Risk and the City

I recently presented at a two-day seminar organized by the Geneva Association in collaboration with the XL Group with a key theme of “urban risk”—a pressing topic, as more than 50 percent of the world’s population currently lives in cities. By 2030, the proportion will have risen to 60 percent.

I came to the meeting with a presumption that as cities expand, the risk from natural disasters will fall for a few different reasons:

  • Higher concentrations of people and value in urban areas motivates better flood defenses and more effective drainage systems than in rural areas.
  • Tall buildings have more of their value out of reach of floods.
  • City buildings are much more likely to have been designed by a structural engineer who has accounted for risks such as wind damage or earthquake shaking.
  • Friction from buildings at the boundary layer slows down hurricane winds.

These are all good reasons why urbanization should be a powerful force for risk reduction.

Blackout in New York City during Hurricane Sandy. Credit: David Shankbone

Conversely, here are ten reasons risk can be higher in cities:

1)    Desire to be close to the center of the city inevitably raises land values, and encourages land to be “reclaimed” for development, while still remaining susceptible to flooding, liquefaction, and amplified earthquake shaking.

2)    High central business district land values encourage the use of underground space for storing some of the most valuable and mission-critical equipment, raising the costs when the city floods.

3)    Land in the city that is abandoned as too landslide-prone or too flood-prone gets built on anyway by informal settlements, which then add to the urban risk.

4)    The September 11, 2001 attacks and the 1985 Mexico City earthquake highlighted situations where people living or working in high-rise city center buildings were at much greater risk than those beyond the city or in the suburbs.

5)    While in wealthy countries structural engineers ensure that taller buildings meet construction standards, in developing countries many midrise buildings are constructed without engineers.

6)    When the urban flood defenses do break, such as New Orleans in 2005 or in Nagoya, Japan in 2000, the consequences are much worse than if the defenses had not been constructed, because some cities have been developed as if there is no risk.

7)    Hazards and buildings interact in complex ways. Urban tornadoes create a debris field that expands the width of the damage zone beyond the highest winds. Urban storm surges and hurricane winds also turn building debris into hazard agents.

8)    Cities are totally dependent on electrical power. When the power goes out, all kinds of functions stop. For example, during Superstorm Sandy, many disabled people were stranded in their apartment buildings in the absence of working elevators.

9)    Cities can show reduced levels of social support in disasters, as seen in the higher casualty rates in Paris during the August 2003 French heat wave.

10)   Lastly, cities are typically located on a waterfront where they inevitably confront frontline water hazards such as storm surge or tsunami.

So, does that all add up to higher levels of risk?

To answer that question, we would need to perform a controlled study of two regions: one with a big city and one without, to model the comparative loss ratio for people and property across all perils. Factors such as economic wealth levels would need to be taken into consideration.

What we know for sure is the risks of a big city are different to those of rural areas. Going forward, we will inevitably see an increasing proportion of big urban disasters like those of the last decade in New Orleans, Port au Prince, Christchurch, and New York.

Chief Research Officer, RMS
Robert Muir-Wood works to enhance approaches to natural catastrophe modeling, identify models for new areas of risk, and explore expanded applications for catastrophe modeling. Recently, he has been focusing on identifying the potential locations and consequences of magnitude 9 earthquakes worldwide. In 2012, as part of Mexico's presidency of the G20, he helped promote government usage of catastrophe models for managing national disaster risks. Robert has more than 20 years of experience developing probabilistic catastrophe models. He was lead author for the 2007 IPCC 4th Assessment Report and 2011 IPCC Special Report on Extremes, is a member of the Climate Risk and Insurance Working Group for the Geneva Association, and is vice-chair of the OECD panel on the Financial Consequences of Large Scale Catastrophes. He is the author of six books, as well as numerous papers and articles in scientific and industry publications. He holds a degree in natural sciences and a PhD in Earth sciences, both from Cambridge University.

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