Workshop Summary: Cost Benefit Analysis

InterAction’s Disaster Risk Reduction (DRR) Working Group hosted a panel, Cost Benefit Analysis Tools: Proving the Benefit of Disaster Risk Reduction Programs, to discuss tools for measuring the cost versus the benefit of DRR activities and programs and to share experiences of how these tools are used in the field, specifically in Nepal, Vietnam and El Salvador. Moderated by Rod Snider, senior disaster Preparedness technical advisor for the American Red Cross, the panelists – Karina Copen, a humanitarian and preparation and response program officer for Oxfam America-CAMEXCA, Ulla Dons, former director of programs for Mercy Corps Nepal, and Dr. Marcus Moench, president for the Institute for Social and Environmental Transition (ISET) – discussed the benefits of DRR programs and the most cost-effective ways to support communities that struggle to build up their resiliency in the wake of floods, earthquakes, tsunamis and other disasters. The panelists pointed out that CBAs do have their limitations.  Certain impacts and results, i.e. social benefits and lives saved, are unquantifiable, and therefore are unable to be factored into a cost benefit analysis.  They can also be very time intensive and expensive.

Despite their limitations, CBAs are beneficial and help rule out interventions that are presumed to be beneficial, thus saving time and money.  While CBAs may not inspire a community to implement DRR strategies before a disaster, they can be a way to “pre-position ideas” so that the ideas, resources and skills are available when a disaster hits.

By Tawana Jacobs, associate director of public relations at InterAction