Economic Valuation of on Site Material Damages of High Water on Economic Activities Based in the City of Venice: Results from a Dose-Response-Expert-Based Valuation Approach

24 Pages Posted: 22 Apr 2005

See all articles by Paulo A. L. D. Nunes

Paulo A. L. D. Nunes

University of Padua - Dipartimento Territorio e Sistemi Agro Forestali (TeSAF)

Margaretha Breil

Fondazione Eni Enrico Mattei

Gretel Gambarelli

World Bank - Environment Department - Climate Change Unit

Date Written: April 2005

Abstract

The paper focuses on the economic assessment of damages caused by high water in the city of Venice. In particular, we focus our attention on a valuation exercise that addresses the estimation of monetary, short period, on-site damages due to high water events on the different business activities located in Venice. On-site damages include both mitigation costs, which refer to all types of financial expenditure undergone to avert physical and material damages caused by flooding, and remediation costs, i.e. costs to be sustained for maintenance and substitution of affected building elements. Hence, the present study can be considered as a pioneering attempt to analytically quantify, from an economic point of view, on-site damages from high water. An integrated dose-response modelling and an expert-based valuation approach have been selected as the most suitable economic valuation methodology to shed light on the on-site damages. The main focus of the work is to assess dose-response relationships, which are able to describe the physical effects of high water on the different on-site damage categories, including inner and front doors maintenance, cleaning of pavements and maintenance of the walls. Bearing in mind such an economic valuation framework, we proceed with the estimation of on-site damages not only for the present high water situation (business as usual) but also extend the valuation exercise to three additional high water scenarios: (1) a climate change scenario; (2) a high water protection scenario; and, (3) a combined climate change and protection scenario. Estimation results show that the welfare loss due to on-site, short-term damages supported by the business activities ranges from 3.41 to 4.73 million Euro per year, respectively for the business as usual and climate change scenarios. Finally, we can conclude that the introduction of a public policy protection mechanism that defends the city of Venice from any flooding above 110 cm above the Punta della Salute Tidal Datum, such as the MOSE, will reduce the on-site damages supported by the business activities up to 2.87 million Euro per year.

Keywords: High water damages, Venice, Economic valuation

JEL Classification: C29, Q25

Suggested Citation

Dias Nunes, Paulo Augusto and Breil, Margaretha and Gambarelli, Gretel, Economic Valuation of on Site Material Damages of High Water on Economic Activities Based in the City of Venice: Results from a Dose-Response-Expert-Based Valuation Approach (April 2005). FEEM Working Paper No. 53.05. Available at SSRN: https://ssrn.com/abstract=702965 or http://dx.doi.org/10.2139/ssrn.702965

Paulo Augusto Dias Nunes (Contact Author)

University of Padua - Dipartimento Territorio e Sistemi Agro Forestali (TeSAF) ( email )

Legnaro, Padova 35020
Italy

Margaretha Breil

Fondazione Eni Enrico Mattei ( email )

Campo S. M. Formosa, Castello 5252
Venezia, 30122
Italy
+390412711453 (Phone)
+39 0412711461 (Fax)

Gretel Gambarelli

World Bank - Environment Department - Climate Change Unit ( email )

1818 H Street NW
Room MC5-824, Mail Stop MC5-517
Washington, DC 20433
United States
+1 (202) 473 9396 (Phone)
+1 (202) 614 3240 (Fax)

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