The Prevention of Natural Disasters: Target the Long Run without Delay

Céline Grislain-Letrémy CREST (Centre de recherche en économie et statistiques) ; université Paris-Dauphine. Contact :
Bertrand Villeneuve Université Paris-Dauphine. Contact :

Urbanization in areas prone to natural hazards is massive and will grow. Economic analysis offers several tools to contain this phenomenon: insurance pricing in relation to risk, and zoning and building standards in exposed areas. Both approaches are theoretically equivalent, but their applications pose different challenges, and financial incentives were exaggeratedly reduced in France. In both cases, a more rigorous policy will meet opposition, because it will affect more specifically certain places. We discuss the difficult management of the past, and we explain why the grandfather rights or expropriation can not be considered sustainable responses.

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