Financing flood risk

Average annual financial losses in Europe due to flooding are likely to increase considerably over the coming decades, concludes a paper published online this week in Nature Climate Change.

Major floods, such as those that affected countries across Europe in June 2013 and that are currently afflicting parts of southern England, are expected to become more common under climate change, putting increasing pressure on disaster risk finance at both the national and the EU level.

Brenden Jongman and colleagues show that peak monthly water discharges from European river sub-basins are a good indicator of flood risk. They find a high degree of correlation between peak discharges across sub-basins, which is due to large-scale weather patterns. This means that different rivers often flow high at the same time, threatening floods across large regions. The researchers also model present and future potential flood losses, taking into account both projected climate change and socio-economic development. Their computer simulations suggest that average annual flood losses could increase by 500% from now to 2050, with the frequency of extreme events - leading to losses due to floods of the magnitude suffered in 2013 (12 billion Euro) - approximately doubling over that period.

Although the magnitude and distribution of losses can be contained by investing in flood protection, and their effects mitigated by increasing insurance coverage or by expanding current public compensation funds, the results of the study show that these measures have vastly different efficiency, equity and acceptability implications. The authors conclude that it may become increasingly necessary for European counties to help each other financially when major floods strike.