Collaborating to Develop a Common Flood-Costing Methodology

February 12, 2020

Written by Teghan Acres

The Commission for Environmental Cooperation (CEC) is an intergovernmental organization that brings Canada, Mexico and the United States together to address environmental issues of continental concern. The ‘Costing Floods and Other Extreme Events’ project is in response to the challenge that estimation methods for flood vary greatly across North America. There are significant data gaps in assessing uninsured losses, and much of the available data is not paired with location information. This means that governmental agencies and private entities cannot easily assess “trade-offs” for infrastructure and institutional investments for enhancing disaster resilience. The CEC is aiming to develop a standardized methodology for assessing the cost of catastrophic floods in Canada, Mexico and the United States. The outputs of this project will be used to inform policy and planning processes and to help build resilient communities.

The PWRC hosted an expert workshop for the project in September 2019. The workshop was held to review the proposed flood costing methodology, identify and build partnerships around shared objectives and discuss future actions. The participants represented the three countries with professionals from government agencies, the insurance sector, research and academia and other enterprises. The workshop drew on the unique knowledge each attendee brought from their industry and country. Then, workshop participants jointly worked to identify key elements of a common methodology that can be used for estimating damages and losses incurred by floods.

Some interesting highlights from the participant’s findings are shared here. It was noted that economic impacts included in the methodology for estimating flood-related damages and losses must be applicable to all CEC countries, data must be useful and usable across sectors, well-being and intangible costs need to be adequately accounted, particular attention must be paid to the gap between insured losses and total losses, and data can be difficult to obtain such as private information within insurance companies.

Several recommendations were made about how to move forward. Ensuring information access was a key proposal. This would include an openly available centralized database to share information on economic impacts from floods, information and indices the provide a composite picture of vulnerability and exposure levels, and a glossary of terminology would be useful across industries. To complement this information, a clear definition of what constitutes “extreme” flooding and different flooding types would be beneficial. Looking at the impact of flooding at the watershed level was also brought forward as more inclusive approach. This discussion set the stage for a more specified dialogue on how to create a common method for costing of flood-related damages and losses.

Attendees worked together to build recommendations for a method that would be comprehensive, easily understood and widely applicable. A main takeaway from the conversation was that damages and losses should be categorized using the same terminology as the insurance sector. Specific categories were set with considerations of direct damages, indirect effects and losses/additional costs across the social sector, infrastructure, economic sectors, and emergency assistance. Subsequent expert workshops will be held in the United States and Mexico where the finalized methodology and case studies will be reviewed and additional stakeholders, particularly Indigenous communities, can provide further insights.

The vision of the PWRC is to promote and mobilize research that addresses water issues on multiple scales ranging from local communities to national to global. This project takes the work of the PWRC internationally and leverages our resources to bring together stakeholders across industries. The research resulting from this project will benefit the disaster resilience across communities and contribute to better policy across North America.

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We respectfully acknowledge that the PWRC operates on the unceded traditional territories of the Coast Salish peoples of the Musqueam, Squamish, and Tsleil-Waututh Nations.