1. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS1 HANDBOOK FOR ESTIMATING SOCIO-ECONOMIC AND ENVIRONMENTAL EFFECTS OF DISASTERS Economic Commission for Latin America and the Caribbean The World Bank The World Bank 5. Overall Effects of Damages

2. Overall Effects of Damages Environment Environment The impact of disasters on women The impact of disasters on women Damage overview Damage overview Macroeconomic effects of damages Macroeconomic effects of damages Employment and income Employment and income

3. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS3 Environment Resources / capital: Physical (soil, water, air climate) Biotic (human being, flora, fauna) Perceptual (landscape, scientific and cultural resources) Interactions among the above Environmental services Direct losses in the sector and impact in other sectors, indirect effects through loss in environmental services

4. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS4 Disaster impacts on the environment Temporary damage or destruction of natural assets (direct damage) Temporary damage or destruction of natural assets (direct damage) Reduction or non availability of environmental services provided by natural resource endowment (indirect damage) Reduction or non availability of environmental services provided by natural resource endowment (indirect damage)

5. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS5 Damages to the environment Direct damages Repair costs of natural resources to their previous state: reforestation, land stabilisation, protection against slippage, etc. Repair costs of natural resources to their previous state: reforestation, land stabilisation, protection against slippage, etc. Cost of alternative water sources Cost of alternative water sources Beach cleanup and replenishing Beach cleanup and replenishing Indirect damages Loss of environmental services Loss of environmental services Cleanup from spills of toxic materials Cleanup from spills of toxic materials

6. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS6 DISASTER Environmental change affecting human well being Damage in human-made capital prevent (or increase costs) the use of potentially available environmental goods and services Natural capital’s restoration feasible and is going to be carried out Man-made capital’s restoration feasible and is going to be carried out Total damage (DIRECT): Present value of damage flows caused by environmental change Total damage (DIRECT): Present value of damage flows caused by human-made capital disruption Restoration by natural processes YES NO Natural and/or man-made capital’s restoration allow to immediatily recover environmental damages YESNO Total Damage (DIRECT): Natural and/or human-made capital restoration cost Total damage:   Natural and/or human-made capital restoration cost (DIRECT)   Present value of damage flows occurring during the natural and/or man-made capital restoration phase (INDIRECT) Market price for the environmental asset available? NO Total damage (DIRECT): Market price of the environmental asset YES

7. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS7 Forest values in Latin America and the Caribbean US$/ha/year Source: Lampietti and Dixon

8. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS8 Basic information to be collected Bibliographic and personal sources, library and institutional databases; Bibliographic and personal sources, library and institutional databases; Access directories of government institutions and NGOs; Access directories of government institutions and NGOs; Meet with people in positions of responsibility, appointed technical specialists and other figures; Meet with people in positions of responsibility, appointed technical specialists and other figures; Access laws and regulations in environment; Access laws and regulations in environment; Prepare a plan and guide field studies of affected areas and, if possible, of unaffected and/or pristine areas. Prepare a plan and guide field studies of affected areas and, if possible, of unaffected and/or pristine areas.

9. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS9 Damage to land DS/Dic. 99 Erosion, landslides, landslips, crevices

10. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS10 Damage to soil Parchment and loss of Humidity and fertility Silt deposits and pollution Erosion through inundation and overflowing

11. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS11 Damages to soil Reduced production (agriculture, tourism, commerce, etc.) Pollution, Contamination, Inundation, drought Value of lost production Value of lost landErosion, Sedimentation and landslides Indirect Damages Direct damages Damages caused by

12. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS12 Estimating damages to soil When soil is destroyed it is associated with erosion, sedimentation or landslides: The direct cost is estimated at the commercial value of lost lands ($/ha), or appraised at the present value of (indirect) losses of production during a long enough time period. There are no indirect costs

13. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS13 Estimating damage to soil.. When damages are associated to pollution, inundation or drought There are no direct damages since the natural resource base recovers naturally over a period relatively short Indirect damages are estimated by the temporary reduction in production (agricutlural sector, tourism, commerce, etc.)

14. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS14 Reduction in water resources

15. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS15 Damages to water Damages caused by Direct damages Indirect damages PollutionIncreased costs and reduced income of existing treatment plants Damage or destruction in works Rehabilitation value or reconstruction of existing works Increased costs and reduced incomes from providing services

16. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS16 Estimating damages to water When water damage is associated with pollution Indirect effects are estimated through: The increase in costs and income decreases of the existing treatment plants, and The increase in costs and income decreases of the existing treatment plants, and The cost of introducing new treatment plants (annual expenditures in projects) The cost of introducing new treatment plants (annual expenditures in projects) When damages occur in water works: The direct cost is associated to the rehabilitation and reconstruction of existing systems, and The direct cost is associated to the rehabilitation and reconstruction of existing systems, and The indirect effects come from expenditure increases and diminished operational income of the enterprise that provides the service The indirect effects come from expenditure increases and diminished operational income of the enterprise that provides the service

17. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS17 Damage to air

18. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS18 Reduction in greenhouse gases Source: USAID In Central America 360,000 hectares of vegetation are lost yearly

19. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS19 Forest and bush fires: Further reduction in vegetation cover Source: USGS y NOAA Pacific Ocean Fires in the region in 1998 (associated with El Niño) Caribbean

20. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS20 Damage to air / atmosphere Damage caused by: DirectIndirect PollutionCost of air cleanup Increase in human health costs

21. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS21 Estimating damage to air Indirect damage is estimated through health attention needs and productivity reduction of those affected, at present value during the period of restoring air quality (cleanup) Indirect damage is estimated through health attention needs and productivity reduction of those affected, at present value during the period of restoring air quality (cleanup) The cost of new projects to restore quality and clean the air are accounted as a macroeconomic cost; that is the annual investment in project execution The cost of new projects to restore quality and clean the air are accounted as a macroeconomic cost; that is the annual investment in project execution

22. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS22 Damage to biodiversity, effects on the flora y fauna

23. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS23 Damage to biodiversity and natural capital Diminished or loss in reduction of gases (CO 2 sequestering) Commercial value of forest or loss in timber Biodiversity reduction Fires, Drought, pollution IndirectDirectDamage caused by:

24. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS24 The impact of disasters on women

25. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS25 Women and disasters Men and women share damage impact of disasters; nevertheless women face particular effects associated with sex differences Men and women share damage impact of disasters; nevertheless women face particular effects associated with sex differences Differences in gender roles require different approaches in the face of reconstruction Differences in gender roles require different approaches in the face of reconstruction

26. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS26 Disasters and women Estimates regularly made by ECLAC include damages to assets pertaining to women en each sector, as well as indirect losses of income in remunerated work Estimates regularly made by ECLAC include damages to assets pertaining to women en each sector, as well as indirect losses of income in remunerated work To this should be added other assets and non- formal activities, non-paid household chores performed at home, all of which are not included in the national accounts To this should be added other assets and non- formal activities, non-paid household chores performed at home, all of which are not included in the national accounts

27. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS27 Definitions Reproductive work: Reproductive work: Renewal of workforce (child care, education, etc.) Renewal of workforce (child care, education, etc.) Productive labour force availability (household care and cleaning, food preparation, water supply, personal care and attention, etc.) Productive labour force availability (household care and cleaning, food preparation, water supply, personal care and attention, etc.) Caring of labour force and population not participating in the workplace (ill, aged, incapacitated, etc.) Caring of labour force and population not participating in the workplace (ill, aged, incapacitated, etc.) Backyard economy (to supplement income and nutrition of the household): Backyard economy (to supplement income and nutrition of the household): Domestic bird and minor livestock raising Domestic bird and minor livestock raising Derivate foodstuff within the household (eggs, milk, etc.) Derivate foodstuff within the household (eggs, milk, etc.) Fruit yard Fruit yard Small subsistence lots and parcels Small subsistence lots and parcels

28. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS28 Direct damages Housing, furnishings, appliances lost, when women are heads of household Housing, furnishings, appliances lost, when women are heads of household Assets in formal sectors owned by women Assets in formal sectors owned by women Machinery and equipment of micro and small enterprises informally operated by women at home Machinery and equipment of micro and small enterprises informally operated by women at home “Backyard economy” assets (small species cattle, family lot, vegetable gardens and informally raised crops) “Backyard economy” assets (small species cattle, family lot, vegetable gardens and informally raised crops) Production stocks of both formal and informal activities Production stocks of both formal and informal activities

29. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS29 Direct damages: housing

30. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS30 Direct damages: micro-enterprises

31. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS31 Indirect damages or losses Temporary loss of remunerated work outside the home Temporary loss of remunerated work outside the home Production losses of micro and small enterprises Production losses of micro and small enterprises Same for household operated businesses Same for household operated businesses Production losses of “backyard economy” Production losses of “backyard economy” Increase in “reproductive” associated tasks and work Increase in “reproductive” associated tasks and work Other losses Other losses

32. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS32 Indirect damages: paid work losses

33. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS33 Indirect damage: increase in reproductive work

34. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS34 Sources of information National sources: -Country’s statistics office: censuses and household surveys -National universities and organizations that promote sex equality International sources: -Human Development Report published annually by the United Nations Development Programme (UNDP) -ECLAC: Annual Statistics, Latin-American Demography Center (CELADE), Gender Index System, and CELADE’s Redatam software.

35. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS35 Damage overview The recapitulation of damages marks the culmination of the assessment and lays the basis for the subsequent macroeconomic analysis. It should include: The recapitulation of damages marks the culmination of the assessment and lays the basis for the subsequent macroeconomic analysis. It should include: -The total amount of damage and losses; -Breakdowns that identify the most affected sectors, geographic areas and population groups; -Quantifying of the total impact of damages in monetary terms; -Identifying the sectors and geographical areas requiring priority attention for reconstruction strategies.

36. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS36 Total amount of damage Tasks to determine the total amount: -Prepare a summary of both direct damage and indirect losses; -Avoid double accounting between sectors; -Total damage estimate includes only losses that can be measured in terms of national accounts; -Prepare selected breakdowns: - Total direct damage and indirect losses; - Total direct damage and indirect losses; - Total damage to assets and production and increased costs or - Total damage to assets and production and increased costs or decreased income in the provision of services; and decreased income in the provision of services; and - Total damage to public and private sectors. - Total damage to public and private sectors. -Identify the most affected sectors and which should be given the highest priority in the reconstruction strategy.

37. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS37 Summary of general economic effects Type of damage Short term Medium term Long term Agriculture Price increase Loss of livelihoods Economic hardship in recuperation Changes in employment Housing Loss of assets Displacement Opportunity to rebuild Changes in location Infrastructure Loss of installed capacity Fiscal effects Reconstruction

38. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS38 Summarized table to develop Total Direct Indirect Public Private

39. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS39 Most affected sectors

40. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS40 Geographical distribution of damage

41. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS41 Damages by region

42. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS42 Loss to GDP

43. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS43 Macroeconomic effects of damages Basic steps: Macroeconomic assessment sequenceMacroeconomic assessment sequence Role of the macroeconomistRole of the macroeconomist Establishment of a baselineEstablishment of a baseline Assessment of the economic situation following the disaster (effects on economic growth and income and then on private, fiscal and external accounts)Assessment of the economic situation following the disaster (effects on economic growth and income and then on private, fiscal and external accounts)

44. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS44 Quantification or effects The estimation of the quantifiable effects of the disaster on the main macroeconomic variables, aggregates, and fundamental economic gaps, including: GDP GDP National income National income Investment, gross capital formation Investment, gross capital formation Economic gaps (private, public, external) Economic gaps (private, public, external) Inflation, balance of payments Inflation, balance of payments

45. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS45 Phases in macroeconomic assessment The pre-disaster situationThe pre-disaster situation Economy’s expected performance in the Economy’s expected performance in the disaster year in the absence of it disaster year in the absence of it Expected situation following the disaster Expected situation following the disaster The evaluation is based on the reports The evaluation is based on the reports prepared by the sectoral experts prepared by the sectoral experts

46. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS46 Measuring the damage “delta” or damage gap Pre-existing conditions (ex ante) Expected performance (without disaster) 3-5 years Disaster impact (ex post) 3-5 years The measure Of direct & indirect damages Upon the pre-existing situation (sector by sector baselines) is aggregated into the national accounts and determines the resulting disaster-caused scenario, as the gap over the expected performance prior to the event. Several scenarios may be outlined, based on the assumptions made for the reconstruction process

47. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS47 Sequence from valuation to reconstruction and mitigation

48. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS48 Rate of growth

49. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS49 Economic scenarios

50. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS50 The pre-disaster situation

51. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS51 The expected performance

52. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS52 The post-disaster situation

53. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS53 Impact to be estimated

54. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS54 Measurement and valuation of secondary effects (1)

55. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS55 Measurement and valuation of secondary effects (2)

56. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS56 Gross capital formation

57. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS57 Measurement and valuation of secondary effects (3)

58. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS58 Public finances Central government budget Honduras, 1997-1999

59. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS59 Measurement and valuation of secondary effects (4)

60. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS60 Inflation

61. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS61 Measurement and valuation of secondary effects (5 & 6)

62. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS62 Measurement and valuation of secondary effects (7)

63. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS63 Balance of payments Balance of payments Dominica 1993-1997

64. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS64 Measurement and valuation of secondary effects (8)

65. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS65 Possible scenarios

66. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS66 Scenarios Scenarios: El Salvador 2001

67. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS67 Macroeconomic Models

68. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS68 Preliminary results

69. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS69 Employment and income Steps for assessment: -Use the available sources to determine the extent to which the labor force of the affected country or region’s employment and income was at risk; -Use field studies to assess the post-disaster state situation of jobs and employment generation in the key sectors of the economy in the affected region; -Conduct a much more precise and detailed evaluation on time for the results to be delivered to policy makers in charge of drawing up repair and reconstruction.

70. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS70 Estimation of the overall impact on vulnerable employment The procedure to estimate of the population exposed to disaster damage in terms of employment vulnerability, involves: -Determining the dimensions of the percentage of primary and secondary affected population exposed EAP (those suffering direct loss of employment, reduction in income or a future loss or reduction of income); -Determine the vulnerable EAP by combining the figure on exposed EAP and the percentage of total poverty or poverty index -Determine the factors aggravating employment and income vulnerability The exposed EAP is estimated as the total EAP of the affected area, multiplied by the percentage of primary and secondary affected population.

71. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS71 Economically Active Population vulnerable Estimation of the economically active population vulnerable to loss of employment and income: El Salvador as a result of the january 13, 2001, earthquake

72. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS72 Estimates of losses of employment and income at the sectoral level Some indirect procedures to estimate loss of employment in each affected sector or activity, might consider impacts on: Some indirect procedures to estimate loss of employment in each affected sector or activity, might consider impacts on: a. Micro, small and medium-sized enterprises (MSMEs) b. Agricultural sector

73. ECLAC - 2002 HANDBOOK FOR ESTIMATING THE IMPACT OF DISASTERS73 Impact on the employment and income Impact on the employment and income of workers in MSMEs affected by the january 13, 2001, earthquakes in El Salvador