Whole value at risk for flood damage estimates through spatial data analysis

Abstract

Abstract Effective disaster risk reduction (DRR) for flooding requires a comprehensive estimate of the whole value at risk (WVAR) to inform appropriate and proportionate mitigation expenditure. Conventional flood risk estimation methods focus on the direct effects of inundation on community value and generally ignore collateral effects on assets and populations outside the flooded area. Consequently, conventional methods tend to underestimate the cost of flooding, leading to an underestimate of the return on DRR investment. Using spatial data analysis in an urban case study for Toronto, Canada, we identify and capture the collateral value at risk (ColVaR) to estimate the WVAR more comprehensively. In our case study, ColVaR (mean estimate) amounts to 70% of direct losses (ColVar = $344 M; direct losses = $475 M CAD), ranging from 20%–150% (ColVar $100–$740 M) when spanning the 90% confidence intervals of our Monte Carlo simulations. Thus, we demonstrate that if the collateral value at risk is ignored, WVAR can be significantly underestimated, potentially leading to reduced disaster risk reduction resource allocations and thereby adding risk exposure for communities. We present an accessible, seven-step process using existing spatial analysis tools and techniques that infrastructure stakeholders and planners can use to estimate ColVaR and better formulate DRR measures for their communities.