of lives lost or affected The opportunity cost, cost-benefit or investment / profitability. This is associated with the lack of adequate base lines that assess the level, quality and efficiency / efficacy of health services provided The value and quality of services provided (both curative and preventive) The duration of the transition / emergency phase (when field hospitals and evacuation processes are operational) IT IS EASIER TO DETERMINE The amount of investment required for reinforcement vs. The potential losses in equipment and inventories The cost of reinforcement as compared to the reposition cost of affected infrastructure The alternative cost of providing services when infrastructures collapse IT IS DIFFICULT TO DETERMINE the value of lives lost or affected. Although there are actuary methods to determine the economic value of a life lost or affected (in terms of the lost contribution to production, income not gained, etc.) or, as used in the medical field, an estimate may be made in terms of disability adjusted life years (or DALY), the value of human life is considered not to be quantifiable. Economic valuations in terms of production or income lost would create a paradoxical result in terms of people with lower income or poor having a less valuable life while being the most exposed to disasters given the fact they live under greater risk and their life-support infrastructures are more vulnerable. Also hard to establish, especially where information is scarce or spotty, is the opportunity cost, cost-benefit or investment / profitability. This is associated with the lack of adequate base lines that assess the level, quality and efficiency / efficacy of health services provided. This is related to the fact that usually there is no established value and assessment of the quality of services provided (both curative and preventive) with which to compare the post disaster situation. IT IS EASIER TO DETERMINE the amount of investment required for reinforcement vs. the potential losses in equipment and inventories. It is also worth determining the cost of reinforcement as compared to the reposition cost of affected infrastructure, as well as the alternative cost of providing services when infrastructures collapse. 8May07 RJ

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Defining Post-Disaster Needs Post-disaster urgent activities: Economic recovery Reconstruction of assets Economic recovery program required to restore Personal and family income Essential services or lifelines Production activities in affected sectors Reconstruction program required to repair or replace physical assets 8May07 RJ

Defining Post-Disaster Needs .. The scope and financial needs of the economic recovery and reconstruction programs, must be defined on a solid quantitative basis Financial needs must be assigned on the basis of the following criteria Spatial Sectorial Affected population groups The Damage and Loss Assessment provides the quantitative inputs required for planning and monitoring these Post-Disaster Programs 8May07 RJ

Disaster Effects, Rp Billion 2006 Yogyakarta Quake DaLa Disaster Effects, Rp Billion Damage Losses Total Housing 13,915 1,382 15,296 Transport and Communications 90 Energy 225 150 375 Water and Sanitation 82 4 86 Education 1,683 56 1,739 Health 1,569 21 1,590 Culture and Religion 654 Agriculture 66 640 705 Trade 184 120 303 Industry 4,063 3,899 7,962 Tourism 36 18 54 8May07 RJ

Use of Sector Analysis Economic Recovery Programme Reconstruction 8May07 RJ

From Losses to Economic Recovery Plan

Use of DALA for Recovery Planning Value of Production Losses Impact on: Macro-economic performance Individual and family income Enterprise performance Economic Recovery Program Temporary employment programs Special sector reactivation programs Short-term, soft loans for micro and SMEs 8May07 RJ

Economic Recovery Program Components Modifications to public policies to mitigate macro-economic and individual impact Income generation schemes for most affected population groups, with special reference to those that are not credit worthy Provision of soft term financing to re-start production activities in micro, small and medium sized enterprises Facilitation of construction permits to provide minimum delays of reconstruction start and execution 8May07 RJ

Scope and Priorities in Economic Recovery Scope and priorities of each subprogram defined on basis of criteria arising from loss assessment: Most affected sectors Most affected geographical areas Most affected population groups 8May07 RJ

Losses as Indicator of Economic Recovery Needs A comparison of amount of production losses versus GDP for each affected sector provides measure of impact on sector performance When such impact is high, special sectorial production recovery programs must be designed Financial needs for each sector and subsector can be estimated from value of production losses 8May07 RJ

Spatial Priorities for Economic Recovery Amount of Losses per District 8May07 RJ

Spatial Priorities For Economic Recovery GDP Growth Decline by District 8May07 RJ

Sector Priorities for Economic Recovery Concentration on SMEs 8May07 RJ

From Damage to Reconstruction Needs

Use of DALA for Reconstruction Planning Value of Damage Reconstruction Programme Financing needs Priorities for reconstruction Sectorial Geographical Reconstruction Needs Damage + Technological improvement + Relocation costs + Cost of mitigation + Inflation Financing Formula Government funds Private sector funds Insurance reimbursement International grants International loans - diversion existing loans - fresh loans 8May07 RJ

Reconstruction Needs Value of damage must be supplemented to define financial needs of reconstruction program, by introducing criteria from reconstruction strategy and inflation rates: Reconstruction strategy (“building back better”) Quality improvement Technological innovation Introduction of mitigation measures Relocation to safe areas Overall multi-year inflation due to combination of Speculation Scarcity 8May07 RJ

Reconstruction Needs Financial needs for reconstruction can be defined, focused and prioritized on the basis of the damage assessment, duly adjusted as indicated in previous slide Criteria for assignation of financial resources Per capita damage figures Sector distribution of damage Spatial distribution of damage 8May07 RJ

Spatial Priorities for Reconstruction Total Damage per District 8May07 RJ

Spatial Priorities for Reconstruction.. Damage per Capita per District 8May07 RJ

Sector Priorities for Reconstruction 8May07 RJ

From quantitative to qualitative Damage and losses to natural capital and impact on cultural assets: some recent examples

PROCESSES (CAUSES, ORIGIN) VULNERABILITIES (RESPONSE) STRESS FACTORS Capacity to react (resilience) Sensibility (capacity to adapt) Change in exposure (need to mitigate) 8May07 RJ

PROCESSES (CAUSES, ORIGIN) VULNERABILITIES (RESPONSE) STRESS FACTORS Capacity to react (resilience) Sensibility (capacity to adapt) Change in exposure (need to mitigate) RESILIENCE ADAPTATION MITIGATION PREVENTION VS. RECONSTRUCTION OPPORTUNITY COSTS IN THE FACE OF OTHER INVESTMENT REQUIREMENTS 8May07 RJ

Natural asset losses and its economic effects 8May07 RJ

Environmental damage and losses and disasters Lack of appropriate valuation of natural capital (environmental audits and environmental degradation leading to risk increase) Inappropriate valuation of environmental services: forest services, water retention, CO2 sinking, risk reduction and natural protection, landscape value, tourism-related services Economic valuation of public goods: free riders, externalities and investment requirements 8May07 RJ

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Use of cost based valuation methods i) Replacement cost method: cost of replacing the good or service used as a proxy for the good’s/service’s value. But since most cultural goods are unique and can not be replaced preserving the total value (use and non-use) of the original, only in few cases it is possible to replace a damaged or lost cultural asset to obtain a replica that is as close as possible to the original and its values ii) Restoration cost method assesses the value of a good or service by estimating the costs of restoring the good or service to its original condition (applicable to partially destroyed assets). iii) Substitute cost method establishes the market price of an asset that could be a substitute to the damaged one. iv) Preventive expenditure method (mitigation or defensive expenditure) focuses on the costs of preventing the damages or losses from occurring (For example, costs of maintainence such as conservation measures as providing even temperature and humidity within the premises of a museum or cathedral to protect its contents) 8May07 RJ

Economic impact of cultural heritage Economic and non-economic impact (defined in the Cultural Heritage and Development, World Bank, 2005): a) Positive economic impact on poverty reduction; national employment levels; level of the total output and revenue form cultural and service industries; foreign exchange earnings; b) Beneficial non-economic impact on: educational level and identity cultivation; social cohesion, inclusion and development of social capital; continuous expansion of the nations’ cultural patrimony; safeguarding and conveying the heritage to future generations in a sustainable manner. 8May07 RJ

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Environmental damage caused by soil erosion: Stan impact in Guatemala departments 8May07 RJ

Cultural heritage and socioeconomic losses caused by disasters 8May07 RJ

Alternative valuation methods available Use and non use value Economic income generated by environmental and cultural goods Who is to pay: willingness to pay and price fixation Value associated to other goods and service with market value Tourism Culture and education: historical value Preservation of cultural and religious identity of communities / societies 8May07 RJ

Cultural heritage assessment: an example from indigenous population losses in Guatemala Departamento Viviendas destruidas huipiles destruidos costo total Q Cortes de tela telares costo total Q Total Q Total 2,603 15,618 26,550,600 15,618,000 5,206 780,900 42,949,500 Chimaltenango 8 48 81,600 48,000 16 2,400 132,000 Sololá 1,986 11,916 20,257,200 11,916,000 3,972 595,800 32,769,000 Quezaltenango 29 174 295,800 174,000 58 8,700 478,500 Huehuetenango 580 3,480 5,916,000 3,480,000 1,160 9,570,000 8May07 RJ

Thank You.