No.4 Estimating the Economic Viability of Long-Term Investment in Flood Protection: Case Study of the Natorigawa River

Investments in disaster risk reduction are essential for mitigating disaster damage, an aim stressed by the Sendai Framework for Disaster Reduction. While a cost-benefit analysis is usually conducted for flood protection projects to confirm the viability of any new project, long-term economic analysis at the river basin or the regional scale has rarely been conducted. Policymakers need evidence that investments in flood protection contribute to regional growth. This study proposes a methodology for economic analysis of flood protection investments at the river basin scale and applies it to the Natorigawa River basin as a case study. The study estimates benefits, both past and future, by reducing damage caused by observed and simulated floods. It finds that the methodology is applicable and investments over the last seven decades in the river basin have been efficient, with an estimated benefit-cost ratio of 6.1. The methodology needs to be further simplified for application to developing countries, given the limited data and capacity in these countries. Moreover, methods for estimating the effects of climate change and the cost of replacing facilities need to be developed.

Keywords: Investment for DRR, Cost-benefit analysis, Flood simulation, Evidence-based policymaking