Assessing the real costs of natural hazard-induced disasters: A case study from Australia’s Northern Territory

Natural Hazard-induced Disasters (NHD) cause a wide range of losses to built and natural environments, the latter often beyond standard measures. Precise accounting and characterisation of the losses can assist in developing effective management policies that help to build resilient communities. This study applies trans-disciplinary approaches to assess total, monetary and non-monetary, NHD-related losses, estimated at AUD 156 million per year (2010–2019 average), for Australia’s Northern Territory where bushfires, cyclones, storms and floods are destructive and frequent events. Non-monetary losses, often overlooked or omitted, were estimated at AUD103 million per year, accounting for two-thirds of total disaster-related losses. Marketable losses, estimated at AUD 53 million per year, were inferred, using standard and non-standard datasets, from the Australian Government’s Natural Disaster Relief and Recovery Arrangements, insurance costs (Insurance Council of Australia database), and other relevant sources. Non-monetary losses were accounted for by the loss of ecosystem services from natural systems caused by cyclones and bushfires only, applying ecological economics approaches, but without considering long-term losses over the duration of recovery. This study informs disaster management policies to invest in collective emergency and environmental management planning for reducing NHD risk and building resilience of local communities to manage and prepare for rapidly changing climates. Such an accounting approach is essential in contexts where NHDs disproportionately affect the lives and well-being of disadvantaged remote communities.