The first estimate by the Supply Chain Intelligence Institute Austria (ASCII), the Institute for Economic Research (Wifo) and the Complexity Science Hub (CSH) now amounts to 1.3 billion euros. Investments in flood protection prevented even greater damage; overall, Austria is well prepared for possible floods.
The 1.3 billion euros includes the 700 million euros in damage estimated by the insurance association (VVO), primarily for private households, said ASCII director and CSH scientist Peter Klimek and Wifo economist Klaus Friesenbichler in an interview with the APA . Economists put damage caused by production downtimes, damaged inventory at companies and operational downtimes that are indirectly affected through supply chain effects at 300 to 900 million euros, with an average of 600 million euros. Direct damage such as the destruction of inventory or interruptions to company activity were used to calculate the damage. Indirect damages were calculated using an input-output model.
In addition, there is damage in the agricultural sector, which the economists put at 14.7 million euros – based on the estimates of the Austrian Hail Insurance and with reference to geodata. In total, around 900 companies were affected by the floods; according to an ASCII model, 676 companies were severely affected. Damage to the infrastructure – including damage to the Austrian Federal Railways (ÖBB) – was not included in the estimate due to a lack of official data. With a “bare-chested estimate,” the experts said, including infrastructure damage, around 1.8 billion euros in damage could be expected.
The fact that the damage has not been even greater is also thanks to the preventative measures taken in recent years – not least because 60 million euros are invested annually in flood protection. “The prevention of flooding worked well,” said Friesenbichler. This is also shown by a comparison with previous flood disasters. The floods in 2002 caused damage amounting to 3 billion euros; in 2013, flood damage amounting to 0.9 billion euros was recorded. The construction of flood protection walls and dams, as well as the introduction of alarms, contributed to the reduction.
However, there is still room for improvement when it comes to compensation for those affected. The disaster fund in Lower Austria currently provides coverage of up to 80 percent in cases of hardship. “From the general public’s point of view, this is definitely questionable,” said Friesenbichler. This means there are fewer incentives not to build in flood areas. The fund itself is a good instrument, but using it for recurring damage is not ideal.
For Friesenbichler, it would make more sense to have an insurance solution that also discriminates through premiums – in other words, if you live in an area with a higher risk of flooding, you also pay higher premiums. State support could be available for socially disadvantaged households.
In any case, one must expect that such extreme weather events will become more frequent and more intense in the future due to climate change. Prevention alone will therefore not be enough. “Just building dams won’t be the last resort,” said Friesenbichler. Settlement and branch structures will certainly have to be refined in the future.
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