A region is exposed to two environmental hazards.

- Flood: annual probability 0.02, potential damage cost £5 million.
- Landslide: annual probability 0.005, potential damage cost £12 million.

A mitigation programme costs £1 million per year. It reduces the flood probability by 40 % and the landslide probability by 20 %.

(a) Which hazard contributes more to the expected annual loss before mitigation?
(b) After implementing the mitigation programme, what is the net change in expected annual loss (including the mitigation cost)? State whether the programme reduces the total expected loss.

Question

A region is exposed to two environmental hazards.

- Flood: annual probability 0.02, potential damage cost £5 million.
- Landslide: annual probability 0.005, potential damage cost £12 million.

A mitigation programme costs £1 million per year. It reduces the flood probability by 40 % and the landslide probability by 20 %.

(a) Which hazard contributes more to the expected annual loss before mitigation?
(b) After implementing the mitigation programme, what is the net change in expected annual loss (including the mitigation cost)? State whether the programme reduces the total expected loss.

Accepted Answer

Flood contributes more; mitigation increases expected annual loss by £948,000, so it does not reduce the total loss.

Gce Model Questions Vol1 2022 Geography Question 15

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