A Case Study of Preliminary Cost-Benefit Analysis of Building Levees to Mitigate the Joint Effects of Sea Level Rise and Storm Surge

Abstract

Sea-level rise (SLR) will magnify the impacts of storm surge; the resulting severe flooding and inundation can cause huge damage to coastal communities. Community leaders are considering implementing adaptation strategies, typically hard engineering projects, to protect coastal assets and resources. It is important to understand the costs and benefits of the proposed project before any decision is made. To mitigate the flooding impact of joint effects of storm surge and SLR, building levee segments is chosen to be a corresponding adaptation strategy to protect the real estate assets in the study area-the City of Miami, FL, USA. This paper uses the classic Cost-Benefit Analysis (CBA) to assess the cost efficiency and proposes corresponding improvements in the benefit estimation, by estimating the avoided damages of implementing levee projects. Results show that the city will benefit from implementing levee projects along the Miami River in both a one-time 10 year storm event with SLR and cumulative long-term damage scenarios. This study also suggests that conducting CBA is a critical process before making coastal adaptation planning investment. A more meaningful result of cost effectiveness is estimated by accounting for the appreciation and time value. In addition, a sensitivity analysis is conducted to verify how the choice of discount rate influences the result. Uncertain factors including the rate of SLR, storm intensification, land use changes, and real estate appreciation are further analyzed.

A Holistic Framework for Evaluating Adaptation Approaches to Coastal Hazards and Sea Level Rise: A Case Study from Imperial Beach, California

“…To our knowledge, this was the first time that a replacement cost approach has been used to estimate the suite of ecosystem services of beaches into adaptation planning. Previous CBAs of sea level rise adaptation only estimates some of the ecological benefits of beaches, and therefore undervalues beaches in comparison to competing uses along the coast (e.g., armoring to protect inland and upland property) [8,[10][11][12][13][14]. As explained in more detail in King et al [47], this approach applies the same valuation metric-replacement cost-used to value human-made structures such as buildings and water pumps, as well as privately owned land.…”

“…Damage impacts to both private and public structures were estimated using standard U.S. Army Corps of Engineers (USACE) depth damage curves [10,12], which values damages as a percentage of the structures' replacement cost. Estimates of publicly owned structures and facilities were obtained from the City.…”

“…In particular, assigning monetary value to ecosystem services remains a challenge. Many of the methods used in this analysis are standard (or were standard at the time of the study) [10,12,35,62]. The analysis of flooding, erosion, and the recreational value of beaches is based on relatively standard methods.…”

“…A key part of adaptation planning and establishing local priorities should be a costbenefit analysis (CBA) of options. Most previous CBAs (e.g., [9][10][11][12][13][14]) of coastal adaptation focus on the non-market values of recreation and/or storm prevention. For example in a widely cited study, Liu et al [15] estimates the ecological benefits of beaches in New Jersey, but their "gap analysis" (p. 1276) notes the absence of studies looking at other ecological services provided by beaches other than recreation, "disturbance prevention", and "cultural and spiritual" values.…”

“…Most of these assessments focus primarily on adapting development and infrastructure. An expanded focus on public trust beach recreation and ecosystem services is needed for local and site-specific studies to best guide communities' long-term adaptation planning [8,[11][12][13][14]16,17]. Some studies account for armoring alone, or alongside "greener" alternatives, but established methods for comprehensive comparison of specific community's full range of adaptation alternatives are largely lacking.…”