Spain | Data and models to cope with climate disasters

Summary

The images of the floods that hit Valencia last October are still fresh in the collective memory. BBVA Research has developed an analytical framework to make the most of the available information and quantitatively assess both the impact and recovery after a climate disaster.

Key points

• Key points:
• The first step is to estimate the economic damages for those cases in which there is no information, because there is no reliable measurement or not enough time has passed for its quantification in the EM-DAT database.
• Applied to the case of the floods, before the event was recorded, we estimate a material loss of about 1.1% of Spain's GDP, assuming a severity comparable to 10% of the most severe floods in the sample.
• This loss could vary between 0.6% and 1.7% within this assumption, with the lower bound being in line with the data subsequently reported by EM-DAT (0.65% of GDP).
• The second step is to use the material damage estimated above to analyze the effect on the economy. According to the previously estimated damages, our tool infers that employment in the province of Valencia would have been reduced by between 1.4% and 2.2%, very close to the drop finally recorded of 1.6% compared to the counterfactual scenario in the absence of the floods.
• In Spain as a whole, employment fell by between 0.1 and 0.2 percentage points, half of which is attributed to the direct effect in Valencia and the rest to indirect effects in other provinces.

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