Conrad draft 11-21-14
P Economic Methods and Policies – NFPPR 2015
Recommendation
Explanation/rationale
1. Create financial incentives for
communities that are taking
additional flood-risk and floodplain
management measures through more
favorable cost-sharing for disaster
assistance and other federal grants.
Use FEMA Community Rating System
or another similar community rating
approach and establish sliding-scale
for grants to provide incentives.
[Congress, Administration, FEMA,
HUD, USACE, DOT, EPA, others] (was
16.(b), with modified 16.(a)).)
More favorable federal cost-sharing to
incentivize flood risk management. Federal
grants programs should be structured to
reward those communities that go beyond the
minimum requirements to reduce risks and
costs of disasters. This would also serve to
incentivize communities to take greater
responsibility for flood hazard mitigation as it
affects their own development and resiliency.
Use FEMA Community Rating System or
another similar community rating approach
and establish sliding-scale for grants to provide
incentives.
2. Revise and implement federal agency
Guidelines to reflect the new
Principles and Requirements for
Federal Investments in Water
Resources to include resilience and
sustainability; account for all benefits;
provide greater emphasis on
nonstructural approaches; and to
balance economic, social and
environmental concerns. [Council on
Environmental Quality, working with
federal water resources agencies]
(was P.9)
Revise and implement Guidelines reflecting
new Principles and Requirements. In WRDA
2007 (Sec. 2031), Congress directed a
substantial revision and modernization of the
federal planning procedures for water
resources development projects. The revision
process has progressed, but needs to be
completed and implemented. Congress should
eliminate annual rider from Energy and Water
Development appropriations bills that restricts
participation by USACE in finalizing and
implementing an updated P&R.
3. Enable and support federal
interagency and interdepartmental
water policy coordinating mechanisms
to implement the Principles,
Requirements and Guidelines for
Federal Investments in Water
Resources. [Congress, Administration,
FIFM-TF] (was P.8)
Support coordinating mechanisms to
implement Principles and Requirements. For
decades it has been increasingly apparent from
a wide range of audits and studies and that
greater coordination among federal water
agencies and programs is necessary; this is
heightened by concerns about climate change
and rising sea-levels. Such coordination is
especially necessary in economic and
environmental planning and evaluation for
water resources development and for finalizing
and implementing new Principles,
Requirements, and Guidelines, required by
NFPPR rec and rationale
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P Economic Methods and Policies – NFPPR 2015
Recommendation
Explanation/rationale
WRDA 2007. The Administration has
reestablished the FIFM-TF, which can assist,
but a broader, more active coordination effort
also continues to be needed. [consider combining
this with P.9 above; see also I.5 Structural Projects –
Policy and Planning and consider merging and where to
place in overall NFPPR 2015 document]
4. Develop and transition federal
National Economic resilience/sustainability
standard. Interest is growing among natural
resource and water resource economists and
planners to move toward standards particularly
for infrastructure investment which expand
beyond a unitary focus on economic
development to include consideration of
environmental, social, and economic
sustainability and equity over the longer term.
Floodplain management, public safety and
long-term environmental quality and
sustainability would, in many instances,
improve by expanding to a
resilience/sustainability standard approach.
5. Modify the Army Corps of Engineers’
Set federal cost-share for all nonstructural
standard cost-sharing formula for all
projects at 75 percent and require accounting
nonstructural flood damage reduction of natural function benefits. The purpose is to
to provide a 75/25 federal/nongrant a modest financial (cost-share) incentive
federal (local) cost-share ratio, similar to encourage communities to use more nonto FEMA hazard mitigation programs, structural approaches for flood damage
and merge the Corps’ and FEMA’s BCA reduction projects, especially where, unlike
guidelines and criteria to account for
with structural projects, the non-structural
natural function benefits. [Congress,
approaches will not encourage future
Administration] (was P.15).
increased at-risk development and increased
“residual risk” from structural project failures.
Merge FEMA and USACE benefit-cost
guidelines and criteria to improve and provide
full accounting for natural function benefits.
6. Continue to promote and prioritize
Prioritize multi-objective, collaborative
collaborative planning and
planning and implementation through Silver
implementation efforts such as the
Jackets and other similar programs. As water
Silver Jackets program or other similar resource budgets are continuing to face
programs. (was P.17).
increasing pressures, and as climate change,
population growth and urbanization, and sea
level rise continue to place more demands on
planning principles to a National
Economic Resilience and Sustainability
standard instead of the current
National Economic Development
standard to explicitly incorporate the
values of multiple ecosystem services,
including the non-market public
values, provided by our nation’s water
resources. [CEQ, working with the
Council on Economic Advisors (CEA)
and federal water resources agencies]
(was P.1)
NFPPR rec and rationale
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Conrad draft 11-21-14
P Economic Methods and Policies – NFPPR 2015
Recommendation
Explanation/rationale
7. Evaluate and recommend priorities
and effective means to implement
National Research Council
recommendations for reforms to
benefit-cost analysis for all federal
water resources-related programs,
including best methods and
approaches to discounting. [CEQ, CEA,
FIFM-TF, federal water resource
agencies] (was P.2)
8. Consider and broaden benefits
guidance in benefit-cost analysis for
hazard mitigation projects to include
all benefits, including non-market
societal and environmental benefits.
[FEMA] (was P.4)
9. Incorporate the value($) of
ecosystem services in all federal B/C
analyses and require consideration in
all flood risk and water resource
management decisions by all
agencies. [CEQ, FIFM-TF, USACE,
NRCS, USFWS, NOAA, EPA] (was K.6,
see also P.7)
NFPPR rec and rationale
already limited dollars, multi-objective
planning and project implementation efforts
will be essential to help find efficiencies and to
bring multiple interests and funding sources
together to address flood and other water –
related problems.
Implement National Research Council BenefitCost reforms. (Conrad note: before making this
recommendation, I think we need to say exactly
what we are referring to when we identify ‘NRC
recommendations’ – 1999 report, 2002 report,
2004 report, 2014 East Coast and Gulf Report,
etc.?? and which recommendations we feel are
most important to highlight. With all the other
recommendations I’ve had here to work on,
and while I believe this is a very important
recommendation for ASFPM to make, I’ve not
had time to date to review the NRC reports to
frame a definitive rationale. Will do it, but need
a bit more time on this one.)
Benefits guidance for FEMA benefit-cost
analyses. In June 2013, FEMA took a historic
step to allow inclusion of environmental
benefits in Benefit-Cost analysis for acquisitiondemolition project grants for HMA programs.
Prior to then only benefits for avoided
damages and deaths were generally allowable,
which severely limited the range of acquisition
projects that could meet the positive BCA
threshold. Building on this experience, FEMA
should broaden benefits guidance to include all
benefits, including non-market societal and
environmental benefits in its HMA BCA’s.
Incorporate ecosystem services benefits into
all federal BCAs. While this is currently implied
for follow-on Guidance in the , but not yet
implemented, Principles and Requirements,
federal agencies should focus greater attention
on developing protocols and values for
ecosystem services that are acceptable for use
by all federal agencies. In addition, a cross-
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P Economic Methods and Policies – NFPPR 2015
Recommendation
Explanation/rationale
agency effort should be made to identify and
demonstrate savings that are possible through
long-term viability and sustainability for
property as well as biological and other natural
resources.
Additionally, recognize and prioritize natural
floodplain function-focused projects over
structural measures when possible. See also
P.7
[additional option} Adjust federal BCA
methodology so the USACE and FEMA
methodology are consistent, and enhanced
consideration of ecosystem services are
considered in all federal BCA methodologies
and analyses. [CEQ, USACE, FIFM-TF, FEMA,
federal water resources and natural
resources agencies] (was K.9)
Consistent federal BCA methodology for
enhanced consideration of ecosystem
services. FEMA has begun to make progress in
valuation of ecosystem services in its BCA, and
the USACE, USFWS, NRCS/USDA, and other
agencies have broad experience in identifying
natural service values. An effort should be
made to bring the expertise of these federal
agencies together to develop methods for
greater incorporation of ecosystem values in all
federal BCA.
Comment: Cost-sharing for structural needs to
be same for USACE and FEMA—65.35 – Conrad
note: this point is, I believe, covered in P.5
above.
10. Provide updated guidance for the use
of risk-based analysis for projects in
high-risk areas (urban levees).
[Administration, MitFLG, FIFM-TF,
FEMA, USACE] (was P.12).
Update guidance for risk-based analysis for
levees and projects in high-risk, urban areas.
A array of questions are necessitating
considered updated guidance for levees and
other flood projects located in high-risk, urban
and populated areas. Such issues include what
standards should be applied, what is “tolerable
risk,” roles of sponsors, how to communicate
risk, and what assurances to require for
maintaining project capability? (Conrad note: Larry,
and others, do these seem to be he right/best questions for a
short rationale?)
11. Revise federal benefit-cost analysis
Account for opportunity costs and life-cycle
procedures to account for opportunity O&M costs. Current BCA procedures often do
NFPPR rec and rationale
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P Economic Methods and Policies – NFPPR 2015
Recommendation
Explanation/rationale
costs (foregone benefits) and full lifecycle operation and maintenance
costs for implemented projects.
[CEQ,CEA, federal water resources
agencies] (was P.3)
not adequately account for foregone benefits
and the full life cycle costs of projects. These
failings often result in substantial bias for
structures and hide future costs and important
natural service and natural floodplain values.
12. Direct FEMA’s National Benefit/Cost
Team to annually prepare a study
comparing FEMA benefit-cost
methodology and procedures with
emerging BCA best practices and
studies of risk reduction, and evaluate
and make recommendations to the
Administrator for BCA improvements.
[FEMA] (was P.6)
FEMA annual study and recommendations for
benefit-cost analysis. To build on recent
progress and to make improvements in FEMA’s
use of benefit-cost analysis in risk reduction
and hazard mitigation programs, institute a
regular, annual review by the National
Benefit/Cost Team comparing current
methodologies with emerging best practices
and make recommendations for adjustments
when warranted.
Update use of risk-based analysis in structural
flood risk reduction projects. In light of lessons
learned in the wake of recent events (Katrina,
Sandy, Midwest flooding, etc.) and new science
including science of climate and sea-levels,
fund a new study evaluation to update use of
risk-based analysis in designing and building
flood risk reduction structures.
Flood-only benefit-cost methodology. Many
unique factors in analyzing and planning flood
risk reduction-related projects, both structural
and nonstructural may suggest comparing
existing FEMA and USACE methodologies and
considering development of a unified, floodonly benefit-cost methodology. A GAO or NAS/
study should be a first step.
13. Direct and fund a new evaluation of
the use of risk-based analysis in the
design and construction of flood risk
reduction structures. [Administration,
USACE] (was P.11).
14. Conduct a study to identify current
differences in methodologies and the
potential advantages and
disadvantages of establishing a
unified, flood-only benefit-cost
methodology for FEMA and the Army
Corps of Engineers programs.
[Congress, GAO, NAS/NRC, USACE,
FEMA] (was P.5)
15. Include cost of land and easements as
part of total project costs, and not
exclusively as a local sponsor costshare responsibility. (was P.10)
NFPPR rec and rationale
Nonstructural project lands costs should not
be exclusively a local responsibility. Conrad
note: This policy is already the case in both FEMA HMA
and Corp flood damage reduction programs, including
for nonstructural projects; thus it probably is
unnecessary for inclusion in NFPPR 2015. – It may be
worth proposing, however, that for the Corps program, a
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P Economic Methods and Policies – NFPPR 2015
Recommendation
Explanation/rationale
differential cost-share should be considered that favors
and gives credit for nonstructural fdr projects, if it
guarantees no increase in flood risk (e.g. a
buyout/relocation or permanent zoning that prohibits
new at-risk building.) I have added such a policy
proposal/suggestion to the list. See 5. above. - drc.
NFPPR rec and rationale
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