The Value of a Hydrological Information and Forecasting System

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The climate change in the coming years is expected to result in longer dry periods in the summer in Denmark, but also more floods from torrential rain and overflowing groundwater.

In this analysis, we have mapped the value of a so-called Hydrological Information and Forecasting System, which is to gather all relevant data on water, climate and terrain and show where the water will be at in the future. The Hydrological Information and Forecasting System can thus contribute that a number of decisions on, among other things, investments in climate adaptation, infrastructure and watercourse management can be taken on the basis of knowledge about future climate effects.

In the analysis, we have mapped out the most important decisions that the Hydrological Information and Forecasting System can help to improve as well as how and for whom they can create value. Moreover, for the effects we can value most confidently, we have calculated their economic value. The effects consist of the impact (costs and benefits) that citizens, businesses and the public can achieve when the Hydrological Information and Forecasting System is implemented, compared to a situation where the hydrological information is at the same level as today.

Main results

The Hydrological Information and Forecasting System will help to create a better knowledge base for decisions related to the water cycle. Our analysis indicates that there are numerous decision makers/users who can use the knowledge generated by the Hydrological Information and Forecasting System to make better decisions about planning of and investing in, among other things, climate adaptation, land use and watercourse management. In the analysis, we have identified those who can use the Hydrological Information and Forecasting System, what decisions it can strengthen and what effects it can provide. Data in the Hydrological Information and Forecasting System can be used very broadly, so there may be additional users and effects that we have not identified.

The economic value of the Hydrological Information and Forecasting System is calculated only for two of the nine possible effects of the Hydrological Information and Forecasting System that we have mapped. We estimate that the Hydrological Information and Forecasting System, through a better knowledge base for decisions related to a nationwide 100-year rain, can generate a total value of between DKK 90 million and 140 million per year. In our central estimate, where the total damage costs associated with a nationwide 100-year rain today are set at DKK 31 billion, the total economic value of a fully developed Hydrological Information and Forecasting System is DKK 116 million per year. This is in corresponds to that a fully developed HIP can reduce the total damage costs of a 100-year rainfall by just over a third.

The study is commissioned by The Danish Agency for Data Supply and Efficiency.

Links

Højbjerre Brauer Schultz (2019): "Værdien af et Hydrologisk Informations- og Prognosesystem".

Contact

ESBEN ANTON SCHULTZ

ESBEN ANTON SCHULTZ

PARTNER, PH.D. (ECONOMICS)