From Flood Damage Reduction to Flood Risk Management: Implications for USACE Policy and Programs
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1 From Flood Damage Reduction to Flood Risk Management: Implications for USACE Policy and Programs IWR Policy Report 2014-R-02
2 Background Study Origin: Funded by FY2008 Consolidated Appropriations Act; Supplemental support from NFRMP Study Purpose: Identify policy & legislative changes that would allow the USACE to be more effective in working with other federal & non-federal agencies & stakeholders in the management of flood risk
3 Final Report Structure Chapter 1 Introduction Chapter 2 Historical context for understanding evolution of federal FRM roles & differing perspectives on federal FRM objectives Chapter 3 Meaning of and logic for USACE policy to foster RICR decision making Chapter 4 Recommendations for USACE FRM policy & programs
4 Stand-Alone Report Appendices Appendix A Vocabulary of flood risk management terms Appendix B Review of federal reports on a Unified National Program for Floodplain Management, Appendix C Understanding decision making by communities & individuals that affects flood risk Appendix D Comprehensive review of USACE flood risk management programs
5 Consistent and Clear Vocabulary Required for coherent policy discourse 5
6 Floodplain One of many FRM terms with inconsistent meaning 6
7 Flood Risk Defined Hazard Hazard Impedance Performance Exposure Vulnerability Consequences HAZARD (What can cause harm?) PERFORMANCE (How will the system react?) EXPOSURE (Who & What are in harm s way?) VULNERABILITY (How susceptible to harm?) CONSEQUENCE (How much harm?) RISK (Probability and severity of adverse consequences) 7
8 Flood Risk Reduction and Management Actions Reduce the Hazard Gray dams, levees, channels, walls Green natural buffers through wetland/floodplain restoration System performance reliability Reduce exposure of people and assets Emergency and permanent evacuation Reduce vulnerability people and assets Elevation Ring levees Flood proofing Emergency preparedness Increase speed of post flood recovery (resiliency) Post flood aid Take up rates for NFIP policies 8
9 Current Reality for National FRM No national consensus on what is meant by wise use of floodplains Federal Agency authority and capacity is limited Local Community capability is on the increase 9
10 Result: USACE emphasizing shared responsibility Recognizes that communities (local governments) and individuals (landowners, households, businesses) are the key decision makers w/r/t choices that affect flood risk Report Theme: USACE can make shared responsibility operational in agency programs by making Risk Informed and Cost Responsible (RICR) decision making the goal of FRM program
11 Risk Informed Means Individuals in their roles in the community, in the household, and in business have access to the same information as available to technical experts about likelihood and consequences of flooding effectiveness of actions that reduce flood risk and manage residual risk, limitations government programs that provide pre- and post-flood assistance.
12 Cost Responsible Means Communities and individuals bear costs for floodplain location, as required by law and regulation On site Expenditures for risk reduction NFIP risk based flood insurance premiums for risk management Property damages (residual risk) Off site Environment hydrologic trespass
13 Why RICR: History? Use of floodplains involving periodic damages is not, in itself, a sign of unwarranted or inefficient development. It may well be that the advantages of flood plain location outweigh the intermittent cost of damage from floods.. Principles of national efficiency require, however, that the benefits of flood plain occupants exceed all associated costs, not merely those borne by the individual or enterprise that so locates. HD 465 (1966) 13
14 House Document 465 Core Responsibilities 14
15 Individual responsibility careful weighing of the costs and advantages of developing and occupying alternative sites; willingness to assume financial responsibility for new locational decisions.
16 [Community] responsibility for guiding desirable expansion and avoiding, to the fullest possible degree, use of high hazard areas for uneconomic activities; organizing flood project beneficiaries to pay for services rendered.
17 State responsibility for establishing floodplain encroachment lines; granting of authority to assure conspicuous demarcation by state and local planners of flood hazard areas; and assisting local planning and project financing efforts.
18 Federal responsibility for collection and dissemination of needed data; provision of technical services to assist in intelligent application of data in local planning; construction of flood control projects; management or supervision of an actuarially sound insurance program; and provision of credit, where needed, for local contributions to flood project construction.
19 Why RICR for USACE: Contemporary Reality - Frames the national conversation over responsibility for flood risk management at existing and new flood risk reduction infrastructure. - NFIP map accreditation/ levee certification - LSAC and the LSP - No money for federal upgrades - Role of NBF in rethinking flood risk reduction and management 19
20 Why RICR for USACE: Opportunity Makes the case for increasing commitment to risk communication and public engagement. Consistent with what federal programs are actually saying and doing ( shared responsibility and accountability; NFIP reform) 20
21 Why RICR: Messaging? Federal agencies are not telling others that their decisions are unwise, but rather are committed to neutral transmission of risk information and establishing and advancing cost responsibility as defined by Federal policy. 21
22 Risk Informed Recommendations Two Examples of Effective Provision of Risk Information Clarity about federal program authority and budget limits Draw from research in behavioral science in design of risk communication programs
23 USACE FRM Program Description Important part of risk communication challenge Vital for effectively communicating to communities and individuals limits on program authorities and budgets
24 Provision of Risk Information Use insights from the literature on risk perceptions and decision heuristics for the design of risk communication efforts Appendix C, Forthcoming RFF report Briefly, in review
25 Decision context Complexity Systems of thinking Heuristics (mental short cuts) Risk communication outcomes Understanding vs nudging The messenger and the message
26 Risk Attitudes Degree of risk aversion Voluntary or not Catastrophe potential Heuristics & Biases Availability heuristic Optimism & myopia Dismiss/ignore low probabilities Gambler s fallacy Framing Perception of Flood Risk Probability of a loss Magnitude of potential adverse consequences Information Official Sources o FIRMs o Lender o Websites Social Network o Friends o Family Personal o Past experience o Observation HOUSEHOLDS LOCATION CHOICE Constraints Wealth/income Job location Family Ties Risk-Related Amenities FRM Costs Cost of insurance Cost of reduction/management Cost of moving HOUSEHOLD RISK REDUCTION / MGT CHOICES Location Net Benefits View Recreational opportunities Proximity to beach/river LOCAL GOVERNMENT FLOOD RISK MANAGEMENT DECISION Neighborhood (dis-)amenities Tax rate Crime rate School district Location (dis-)amenities Distance to job & business district Distance to transit Distance to parks Property (dis-)amenities Size of house and lot Rooms Price Style
27 Systems of thinking Heuristics (mental short cuts)
28 Risk Communication Outcomes Understanding or Nudging
29 The messenger and the message
30 A well designed risk communication program, whether the objective is to inform or to nudge, does not assure that different decisions will be made.
31 COMMENTS REACTIONS QUESTIONS From Flood Damage Reduction to Flood Risk Management: Implications for USACE Policy and Programs
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