Cover: How Can DoD Compare Damage Costs Against Resilience Investment Costs for Climate-Driven Natural Hazards?

How Can DoD Compare Damage Costs Against Resilience Investment Costs for Climate-Driven Natural Hazards?

Overview of an Analytic Approach, Its Advantages, and Its Limitations

Published Apr 28, 2023

by Anu Narayanan, Patrick Mills, Tobias Sytsma, Kelly Klima, Rahim Ali

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Research Questions

  1. How do the costs of investments in resilience to climate-driven extreme weather events compare with post-disaster damage costs?
  2. What types of data, information, methods, and tools are available to answer this question in a systematic and repeatable way?
  3. Which hazards, facility types, and resilience options lend themselves to this type of cost comparison?

U.S. Department of Defense (DoD) installations have been affected by extreme weather events, such as wind and flood damage from Hurricane Sally at Naval Air Station Pensacola and flooding from severe storms at Offutt Air Force Base. More-frequent and less-extreme events, such as recurrent flooding or hailstorms, also disrupt DoD missions and result in considerable financial loss. DoD needs a way to compare the damage costs resulting from extreme weather events against the costs of mitigating that damage through enhanced installation resilience.

There is currently no DoD-validated model or method for systematically comparing climate hazard damage costs against the costs of investing in resilience options. This report begins to address this gap by assessing the relevance and limitations of one analytic approach. Climate change is likely to increase the frequency and severity of extreme weather events, but it is difficult to predict with certainty which installations will be hit and when, or even by what type of hazard. It is important for DoD to account for this uncertainty by setting priorities for where and how much to invest in installation resilience to climate-driven hazards.

Tools such as the Federal Emergency Management Agency's natural hazard analysis tool (Hazus) could be used to further understanding of the value of investing in installation resilience to climate-driven hazards. In 19 case studies, the annualized cost of a resilience option was compared with the averted damage over that option's lifetime under a variety of disaster scenarios to screen for potentially attractive resilience investment options.

Key Findings

  • The findings demonstrate that The Federal Emergency Management Agency's natural hazard analysis software (Hazus) or a similar tool could be used to begin to understand the value of investments in installation resilience to climate-driven hazards. However, available data to support analyses presented in this report are limited.
  • The illustrative results in this analysis can guide additional data collection and analysis that could highlight specific courses of action DoD should take to improve installation resilience to climate change.
  • Considering these data and the modeling challenges, one alternative to modeling/simulation-modeling and simulation–based analyses is to learn from real-world events as they occur and from historical installation storm damage data.
  • However, there are downsides to this such an approach: Data might not have been captured for some installations, data might be difficult to extract from installation data sources, and many DoD installations might not have been affected by enough extreme weather events to have sufficient data points to offer.

Recommendations

  • Validate, verify, and customize the data and methods used in this report to develop natural hazard analysis tools tailored for DoD purposes.
  • Augment centrally available data with installation-provided data to conduct DoD-relevant analysis.
  • Enable installation-level analysis by issuing guidance on how to evaluate resilience options; ensuring access to, and familiarity with, analytic tools; and using mechanisms to track and record storm damage data.

This research was sponsored by the Office of the Secretary of Defense, Office of Cost Assessment Program Evaluation (OSD CAPE) and conducted within the Acquisition and Technology Policy Center of the RAND National Security Research Division (NSRD).

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