Published works

Published works

Integrated economic assessment of flood management options for Adelaide

TitleIntegrated economic assessment of flood management options for Adelaide
Publication TypeConference Paper
Year of Publication2016
AuthorsChalak, M, Florec, V, Hailu, A, Gibson, FL, Pannell, DJ
Conference NameAFAC16
Date Published08/2016
PublisherBushfire and Natural Hazards CRC
Conference LocationBrisbane

cent of the overall cost of Australian natural disasters is the consequence of flooding and this, on average, costs approximately $600 million per annum (Gentle et Bureau of Transport Economics, 2001; Productivity Commission 2015). These average figures do not reflect the severity of the impact that some floods can cause. For example, the magnitude and extent of the recent (2011) Queensland floods was vast, with an overall cost estimates above $6.8 billion.

There is a growing recognition that Australia’s disaster funding arrangements are not efficient and do not create the right incentives for managing risks (Productivity Commission 2015). There is underinvestment in disaster mitigation and overinvestment in post-disaster interventions. Across Australia, flood maps have become a major mitigation strategy. Other mitigation strategies include structural solutions such as levees, dams, diversion channels, floodgates, and detention basins as well as non-structural solutions such as early warning and evacuation systems and community education programs. The structural solutions are typically capital intensive and costly. On the other hand, the assessment of flood mitigation benefits generally tends to be partial and focused on tangible and direct benefits. As a result, investment decisions can be suboptimal. For optimal and equitable investment in mitigation, it is important to understand the full range of costs and benefits and also how these costs and benefits are distributed among different segments of the community. Therefore, it is important that cost and benefit assessment methods depict an adequate picture of the costs and benefits of possible risk mitigation measures. Otherwise, even simple option evaluation procedures such as cost-benefit analysis are not precise. A panel of experts convened under the European Union’s ‘Costs of Natural Hazards’ (CONHAZ) project identified key areas for improvement in cost/benefit assessment and these include the need for more focus on non-structural measures, and indirect and intangible costs (Meyer et al. 2013). Intangible values, normally excluded from benefit cost analysis, can be significant or even the most dominant set of values in some cases.

The purpose of this presentation is to address the shortcoming in relation to intangible values in the context of flood mitigation option analysis for the Brown Hill and Keswick catchments in Adelaide. The catchments include both rural and urban areas and involve local government councils for Adelaide, Burnside, Mitcham, Unley and West Torrens. This analysis focuses on a set of flood mitigation options that are currently under consideration following a public consultation. Previous analysis done on these options suggests that the benefit-cost ratios appear unfavourable. However, the analysis was done without the inclusion of intangible values. In this presentation we argue why intangible values should be included and provide estimates that show how our understanding of the costs and benefits of mitigation options would change with the inclusion of intangible values to account for the health, environmental and social impacts of floods. Intangible values relevant in the context of natural hazards in general are shown in Table 1.

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