Lifecycle Problems in Consequence Estimation

The United States Army Corps of Engineers (USACE) guidance documents require economists and planners to meet a very high standard when evaluating consequences resulting from flood events. The guidance documents require analysts to evaluate how government action changes the consequences over time, in addition to evaluating how government inaction changes consequences over time as well. Corps guidance (Engineering Regulation 1105-2-100, Section 2-3.c.4 and Engineering Regulation 1105-2-100, Section 2-3.b respectively) require the evaluation of direct and indirect economic impacts, life risk impacts, and agricultural impacts for both current conditions and future most likely conditions across a range of alternatives. Evaluating the potential for impacts from flooding across time, and how time impacts their existence or vulnerability, is considered a “lifecycle approach”. Little to no guidance is available on the process of calculating this “lifecycle approach” regarding changes in the value and number of assets within the floodplain over time. Performing a lifecycle analysis of a project over durations from 30 to 100 years, depending on the project purpose, requires evaluation of the changes in human behavior caused by changes in the floodplain such as reconstruction of structures, maintenance of structures, construction of new structures, population growth, and what type of structures are being built within the study area. This type of evaluation is not fully supported by most of the software programs utilized for flood risk management in the planning context. This paper is intended to describe pros and cons of economic lifecycle evaluation techniques to address the needs stated by policy, and tools that are being developed to support this analysis