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    "\n",
    "# Introduction\n",
    "\n",
    "CLIMADA implements a fully probabilistic risk assessment model.\n",
    "According to the IPCC [[1](#references)], natural risks emerge through the\n",
    "interplay of climate and weather-related hazards, the exposure of goods\n",
    "or people to this hazard, and the specific vulnerability of exposed\n",
    "people, infrastructure and environment. \n",
    "\n",
    "The unit of measurement for risk in CLIMADA is selected based on its relevance\n",
    "to the specific decision-making context and is not limited to monetary units\n",
    "alone. For instance, wildfire risk may be quantified by the burned area\n",
    "(hazard) and the exposure could be measured by the population density or the\n",
    "replacement value of homes. Consequently, risk could be expressed in terms of\n",
    "the number of people affected for evacuation planning, or the cost of repairs\n",
    "for property insurance purposes.\n",
    "\n",
    "Risk has been defined by the International Organization for\n",
    "Standardization as the \"effect of uncertainty on objectives\" as the\n",
    "potential for consequences when something of value is at stake and the\n",
    "outcome is uncertain, recognizing the diversity of values. Risk can then\n",
    "be quantified as the combination of the probability of a consequence and\n",
    "its magnitude:\n",
    "\n",
    "$$\\text{risk} = \\text{probability} \\times \\text{severity}$$\n",
    "\n",
    "In the simplest case, $\\times$ stands for a multiplication, but more\n",
    "generally, it represents a convolution of the respective distributions\n",
    "of probability and severity. We approximate the $severity$ as follows:\n",
    "\n",
    "$$\\text{severity} = F(\\text{hazard intensity}, \\text{exposure}, \\text{vulnerability}) = \\text{exposure} * f_{\\text{imp}}(\\text{hazard intensity})$$\n",
    "\n",
    "where $f_{\\text{imp}}$ is the impact function which parametrizes to what extent\n",
    "an exposure will be affected by a specific hazard. **While the term 'vulnerability\n",
    "function' is broadly used in the modelers community, we adopt the broader term \n",
    "'impact function'. Impact functions can be vulnerability functions or structural \n",
    "damage functions, but could also be productivity functions or warning levels. This \n",
    "definition also explicitly includes the option of opportunities (i.e. negative damages).**\n",
    "\n",
    "Using this approach, CLIMADA constitutes a platform to analyse risks of different\n",
    "hazard types in a globally consistent fashion at different resolution levels, \n",
    "at scales from multiple kilometres down to meters, tailored to the specific \n",
    "requirements of the analysis.\n",
    "\n",
    "\n",
    "<br/><br/>\n",
    "\n",
    "## References\n",
    "<a id=\"1\">[IPCC]</a> \n",
    "IPCC: Climate Change 2014: Impacts, Adaptation and Vulnerability.\n",
    "    Part A: Global and Sectoral Aspects. Contribution of Working Group\n",
    "    II to the Fifth Assessment Report of the Intergovernmental Panel on\n",
    "    Climate Change,\n",
    "    edited by C. B. Field, V. R. Barros, D. J.\n",
    "    Dokken, K. J. Mach, M. D. Mastrandrea, T. E. Bilir, M.\n",
    "    Chatterjee, K. L. Ebi, Y. O. Estrada, R. C. Genova, B. Girma, E. S.\n",
    "    Kissel, A. N. Levy, S. MacCracken, P. R. Mastrandrea, and L. L.\n",
    "    White,\n",
    "    Cambridge University Press, United Kingdom and New York, NY,\n",
    "    USA., 2014."
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