Costing Floods and Other Extreme Events

Lead Organization 

Commission for Environmental Cooperation (CEC) - An intergovernmental organization that supports cooperation among the NAFTA partners (United States, Mexico and Canada) to address environmental issues of continental concern.

About the Project

At present, the methods by which costs of flood damages are estimated vary significantly among federal and state/provincial jurisdictions and across the three CEC countries. There are significant data gaps in assessing uninsured losses, and much of the available data are not georeferenced adequately. Much of this information is not available in real-time either. Further, the economic impacts of cascading multi-hazards (for example, dry season > forest fires > floods > landslides) are not well documented. As a result of this situation, governmental agencies and private entities cannot easily assess “trade-offs” for infrastructure and institutional investments for enhancing disaster resilience. The information gaps also limit joint responses between US, Canada and Mexico, particularly when encountering extreme events that impact multiple jurisdictions.

Why Address the Problem

The economic costs of floods and other extreme events are a central element of policy formulation to address future impacts (e.g., cost/benefit analyses), allocate adequate resources for monitoring and preparedness, and provide support for building resilient communities. The costing of these extreme events, when available in a timely manner, can be utilized by various levels of government from national to sub-national to municipal, as well as various sectors of the economy such as agriculture, natural resources extraction industries, the media, and the insurance industry.

Project Objectives

The overall objective of this project is to formulate a standardized methodology for assessing the cost of extreme floods in the US, Mexico, and Canada. This methodology will be developed in close cooperation between interested government agencies, Indigenous community representatives, private sector partners, and domain experts. The composition of this group will include the end-users of this methodology and data generated from it, particularly those designing infrastructure investments, enhancements to community resilience, and long-term planning. This group will further extend this methodology, through case studies in each of the three countries, to a multi-hazard assessment that incorporates other extreme events (such as hurricanes, tornadoes, forest fires, landslides, etc.). Such integrated and standardized methodologies do not exist at this time.

The costing methodologies developed under this project, when applied across the three countries, would enable systematic investments by the governmental agencies partnering in this initiative to enhance resilience to extreme floods, reduce the economic impact of future events, and support real-time monitoring and disaster response. A common cost assessment methodology would also enable regional collaboration in applied and targeted research on future impacts of extreme events, operations for mitigating impacts of extreme events, and coordinated policymaking among the three countries.

Project Outputs

This project aims to formulate a common methodology for measuring the economic impacts of extreme floods, tabulate the economic costs of floods and related extreme events in the US, Mexico, and Canada for a 5-year period (2013-2017), analyze the emerging patterns, and identify the design elements for a common platform through which this information can be shared. It is anticipated that this project, executed from April 2019 to December 2020, would guide the future development of a centralized portal (beyond this project period) for researchers, insurance industry, communities, and businesses to access information relevant to preparing for weather-related hazards. Data could potentially include economic impacts (e.g., damages in personal property, business expenditures or losses), including agricultural impacts (e.g., crop loss), transportation impacts (e.g., road closures, air flight cancellations), and impacts from other sectors.

The proposed project will also inform future methodologies for determining the economic impacts of other types of extreme events. Such an approach, to be discussed through workshops involving experts and project partners during 2020, would enable a more realistic analysis of the costs associated with a broader range of extreme events, including hurricanes, tornadoes, forest fires, landslides, etc. Proof-of-concept application of this methodology will be developed through three case studies, one in each country. Findings from the expert workshops will be summarized in a policy brief that targets project beneficiaries as well as policymakers and planners within the three governments.

Project Beneficiaries and Partners

The project beneficiaries – primarily end-users of extreme events data such as federal, state/provincial, and municipal level government agencies, Indigenous community organizations, and key sectors of economy such as insurance, agriculture and transportation – will be incorporated directly in the project as partners. These end users will provide inputs into the methodological development and design of case studies in Mexico, US and Canada, essentially serving as project partners. Additionally, domain experts and institutions from the three countries will also comprise the project team.