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Earthquake Loss Estimation

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1 Earthquake Loss Estimation
Session Mr. James Daniell Risk Analysis Earthquake Risk Analysis 1 1

2 Learning Objectives Learn how to undertake an earthquake loss estimation Know how to convolve the hazard, exposure and vulnerability using damage loss conversion and uncertainties Know what socio-economic loss components are needed in an earthquake loss estimation Know where earthquake risk analysis fits into earthquake risk management. Know what global software tools are available to undertake an earthquake loss estimation Understand that there are many uncertainties that can only be quantified by earthquake loss estimation engineers. The objectives for this session are to incorporate what has been learnt in the previous two sessions to undertake and learn about the basics of earthquake loss estimation. Hopefully you will gain an understanding of; how to convolve the hazard, exposure and vulnerability using damage loss conversion and uncertainties; knowing what socio-economic loss components are needed in an Earthquake Loss Estimation; knowing where earthquake risk analysis fits into Earthquake Risk Management; what global software tools are available to undertake an Earthquake Loss Estimation and applying what has been learnt in the module to obtain a loss estimate for real situations; and finally understanding that there are many uncertainties that can only be quantified by earthquake loss estimation engineers.

3 Why do we undertake Earthquake Loss Estimation?
The number of earthquakes are the same but exposure is increasing, therefore losses are increasing Total Economic losses for earthquake and secondary effect events from Jan 1900 – Marc 2010, CAT DAT Damaging Earthquake Catalogue Developing Country Losses Developed Country Losses The trend of the number of damaging earthquakes is slightly increasing, due to exposure and better recording, but not significantly. Economic losses have been increasing in both the developed and non-developed world from earthquakes even when using an inflation-adjusted, or construction cost adjusted trend. Due to the increases in populations the rate of exposure to earthquakes is increasing, and while better standards of construction are being practices in some countries, in many earthquake-prone countries buildings are being constructed without much regard to building codes. Earthquake loss estimation methods have been around since the 1970’s, but with advances in technology, these methods are finding roles in many areas of earthquake planning. While early efforts concentrated only on planning scenarios for mitigation response (i.e., determining the level of resources after a major event, and where to deploy them), earthquake loss estimation is also now being increasingly applied to loss estimation after a major earthquake (this currently applies mostly to insurance estimates of loss after a significant event); evaluation of the effectiveness of mitigation measures and/or strategies (i.e., cost benefit analysis). 3

4 Earthquake Loss Estimation - towards mitigation
Earthquake loss estimation is the combination of three main factors – hazard, vulnerability and asset value. Losses are the decrease in asset value resulting from damage. Losses are typically given in terms of the number of damaged assets, or as a cost – such as the cost to replace or repair the damaged assets. “Acceptable Risk” and Cost-Benefit Analysis Loss estimation studies are very useful tool for developing emergency preparedness plans and for promoting seismic risk mitigation. During the first 2 sessions, the Hazard, Vulnerability and Exposure (assets) modules have been discussed. This information is required to identify possible loss estimates from an earthquake. Damages are building collapse, pipeline rupture, death, physical injury or any other degradation in condition of physical, human, social, financial, environmental assets. Losses are the decrease in asset value which result from damage. It is important to note here, that the asset value does not always have to be defined in monetary terms. In loss estimation, losses are typically given in terms of the number of damaged assets (e.g., number of casualties, or number of damaged buildings) or as a cost (e.g., the cost to replace or repair the damaged assets). Despite their complexity, loss estimation studies have proven to be very useful tool for developing emergency preparedness plans and for promoting seismic risk mitigation. In many earthquake mitigation studies, it is necessary to simulate what the future potential benefits are with prescribed mitigation measures. The decision of whether the seismic loss or risk is acceptable or not (i.e. the socio-economic losses resulting from collapsed infrastructure) can then be made by the relevant stakeholders using procedures such as Cost-Benefit Analysis. In general, the application of cost-benefit analyses requires that the anticipated or estimated future benefits associated with the implementation of a particular mitigation measure outweigh the initial cost of the mitigation. In order to estimate these potential benefits or savings, it is necessary that loss estimation methods be applied. In earthquake loss estimation analysis, by evaluating the potential earthquake scenarios for any region, and undertaking a full earthquake loss assessment, the potential risks can be identified. Identification and detailed analysis of areas at risk using an earthquake loss assessment procedure provides the first step to mitigation. Risk needs to be considered in two ways – in severity vs. frequency and in terms of mean and variability (uncertainty). Seismic Risk, loss, mitigation, acceptable risk, cost-benefit. 4

5 Earthquake Loss Estimation
This diagram shows the steps needed for an earthquake loss estimation assessment (include variability). We have the inputs for exposure that you learnt about as elements of risk, which are required to build inventories. During Session 1, the hazard is calculated for a certain scenario, as well as the vulnerability for a certain scenario, or at least the components required. Uncertainties include ground motion in the selected ground motion parameter for damage and also the annual frequency of occurrence. Building performance variability also plays a role, as well as difficulty in modelling secondary hazards. This is then all calculated together in the assets-at-risk part to then calculate the social and economic impacts, which you will learn about today. In most cases, socio-economic vulnerability has been calculated as a separate component. Adapted from RiskScape, 2009 5

6 What influences damage-loss conversion?
Magnitude, depth & duration of EQ source Time of Day Population Density Site Hazard, Exposure & Topography Vulnerability & Cost Magnitude, depth and duration of the earthquake source, play a role because that changes the ground motion Time of day – larger losses can occur during working times due to people being in schools or office buildings. Large structures, depending on the period of the earthquake, can be less safe. Population density – more density means greater probability of social and economic losses. Site Hazard, Exposure, Topography, Geology, and depth – sediments and unconsolidated soils (generally in valleys) amplify ground motion and thus increase building damage potential. Buildings built on solid rock are generally less susceptible to earthquake damage. Some soil types can become liquefied when saturated. Distance away from the earthquake hypocentre - Attenuation of the waves occurs with increasing distance giving lower ground motion and less hazard further away from the source. Construction type vulnerability – variance in seismic design and building materials lead to differing susceptibility to earthquake damage. Distance from quake source 6

7 Damage-Loss Conversion
After the vulnerability assessment, the infrastructure damage is expressed as the no. of infrastructure per geocell, in a damage state (none to collapse) or as a damage ratio with variability. A relationship of economic and social loss estimates for each of these damage states is needed! If the scenario is changed, building damage needs to be recalculated. Age Pre-1970 Post-1970 Type URM Timber Geocell B 0.269 0.151 0.077 0.055 Geocell E 0.811 0.603 0.396 OR After undertaking a vulnerability assessment, the infrastructure damage is generally expressed as the no. of infrastructure per microzonation, in certain damage levels (none to collapse). Thus, direct conversion of the loss from these damage percentages simply requires a relationship of economic and social loss estimates for each of these damage states. This is provided for a certain hazard or magnitude. If this hazard calculated changes, then a new set of damage % needs to be calculated. i.e. the earthquake loss estimation process needs to be redone. 7

8 Direct vs. Indirect Impact
Earthquake Impacts deaths, injuries, homeless, evacuated and affected population calculated via empirical historical EQ ratios of losses, or analytical numerical models Social repair and reconstruction costs associated with infrastructure damage direct Economic Psycho-social trauma, weakening of institutions, a consequence of the direct physical damage associated with the earthquake Social So far we have only learned of direct losses. However, earthquake risk concerns 2 different types of loss – direct and indirect, where indirect losses are those not concerned with direct earthquake impacts. We have already learned that there are also tangible and intangible losses, and loss which cannot be estimated in terms of monetary currency. The terms “direct” and “indirect” loss are used variously. For simplicity we show here only social and economic, direct and indirect losses. The direct losses are generally calculated via empirical analysis of observed social and economic losses from previous earthquakes, or analytical numerical models of these phenomena. Direct social losses include deaths, injuries of varying degrees, displaced or evacuated population, whereas indirect social losses are weakening of institutions or the psycho-social trauma as a result of being displaced or losing family members. Direct economic losses are the repair and reconstruction costs associated with infrastructure. Indirect economic losses result as a consequence of the direct physical damage associated with the earthquake. These are associated with flow-on effects, business interruption, diminished production of goods and delivery of services due to disruptions in the lifeline networks. indirect Business interruption, diminished production and services Economic 8

9 Direct Economic Loss Conversion
The replacement cost is usually calculated multiplying the floor area, construction cost per unit area, number of buildings and number of storeys. Empirical repair ratios can be derived for each of these damage levels vs. the entire replacement cost. Repair/Replacement = Mean Damage Ratio (MDR) Local construction and cost data, production material, demolition and debris removal, lifeline, government law and social data are needed! Depending on the type of infrastructure, empirical repair ratios can be derived for each of these damage levels vs. the entire replacement cost. The replacement cost is usually calculated multiplying the area, construction cost per unit area, no. of buildings and no. of storeys. Repair costs are simply calculated via empirical means and the expected cost to fix the damage in each limit state. This ratio of repair to replacement is called the mean damage ratio Repair÷Replacement = Mean Damage Ratio (MDR) MDR is generally between 0 and 1, except where the repair cost exceeds replacement due to demolition and associated costs. The figure shows the difference in repair costs between damage states in Turkey (dark) and the U.S. (light). Local data is thus needed to undertake such a conversion. Local construction and cost data, production material, demolition and debris removal, lifeline, government law and social data are needed! 9

10 Direct Social Loss Conversion
This includes both empirical and analytical social death, injury and homeless, evacuated, affected population ratios for conversion from building damage estimates. Much uncertainty – development level! Given the damage levels, occupancy data is required per building given a certain time of day. It is also important to identify large social loss areas, like marketplaces, schools and stadiums. For particular types of infrastructure, social death, injury and homeless ratios have been developed for conversion from building damage estimates. Social losses are extremely difficult to quantify, as there is much uncertainty within these brackets and the development level around the world impacts on these casualty rates. Given the damage levels, occupancy data is required per building given a certain time of day. It is also important to identify large social loss areas, like marketplaces, schools and stadiums. The first picture shows a marketplace following the 2009 Padang Earthquake in Indonesia. The second picture shows a school which was destroyed in the 2002 San Giuliano Earthquake in Italy. The third picture shows the post-earthquake effects at Candlestick Park, USA, following the World Series 1989 Baseball game which was interrupted by the Loma Prieta earthquake. 10

11 Direct Social Loss Conversion
KOERI (2002) give deaths as the number of severely damaged (D4) and collapsed (D5) buildings. An expert opinion system gave serious injuries as 4x deaths. There are many empirical casualty rate models. Region-specific usually. The following is a comparison of the aforementioned casualty rate methods. The deaths are calculated from the severe and collapsed limit states in some cases like KOERI (2002), which just used the no. of buildings in D4 + D5 as the no. of deaths in some cases. ATC-13 has a simple calculation which is simply that serious injuries are 4x the no. of deaths. Another value in literature is also that 12x deaths = light injuries. Of course, this is very rough and has been defined from the median in all earthquake cases. Coburn and Spence (2002), Spence (2007), Badal and Samardzhieva (2003), PAGER-CAT (2009) etc. are some empirical casualty rate models. Below is shown the Spence (2007) social losses for a building in the complete damage state. This is derived from some past data and provides a good method. It gives a range of different casualty types from uninjured, slight, moderate, severe, disabilitating injuries and then deaths for different building types. Other calculations have been proposed as part of USGS PAGER, which incorporate deaths and injuries using empirical fatality rates that are country specific. However, there is a large scatter associated. Here we see the rates for India. In the top diagram this should show all values on the green line where this is the model estimated deaths versus the actual recorded deaths. Spence, 2007 Jaiswal et al., 2009 11

12 Indirect Socio-Economic Loss Conversion
Modelling indirect effects is difficult due to lack of data and complexity of relationships between indirect and direct effects! Two types – hazard dependent and hazard independent. Hazard Dependent Systems approach computing output by modelling between and within system elements. Hazard Independent Calculating an impact factor using socio-economic indicators that aggravate the physical risk values. Business Interruption Flow-on lifeline problems Bottlenecks (Economy) Social vulnerability (fragility) Coping Capacity (resilience) Economic vulnerability (fragility) Currently there are very few models worldwide which calculate the indirect effects – usually this is due to the complexity of relationships between indirect and direct effects and lack of exposure data. There are two types of indirect loss conversion methods; those which are hazard dependent and those that are hazard independent. Those hazard dependent studies require a systems approach computing output by modelling system element links. Specific studies are usually done on a regional basis to look at the effect of an earthquake on the economy, recovery and resilience as well as business interruption. Identification of the risk management plans, government response times, possible bottlenecks in the system and costs associated with recovering each of these systems should be looked at to compute this. Complex macro-economic models are usually required to calculate flow-on effects to the economy. In terms of hazard independent studies, these are usually calculated using the method that was shown to you in the socio-economic vulnerability section, which uses an impact factor utilising socio-economic indicators that aggravate the physical risk values. Social vulnerability indicators such as poverty, age and gender as well as economic vulnerability indicators such as debt and purchase power are generally fragility-based. Coping capacity indicators like preparedness, development level and temporary shelter possibilities are generally resilience-based. 12

13 Earthquake Loss Consequences
Outputs of earthquake loss estimation The spatial and temporal outputs of earthquake loss estimation are demonstrated in this diagram which shows the flow chart and then short term and long term social and economic consequences for housing, economic loss, health and social disruption. The process of earthquake loss estimation gives building damage, social, economic, affected infrastructure and short and long-term effects as calculation possibilities. This shows how complex it is to accurately quantify earthquake losses, but gives a good understanding as to the important outputs. The long term impacts and mediation strategies are a very important output of earthquake loss estimation. Just one example is health where short term consequences are casualties, fatalities and health care disruption whereas long term consequences are psychological distress and chronic injury. Adapted from SYNER—G, 2009 13

14 Earthquake Loss Assessment for mediation and mitigation
POST-EVENT COST Earthquake Occurrence BENEFIT PRE-EVENT Earthquake Loss estimation can be used for many mitigation purposes, pre-event and post-event, including :- Cost-benefit decision-making aids in comparing costs/impacts associated with retrofitting infrastructure vs. existing building stock earthquake losses; as well as the cost of implementing design codes for a certain capacity. Insurance/reinsurance purposes in defining annual premiums to aid community or individual rebuilding/repair efforts post-earthquake. Pre-event high loss area determination in order to help governments decide where retrofitting or seismic engineering should be undertaken first. Emergency Management planning using probabilistic and deterministic pre-event loss assessment. Post-event loss assessment to aid where emergency management and disaster relief resources are placed. 14

15 Using the earthquake cycle to protect against Earthquakes and Secondary Hazards
The previous slide shows direct mitigation strategies, whereas the process of earthquake loss estimation is only one part of the earthquake cycle. When an earthquake occurs, there is a response and recovery phase in which the short and long term effects need to be fixed. Next, earthquake loss estimation is undertaken to look at the possible effects of the next earthquake and past earthquakes due to increased awareness of risk. Considering its results, policy usually is put in place that buildings need to be designed for a higher level of seismic resistance. Then, depending on the hazards that are identified through the earthquake loss estimation, different mitigation and mediation strategies should be employed. Preparedness is then an important part of regional strategies by increasing awareness. Projects such as ShakeOut can be undertaken. It is a yearly project in California to practise social preparation at work, in the school or at home. Authorities are hoping to significantly reduce the casualty toll from the next earthquake. The next earthquake then occurs, and further revisions are made. For each of the following primary and secondary hazards, a proposed cycle is shown. Earthquake Shaking – 1) Undertake a probabilistic seismic hazard assessment, exposure and vulnerability analysis and loss calculation, 2) Implement construction methods which reduce earthquake collapse potential, 3) Ensure large loss, critical, utility and transportation design reduces earthquake impact, 4) Community awareness campaigns. Liquefaction – 1) Evaluate potential for liquefaction, 2) Undertake in-situ remediation, 3) Do not allow construction in liquefaction prone areas. Fault Rupture – 1) Avoid construction, 2) Relocate critical and large loss facilities, 3) Implement low-use facilities such as parks, playing fields etc. Tsunami – 1) Early warning systems with broadcast signals for low-lying areas and beaches, 2) Implement safety guidelines. Landslides – 1) Evaluate potential for landslides, 2) Undertake slope stabilisation strategies, 3) Encourage relocation of vulnerable communities. Fire – 1) Identify potential fire hazards, 2) Implement a fire management plan for earthquakes, 3) Government planning. In all cases, socio-economic vulnerability should be calculated to identify the relative community resilience, recovery and mediation structures that exist. 15

16 Earthquake Loss Estimation Tools
Many tools that can be used depending on the desired model, use and data availability: open source or proprietary for real-time monitoring complex or simple empirical or analytical Some example of non-proprietary tools HAZUS-MH (North America) – scenario risk analysis for hurricane, earthquake and floods. CAPRA (Central America) – probabilistic risk analysis to the analysis of hurricane, earthquake, volcano, flood, tsunami and landslide hazards. RADIUS – excel-based tool for preliminary estimation of damage in developing countries GEM – currently being developed as the first global earthquake model Earthquake Loss Estimation tools are mostly proprietary. However, there are some good open source holistic tools that can be used depending on the desired model. For real-time monitoring, tools such as WAPMERR provide real-time information on earthquakes – source information. For hazard, most calculate hazard at a site using GMPEs but most earthquake tools need input of the geology, geotechnical information and tectonic regime. Depending on what information is known, more complex data may be needed. For vulnerability, some software uses empirical and some uses analytical methods – this can be chosen; it depends on how complicated the analysis required is. Most software use simple damage loss conversion but some software is adaptable so that regional damage-loss conversion can be inputted. You should attempt to get as much regional occupancy data as possible, as well as local infrastructure cost information before undertaking your socio-economic damage loss conversion. Local Government laws and response play a major role in recovery and resilience, and therefore this also should be included in your analysis. HAZUS is developed by FEMA (Federal Emergency Management Agency) of the USA and currently analyzes earthquake, flood (coastal and riverine) and hurricane wind losses. HAZUS provides various types of exposure data for the continental United States and can estimate direct and indirect economic losses from general building stock and repair costs of utility systems. Outputs of HAZUS include building damage states, casualties, debris, shelter needs, and number of households without water or power The CAPRA methodology applies the principles of probabilistic risk assessment to the analysis of hurricane, earthquake, volcano, flood, tsunami and landslide hazards. CAPRA includes applications that utilize data for: (i) the creation and visualization of hazard and risk maps, (ii) cost-benefit analysis tools for risk mitigation investments, and (iii) the development of financial risk transfer strategies. The platform’s architecture has been developed by regional experts to be modular, extensible and open, allowing it to be expanded and improved. RADIUS – Deexcel-based tool for preliminary estimation of damage in developing countries. It is a simple-to-use earthquake damage estimation tool for use by city administrators, who want to have an idea of the property damage and human life loss to a city. The tools uses simplified methodologies for speedy calculation and ease of use of features and is intended as an awareness raising tool, and not intended for precise loss estimation GEM – Global Earthquake Model, is currently an initiative which is under development. GEM will be the first global, open source model for seismic risk assessment at a national and regional scale, and aims to achieve broad scientific participation and independence. It will be conducted in three integrated modules: Hazard, Risk, and Socio-Economic Impact. __________________________________________________________________________________________ The OPAL procedure (Daniell, 2009) gives a current state-of-the-art of open source earthquake loss estimation tools and procedures. There are also numerous other closed source tools around the world which have not been included. Some of the downloadable software programs are described below. OpenSHA ( – is a group of programs by the USGS and SCEC to plot hazard spectrums, GMPEs, hazard curves, ShakeMaps and Benefit-Cost calculators which allows for accurate hazard calcs. OPENRISK – is incorporated within OpenSHA to provide vulnerability curves for use in ELEs, Benefit-Cost Analysis program etc. – OSRE – A Kyoto University simplified Japanese ELE software program. SELENA – is Matlab-based, uses the HAZUS methodology, providing a socio-economic loss value as well as damaged buildings estimate for inputted HAZUS vulnerability classes. EQRM – is an Australian HAZUS based ELE routine, in open source Python. It allows for modification to experienced users. CAPRA – Central America specific software, providing a useful open source format - RADIUS – A simple earthquake loss estimation program designed for use within Excel providing a good readout of earthquake risk. - Numerous initiatives worldwide are always being started. This is just a selection. USGS real-time – USGS PAGER – Real-Time calculation of population exposure and in the future, losses - OPENSHA – Open Source Hazard Modelling – SYNER-G - European Regional Lifeline and Infrastructure ELEs – EMME – Middle East Regional Infrastructure ELEs – CEDIM, KIT, Monash Foundation – OPAL, CATDAT, EQLIPSE Project – EERI – World Housing Encyclopaedia – EMI – Megacities Initiative - GDACS – Real-time information for earthquakes – GEM – A worldwide global earthquake initiative – 16

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