The POLICY CHALLENGE FOR HAZARD LOSS R&D
The findings outlined in the previous chapters raise a number of difficult policy questions for the prioritization of federal funding for R&D on hazard loss reduction. Would different R&D strategies lead to improved loss reduction? Are the standards or principles implicit in the present R&D allocation strategy the most beneficial ones? Should the spread be balanced, or should the bulk of funding be applied to the activities promising the greatest return on investment? Or is the goal to have as diverse a portfolio as possible? Indeed, in the face of rising hazard losses in recent years, will the present R&D portfolio meet the challenge, or must policymakers take action now to reevaluate R&D investment in lessening hazard losses?
All of these key policy questions hinge on data that can elucidate the relative benefits of a specific kind of R&D for a specific hazard type. A comprehensive evaluation of the present federal allocation strategy requires a means by which to assess the “payoff” of hazard loss R&D efforts and thereby determine whether the investments are worth the associated costs. Unfortunately, the most immediate problem for policymakers is the inability to determine these values. In this chapter, we discuss a range of factors that contribute to this problem.
Substantive assessments of national hazard loss R&D efforts are severely constrained by the lack of accurate loss data—the primary information that might be used to measure the effectiveness of such efforts. The federal government has no uniform procedure in place for compiling figures on the economic effects of natural hazards. Insurance companies provide useful data on their payouts following a disaster, but data on uninsured losses are particularly difficult to gather. And the insured losses are only a fraction of the total losses. For example, private insurers in the United States do not offer coverage for flood losses. More broadly, there is no thorough, standardized database that pulls all the pertinent information together in a way that can be easily accessed and used by policymakers, government agencies, localities, nonprofit organizations, and other interested parties.