Benefit-Cost Analysis for Green and Grey Infrastructure - Evaluating Cost-Effective Strategies for Flood Loss Reduction, Erosion Mitigation, and Water Quality Improvements From Projects to City-Wide Strategies

The following presentation was made to the Southern Ontario Municipal Stormwater Discussion Group on September 27, 2018. It describes benefit-cost analysis to show the return on investment (ROI) of infrastructure improvements to reduce flood damages (insured and total), and to achieve other benefits including erosion mitigation and water quality improvements. Earlier benefit cost analyses for projects ranging from the Winnipeg floodway to the Stratford, Ontario storm system master plan are shown. The benefit-cost ratio of an Ontario flood control study is shown including a comparison of grey and green infrastructure cost effectiveness - analysis shows the grey infrastructure solution can meet the current Disaster Mitigation Adaptation Fund (DMAF) benefit/cost threshold of 2:1 required to be eligible for federal funding. In addition, city-wide analysis of grey infrastructure storm and sanitary system upgrades and green infrastructure / low impact development infrastructure strategies is summarized.

Grey and Green Infrastructure Benefit Cost, Return on Investment Analysis for Flood Control and Asset Management from Robert Muir

Results show that the grey infrastructure solution can meet the DMAF benefit/cost threshold of 2:1 but that the benefit/cost of green infrastructure is substantially below it considering flood reduction benefits. When other benefits are considered, and targeted implementation of green infrastructure is considered (e.g., representing 25% of the urban area with limited overland drainage design standards) and considering additional benefits including a substantial 'willingness to pay' estimate for water quality improvements, costs continue to exceed benefits. The insurance industry and some affiliated research groups have suggested that natural infrastructure or green infrastructure should be considered to improve climate resilience and reduce flood damages - this analysis would suggest that approach is misguided and could misdirect scare resources to ineffective strategies. In addition, the impacts of green infrastructure that infiltrate runoff into the ground, stressing wastewater systems and increasing basement flooding have not been considered in the analysis - if considered, these wastewater system flood impacts, as well as pumping and treatments costs, and potentially the cost of increased CSO's and their water quality impairment, would have to be estimated to reduce the net benefits achieved by managing overland flooding.

Grey and green infrastructure benefits and costs. Selected scenarios are shown.

***

A recent presentation at the OPWA Right of Way Conference evaluates B/C ratios considering flooding only and assumes green infrastructure is implemented in 25 % of the Markham urban area. The ROIs for Markham's best practices for flood risk reduction (i.e., policies and programs), approved grey infrastructure upgrades, and evaluated green infrastructure retrofits. A summary is below and shows a B/C ratio for green infrastructure of 0.1 considering insured losses (Scenario A' above) and 0.3 considering total losses:

The full presentation is available here: link

If "Climate resilience must be part of every government’s agenda" per Intact Financial and Sun Life, What is Insurance Industry's Role?

A Globe and Mail opinion piece from the insurance industry does some finger pointing on resilience, but should look in the mirror and consider its role in a public-private partnership. It is right to have resilience on every government's agenda - it is - how can the insurance industry participate and support the move toward greater resilience? Besides in writing opinions pieces from its echo chamber and foisting impractical research on governments who are trying to get things done? My response below.

***

These insurance executives need some new advisers, preferably from the engineering community and should realize that just as fire insurance has evolved so will flood insurance. And certainly flood resiliency is important and communities must protect critical infrastructure, but the opinion piece is just that – grossly uninformed sound bite opinions gathered and amplified in an echo chamber of the insurance industry’s own making. Someone open the door and let in some fresh air for clearer thoughts.

What is with the focus on climate change causing extreme weather events and impacts? All good engineers know that flood damages are caused by historical design standards in old communities (old small sewer pipes never designed to handle big storms at all) and historical high-risk land use decisions (long term leases to Toronto Island cottagers and commuter rail lines through the bottom of the Don River Flood Plain) ... hazards that have been in place for over a century. And despite what the insurance industry has been saying (storms are more frequent or severe due to climate change), official Engineering Climate Datasets say the opposite in regions like southern Ontario. And it has been uncovered that widely-touted “Insurance Facts” like weather events that happened every 40 years is no happening every 6 year, has been shown to be absolutely ‘made up’ by those in the engineering community who rely on data to design resilient communities. So hazards are long standing, damages may be increasing because the insurance industry is growing just like urban areas are, increasing exposure to the same ‘old normals’ we have always contended with. The ‘new normal’ is an insurance industry-affiliated research organization categorically misinforming the public on the causes and often appropriate solutions to mitigate flooding.

Saying “our industry can help find solutions” – oh, really? The engineering community begs to differ. Why does the insurance industry’s research organization promote wetlands as a solution to urban flooding, cherry-picking atypical watersheds covered with wetlands as their case studies, and prescribe them as an absolutely impractical solution to tackling today’s infrastructure capacity constraints across the country? Why does it promote green infrastructure like permeable pavement on driveways to soak rain into the ground while at the same time promoting sealing of cracks in driveways to keep it out of the ground. Conflicted? Confused? Absolutely. Never mind that permeable pavement has such as high maintenance cost it has a payback period of over 300 years if you install it. This is not helpful.

The insurance industry is so panicked, maybe because it is being misinformed on all the facts, and as KPMG recently noted did not do a good job of pricing flood insurance at all, that it is throwing everything at the wall to see what will stick as solutions. Bioswales? Aka soggy green ditches on every front yard to store runoff from the road – those are being promoted by the insurance industry from Senate committee presentations to TVO spotlights. While the insurance industry recommends these green infrastructure measures, economic analysis shows they pay back pennies in flood reduction benefits for every dollar invested in capital construction and ongoing maintenance. Are those the keen financial investments the insurance industry wants communities to make, and taxpayers to pay for? Please – if these are your practical solutions for cities STOP right now. You’re sinking them and diverting attention from solutions that can make a difference.

The insurance industry needs an “A-Team” to give them fact on what is causing flooding and the priorities for addressing it, and where they can help. Get out of the echo chamber. Insurance industry research agencies can do more harm than good in mis-identifying problems and prescribing the least technically and cost effective solutions.

Here’s an idea – all cities have to complete asset management plans to get federal gas tax funding. Why don’t insurance companies share a bit of their data, and help cities set infrastructure upgrade priorities instead of just saying there is a crisis in the papers? That’s right, be active in this ‘public-private partnership’ you write about– tell the folks down the hall to find a few big cities that you insure and go reach out and share some risk data with them so they can refine their infrastructure investment priorities. This ain’t rocket surgery. Work with city engineers on the resiliency aspect of their asset plans – insurance folks, you have risk mapping at the postal code level of details that many small municipalities do not have – some small cities don’t even have digital mapping of assets at all. Support them. Create a 'capacity-building' program to do this through FCM ... I'd volunteer for that.

In 28 years of practice I have never seen an insurance industry representative at a community meeting about local flooding and I’ve been to many. To make a public-private partnership that has to change. How? Create an insurance industry group that actively participates in the current problem solving process – maybe you will have to herd cats among all the companies to make this happen, but it will be worth the effort. In Ontario we call this the Class Environmental Assessment process, and this is how we have been defining and solving flooding and other infrastructure problems for over 30 years. Insurance industry, come on out to our meetings. Join our project stakeholder committees. Don’t just wait for big flood with in Peterborough or Windsor to show up and declare a crisis. Make it part of someone’s day job. Participate. Share. Help.

You may not know this but this type of data sharing partnership has already happened in some advanced cities where the insurance industry and cities are working together on solutions. We need to support this ground-level public-private collaboration as opposed to having insurance-industry research organizations proposing out-of-touch, impractical and costly ‘solutions’ upon cities – that will only keep us in a holding pattern and prevent us from moving ahead on effective resiliency strategies. Please stop with promoting the bioswales, permeable pavement and wetlands! As pretty as this stuff looks in the artist renderings, it would be a green blob menace to government finances and we just don't have wetland-flood-remediation opportunities in most urban areas.

So please get some fresh air. Get in touch with the local engineers and participate in finding practical solutions in all communities, at the ground level. Opinion pieces do not really solve anything, nor cherry-picked, headline-grabbing research – governments can achieve extreme weather resilience with your active participation.

Robert J. Muir, P.Eng.
Toronto

Urban Flood Risk Evaluation to Guide Best Practices and Projects - Tiered Vulnerability Assessment and Risk Mapping for Storm, Wastewater and River Systems from Flood Plain to Floor Drain

A tiered vulnerability assessment framework for existing flood risk in urban systems was developed to support best practices development in Canada as published in this previous post. Risk mapping is critical to defining areas of interest for implementation of no-regrets policies and practically deployed programs that can reduce risk in a cost-effective and technically effective manner. Examples of such include stormwater management peak flow control policies, or construction by-laws, and low-cost programs to reduce stresses on infrastructure systems (e.g., sanitary or combined sewer downspout disconnection) or to isolate flood-prone properties from sewer back-up risk (e.g., plumbing protection through backwater valve installation or foundation drain disconnection/sump pump installation).

A review of vulnerability assessment methods was prepared for the Ontario Urban Flooding Collaborative to share risk mapping approaches being considered as part of an Ontario-wide strategy being developed to reduce existing urban flood risks. The September 13, 2018 webinar presentation is below:

Urban Flood Risk Mapping - Tiered Vulnerability Assessment in Risk Mitigation Frameworks for Existing Communities from Robert Muir

The presentation illustrates examples of tiered vulnerability assessment in areas with existing urban flooding interests and demonstrates how progressively more advanced risk characterization methods (e.g., monitoring, modelling) are considered commensurate with the level of risk. Simple methods including mapping of reported flooding to identify areas of interest for no-regrets initiatives (policies and programs) to more advanced hydrodynamic modelling methods to support economic analysis and design/implementation of viable projects are shown.

An early example of layering of multiple risk factors related to construction practices (e.g., type of drain connections to the municipal sewer network), overland flow (pluvial) flooding risks, and storm sewer surcharge back-up potential is shown, i.e., the presentation author's Stratford City-wide Storm System Master Drainage Plan. The range of simple to advanced risk characterization methods that were combined in the overall system screening and prioritization are illustrated on the following slide:

Urban Flood Risk Mapping - City of Stratford City-wide Storm System Master Plan. Dillon Consulting Limited. 

Several recent examples of multiple risk factor screening are shown in a recent blog post - the following map illustrates how era of construction (design standards inferred from dwelling age), topographic risk factors like catchment slope, overland flow path design (i.e., pluvial flooding risk) and reported historical flooding are related in a north Toronto neighbourhood:

Era of Dwelling Construction, Overland Flow and Catchment Slope, and Flood Report History - Risk Factors Affecting Reported Basement Flooding During Extreme Rainfall Events, City of Toronto Flood Reports.

While there are numerous examples where the risk factors explain the observed flooding, there are equally as many examples of risk factors not explaining the observed flooding. So mapped risk factors can explain overall trends, however there is considerable scatter in the data meaning a high degree on uncertainty when it comes to defining actions required to address priority flood risk reduction measures. As a result, local, detained risk assessments as part of comprehensive studies are required to support and infrastructure investments after areas of interest are screened though high level vulnerability assessment.

A holistic process of tiered flood risk vulnerability assessment to identify no-regrets, low-cost policies and programs (i.e., best practices) and then, commensurate with risks, more advanced assessments to define capital projects is shown in the following slide from the presentation above.

Process for Defining Policies, Programs and Projects for Urban Flood Risk Reduction Including Tiered Vulnerability Assessment (Risk Mapping).

Some 'best practices' can be identified with high level, simple to intermediate risk screening as shown below:

Defining No-regret, Low-Cost, Practically-Deployed Policies and Programs  for Urban Flood Risk Reduction With Simple and Intermediate Vulnerability Assessment (Risk Mapping).

When considering sanitary / wastewater collection systems, this holistic process for assessing risk and defining policies, programs and projects is illustrated below, including example risk factor thresholds that may be used to guide progression to more advanced tiers of assessment, and ultimately design and economic screening.

Sanitary / Wastewater System Risk  Assessment Process to Implement Policies, Programs and Capital Projects - Simple to Advanced Risk Mapping and System Analysis to Prioritize Actions with an Urban Flood Risk Reduction Strategy 

Similarly, storm systems can be assessed in a holistic manner with progressively more and more advanced / detailed risk characterization.

Sanitary / Wastewater System Risk  Assessment Process to Implement Policies, Programs and Capital Projects - Simple to Advanced Risk Mapping and System Analysis to Prioritize Actions with an Urban Flood Risk Reduction Strategy

For illustrative purposes, the City of Toronto financial screening threshold for basement flood mitigation projects is shown ($32k per benefiting property) to evaluate advanced evaluation projects. A benefit/cost of 2 is also shown, which is based on the eligible Disaster Mitigation Adaptation Fund project Return on Investment (ROI) threshold. Alternative thresholds for benefit/cost ratios (from under unity to 1.3) to support pubic investment in flood mitigation infrastructure are discussed by Watt in Hydrology of Floods in Canada.

A holistic approach to urban flood risk mitigation will focus on high risk areas and deliver risk reduction in a timely and cost-effective manner. Across Canada and Ontario, many communities were designed and constructed under design standards with limited flood resiliency compared to today's modern standards. The proportion of existing residential communities that have resiliency limitations can be estimated according to Statistics Canada data on dwelling construction date ("Dwelling Condition (4), Tenure (4), Period of Construction (12) and Structural Type of Dwelling (10) for Private Households of Canada, Provinces and Territories, Census Divisions and Census Subdivisions, 2016 Census"). Data tables for various geographies (i.e., Canada and Ontario), and for various ground dwelling types (i.e., single detached house, semi-detached house, row house, and other single attached house) have been used to estimate the proportion of residential development within various eras of construction to classify resiliency and risk mitigation needs. The graphs below illustrate the number and proportion of these types of dwelling construction in different construction eras based on Statistics Canada's 2016 Census data.

Ground Dwelling Era of Construction - Ontario and Canada - Design Standards and Flood Resiliency. Dwelling Count and Cumulative Fraction of Dwellings Using Statistics Canada 2016 Census Data.

Ground Dwelling Era of Construction - Ontario - Design Standards and Flood Resiliency. Dwelling Count and Cumulative Fraction of Dwellings Using Statistics Canada 2016 Census Data.

Pre-1990 construction accounts for about 65% of residential ground dwellings in Canada and in Ontario (i.e., excluding apartments). Generally, design standards after 1990 offer high resiliency (very low risk) such that risk mitigation through remediation is not a priority. Lower risks are expected in post-1980's construction where wastewater systems are fully separated (i.e., about 14% of Ontario construction), and moderate to high risks are expected in communities constructed before 1980. Tiered vulnerability assessments will typically begin with the 65% of pre-1990 areas, and progressively refine risks associated with systems within those areas.  To illustrate this, sanitary system upgrades to address flood risks in the City of Markham, determined after advanced risk assessments, may account for less that 2% of the total sanitary sewer length - modelling revealed that only 1.8% of sanitary maintenance holes exhibited surcharge during a 100-year event that would be considered a basement flooding risk.

***

More reading:

i) costs and benefits of green and grey infrastructure

An Economic Analysis of Green v. Grey Infrastructure from Robert Muir

ii) technical and financial constraints with green infrastructure / low impact development implementation

Ontario Society of Professional Engineers OSPE Green Infrastructure Roundtable - Green Infrastructure – Cost Effectiveness and Technical Challenges for Flood Mitigation from Robert Muir

iii) Weathering the Storms with Ontario's Environment Plan - Understanding Challenges and Opportunities for Flood Resilience in Ontario