Flood prevention schemes: guidance for local authorities

Chapter 5: FLOOD PREVENTION SCHEMES: GUIDANCE FOR LOCAL AUTHORITIES - ECONOMIC APPRAISAL

CONTENTS

1. Introduction
Scope
Background to benefit-cost analysis
Goals
2. The appraisal context
Defining the problem
Strategic approach
Issues which cannot be incorporated into a
benefit-cost analysis
Hazard management options
Environmental protection Consultation
Multi-functional schemes
3. Stages in a benefit-cost analysis
Main stages
Identifying the 'do nothing' option
Identifying the 'do something' options
Identifying the probabilities of failure
The nature of benefits and costs
Boundaries of the benefit-cost analysis
What is a benefit and what is a cost?
Level of detail
Post project evaluation
4. Assessing the benefits
4.1 Evaluation of losses
Domestic and other urban property
Temporary and semi-permanent structures
Infrastructure
Indirect losses
Socio-economic equity
Non-monetary impacts on households
4.2 Recreational and environmental values
Recreation
Environmental and heritage issues
4.3 Flood prevention benefits
Damage calculation
Calculating the benefits
Sampling the return periods
Above-design-standard benefits
Development benefits
Freeboard
Simplified assessment
Use of software packages
5. Comparing costs and benefits
Estimating the costs
Other cost elements
Treatment of project risk
Discounting and economic efficiency
Economic sustainability
6. Choosing the option
Introduction
Standards
The decision process
Sensitivity analysis and robustness testing
References
Glossary of terms
Annex A: Transfer payments
When does a change result only in a transfer payment?
Test for a transfer payment
Examples of a transfer payment
Examples of changes which are not a transfer payment
Annex B: Components of economic value and environmental assets
Introduction
The need to derive existence values
Determining existence value
Guidance for contingent valuation and other studies
Further reading
Annex C: Optimism Bias Data For Flood Prevention Costs