
<p>20/01/2014 </p><p><strong>Costs and benefits of adapting to climate change - the case of spatial planning and coastal flood protection in the Netherlands </strong></p><p>Karianne de Bruin <br>Senior Research Fellow – CICERO </p><p>NZCCRI Seminar Series Friday 6<sup style="top: -0.25em;">th </sup>December 2013 </p><p>Multi‐criteria analysis <br>Cost‐benefit analysis </p><p>Iterative risk <br>Cost‐ effectiveness analysis <br>(adaptive) management </p><p>Decision support tools </p><p>Robust decision making </p><p><strong>Decision support tools </strong></p><p>Portfolio analysis <br>Real options analysis </p><p>Spatial planning Coastal protection </p><p>1<br>20/01/2014 </p><p>Multi‐criteria analysis </p><p>Cost‐benefit analysis </p><p>Iterative risk </p><ul style="display: flex;"><li style="flex:1">(adaptive) </li><li style="flex:1">Cost‐ </li></ul><p></p><ul style="display: flex;"><li style="flex:1">effectiveness </li><li style="flex:1">management </li></ul><p>Robust </p><p>decision making analysis </p><p><strong>Decision support tools </strong></p><p>Portfolio analysis <br>Real options analysis </p><p>Multi‐criteria analysis </p><p><strong>Cost‐ </strong></p><p><strong>benefit analysis </strong></p><p>Iterative risk </p><ul style="display: flex;"><li style="flex:1">(adaptive) </li><li style="flex:1">Cost‐ </li></ul><p>effectiveness analysis management <br>Robust </p><p>decision making </p><p><strong>Decision support tools </strong></p><p>Portfolio analysis <br>Real options analysis </p><p><strong>Real options </strong></p><p>2<br>20/01/2014 </p><p>Climate change Adaptation Uncertainty </p><p>Source: de Bruin (2011) </p><p>Evaluation methods </p><p><strong>Adaptation decision </strong></p><p>- Whether to adapt? - What to adapt? - How much to adapt? - When to adapt? </p><p>3<br>20/01/2014 </p><p><strong>Cost-benefit analysis </strong></p><p></p><ul style="display: flex;"><li style="flex:1">Urgency </li><li style="flex:1">Feasibility </li><li style="flex:1">Costs </li><li style="flex:1">…</li></ul><p></p><ul style="display: flex;"><li style="flex:1">3</li><li style="flex:1">2</li><li style="flex:1">1</li></ul><p></p><p>€€€ </p><p>54<br>53<br>5</p><p>€</p><p>5</p><p>€</p><p>…</p><p><strong>Cost-benefit analysis </strong></p><p>Critical points <br>- Data requirement - Types of costs and benefits - Discounting - Uncertainty </p><p>4<br>20/01/2014 </p><p><strong>Uncertainties </strong></p><p>Physical effects of climate change Economic <br>- Costs and benefits of adaptation options - Irreversibility & flexibility </p><p>Policy <br>- Time horizon of decision-makers - Feasibility </p><p>5<br>20/01/2014 </p><p><strong>Cost-benefit analysis - Plus </strong></p><p></p><ul style="display: flex;"><li style="flex:1">Urgency </li><li style="flex:1">Feasibility </li><li style="flex:1">Costs </li><li style="flex:1">…</li></ul><p></p><ul style="display: flex;"><li style="flex:1">3</li><li style="flex:1">2</li></ul><p></p><p>€€€ </p><p>54<br>53</p><p>€€</p><p>…</p><p><strong>Spatial planning </strong></p><p>Photo: Karianne de Bruin </p><p>6<br>20/01/2014 </p><p><strong>Context </strong></p><p>Source: Rijkswaterstaat </p><p><strong>Costs and benefits </strong></p><p>Costs: Investment costs and maintenance costs </p><p>Primary benefits correspond to the objective of the adaptation measures – avoided direct damage </p><p>Secondary benefits which result from the adaptation but are not its primary objective </p><p>7<br>20/01/2014 </p><p><strong>Zuidplaspolder </strong></p><p>Based on Melmer, J. (Hoogheemraadschap Schieland en de Krimpenerwaard) </p><p><strong>Spatial planning ZPP </strong></p><p>- Dutch policy makers selected the ZPP for urban developments, focused on new residential, commercial and further agricultural development (greenhouse horticulture) <br>- Province + NGOs + municipalities + water authority made a master plan for the spatial development <br>- Hotspot Zuidplaspolder project </p><p>8<br>20/01/2014 </p><p><strong>Climate change impacts </strong></p><p>Flooding from river discharge - Failure probability of the flood defence - Simulated water flow in the ZPP - Potential economic damage </p><p>Excessive precipitation - Frequency inundation extreme rainfall event - Model local water levels - Damage caused by inundation </p><p><strong>Zuidplaspolder </strong></p><p>Based on Melmer, J. (Hoogheemraadschap Schieland en de Krimpenerwaard) </p><p>9<br>20/01/2014 </p><p><strong>Zuidplaspolder </strong></p><p>Based on Melmer, J. (Hoogheemraadschap Schieland en de Krimpenerwaard) </p><p><strong>Options </strong></p><p>1. Water storage for housing and greenhouse development in the northern part of the ZPP </p><p>2. Climate robust ecological network (entire area of the ZPP) </p><p>3. Climate robust design of a residential area of <br>Nieuwerkerk Noord </p><p>4. Climate robust design of a residential area of <br>Moordrecht </p><p>10 <br>20/01/2014 </p><p>Source: de Bruin et al. (2013) </p><p><strong>Reference situation </strong></p><p>0-alternative: reference situation for the polder area based on the current master plan for the spatial development of the ZPP, but without additional adaptation measures </p><p>11 <br>20/01/2014 </p><p><strong>Quantified costs and benefits </strong></p><p>- Investment costs - Maintenance costs - Avoided damages - Effects on nature, landscape and water values associated with alternative land use types (WTP per year additional municipal tax) </p><p><strong>Net present value (million €) </strong></p><p></p><ul style="display: flex;"><li style="flex:1">Adaptation option </li><li style="flex:1">Discount rate </li></ul><p></p><ul style="display: flex;"><li style="flex:1">2.5% Declining </li><li style="flex:1">4% </li></ul><p></p><ul style="display: flex;"><li style="flex:1">Water storage Zuidplas Noord </li><li style="flex:1">-17.2 </li></ul><p>59.7 <br>-19.6 50.34 <br>-18.39 <br>-22.8 <br>37.7 <br>-19.3 <br>Ecological network entire polder Climate robust design Nieuwerkerk Noord Climate robust design Moordrecht Noord <br>-17.81 </p><ul style="display: flex;"><li style="flex:1">-19.55 </li><li style="flex:1">-19.62 -19.72 </li></ul><p></p><ul style="display: flex;"><li style="flex:1">Adaptation strategy (sum of all options) </li><li style="flex:1">5.14 </li><li style="flex:1">-7.27 -24.12 </li></ul><p></p><p>12 <br>20/01/2014 </p><p><strong>Lessons learned </strong></p><p>- Sensitivity of NPV results; time horizon, long-term costs and benefits and the discount rate <br>- Inclusion of primary and secondary benefits - Awareness of underlying assumptions and sensitivity of results <br>- ‘What-if’ setting </p><p><strong>Follow-up </strong></p><p>Source: Xplorelab </p><p>Hotspot Zuidplaspolder - Xplorelab The Dutch government granted 24 million € for the implementation of sustainable and climate proof pilots in the Zuidplaspolder </p><p>13 <br>20/01/2014 </p><p><strong>Coastal flood protection </strong></p><p>Photo: Karianne de Bruin </p><p><strong>Coastal flood protection </strong></p><p>Context: flood protection, safety standards, climate change, stakeholders </p><p>Uncertainty: Sea-level rise, timing of resolution of uncertainty </p><p>Decision makers: Coastal managers </p><p>14 <br>20/01/2014 </p><p><strong>Decision support </strong></p><p>Evaluation of local coastal adaptation options Assess how climate change uncertainty affects the decision to invest in coastal flood protection </p><p>How the incorporation of stakeholder perceptions changes the optimal investment decision </p><p><strong>Local coastal adaptation </strong></p><p>Optimal coastal protection under climate change uncertainty for a Dutch coastal area. </p><p>15 <br>20/01/2014 </p><p><strong>Local coastal adaptation </strong></p><p>Current protection </p><p><strong>?</strong></p><p><strong>Sea level rise </strong></p><p><strong>+</strong><br><strong>+</strong></p><p><strong>+</strong></p><p>WB21 midden scenario (zeespiegelstijging inclusief bodemdaling) </p><p>Source: KNMI (2009) </p><p>16 <br>20/01/2014 </p><p><strong>Investment model </strong></p><p>An investment model is developed that simulates optimal decision-making in coastal flood protection, incorporating flexible timing of investment in coastal adaptation to uncertain climate-induced sea-level rise. </p><p><strong>Local coastal options </strong></p><p>NSotrnu‐sctruurcatlural </p><p>Focus on investment in structural and/or non-structural coastal adaptation options. </p><p>17 <br>20/01/2014 </p><p><strong>Investment model </strong></p><p>Two decision moments: <br>- Investment decision (t=0) - Adjustment of investment decision (t=k) </p><p>Two random variables <br>- Climate change uncertainty - Resolution of uncertainty </p><p><strong>Decision tree </strong></p><p>Source: de Bruin (2011) </p><p>18 <br>20/01/2014 </p><p><strong>Costs and benefits (1) </strong></p><p>Preliminary costs of coastal flood protection measures based on ARCADIS (2010) (1000€) <br>Non-structural Structural </p><p><strong>Costs </strong></p><p>Fixed investment cost Annual Cost <br>29458 <br>48 <br>38230 <br>36 </p><p>Maximum additional annual flood damage with 1.0m climate induced sea-level rise is 1 400 000 € (Based on Deltares (2010)) </p><p>ARCADIS (2010). MKBA Kustversterking Katwijk. (In English: Social Cost-Benet Analysis of coastal flood protection in Katwijk). ARCADIS, Rotterdam, the Netherlands. </p><p>Deltares (2010). Overstromingsrisico en droogte in een veranderend klimaat, verkenning van wegen naar een klimaatveranderingsbestendig Nederland (In English: Flood risks and droughts in a changing climate, exploring roads towards a climate proof Netherlands). Deltares, Delft, the Netherlands. </p><p><strong>Perceptions </strong></p><p>Stakeholder perceptions are identified through workshops to gain insight into stakeholders’ attitude towards uncertain future impacts of climate change coastal flood protection </p><p>Photo: Karianne de Bruin </p><p>19 <br>20/01/2014 </p><p><strong>Perceptions </strong></p><p>Indirect stakeholders <br>- Current safety standard - Flexibility of option - Robust for future climate change </p><p>Direct stakeholders <br>- Impact on tourism sector - Spatial quality - Parking issue </p><p><strong>Costs and benefits (2) </strong></p><p>Preliminary costs of coastal flood protection measures based on ARCADIS (2010) (1000€) <br>Non-structural Structural </p><p><strong>Costs </strong></p><p></p><ul style="display: flex;"><li style="flex:1">Fixed investment cost </li><li style="flex:1">29458 </li></ul><p>48 <br>38230 </p><ul style="display: flex;"><li style="flex:1">36 </li><li style="flex:1">Annual Cost </li></ul><p>Cost tourism sector during implementation </p><p><strong>Annual negative costs (benefits) </strong></p><p>Tourism revenues </p><ul style="display: flex;"><li style="flex:1">473 </li><li style="flex:1">473 </li></ul><p>-620 <br>-45 <br>-1250 </p><ul style="display: flex;"><li style="flex:1">-29 </li><li style="flex:1">Extra nature (per ha) </li></ul><p></p><p>ARCADIS (2010). MKBA Kustversterking Katwijk. (In English: Social Cost-Benet Analysis of coastal flood protection in Katwijk). ARCADIS, Rotterdam, the Netherlands. </p><p>20 <br>20/01/2014 </p><p><strong>Results </strong></p><p>Optimal initial investment decision depends on the expected waiting time for the resolution of uncertainty, the discount rate, the cost structure of the measures and the inclusion of start-up costs, and tourism and nature benefits (ancillary benefits) </p><p>Initial investment decision in structural and non-structural coastal adaptation measures </p><p></p><ul style="display: flex;"><li style="flex:1">(a) Structural </li><li style="flex:1">(b) Non‐structural </li></ul><p></p><p>Source: de Bruin (2011) </p><p>21 <br>20/01/2014 </p><p><strong>Follow-up </strong></p><p><a href="/goto?url=http://www.kustversterkingkatwijk.nl" target="_blank">www.kustversterkingkatwijk.nl </a></p><p><strong>Thank you for your attention </strong></p><p><strong>Contact details: [email protected] </strong></p><p>22 <br>20/01/2014 </p><p><strong>References </strong></p><p></p><ul style="display: flex;"><li style="flex:1">-</li><li style="flex:1">De Bruin, K., H. Goosen, R. Groeneveld and E.C. van Ierland </li></ul><p>(2013). Costs and benefits of adapting spatial planning to climate change: lessons learned from a large-scale urban development </p><p>project in the Netherlands. <em>Regional Environmental Change - </em></p><p><em>published online </em>(doi: 10.1007/s10113-013-0447-1) <br>-</p><p>-<br>De Bruin, K. and E. Ansink (2011). Investment in flood protection measures under climate change uncertainty. <em>Climate Change Economics </em>2(4): 321-339 (doi: 10.1142/S2010007811000334) </p><p>De Bruin, K. (2011). An economic analysis of adaptation to climate change under uncertainty. PhD thesis Wageningen University (http://edepot.wur.nl/182256) </p><p><strong>Contact details: [email protected] </strong></p><p>23 </p>
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