Spreading the use of economic methods in coastal risk management: a simple but insightful "calculator"

Abstract

European Directives, such as the EU Floods Directive (2007/60/EC) require that decision makers include objective methodologies, such as benefit-cost analysis, in their assessments of flood risk reduction measures. Methodologies to establish a sustainable knowledge framework addressing the costs and benefits of prevention and response to coastal hazards resulting from hydro-meteorological, hydrographic and other natural events and processes (e.g. flooding, beach erosion, cliff erosion, sea level rise) are not homogeneously implemented in the European Union. Until now, investment decisions in this field have been made more on local political imperatives than logical economic risk assessments. This paper aims to overcome some these limitations by demonstrating the usefulness of a simplified benefit-cost methodology and its application to a coastal case where a number of alternative flood risk reduction schemes are considered. The method allows the economically optimal scheme to be identified. The method is discussed within the context of generally poorly comprehended aspects; issues presented in coupling benefit-cost methods with vulnerability and related assessments; and key data uncertainties.