ESPON-TITAN: Territorial Impacts of Natural Disasters

Commissioned by ESPON (the European Spatial Planning Observation Network), Cambridge Econometrics delivered a piece of research looking at the economic impact of four major natural disasters on European countries and regions. Impacts of frequency, regional distribution and the individual and cumulative impacts on European regions were studied. This piece of research was delivered as part of a wider research consortium.

Looking at the period of 1995-2017, we estimated the extent of direct and indirect impacts of droughts, windstorms, flood and earthquakes to assess the overall economic impacts of natural disasters.

Key findings

  1. Indirect economic impacts, in specific regions and economic sectors (i.e. resulting from the disruption of economic activities induced by the direct impacts on economic sectors in the same region and/or in other regions) tend to be almost as large as direct economic impacts of disaster events.
  2. Supply chains, represented by the input-output linkages, are highly important in distributing the economic impacts from directly impacted regions to the “economically” closer, but directly not affected regions.
  3. Central and Eastern European and South-Eastern European countries tend to be relatively more affected by these types of natural hazards, in economic terms (damages in proportion of their regional gross value added, GVA), than most other parts of Europe.
  4. Whilst the overall frequency of natural disasters is consistent across richer and poorer European countries, the institutional systems and infrastructural endowments tend to be less equipped to prepare and protect against the impacts of a natural disasters. This is apparent through higher human cost from natural disaster events.
  5. Flood and windstorm natural disasters have had the largest negative impact on economic output in almost all analysed years across the European territory. At the same time, results suggest that heavy earthquake events, despite being rare, tend to result in significant economic losses compared to the other event types.