Gamper 2006

Nat. Hazards Earth Syst. Sci., 6, 293–302, 2006 www.nat-hazards-earth-syst-sci.net/6/293/2006/ © Author(s) 2006. This work is licensed under a Creative Commons License.

Natural Hazards and Earth System Sciences

A conceptual approach to the use of Cost Benefit and Multi Criteria Analysis in natural hazard management
C. D. Gamper1,2 , M. Th¨ ni1,2 , and H. Weck-Hannemann1,2 o
1 alpS 2Institute

Centre for Natural Hazard Management, Innsbruck, Austria of Public Finance, University of Innsbruck, Innsbruck, Austria

Received: 25 July 2005 – Revised: 22 February 2006 – Accepted: 22 February 2006 – Published: 8 May 2006

Abstract. Decision-making for protection measures against natural hazards entails major complexities for final decision makers. The issue in question does not onlyimplicate a variety of criteria that need to be considered but also scarce financial resources make the allocation decision a difficult task. Furthermore, these decisions appear to be multidisciplinary in nature. Stakeholders from experts over politicians and the public are among the affected parties in making and dealing with the consequences of such decisions. In order to capture the complexitythat arises when incorporating the varieties of interests as well as impacts protection measures have on the environment, the economy and society, transparent and multidisciplinary decision support techniques are needed. This paper looks at how Cost Benefit Analysis (CBA), a tool already applied to decisions concerning protective measures, and Multi Criteria Analysis (MCA), even though new to thefield as such but already successfully practiced in other environmental areas, perform according to the abovementioned criteria. A conceptual overview of the methodologies will be given along with a discussion of the respective strengths and weaknesses. Looking at past applications, this overview gives an analysis about the potential of socio economics in its contribution to natural hazard research.1 Introduction Decisions made in natural hazard management in general and for protective measures in specific, can be characterised as environmental decisions, not only because the issue in question is nature, but also because of the characteristics generally known from environmental decisions.

Correspondence to: C. D. Gamper (gamper@alps-gmbh.com)

From a socio-economic perspective theenvironment is a public good. Such a good is characterised by non-rivalry meaning that public goods are goods for which consumption by any one individual does not detract from the ability of others to consume them. Furthermore, it is characterised by nonexclusivity, in other words by indivisibility (“all or nothing” provision) and collective consumption (individuals cannot be excluded from consumption)(Edwards-Jones et al., 2000). Contrary to private goods, there is no market which takes over the decision process for allocating the goods (Connolly and Munro, 1999). This so called market failure with public goods is compensated by the state taking over the decision responsibility. So, instead of individuals it is the state that decides on resource allocation. In democratic systems the decisionresponsibility of the state and other decision mechanisms is given to politicians who – as representatives of the population – have an incentive to make decisions based on the general will of the people as they strive to be reelected (Mueller, 2003). In the case of environmental issues, and therefore protective measures against natural hazards, politicians are confronted with a complex choice.Environmental decisions affect a multiplicity of parties, from individuals as consumers or organisations of producers to tax payers. Also, the modes of environmental decision making, as well as the underlying assumptions, tools and criteria are highly diverse and add on to this multiplicity in decision-making. Take protection measures as an example: for the proper installation of avalanche...