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Assessing the real costs of natural hazard-induced disasters: A case study from Australia’s Northern Territory

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Natural Hazard-induced Disasters (NHD) cause a wide range of losses to built and natural environments, the latter often beyond standard measures. Precise accounting and characterisation of the losses can assist in developing effective management policies that help to build resilient communities. This study applies trans-disciplinary approaches to assess total, monetary and non-monetary, NHD-related losses, estimated at AUD 156 million per year (2010–2019 average), for Australia’s Northern Territory where bushfires, cyclones, storms and floods are destructive and frequent events. Non-monetary losses, often overlooked or omitted, were estimated at AUD103 million per year, accounting for two-thirds of total disaster-related losses. Marketable losses, estimated at AUD 53 million per year, were inferred, using standard and non-standard datasets, from the Australian Government’s Natural Disaster Relief and Recovery Arrangements, insurance costs (Insurance Council of Australia database), and other relevant sources. Non-monetary losses were accounted for by the loss of ecosystem services from natural systems caused by cyclones and bushfires only, applying ecological economics approaches, but without considering long-term losses over the duration of recovery. This study informs disaster management policies to invest in collective emergency and environmental management planning for reducing NHD risk and building resilience of local communities to manage and prepare for rapidly changing climates. Such an accounting approach is essential in contexts where NHDs disproportionately affect the lives and well-being of disadvantaged remote communities.

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We are very thankful to the Department of Treasury and Finance, Northern Territory Emergency Services, AIDR for AUS-DIS, ICA and others for providing ND cost-related data as required. The project was funded by the Bushfire and Natural Hazards Cooperative Research Centre.

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Dr Kamaljit K Sangha conceived the idea presented in this paper, collected and analysed data, and compiled the first draft of manuscript that was circulated among all the co-authors for discussion and feedback. Prof Jeremy Russell-Smith provided ideas how to better present the data, and reviewed the draft thoroughly. Dr Andrew Edwards analysed cyclone paths and fire frequency data for costing purposes. Assoc Prof Akhilesh Surjan critically reviewed the article and provided feedback. All the authors contributed to the final manuscript.

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Correspondence to Kamaljit K. Sangha.

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Sangha, K.K., Russell-Smith, J., Edwards, A.C. et al. Assessing the real costs of natural hazard-induced disasters: A case study from Australia’s Northern Territory. Nat Hazards 108, 479–498 (2021).

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