isdf4 2008-05-08 130 safety standard for flooding flood standard carel eijgenraam cpb netherlands...
Post on 15-Dec-2015
214 Views
Preview:
TRANSCRIPT
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Flood Standard
Carel Eijgenraam
CPB Netherlands Bureaufor Economic Policy Analysis
An optimal Safety Standard for Dike-ring areas
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Map of Dike-Ring Areas
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Main topics
1. What is the most efficient level of safety? or:What is the optimal height of a dike?
2. How can the theoretical results be translated into legal safety standards?
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing • Absolute safety against flooding is impossible.
There will always be damage by flooding.
• More safety and less risk on damage are ALWAYS possible,but at rising costs.
• Making choices is possible and necessary, e.g. on the height of dikes.
• Economic question with a rational solution, but in the end a political decision has to be taken (imponderables, risk aversion)
Starting points forsafety standards
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing Central question:
• At which size of investment in prevention,e.g. in heightening dikes,are the social costs of an additional investment bigger than the social benefits of the extra decrease of the expected loss?
• At this point: stop investing.
Choosing on safety
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Cost Minimisationfor one-time investment
A
R = future expected loss = chance × loss
C = I + R
I = investment costs
X̂
Cost (euro)
Heightening dike (m)
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Cost Minimisation dynamic
Changes in the future:• deterioration water system e.g. climate change, subsidence of land => probability of flooding rises• growth of population and wealth
=> loss by flooding increases
In combination: expected loss increases(= probability x loss by flooding)
=> Changes lead to more than one decision on investment
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Driving Forces of the Investment Strategy
Two influences on decision:• discount rate (δ > 0):
– postpone investment expenses
• fixed investment costs:– do as much as possible at one time
Consequence: Heightening in jumps=> safety level is not constant, but fluctuating
Two questions to answer:• when?• how much?
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Optimal Strategy Dike Ring:Interval for expected loss
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Rising costs ==>Rising optimal loss interval
time
S–
S+
Expected damage per year (euros)
when ?
how much? =how long?
high
low
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Probabilities of Flooding for dike ring 43 Betuwe
0.00000
0.00050
0.00100
0.00150
0.00200
0.00250
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
PMIDDEN PPLUS PMIN P PWET
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Legal Safety Standards
Discussion about new legal safety standards for dike-ring areas
My personal policy advise:Use the middle of the interval as test
when action becomes desirable• understandable standard• only depending on average costs• enough time left for preparation and
construction of big actions
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Middle Probability of Flooding
S = δ × standard size × average optimal costs p.u.
mean
(t)
P =
mid
tS / V
mean
(t) t
P = Probability of flooding p.y.V = Wealth (damage by flooding)S = Expected loss p.y. (P x V)
Standard size = action that diminishes P with factor e (= 2,72...)
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Probability of Flooding when Investing continuously
probability
time
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Middle Probability of Floodingas standard test for action
P =mid
t
yearly cost of ‘standard’ action
Wealth
P ≈ “constant” x mid
t
lenght of dike
number of inhabitantst
t
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Middle optimal safety (2,5%) andinhabitants per km dike (log)
100
1000
10000
100000
100 1000 10000 100000
safetymiddle probability
inhabitants / leghth of dike
44
45
50
41
42
1151
49
432000
1250
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Two common ideas in the discussion about standards
• More differentiation seems efficient:more people/value => more safety(both between areas and in time)– compare 50 with 51 and 49
• Base new standards on CBA
• Both ideas on efficiency do raise questions on equality
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Two consequences of using Cost Benefit-Analysis
• Costs matter as much as benefits.– compare dike-ring areas 45 and 43
• Outcome is roughly in line with distributing the same amount of money to every inhabitant of a dike ring, irrespective the situation of that dike ring.
==> CBA leads to equality in input, not to equality in output.
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Other Policy Considerations
• Guarantee minimum level for personal safety
• Standard for societal risk,
if more than proportional (CBA)?
Takes the highest safety standard of the three (CBA, PS, SR)
ISDF42008-05-08
130
Saf
ety
Sta
ndar
d fo
r F
lood
ing
Important Messages onSafety of Dike-ring Areas
1. Not the probability of flooding, butthe expected loss is the pivotal variable in making decisions about the safety of dike-ring areas.
2. Derive the legal safety standard for the probability of flooding from the expected loss.
3. My policy advice:Use the Middle Probability of Flooding as basis for the standard for testing the safety of the whole dike ring.
4. Add a text in the law that makes robust designs and actions possible.
top related