Damage assessments of natural hazards supply crucial information to decision support and policy development in the fields of natural hazard management and adaptation planning to climate change. Specifically, the estimation of economic flood damage is gaining greater importance as flood risk management is becoming the dominant approach of flood control policies throughout Europe. This paper reviews the state-of-the-art and identifies research directions of economic flood damage assessment. Despite the fact that considerable research effort has been spent and progress has been made on damage data collection, data analysis and model development in recent years, there still seems to be a mismatch between the relevance of damage assessments and the quality of the available models and datasets. Often, simple approaches are used, mainly due to limitations in available data and knowledge on damage mechanisms. The results of damage assessments depend on many assumptions, e.g. the selection of spatial and temporal boundaries, and there are many pitfalls in economic evaluation, e.g. the choice between replacement costs or depreciated values. Much larger efforts are required for empirical and synthetic data collection and for providing consistent, reliable data to scientists and practitioners. A major shortcoming of damage modelling is that model validation is scarcely performed. Uncertainty analyses and thorough scrutiny of model inputs and assumptions should be mandatory for each damage model development and application, respectively. In our view, flood risk assessments are often not well balanced. Much more attention is given to the hazard assessment part, whereas damage assessment is treated as some kind of appendix within the risk analysis. Advances in flood damage assessment could trigger subsequent methodological improvements in other natural hazard areas with comparable time-space properties.

This paper is the outcome of a community initiative to identify major unsolved scientific problems in hydrology motivated by a need for stronger harmonisation of research efforts. The procedure involved a public consultation through on-line media, followed by two workshops through which a large number of potential science questions were collated, prioritised, and synthesised. In spite of the diversity of the participants (230 scientists in total), the process revealed much about community priorities and the state of our science: a preference for continuity in research questions rather than radical departures or redirections from past and current work. Questions remain focussed on process-based understanding of hydrological variability and causality at all space and time scales. Increased attention to environmental change drives a new emphasis on understanding how change propagates across interfaces within the hydrological system and across disciplinary boundaries. In particular, the expansion of the human footprint raises a new set of questions related to human interactions with nature and water cycle feedbacks in the context of complex water management problems. We hope that this reflection and synthesis of the 23 unsolved problems in hydrology will help guide research efforts for some years to come.

Risk management has reduced vulnerability to floods and droughts globally^1,2, yet their impacts are still increasing³. An improved understanding of the causes of changing impacts is therefore needed, but has been hampered by a lack of empirical data^4,5. On the basis of a global dataset of 45 pairs of events that occurred within the same area, we show that risk management generally reduces the impacts of floods and droughts but faces difficulties in reducing the impacts of unprecedented events of a magnitude not previously experienced. If the second event was much more hazardous than the first, its impact was almost always higher. This is because management was not designed to deal with such extreme events: for example, they exceeded the design levels of levees and reservoirs. In two success stories, the impact of the second, more hazardous, event was lower, as a result of improved risk management governance and high investment in integrated management. The observed difficulty of managing unprecedented events is alarming, given that more extreme hydrological events are projected owing to climate change³.

The Sustainable Development Goals (SDGs) of the United Nations Agenda 2030 represent an ambitious blueprint to reduce inequalities globally and achieve a sustainable future for all mankind. Meeting the SDGs for water requires an integrated approach to managing and allocating water resources, by involving all actors and stakeholders, and considering how water resources link different sectors of society. To date, water management practice is dominated by technocratic, scenario‐based approaches that may work well in the short term but can result in unintended consequences in the long term due to limited accounting of dynamic feedbacks between the natural, technical, and social dimensions of human‐water systems. The discipline of sociohydrology has an important role to play in informing policy by developing a generalizable understanding of phenomena that arise from interactions between water and human systems. To explain these phenomena, sociohydrology must address several scientific challenges to strengthen the field and broaden its scope. These include engagement with social scientists to accommodate social heterogeneity, power relations, trust, cultural beliefs, and cognitive biases, which strongly influence the way in which people alter, and adapt to, changing hydrological regimes. It also requires development of new methods to formulate and test alternative hypotheses for the explanation of emergent phenomena generated by feedbacks between water and society. Advancing sociohydrology in these ways therefore represents a major contribution toward meeting the targets set by the SDGs, the societal grand challenge of our time.

There is a wide variety of flood damage models in use internationally, differing substantially in their approaches and economic estimates. Since these models are being used more and more as a basis for investment and planning decisions on an increasingly large scale, there is a need to reduce the uncertainties involved and develop a harmonised European approach, in particular with respect to the EU Flood Risks Directive. In this paper we present a qualitative and quantitative assessment of seven flood damage models, using two case studies of past flood events in Germany and the United Kingdom. The qualitative analysis shows that modelling approaches vary strongly, and that current methodologies for estimating infrastructural damage are not as well developed as methodologies for the estimation of damage to buildings. The quantitative results show that the model outcomes are very sensitive to uncertainty in both vulnerability (i.e. depth–damage functions) and exposure (i.e. asset values), whereby the first has a larger effect than the latter. We conclude that care needs to be taken when using aggregated land use data for flood risk assessment, and that it is essential to adjust asset values to the regional economic situation and property characteristics. We call for the development of a flexible but consistent European framework that applies best practice from existing models while providing room for including necessary regional adjustments.