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1 State departments of transportation (DOTs) are facing a daunting challenge in the coming years: they need to find ways to repair and replace aging infrastructure that the ASCE scored between a D and a C+, they need to do it in a way that allows the assets to adapt to and recover quickly from extreme weather events and climate change, and they need to accomplish these tasks with budgets that are static or dwindling. In short, state DOTs need to find ways to optimize scarce resources. In the face of changing climate and an increase in extreme weather, tools that address cost-effectiveness can help DOTs make informed decisions about how to invest their limited funds. Cost-benefit analysis (CBA) is one tool available to DOTs to help them evaluate if and how to incorporate adaptation for climate variability and extreme weather by quantifying the benefits and costs of a project or policy using an equivalent mon- etary value for each alternative. Research for Project 20-101 revealed that while DOTs are taking into account changing climate and extreme weather when making infrastructure decisions, they typically are not using a formal set of tools or CBA to address climate resilience. When transportation practitioners are questioned about why they do not typically conduct a CBA as part of their investment decision-making processes, many reveal their percep- tion that CBA is too time-consuming and expensive to conduct routinely; CBA is done only for projects above a certain cost threshold or for grant applications that require it. For CBA and other decision-making tools to be routinely useful, DOTs indicated these tools need to â¢ Leverage existing data and processes to the greatest extent possible, â¢ Complement existing methods and policies, â¢ Yield results in net present value, and, most importantly, â¢ Be simple to use. While many frameworks and tools offer elements needed to perform a climate-informed project-level CBA, no single framework or tool meets the criteria desired by transportation practitioners. This guidebook was developed to fill the gaps identified by DOTs. It is intended to provide a consolidated resource for transportation practitioners to more readily consider CBA as a tool in investment decision making when considering different climate and extreme weather S U M M A R Y Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate ChangeâGuidebook
2 Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate ChangeâGuidebook adaptation alternatives. Chapters 1 through 6 provide information about CBAs, using CBA as part of the investment decision-making process, and climate change: â¢ Chapter 1 summarizes why and how this guidebook was developed, and introduces a fictitious scenario used throughout the guidebook to illustrate concepts discussed in each subsequent chapter. â¢ Chapter 2 provides an overview of CBAâdifferent types such as project-level and triple bottom-line CBAs; metrics such as net present value and benefit-cost ratio; and impacts of funding sources, such as grants and loans, on CBAs. â¢ Chapter 3 provides an overview of climate change considerations. Selection of climate scenarios and time frames will influence which adaptation alternatives will be cost-effective. The chapter discusses accounting for non-stationarity and provides guidance on how to evaluate whether climate adaptation will be considered. â¢ Chapters 4 and 5 discuss common costs and benefits used to conduct CBAs, and also include information about environmental, social, and safety considerations incorporated in a triple bottom-line CBA. â¢ Chapter 6 provides practitioners with information about selecting alternatives and analysis time frames for completing a CBA, to allow appropriate time frames and alternatives to be incorporated into the transportation-planning process. The culmination of the research conducted for this project is the development of an approach that allows practitioners to conduct short, simple CBAs to evaluate if climate and extreme weather adaptation strategies might be cost-effective. The approach, which includes two levels of analysis, was developed to be consistent with methods described in FHWAâs Hydraulic Engineering Circular 17, âHighways in the River Environment: Extreme Events, Risk and Resilience.â A Study Level 1 analysis as described in Chapter 7 provides an approximate test to evaluate if incorporating adaptation measures would be cost-effective. A Study Level 2 analysis as described in Chapter 8 builds on a Study Level 1 analysis to return a benefit-cost ratio and net present value of costs and benefits under future climate conditions. The analysis levels are applied to case studies that have already completed CBAs; a comparison shows results between the case study CBAs and the results from the simplified approaches are consistent, suggesting that the simplified approach could be a useful screening tool for transportation practitioners deciding whether to consider incorporating climate and extreme weather adaptation into capital-improvement projects. Spreadsheet tools were created in Excel for Study Level 1 and 2 analyses. These tools are available for users of this guidebook to download; to access them, search the TRB website for âNCHRP Research Report 938â. Each workbook includes an example from the guidebook calculated at two different discount rates and also a blank tab for users to input their own project data. Also available on the TRB website is the contractorâs final report on NCHRP Project 20-101, which is published as NCHRP Web-Only Document 271 (available at http://www.trb.org/ main/blurbs/180536.aspx). Increasingly frequent weather events present potentially serious and costly impacts on an aged, already-taxed transportation infrastructure. In the face of these extreme events, transportation practitioners need tools and policies that help them make informed decisions about how to invest limited financial resources. CBA is one tool that can help strengthen the case for making climate-resilience investments, particularly because the peak benefits could be realized later in the infrastructure life cycle. CBA does have some limitations, such as the inability to monetize all of the benefits associated with a project or policy. Yet it is a useful tool in the transportation-planning toolbox to help practitioners screen projects and adaptation approaches, then identify those for further consideration of incorporation into a project.