Assessing the economic loss due to natural disasters from outer space

Abstract

We propose an innovative approach to provide climate service by using the geographic distributions of natural disasters, assets exposed to disasters, and nighttime lights to estimate the potential benefit of climate-change adaptation through the economic loss avoided. We use a quasi-experimental panel data approach to assess the economic loss pre-and post-natural disaster reflected by changes in nighttime lights. Annual data from 1992 to 2012 in the Philippines is used as an example for illustration. We find that the potential benefits of climate-change adaptation might be much higher than those implied in the previous literature based on the Philippines data. We also show that the benefits would increase with the frequency of natural disasters. Our approach provides a cost-effective, transparent, and timely alternative to the conventional approach.

Keywords

• Adaptation
• Natural disaster
• Nighttime lights
• Cost-benefit