Flood Response Surge Support for NRRA - Task 4: Economic Value at Risk Assessment Tool

Brief description

NRRA requested surge team to develop a means to produce a defensible, evidence-based estimate of total economic impact of disasters for the recent flood events in Northern NSW and southern Queensland in February and March 2022 . Although the primary objective was to be quantify the total economic impact for the entire flood event, the team developed an approach that would enable estimation of value at risk and value impacted at higher spatial resolution or granularity that could also be used to inform policy and program design.

The aim was to develop a minimum viable product (MVP) for immediate use by the NRRA.

An approach was developed to estimating economic value at risk for administrative areas and then use flood extent to calculate percent of each administrative area impacted by the hazard, to estimate economic value impacted. Gross Value Added (GVA) by each administrative area (ASGS SA2 level) was selected as the headline economic value at risk figure. The GVA for each administrative area can be aggregated to a headline figure of total economic impact. The approach was intended to be rapid and robust, and to provide a preliminary view of direct impacts soon after a disaster occurs.

The outputs include:

A) An Economic value-at-risk data stack (including a range of economic data - jobs, productivity by worker, property reconstruction value, inter-regional and sectoral economic activity and built environment data)

B) A calculation sheet to calculate value impacted based on value at risk (GVA) and input parameters to quantify hazard within each administration unit

Both outputs are contained within a Microsoft Excel document.

Acknowledgement: This publication was developed by the CSIRO on behalf of the Australian Climate Service, a Type F Commonwealth entity hosted by the Bureau of Meteorology and delivered through a partnership between the Bureau of Meteorology, Australian Bureau of Statistics, CSIRO and Geoscience Australia.

Important disclaimer: CSIRO advises that the information contained in this publication comprises general statements based on scientific research. The reader is advised and needs to be aware that such information may be incomplete or unable to be used in any specific situation. No reliance or actions must therefore be made on that information without seeking prior expert professional, scientific and technical advice. To the extent permitted by law, CSIRO (including its employees and consultants) excludes all liability to any person for any consequences, including but not limited to all losses, damages, costs, expenses and any other compensation, arising directly or indirectly from using this publication (in part or in whole) and any information or material contained in it.
Lineage: 1.\tData collection 
•\tDiscussion around potentially relevant data with ABS and GA
•\tSubsequent requests for data from data providers GA and ABS
2.\tData wrangling, cleansing, integration, formatting, etc. 
•\tData stack architecture built in r and reproduced in Excel format 
•\tFully integrated data structure for all of Australia by SA2 by year produced from all available data (note that not all geographies or years were available for all metrics)
•\tCreation of full data list including source, type, description, geography, time period(s), and format(s) of data included in the data cube
3.\tIdentification of Gross Value Added (GVA) as headline ‘economic value at risk’ indicator  
•\tGVA represents the value of goods and services produced minus intermediate consumption (i.e. the value of inputs into their production such as raw materials, rent, and labour costs). 
•\tGVA per worker per industry was only available at the LGA level. Using the count of workers per industry per SA2, an estimate of total GVA per industry per SA2 was calculated using the LGA GVA per worker data applied to all SA2s within the given LGA. Where SA2s were split between LGAs, a weighted average GVA per worker by industry was calculated, with weighting related to the percentage of SA2 land area in the relevant LGAs. 
•\tGVA informs the calculation of Gross Regional Product, but excludes the influence of taxes and subsidies. 
4.\tSelection and analysis of relevant data 
•\tCalculation of GVA per industry per SA2 
•\tSelected data taken from most recent year available 
5.\tIntegration of ‘% of impacted land’ as an input function
6.\tInput flood extent table by % of each SA2 to calculate annual economic value at risk in $m (real)