SCIENCE IS USED FOR DISASTER RISK REDUCTION Review of Comoros UNISDR Working Papers on Public Investment Planning and Financing Strategy for Disaster Risk Reduction February 2015 1 OECD Regional DevelopmentPlease cite this paper as: Working Papers 2014/12 UNISDR Working Papers on Public Investment Planning and Financing Strategy for Disaster Risk Reduction: Review of Comoros, 2015, UNISDR. Geneva. UNISDR Working Papers on Public Investment Planning and Financing Strategy for Disaster Risk Reduction Review of Comoros February 2015 UNISDR Working Papers on Public Investment Planning and Financing Strategy for Disaster Risk Reduction This series is designed to make available to a wider readership selected studies on public investment planning and financing strategy for disaster risk reduction prepared for use in co-operation with Member States. Authorship is usually collective, but principal authors are named. UNISDR Working Papers should not be reported as representing the official views of the UNISDR or of its member countries. The opinions expressed and arguments employed are those of the author(s). Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on disaster risk reduction. 2 Contents Contents ................................................................................................................................................................... 3 List of Tables ............................................................................................................................................................ 4 List of Figures ........................................................................................................................................................... 5 List of Acronyms ....................................................................................................................................................... 7 Acknowledgements .................................................................................................................................................. 8 Executive Summary ................................................................................................................................................. 9 1. Introduction: Conceptual Framework ................................................................................................................. 11 A. Background: what are challenges? ................................................................................................................ 12 B. Streamlined process for evidence based decision making ............................................................................ 17 C. Basic concept of economic loss: direct loss, indirect loss and macro-economic impact ............................... 21 B.1. Direct loss ................................................................................................................................................ 22 B.2. Indirect loss and macro-economic impact ............................................................................................... 24 B.3. Macro-economic impact .......................................................................................................................... 25 B.4. Impact on public finance .......................................................................................................................... 27 Reference ........................................................................................................................................................... 29 2. Disaster Loss ..................................................................................................................................................... 30 A. Overview .................................................................................................................................................... 30 B. Disaster loss in Comoros ............................................................................................................................... 31 3. Disaster Risk ...................................................................................................................................................... 33 A. Overview ........................................................................................................................................................ 33 B. Probabilistic Risk Assessment in Comoros .................................................................................................... 35 B.1. Cyclone wind risk assessment ................................................................................................................ 35 B.2. Earthquake risk assessment ................................................................................................................... 39 Reference ........................................................................................................................................................... 43 4. National DRM/DRR/CCA Framework ................................................................................................................ 44 A. Institutional Structures .................................................................................................................................... 44 B. Legal Structures ............................................................................................................................................. 45 5. DRR/DRM/CCA in Public Investment Planning ................................................................................................. 46 A. Current Status of DRR/DRM/CCA Public Investment Planning ..................................................................... 46 B. Contingency Finance Mechanisms ................................................................................................................ 46 C. Economic analysis to support risk sensitive pubic investment planning ........................................................ 47 C.1. Summary of the Risk-Sensitive Budget Review ...................................................................................... 47 C.2. Summary of Macro-Analysis / CATSIM (See also Annex B for theoretical and technical backgrounds and a detailed case study) .............................................................................................................................. 49 C.3. Summary of Probabilistic CBA ................................................................................................................ 51 6. Policy Recommendations ................................................................................................................................... 53 Annex A: Risk-Sensitive Budget Review (RSBR) .................................................................................................. 54 A. Overview ........................................................................................................................................................ 54 B. DRM Marker ................................................................................................................................................... 56 C. The budget review methodology: Application of DRM marker ....................................................................... 57 3 References ......................................................................................................................................................... 59 Annex A-1. CHECKLIST for a risk-sensitive budget review ............................................................................... 59 Annex B. CATSIM Assessment ............................................................................................................................. 62 A. Overview ........................................................................................................................................................ 62 B. CATSIM Analysis in Comoros .................................................................................................................... 63 Step 1: Direct Risk Assessment ...................................................................................................................... 63 Step 2: Fiscal Resilience Assessment ............................................................................................................ 64 Step 3: Estimating potential “fiscal resources gap” ......................................................................................... 65 Conclusion: Toward risk layered approach ..................................................................................................... 68 Further challenge: Data gaps and way forward .............................................................................................. 69 References ......................................................................................................................................................... 70 Annex C. Probabilistic Cost-Benefit Analysis (CBA) for Comoros ......................................................................... 71 A. Overview .................................................................................................................................................... 71 B. Methodology of CBA .....................................................................................................................................