WG-F Workshop Floods and Economics Austria: Introduction of new Guidelines and Tools for Cost-Benefit-Analysis in FRM Peter Hanisch Michael Kremser Heinz Stiefelmeyer Gent, 25./ 26.Oct. 2010
Table of Contents Introduction: Types of Floods in Austria Legal Framework, Proceedings FRM: Responsibilities, Administration, Financing Application of CBA in Flood Protection Projects Types of Measures evaluated using CBA The new CBA in FP Projects Goals Methods Tools Resume of Experiences Evaluation Extended Applications Page 2
Introduction Recent Floods in Austria 2002 Floods: Central & North (Upper & Lower Austria) 2005 Floods: West (Tyrol & Vorarlberg) 2006 Floods: North-East (Weinviertel Region in Upper Austria) Innsbruck, 520 m ü.a. Salzburg, 425 m ü.a. Vienna, 160 m ü.a. Großglockner, 3798 m MSL Klagenfurt, 440 m ü.a. Area: Mean Maximum 84.000 Annual km² Daily Precipitation: Altitude: : 140 140 50-3800 - 3800 300 m mm m ü.a. ü.a. Page 3
Introduction To give you an idea what floods are looking like in Austria Gent, 25.+26.10.2010 WG-F Workshop Floods and Economics Page 4
Legal Framework, Proceedings Legal Framework for the Application of CBA in FP Projects 1979, 1985: Water Subsidies Law ( Wasserbauten-Förderungs-Gesetz ) 1980: Preliminary Guideline for CBA in River Engineering 2007: EU Flood Directive 2008: New Guideline for Cost-Benefit-Analysis for Flood Protection Measures There is NO Legal Claim to Flood Protection Page 5
Legal Framework, Proceedings Flood Risk Management Flood Protection: Responsibilities Administration and Technical Support: Provincial Governments Applicant: Community; Water Association or Cooperative of Communities Authority: District, Province or Federal State Financing: Subsidies by the Federal State and the Province Granted by the Federal Ministry of Agriculture, Unit of Flood Protection ( Bundeswasserbauverwaltung ), according to the Subsidy Guidelines NO subsidy without legal permit Page 6
Legal Framework, Proceedings Types of Measures evaluated using a CBA Type of Measure Federal State (Republik Österr.) Province (Bundesland) Community (Gemeinde) Flood Risk Studies, Flood Hazard Zoning 100% Flood Protection Projects > 100 k Federal water bodies 70% (up to 85%) 30% (15%) Regional & local w.b. 40% (up to 60%) 40% (30%) 20% (10%) River Maintenance 1/3 1/3 1/3 CBA mandatory Page 7
The 2008 Guidelines for CBA in FP Administrative and Legal Goals Replacement of preliminary guidelines Conformity to legal framework (national legislation, EU-Standards) Harmonization with Guidelines of the Torrent Control and Avalanche Protection Unit Technical Goals Integration with design process Decision support, selection from alternative solutions Transparency of decisions and design process Ex-post evaluation of input parameters and results Comparability and standardization Page 8
The 2008 Guidelines for CBA in FP Applicable to Basin-wide FP programs ( Gewässer-Entwicklungskonzept ) General FP projects Detail project (permit project) Financial Range Mandatory: Project cost > 1.000.000 Simplified procedure: 110.000 up to 1.000.000 Not applicable: < 110.000 Maintenance, Adjustment to State of the Art Page 9
The 2008 Guidelines for CBA in FP General Procedure: Aggregate Evaluation: three column model Taking into account Economic, Socio-cultural and Ecological aspects Dual Balance Model Monetary Balance #1 ( Teilbilanz 1 ) Non monetary Balance #2 ( Teilbilanz 2 ) To provide an overall positive result, Balance #1 does not necessarily have to be positive Page 10
The 2008 Guidelines for CBA in FP As described in the Guidelines, the CBA compares two scenarios which are evaluated regarding the potential damages and risks: Situation WITH FP measures in place Actual Situation (WITHOUT FP) Using a Standardized Tool Page 11
The 2008 Guidelines for CBA in FP Hydrology and Hydraulics Investigation of potential damages at least at three stages 30-yr flood 100-yr flood (Dimensioning Flood) 300-yr flood (Residual Risk) Identification of dam overtopping Crucial point for CBA results Flooded Areas for all stages (Floods) Taking into account existing freeboard!? Page 12
The 2008 Guidelines for CBA in FP Investigation of potential damage (monetary) for residential housing (Damage Function dependent on Flood Water Level) Non-residential housing Infrastructure (On-site Investigation) (Fill-out Forms) Losses on Net Product Agriculture and Forestry Flood Protection Works Tourism Wohngebäude Nicht-Wohngebäude + Öffentliche Gebäude Verkehrs-, Ver- sowie Entsorgungsinfrastruktur Wasserbauliche Anlagen und Gewässer Land- und forstwirtschaftliche Flächen Sonstige Flächennutzungen Summe der Vermögensschäden Wertschöpfungsverluste Gewerbe und Industrie Zusätzliche Wertschöpfungsverluste im Fremdenverkehr Summe der Wertschöpfungsverluste Katastrophenschutz - Aufwand für HW-Einsatz Summe der monetär bewerteten Schäden SUMME DER MONETÄR BEWERTETEN SCHÄDEN bei HQ 30 35 100 300 in in in in 806,846.5 6,797,546.3 8,511,831.3 18,738,245.7 110,000.0 2,652,000.0 6,562,000.0 9,243,000.0 1,074,579.0 3,008,097.5 3,287,039.0 3,449,040.0 300,000.0 700,000.0 750,000.0 800,000.0 11,903.9 24,707.4 32,943.2 52,567.8 0.0 0.0 0.0 0.0 2,303,329.4 13,182,351.2 19,143,813.5 32,282,853.4 9,720.0 308,118.0 862,116.0 1,016,221.0 0.0 621,600.0 3,036,960.0 4,795,200.0 9,720.0 929,718.0 3,899,076.0 5,811,421.0 120,000.0 400,000.0 500,000.0 500,000.0 2,433,049.4 14,512,069.2 23,542,889.5 38,594,274.4 => Sum of monetary assessed damages at all stages investigated (at least 30-, 100-, 300-yr flood) Page 13
The 2008 Guidelines for CBA in FP Damage Expected Value WITH and WITHOUT FP Measures in place Damage Probability Function Damage Without With Damage expected value Reduced Residual FP Measures in place Flood Flow (return period) Probability Page 14
The 2008 Guidelines for CBA in FP Monetary Assessment: Balance #1 Yearly expected damage /yr through integral Return on benefits Payment of Interest for Investment Costs Planning & Design, Construction, Land Use Compensation, Reinvestment, Maintenance Result of Balance #1 KAPITALWERT KW NET PRESENT VALUE ohne Berücksichtigung von Wertsteigerungen - 940,197 mit Berücksichtigung 1% Wertsteigerung With consideration of 2,912,954 mit Berücksichtigung 2% Wertsteigerung x % increase in value 8,817,166 NUTZEN-KOSTEN-VERHÄLTNIS NKV ohne Berücksichtigung von Wertsteigerungen BENEFIT-COST-RATIO 0.93 mit Berücksichtigung 1% Wertsteigerung With consideration of 1.21 mit Berücksichtigung 2% Wertsteigerung x % increase in value 1.63 Page 15
The 2008 Guidelines for CBA in FP Non- monetary Assessment Balance #2 Description of monetary non recordable direct and indirect effects Risk of Physical Injury Monetary non recorded or non recordable benefits Non-economical, socio-cultural aspects Ecological aspects Assessment by specialist (subjective view) => Result Balance #2 Aggragation of Balance #1 and #2 -> Integrated Assessment Page 16
Resume of Experiences Evaluation: Compilation of a damage data base -> Comparability, Standardization,... Page 17
Resume of Experiences Variation of damages in residential housing at 1 m flooding S = Smin+ 1.000 *B * W Page 18
Resume of Experiences Lessons learned... From about 100 CBA s within the last 3 years, assessing a budget of 300 Mln Many FP projects hardly reach an economic B-C ratio > 1, especially small-scale measures -> political B-C ratio Acceptance by engineers, by clients / applicants Expenditures for conducting a proper CBA Reverse engineering -> calculating required damage starting with a B-C-ratio > 1 Often implemented too late in the design process Sensitivity of results regarding input data... Page 19
Resume of Experiences Extended applications... Discussion of alternatives Integration ( Hiding ) of single expensive FP measures within a basin-wide FP scheme Allocation of project costs to different stakeholders using potential damage ratio Involvement of the public in the decision process; imparting actual risk, potential damages and residual risk to the public Priorising FP measures Assessment of affordable project costs, starting from potential damages... still working on it... Gent, 25.+26.10.2010 WG-F Workshop Floods and Economics Page 20
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