Investing in infrastructure: Costs, benefits and effectiveness of disaster risk reduction measures. Presentation made by: Jarl Kind & Cees van de Guchte (Deltares)

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. 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. 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. 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. Value of nature in CBA
Intangibles in Dutch CBAs for FRM 5