Risk-Averse Economic Optimization in the Adaptation of River Dikes to Climate Change

L. Wang (), P. Gelder, J. Vrijling, S. Maskey and R. Ranasinghe

Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), 2015, vol. 29, issue 2, 359-377

Abstract: To guarantee a safe flood defence in a changing environment, the adaptation to climate change needs to be considered in the design of river dikes. However, the large uncertainty in the projections of future climate leads to varied estimations of future flood probability. How to cope with the uncertainties in future flood probability under climate change is an inevitable question in the adaptation. In this paper, the uncertainty introduced by climate projections was integrated into the ‘expected predictive flood probability’, and the risk-aversion attitude was introduced in the adaptation of river dikes. The uncertainty of climate change impact on flood probability was represented by the uncertainty in the parameters of the probabilistic model. This parameter uncertainty was estimated based on the outputs from the GCMs participated in IPCC AR4. The parameter uncertainty estimated from different GCMs under selected scenarios was integrated into the expected predictive probability of flooding, which was used in the risk-averse economic optimization. Different optimal results were obtained based on varied values of the risk-aversion index. A case of dike ring area in China was studied as an example using the proposed approach. The results show that the uncertainty of climate change increases the optimal dike height and decreases the optimal safety level. The proposed approach enables decision makers to cope with the climate change and the associated uncertainty by adjusting the risk-aversion level. Copyright Springer Science+Business Media Dordrecht 2015

Keywords: Climate change; Uncertainty; Flood probability; Risk-aversion; Economic optimization (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1007/s11269-014-0814-9

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