Direct and indirect economic losses using typhoon-flood disaster analysis: An application to Guangdong Province, China

Abstract

Guangdong Province is one of China’s largest and most developed regions. It is home to more than 113 million people and features unique geographical and climatic characteristics. Typhoons that pass through often result in heavy rainfall, which causes flooding. The region’s risk of typhoon and flood disasters, and the resulting indirect economic impacts, have not been fully assessed. The purpose of this paper is to introduce a method for assessing the spatial and temporal cumulative risk of typhoon-induced flood disasters, and the resulting indirect economic impacts, in order to deal with the uncertainty of disasters. We combined an analytic hierarchy process (AHP) and spatial analysis using a geographic information system (GIS) to produce a comprehensive weighted-risk assessment from three different aspects of disaster, vulnerability, and resilience, with 11 indicators. A new method for computing risk based on spatial and temporal cumulative patterns of typhoon-induced flood disasters was introduced. We incorporated those direct impacts into a computable general equilibrium (CGE) model to simulate indirect economic losses in alternative scenarios according to different risk levels. We found that the risk in the coastal area is significantly higher than that in the northern mountainous area. The coastal areas of western Guangdong, Pearl River Delta, and Chaoshan Plain face the greatest risk. Our results indicate that typhoon and flood disasters have negative effects on the real GDP, residents’ income, consumption, and several other macroeconomic indicators. We found differing disaster impacts across industrial sectors, including changes in the output, prices, and flow of labor among industries. Our estimates provide scientific support for environmental planning, spatial planning, and disaster-risk management in this important region. They are also of reference value for the development of disaster management strategies in similar climatic regions around the world.