96746 PACIFIC CATASTROPHE RISK ASSESSMENT AND FINANCING INITIATIVE MARSHALL ISLANDS SEPTEMBER 2011 COUNTRY RISK PROFILE: MARSHALL ISLANDS The Republic of the Marshall Islands is expected to incur, on average, 3 million USD per year in losses due to earthquakes and tropical cyclones. In the next 50 years, the Republic of the Marshall Islands has a 50% chance of experiencing a loss exceeding 53 million USD and casualties larger than 50 people, and a 10% chance of experiencing a loss exceeding 160 million USD and casualties larger than 150 people. BETTER RISK INFORMATION FOR SMARTER INVESTMENTS COUNTRY RISK PROFILE: MARSHALL ISLANDS 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 Marshall Islands (2010) General Information: Total Population: 54,800 GDP Per Capita (USD): 2,840 Total GDP (million USD): 155.8 Asset Counts: Residential Buildings: 11,407 Public Buildings: 608 Commercial, Industrial, and Other Buildings: 879 All Buildings: 12,894 Hectares of Major Crops: 8,601 Cost of Replacing Assets (million USD): Buildings: 1,404 Infrastructure: 286 Crops: 6 Total: 1,696 Figure 1: Building locations. Government Revenue and Expenditure: Mars hall 12° N Total Government Revenue (Million USD): 103.8 Is lands 10° N (% GDP): 66.6% 0 0.25 0.5 1 Total Government Expenditure 8° N Kilometers (Million USD): 104.1 Kwajalein Atoll (% GDP): 66.8% 6° N 0 150 300 600 Majuro 1  ata assembled from various references including WB, ADB, IMF and The Secretariat of the D Kilometers Atoll Pacific Community (SPC). 162° E 164° E 166° E 168° E 170° E 172° E 2  The projected 2010 population was trended from the 2006 census using estimated growth rates provided by SPC. K wajalein 0 0.5 1 E beye B uilding R eplacement Table 1 summarizes population and the inventory of buildings, Kwajalein Cos t Dens ity Atoll (million US D / km^2) infrastructure assets, and major crops (or “exposure”) at 0 - 0.5 5 - 10 risk as well as key economic values for the Republic of the Laura 0.5 - 1 10 - 200 Marshall Islands. It is estimated that the replacement value 0 1 2 1 - 2.5 303 of all the assets in the Republic of the Marshall Islands is Kilometers 2.5 - 5 580 1.7 billion USD of which about 83% represents buildings and 17% represents infrastructure. Figures 1 and 2 illustrate the building exposure location and 0 0.25 0.5 1 replacement cost distribution, respectively. The footprints of Kilometers 0 1 2 3 about 7,700 of the approximately 13,000 buildings shown in Figure 1 were digitized from high-resolution satellite imagery. Kilometers Delap Laura 0 2 4 8 Figure 3 displays the land cover/land use map that includes the Delap Kilometers location of major crops. The data utilized for these exhibits Majuro Atoll was assembled, organized and, when unavailable, produced 2 Figure 2: Building replacement cost density by atoll. in this study. September 2011 COUNTRY RISK PROFILE: MARSHALL ISLANDS Marshall 12° N Islands 10° N 0 0.25 0.5 1 8° N Kilometers Kwajalein Atoll 6° N 0 150 300 600 Majuro Kilometers Atoll 162° E 164° E 166° E 168° E 170° E 172° E Kwajalein 0 0.5 1 Ebeye Kwajalein Atoll Laura 0 1 2 Kilometers 0 0.25 0.5 1 Kilometers 0 1 2 3 Kilometers Laura 0 2 4 8 Delap Delap Kilometers Figure 3: Land cover/land use map. Majuro Atoll HAZARDS TROPICAL CYCLONE AND EARTHQUAKE ­ 0 25 50 75 100 125 150 175 200 IN MARSHALL ISLANDS The Pacific islands region is prone to natural hazards. The Maximum Wind Speed Republic of the Marshall Islands is located north of the Figure 4: Maximum 1-minute sustained wind speed (in miles per hour) with a 40% equator in an area known for the frequent occurrence of chance to be exceeded at least once in the next 50 years (100-year mean return period). tropical cyclones with damaging winds, rains and storm surge Marshall 12° N all year round. In the North Pacific region from Taiwan to the equator in latitude and from Indonesia to east of Hawaii in Islands 10° N 0 0.25 0.5 1 longitude, more than 1,400 tropical cyclones with hurricane- 8° N Kilometers force winds spawned in the last 60 years, with an average Kwajalein Atoll of about 25 tropical storms per year. The Republic of the 6° N 0 150 300 600 Majuro Marshall Islands was affected by devastating cyclones several Atoll Kilometers times in the last few decades. For example, typhoon Paka in 162° E 164° E 166° E 168° E 170° E 172° E 1997 caused severe damage to crops and damaged 70% of Kwajalein 0 0.5 1 houses on Ailinglaplap Atoll, with total damages estimated Ebeye Kwajalein at 80 million USD for the entire nation. Typhoons Zelda, Axel Atoll and Gay each caused significant damage and losses within Laura a span of one year (1991-1992). Figure 4 shows the levels of 0 1 2 wind speed due to tropical cyclones that have about a 40% Kilometers chance to be exceeded at least once in the next 50 years (100- year mean return period). These wind speeds, if they were to occur, are capable of generating moderate to severe damage 0 0.25 0.5 1 to buildings, infrastructure and crops with consequent large Kilometers 0 1 2 3 economic losses. Kilometers Laura 0 2 4 8 Delap Delap Kilometers The Republic of the Marshall Islands is situated along a Majuro Atoll relatively quiet seismic area but is surrounded by the Pacific “ring of fire,” which aligns with the boundaries of the Perceived Shaking Not Felt Weak Light Moderate Strong Very Strong Severe Violent Extreme Moderate/ Very tectonic plates. These boundaries are extremely active seismic Potential Damage none none none Very light light Moderate Heavy Heavy Heavy 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 zones capable of generating large earthquakes and, in some 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 cases, major tsunamis that can travel great distances. No Instrumental Intensity I II-III IV V VI VII VIII IX X+ significant earthquakes have been observed in recent history. Scale based upon Wald. et al: 1999 However, in 1899, a large earthquake off the eastern coast of 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 New Ireland, Papua New Guinea generated a tsunami that the next 50 years (100-year mean return period). caused a considerable amount of damage in the Republic September 2011 COUNTRY RISK PROFILE: MARSHALL ISLANDS of the Marshall Islands. Figure 5 shows that the Republic of Marshall 12° N the Marshall Islands has a 40% chance in the next 50 years Islands 10° N of experiencing, at least once, very weak levels of ground 0 0.25 0.5 1 shaking. These levels of shaking are not expected to cause 8° N Kilometers Kwajalein Atoll any significant damage to well-engineered buildings. 6° N 0 150 300 600 Majuro Kilometers Atoll RISK ANALYSIS RESULTS 162° E 164° E 166° E 168° E 170° E 172° E To estimate the risk profile for The Republic of the Marshall Kwajalein 0 0.5 1 Islands posed by tropical cyclones and earthquakes, a Ebeye Total Average Annual Kwajalein Loss (thousand USD) simulation model of potential storms and earthquakes Atoll 0 - 10 50 - 75 that may affect the country in the future was constructed. Laura 10 - 15 75 - 100 This model, based on historical data, simulates more than 0 1 2 15 - 30 650 Kilometers 30 - 50 1830 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 large magnitude events in South 0 0.25 0.5 Kilometers 1 0 1 2 3 and North America, Japan and the Philippines, which could Kilometers generate tsunamis that may affect Marshall Islands’ shores. Laura 0 2 4 8 Delap Delap Kilometers Majuro Atoll The country’s earthquake and tropical cyclone risk profiles are derived from an estimation of the direct losses to buildings, Figure 7: Contribution from the different atolls to the average annual loss for tropical cyclone and earthquake (ground shaking and tsunami). infrastructure assets and major crops caused by all the simulated potential future events. The direct losses include Marshall 12° N the cost of repairing or replacing the damaged assets, but Islands 10° N do not include other losses such as contents losses, business 0 0.25 0.5 1 interruption losses and losses to primary industries other 8° N Kilometers Kwajalein Atoll than agriculture. The direct losses for tropical cyclones are 6° N 0 150 300 600 caused by wind and flooding due to rain and storm surge, Majuro Kilometers Atoll while for earthquakes they are caused by ground shaking 162° E 164° E 166° E 168° E 170° E 172° E and tsunami inundation. After assessing the cost of repairing Kwajalein 0 0.5 1 or rebuilding the damaged assets due to the impact of all the Ebeye AAL / Asset Value Kwajalein 0% - 0.1% simulated potential future events, it is possible to estimate Atoll 0.1% - 0.2% in a probabilistic sense the severity of losses for future Laura 0.2% - 0.3% 0.3% - 0.4% catastrophes. 0 1 2 0.4% - 0.5% Kilometers 0.5% - 0.75% Tropical Cyclone Earthquake 0.75% - 1% Average Annual Loss = 3.0 million USD Average Annual Loss = 0.1 million USD 1% - 6% 8.1% 0.4% 2.2% 8.1% 0 0.25 0.5 1 Buildings Buildings Kilometers Cash Crops Cash Crops 0 1 2 3 Infrastructure Infrastructure Kilometers 83.8% 97.4% Laura 0 2 4 8 Delap Delap Kilometers Figure 6: Average annual loss due to tropical cyclones and earthquakes (ground Majuro Atoll shaking and tsunami) and its contribution from the three types of assets. Figure 8: Contribution from the different districts to the tropical cyclone and earthquake (ground shaking and tsunami) average annual loss divided by the replacement cost of The simulations of possible next-year tropical cyclone and the assets in each district. earthquake activity show that some years will see no storms or earthquakes affecting the Republic of the Marshall Islands, The same risk assessment carried out for the Republic of the while other years may see one or more events affecting the Marshall Islands was also performed for the 14 other Pacific islands, similar to what has happened historically. The annual Island Countries. The values of the average annual loss of losses averaged over the many realizations of next-year Republic of the Marshall Islands and of the other 14 countries activity are shown in Figure 6 separately for tropical cyclone are compared in Figure 9. and for earthquake and tsunami, while the contributions to the average annual loss from the different atolls are In addition to estimating average risk per calendar year, displayed in absolute terms in Figure 7 and normalized by another way of assessing risk is to examine large and the total asset values in each atoll in Figure 8. Figure 8 shows rather infrequent, but possible, future tropical cyclone and how the relative risk varies by atoll across the country. earthquake losses. Table 2 summarizes the risk profile for the 4 Republic of the Marshall Islands in terms of both direct losses September 2011 COUNTRY RISK PROFILE: MARSHALL ISLANDS Tropical Cyclone Earthquake Ground Motion Tsunami Average Annual Loss (million USD) 100 10 8 80 6 A more complete picture of the risk can be found in Figure 4 10, which shows the mean return period of direct losses in 2 60 0 million USD generated by earthquake, tsunami and tropical cyclones combined. The 50-, 100-, and 250-year mean return 40 period losses in Table 2 can also be determined from the 20 curves in this figure. The direct losses are expressed both in absolute terms and as a percent of the national GDP. 0 In addition to causing damage and losses to the built environment and crops, future earthquakes and tropical cyclones will also have an impact on population. The same Figure 9: Average annual loss for all the 15 Pacific Island Countries considered in probabilistic procedure described above for losses has been this study. adopted to estimate the likelihood that different levels of and emergency losses. The former are the expenditures casualties (i.e., fatalities and injuries) may result from the needed to repair or replace the damaged assets while the future occurrence of these events. As shown in Table 2, our latter are the expenditures that the Marshallese government model estimates, for example, that there is a 40% chance may need to incur in the aftermath of a natural catastrophe in the next fifty years (100-year mean return period) that to provide necessary relief and conduct activities such as one or more events in a calendar year will cause casualties debris removal, setting up shelters for homeless or supplying exceeding 70 people in the Republic of the Marshall Islands. medicine and food. The emergency losses are estimated as a Events causing 200 or more casualties are also possible but percentage of the direct losses. have much lower likelihood of occurring. Table 2 includes the losses that are expected to be exceeded, TABLE 2: Estimated Losses and Casualties Caused by Natural Perils on average, once every 50, 100, and 250 years. For example, Mean Return Period AAL 50 100 250 a tropical cyclone loss exceeding 66 million USD, which is (years) equivalent to about 42% of Marshall Islands’ GDP, is to be Risk Profile: Tropical Cyclone expected, on average, once every 100 years. In the Republic Direct Losses of the Marshall Islands, tropical cyclone losses are expected (Million USD) 3.0 32.8 66.2 123.0 to be substantially more frequent and severe than losses (% GDP) 1.9% 21.1% 42.5% 78.9% due to earthquake ground shaking and tsunami. The latter, Emergency Losses however, remain potentially catastrophic events. (Million USD) 0.7 7.6 15.2 28.3 (% of total government 0.7% 7.3% 14.6% 27.2% 250 expenditures) TC+EQ Direct Losses (million USD) 200 TC Casualties 3 36 69 118 EQ 150 Risk Profile: Earthquake and Tsunami Direct Losses 100 (Million USD) 0.1 0.3 2.3 5.9 50 (% GDP) 0.1% 0.2% 1.5% 3.8% 0 Emergency Losses 0 100 200 300 400 500 600 700 800 900 1,000 Mean Return Period (years) (Million USD) 0.0 0.1 0.5 1.4 (% of total government 0.0% 0.1% 0.5% 1.3% 160% expenditures) TC+EQ TC Casualties 0 0 1 3  GDP) 120% EQ Risk Profile: Tropical Cyclone, Earthquake, and Tsunami Direct Losses (% 80% Direct Losses (Million USD) 3.1 34.1 67.4 123.0 40% (% GDP) 2.0% 21.9% 43.3% 78.9% 0% Emergency Losses 0 100 200 300 400 500 600 700 800 900 1,000 Mean Return Period (years)  (Million USD) 0.7 7.8 15.5 28.3 Figure 10: Direct losses (in absolute terms and normalized by GDP) caused by either (% of total government 0.7% 7.5% 14.9% 27.2% expenditures) tropical storms or earthquakes that are expected to be exceeded, on average, once in the time period indicated. Casualties 3 38 76 128 5 Casualties include fatalities and injuries. 1 September 2011 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