Disasters as a Necessary Part of Benefit-Cost Analyses
R. K. Mark 1 and
D. E. Stuart-Alexander 2
1 Physical scientist in the Branch of Western Environmental Geology at the U.S. Geological Survey, Menlo Park, California 94025
2 Geologist in the Branch of Western Environmental Geology at the U.S. Geological Survey, Menlo Park, California 94025
Benefit-cost analyses for water projects generally have not included the expected costs (residual risk) of low-probability disasters such as dam failures, impoundment-induced earthquakes, and landslides. Analysis of the history of these types of events demonstrates that dam failures are not uncommon and that the probability of a reservoir-triggered earth-quake increases with increasing reservoir depth. Because the expected costs from such events can be significant and risk is project-specific, estimates should be made for each project. The cost of expected damage from a "high-risk" project in an urban area could be comparable to project benefits.
