Assessing the cascading economic impacts of critical infrastructure failures on supply-chains: a case study of Cambodia floods

Southeast Asia is becoming more and more vulnerable to extreme weather events and especially flooding due to its susceptibility to tropical cyclones, storm surges and heavy rainfall, as demonstrated by the frequency and magnitude of catastrophic events like those in 2020. This vulnerability is driven by many factors, including growing population, rapid urbanization and extensive land use changes driven by agricultural expansion, especially in Cambodia, which is situated in one of the most flood-vulnerable zones in mainland Southeast Asia. In this region, flood hazards have caused severe damages on households and on infrastructures, such as roads and bridges, causing extensive impacts on the national economy. These challenges are expected to intensify in the future due to climate change, particularly through compound events such as the interactions between riverine flooding and tropical cyclones. Despite these growing risks to critical infrastructures, two crucial gaps persist in the current practice: the integration of both direct damages and indirect impact assessments, and the understanding of the economic impacts of compound events, particularly on how these events could potentially amplify economic disruptions. In order to address these gaps, this study presents a framework that is able to bridge direct and indirect impact modeling through the combination of the open-source CLIMADA platform with the agent-based model Disrupt-SC, thanks to their spatially explicit nature. CLIMADA is adopted to quantify direct infrastructure damages from flooding events, while Disrupt-SC, simulates the cascading effects through transport and supply chain networks, including rerouting, price adjustments, and product shortages. In particular, this framework is particularly suitable to analyze the economic impacts of spatially and temporally compounding hazards. To test its applicability, the framework is applied to Cambodia. Using high-resolution data on households, firms, and trade flows we mapped the cascading effects of critical infrastructure network disruptions during compound events, enabling a comprehensive evaluation of both immediate damages and the propagation of economic impacts through supply chains. In particular, the analysis reveals crucial infrastructure components whose disruption during compound events could trigger country-wide economic impacts. This methodology offers a comprehensive framework for understanding flood impacts and their propagation through interconnected systems, contributing to more effective adaptation strategies in vulnerable and developing countries and providing decision-makers with actionable insights for prioritizing infrastructure resilience investments in Cambodia's most vulnerable regions.