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Flood Recovery Mechanisms: Their Role In Delivering Adaptive Management Of Flood Risk

Congress: 2015
Author(s): Sally Priest (London, UK), Edmund Penning-Rowsell
Flood Hazard Research Centre1

Keyword(s): Sub-theme 17: Climate change, impacts and adaptation,
AbstractRecovery strategies have an invaluable role in facilitating individual and community recovery from the often devastating impacts of flooding. As well as enabling recovery and compensation, a well-functioning approach to recovery is also essential for other flood risk management options, and providing a supporting or buffering function for large over design standard flood events or if other flood management measures fail. There are many flood recovery mechanisms (including private market insurance, state flood insurance, government compensation schemes, tax relief, international donors) and recipients of aid vary between individual citizens or businesses, communities, local governments and even national governments. Recovery approaches also vary considerably both in terms of who contributes to paying for the strategy and ultimately who is able to recover: ranging from a situation where the beneficiary pays through to a situation of national solidarity (Penning-Rowsell and Priest, in press). With financial losses from flooding rising and increasing stress placed on disaster-risk finance (Jongman et al., 2014) the future role and viability of existing flood recovery mechanisms need critical analysis. Our research explores the extent to which flood recovery enables the reduction of future flood risk and promotes adaptation or whether it is merely focused on restoration and recovery to the pre-flood condition.

Over thirty international recovery mechanisms have been reviewed as part of a desk-based analysis - supplemented by qualitative interviews - to identify the potential and barriers of different types of approaches. Analysis has focussed on not only the potential for the promotion of adaptation to flood risk, but also on how effective current approaches are able to deliver these types of solutions. The research has identified that there are many different instruments which are utilised in existing recovery approaches and are being used, or have the potential, to incentivise risk reduction or adaptive behaviour to flood risk. Table 1 provides an overview of these instruments, how they promote risk reduction or adaptive approaches and examples of the international recovery systems where these are present.

Table 1. Instruments used by recovery mechanisms that may directly or indirectly promote adaptive flood risk management

Despite there being significant potential for some recovery measures to incentivise the uptake of flood mitigation or risk reduction measures, the degree to which they currently promote adaptation to flooding is limited. Different recovery approaches could be doing more to integrate risk reduction into their core functions and Thieken et al. (2006) for instance argue that insurers could be doing more to encourage the uptake of measures through clearer premium of deductible incentives. Indeed, insurers are well placed to be able to access those at risk and provide information. However, there are two principal obstacles to the extent to which recovery mechanisms are able to achieve adaptation. Firstly, in many cases the incentivising risk reduction or adaptive behaviour is often a by-product of the use of the instruments in Table 1, rather than the central purpose. Ultimately, the core focus of many of these instruments is the management and reduction of the total financial exposure of a recovery strategy (i.e. limiting total loss) rather than truly incentivising and promoting adaptive behaviour.

Secondly, the research has identified significant barriers to the uptake of flood risk reduction measures. These include:
A lack of awareness and/or understanding of flood risk and the scale of any potential impacts;
A lack of awareness that insurance policy/compensation schemes guarantee full coverage - therefore those affected are not aware they might need to reduce their risk;
A lack of awareness and/or understanding of their flood risk and the scale of any potential impacts;
A lack of awareness of the potential options to reduce risk;
An inability to understand the trade-off of availability/affordability of insurance and the cost of mitigation measures;
Inadequate incentives for implementing individual scale measures (i.e. risk-reflective pricing is not working).

Despite the opportunities and the significant potential for flood recovery mechanisms to impact in these areas, current instruments are failing to address the barriers and obstacles presented above. Until these are addressed merely increasing the burden on those affected by flood risk or removing the ability of a community or individual from financially recovering from flood risk appears largely insufficient to promote and incentivise adaptive behaviour. 1. Jongman et al. 2014. Increasing stress on disaster-risk finance due to large floods. Nat. Climate Change 4, 264-268. 2. Penning-Rowsell, E.C. and Priest, S.J. (in press) Sharing the burden of adapting to increasing flood risk: who pays for flood insurance and flood risk management investment in the United Kingdom. Accepted by Mitigation and Adaptation Strategies for Global Change. 3. Thieken, A.H., Petrow, T., Kreibich, H. and Merzi, B. (2006) Insurability and mitigation of flood losses in private households in Germany. Risk Analysis, 26(2): p. 1-13.

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