Guidelines to Incorporate the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change (2020)

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1 Summary Overview and Products The systems that transportation agencies manage and maintain are vital to social and economic growth; society depends on them now more than ever to support both business and leisure activities. Recently, new laws, Executive Orders, and rules have been issued with the intent of making transportation systems and their assets more reliable both now and in the future by focusing on asset management, state of good repair, and adapting to the impacts of climate change and extreme weather. Society’s increased reliance on transportation systems and recent federal requirements are placing additional demands on budgets and staffs that are already stretched thin. Transportation practitioners need to understand what data and tools are available to help them make timely, informed decisions about the best use of limited resources to achieve desired results. Cost-benefit analysis (CBA) is one tool decision makers can use when evaluating if and how to incorporate adaptation for climate change or extreme weather into the design of a transportation asset or system. CBA holds out promise to improve public sector decision making. It offers a common language for comparing diverse considerations. All agencies deal with budget issues and nearly everyone must be accountable in and for budgets, so CBA seems like common sense. Agencies are also responsible for saving lives and ensuring the smooth operation of the central background system of mobility, transportation, and access that enables the rest of our lives; i.e., access to family, jobs, businesses, healthcare and human services, recreation, even achievement of happiness, many of which cannot be quantified. Fulfilling these sometimes-conflicting objectives often requires trade-offs, and CBA makes these trade-offs explicit by casting all objectives in monetary terms. Public infrastructure, investment, planning, and strategy practitioners are responsible for making good decisions, including deciding when cost-benefit analysis is appropriate. While CBA can be complex, it is important not to ignore the future impact of climate change on today’s decisions. Sometimes this can be done with a simple “back-of-the envelope” analysis, with or without a spreadsheet tool such as Excel, to get an idea of the magnitude of the potential effects. The guidebook produced as part of this project (published as NCHRP Research Report 938) includes two frameworks that were developed for the project to allow practitioners to conduct CBAs to a level of detail they deem appropriate; a sketch-level analysis can serve as a screening tool to evaluate if adaptation is even appropriate, while a more detailed climate resilience analysis can help to answer the question, “How much can I spend on an adaptation project and have it remain cost-effective?” Currently, transportation agencies conduct CBAs infrequently, usually only when they are required as part of funding source reporting or when the agency’s internal practices dictate their use. However, departments of transportation (DOTs) acknowledge CBA’s usefulness as a potential tool for evaluating various options, particularly if the analysis can be done relatively easily using available data. Furthermore, there is growing emphasis from policy and funding entities to address project cost- effectiveness, and increasing awareness of the need for climate resilience when DOTs experience more disruptions and damage. Agencies will increasingly want to use CBA during planning as part of the process of choosing between project alternatives. The guidebook provides recommendations for how to incorporate CBA into planning and climate adaptation processes, focusing on flood events. Floods are one

2 of the most common and costly natural hazards impacting transportation assets, and there is a reasonable amount of data available to support CBAs for flood adaptation. CBA is useful for climate change response and adaptation, and if used properly, it has great potential for long-range planning. CBA should help agencies navigate the spectrum of decisions from mitigation and greenhouse gas reduction to adaptation: where does investing public funds generate the most public good? Future Needs The frameworks and guidebook produced for this project include detailed explanations of how to apply the frameworks to a handwritten analysis. Two companion Excel-based spreadsheets were created using the methodologies included in the guidebook to simplify and expedite the calculations. As agencies progress in their use of CBA and the level of sophistication needed to complete CBAs increases, there could be the need for a tool that supports more sophisticated analyses. While flood hazards have a relative wealth of data available to support CBAs for flood adaptation projects, much less quantifiable information is available regarding the potential impacts of extreme heat on transportation assets and systems. Additional research is needed to gain a better understanding of the impacts of extreme heat on these assets and systems so that transportation practitioners can begin to plan accordingly to mitigate to the extent possible and practicable and to adapt as appropriate to these future conditions. Zillow recently completed a holistic residential sector analysis based on National Oceanic and Atmospheric Administration (NOAA) and Intergovernmental Panel on Climate Change (IPCC) flood estimates for the business-as-usual scenario. A parallel regional or national analysis for the transportation sector could be conducted to allow transportation and other government agencies to understand potential long-term impacts to transportation systems. Such an analysis will allow agencies to plan for future impacts to assets and systems with long useful lives and to evaluate current policies to determine if a shift or new direction is needed. Chapter Sequence and Descriptions Chapter 1: Background This chapter discusses the challenges associated with planning for and adapting to climate change and extreme weather, and the gaps in resources that led to the development of the guidebook. It includes an overview of the problem statement and scope of this project. Chapter 2: Research Approach This chapter presents the two-phased approach used to develop the guidebook. Chapter 3: Findings and Applications This chapter details the methodologies and outcomes used to create the guidebook. It includes a discussion of the literature review and development of background reports; a field survey of state DOTs; follow-up interviews with DOT representatives; and development of the guidebook.

3 Chapter 4: Conclusions and Research Recommendations This chapter discusses the final guidebook, summarizing key findings. In addition, it describes potential areas for future research and development.