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Benefit-Cost
on a Bigger Scale
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Home >> Mitigation >> Benefit-Cost
of Mitigation Projects
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a grander scale, the Federal Emergency Management Agency (FEMA)
issues Hazard Mitigation Grants to state and local governments
for mitigation projects. Benefit/Cost analysis plays an important
part in determining which Hazard Mitigation Grant projects (HMPG)
get funded. The following scenario is an example of how this might
work: |
A
small, local government wishes to seismically retrofit
its highway bridge. This bridge is
a major thoroughfare,
and vital to the local community’s economy. In the event
of an earthquake, the bridge would likely suffer damage, due
to the original design of the bridge and the bridge’s
physical location, possibly causing casualties and seriously
impacting the local economy. Experts are asked to help the
local transportation department determine estimates on how
bridge damage would affect the community and what incurred
costs could be expected with a retrofit. The experts, geologists,
economists, and engineers, determine that a retrofit of the
bridge would cost approximately $850,000 & take about 3
days to anchor sections of the bridge together, and reinforce
an eroded piling. Economists estimate that if an earthquake
damaged the bridge, it would cost about $1.5 million to repair
the bridge, and another $500,000 lost in economic impact, for
a total of about $2 million, lost over a 4 week recovery period. |
CUSEC File
Photo: This is an example of a structural mitigation retrofit
on a bridge, with cable
ties connecting the piers to the spans |
According
to FEMA, a mitigation project needs to have a Benefit-Cost Ratio
of 1.0 or higher to be considered effective. This ratio is derived
from dividing the benefit savings of the project by the total
cost of the project. In the example above, $2,000,000 ÷ $850,000
would equal a 2.35 benefit-cost ratio. This above average benefit-cost
analysis would aid the local government in justifying their needs
for a Hazard Mitigation Grant and preparing their community for
an earthquake.
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| Our
bridge example above is a good example of just one the types of
mitigation projects that happen every year across the United
States. CUSEC
will continue to promote cost-effective mitigation projects in both
the public and private sectors in the central United States. Remember,
when considering any mitigation project, it is always useful to
consult a professional and also consider
the benefits
vs. the costs
of a project. This ensures that money is spent in the right places,
where it can be used most. |
The safety information
contained on this page was compiled from many sources. We have
tried to maintain the most credible and pertinent information for
earthquake safety. The recommendations found on this page are just
that and are subject to change as new information and procedures
become available. The Central United States Earthquake Consortium
or any of its Members are not responsible and assume no liability
for any actions undertaken by any person utilizing information
contained herein or liability for any injury, death or property
loss which occurs in connection with an earthquake. |
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