Assessing the economic impacts of crises: a decision-support approach to long-term strategic planning

Abstract

The assessment of economic impacts of crises and risk reduction generated by different mitigation measures is a multidimensional problem and often a challenging task. A major issue hindering the process is a lack of structured information. In particular, intangible losses are difficult to evaluate monetarily. Furthermore, the uncertainty related to the operational environment is difficult to estimate. This paper proposes a practical economic approach that aims at assessing different measures to mitigate the impacts of the crises. The purpose is to contribute to the understanding of the decision-making related to crisis management so that the goals of the decisions can be reached. The approach is mainly aimed at enhancing decision-making on a strategic level and at supporting crisis-management training. Additionally, a software tool based on the approach will be developed to make the assessment procedure usable in practice. The approach is demonstrated in two pilot cases: extreme winter storm in North of Finland and a major earthquake in Italy. The paper is based on research carried out in the CRISMA integration project which is funded by the European Community's Seventh Framework Programme.

A holistic approach for assessing impact of extreme weather on critical infrastructure

“…Before the investment decision can be made, alternative measures should be subject to an economic evaluation, i.e. CBA [3]. The primary purpose behind the measure assessment is to determine the long-term implications of decisions.…”

“…Hence, decision makers are pressured to find new ways to cope with the impending disasters and to increase awareness of the overall impacts and risk. Optimal decisions require that decision makers are aware of how their decisions may affect the expected damages [3]. For example, understanding the severity of the impact of the failure of an infrastructure can be used to determine if an infrastructure (or part thereof) is deemed to be critical.…”

A Framework for Assessing the Social and Economic Impact of Sustainable Investments

“…Moreover, every sustainable investment is associated with some key stakeholders that are part of the decision-making process and have a major influence on the outcome. These stakeholders, e.g., public organizations, local, regional and state authorities, private companies and citizens, represent different levels of decision-making and constitutional power in society [16,17]. Figure 1 describes the conceptual assessment framework that was developed and used in the project.…”