Flooding caused by storm surges inflicts major economic costs on the business sector. New calculations from DTU show that the economic consequences of flooding are far greater than previously documented. For the first time, production losses in the private sector, losses of agricultural crops and the value of lost agricultural land have been included in the national damage estimates for storm surges, cloudbursts and flooding from watercourses.
The results show that production losses in private enterprises could amount to around DKK 50 billion in present value over the next 100 years. Added to this are losses of agricultural crops amounting to around DKK 7 billion and a loss in the value of agricultural land of approximately DKK 15 billion.
"The new calculations provide a more accurate picture of the total socio-economic consequences of climate-related flooding when damage and production losses in the private sector are considered. The growing losses make the need for faster climate adaptation even more urgent and economically viable for Denmark," says Professor Kirsten Halsnæs from DTU.
The new figures are included in the report "Floods in Denmark: Economic and human consequences" (in Danish only), which has been prepared by researchers from DTU Management in collaboration with the CIP Foundation, which has funded the report. The CIP Foundation is a non-profit organisation whose aim is to identify areas where structural projects can support necessary social change. The organisation describes itself as an action tank rather than a think tank.
The report follows up on DTU's 2024 analysis, "Economic consequences of flooding – National damage calculations and assessment of the need for climate adaptation", which showed that flooding from storm surges and cloudbursts over the next 100 years could cost Danish society a total of up to DKK 406 billion.
Businesses could be hit hard
Whilst previous analyses focused primarily on damage to buildings, infrastructure and tourism, the new calculations show that business production could also be hit hard when factories, port areas and service companies are forced to close temporarily following flooding.
According to the report, industrial areas and port cities are particularly vulnerable. Flooding can lead to disrupted supply chains, production stoppages and significant losses in value addition. The calculations are based, among other things, on the cross-referencing of CVR data, business addresses and national flood maps for storm surges, cloudbursts and watercourses.
Agriculture is also significantly affected. In addition to crop losses, the report shows that prolonged flooding and saltwater intrusion can lead to permanent loss of value in agricultural land. In some areas, land may lose its agricultural value and become salt marsh.
The researchers conclude that the report provides a detailed data set that can underpin the funding and development of specific climate adaptation projects. In this context, there will be a need for further local work to gather knowledge about damage and the possibilities for damage reduction.
