Risk Analysis of Natural Hazards

Table of Contents

1. Frontmatter

2. Chapter 1. Risk Analysis of Natural Hazards: Interdisciplinary Challenges and Integrated Solutions

   Paolo Gardoni, Colleen Murphy, Arden Rowell

   Abstract

   Natural hazards can have a devastating impact on society. They cause billions of dollars of damage each year, kill thousands, and render millions homeless, and their frequency and severity are expected to increase with climate change. Although the source of damage from natural hazards may appear to be “natural,” in fact it results from complex interactions between the natural environment, human decisions about the built environment, and social vulnerability. This volume brings together leading minds in engineering, science, philosophy, law, and the social sciences to develop a deeper understanding of the interdisciplinary challenges involved in the mitigation of natural hazards.

   Parts I and II of this volume explore risk assessment, first by providing an overview of the interdisciplinary interactions involved in the assessment of natural hazards, and then by exploring the particular impacts of climate change on natural hazard assessment. Part III discusses the theoretical frameworks for the evaluation of natural hazards. Finally, Parts IV and V address the risk management of natural hazards: Part IV provides an overview of the interdisciplinary interactions underlying natural hazard management, and Part V explores decision frameworks that can help decision makers integrate and respond to the complex relationships among natural events, the built environment, and human behavior.

3. Risk Assessment: An Interdisciplinary Perspective

   1. Frontmatter

   2. Chapter 2. Social Choice and the Risks of Intervention

      Timothy G. McCarthy, Noreen M. Sugrue

      Abstract

      In this chapter we shall describe and illustrate a framework for assessing risk in the context of social intervention, where by a social intervention we mean a set of actions undertaken, typically by an organized ensemble of agents external to a given society, in order to solve a problem identified within that society. We focus on the general problem of amalgamating expert risk assessment and lay risk assessment. A methodology for integrating divergent assessments of risk has at least two virtues: (1) Where these are presumed to differ, this methodology forces the normative and descriptive assumptions underlying the assessments into the open, so that they can be examined; and (2) It provides risk policymakers with a tool for systematically prioritizing the normative constraints underlying the assessments of risk. We argue that there is no need either to rationalize or to condemn the systematic gap in risk analyses that exists between experts and laypersons. Rather, experts and laypersons should be understood as having different competencies, capabilities and normative requirements. Public (and private) risk managers need a systematic approach to managing these distinctive capabilities and requirements—an approach that recognizes the strengths and constraints of each analytical group, and which allows risk managers to integrate all of these factors. In this paper, we are interested in identifying and analyzing how technical experts’ risk analyses interact with the lay public’s assessments of risk with the principal goal being first to specify formal representations or models of the divergent assessments of risk generated by experts and the lay public and second, to introduce a model for integrating those assessments. We then apply the model to case studies involving natural disasters and health.

   3. Chapter 3. Vulnerability to Natural Hazards: Philosophical Reflections on the Social and Cultural Dimensions of Natural Disaster Risk

      Mark Coeckelbergh

      Abstract

      Risk analysis and risk management are ways for humans to cope with natural disaster risk. This chapter connects discussions about risk with reflections on nature, technology, vulnerability, and modernity. In particular, it raises questions regarding the natural/human distinction and how human societies and cultures (should) cope with risk. How “natural” are hazards, given human interventions in and interpretations of events, and what are the limitations of “objective” modern approaches to risk? The chapter argues that coping with risk related to natural disasters should be sensitive to the social and cultural dimensions of risk. For this purpose it proposes the concept of “vulnerability transformations”. It focuses on the experience and phenomenology of natural hazards in relation to existential vulnerability, and, taking a cross-cultural perspective, shows that apart from modern scientific thinking there are also other, less modern ways to cope with natural hazards.

   4. Chapter 4. Discount Rates and Infrastructure Safety: Implications of the New Economic Learning

      Daniel A. Farber

      Abstract

      Discounting is a tool used by economists to make tradeoffs over time. Discounting is relevant to disaster risks because they are generally low-probability and hence are not likely to occur immediately. The combination of low probability and the on-going nature of the risks make discounting especially salient for large-scale disasters. Because infrastructure can last for many decades in the future, the choice of discount rates can significantly affect assessments of the value of increased safety measures. An emerging consensus among economists calls for applying discount rates that are lower for risks farther in the future as compared with harms in the immediate future. The rationale is that long-term investments provide a hedge against uncertainty regarding future economic growth. Declining rates are also justified when portions of the population have low prospects for income growth compared with other societal groups. Inequality, particularly the future economic prospects of poorer individuals, matters in terms of discounting. Fixed discounting rates such as those now used by the U.S. government may undervalue disaster risks by using too high a discount rate. The implication is that society has been underinvesting in infrastructure resiliency.

4. Future Challenges: Impact of Climate Change

   1. Frontmatter

   2. Chapter 5. Setting the Stage for Risk Management: Severe Weather Under a Changing Climate

      Donald J. Wuebbles

      Abstract

      The most recent evaluations of the state of changes occurring in the Earth’s climate through the 2013 Assessment Report 5 (AR5) of the Intergovernmental Panel on Climate Change and through the 2014 U.S. National Climate Assessment clearly indicates that climate change is happening now, it is changing rapidly, and that the primary cause is human activities. These assessments draw upon the latest scientific understanding of climate and climate change, synthesizing recent advances in the understanding of the science of climate change, and providing a succinct overview of the past and projected effects of climate change on the United States and the world. Findings include new analyses of the observed trends and projected future climate changes. Along with increasing temperatures over most of our planet, the pattern of precipitation change in general is one of increases at higher northern latitudes and drying in the tropics and subtropics over land. One of the major findings is that there has been an increase in some key types of extreme weather events, especially in heat waves and large precipitation events, in the U.S. (and throughout the world) over the last 50 years. There has been an increase in the number of historically top 1 % of heavy precipitation events across all regions of the U.S.—this is not surprising, as the atmosphere warms it holds more moisture. The analyses also indicate the trend towards large precipitation events is likely to continue to increase throughout this century. The drying of the subtropics and wetter conditions at more northern latitudes means that both droughts and floods are likely to be increasing issues in various parts of the world. Scientific analyses indicate a strong link between changing trends in severe weather events and the changing climate. In addition, there are many concerns about potential impacts of the changing climate, e.g., the effects of sea level rise on coastal areas. The aim here is to summarize the findings from the new assessments, plus provide a discussion of the current understanding of severe weather in relation to the science of climate change, with a special emphasis on the issues and remaining uncertainties affecting our future.

   3. Chapter 6. Climate Change and Natural Hazards

      Douglas MacLean

      Abstract

      Climate change is happening, and the consequences are likely to be bad. If we—the people and nations of the world—fail to take action soon to address its causes and mitigate its effects, the consequences may be very bad. What should we do? Bill McKibben calls this “the most important question that there ever was,” and many of the scientists who study the issue have described it as one of the most difficult and important challenges that human civilization has confronted. (The quote comes from a tribute McKibben gave for James Hansen. See Justin Gillis, “Climate Maverick to Retire from NASA,” The New York Times, April 1, 2013.) My goal in this chapter is to examine some of the moral dimensions of the problem. These turn out to be philosophically complicated and challenging. As a practical matter, the causes and consequences of climate change have unprecedented spatial and temporal scope. Others who have written on climate change ethics have pointed out that these facts about scope make the problem difficult to think about clearly. I will describe these issues, but my goal is to try to explain how the spatial and temporal dimensions interact to create a unique moral dilemma. There are ample grounds in this analysis for pessimism, but I believe it also suggests how we can most usefully think about constructive responses to McKibben’s question.

   4. Chapter 7. Managing Risks to Civil Infrastructure due to Natural Hazards: Communicating Long-Term Risks due to Climate Change

      Bruce R. Ellingwood, Ji Yun Lee

      Abstract

      Civil infrastructure facilities play a central role in the well-being of modern society. Lifecycle engineering of such facilities requires consideration of uncertainties in natural hazard occurrence and intensity, and the response of buildings, bridges, transportation networks and lifelines to these hazards. The service periods for certain critical civil infrastructure facilities may extend well beyond the service lives of 50–100 years traditionally adopted for buildings and bridges. The potential effects of global climate change on such facilities, both in terms of frequency and severity of the extreme events from natural hazards, have become a major concern to facility owners and to authorities responsible for managing risk in the public interest. This paper examines issues that must be addressed in life-cycle reliability assessment of civil infrastructure that must remain functional for service periods of several generations.

   5. Chapter 8. Assessing Climate Change Impact on the Joint Wind-Rain Hurricane Hazard for the Northeastern U.S. Coastline

      David V. Rosowsky, Lauren Mudd, Christopher Letchford

      Abstract

      In this chapter, we present results of a study to assess the impact of possible future climate change on the joint hurricane wind and rain hazard along the US eastern coastline. To characterize the hurricane wind hazard, climate change scenarios were coupled with simulation-based hurricane genesis, wind field, and tracking models to examine possible changes in hurricane intensity (maximum wind speed) and hurricane size (radius to maximum winds). A number of different postulated climate change models (IPCC scenarios) were considered. Each scenario suggested changes in sea surface temperature (SST), the driving parameter in most modern hurricane wind field models. The evolution of hurricane genesis frequency and hurricane track behavior were examined, though no temporal trend was apparent in either. A rainfall hazard model was then developed using recorded rainfall data associated with hurricane events and a probabilistic model relating wind and rain was constructed. The pairwise joint distributions of maximum wind speed, spatial extent/storm size, and maximum rainfall rate—under current and future climate scenarios—were developed and compared. Finally, joint multivariate (wind speed intensity, spatial extent/storm size, rainfall rate) distributions were constructed to describe the joint wind-rain hurricane hazard including consideration of projected climate change impacts. Implications for current and future design (code provisions) are discussed.

5. Risk Evaluation: Theoretical Frameworks

   1. Frontmatter

   2. Chapter 9. Deontology and Natural Hazards

      Adam Hosein

      Abstract

      In this chapter, I explore some fundamental moral questions about how we should evaluate disaster policy. I offer a challenge to the dominant approach, namely cost-benefit analysis, arguing that we need to give weight to some crucial moral distinctions that this approach ignores, such as the difference between doing and allowing harm. In place of cost-benefit analysis, I defend an alternative “deontological” approach, which incorporates these distinctions. But I also show that more work is needed to fully develop a deontological theory of disaster policy. There are fruitful new avenues in this area for both policy analysts and moral theorists.

   3. Chapter 10. Managing Risks of the Unknown

      Sven Ove Hansson

      Abstract

      Traditional probabilistic risk assessment needs to be supplemented in at least two ways: We need ways to analyze risks for which no meaningful probability assessments are available, and we need to take into account ethical issues such as voluntariness, intentions, consent and equity. In this contribution three tools for such an extended risk assessment are presented with a particular emphasis on how they can be used to deal with risks that have large components of natural causes: Possibility analysis deals with “mere possibility arguments”, i.e. risks that we know very little about. The three-party model is a framework for analyzing the ethics of risk. Hypothetical retrospection is a method for overall assessment of risks in non-numerical terms. These tools are all constructed to introduce important considerations into risk assessment that tend to be excluded or neglected in the traditional approaches. This widening of the scope of risk assessment does not make the assessment easier, but it can contribute to making its output more useful and more responsive to social needs.

   4. Chapter 11. Intergenerational Justice in Protective and Resilience Investments with Uncertain Future Preferences and Resources

      Louis Anthony (Tony) Cox Jr., Emeline D. Cox

      Abstract

      How much should each generation invest in building resilient infrastructure to protect against possible future natural disasters? If such disasters are infrequent, members of each generation may be tempted to defer investments in resilience and protective infrastructure (e.g., in building or improving dams and levees; retrofitting office and residential buildings; creating more robust transportation, power, and communications networks; etc.) in favor of consumption or growth. Succumbing to this temptation imposes risks on future generations of needlessly large losses or disproportionate need to invest in resilience. Yet, even the most dutiful and altruistic present generation has limited obligations to invest to protect future ones, especially if present investments in resilience reduce growth and future prosperity, or if the preferences, priorities, resources, and capabilities of future generations are highly uncertain. This paper discusses several different frameworks for clarifying how much each generation should invest in protection. Optimal economic growth models provide a well-developed technical framework for maximizing average or minimal expected social utility over time, but require consistency and cooperation over time that may not be psychologically or politically realistic. If investment decisions are viewed as a form of dynamic “dictator game” in which earlier generations choose how to allocate benefits between themselves and later generations, then insights from behavioral economics, risk psychology, and moral psychology suggest cues related to deservingness and trustworthiness that powerfully affect what is perceived as fair and right in such settings. A Rawlsian concept of justice (what investment decision rules would people choose from behind a veil of ignorance, in which no one knew what generation he or she would be born into?) solves the problems of over-discounting long-delayed and uncertain consequences that have frustrated some previous efforts to apply cost-benefit analysis to ethically charged issues involving intergenerational justice. We suggest several principles for applying insights from these different frameworks to investments in building resilient communities and mitigating natural disaster risks across generations.

6. Risk Management: Interdisciplinary Perspectives

   1. Frontmatter

   2. Chapter 12. War Rhetoric and Disaster Transparency

      Lisa Grow Sun, RonNell Andersen Jones

      Abstract

      In recent years, war and national security rhetoric has come to permeate the legal and policy conversations on a wide variety of natural and technological disasters. This melding of disaster and war to justify exceptions to ordinary constitutional and democratic norms is particularly apparent in governmental restrictions on the flow of its communications in disasters, as limitations on information flow that might be warranted when there are thinking enemies (such as in times of war) are invoked in disaster scenarios lacking such thinking enemies. The extension of wartime transparency exceptionalism into nonthinking-enemy disasters—reflected in both legislation and official rhetoric—is deeply troubling: it risks the illegitimate construction of enemies by government and the unwarranted transformation of public spaces into war zones from which the public can be more easily excluded. Only by consciously disaggregating dissimilar forms of emergencies and removing the rhetoric of war from disaster decision-making can the government make appropriate determinations about the provision of information in times of community or national crisis.

   3. Chapter 13. Participatory Decision-Making on Hazard Warnings

      Gordon Woo

      Abstract

      There are many hazard situations where there is significant uncertainty over whether a dangerous event will actually materialize and threaten a populated region. In the presence of such uncertainty, hazard warnings may be issued to motivate a diverse range of mitigating actions that might reduce the risk of casualties should a major natural hazard event occur. Most of these possible actions involve the active cooperation of citizens in the region affected. Guidelines for the involvement of citizens in the decision-making process are identified, with a focus on key principles that provide a platform for participatory decision-making. These principles include the democratic right of citizens to information and choice; the need for basic training and education on risk issues to enable citizens to make more evidence-based decisions; the opportunities for governments to nudge rather than coerce citizens into taking actions; the scope for application of the precautionary principle; and the over-arching need for decisions to be rational, equitable and defensible.

   4. Chapter 14. The Natech: Right-to-Know as Space-Time Puzzle

      Gregg P. Macey

      Abstract

      Federal environmental law began with a plea: that agencies and other parties consider, and mitigate, the environmental impacts of their work. The task remains unfulfilled given the nature of those impacts: They feature system effects, nonlinear interactions, feedback loops, discontinuous and threshold dynamics, and uncertain boundaries. The administrative state has limited means to address them. It relies on artificial constructs to assess and respond to impacts, such as worst-case scenarios, reasonable foreseeability, and scales that are either inappropriately narrow (“linked” projects) or large and vague (“program-level”). Right-to-know laws share this shortcoming, a product of the disasters that led to their enactment and the laws to which they were appended. In place for a quarter century, the framework is under renewed scrutiny. Recent accidents reveal risks from new and repurposed infrastructure, and point to chemical listing, threshold, labeling, and other potential reforms. But these are incremental adjustments to a baseline approach to chemical risk that operates under longstanding temporal and spatial constraints. Right-to-know privileges annualized data and the state of knowledge shortly after a release beyond a facility boundary. These choices limit data available for emergency response, particularly when chemical processing, oil and gas production, and other infrastructure are placed under stress. To explore how right-to-know laws can better account for system effects, I focus not on the black swan events or worst-case scenarios that shape new legislation and consume an outsized portion of administrative resources, but rather on increasingly common, geographically dispersed, and temporally discontinuous infrastructure stressors known as natechs. A natech event occurs when a natural hazard such as a storm, earthquake, or flood triggers technological accidents that result in the release of chemical agents into the environment. Natechs share several traits, including simultaneous releases, cascading and domino effects, and scattered or inaccessible infrastructure. They often occur under “best case” conditions, due to the weakness of the natural hazard trigger or the readiness of infrastructure in its path. They lead to non-state responses that identify, reconstruct, and track cumulative impacts that would be lost to regularized reporting at discrete scales. These non-state responses ensure situational awareness in emergent spaces, irrespective of facility boundary. And they suggest event sequences that can be leveraged for hazard mitigation. By focusing on a growing inventory of mundane infrastructure stressors, natechs can serve as proxies for some of the cumulative, delayed, distributed, and nonlinear impacts that environmental laws find difficult to address.

7. Risk Management: Decision Frameworks

   1. Frontmatter

   2. Chapter 15. Private Versus Public Insurance for Natural Hazards: Individual Behavior’s Role in Loss Mitigation

      Peter Molk

      Abstract

      This chapter explores how insurance markets can be used to manage social exposure to catastrophic risks. Insurers set premiums to reflect underlying risk levels that they calculate using their best actuarial science. This process gives individuals private incentives prospectively to mitigate risks of loss. Private insurers, however, frequently exclude natural hazard losses from coverage, removing the private loss mitigation incentives from the market and leaving individuals without insurance against natural hazards, unless government-provided or – sponsored plans step in. These government programs amount to a species of public insurance against natural hazards. The chapter explores problems inherent in these public programs and finds that private insurance provides a viable alternative. Conventional explanations say that private insurers exclude natural disaster losses, and indeed are incapable of covering these risks, because of the difficulty in insuring highly correlated, high-dollar losses. However, I show as a matter of both theory and practice that these explanations do not fully explain private insurers’ behavior. Instead, I argue that insurers exclude natural disaster losses because of costly market contracting between insurers and policyholders. Information imbalances between policyholders and insurers and coordination failures among insurers lead to an equilibrium where natural hazard coverage is sacrificed for lower premiums. This analysis suggests that a regulatory response focusing on mitigating or compensating for contracting costs could reinvigorate private insurance’s role in managing risk and offer significant benefits. Throughout the chapter I draw from the United States flood insurance program, a 50-year project run by the federal government that has experienced representative degrees of successes and failures, to show the practical implications from this analysis.

   3. Chapter 16. Risk-Informed Decision Framework for Built Environment: The Incorporation of Epistemic Uncertainty

      Eun Jeong Cha, Yan Wang

      Abstract

      Managing a risk to a built environment from natural and man-made hazards is an important issue for the prosperity of a nation. Risk assessment forms the basis for the risk management, which often involves uncertainties that arise from our ignorance about the risk, such as lack of data, errors in collected data, and assumptions made in the modeling and analysis. This uncertainty that arises from imprecise information is referred to as epistemic uncertainty, as opposed to the aleatory uncertainty that arises from the variability of possible outcomes. If epistemic uncertainty prevails, assessing and managing a risk rely on risk perception of a decision maker. Studies have suggested that the risk of low-probability high-consequence events tends to be overestimated by the public. Thus, the role of risk perception in risk management of civil infrastructure exposed to natural and man-made hazards becomes significant because of the potential catastrophic consequences of such risks (e.g. casualties, functional and economic losses of the built environment, etc.) to the public. The consideration of epistemic uncertainty and risk perception in risk assessment of a built environment may lead to a risk management solution that is different from what is obtained when it is not incorporated. In this study, we present a risk-informed decision-making framework that can assist decision makers, including governmental agencies that allocate limited resources to enhance the safety and security of the civil infrastructure. In this framework, epistemic uncertainty is incorporated by utilizing generalized interval probability theory and cumulative prospect theory. The framework is illustrated with an example of regional hurricane risk management for residential buildings located in Miami-Dade County, Florida, considering the effect of changing climate.

   4. Chapter 17. Societal Perspective in Risk Management: Application of Life-Quality Index

      Mahesh D. Pandey, Neil C. Lind

      Abstract

      Risk can always be reduced but at some cost. Since disproportionate cost of risk reduction diverts societal resources away from other critical needs, efficiency argument has been enshrined in regulatory practices worldwide. This means the benefits of improved safety must be balanced against the cost of risk reduction. Aging and degradation of infrastructure facilities and systems have raised concerns over the safety of public, environment and economic productivity. Large investments are required to upgrade civil and industrial infrastructures in compliance with safety regulations. The chapter presents the Life Quality Index (LQI) formulation to assess the effectiveness of regulations and infrastructure projects that have major impact on life safety.