Risk caused by the propagation of earthquake losses through the economy

Author(s)

Leon, J. A. ; Ordaz, M. ; Haddad, E. ; Araujo, I. F.

• Document type: Journal article
• Source: NATURE COMMUNICATIONS; v. 13, n. 1, p. 11-pg., 2022-05-25.

Abstract

The economy of a country is exposed to disruptions caused by natural and man-made disasters. Here we present a set of probabilistic risk indicators, the Average Annual Loss (AAL) and the Loss Exceedance Curve (LEC), regarding to production, employment, Gross Domestic Product (GDP), Gross Regional Product (GRP), export volume, inflation, tariff revenue, among others, due to earthquakes. All indicators are computed using a systematic probabilistic approach, which integrates the seismic risk assessment with spatial computable general equilibrium models, both robust and well-known frameworks used worldwide in their respective fields. Our approach considers the induced damage and frequency of occurrence of a vast collection of events that collectively describe the entire seismic hazard of a country, giving us a better and more complete understanding of the full consequence of earthquakes. We illustrate this approach with an example developed for Chile. The integration of risk analysis and spatial CGE modeling frameworks allowed for measuring the direct and indirect consequences of extreme events via novel probabilistic risk indicators which incorporate elements of uncertainty and systemic effects (AU)

• FAPESP's process: 19/00057-9 - Agricultural and agro-industrial sustainability in Chile: modeling the impacts of climate change and natural disasters in an integrated framework
• Grantee: Inácio Fernandes de Araújo Junior
• Support Opportunities: Scholarships in Brazil - Technical Training Program - Technical Training
• FAPESP's process: 18/08337-8 - Agricultural and agro-industrial sustainability in Chile: modeling the impacts of climate change and natural disasters in an integrated framework
• Grantee: Eduardo Amaral Haddad
• Support Opportunities: Regular Research Grants
• FAPESP's process: 14/50848-9 - INCT 2014: INCT for Climate Change
• Grantee: Jose Antonio Marengo Orsini
• Support Opportunities: Research Program on Global Climate Change - Thematic Grants