Making Better Decisions: Calculating the Benefits of Stormwater Infrastructure

Good decisions are informed by the best available information. In addition, proactive investment in hazard management is more likely to result in value for money than reactive investment in disaster recovery. Economic appraisal of schemes is a fundamental part of the decision-making process to ensure that the benefits of investing in flood risk management deliver the desired improvement in social welfare. However, economic analysis can only provide part of the required information to inform decision makers, and as such can commonly be used as part of a wider Multi-Criteria Analysis.

This paper reports the development of an economic appraisal tool for Christchurch City Council (‘Council’) to interrogate and evaluate stormwater management approaches, inform climate adaptation and help plan significant infrastructure delivery. The key features of the economic appraisal tool are that it:

• builds on flood damage estimated by NIWA’s RiskScape tool;
• applies economic theory drawn from within New Zealand and internationally;
• is flexible to assess economic costs and benefits of a range of mitigation options, flood sources and timescales; and
• is simple to use and tailored to Council’s audience and required outcomes.

The tool provides a framework for understanding the damages resulting from flooding, how these damages could be reduced by flood management schemes and how the cost of such schemes compare with the damages avoided. The tool can inform decision making at multiple stages through a project lifecycle; firstly as part of options development and then during the appraisal process to determine how the costs of a scheme compare with its benefits. It combines hydraulic modelling data and estimates of scheme cost and then maps the pattern of flood damage and calculates key economic metrics. Whilst developed for Christchurch, the theory and the approach to economic modeling has wide applicability