In the European Union, from 1980 to 2020, natural hazards affected nearly 50 million people and have cost Member States on average 12 billion EUR each year, approximately the same amount the EU spends on Research and Innovation in 2021. Using risk models to estimate the future socio-economic impact of disasters in Europe, the study shows that the EU and its Member States may face large funding gaps when respond to some disaster scenarios.

The report is funded by the Union Civil Protection Mechanism under partnership between DG ECHO and the World Bank. A Steering Group led by DG ECHO and bringing together five other Directorates General (JRC, ECFIN, REGIO, CLIMA, ENV) provided technical guidance from the European Commission. 
The Economics of Disaster Prevention and Preparedness calls for “smart” disaster risk management investments, financial preparedness instruments and targeted capacity building efforts. The report,  online as of 3rd June 2021, provides Benefit-Cost Ratios (BCR) using triple dividend of resilience approach and shows that investments in prevention and preparedness always provide more benefits compared to the investments. Detailed analysis of earthquakes and floods events were conducted through modelling (other hazards are planned for the future) shows large annual government liability (1% of GDP) with liabilities up to 17% of GDP for major disasters.

The report provides concrete recommendations on technical/scientific, policy reform and investments like the need to increase investment on resilience and on financial preparedness, as well as on capacity building for MS to carry out BCR analysis at national level to help formulating solid strategic proposals.  
The study was officially launched on 7 June by ECHO Director-General Vivi Michou and the World Bank Country Director for the EU, Galina Vincelette. Raed Arafat, Director General of Romania’s Civil Protection and George Karagiannis, Deputy Secretary General for Civil Protection in Greece participated in this event, which was moderated by Karin Helmstaedt, journalist and TV host.