Increasing stress on disaster-risk finance due to large floods
Jongman, B., Hochrainer-Stigler, S., Feyen, L., Aerts, J. C., Mechler, R., Botzen, W. W., … & Ward, P. J. (2014). Increasing stress on disaster-risk finance due to large floods. Nature Climate Change, 4(4), 264-268.
Recent major flood disasters have shown that single extreme events can affect multiple countries simultaneously1, 2, 3, which puts high pressure on trans-national risk reduction and risk transfer mechanisms4, 5, 6. So far, little is known about such flood hazard interdependencies across regions7, 8 and the corresponding joint risks at regional to continental scales1, 9. Reliable information on correlated loss probabilities is crucial for developing robust insurance schemes5 and public adaptation funds10, and for enhancing our understanding of climate change impacts9, 11, 12. Here we show that extreme discharges are strongly correlated across European river basins. We present probabilistic trends in continental flood risk, and demonstrate that observed extreme flood losses could more than double in frequency by 2050 under future climate change and socio-economic development. We suggest that risk management for these increasing losses is largely feasible, and we demonstrate that risk can be shared by expanding risk transfer financing, reduced by investing in flood protection, or absorbed by enhanced solidarity between countries. We conclude that these measures have vastly different efficiency, equity and acceptability implications, which need to be taken into account in broader consultation, for which our analysis provides a basis.