Investing in infrastructure: Costs, benefits and effectiveness of disaster risk reduction measures.
Presentation made by:
Jarl Kind & Cees van de Guchte (Deltares)
2024: The FAR, Federal Acquisition Regulations, Part 30
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Dutch practice in the context of CBAs and CEAs for FRM
1. Assessing the value of intangibles
Dutch practice in the context of CBAs and CEAs for FRM
Jarl Kind & Cees van de Guchte (Deltares)
OECD High Level Risk Form โ Investing in infrastructure resilience โ
costs, benefits and effectiveness of disaster risk reduction measures
Paris, September 18-19, 2019
2. Intangibles
Intangibles in Dutch CBAs for FRM 2
Costs Benefits
Tangible - Dike investments Tangible - Reduction of asset losses
Intangible - Loss of open view Intangible - Reduction of loss of life
- Reduced sedimentation - Reduction of damage to ecosystems
Co-benefits
Tangible - Excavation of building materials
Intangible - New nature
- Increased biodiversity
CBA for FRM
Examples of tangible and intangible costs and benefits
3. CBA/CEA for FRM in the NL
The Netherlands has legal flood protection standards:
โข Legal standards valid for longer time periods (decades)
โข Recent update (2017), next update expected in 2050
โข Almost all 2017 standards are based on a combination CBA (efficiency)
and casualty risk (equity)
CBA for optimal (legal) flood protection standards:
โข Based on costs and benefits of dikes (=cheapest)
โข Assumes no co-benefits
โข Intangibles: Value of Statistical Life (VOSL), Value of Injuries (VOI) and
Value of Evacuation (VOE)
CEA for nature based solutions (e.g. Room for the River):
โข To justify higher costs than dikes
โข Flood protection standard = legal = fixed (hence CEA)
โข Intangibles: ecosystem services (โฌ) and biodiversity (nature points)
Intangibles in Dutch CBAs for FRM 3
4. Value of Statistical Life for Flooding
โข Based on Choice
Experiments
โข VOSL= 7 million Euro
โข Used in CBA for flood
protection standards, 10 โ
30% of total Damage
Note:
โข VOSL somewhat misleading
term, โthe value of human lifeโ
โข VOSL: willingness to pay for a
small decrease in fatality risk
due to a particular negative
event
โข For practical reasons
aggregated to 1 โstatistical lifeโ.
Intangibles in Dutch CBAs for FRM 4