Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change—Guidebook (2020)

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103 Scientific studies widely show climate is beginning to exacerbate extreme weather. Higher temperatures mean more evaporation and moisture in the atmosphere and stronger storms, droughts, and heat waves. DOTs are preparing for • Increased incidence and magnitude of extreme events common to the region; • Unseasonal or unusual types of extreme weather hazards; and • The gradual shifting of climate zones outside the parameters for which infrastructure was designed (Meyer et al., 2014), including – Higher maximum temperatures; – Depending on geography, wetter or drier climates; – Changes to expected types of winter precipitation; and – Rising sea level. Such climate changes could reduce the life span of DOT assets. For DOTs, increasingly frequent weather events present a connected set of issues with poten- tially serious, costly impacts on infrastructure; moreover, much of our nation’s transporta- tion infrastructure is reaching the end of its useful life. In some cases, competing priorities and limited budgets have resulted in underfunded preventive maintenance programs. In addition to extreme weather events, aging infrastructure is also being stressed by increases in population and development. Effective planning for resilience acknowledges the multiple “1-in-100-year events” occur- ring in 5-, 10-, and 15-year periods, affecting DOTs around the country. Moreover, many more catastrophic events have occurred in the last decade, such as the 2013 floods in Colorado, estimated to be caused by a 1-in-1,000-year rainfall event (Minchon, 2013), and the 1-in- 500-year hurricane and flood events in South Carolina in 2015 (Holmes, 2015). In the face of changing climate and increased incidence of extreme weather, tools and policies, particularly those that address cost-effectiveness, can help DOTs make informed decisions about how to invest limited funds. In particular, CBA for climate adaptation helps provide a rigorous foundation for decision making, improving stewardship of limited public monies and transpor- tation system resilience. CBAs can help strengthen the case for resilience investments, particu- larly because peak benefits usually occur later in the infrastructure life cycle (Coley, 2012). Climate resilience means recognizing that extremes are not necessarily extraordinary, and effective CBA methodologies are needed to support the ability to efficiently select between project alternatives, allowing transportation agencies to prepare, respond, and recover quickly. CBA is not a cure-all, though. CBA has some limitations to consider when evaluating trans- portation projects for funding. The need to evaluate the costs and benefits associated with Conclusion

104 Incorporating the Costs and Benefits of Adaptation Measures in Preparation for Extreme Weather Events and Climate Change—Guidebook a project is inherent in any CBA; however, individuals compiling data for the analysis might accidentally omit certain costs or benefits. One potentially significant limitation is the ability to quantify all costs and benefits associated with a project. For example, a project could have social benefits such as improved aesthetics in a neighborhood, but the value of these visual improvements is difficult to assess. With respect to climate change, there is uncertainty associated with what conditions will be like decades into the future, and associated with this uncertainty is debate about the appropriate discount rate to use to determine the present value of future benefits. Last, the data used to conduct the analysis cannot be turned into a project budget. CBAs conducted as screening tools early in the planning process are based on conceptual designs and on costs and benefits calculated using best available information at that stage of the process. They may be useful for early budget planning but not as the basis for the final project budget. While CBA has limitations, it is a useful tool in a DOT’s planning toolbox. It can help DOTs screen projects and adaptation approaches to identify those for further consideration. As DOTs acknowledge and plan for the increased stress a changing climate and extreme weather are likely to bring, CBA can help them identify when and which adaptation measures will be considered for incorporation into a project.