Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change—Guidebook (2020)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

129 The following presents a worksheet for Level 1 analysis. Level 1: Climate-Adapted Benefit-Cost Analysis This is an approximate test to see if it would be cost-effective to upgrade assets to the future conditions posed by climate change. This approach uses a number of variables in the calcula- tions. A list of the variables that are used and their definitions is included in Table G-1. A P P E N D I X G Worksheet for Level 1 Analysis Table G-1. List and definitions of variables used to conduct a CBA for climate-adapted assets. Variable Definition Tcnd Return period for which no damages occur Tcmod Next-highest return period after Tcnd; return period for which moderate damages are expected to occur Tcmax Return period for which damages are practically maximized Dcmod The amount of damages in dollars that are expected to occur as a result of a hazard event having a return period of Tcmod Dcmax The amount of damages in dollars that are expected to occur as a result of a hazard event having a return period of Tcmax Qcnd Discharge flow in cfs associated with current conditions and no damages Qcmod Discharge flow in cfs associated with current conditions and moderate damages Qcmax Discharge flow in cfs associated with current conditions and maximum damages Dacmod Expected annualized damages for an event of moderate damage level under current conditions Dacmax Expected annualized damages for an event of severe damage level under current conditions Dac Total expected annualized damages under current conditions PVC Present value coefficient DTc Present value of total expected damages under current conditions Tfnd Return period under future climate conditions for which no damages are expected to occur T’fnd Return period under future climate conditions for which little damages are expected to occur Tfmod Return period under future climate conditions for which moderate damages are expected to occur (continued on next page)

130 Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change—Guidebook Table G-1. (Continued). Variable Definition Dafint1 Expected annualized damages for an event having a return period of Tfint1 Dafint2 Expected annualized damages for an event having a return period of Tfint2 Tide Elcnd Flood elevation associated with no damages from tidal flooding under current conditions Tide Elcmod Tidal flood elevation associated with moderate damages under current conditions Tide Elcmax Tidal flood elevation associated with maximized damages under current conditions Tide Elfnd Flood elevation associated with no damages from tidal flooding under future conditions Tide El’fnd Flood elevation associated with little damages from tidal flooding under future conditions Tide Elfmod Flood elevation associated with moderate damages from tidal flooding under future conditions Tide Elfmax Flood elevation associated with maximized damages from tidal flooding under future conditions Tfmax Return period under future climate conditions for which damages are expected to be practically maximized Qfnd Flow under future climate conditions for which no damages are expected to occur Qfmod Flow under future climate conditions for which moderate damages are expected to occur Qfmax Flow under future climate conditions for which damages are expected to be practically maximized D’fnd The amount of damages in dollars that are expected to occur as a result of a hazard event having a future return period of T’fnd Dfmod The amount of damages in dollars that are expected to occur as a result of a hazard event having a future return period of Tfmod Dfmax The amount of damages in dollars that are expected to occur as a result of a hazard event having a future return period of Tfmax D’afnd Expected annualized damages for an event of little damage level under future conditions Dafmod Expected annualized damages for an event of moderate damage level under future conditions Dafmax Expected annualized damages for an event of severe damage level under future conditions Daf Total expected annualized damages under future conditions DT Additional damages associated with climate adjustment and no adaptation Tfint1 Interpolated return period between a return period associated with little damages and one associated with moderate damages under future climate conditions Tfint2 Interpolated return period between a return period associated with moderate damages and one associated with maximum damages under future climate conditions

Worksheet for Level 1 Analysis 131 External Data Requirements Parameter Value Used in Scenario Data Source(s) Facility of concern Culvert Project file Geographic location of the facility/corridor under consideration Chesterfield, VA Site plan, maps Hazard(s) of concern Flood Hazard analysis Current design criteria—flow rate 9,000 cfs Engineering designs and plans Current design criteria—recurrence interval 50-year event AASHTO design manual, DOT design manual Discount rate(s) to be used in the analysis 7% OMB A-94 Expected useful life of current facility Within 2 years Capital plan, O&M records Expected useful life of replacement facility 50 Virginia DOT design guides Anticipated time frame for implementation of adaptation strategies 2 years Capital plan Scenario(s) to be used for analysis Precipitation conditions in 2049 NOAA Atlas 14, SWMM-CAT for warmer, wetter conditions 2045–2075 Design concepts of adaptation strategies Enlarge culvert, add multiple culverts, use box or arch culvert Engineering department Cost estimate for each adaptation strategy (life-cycle costs, including any long-term adverse impacts from the adaptation strategy) Cost estimates Historical data, recent bids for similar work, cost-estimating software Identification of any non-quantifiable costs associated with the project None DOT analysis Estimates of damages sustained from the hazard of concern Loss estimates Historical data, engineering analyses, O&M records, depth- damage curves Estimates of additional benefits resulting from the project, separated by physical/social/environmental if using multiple discount rates Benefits estimates FEMA benefit-cost analysis tools for drought, ecosystem services, and post- wildfire mitigation Identification of any non-quantifiable benefits associated with the project None DOT analysis Current Conditions Step 1. Determine return periods. Description Variable Value Largest return period for which there will be no damage (Design Return Period) Tcnd (years) 50 Return period associated with an event that would cause moderate but considerable structural damage or roadway flooding and traffic interruption. This would be Tcmod (years) 100 the next-highest standard return period to Tnd Return period for which damages would be practically maximized Tcmax(years) 500

132 Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change—Guidebook Step 2. Determine damages associated with Step 1. Total damages associated with Tcnd Dcnd ($) 0 Total damages associated with Tcmod (e.g., loss of riprap, short- term road closure, traffic control and road cleanup costs) Dcmod ($) 1,630,000 Total damages associated with Tcmax (i.e., failure of the hydraulic structure leading to large structural damage and loss of road service and possibly injuries or fatalities) Dcmax ($) 3,227,000 Present value coefficient for the remaining project useful life (i.e., remaining service life during the period of projected climate change) from Appendix B PVC (%) 13.801 Step 3. Determine current discharge flows associated with Step 2. Associate discharges with return period, Tcnd under current (no climate change) conditions Qcnd (cfs) 9,000 Associate discharges with return period, Tcmod under current (no climate change) conditions Qcmod (cfs) 10,505 Associate discharges with Tcmax under current (no climate change) conditions Qcmax (cfs) 13,982 Step 4. Calculate expected annual damages between Tcnd and Tcmod based on Step 1 and Step 2. = * ( − ) = 0 + 1,630,000 2 * ( 1 50 − 1 100 ) = 815,000 * 0.01 = 8,150 = $8,150 Step 5. Calculate expected annual damages between Tcmod and Tcmax based on Step 1 and Step 2. = * ( − ) = 1,630,000 + 3,227,000 2 * ( 1 100 − 1 500 ) = 2,428,500 * 0.008 = 19,428 = $19,428

Worksheet for Level 1 Analysis 133 Step 6. Calculate total annualized damages. = + = $8,150 + $19,428 = $27,578 = $27,578 Step 7. Calculate present value of total expected damages under current conditions. = * = 27,578 *13.801 = $380,604 Note: PVC can be determined based on Appendix B. Step 8. Summarize the data for current climate conditions. Tc(years) Dc($) Qc(cfs) Dac($) Tcnd 50 0 9,000 0 Tcmod 100 1,630,000 10,505 8,150 Tcmax 500 3,227,000 13,982 19,428 Total annualized damages 27,578 Step 9. Plotting • Create a graph by plotting the return periods Tcnd, Tcmod, and Tcmax (Step 8) on a logarithmic scale on the x-axis against the associated discharges on the y-axis. • Create a second graph by plotting the discharges on the x-axis (with a “normal” scale as opposed to logarithmic) and the estimated damages (D) (Step 8) associated with each discharge on the y-axis.

136 Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change—Guidebook Calculate future flows and associated expected damages for future climate conditions. To do this, start by identifying the climate change scenario to be used for analysis (see Chapter 3). For the selected climate scenario, calculate the estimated future discharges for each return period (i.e., return period in which no damages occur, return period in which moderate damages occur, and return period in which significant damages occur). This will result in identifying values for Qf1, Qf3, and Qf5. Step 10. Calculate the future flows for selected return periods. Description Variable Value Associate discharges with return period, Tfnd (i.e., Tcnd) based on climate change conditions Qfnd 9,979 Associate discharges with return period, Tfmod (i.e., Tcmod) based on climate change conditions Qfmod 11,665 Associate discharges with Tfmax (i.e., Tcmax) based on based on climate change conditions Qfmax 15,562 Step 11. Plotting: Summarize the current and future flows for each return period. Tc(years)* Qc (cfs)* Tf (years) Qf (cfs) 50 9,000 50 9,979 100 10,505 100 11,665 500 13,982 500 15,562 *See Step 8 Plot the future discharges under the selected climate change scenario Qfnd, Qfmod, and Qfmax on the same logarithmic graph as the baseline conditions (see Step 9). Step 12. Calculate the future return period for the selected climate scenario based on Step 11. This provides an estimate of the climate-adjusted return period for the base flow. = − − * − − = 10 = log (100) − ( 100 − 50) * 11,665 − 9,000 11,665 − 9,979 = 2 − (2 − 1.699 ) * 1.58 = 2 − 0.476 = 1.524 33.4

Worksheet for Level 1 Analysis 137 Step 13. Interpolate the damages ( ) linearly based on revised future discharges (Step 11) using the equations below. = + − ( − ) * ( − ) = 0 + (9,979 − 9,000 ) (10,505 − 9,000) * (1,630,000 − 0) = 0.65 * 1,630,000 = $1,060,312 Step 14. Interpolate the damages ( ) linearly based on revised future discharges (Step 11) using the equations below. = + − ( − ) * ( − ) = 1,630,000 + (11,665 − 10,505 ) (13,982 − 10,505) * (3,227,000 − 1,630,000) = 1,630,000 + 0.334 * 1,597,000 = 1,630,000 + 533,398 = $2,162,793 Step 15. Interpolate the damages ( ) linearly based on revised future discharges (Step 11) using the equations below. = + − * = 3,227,000 + (15,562 − 13,982 ) 13,982 * 3,227,000 = 3,227,000 + 0.113 * 3,227,000 = 3,227,000 + 364,651 = $3,591,659

138 Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change—Guidebook Step 16. Summarize the climate-adjusted values for discharge and damages. Set the future damages (Dfnd) corresponding to Tfnd to $0, as this value corresponds to the same discharge as Qcnd (i.e., Qcnd = Qfnd) . Tf Df ($) Qf (cfs) Tfnd 33.4 0 9,000 T’fnd 50 1,060,312 9,979 Tfmod 100 2,162,793 11,665 Tfmax 500 3,591,659 15,562 Step 17. Plot the damages against the peak discharges on the same regular graph paper as for the previous figure to develop a curve for climate-adjusted flows. Step 18. Calculate the annualized damages for climate-adjusted conditions using a similar approach to the previous section, substituting the climate-adjusted values for the current condition values based on Step 16. = * ( − ) = ($0 + $1,060,312 ) 2 * 1 33.4 − 1 50 = 530,156 * 0.00994 = $5,270 Step 19. Calculate the annualized damages for climate-adjusted conditions using a similar approach to the previous section, substituting the climate-adjusted values for the current condition values based on Step 16. = + 2 * ( 1 ’ − 1 ) = ($1,060,312 + $2,162,793 ) 2 * 1 50 − 1 100 = 1,611,553 * 0.01 = $16 ,116

Worksheet for Level 1 Analysis 139 Step 20. Calculate the annualized damages for climate-adjusted conditions using a similar approach to the previous section, substituting the climate-adjusted values for the current condition values based on Step 16. = + 2 * ( 1 − 1 ) = ($2,162,793 + $3,591,659 ) 2 * 1 100 − 1 500 = 2,877,226  0.008 = $23,018 Step 21. Calculate the annualized damages for climate-adjusted conditions using a similar approach to the previous section, substituting the climate-adjusted values for the current condition values. = + + = 5,270 + 16,116 + 23,018 = $44,404 Step 22. Calculate the annualized damages for climate-adjusted conditions using a similar approach to the previous section, substituting the climate-adjusted values for the current condition values. = * = $44,404 * 13.801 = $612 ,820 Step 23. Summarize the climate-adjusted values. Tf Qf (cfs) Df($) Daf($) Tfnd 33 9,000 0 0 T’fnd 50 9,979 1,060,312 5,270 Tfmod 100 11,665 2,162,793 16,116 Tfmax 500 15,562 3,591,659 23,018

140 Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change—Guidebook Step 24. Compare the additional damages for the base case with and without climate adjustment using the base case damages calculated in Step 7 and climate-adjusted damages calculated in Step 22. ∆ = − ∆ = 612,820 − 380,604 ∆ = $232 ,216 This value represents the additional present value of the expected damages from climate change during the asset’s remaining useful life. A resilience/mitigation measure aimed at maintaining the current frequency-damage structure (design level) while accounting for climate change must cost less than this value to be cost-effective.