96748 PACIFIC CATASTROPHE RISK ASSESSMENT AND FINANCING INITIATIVE NAURU SEPTEMBER 2011 COUNTRY RISK PROFILE: NAURU Nauru is expected to incur, on average, less than 2 thousand USD per year in losses due to earthquakes and tropical cyclones. In the next 50 years, Nauru has a 50% chance of experiencing no economic losses and no casualties, and a 10% chance of experiencing a loss exceeding 0.2 million USD and no casualties. BETTER RISK INFORMATION FOR SMARTER INVESTMENTS COUNTRY RISK PROFILE: NAURU POPULATION, BUILDINGS, INFRASTRUCTURE AND CROPS EXPOSED TO NATURAL PERILS An extensive study has been conducted to assemble a comprehensive inventory of population and properties at risk. Properties include residential, commercial, public and industrial buildings; infrastructure assets such as major ports, airports, power plants, bridges, and roads; and major crops, such as coconut, palm oil, taro, vanilla and many others. TABLE 1: Summary of Exposure in Nauru (2010) General Information: Total Population: 10,800 GDP Per Capita (USD): 3,190 Total GDP (million USD): 34.5 Asset Counts: Residential Buildings: 2,290 Public Buildings: 166 Commercial, Industrial, and Other Buildings: 299 All Buildings: 2,755 Hectares of Major Crops: 86 Cost of Replacing Assets (million USD): Buildings: 411 Infrastructure: 42 Crops: 0.1 Total: 453 Figure 1: Building locations. Government Revenue and Expenditure: Total Government Revenue (Million USD): 13.5 (% GDP): 39.1% Total Government Expenditure (Million USD): 13.5 (% GDP): 39.1% 1 Data assembled from various references including WB, ADB, IMF and The Secretariat of the  Pacific Community (SPC). 2 The projected 2010 population was trended from the 2006 census using estimated growth  rates provided by SPC. Table 1 summarizes population and the inventory of buildings, infrastructure assets, and major crops (or “exposure”) at risk as well as key economic values for Nauru. It is estimated that the replacement value of all the assets in Nauru is 450 million USD, of which about 91% represents buildings and 9% represents infrastructure. Figures 1 and 2 illustrate the building exposure location and replacement cost distribution, respectively. The footprints of almost every building in Nauru, about 2,750 buildings shown in Figure 1, were digitized from high-resolution satellite imagery. Figure 3 displays the land cover/land use map that includes the location of major crops. The data utilized for these exhibits was assembled, organized and, when Figure 2: Building replacement cost density by district. 2 unavailable, produced in this study. September 2011 COUNTRY RISK PROFILE: NAURU 166°55'0"E 166°56'0"E 166°57'0"E 0 Nauru 0.5 1 2 Kilometers 0°31'0"S 0°31'0"S 0°32'0"S 0°32'0"S 0°33'0"S 0°33'0"S Yaren 0°34'0"S 0°34'0"S 166°55'0"E 166°56'0"E 166°57'0"E Figure 3: Land cover/land use map. 0 25 50 75 100 125 150 175 200 HAZARDS TROPICAL CYCLONE AND EARTHQUAKE ­ Maximum Wind Speed IN NAURU Figure 4: Maximum 1-minute sustained wind speed (in miles per hour) with a 40% The Pacific islands region is prone to natural hazards. Nauru is chance to be exceeded at least once in the next 50 years (100 year mean return period). located on the equator and it is outside the belt of frequent 166°55'0"E 166°56'0"E 166°57'0"E occurrence of tropical cyclones with damaging winds, rains and storm surge between the months of October and May. Nauru 0 0.5 1 2 In the Pacific region from Taiwan to New Zealand in latitude and from Indonesia to east of Hawaii in longitude almost Kilometers 2,500 tropical cyclones with hurricane-force winds spawned 0°31'0"S 0°31'0"S in the last 60 years, with an average of about 41 tropical storms per year. However, in historical times none of these cyclones affected Nauru. Figure 4 shows the levels of wind speed due to tropical cyclones that have about a 40% chance to be exceeded at least once in the next 50 years (100-year 0°32'0"S 0°32'0"S mean return period). These wind speeds are not capable of generating any damage to buildings, infrastructure and crops. Note that significant wind speeds from local storms are possible in Nauru but the consequences of such storms are expected to be negligible. 0°33'0"S 0°33'0"S Yaren Nauru is situated in a very quiet seismic area but is surrounded by the Pacific “ring of fire,” which aligns with the boundaries of the tectonic plates. These tectonic plate boundaries are 0°34'0"S 0°34'0"S extremely active seismic zones capable of generating large earthquakes and, in some cases, major tsunamis that can travel 166°55'0"E 166°56'0"E 166°57'0"E great distances. In historical times no records of earthquake Perceived Shaking Not Felt Weak Light Moderate Strong Very Strong Severe Violent Extreme or tsunami damage in Nauru have been reported. Figure Moderate/ Very Potential Damage none none none Very light light Moderate Heavy Heavy Heavy 5 shows that Nauru has a 40% chance in the next 50 years Peak ACC. (%g) <0.17 0.17-1.4 1.4-4.0 4.0-9 9-17 17-32 32-61 61-114 >114 of experiencing, at least once, almost no levels of ground Peak Vel. (cm/s) <0.12 0.12-1.1 1.1-3.4 3.4-8 8-16 16-31 31-59 59-115 >115 Instrumental Intensity I II-III IV V VI VII VIII IX X+ shaking. These levels of shaking are not expected to cause Scale based upon Wald. et al: 1999 damage to buildings and infrastructure. Figure 5: Peak horizontal acceleration of the ground (Note: 1g is equal to the acceleration of gravity) that has about a 40% chance to be exceeded at least once in 3 the next 50 years (100-year mean return period). September 2011 COUNTRY RISK PROFILE: NAURU RISK ANALYSIS RESULTS 166°55'0"E 166°56'0"E 166°57'0"E To estimate the risk profile for Nauru posed by tropical Nauru 0 0.5 1 2 cyclones and earthquakes, a simulation model of potential Kilometers storms and earthquakes that may affect the country in the 0°31'0"S 0°31'0"S future was constructed. This model, based on historical data, simulates more than 400,000 tropical cyclones and about 7.6 million earthquakes, grouped in 10,000 potential realizations of the next year’s activity in the entire Pacific Basin. The catalog of simulated earthquakes also includes 0°32'0"S 0°32'0"S large magnitude events in South and North America, Japan and the Philippines, which could generate tsunamis that may affect Nauru’s shores. 0°33'0"S 0°33'0"S The country’s earthquake and tropical cyclone risk profiles are derived from an estimation of the direct losses to buildings, Yaren infrastructure assets and major crops caused by all the simulated potential future events. The direct losses include Total Average Annual Loss (USD) the cost of repairing or replacing the damaged assets, but 0-1 5 - 10 50 - 100 500 - 1,000 0°34'0"S 0°34'0"S do not include other losses such as contents losses, business 1-5 10 - 50 100 - 500 1,000 - 1,500 166°55'0"E 166°56'0"E 166°57'0"E interruption losses and losses to primary industries other Figure 7: Contribution from the different atolls to the average annual loss for tropical than agriculture. The direct losses for tropical cyclones are cyclone and earthquake (ground shaking and tsunami). caused by wind and flooding due to rain and storm surge, while for earthquakes they are caused by ground shaking In addition to estimating average risk per calendar year, and tsunami inundation. After assessing the cost of repairing another way of assessing risk is to examine large and or rebuilding the damaged assets due to the impact of all the rather infrequent, but possible, future tropical cyclone and simulated potential future events, it is possible to estimate earthquake losses. Table 2 summarizes the risk profile for in a probabilistic sense the severity of losses for future Nauru in terms of both direct losses and emergency losses. catastrophes. The former are the expenditures needed to repair or replace the damaged assets while the latter are the expenditures that Tropical Cyclone Earthquake Average Annual Loss = 90 USD Average Annual Loss = 1,540 USD the Nauruan government may need to incur in the aftermath 1.0% 4.5% 0.0% 1.0% of a natural catastrophe to provide necessary relief and Buildings Buildings conduct activities such as debris removal, setting up shelters Cash Crops Cash Crops for homeless or supplying medicine and food. The emergency Infrastructure Infrastructure 99.0% losses are estimated as a percentage of the direct losses. 94.4% Figure 6: Average annual loss due to tropical cyclones and earthquakes (ground Table 2 includes the losses that are expected to be exceeded, shaking and tsunami) and its contribution from the three types of assets. on average, once every 50, 100, and 250 years. For example, an The simulations of possible next-year tropical cyclone and an earthquake and tsunami loss exceeding 0.01 million USD, earthquake activity show that some years will see no storms which is equivalent to about 0.03% of Nauru’s GDP is to be or earthquakes affecting Nauru, while other years may see expected, on average, once every 250 years. In Nauru, almost one or more events affecting the islands, similar to what has no losses due to tropical cyclones are expected. happened historically. The annual losses averaged over the many realizations of next-year activity are shown in Figure A more complete picture of the risk can be found in Figure 9, 6 separately for tropical cyclone and for earthquake and which shows the mean return period of direct losses in million tsunami, while the contributions to the average annual loss USD generated by earthquake, tsunami and tropical cyclones from the different districts are displayed in absolute terms combined. The 50-, 100-, and 250-year mean return period in Figure 7. losses in Table 2 can also be determined from the curves in this figure. The direct losses are expressed both in absolute terms The same risk assessment carried out for Nauru was also and as a percent of the national GDP. performed for the 14 other Pacific Island Countries. The values of the average annual loss of Nauru and of the other In addition to causing damage and losses to the built 14 countries are compared in Figure 8. environment and crops, future earthquakes and tropical cyclones will also have an impact on population. The same 4 September 2011 COUNTRY RISK PROFILE: NAURU Tropical Cyclone Earthquake Ground Motion Tsunami Average Annual Loss (million USD) 100 TABLE 2: Estimated Losses and Casualties Caused by Natural Perils 10 8 Mean Return Period AAL 50 100 250 80 6 (years) 4 2 Risk Profile: Tropical Cyclone 60 0 Direct Losses 40 (Million USD) 0.00 0.00 0.00 0.00 (% GDP) 0.00% 0.00% 0.00% 0.00% 20 Emergency Losses 0 (Million USD) 0.00 0.00 0.00 0.00 (% of total government 0.00% 0.00% 0.00% 0.00% expenditures) Casualties 0 0 0 0 Risk Profile: Earthquake and Tsunami Figure 8: Average annual loss for all the 15 Pacific Island Countries considered in this study. Direct Losses (Million USD) 0.00 0.00 0.00 0.01 probabilistic procedure described above for losses has been (% GDP) 0.00% 0.00% 0.00% 0.03% adopted to estimate the likelihood that different levels of Emergency Losses casualties (i.e., fatalities and injuries) may result from the (Million USD) 0.00 0.00 0.00 0.00 future occurrence of these events. As shown in Table 2, our (% of total government 0.00% 0.00% 0.00% 0.02% model estimates, for example, that there is a 40% chance in expenditures) the next fifty years (100-year mean return period) that one Casualties 0 0 0 0 or more events in a calendar year will cause no casualties Risk Profile: Tropical Cyclone, Earthquake, and Tsunami in Nauru. Events causing a few casualties are possible but Direct Losses have much lower likelihood of occurring. (Million USD) 0.00 0.00 0.00 0.02 (% GDP) 0.00% 0.00% 0.00% 0.07% 0.8 Emergency Losses TC+EQ Direct Losses (million USD) TC (Million USD) 0.00 0.00 0.00 0.01 0.6 EQ (% of total government 0.00% 0.00% 0.00% 0.04% expenditures) 0.4 Casualties 0 0 0 0 0.2 Casualties include fatalities and injuries. 1 0.0 0 100 200 300 400 500 600 700 800 900 1,000 Mean Return Period (years) 2.0% TC+EQ TC  GDP) 1.5% EQ Direct Losses (% 1.0% 0.5% 0.0% 0 100 200 300 400 500 600 700 800 900 1,000 Mean Return Period (years)  Figure 9: Direct losses (in absolute terms and normalized by GDP) caused by either tropical storms or earthquakes that are expected to be exceeded, on average, once in the time period indicated. September 2011 5 APPLICATIONS their fiscal balance. The earthquake and tropical cyclone The country risk profiles can support multiple applications hazard models also provide critical information for building that benefit both public and private stakeholders. In urban codes in terms of country-specific seismic and wind loads and development planning, planners can use the risk that buildings should be designed for to ensure adequate profile information to identify the best location of new shelter to the population. The risk information can also help development areas, evaluate how natural hazards may identify existing vulnerable areas and communities located shape their development, and to assess whether the benefits in or adjacent to these areas. This information can assist in of reducing the risk of natural events justify the costs of supporting more targeted intervention in community-based implementing the risk mitigating measures. In addition, disaster risk management and climate change adaptation the risk profiles can inform the development of disaster actions. In the occurrence of a natural disaster the database risk financing and insurance solutions and ex ante budget also provides extremely useful baseline data and information planning options to increase the financial resilience of the for conducting timely and effective post-disaster damage countries against natural disasters while maintaining assessments. For information please visit http://pacrisk.sopac.org/ or contact pcrafi@sopac.org