Resolution No. 5303 - Laserfiche WebLink

Home Browse Search

Appendix G: Economic Analysis of Natural Hazard Mitigation Projects This appendix outlines three approaches for conducting economic analyses of natural hazard mitigation projects. They serve as a means for documenting how action prioritization shall include a special emphasis on the extent to which benefits are maximized according to the proposed projects and their associated costs. It describes the importance of implementing mitigation activities, different approaches to economic analysis of mitigation strategies, and methods to calculate costs and benefits associated with mitigation strategies. Information in this section is derived in part from: The Interagency Hazards Mitigation Team, State Hazard Mitigation Plan, (Oregon State Police — Office of Emergency Management, 2000), and Federal Emergency Management Agency Publication 331, Report on Costs and Benefits of Natural Hazard Mitigation. This section is not intended to provide a comprehensive description of benefit/cost analysis, nor is it intended to evaluate local projects. It is intended to (1) raise benefit/cost analysis as an important issue, and (2) provide some background on how economic analysis can be used to evaluate mitigation projects. Why Evaluate Mitigation Strategies? Mitigation activities reduce the cost of disasters by minimizing property damage, injuries, and the potential for loss of life, and by reducing emergency response costs, which would otherwise be incurred. Evaluating possible natural hazard mitigation activities provides decision -makers with an understanding of the potential benefits and costs of an activity, as well as a basis upon which to compare alternative projects. Evaluating mitigation projects is a complex and difficult undertaking, which is influenced by many variables. First, natural disasters affect all segments of the communities they strike, including individuals, businesses, and public services such as fire, police, utilities, and schools. Second, while some of the direct and indirect costs of disaster damages are measurable, some of the costs are non -financial and difficult to quantify in dollars. Third, many of the impacts of such events produce "ripple -effects" throughout the community, greatly increasing the disaster's social and economic consequences. While not easily accomplished, there is value, from a public policy perspective, in assessing the positive and negative impacts from mitigation activities and obtaining an instructive benefit/cost comparison. Otherwise, the decision to pursue or not pursue various mitigation options would not be based on an objective understanding of the net benefit or loss associated with these actions. What are some Economic Analysis Approaches for Evaluating Mitigation Strategies? 6-119 January 2020