Indirect Flood Risk Modelling: Development and Sensitivity Analysis

This chapter proposes an integrated direct and indirect flood risk model for small and large-scale flood events, allowing for dynamic modelling of total economic losses from a flood event to a full economic recovery. A novel approach is taken which translates direct losses of both capital and labour into production losses using the Cobb-Douglas production function, aiming at improved consistency in loss accounting. The recovery of the economy is modelled using a hybrid input-output model and applied to the port region of Rotterdam, using six different flood events (1/10 up to 1/10,000). This procedure allows gaining a better insight regarding the consequences of both high and low-probability floods. The results show that in terms of expected annual damage, direct losses remain more substantial relative to the indirect losses (approximately 50% larger), but for low-probability events the indirect losses outweigh the direct losses. Furthermore, parameter uncertainty is explored using a global sensitivity analysis, and varied critical assumptions in the modelling framework related to, amongst others, flood duration and labour recovery, using a scenario approach. Our findings have two important imp-lications for disaster modellers and practitioners. First, high-probability events are qualitatively different from low-probability events in terms of the scale of damages and full recovery period. Second, there are substantial differences in parameter influence between high-probability and low-probability flood modelling. These findings suggest that a detailed approach is required when assessing the flood risk for a specific region. 59 integrated direct and indirect flood risk modelling