Understanding Business Disruption and Economic Losses Due to Electricity Failures and Flooding

Elco Koks; Raghav Pant; Scott Thacker; Jim W. Hall

doi:10.1007/s13753-019-00236-y

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Article Navigation > International Journal of Disaster Risk Science > 2019 > 10(4): 421-438

Elco Koks, Raghav Pant, Scott Thacker, Jim W. Hall. Understanding Business Disruption and Economic Losses Due to Electricity Failures and Flooding[J]. International Journal of Disaster Risk Science, 2019, 10(4): 421-438. doi: 10.1007/s13753-019-00236-y

Citation:

Elco Koks, Raghav Pant, Scott Thacker, Jim W. Hall. Understanding Business Disruption and Economic Losses Due to Electricity Failures and Flooding[J]. International Journal of Disaster Risk Science, 2019, 10(4): 421-438. doi: 10.1007/s13753-019-00236-y

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Understanding Business Disruption and Economic Losses Due to Electricity Failures and Flooding

doi: 10.1007/s13753-019-00236-y

1 Environmental Change Institute, University of Oxford, South Parks Road, Oxford OX1 3QY, UK;
2 Institute for Environmental Studies, Vrije Universiteit Amsterdam, De Boelelaan 1085, 1081 HV Amsterdam, The Netherlands;
3 United Nations Office for Project Services(UNOPS), Marmorvej 51, 2100 Copenhagen, Denmark

Available Online: 2021-04-26

Abstract

Abstract

Failure of critical national infrastructures can cause disruptions with widespread economic impacts. To analyze these economic impacts, we present an integrated modeling framework that combines:(1) geospatial information on infrastructure assets/networks and the natural hazards to which they are exposed; (2) geospatial modeling of the reliance of businesses upon infrastructure services, in order to quantify disruption to businesses locations and economic activities in the event of infrastructure failures; and (3) multiregional supply-use economic modeling to analyze wider economic impacts of disruptions to businesses. The methodology is exemplified through a case study for the United Kingdom. The study uses geospatial information on the location of electricity infrastructure assets and local industrial areas, and employs a multiregional supply-use model of the UK economy that traces the impacts of floods of different return intervals across 37 subnational regions of the UK. The results show up to a 300% increase in total economic losses when power outages are included in the risk assessment, compared to analysis that just includes the economic impacts of business interruption due to flooded business premises. This increase indicates that risk studies that do not include failure of critical infrastructures may be underestimating the total losses.
- Economic impacts,
- Flood hazard,
- Indirect economic losses,
- Infrastructure failure,
- United Kingdom

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References(61)

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