86 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 41 | 2023 storm took the country by surprise; the unavoidable damage became greater than expected; and the rebuilding period dragged on. One of the major problems during this time was a lack of awareness that flooding damage was not covered by private insurance companies. Since 1991, flooding caused by a storm surge has been considered a disaster, therefore not included in general homeowner's insurance. It is instead covered by the disaster program managed by the Danish Storm Council. This differentiation was not clear at the time of the storm and caused much confusion and stress, with the general public not aware of this second entity and the Council not quick to respond. Since then, the Danish Storm Council has educated the public on the difference in coverage due to fire damage (covered by general homeowner’s insurance) or water damage caused by a storm surge (covered by the Danish Storm Council) (Baron, 2020). Another change that emanated from Storm Bodil was the development of Copenhagen’s Storm Flood Plan, released in 2017. This plan emphasized the importance of additional flood protection for low-lying areas in the south of Copenhagen and in the north, which were found the most susceptible to flooding. The plan estimated that if no additional protection was installed, the city was at risk of losing $0.94B to $1.61B over the next 100 years in direct costs of water level rise (Klimasikring og kystlandska, 2022). With climate continuing to evolve, extreme weather events will occur more often and in larger magnitude. Copenhagen’s Storm Flood Plan was a good first step, but it is imperative that Denmark continues to make conscious efforts to adapt and prepare for the challenges that it will face in the future. Rising sea level risks Rising sea levels create risks that are only com-pounded by extraordinary storm surges. These risks vary depending on the size of affected communities and include maritime operations as well as infrastructure and human losses. Understanding these distinctions can assist with preparedness planning. Sea level rise in large cities Denmark is largely urbanized, with 88% of the Danish population living in urban areas or cities (O’Neill, 2023). The two largest cities in Denmark are Copenhagen and Aarhus, making up 40% of the total population (Copenhagen, Denmark Metro…, 2022). Both cities have adequate resources and, through strategic urban planning, could improve plans to mitigate and adapt to the challenges that climate change will surely bring. Current flood protection in Copenhagen is based on a water level 150 cm above the mean sea level; this protection level is associated with a return period of 120 years. This means that Copenhagen is currently protected from a storm that has a 1 in 120 chance of happening every year, equivalent to an 0.83% chance of occurrence every year. However, if the mean sea level were to increase by 25 cm with no additional flood protection installed, the protection level would decrease to the level of a 1- in 10-year storm, increasing the probability of flooding to 10% every year (Coastal Flood Risk Denmark, 2022). For a case study in Copenhagen, six professors from international backgrounds designed a model to predict the relationship between economic losses, SLRs, and protection level. Economic losses include the direct and indirect costs of flooding in Copenhagen. The researchers defined direct losses as the cost of repairing damaged buildings and infrastructure along with the goods and jobs lost. Indirect costs are defined as the reduction in the production of goods and services across the economy due to the disaster, which includes business interruption and the loss of production of goods and services. In other words, the cost of the disaster is the sum of what is not produced plus the sum of the things that are produced but are not consumed and all the damage done to physical property (Hallegatte et al., 2010). Estimates vary for how much SLRs will cost the city. In the case study mentioned previously, researchers estimated the current protection level of Copenhagen to be 200 cm above the mean sea level. Denmark is expecting an SLR in the range of 25 cm in the next 50 years. Their model suggests that the increased annual probability of flooding due to an SLR of 25 cm would cost the city of Copenhagen an average of almost €1M per year in direct and indirect costs (Hallegatte et al., 2010). The estimation of the protection in Copenhagen in this study is slightly above other assessments, which indicate that the current protection level is only 150 cm above the sea level, not 200 cm (Coastal Flood Risk Denmark, 2022). Predicted costs rise rapidly with reduced protection. The case of protection at 150 cm would correspond to annual losses of almost €100M on average, a hundred-fold more than with protection at 200 cm. Clearly, serious consideration of protection against SLR is in order given the potential for catastrophic loss. Sea level rise in small cities Aside from the two main cities of Copenhagen and Aarhus, the other 60% of the Danish population resides in smaller cities. Many of these towns
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