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Sharing Environmental Risks: How to Control Governments' Losses in Natural Disasters.

Recent natural disasters have demonstrated the public sector's vulnerability to natural hazards. It is estimated that state and local governments lose $1 billion annually as a result of damages to public facilities from such disasters, which are minimally covered by insurance or disaster assistance from the federal government.

The book identifies four options to address environmental risk: react to disasters through available resources; risk elimination or risk reduction by relocating infrastructure away from highly vulnerable locations or by redesigning existing infrastructure; or transfer risk to other levels of government, to the private sector or through additional insurance coverage.

Environmental risk assessment and policy formulation should be assigned to the department responsible for risk management. According to Burby, current state and local policies are lacking in three areas: costs containment, incentives for governments to prevent or minimize loss and equal criteria among governments to define the need for aid.

The intergovernmental issues in assumption of responsibility and financial assistance are addressed in the book, including the history of the federal disaster relief policy. All of the existing disaster relief acts are identified and explained in a concise manner, and the book provides a candid interpretation of the policies and intentions of the Federal Emergency Management Agency.

The focus of the book is centered around local governments and their dilemma referred to as the "land-use management paradox," which states that, until exposure to losses in natural disasters becomes serious, policy approaches to hazard mitigation (e.g., building standards and zoning) lack sufficient political priority to be enacted. It is noted that, even when localities have adopted regulatory approaches to reduce risk associated with new infrastructure, this does not reduce the potential risk associated with existing development.

More than 130 natural disasters were studied, concentrating on developing policy options and identifying constraints for being proactive as well as reactive to a disaster. There are varying degrees to which natural hazards impede the ability of infrastructure to function properly in a locality and in which a locality can provide relief and remedy the infrastructure.

There are two planning strategies explored to control losses: financial and physical. Financial planning strategies include risk identification, elimination, reduction, assumption, transfer and the linking of these strategies to physical planning strategies, which include comprehensive planning, community facility planning, capital improvement programming and growth management.

There are four issues identified in the book for sharing environmental risks: technical feasibility of risk analysis, economic considerations, local decision makers' willingness to share risks and intergovernmental considerations; each is presented clearly with examples.

This book should be reviewed by risk management divisions, as it can serve as a comprehensive checklist to ensure that new or existing policies effectively handle environmental risks. Since finance and planning departments often work with risk management, this book also provides effective strategies for those officials.

Local governments' environmental risks not only are associated with natural disasters, but also with more common potential environmental hazards, such as underground storage tanks and landfills. The conceptual model of this book, therefore, is applicable to public works and public utility officials of the state or local government.

This book provides timely information; however, current environmental policies should be referenced prior to developing or altering an environmental risk policy. Although the book is often technical and statistical in nature, the accompanying narratives are presented explicitly. The book's chapters are clearly defined and can be cross-referenced easily, providing the user with a valuable resource.

Sharing Environmental Risks is available for $28 from Westview Press, 5500 Central Avenue, Boulder, CO 80301-2847 (303/444-3541).

Reviewed by Joseph P. Casey, assistant director of finance for the County of Hanover, Virginia.
COPYRIGHT 1993 Government Finance Officers Association
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Author:Casey, Joseph P.
Publication:Government Finance Review
Article Type:Book Review
Date:Jun 1, 1993
Words:603
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