Understanding the Economic Impacts of Flooding and Risk Modelling
How flood risk modelling informs economic assessments of flood defence schemes, from depth-damage relationships to Annual Average Damage calculations.
Flooding is a problem the world over — from the recent floods in Brisbane, Australia, to the string of named storms in the UK in 2022, it is clear that flooding causes disruption to lives and livelihoods.
A paper published in 2021 estimated that since 2000, 290 million people have been affected by flooding, with 2.3 million square kilometres of land inundated.
2022 has seen the UK experience a record three named storms back-to-back in the same week (Dudley, Eunice, and Franklin), causing widespread flooding. The EA estimated some 400 properties were affected, with 35,000 properties protected through flood defence schemes.
How Flooding Causes Economic Damages
Flood damages are generally a function of the depth of water against the underlying asset. A property is assigned a number of costs at different depths to help obtain a relationship between the depth of flood water and damage to the building.
For example, a 15cm inundation of a building may damage floors and furniture. A flood of 1m will likely affect all the same items, plus electrical supplies and additional assets. As depth increases, flood cost increases up to total loss.
Flood Risk Modelling for Economic Impact Assessment
We can forecast risk to properties by using a property database and contrasting it with flood model data to get the maximum predicted flood level at each asset location. This process can be repeated with both defended and undefended scenarios to derive an estimate of the effect of the flood defence.
Accounting for Climate Change
To get an accurate picture of benefits over the lifetime of the asset, climate change must be taken into account. River flows will likely increase over the coming years.
Calculating Economic Viability
We take the sum of damage across a range of return periods to create Annual Average Damage (AAD) — the likely damage that might occur in any given year. If the cost of the asset is less than the sum of the damages over its lifetime, the flood defence is likely economically effective.
The five-case model used by the EA incorporates strategic options, long lists, short lists, and monitoring to identify a preferred option.
Long-Term Economic Impacts on Public Health
In August 2020 Public Health England published a study concluding that “flooding has an adverse impact on people’s well-being for up to three years after the event,” indicating the economic damage model may be missing long-term financial impact and public health demand.