Does economic growth really reduce disaster damages? Index decomposition analysis for the relationship between disaster damages, urbanization and economic growth and its implications

ABSTRACT

This article aims to explore the characteristics of disaster damages in the context of economic growth and urbanization using index decomposition analysis. The key ideas of this study begin with two main research questions. First, does economic growth make any contribution to the reduction of disaster damages? Is the economic growth of a nation able to outweigh the respective disaster damages, particularly in advanced economies? Second, does urbanization tend to expand exposure to natural hazards and increase disaster damages? In this paper, a great deal of attention is paid to exploring answers to the above two questions using the case of Organization for Economic Cooperation and Development (OECD) countries. The main methodological concept starts with regarding disaster damages as one of various environmental impacts, which enables the proper application of the IPAT model. It is found that economic development contributed most to the decline of disaster damages and urbanization contributed slightly to the increase of disaster damages in OECD countries from 1990 to 2010.

KEYWORDS:

• Economic growth
• disaster damages
• environmental impacts
• IPAT model
• urbanization

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

This work was supported by the National Research Foundation of Korea Grant funded by the Korean Government [NRF-2013-S1A2A1A01033214].