Decision-makers today are required to assess disaster risk management options in increasingly complex and uncertain environments. Disaster risk management typically involves significant investment to mitigate low probability or highly uncertain events. We argue that under these circumstances existing economic evaluation toolkits do not adequately support decision-making. Our paper outlines the key economic evaluation tools used in decision-making and, in turn, advances a research agenda for future development and application of these approaches. Priority challenges to be addressed include resilience thinking, multi-capital assessment, valuing the future, accounting for distributional equity, social appetite for risk, and deep uncertainty. We also recommend a strong focus on capacity and capability building to improve the risk literacy of decision-makers.
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This paper is a product of the confluence of three New Zealand government-funded research programmes: the Natural Hazards Research Platform, the Resilience to Nature’s Challenges National Science Challenge and the QuakeCoRE. We would like to gratefully acknowledge the support and funding of the Ministry of Business, Innovation and Employment (MBIE). This project was also (partially) supported by QuakeCoRE, a New Zealand Tertiary Education Commission-funded Centre. This is QuakeCoRE publication number 0172. We also acknowledge the support and contribution of the disaster research and practice community to the advancement of resilience practice and thinking in New Zealand.
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Smith, N., Brown, C., McDonald, G. et al. Challenges and Opportunities for Economic Evaluation of Disaster Risk Decisions. EconDisCliCha 1, 111–120 (2017). https://doi.org/10.1007/s41885-017-0007-0
- Disaster risk
- Economic evaluation
- Deep uncertainty
- Cost benefit analysis