Framework and Methods for the Evaluation of Intangible Losses and their Integration in Coastal Flood Risk Analysis

i Zusammenfassung . ii 1 Introduction . 1 1.1 Motivation 1 1.2 Objectives 2 1.3 Methodology 3 2 Flood Risk Analysis . 4 2.1 Flood Risk Analysis Framework 4 2.1.1 Flood Risk . 4 2.1.2 Prediction of Flood Risk, Tolerable Risk, Residual Risk and Risk Management. 6 2.2 Flood Risk Prediction 8 2.2.1 Flooding Probability . 8 2.2.2 Consequences . 9 2.2.3 Calculation of Flood Risk . 12 2.3 Discussion and Implications 13 3 Social impacts due to coastal floods . 15 3.1 Introduction to Social Impacts 15 3.1.1 Loss of Human Life . 15 3.1.2 Physical Injuries . 16 3.1.3 Psychological Health Impacts . 17 3.1. 4 Historical and Cultural Losses . 17 3.2 Evaluation of Social Impacts 18 3.2.1 Loss of Life and Injuries . 18 3.2.2 Psychological Health Impacts . 22 3.2.3 Cultural and Historical losses . 22 3.3 Economical valuation of Social Impacts 23 3.3.1 Stated Preference Methods . 25 3.3.2 Revealed Preference Methods . 27 3.3.3 Non-behavioural valuation methods . 30 3.3.4 Summary of Economic valuation methods . 31 3.4 Available Tools for the Evaluation of Social Losses 32 3.4.1 Hazards U.S. Multi-Hazard (HAZUS-MH) . 32 3.4.2 LIFESim . 33 3.5 Discussion and Implication 35 Evaluation of Intangible Losses XtremRisK_Report_4-1_Draft_1. doc iv August 2010 4 Environmental Impacts of Floods . 37 4.1 Introduction to Environmental Impacts 37 4.2 Basic Principles of Environmental Valuation 38 4.2.1 Environment and Public Goods . 38 4.2.2 Total Economic Value . 38 4.3 Ecosystem Services Definition and Classification 40 4.4 Economic Valuation of Ecosystem Services 42 4.4.1 Revealed Preference Methods (Market Based) . 45 4.4.2 Revealed Preference Methods (Surrogate Markets) . 47 4.4.3 Stated Preference Methods (Non-Market Valuation) . 48 4.4.4 Benefits Transfer . 49 4.5 Available tools for the Assessment of Ecosystem Services 50 4.5.1 Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST) 50 4.5.2 Multi-scale Integrated Models of Ecosystem Services (MIMES) . 51 4.5.3 Artificial Intelligence for Ecosystem Services (ARIES) . 52 4.6 Discussion and Implications 53 5 Integration of Intangible Losses with Tangible Losses . 55 5.1 Cost Benefit Analysis 55 5.1.1 Economic Principles Related to CBA . 55 5.1.2 Methodology of Cost Benefit Analysis . 56 5.1.3 Advantages and limitations of CBA . 59 5.2 Multi Criteria Analysis 60 5.2.1 Methodology of Multi Criteria Analysis . 60 5.2.2 Advantages and limitations of MCA . 62 5.3 Weighting and Aggregation methods 63 5.4 Discussion and implications 65 6 Specification of Objectives and the Methodology . 68 6.1 Specification of Objectives 68 6.2 Specification of the Methodology 69 6.2.1 Methodology for Evaluation of Loss of Life and Injuries . 70 6.2.2 Methodology for Evaluation of Psychological Health Impacts . 71 6.2.3 Methodology for Evaluation of Cultural Damages . 72 6.2.4 Methodology for Evaluation of Environmental Losses . 73 Evaluation of Intangible Losses XtremRisK_Report_4-1_Draft_1. doc v August 2010 LIST OF FIGURES Figure 1.1: Classification of Flood Damages (modified from Smith and Ward, 1998, Jonkman and Vrijling, 2008) . 2 Figure 1.2: Tentative Methodology . 3 Figure 2.1: Integrated PRA based concept for flood risk management (Oumeraci, 2004) . 6 Figure 2.2: The ALARP principle (Health and Safety Executive, 1992, Oumeraci, 2004) . 8 Figure 2.3: Classification of Flood Losses (modified from Jonkman and Vrijling, 2008; Smith and Ward, 1998; Merz et al., 2004 and Messner et al., 2006) . 9 Figure 2.4: Residential stage-damage curve for a medium-sized house (modified from Queensland government, 2002) . 11 Figure 2.5: Damage-probability curve (modified from Messner et al., 2006) . 13 Figure 3.1: Approach for estimate loss of life and injuries by Penning-Rowsell et al. (2005) . 21 Figure 3.2: Loss of Life Approach proposed by Jonkman et al. (2008) . 22 Figure 3.3: Economic valuation techniques for social losses (own illustration) . 24 Figure 3.4: Flood depth-anxiety-productivity-income interrelationships (Lekuthai and Vongvisessomjai, 2001; Lekuthai, 2003) . 29 Figure 3.5: Conceptual model of the LQI (modified from Nathwani et al., 1997) . 31 Figure 3.6: LIFESim approach to life-loss estimation (Aboelata and Bowles, 2005) . 34 Figure 4.1: Structure of Chapter 4. 37 Figure 4.2: Types of goods . 38 Figure 4.3: Classification of ecosystem services (modified from MEA, 2005) . 41 Figure 4.4: Environmental valuation techniques (modified from Pagiola, 2005, Turner et al., 2010) . 44 Figure 4.5: The InVEST Process (Tallis et al., 2010) . 51 Figure 4.6: General outline of MIMES model (Boumans and Costanza, 2007) . 52 Figure 5.1: Main stages in Cost benefit analysis (modified from DEFRA, 2001) . 57 Figure 5.2: Main stages in Multi criteria analysis . 61 Figure 5.3: Proposed integration methodology . 65 Figure 6.1: Study Methodology . 69 Figure 6.2: Methodology for evaluation of loss of life and injuries (modified from PenningRowsell et al. 2005) . 70 Figure 6.3: Methodology for the evaluation of psychological impacts (own illustration) . 71 Figure 6.4: Methodology for the evaluation of cultural losses (own illustration) . 72 Figure 6.5: Methodology for the evaluation of environmental damages (own illustration) . 73 Evaluation of Intangible Losses XtremRisK_Report_4-1_Draft_1. doc vi August 2010 LIST OF TABLES Table 2.1: Definitions of ‘Risk’ (after Kelmann, 2003) . 5 Table 3.1: Number and percentage of injured persons reported during 8-25, September 2005 (modified from Williams et al., 2005). 17 Table 3.2: Choice modelling approaches (DEFRA, 2005) . 27 Table 3.3: API approach parameters . 29 Table 3.4: Past research studies on economic valuation of intangible losses . 32 Table 4.1: Components of Total Economic Values (modified from Dyiegielewska et al., 2009; Beckmann, 2008;