Transport system management under extreme weather risks:Views to project appraisal, asset value protection and risk-aware system management

Until recently, research on potential economic impacts of climate change and extreme weather events on transport infrastructure was scarce, but currently this area is rapidly expanding. Indeed, there is a growing international interest, including the European area, regarding the impacts of extreme weather and climate change on the management of various transportation modes. This paper reviews briefly the present status regarding the knowledge of financial aspects of extreme weather impacts on transportation, using recent research findings from Europe, and proposes some new views in cost-benefit analysis, project appraisal and asset value protection for the management of transport systems under extreme weather risks. Quite often, risk management is understood as a response to truly extreme impacts, but this constitutes a misunderstanding. Some values are more extreme than others, and in the context of extreme weather, some weather phenomena are more extreme in their intensity and resulting impacts. An analysis of the level of costs and risks to societies, as a result of extreme weather, reveals that the risks in different European Union member states deviate substantially from each other. Also, the preparedness of different societies to deal with extreme weather events is quite variable. Extreme weather and climate change costs and risks represent a new type of item, which has to be dealt with in project appraisal. Although a fully established procedure does not exist, some fundamental ideas of cost-benefit analysis under extreme weather scenarios are presented in this paper, considering accident costs, time costs and infrastructure-related costs (comprising physical damages to infrastructures and increased maintenance costs). Cost-benefit analysis is usually associated with capital investments, but the original idea of cost-benefit analysis is not restricted to investment appraisal. Therefore, activities such as enhanced maintenance, minor upgrades, adoption of new designs, improved information services and others may be subject to cost-benefit analysis. Extreme weather and climate change costs and risks represent a new type of item, which apparently has to be dealt with also in project appraisal. A fully established procedure does not exist, although some basic principles have been introduced in analytical format. There is a lack of models to estimate extreme weather impacts and consequences and how to adapt to those costs. Optimising the efforts in maintenance and new design standards is even further away, but constitutes an overwhelming task. In this respect, new approaches and ways of thinking in preserving asset's residual value, return periods, sustainability and equity and formal methods supplementing cost-benefit analysis are put forward. The paper concludes with a call for the need for more integrated management of transport systems. In particular, it is recognised that the different stages of transport system planning pose their own challenges when assessing the costs and benefits of policy measures, strategies and operational decisions.