Flood Risk Management in Flood Risk Management in Hungary's Upper Tisza BasinHungary's Upper Tisza Basin
A model-based, stakeholder approachA model-based, stakeholder approach
IIASAIIASAwithwith
Hungarian Academy of ScienceHungarian Academy of ScienceStockholm UniversityStockholm University
Funded by Swedish FORMASFunded by Swedish FORMAS
BackgroundBackground
Escalating flood losses in Hungary Tisza region is especially at risk and vulnerable Government has invested huge sums on levees
throughout Hungary Government rebuilds homes and compensates
victims Status quo unacceptable to some stakeholders
Hungary and the Tisza RiverHungary and the Tisza River
Government assistanceGovernment assistance
Government financed housing reconstructionGovernment financed housing reconstruction after the 2001 floods in Hungaryafter the 2001 floods in Hungary
Source: IIASA, Linnerooth-Bayer and Vari, 2003
The Public Policy Context
• The Hungarian government says it can no longer afford its escalating expenses for:
- Reducing flood risks (Loss reduction)- Compensating victims (Loss sharing)
ButBut
• Insurers appear unwilling to increase their exposure in high-risk areas
• Many appear concerned about the environmental effects of flood-loss measures
• Many in the public may feel it is unfair to impose more responsibility on poor areas
Upper Tisza Study Objective
Can we identify a flood risk management strategy that is acceptable to the stakeholders?
PILOT study with emphasis on developing a flood insurance system for Hungary.
The Upper Tisza StudyThe Upper Tisza Study______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Hydro-Model• One-dimension• Unsteady Flow
Flood Model• GIS-Based• Flood Depth
Loss Model• Agriculture• Infrastructure
Public Survey
Policy Model• Cost-Benefit• Stochastic Opt.
Stakeholder Interviews
Stakeholder Interviews informed by the model
Stakeholder Workshop
Interviews with 24 active Interviews with 24 active stakeholdersstakeholders
National government– Finance ministry– Ministries of water
management, agriculture, environment
Local governments Water authorities
Public– Upper Tisza– Downstream– Non-risk areas
Insurance Companies NGOs Experts
Stakeholder Views
Egalitarian/Holistic•Naturalization•Sustainable development•Mutual insurance
Individualistic•Self responsibility•Relocation w. compensation•Private insurance•Incentives
Hierarchical•Structual mitigation to protect lives•Government compensation to victims
Survey of the PublicSurvey of the Public
Upper Tisza regionDownstream cityNon-risk urban areaNon-risk city
Chosen by(%)
Poor maintenance of levees 73
Clearance of forests 63
Levees not sufficient 57
Upstream countries 46
Global climate change 42
Building permitted in high-risk areas 34
Weakened water management authorities 21
River regulation (naturalisaton) 20
Poor warning systems 12
People choose to build in flood-risk areas 10
Insufficient private mitigation measures 8
What are the main causes of increasing flood losses?
What are the most important What are the most important mitigation measures?mitigation measures?
Heightening and strengthening leveesLittle support for
– Individual measures, e.g., changing agriculture
– Relocation– Renaturalization
What is the most important argument for government compensation?
The government has always compensated
flood victims26%
The government is responsible for flood
losses51%
Social solidarity on the part of Hungarian
taxpayers19%
do not know4%
70
64
2730 29
37
44
53
3234 35
45
2
8
5
10
0
10
20
30
40
50
60
70
Social solidarity requiresthat government
compensate flood victims
Everybody should takemore responsibility
(including insurance)
Locals should pulltogether and create a
fund
It does not matter whatyou do
Do you agree with the following statements?
Upper Tisza Downstream No Risk Rural No Risk Urban
Flood-Loss-Policy ModelFlood-Loss-Policy Model
HydrologicalModel
One -dimensionalUnsteady Flow
InundationModel
GIS-BasedFlood DepthFlood Duration
ConsequenceModel
AgriculturalUrbanInfrastructuralHistorical Buildings
Policy Model
Test policy options
Monte Carlo simulated losses
Three Policy Paths for Round 3: Three Policy Paths for National Flood Insurance ProgramNational Flood Insurance Program
______________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Option 1 Option 2 Option 3
Voluntaryprivate
insurance(cross subsidies)
Voluntaryprivate
insurance(risk based)
Voluntary private insurance
(cross subsidies,government pays
premiums for poor)
Government reinsurance
(with tax payer support)
Government compensates
victims(percentage
of losses)
Government compensates
victims(fixed amount)
Voluntaryprivate
insurance(cross subsidies)
Private InsuranceVoluntaryFlat rate
Subsidies for poor households
Government CompensationOnly for households
with insurance
Round 4
Stakeholder workshop on a national insurance scheme
Private reinsurance
SummarySummary
Context: Strong stakeholder differences and conflicts on flood risk management, especially for vulnerable regions
Process: Iterative process that respected views of stakeholders. Interviews, questionnaire, stakeholder workshop
Outcome: Consensus on mitigation strategy and a national insurance program that is influencing parliamentary process
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