What are the economic costs of the recent widespread flooding across Europe?

The recent floods in Central Europe are projected to cause significant economic losses, potentially exceeding €1 billion. Affected countries include Austria, Poland, the Czech Republic, and Romania, with Poland's insurer PZU bracing for a 10% profit hit. Damaged infrastructure and halted production at key factories will slow economic growth, with early estimates predicting up to a 0.5% GDP impact in Czechia. While short-term effects are severe, it’s not bad news for everyone – the restoration efforts could boost the construction sector and long-term investments.

Deadly floods in Europe: How much is it going to cost economies? | Euronews

1. Explain the characteristics of a ‘public good’.

2. Using information from the article, discuss whether flooding is a ‘public bad’.

3. Discuss policies that could be used to reduce the risks from flooding.