Economic evaluation of structural and non-structural flood risk management measures: examples from the Mulde River

The concept of flood risk management, promoted by the EU Floods Directive, tries to mitigate flood risks not only by structural, hydraulic engineering measures, but also by non-structural measures, like, e.g., land-use planning, warning and evacuation systems. However, few methods currently exist for the economic evaluation of such non-structural measures and, hence, their comparison with structural measures. The objective of this paper is to demonstrate the potential benefits of employing a wider range of economic appraisal methods for flood projects, in particular, it provides examples and applications of methodologies which may be employed to evaluate non-structural measures and their transaction costs. In two case studies at the Mulde River, Germany, two non-structural measures, a resettlement option and a warning system, are evaluated and compared with structural alternatives with regard to their effectiveness, cost-effectiveness and efficiency. Furthermore, a simple approach is tested in order to show the transaction costs of these measures. Case study results show that the choice of evaluation criteria can have a major impact on the assessment results. In this regard, efficiency as an evaluation criterion can be considered as superior to cost-effectiveness and effectiveness as it is also able to consider sufficiently the impacts of non-structural measures. Furthermore, case study results indicate that transaction costs could play an important role, especially with non-structural measures associated with land-use changes. This could explain why currently these kinds of measures are rarely selected by decision makers.