Does disaster risk reduction actually pay off? If so, what are the benefits and underlying mechanisms? This costbenefit analysis (CBA) finds that the USD 2.4 million of external support to the disaster risk management programme of Georgia Red Cross Society (GRCS), launched in 2010, has paid off extremely well: In the three surveyed areas, identified benefit-cost ratios range between 12.51 and 54.54.
The study identifies avoided hazard losses as the main benefit and analyses the various channels that lead to loss avoidance. It also notes significant organisational and governance co-benefits.
Several cost-benefit analyses have researched the ratio between costs for risk mitigation and benefits in terms of avoided losses. While showing positive benefit-cost ratios, it has been argued that such approaches fail to grasp the full value of DRR, as they do not reflect multiple developmental benefits.
This study aims to make amends, while also analysing the interplay between the factors that lead to loss avoidance. It confirms the underlying assumptions of many communitybased DRR projects: that household and community preparedness as such is a potent factor to reduce hazardrelated losses.
Located in the southern Caucasus and home to 3.7 million people, Georgia has achieved considerable economic and development progress since it re-emerged as an independent nation after the 1991 break-up of the Soviet Union. Yet, much of this progress has still to reach many rural parts of the country, where most make a living based on small-scale agriculture.
As a mountainous country located on a major fault line,
Georgia is exposed to geophysical and hydro-meteorological hazards. While earthquakes pose the greatest risk to lives and livelihoods, other hazards are much more frequent - mudflows, landslides and floods in particular.
Taken together, these hazards incurred 72.3% of recorded economic hazard losses between 1995 and 2010. Over the same period, overall recorded losses amounted to more than USD 1.8 billion - equivalent to 1.9% of its GDP over this timeframe, or USD 499 per citizen. Without proactive action, the impending effects of climate change are expected to make matters worse, leading to even greater hazard-related damages and losses.