Economic Feasibility of Flood Control Improvements

Although severe flooding problems continue to occur throughout the nation, economic justification of flood control improvements is becoming increasingly more difficult. Reasons for the difficulties in formulating economically feasible structural plans of improvement include increases in discount rate, greater reliance on nonstructural measures, cost escalations, environmental quality considerations, and the lengthy time required between study initiation and actual implementation. Decreasing benefit‐to‐cost ratios should be an important consideration in formulating water policy, particularly in regard to reassessing the role of the economic criterion in determining project justification, verifying that the discount rate formula appropriately represents the public interest, and developing procedures to expedite the water resources development process. In regard to project planning, the increasing difficulty in justifying flood control projects contributes to the need for more innovative plans incorporating a broader range of measure types and combinations, expanded evaluation and tradeoff analysis techniques, and improved capabilities for handling the uncertainties involved in an economic analysis.