Climate Resilience and Benefit–Cost Analysis: A Handbook for Airports (2019) / Chapter Skim
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Pages 47-54
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From page 47... ...
47 After completing all of the preparatory work described in Chapters 3, 4, and 5, the resilience team can get to the task of actually performing a risk analysis. Beyond the calculation methodologies described in Chapter 2, this chapter delves into specific topics related to financial feasibility and benefit–cost analyses in the context of risks and uncertainties associated with climate change.
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From page 48... ...
48 Climate Resilience and Benefit–Cost Analysis: A Handbook for Airports of financial feasibility or benefit–cost) in order to properly assess which project can or should be undertaken.
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From page 49... ...
Other Relevant Topics for Airports Addressing Climate Change 49 Conversely, because a BCA considers only net societal costs, an up-front capital expenditure would be included fully in the year it was expended, but depreciation expenses associated with that expenditure (which might appear over time on an airport's income statement) would not be included in a BCA.
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From page 50... ...
50 Climate Resilience and Benefit–Cost Analysis: A Handbook for Airports 6.3 Hard-to-Quantify Impacts and Direct Environmental Strategies As stated previously, the types of impacts associated with different types of climate change suggest that the benefits to making climate resilient infrastructure investments may often be difficult to quantify from a technical standpoint. For example, if climate change would increasingly cause aircraft to be weight-restricted on hot days, it is not necessarily a simple task to estimate the financial impact on carriers or passengers.
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From page 51... ...
Other Relevant Topics for Airports Addressing Climate Change 51 matter to evaluate the environmental benefits of undertaking such an investment. One approach would be to use the economic concept of "willingness to pay." There have been multiple studies that have attempted to estimate how much (in dollar terms)
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From page 52... ...
52 Climate Resilience and Benefit–Cost Analysis: A Handbook for Airports Continuing with the example, the runway extension would create the following impacts as the airport incurred costs to build and operate the project: • Direct impacts: Employment for construction and operations, which in turn would add income to the local community and would increase the regional output of construction services; • Indirect impacts: Other key inputs (e.g., sand, concrete, equipment rentals, construction management) would be also be purchased within the community; • Induced impacts: Some of the income created in the direct and indirect impacts would be re-spent in the local community.
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From page 53... ...
Other Relevant Topics for Airports Addressing Climate Change 53 In contrast, a benefit–cost study compares benefits to costs and provides information about whether the project makes economic sense from a national perspective. The benefits of the runway extension project would be defined primarily as passenger (and cargo)
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From page 54... ...
54 Climate Resilience and Benefit–Cost Analysis: A Handbook for Airports uncertainty (FAA 1999b, p.
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