Assessing entrepreneurial and regional‐economic flood impacts on a globalized production facility

Abstract

Indirect economic losses and business interruption effects triggered by natural hazards are widely underestimated by corporate managements. They can exceed direct damages in the case of flood events and are difficult to evaluate because of missing data and methods on a micro‐scale. Existing data can be used for meso‐analysis, but are of little relevance for either mitigation policies or cost‐efficient technical mitigation measures for individual flood‐prone premises. The study represents an interdisciplinary collaboration for improving risk management strategies based on a flood scenario for an individual production company in Austria with high regional‐economic impact. Based on flood modelling, using LiDAR data as source, and on expert judgements, we analyse the entrepreneurial and regional‐economic impacts of a specific production site. The flood model used is based on an HQ100 with a climate change variability of 3%, which is mainly triggered by a change in air temperature and successively increasing heavy rainfall events. The main objective for this assessment is to give result‐based recommendations to improve public and private risk management of the affected area and to provide data for cost–benefit frameworks for technical and nontechnical prevention. Overall, we calculated a total decline of revenues of approximately 14.1 to 14.3 million euros, even though the production site experiences only shallow flooding.

Assessment of Business Interruption of Flood-Affected Companies Using Random Forests

“…They use functional fragility curves and accelerated failure time models to estimate the extent of damage to production capacity and production-affected time, including stagnation and recovery time. The study in [24] developed a semi-quantitative framework to assess the entrepreneurial and regional-economic flood impacts of one specific production facility. Their approach relies mainly on a quantitative flood hazard modelling, resulting in a detailed inundation area and water level maps for the commercial area, as well as a rather qualitative vulnerability assessment based on co-development with the company.…”

Potential future exposure of European land transport infrastructure to rainfall-induced landslides throughout the 21st century

“…Extensive soil sealing across Europe (Nestroy, 2006), climate change (European Environment Agency, 2014;Loveridge et al, 2010) and extreme weather impacts (Schlögl and Laaha, 2017) challenge the resilience of transport systems, thus growing into a matter of major concern, not only because of physical damage to assets (Kellermann et al, 2015), but also due to potential overall societal losses caused by network failures and interruptions, which often far exceed infrastructure damage (Postance et al, 2017;Pfurtscheller and Vetter, 2015;Bíl et al, 2015;Pfurtscheller, 2014;Pfurtscheller and Thieken, 2013;Meyer et al, 2013). Thus, the assessment of land transport infrastructure exposure towards adverse climate events and related natural hazards is of great importance for Europe's economy, for its intermodal transport, its freight and logistics networks and for settlements in hazard-prone regions (Koetse and Rietveld, 2009;Doll et al, 2014).…”

Integrated assessment of short-term direct and indirect economic flood impacts including uncertainty quantification

“…affecting other companies due to disruptions in the production chain. Comprehensive impact assessments that capture both, direct and indirect economic impacts, are needed to inform flood risk management [3, 4] and are increasingly demanded by decision makers [5, 6]. Relying on cost-benefit analyses that exclude indirect economic impacts may lead to sup-optimal decisions [7, 8].…”