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Dutch practice in the context of CBAs and CEAs for FRM

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Investing in infrastructure: Costs, benefits and effectiveness of disaster risk reduction measures.

Presentation made by:
Jarl Kind & Cees van de Guchte (Deltares)

Published in: Government & Nonprofit
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Dutch practice in the context of CBAs and CEAs for FRM

  1. 1. Assessing the value of intangibles Dutch practice in the context of CBAs and CEAs for FRM Jarl Kind & Cees van de Guchte (Deltares) OECD High Level Risk Form – Investing in infrastructure resilience – costs, benefits and effectiveness of disaster risk reduction measures Paris, September 18-19, 2019
  2. 2. Intangibles Intangibles in Dutch CBAs for FRM 2 Costs Benefits Tangible - Dike investments Tangible - Reduction of asset losses Intangible - Loss of open view Intangible - Reduction of loss of life - Reduced sedimentation - Reduction of damage to ecosystems Co-benefits Tangible - Excavation of building materials Intangible - New nature - Increased biodiversity CBA for FRM Examples of tangible and intangible costs and benefits
  3. 3. CBA/CEA for FRM in the NL The Netherlands has legal flood protection standards: • Legal standards valid for longer time periods (decades) • Recent update (2017), next update expected in 2050 • Almost all 2017 standards are based on a combination CBA (efficiency) and casualty risk (equity) CBA for optimal (legal) flood protection standards: • Based on costs and benefits of dikes (=cheapest) • Assumes no co-benefits • Intangibles: Value of Statistical Life (VOSL), Value of Injuries (VOI) and Value of Evacuation (VOE) CEA for nature based solutions (e.g. Room for the River): • To justify higher costs than dikes • Flood protection standard = legal = fixed (hence CEA) • Intangibles: ecosystem services (€) and biodiversity (nature points) Intangibles in Dutch CBAs for FRM 3
  4. 4. Value of Statistical Life for Flooding • Based on Choice Experiments • VOSL= 7 million Euro • Used in CBA for flood protection standards, 10 – 30% of total Damage Note: • VOSL somewhat misleading term, “the value of human life” • VOSL: willingness to pay for a small decrease in fatality risk due to a particular negative event • For practical reasons aggregated to 1 ‘statistical life’. Intangibles in Dutch CBAs for FRM 4
  5. 5. Value of nature in CBA Intangibles in Dutch CBAs for FRM 5

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