An economical optimal investment strategy in a multi-layer flood risk approach

Flood risk reduction can be obtained in many ways and by many measures. A common approach in The Netherlands is to divide the measures in three layers: flood prevention, land use planning and emergency measurement. An important question is how to select the measures among these layers, and whether it is necessary to select measures in all three layers. In this paper we follow an economic approach: the selection of measures is guided by minimizing the total costs (for example investments, risk and maintenance). The method is applied for the Dutch context. It can be concluded that in the Dutch polder context, the main part of the investments is in flood prevention, but it is often also optimal to invest (in our examples < 1% of the total costs) in improvements for the organization of emergency management. As a general rule of thumb, the results of our method show that the smaller the optimal flooding probability, the smaller the part of the investment is invested in the organisation of emergency management. Investment in physical measures (land use planning, emergency personnel, road capacity) are in general not cost effective with regard to flood risk management. Possibly, coalitions (and combination of budgets) for these measures can be organized to fulfill other objectives, which will, however result in more complex projects. In addition, multi layer flood risk is not only about the design of the measures, but also about the question how to maintain and how to periodically inspect them. The maintenance (inspection and repair) can be costly for specific measures. It can for example be questioned if regulation to minimize flood risk by land use planning should applied in entire areas or only in specific zones. evacuation are a key factor in reducing the loss of life (Chowdhury,, 1993). An important element in coastal planning and policy in various parts of the world concerns the assessment of the effects of climate change and sea level rise on flood risks and vulnerability (Nicholls et al., 2011). Flood risk is defined as the product of the probability of flooding and the consequences of flooding. Consequences are often expressed as economic costs and loss of life. Both indicators are important and are to be considered in discussing acceptable (or tolerable) risk. The consequences of a flood depend on the characteristics of natural phenomenon, the demographics and economic activity of the exposed area and emergency measures. A flood risk management strategy can consist of multiple layers, such as prevention with levees, land use planning, building codes, insurance and emergency management. A multiple layer safety approach as followed in The Netherlands consists of three layers: (1) prevention (2) land use planning