TY - JOUR
T1 - Social vulnerability in cost-benefit analysis for flood risk management
AU - Kind, Jarl
AU - Botzen, W. J.Wouter
AU - Aerts, Jeroen C.J.H.
PY - 2020/4
Y1 - 2020/4
N2 - Traditional cost-benefit analyses (CBAs) of flood risk reduction measures usually ignore distributions of damages over populations, which disadvantages the poor. Instead, a CBA based on social welfare includes individual social vulnerability through relative impacts on consumption. If vulnerabilities are high, floods are catastrophic and cause poverty, migration or indirect deaths, and risk reductions have high social welfare values. For non-catastrophic risks, social welfare values of risks are relatively higher for vulnerable low-income households. We present a framework to integrate social vulnerability into CBAs, and show how financial protection reduces social flood vulnerability and provides welfare benefits. A case study illustrates that traditional CBAs underestimate the social welfare value of flood risk reduction measures, up to a factor of 30. Data on financial protection is however scarce, which hampers estimation of the social welfare value in practice. A solution is to increase financial protection of individuals, in addition to offering physical flood protection.
AB - Traditional cost-benefit analyses (CBAs) of flood risk reduction measures usually ignore distributions of damages over populations, which disadvantages the poor. Instead, a CBA based on social welfare includes individual social vulnerability through relative impacts on consumption. If vulnerabilities are high, floods are catastrophic and cause poverty, migration or indirect deaths, and risk reductions have high social welfare values. For non-catastrophic risks, social welfare values of risks are relatively higher for vulnerable low-income households. We present a framework to integrate social vulnerability into CBAs, and show how financial protection reduces social flood vulnerability and provides welfare benefits. A case study illustrates that traditional CBAs underestimate the social welfare value of flood risk reduction measures, up to a factor of 30. Data on financial protection is however scarce, which hampers estimation of the social welfare value in practice. A solution is to increase financial protection of individuals, in addition to offering physical flood protection.
KW - cost-benefit analysis
KW - equity
KW - flood risk management
KW - natural disasters
KW - social resilience
KW - social vulnerability
KW - social welfare
UR - http://www.scopus.com/inward/record.url?scp=85073110194&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85073110194&partnerID=8YFLogxK
U2 - 10.1017/S1355770X19000275
DO - 10.1017/S1355770X19000275
M3 - Article
AN - SCOPUS:85073110194
SN - 1355-770X
VL - 25
SP - 115
EP - 134
JO - Environment and Development Economics
JF - Environment and Development Economics
IS - 2
ER -