# **1 Introduction**

A natural disaster is not a “natural” event. Human and natural systems are affected by _natural hazards_ , such as earthquakes, storms, hurricanes, intense precipitations and floods, droughts, landslides, heat waves, cold spells, and thunderstorms. If a hazard affects a human system – from one house to one region – and causes sufficiently large negative consequences to this system, the event can then be labelled as a natural _disaster_ . But a disaster occurs only when there is the conjunction of a natural event – the hazard – and a human system, leading to negative consequences. As such, what we call a natural disaster is thus above all a social and human event (World Bank 2010).

The most immediate consequences of natural disasters are the fatalities and casualties. Between 1980 and 2011, disasters have caused 2,275,000 fatalities 1F<sup>2</sup> , almost half of them in low-income countries (vs. 5% in high-income countries). The first priority of disaster risk management is therefore to save lives, especially in developing countries where most of these losses occur. There is a large toolbox of measures to do so, from improved coastal dikes and the protection of coastal wetlands and coral reefs to more resistant buildings and infrastructure (World Bank, 2013a). A very cost effective way of avoiding disaster fatalities is through early warning systems coupled with evacuation schemes (Hallegatte, 2012; Subbiah et al., 2008).

In addition to human losses, natural disasters have economic consequences, which also affect welfare. From an economic perspective, a natural disaster can be defined as a natural event that causes a perturbation to the functioning of the economic system, with a significant negative impact on assets, production factors, output, employment, or consumption. 2F<sup>3</sup> When it happens, the perturbation affects the economic system in a way that goes beyond the immediate loss of assets and the monetary expenditures to replace damaged property. Additional consequences include the loss of output and production, loss of income and livelihood, rationing in some sectors, and loss of employment and tax revenues. On top of human losses, these consequences need to be accounted for to assess the disaster impact on the population’s welfare.

The ability of an economy or a society to minimize welfare losses for a disaster of a given magnitude is often referred to as its _resilience_ . In the context of the post-2015 Millennium Development Goals, the Sustainable Development Goals, and the second phase of the Hyogo Framework for Action, many initiatives aim at defining and measuring country-level _resilience_ through appropriate indicators (e.g., Rose, 2013). These resilience indicators can possibly be used to measure the progress achieved in improving resilience in a given country, or to compare countries with each other to help target resources where they are the most needed or the most efficient. However, the complexity of the

> 2 Data from the EM-DAT database, created and maintained by the Center for Research on the Epidemiology of Disasters (CRED) at the Catholic University of Louvain.

> 3 There are multiple formal definitions. The Center for Research on the Epidemiology of Disasters (CRED) at the Catholic University of Louvain defines a disaster as a natural situation or event which overwhelms local capacity and/or necessitates a request for external assistance. For a disaster to be listed in the EM-DAT database, at least one of the following criteria should be met: (i) 10 or more people are reported killed; (ii) 100 people are reported affected; (iii) a state of emergency is declared; (iv) a call for international assistance is issued.

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