How to Spend $75 Billion to Make the World a Better Place

by Bjørn Lomborg

Finally, Kunreuther and Michel-Kerjan explore setting up early disaster warning systems. Based on existing studies and research from Stephane Hallegatte, they find that early warning systems in developing countries would require less than $1 billion a year and would have direct benefits (reductions in the losses from disasters) of between $1 billion and $5.5 billion per year. There are additional benefits, such as the reduction in evacuation costs, the reduced costs to the health care system, improved continuity of education (from preserving schools), reduced social stress, and avoided business interruption, which is worth at least another $3 billion and possibly $30 billion. In total, the benefits could range from four to 35 times their cost. But who should pay for disaster protection measures? As Kunreuther and Michel-Kerjan point out, there is a need to persuade international donors to start investing more systematically in disaster risk reduction before a disaster strikes, rather than focusing almost exclusively on post-disaster assistance, as they do today.

Early warming systems mitigate damage by allowing preparation measures