FLOODS

What makes floods different

Floods are rapid-onset: the hazard arrives in hours, the damage occurs immediately, and the event that matters is the extreme rather than the average. That shapes the whole assessment. The relevant statistic is not the mean condition but the probability of exceeding a threshold, the losses are concentrated in a small number of events, and the value of an intervention is expressed as a change in the expected annual damage or in the losses from a design event.

Floods are also the hazard for which the insurance value argument is easiest to make, because the losses are insurable, they are recorded, and there is an industry whose accounts they appear in. That is why the flood cases supply most of the evidence in this guide for what an ecosystem's risk reduction is worth in monetary terms.

How it is assessed

The chain begins with hydrological and hydraulic modelling of the Nature Based Solutions or hybrid solutions, to establish their effect on flood extent and depth. That effect is then converted into damage through the damage cost methodology, which connects the depth and extent of inundation to the value of what is affected, using damage functions that differ by asset type.

For a flood mitigation scheme the comparison is usually made in terms of expected annual damage avoided against the life cycle cost of the intervention, with the co-benefits reported alongside. Where the objective is fixed, as it often is by a standard of protection, the comparison becomes one of cost-effectiveness — which combination of measures achieves the standard for least — and the flood-excess volume technique provides a rapid way of making that comparison before a full appraisal is commissioned.

Where the intervention is intended to reduce insured losses, the same physical result is carried into the catastrophe risk modelling so that the reduction can be expressed in the terms an insurer uses. This is the point at which a flood mitigation measure becomes a candidate for a financing arrangement rather than a public expenditure.

Where the methods are described

The hazard and risk modelling approaches page covers the modelling chain for floods and droughts together. The economic damage costs page covers the conversion of hazard into loss. The demonstration-level assessment shows the chain applied to a flood case from problem to financing arrangement.