Presentation on NRC Flood Control Benefit Cost Guideline made at WEAO 2021 Technical Symposium in London, Ontario, November 9, 2021.

1. National Guidelines on Undertaking a
Comprehensive Analysis of Benefits, Costs and Uncertainties
of Storm Drainage and Flood Control Infrastructure
in a Changing Climate
Fabian Papa | FP&P HydraTek
Robert Muir | City of Markham (formerly with Dillon Consulting)
Yehuda Kleiner | National Research Council of Canada
WEAO | Technical Symposium – London, Ontario
9 November 2021

2. 2
 To provide guidance on how to prepare a Benefit-Cost Analysis
(BCA) for storm drainage and flood control infrastructure
 To provide an objective, data-driven approach to prioritize
projects and identify “good” infrastructure investment value
 To identify data to support BCA including:
 Flood Damages = potential benefits (an industry gap)
 Infrastructure Costs (especially new measures like green infrastructure)
 To improve robustness of BCA:
 Accounting for Uncertainty
 Accounting for Non-stationarity (growth, climate effects)
 Accounting for Time-value of Money
Purpose of Guidelines
Cost
Benefit

3. 3
* Project mandate considers Direct & Indirect,
Tangible Benefits associated predominantly with
Flood Damage reduction
* Other studies conducted in parallel to address
Intangible Benefits (e.g., environmental, social,
legal) are integrated into the guideline:
* Case Studies were assessed with and without
Intangible Benefits to assess co-benefits
* Includes GHG costs (impacts of construction) and
benefits (natural / green infrastructure)
Scope of Guidelines

4. 4 WEAO Spring Conference 2019
WEAO Fall Workshop 2019
CWWA Conference 2019
WEAO Fall
Workshop 2020
Now
* A Economic Analysis of Green and Grey Infrastructure (WEAO Apr. 2019)
* History of cost-benefit analysis in water resources & renewed focus (DMAF funding)
* Insurance loss data for flood benefits (IBC, Munich Re, CatIQ)
* Case study on Direct Flood & Erosion & Indirect Quality benefits
* Benefit/cost ratios for grey and green approaches
* Development of NRC Guidelines (WEAO Oct. 2019)
* Insurance flood & water loss analysis (more Benefit data)
* Top-down damage scaling method
* Green infrastructure project & program review (Cost data)
* Climate change (extreme rain) trends
Previous Papers & Presentations

5. 5
Damage Estimation
$43,000
Commonly
Reported
Sewer Back-up / Water Damages for Canada, 2008-2018
Source: CatIQ
Average claim in
Canada
= $22,300
in Ontario
= $18,500
55 Catastrophic Events & over 70,000 closed claims – insured losses define potential Direct Benefits

6. 6
Damage Estimation
Region
Flood Loss
EAD ($M)
Sewer Back-up /
Water EAD ($M)
Canada $819.2 $375.6
Alberta $414.2 $88.83
British Columbia $16.14 $0.7519
Manitoba $14.16 $1.833
New Brunswick $7.318 $2.331
Newfoundland and Labrador $10.22 $1.831
Nova Scotia $18.85 $14.20
Ontario $289.2 $243.6
Prince Edward Island $0.2220 $0.0085
Québec $90.35 $35.91
Saskatchewan $41.75 $15.02

7. 7
Life-Cycle Costs
Green Infrastructure – Capital Cost by Volume
Philadelphia Green
Infrastructure
Storage Costs:
$2000 / m3
(average)

8. 8
Life-Cycle Costs
Green Infrastructure – Capital Cost by Type
Philadelphia Green
Infrastructure
Storage Costs:
$1700 - 3400 / m3
(Trench Perv. Pavement)
Infiltration Trench
Pervious Pavement
Rain Garden
Tree Trench

9. 9
Climate Change Trends (past)
Trends in Rainfall Design Intensities
(Average for 226 Stations)
Duration
Return Period
All
2 Yr 10 Yr 50 Yr 100 Yr
5 Min. 0.4% -0.9% -1.4% -1.6% -0.9%
30 Min. 0.8% -0.2% -0.3% -0.4% -0.1%
1 Hr 0.8% 0.0% -0.7% -0.7% -0.1%
6 Hr 0.3% -0.4% -0.7% -0.7% -0.3%
24 Hr 0.5% -0.3% -0.3% -0.4% -0.1%
All 0.6% -0.3% -0.6% -0.5% -0.2%
Overall decrease in extreme rain intensities
IDF Updates in Canada
Version 2.00 to 3.10 Datasets

10. 10
Damage Trends (past)
* Canada in a Changing Climate: National
Issues report (2021) noted socioeconomic
impact on losses:
* “Since 1983, the increasing trend in insured
losses associated with extreme weather
disasters in Canada has primarily been due to
an accumulation of value (e.g., people,
assets, wealth) year-on-year.”
* Importance of value accumulation on
losses highlights the need to consider
growth in damage (benefit) estimation. $0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
Net
Written
Premiums
(millions)
Loss
&
Loss
Expenses
(thousands)
Losses Net Written Premiums
Expon. (Losses) Expon. (Net Written Premiums)
Growth in Catastrophic Loss &
Loss Expenses & Net Written
Premiums in Canada (1983 - 2017)

11. 11
Climate Change Trends (future)
Existing IDF IDF Change Factor (CF) Based
On Temp. Rise (DT oC)
(Pacific Climate Impacts Consortium)
Projected Temperature
Increase
2 Deg.
21% Rise

12. 12
* National Guideline Development for BCA (WEAO Oct. 2020)
* Top-down ‘area-based’ vs Bottom-up ‘object-based’ Methods
* Uncertainty methods:
* Sensitivity & Monte Carlo Analysis, Stress Tests
* Case Studies:
* #1 National Flood Adaptation Funding
What level of funding should be allocated at a national level
to reduce flood-related damages?
* #2 City-Wide & Project-Scale Funding
How much should I be spending in my City or each project?
Previous Papers & Presentations
Approach
varies with data
granularity
Complexity
varies with data
uncertainty
Approach
applies
across
varied
spatial
scale

13. 13
Approaches to Benefit Estimation
* Top-Down Analysis
* aka “area-based”
* Uses aggregated insurance loss
data for damage estimation
* Modest effort
* Bottom-Up Analysis
* aka “object”-based (e.g., bldgs.)
* Uses damage-frequency curves
for damage estimation
* A lot of data and analysis effort
$
$$$

14. 14
* Monte Carlo Analysis
Uncertainty Analysis
$2,305
$1,427
50%
Conf.
Band
Average $1,817
* Sensitivity Analysis

15. 15
* Guideline Content:
* Introduction & Scope
* Key Definitions
* Summary of
Foundational Research
* General Approach
* Time Value of Money
* Estimating Benefits
* Estimating Costs
* Analysis
Guideline Format
* Appendices
* App. A – Bibliography
* App. B – Industry Scan
* App. D – Direct & Indirect Flood Damages
* App. E – Climate Change Flood Damage Considerations
* App. F – Life Cycle Costs of Infrastructure
* App. G – Economic, Legal, Social and Indirect Costs
* App. H – Post Flood Event Environmental Impacts
* App. I – Case Studies
Roadmap (42 pages)
Data, Examples, Deep Dive into References (650+ pages)
(300 references !)

16. 16
* Expected Annual
Damage (EAD)
Concepts

17. 17
* Case Study 1 – National Level Policy Development
* Case Study 2 – Municipality-Level Project Planning
* Case Study 3 – Existing Storm Sewer System Damage Reduction
* Case Study 4 – Riverine Alternative Evaluation
* Case Study 5 – Urban Storm Drainage Design Standard Review Under
Climate Change
* A range of spatial scales (national, municipality, neighbourhood, project phase)
* Top-down and bottom-up Benefit analysis using App. D insurance losses
* Alternative Costs evaluation using App. F infrastructure costs
* Simple deterministic to complex stochastic analysis of uncertainty including due
to future climate effects
Case Studies

18. 18
* Evaluates broad alternatives:
* Regional Storage
* Land Use Change
(high risk property purchase)
* Dyke Rehabilitation
* Evaluates alternative designs
for preferred alternative
Case Study 4 – Riverine Alternative
Evaluation
Regional Storage
Benefits Stream &
Present Value
Increases with
Future Climate
Effects (non-linear)
& Growth

19. 19
* Assessment of Benefit-Cost Ratio for risk mitigation approaches:
* Dyke rehabilitation preferred based on bottom-up tangible benefits
(annualized building structure damages).
Case Study 4 – Riverine Alternative
Evaluation (Tangible Benefits)
Regional
Storage
Land Use
Change
Dyke
Rehab.
Present Value of Benefits (2020; millions) $36.2 $29.9 $42.0
Present Value of Costs (2020; millions) $57.0 $707 $10.2
Benefit-Cost Ratio 0.64 0.04 4.12
App. F Cost Data
Reservoir:
$7.60 – 9.50 / m3
Dyke:
$5,300 / m raised / m

20. 20
* Reassessment of Benefit-Cost Ratio:
Case Study 4 – Riverine Alternative
Evaluation (Intangible Benefits)
Regional
Storage
Land Use
Change
Dyke
Rehab.
Present Value of Tangible Benefits (millions) $36.2 $29.9 $42.0
Present Value of Economic, Legal, Social and Indirect
Benefits (millions) Intangible
$66.4 $63.3 $67.9
Present Value of Environmental Benefits – GHG
emission reduction, carbon sequestration, and erosion
restoration avoided (millions) Intangible
$2.0 $0.54 $0.60
Total Present Value of Benefits $105 $94 $111
Present Value of Costs $58 $717 $10.3
Benefit-Cost Ratio Including Intangible 1.81 0.13 10.7
Benefit-Cost Ratio (Tangible Costs & Benefits Only) 0.64 0.04 4.12
Minor impact
85 - 90% Due to
Home Value Reduction
Intangible & indirect
costs increase B/C.
Does not affect
option ranking.

21. 21
* Considers stochastic nature of
future climate effects on design
rainfall intensities
* Evaluates alternative design
standards and associated capital
upgrade costs over range of
future rainfall intensities
Case Study 5 – Urban Storm Drainage Design
Standard Review Under Climate Change
Projected 100-year 24-Hour Intensity Ranges
50% Non-Exceedance
90% Non-Exceedance
95% Non-Exceedance

22. 22
* Upgrade costs increase significantly at higher projected rainfall intensities.
* Low B/C Ratio when upgrading to upper range (< 5 - 10% exceedance) if
expected rainfall (50% exceedance) occurs.
* Real Options Analysis (adaptive management) proposed where
uncertainty is high, and risk of upgrade costs exceeding benefits is high.
Case Study 5 – Urban Storm Drainage Design
Standard Review Under Climate Change
Non-Exceedance Probability for Design Upgrades
50% 90% 95%
Present Value of Benefits (2017; millions) (50% rainfall realized) $0.27
Present Value of Construction Costs (2017; millions) $0.36 $4.1 $7.1
Benefit-Cost Ratio 0.76 0.07 0.04

23. 23
* Simplified version of guidelines suitable for smaller communities
* Additional case studies
* Simplified step-by-step procedures, automated and spreadsheet-based.
* Trade-offs in simplicity and accuracy / rigour
* Challenging to have a one-size-fits-all template, i.e.,
* Many types of flooding
* Many alternatives
* Improved evaluation of Intangible Benefits
* Framework is in place, requires further quantification of monetary equivalents
Future Work Considerations

24. National Guidelines on Undertaking a
Comprehensive Analysis of Benefits, Costs and Uncertainties
of Storm Drainage and Flood Control Infrastructure in a
Changing Climate
Project Contacts
Fabian Papa, FP&P HydraTek Inc. | fpapa@fabianpapa.com
Robert Muir, City of Markham | rmuir@markham.ca
Yehuda Kleiner, NRC | Yehuda.Kleiner@nrc-cnrc.gc.ca