Flood and Coastal Erosion Risk Management

A Manual for Economic Appraisal

Edmund Penning-Rowsell, Sally Priest, Dennis Parker, Joe Morris, Sylvia Tunstall, Christophe Viavattene, John Chatterton, Damon Owen

• Publisher: Routledge
• Year: 2014
• ISBN:
  9781135074531
• Edition: 1
• Topic: Physical Sciences
• Subtopic: Geography
• Index: Geography

A new 'Multi-Coloured Manual'

This book is a successor to and replacement for the highly respected manual and handbook on the benefits of flood and coastal risk management, produced by the Flood Hazard Research Centre at Middlesex University, UK, with support from Defra and the Environment Agency. It builds upon a previous book known as the "multi-coloured manual" (2005), which itself was a synthesis of the blue (1977), red (1987) and yellow manuals (1992). As such it expands and updates this work, to provide a manual of assessment techniques of flood risk management benefits, indirect benefits, and coastal erosion risk management benefits.

It has three key aims. First it provides methods and data which can be used for the practical assessment of schemes and policies. Secondly it describes new research to update the data and improve techniques. Thirdly it explains the limitations and complications of Benefit-Cost Analysis, to guide decision-making on investment in river and coastal risk management schemes.

1 Introduction

The purpose and contents of this Manual

This chapter sets the scene for the appraisal of the benefits of flood and coastal erosion risk management in England and Wales. It discusses in Section 1.1 the purpose of this Manual, and locates this in the wider context of environmental assessment.

Section 1.2 is designed to guide the reader through the Manual, including ‘How to get started’ and ‘Where to find what’. Reference is made to underpinning documents produced by the Treasury on public sector investment (HM Treasury, 2003) and by Defra on appraisal policy (Defra, 2009). In this respect some significant changes have occurred in the field of project appraisal and flood and coastal risk management since 2005, when our last Manual was produced (Penning-Rowsell et al., 2005a), in terms of both approach and the use of different techniques (e.g. providing some financial data for local rather than national application).

Government policy for flood and coastal erosion risk management (FCERM) has also changed since the beginning of this century (Section 1.3). The Department for Environment, Food and Rural Affairs (Defra) is the government department responsible for flood and coastal erosion risk management (previously ‘flood defence’ and before that ‘land drainage’). In the mid-2000s Defra developed a new policy framework in the form of ‘Making Space for Water’ (Defra, 2004a; 2005) which has had implications for project appraisal – e.g. balancing national and local priorities – and for government investment priorities. The Pitt Review (Pitt, 2008), following the 2007 floods, has also led to changes in flood management policy, enacted through the Flood and Water Management Act 2010 (HM Government, 2010a). This has primarily given new responsibilities to bodies at the local level to co-ordinate and participate in managing flood risk, within a new National Strategy developed by the Environment Agency (2011a). Defra has also developed an important new ‘partnership funding’ approach (Defra, 2011a) and at the same time delegated many responsibilities for project appraisal to the Environment Agency, and the Agency in turn has developed considerably more documentation on this subject than has ever existed before (Environment Agency, 2010a; see Table 1.1).

SUPPORTING INFORMATION ON MCM-ONLINE

Throughout this Manual, readers will find reference to Supporting Information on MCM-Online. This is the supplementary material provided for many chapters. In addition to this Supporting Information, certain chapters herein are based on direct and indirect damage data contained previously on the Multi-Coloured CD (2010). These data are now replaced by those available on the new Multi-Coloured Manual website: http://www.mcm-online.co.uk.

Section 1.4 outlines the aims and assumptions of benefit–cost analysis, before Section 1.5 discusses the difficulties of, and uncertainty in, predicting the future for which risk management is planned in a ‘non-stationary’ world. More pragmatically, Section 1.6 lays out a framework for different levels of project appraisal – generalised and detailed – and Section 1.7 gives some guidance about the time and resources needed. There follow a few words on estimating scheme costs, and on how to update the data contained in this Manual by using its parallel web-based ‘Multi-Coloured Manual Online’ (termed herein ‘MCM-Online’), containing the data and techniques covered by this Manual (Sections 1.8 and 1.9, respectively). Finally, we outline what is new in this volume in relation to our previous Manual publications, and provide a list of some of the papers that we have published in the last eight years from the Flood Hazard Research Centre.

Table 1.1 Sources of guidance on appraising flood and coastal erosion risk management schemes and plans

Source reference	Document	Purpose
HM Treasury 2003	The ‘Green Book’	Identifies the preferred approach to public sector investment appraisal
Environment Agency 2010a	Flood and Coastal Erosion Risk Management Appraisal Guidance (FCERM-AG)	How a project appraisal and cost benefit analysis (CBA) should be completed for flood and coastal erosion risk management projects
Flood Hazard Research Centre and the Environment Agency 2013	The new ‘Multi-Coloured Manual’ (MCM)	This volume: gives details of relevant research and detailed guidance on benefit assessment methods and data
http://www.mcm-online.co.uk http://www.fhrc.mdx.ac.uk	Middlesex University FHRC MCM-Online	Provides data and other information (including questionnaires) for the support of flood and coastal erosion risk management project appraisals

1.1 THE RATIONALE, PURPOSE AND STRUCTURE OF THIS VOLUME: THE NEW ‘MULTI-COLOURED MANUAL’ ANALYSIS (MCA)

1.1.1 The rationale

The rationale of this Manual is to aid and improve decision-making. The relevant decisions are about investment in fluvial flood risk management policies, plans or schemes, and at the coast in policies, plans and schemes to manage the risks of both coastal flooding and the erosion of the land by the sea. These decisions should be seen in the context of the modern philosophy of an integrated and holistic approach to sustainable catchment and coastal management, with stakeholder engagement embedded in the decision process, and sustainability and adaptive management always foremost in our thinking and in the processes that we design to guide this thinking and our decisions.

The focus of this rationale should not be misinterpreted. Although much of this Manual is aimed at ‘projects’ or ‘schemes’, by which it is usually meant any plan, programme or engineering works for which appraisal and decision-making are required, this should by no means be the only or indeed the primary outcome from using this Manual. There are many alternative strategies which should be reviewed for catchments and for the coast within the modern approach, including the ‘do nothing’ option which would let flooding and erosion continue. In summary, the term ‘scheme’ here is not meant to imply an engineering scheme but includes both structural engineering ways to reduce flood or erosion risks and non-structural alternatives (flood warning, emergency response, land use planning, etc). The term ‘scheme’ is used hereinafter for the sake of simplicity alone.

Another caveat concerns the understandable tendency when evaluating investment projects to consider just the site in question. But it is clear that a regional perspective is necessary in the planning of coastal erosion risk management policies and works, and that a whole-catchment approach gives a significant new dimension to the planning of particular fluvial flood risk management schemes.

This arises because there is a measure of hydrographic interdependency between locations along a coastline, such that erosion in one place can result in protective deposition elsewhere. In addition, flooding in particular catchment areas can be a function of problems created elsewhere, such as accelerated runoff caused by the urbanisation of upland areas, or the encroachment on to floodplains by urban land uses which thereby are threatened with inundation. A modern regional and catchment perspective – first pioneered in the UK by Gardiner (1991) – allows consideration of these factors, which may be missed in any purely local analysis.

In addition, a range of alternative strategies needs to be reviewed and appraised. These can be structural engineering schemes or non-structural alternatives. The latter may take the form of stricter land use control in floodplain locations, or tighter designation of environmental ‘no go areas’, such as Sites of Special Scientific Interest, where no flood risk management schemes should be implemented. Equally valid may be insurance arrangements to spread the impact of floods, or warning systems to allow those at risk to reduce their vulnerability.

The modern integrated approach is needed, rather than one which looks at only local issues and uses a single-discipline approach to analysis and policy-making. A multi-functional approach is also needed in the management of river catchments, so that flood risk management plans and policies fit in with other water management objectives such as navigation, water supply and pollution control, in the spirit of the EU Water Framework Directive (Green, 2003). This is not easy, and makes many of the decisions on investment very complex and difficult. But only with a systematic approach to evaluation will decision-making improve, unintended consequences be minimised, and the nation’s stock of economic and environmental resources along our rivers and at the coast be enhanced.

This Manual continues the designation as the ‘Multi-Coloured Manual’ because it embraces techniques contained in previous Middlesex University volumes in this series: the ‘Blue Manual’ (Penning-Rowsell and Chatterton, 1977), the ‘Red Manual’ (Parker et al., 1987), and the ‘Yellow Manual’ (Penning-Rowsell et al., 1992). We also first produced an early draft of this ‘Multi-Coloured Manual’ in 2003 (Penning-Rowsell et al., 2003), which MCM (2005) and its associated Handbook and CD then replaced (Penning-Rowsell et al., 2005a; 2005b). Eight years later this volume adds new results and is accompanied by the ‘Multi-Coloured Manual Online’ (MCM-Online), the web-based repository for all the data to which we here refer.

This Manual is therefore an updated and improved version of all of those previous manuals, dealing as they did, respectively, with flood risk management benefits (1977), indirect benefits (1987), coastal erosion risk management and sea defence benefits (1992), and all three combined (2003 and 2005). Although the user of this Manual is occasionally referred to sections of those manuals, it is intended that this volume stands alone and readers should not need to refer to the previous publications.

Both this Manual (MCM) and MCM-Online build on the definitive Treasury ‘Green Book’ guidance on investment in public sector projects (HM Treasury, 2003), including, for example, the use of weightings to correct for distributional impacts, optimism bias considerations when assessing project costs, and variable discount rates for projects with long lives (Table 1.1). They also have both built on Defra’s original Project Appraisal Guidance series (e.g. MAFF, 1999: PAG3) and are complemented now by the Environment Agency’s own appraisal guidance, issued in 2010 (Environment Agency, 2010a), and its additional guidance documents on its website (Table 1.2). In this respect, and to be clear, references here and in the Handbook on MCM-Online are therefore to ‘Environment Agency (EA) appraisal guidance’ (Environment Agency, 2010a) and to Defra’s ‘appraisa...