Cost-benefit analyses for flood risk management: more focus on vulnerable groups

Published: 21 June 2019

Floods cause a great deal of human suffering and major economic damage. Decisions about the allocation of the financial resources available to reduce flood risks - which are often inadequate - raise questions not only about efficiency, but also about fairness and sustainability. Uncertainty about the future complicates these decisions. Jarl Kind (an economist at Deltares) investigated how cost-benefit analysis (CBA) for flood risk management based on social welfare can help to support decisions in a context of uncertainty.

In his study, Jarl recommends an improved, alternative, application of the cost-benefit analyses that are used to underpin and prioritise investments in flood management measures. The cost-benefit analyses should focus more on the differences between rich and poor, vulnerable and non-vulnerable, people and on uncertainty about future developments. The improved application of these CBAs leads to different recommendations and therefore to different political decisions about who needs protection and where, and how much protection is needed. This is highly relevant because billions of dollars will be needed annually to protect a growing global population from flood risks.

Jarl: “In poor countries, measures (such as insurance, compensation and aid) that spread the damage differently among the population may be more important than physical measures designed to reduce the absolute level of flood risk”.

Jarl received his doctorate at the VU-University of Amsterdam yesterday afternoon.