This document provides an examination of the impact of disasters and climate shocks on poverty in the Europe and Central Asia region. It introduces a disaster risk assessment model that integrates socioeconomic resilience into traditional risk analysis. It is valuable for policymakers, DRM practitioners, and those interested in poverty reduction and disaster resilience in the region.
Key Insights
Climate change, urbanization, and socioeconomic vulnerability are the region’s main risk drivers
Climate change by raising temperatures and changing hydrology, is expected to produce more frequent, intense disaster events in the ECA region. Increased aridity and widespread wildfires will result in the loss of vegetation, while prolonged periods of intense rainfall and snowmelt will increase the frequency of massive mudslides, rockslides, and debris flows. In parts of Central Asia and the Western Balkans specifically, unprecedented heat extremes could occur in over 60 percent of summer months and drought risk could increase by 20 percent in a 4°C warmer world. “At the same time, projections suggest an increase in riverine flood risk, mainly in spring and winter, due to more intense snowmelt in spring and heavier rainfall in the winter months.”
Disaster effects can be better managed with a resilience-informed analysis looking at households
Traditional risk assessments often focus on direct damages and may not fully capture the distributional effects of disasters, especially given the significant level of socioeconomic inequalities in the ECA region.
Disasters increase existing poverty levels
Depending on available coping mechanisms such disaster impacts tend to widen income inequalities and create additional sources of vulnerability. Disaggregating asset losses at household level enables this analysis to move from expected asset losses to some of the second-order effects of a given disaster, focusing specifically on income and consumption losses, which are to be expected when households are affected by a given shock. From this perspective, disaster losses are assessed not just in terms of economic costs but also as an obstacle to poverty reduction efforts and other sustainable development aspirations.
Disasters accentuate existing socioeconomic inequalities
When disasters damage or destroy the assets on which individuals rely for their livelihood, affected households face income losses. Households’ ability to anticipate or mitigate these losses will inherently depend on their socioeconomic capacities, such as their pre-disaster income and their access to other types of financial resources.
Policy actions that can minimize disaster impacts at a household level
Policy actions need to reflect communities’ ability (or inability) to cope with and recover from shocks, such as disasters. Determining well-being losses and the resulting level of socioeconomic resilience can inform resilience-building and risk reduction interventions for both pre-disaster and post-disaster contexts, and also examine their added value across different income groups.
Key Statistics & Data
- The ECA region has experienced roughly 500 significant floods and earthquakes in the past 30 years, leading to approximately 50,000 fatalities and more than US$80 billion in damages.
- In 2016, almost 489 million people lived in the ECA region, generating an estimated regional gross domestic product of US$1.15 trillion.
- Close to 30% of capital cities across Europe and Central Asia have been destroyed by earthquakes or floods at some point in their history.
- The COVID-19 pandemic exacerbated the effects of natural disasters in 2020, by degrading micro-economic and macroeconomic coping mechanisms and responses.
- Between 2008 and 2015, weather- and climate-related losses amounted to €426 billion (at 2017 values) in the EU.
- Long-term average annual losses in GDP percentage due to earthquakes range from 0.05% in Bulgaria to 0.48% in Georgia.
- Long-term average annual losses in GDP percentage due to floods range from 0.04% in Greece to 0.97% in Croatia.
Methodology
This report uses the Unbreakable methodology to combine conventional disaster risk assessments with social welfare theory. A disaster risk assessment model is presented that adds the dimension of socioeconomic resilience. For a selected disaster risk, the model combines exceedance probability curves with household data from the World Bank’s Global Monitoring Database (GMD) to model the distributional impacts of disasters.
Implications and Conclusions
The report demonstrates that traditional risk assessments, which focus on asset losses, may not fully capture the socioeconomic consequences of disasters, and that socioeconomic resilience is a critical factor in determining a region’s ability to cope with and recover from such events. The report identifies policy actions that can minimize disaster impacts at a household level and emphasizes the importance of risk-informed and socially inclusive DRM interventions. The framework allows for a better understanding of which population groups (or geographical areas) are likely to be the most impacted, and why.
Key Points
- Disasters not only impact physical assets but also income levels and the ability of households to contribute to the local economy.
- Socioeconomic characteristics determine how quickly households recover and whether they require external assistance.
- Climate change, urbanization, and socioeconomic vulnerability are major drivers of disaster risk in the ECA region.
- Disasters can increase existing poverty levels and accentuate socioeconomic inequalities.
- The poor tend to incur more well-being losses than wealthier groups when disasters strike.
- Policy actions can minimize disaster impacts at a household level, and DRM (Disaster Risk Management) interventions should be socially inclusive.
- A new disaster risk assessment model can identify the most vulnerable socioeconomic groups and assess their ability to withstand disaster-related shocks.