Contrasting the Costs and Benefits of Hard and Soft

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					Flooding in Uttar Pradesh, India




Contrasting the Costs and Benefits of Hard and
  Soft Approaches to Disaster Risk Reduction
      under Changing Climatic Conditions


      Daniel Kull (IIASA), Praveen Singh (Winrock)
   Shiraz Wajih (GEAG), Shashikant Chopde (Winrock)
Quantitative Data Issues
Rohini Basin Direct Losses
                                 30,000
                                                                                 Current Conditions
                                                                                 Future A2R1
                                 25,000
   Total Losses (INR Millions)


                                                                                 Future A2R5
                                                                                 Future B1R3
                                 20,000                                          Future B1R4

                                 15,000


                                 10,000

                                                              10-year                             5-year
                                  5,000


                                     0
                                      0.00       0.05            0.10            0.15                 0.20
                                                        Exceedance Probability


                                 Expected Average Annual Losses (INR)
                                 Current conditions                   570 million
                                 Projected climate change scenarios   1050-1230 million
                     Embankments: Past Performance (1973-2007)

                     12.00
                                                            Strict engineering estimate
                                                            More realistic land compensation
                     10.00                                  More realistic embankment performance
                                                            Consider disbenefits of eliminating small floods
                                                            Consider disbenefits of waterlogging crop losses
                      8.00
Benefit/Cost Ratio




                                                            Considering disbenefits of waterlogging disease increase
                                                            Economic efficiency threshold

                      6.00


                      4.00


                      2.00


                      0.00
                             0%   2%   4%   6%   8%       10%         12%         14%          16%         18%         20%
                                                      Discount Rate
  Embankments: Future Maintenance

                     7.0
                                                                      Current Conditions
                                                                      Future A2R1
                     6.0
                                                                      Future A2R5
                                                                      Future B1R3
                     5.0
Benefit/Cost Ratio




                                                                      Future B1R4
                                                                      Economic efficiency threshold
                     4.0

                     3.0

                     2.0

                     1.0

                     0.0
                           0%   2%   4%   6%   8%       10%     12%   14%       16%        18%        20%
                                                    Discount Rate
People-Centered Strategy Performance
Current and projected future conditions:
         B/C Ratio = 2.0 – 2.5
If all benefits reduced by 50%:
         B/C Ratio = 1.0 – 1.3
If non-flood benefits NOT considered:
         B/C Ratio = 0.5 – 1.0                       Trapa (water chestnut) deep-water cultivation.
     B/C ratios computed over 0-20% discount rates   GEAG, 2007


• Capital costs only 40% greater than annual costs
• Annual costs high (INR 2850/household), comparable to
  average annual flood losses (INR 2350-5000/household)
• Annual benefits (flood & non-flood) still higher than costs
• B/C ratio not very sensitive to discount rate, but Net
  Present Value is (INR 5 - 66 billion)
Driving Assumptions
Conclusions & Lessons Learned
• Past embankment performance cannot be concluded to
  have been economically efficient
• Projected climate change negatively impacts future
  embankment performance
• People-centered strategy economically efficient, more
  robust in terms of projected climate change impacts (does
  not depend on specific flood magnitudes)
• Some people-centered benefits accrue regardless of
  flood patterns (discount rate less important)
• Vast uncertainties in data and assumptions – results only
  in orders of magnitude
• Distributional aspects not captured
• Data acquisition effort likely not worth it for quantitative
  CBA (but for other insights)
 Pakistan Case Study




Quantitative Analysis of the Economics of Flood
 Risk Reduction in an Urban Context: The Case
         of the Leh Basin in Rawalpindi



        Fawad Khan (ISET-P & IIASA), PIEDAR
Urban Setting

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                                                                  Afghanistan                                           Punjab

                Railway                                                                                                                          India



                Streams                                    Iran
                                                                        Balochistan




                Islamabad Rawalpindi                                                          Sindh
                Boundary                                        Arabian Sea                                                     0     200
                                                                                                                                Kilometers
Flood Risk Reduction Options
                                                   Loss-Frequency Curve

                               140,000

                                                                              Observed Events
                               120,000                                        Pareto Distribution

                               100,000
         Loss (millions PKR)




                                80,000


                                60,000


                                40,000


                                20,000


                                    0
                                     0.00   0.05        0.10          0.15      0.20                0.25
                                                       Exceedance Frequency



  1.   Expressway & flood control project (government)
  2.   River engineering options (donor)
  3.   Early warning system (government & donor)
  4.   Floodplain relocation (conservationists, civil society)
        Expressway Risk Reduction

                                                   Loss-Frequency Curve

                      140,000
                                                                                   Current Conditions
                                                                                   with Planned Expressway
                      120,000
Loss (millions PKR)




                      100,000

                       80,000

                       60,000

                       40,000

                       20,000

                           0
                            0.00   0.02   0.04   0.06   0.08     0.10    0.12    0.14    0.16      0.18      0.20
                                                        Exceedance Probability
                  River Engineering Risk Reduction

                                                        Loss-Frequency Curve

                      140,000                                              Current Conditions
                                                                           with Retention Pond
                      120,000
                                                                           with Add. Channel Improvements

                      100,000                                              with Combined Pond & Improvements
Loss (millions PKR)




                       80,000

                       60,000

                       40,000

                       20,000

                           0
                            0.00   0.02   0.04   0.06      0.08     0.10       0.12     0.14     0.16       0.18   0.20
                                                            Exceedance Probabilty
                      Floodplain Relocation Risk Reduction

                                                        Loss-Frequency Curve


                      140,000                                                                Current Conditions

                      120,000                                                                w ith Relocation
Loss (millions PKR)




                      100,000

                       80,000

                       60,000

                       40,000

                       20,000

                           0
                            0.00   0.02   0.04   0.06      0.08     0.10       0.12   0.14      0.16        0.18   0.20
                                                           Exceedance Probability
Early Warning System
                               Death-Frequency Curve
                             Death-Frequency Curve
             120
                                                                Historical Observations
                                                                Gumbel Fit
             100



              80
    Deaths




              60



              40



              20



               0
               0.00   0.02   0.04    0.06      0.08      0.10         0.12       0.14
                                    Exceedance Probability
CBA Results
• Expressway B/C ratio = 1.3 – 3.9
• Engineering options (B/C ratios)
  – Retention pond > 5
  – Opening of hydraulic bottleneck > 17
  – Combination of both > 6
• Relocation B/C ratio = 0.8 – 5.5
• Early warning system:
  – Considering moveable assets saved B/C ratio ~ 1.6
  – Cost per live saved > PKR 3 million (USD 44,000)




                    B/C ratios computed over 0-20% discount rates
Conclusions & Lessons Learned
• Flood risk reduction in an urban setting generally
  economically efficient
• Some options more cost effective than others: “opening”
  the river channel and floodplain at bottleneck more cost
  effective than re-engineering entire river reach
• Proper relocation expensive in an urban setting and
  requires appropriate legislative framework
• Cost per life saved with current early warning system
  much higher than saving lives through improvement of
  basic services (health, watsan)
• Despite good data availability, some issues not captured:
  – Indirect (economic) risk
  – Potential climate change impacts
  – Solid waste & sewage issues leading to disease