Natural hazards: Direct costs and losses due to the disruption of production processes

This study compiles and analyses approaches to the assessment of direct costs and of losses caused by the disruption of production processes. It systemizes the methods used in different hazard communities, identifying similarities and differences, so that as much as possible can be learned from each hazard type. It also highlights knowledge gaps and research needs and makes recommendations for cost assessment best practice.

The document presents recommendations on the following themes:

1. Develop a consistent framework for direct cost assessments to make them comparable.
2. Improve data availability and quality.
3. Address uncertainty in direct cost assessments.
4. Validate models.
5. Improve completeness of direct cost assessments.
6. Consider losses due to the disruption of production processes.
7. Develop integrated damage assessment methods.
8. For flood risk, emphasise classifying and quantifying asset values, examining the damage reducing
   effects of flood risk mitigation measures, and developing socio-economic scenarios.
9. For droughts, improve certainty in and relevance of damage estimations.
10. For coastal hazards, develop hazard-specific damage functions.
11. For alpine hazards, take cascading hazards and hazard-specific characteristics into account.

This document is an input paper of the 2015 Global Assessment Report on Disaster Risk Reduction.