The role of economics in making “better”economics  The role of              sustainable flood risk      management decisio...
• What is sustainable flood risk  management? Adapting to and modifying variability within  the wider context of IWRM• Wha...
Well-being• “Material living standards (income, consumption  and wealth);• Health;• Education;• Personal activities includ...
reality                                                                                      interpretation               ...
Flooding is a process, not a state       10.00                                                                            ...
Energy – endothermic or                                           exothermic reactionInput flows: resources,              ...
Floods as a shock to              resource                               the system              economyenvironment       ...
Going from book-keeping to the analysis of                                                                                ...
Energy – endothermic orThe transformational            exothermic reactioneconomy                                         ...
G                   B                                           D                          CA                             ...
65                                                                                                                  A4    ...
Either reduce shock or enhance recoveryWell-being                                                                      D  ...
Change?•   Where?•   In what?•   By whom?•   How?       Power is the capacity to induce change             IDRC Davos 2012...
Societal objectives         rules                                     Resources                                   sustaina...
IDRC Davos 2012 - C. Green & C. Viavattene
Characteristics of power• Domains of power• Components of power          IDRC Davos 2012 - C. Green & C. Viavattene
% adopting innovation                               Late                                                    adapters      ...
Where do we need to go from                here?• Agent based modelling• How do shocks propagate through the  money econom...
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The role of economics in making better sustainable flood risk management decisions

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Colin GREEN, Christophe VIAVATTENE

Middlesex University, United Kingdom

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The role of economics in making better sustainable flood risk management decisions

  1. 1. The role of economics in making “better”economics The role of sustainable flood risk management decisions in making better sustainable flood risk management decisions C. Green 1, C. Viavattene 2 1FHRC / Middlesex University, London, UK. colin.green.fhrc@gmail.com 2FHRC / Middlesex University, London, UK. c.viavattene@mdx.ac.uk IDRC Davos 2012 - C. Green & C. Viavattene
  2. 2. • What is sustainable flood risk management? Adapting to and modifying variability within the wider context of IWRM• What is „better‟? More with less: well-being, resilience, adaptive, learning• What is a „decision‟? Conflict + uncertainty; stakeholders decide what is the best available course of action: how to attempt to change the future• What is „economics‟? Advising on the consequences to the economy from interventions in different ways at different points IDRC Davos 2012 - C. Green & C. Viavattene
  3. 3. Well-being• “Material living standards (income, consumption and wealth);• Health;• Education;• Personal activities including work• Political voice and governance;• Social connections and relationships;• Environment (present and future conditions);• Insecurity, of an economic as well as a physical nature.”Stiglitz et al. (2009) Report by the Commission on the Measurement of Economic Performance and SocialProgress, Paris: Commission on the Measurement of Economic Performance and Social Progress IDRC Davos 2012 - C. Green & C. Viavattene fhrc
  4. 4. reality interpretation decision social relationshipsprecipitation runoff minewater pollutants resource Land Connected groundwater development Erosive material economy pollutants Groundwater recharge river land Flood deposition of pollutants deposition environment well-being Erosive material Flood deposition floods money Deposition in channel economy Channel movement IDRC Davos 2012 - C. Green & C. Viavattene
  5. 5. Flooding is a process, not a state 10.00 floods 8.00 6.00 4.00 2.00 availabilityflow 0.00 demand 1 22 43 64 85 106 127 148 169 190 211 232 253 274 295 316 337 358 -2.00 -4.00 -6.00 droughts -8.00 month Managing variability, not flooding and droughts IDRC Davos 2012 - C. Green & C. Viavattene fhrc
  6. 6. Energy – endothermic or exothermic reactionInput flows: resources, Desired outputslabour Transformations governed by the laws of physics, chemistry and biology wastes The resource economy IDRC Davos 2012 - C. Green & C. Viavattene
  7. 7. Floods as a shock to resource the system economyenvironment well-being money economy Well-being Well-being IDRC Davos 2012 - C. Green & C. Viavattene time time
  8. 8. Going from book-keeping to the analysis of the economic consequences Proportional loss curves - residential Well-being 1.00 D 0.90 A 0.80 0.70 Rijkswaterstaat Trajectory prior to flood C 0.60 UK China% 0.50 Australlia USA 0.40 France CEPRI 0.30 B 0.20 0.10 0.00 0 1 2 3 0.5 1.5 2.5 0.25 0.75 1.25 1.75 2.25 2.75 flood depth time Direct damages IDRC Davos 2012 - C. Green & C. Viavattene
  9. 9. Energy – endothermic orThe transformational exothermic reactioneconomy • Iron Fe2O3(s) + 3CO(g) 2Fe(s) + 3CO2(g) Input flows: resources, Desired outputs • Ammonia labour N2(g) + 3H2(g) ↔ 2NH3(g) ΔHӨ = -92kJ (+ suitable catalyst, temp of 600oC, and pressure of 200 atmospheres) Transformations governed by the laws of physics, chemistry and biology wastes flood Negative Default on savings mortgages flooded Banks households loans Share price falls; fall in Default on claims loan loans capacity Pension funds Reduced Change in payment on employment; consumption pattern Fall in claims reduced investmentConsumers income capacity savings available for consumption claims Commerce and industry flooded Insurance investment payment on Share price businesses claims falls sales Falls in share prices Stocks and shares IDRC Davos 2012 - C. Green & C. Viavattene
  10. 10. G B D CA H F I E m=it-1a.jt-1b.kt-1c (a+b+c =1) three inputs to each node IDRC Davos 2012 - C. Green & C. Viavattene
  11. 11. 65 A4 B C D3 E F G2 H Final value as proportion of undisturbed value I10.9800.96 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 1010.94 A B0.92 C0.90 D 6 E0.88 F 50.86 G H A0.84 4 I B C0.82 D0.80 3 E F A B C D E F G H I G 2 H I 1 Shock of -0.5 at time 40 to A IDRC Davos 2012 - C. Green & C. Viavattene 0 1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101
  12. 12. Either reduce shock or enhance recoveryWell-being D A Trajectory prior to flood C B flood time IDRC Davos 2012 - C. Green & C. Viavattene Baseline trajectory enhanced because a flood plain
  13. 13. Change?• Where?• In what?• By whom?• How? Power is the capacity to induce change IDRC Davos 2012 - C. Green & C. Viavattene
  14. 14. Societal objectives rules Resources sustainably and power effectivelyIDRC Davos 2012 - C. Green & C. Viavattene
  15. 15. IDRC Davos 2012 - C. Green & C. Viavattene
  16. 16. Characteristics of power• Domains of power• Components of power IDRC Davos 2012 - C. Green & C. Viavattene
  17. 17. % adopting innovation Late adapters Early adapters time The S shaped curve of innovation diffusion IDRC Davos 2012 - C. Green & C. Viavattene
  18. 18. Where do we need to go from here?• Agent based modelling• How do shocks propagate through the money economy?• Analysis of power Acknowledgments The work described in this presentation was supported by the European Community‟s Seventh Framework Programme through the grant to the budget of the Integrated Project CONHAZ, Contract 244159 and the EPI-WATER project, Contract 265213. We thank all our partners from the CONHAZ and from the EPI-WATER projects for their contribution in this research. IDRC Davos 2012 - C. Green & C. Viavattene

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