Disasters can cause serious economic and fiscal repercussions by destructing both human and physical assets, disrupting businesses, affecting tax bases, and imposing fiscal costs on the government to fund post-disaster response, recovery, and reconstruction operations.

In the most vulnerable regions, infrastructure-related risks coupled with other expected climate impacts can lead to increased macroeconomic risks, and even effect sovereign credit ratings.

In some cases, infrastructural loss and damages could be more than half of the total direct economic losses. Recent catastrophic events like cyclone Yasa (2020) in South Pacific region, cyclone Amphan (2020) and cyclone Fani (2019) in India, as well as earthquakes in Nepal (2015), Japan (2011), New Zealand (2011), among others have highlighted that the loss and damages experienced in the critical infrastructure sectors (transport, power, telecommunication, irrigation) could be more than 50% of the total direct economic losses.

Such large-scale economic losses put significant fiscal burden on the government(s) to fund post-disaster recovery and reconstruction operations to (re)build critical infrastructural assets.

Further, since critical infrastructure systems are interconnected, therefore, direct loss and damages to such systems could disrupt economic activities and supply-chains resulting in a major economic and fiscal problem for the government. particularly in India, Fiji, Nepal and Mauritius.

The Asian Disaster Preparedness Center (ADPC) has been engaged by the Coalition for Disaster Resilient Infrastructure (CDRI) to provide technical services for fiscal risk assessments due to disasters on critical infrastructure by economically examining disaster-related loss and damages to project future risk exposure (in financial terms) and funding requirements for the government.

The catastrophe model-based exercise will incorporate changing exposure and hazard scenario with probabilistic effects of climate change.

For more, please visit www.adpc.net/CDRI