Decision trees in cost–benefit analysis for flood risk management plans

Abstract

ABSTRACT According to the European Directive 2007/60/CE, flood risk evaluation should include a cost–benefit analysis (CBA) on a long-term time horizon to evaluate the impact of mitigation measures. The standard CBA assumes to know in advance the events observed in the time horizon and a priori compares all mitigation measures by an economic metric. No change is supposed to be made to these measures throughout the time horizon. This modus operandi is not appropriate in the domain of flood risk management because several conditions are uncertain when the CBA is made (e.g., urban policies). This article faces these challenges by the integration of cost–benefit analysis and decision trees, to prescribe mitigation measures under uncertainty on the budget for mitigation actions because their funding can be modified after the conclusion of the CBA. The former integration is discussed in the real case of the lowland valley of the Coghinas River (Sardinia, Italy), for which the classical CBA compared five mitigation measures of infrastructural works. The integration into the decision tree also allows evaluation of mitigation measures with changes in infrastructural works and a lamination action. The outcomes advise decreasing the maximum storage level and increase the peak lamination.