FACE:Hazards Frequently Asked Questions

Sunset San Juans

Here you will find several key questions that might arise from reviewing the Future Avoided Cost Explorer. For more project methodology detail please see the Technical Report.

If you have feedback or questions that remain unanswered, please take the user survey.

Project Goals
What is the purpose of this resource?

FACE:Hazards is a suite of resources for local decision-makers to explore how resilience actions today, can save Colorado money in the long run. This study and web-based visualization helps communities peer into the economic risks of climate change.

FACE:Hazards empowers communities to develop neighborhoods, invest resources, and recover from disasters with data- and climate-informed decisions that reduce our risks to natural hazard impacts.

What are some ways to use this information?

The following ideas were provided through a user feedback survey during the project testing phase. We would love to hear how you hope to use this resource!

  • Gather relevant information for presentations to elected officials
  • Identify impacts that changing climate and populations will have on different regions of the state
  • Present climate change projections for Colorado in terms of economic impacts
  • Local hazard mitigation planning
  • Communicate the economic benefits of hazard planning
  • Identify regions/sectors where a strong case can be made for locally based funding mechanisms
  • Reference for updating Community Development Codes
  • Educate middle and high school students about natural hazards and empower them to develop resilience strategies for their communities
Why did the project focus on flood, drought, and wildfire?

These hazards were selected because of their: 

  • History of adversely impacting large areas and populations across Colorado
  • Recognized sensitivity to a changing climate
  • Potential to affect multiple economic sectors

Flood, drought and wildfire are also three of the major “atmospheric hazards” identified in the Colorado Hazard Mitigation Plan 2018-2023. The information required to estimate future damages and isolate the impact of climate change is common among the three hazards. For example: 

  • The hazards have a recognized physical relationship with available climate data that supports modeling both historical records and future projections
  • Damage functions could be created for each hazard from historical relationships, taking into account relevant features such as location, size, and severity, among others
  • Each of the damage estimates can be adjusted to account for alternative population growth assumptions or conditions.
Were indirect impacts of the hazards considered? (Such as mortality, human health, or ecosystem services?)

No. The scope of this study included direct economic costs that could be easily monetized, such as lost revenue, damages to buildings and infrastructure, and natural hazard response costs. Indirect costs, while significant, were not a part of this study.

2050 Future
What are the differences between the climate change scenarios?

We consider two plausible future scenarios as a way of acknowledging and dealing with uncertainty in Colorado’s 2050 climate. The Moderate and More Severe scenarios differ in the relative magnitude and intra-annual timing of the changes in future air temperature and precipitation across the state as a whole. Scenarios are based on available climate model outputs and in-line with climate scenarios considered by Colorado’s Water Plan and other scientific literature. For further details on the scenarios, please see climate scenario table and chapter 2 of the Hazards Technical Report.

What are the differences between the future population growth scenarios?

The population scenarios we consider incorporate different assumptions about the type and nature of future economic growth in Colorado. Fundamentally, this translates into how much state population is likely to increase, and where new development occurs. For some sectors (e.g., recreation), population growth affects the total available market for customers. For others (e.g., infrastructure) population growth affects exposure to future hazards, such as buildings in floodplains or in the wildland-urban interface, which affect damage projections. For details on each population scenarios, see population scenario table and Chapter 3 of the Hazards Technical Report

Data Access
How can I access FACE:Hazards data?

The underlying data is freely available on the CWCB FTP site or with a permanent DOI on Mendeley. The two main data files include 1) Expected annual damage data, broken out by county, sector, and climate/population scenario, and 2) a resiliency action library (common resilience solutions, including many existing State resources, guides, and active collaboratives that support informed decision making).

What existing state resources were utilized in the study?

The State of Colorado and local governments have multiple tools available to mitigate the impacts of hazards, including but not limited to land use regulations, infrastructure investments, risk transfer, and community education and engagement. Strategic planning efforts, including the Colorado Water Plan, Colorado Resiliency Framework, and the Colorado Natural Hazards Mitigation Plan provide roadmaps to inform action at the state and local levels.

Until this effort, the State did not have a method to quantify its existing and future risk to climate hazards or the potential savings from strategic resilience actions identified through existing planning efforts.

Wherever possible, we used existing state resources to guide the project framing, develop scenarios, and produce model output. These include the following:

  • Technical Update to the Colorado Water Plan
    • Population growth scenario development
    • Change in irrigated acres
  • Colorado Water Plan
    • Climate change scenario development
  • Colorado River Water Availability Study Phase II
    • Climate change scenario development
    • Future hydroclimatic simulations
  • Colorado Wildfire Risk Assessment 2017 Update
    • Wildfire modeling methodology
  • Colorado Flood Hazard Mitigation Plan 2013
    • Mapped floodplains and damage estimates
  • Colorado Department of Transportation
    • Bridge damage and repair data from 2013 flood
  • 2019 Colorado Statewide Comprehensive Outdoor Recreation Plan
    • Skiing expenditures per user day
  • 2018 Colorado Travel Year Report
    • Skiing visitors and expenditures per user day
  • Colorado Division of Water Resources streamflow gauge data
    • Validation of modeled streamflow
  • Colorado Division of Fire Prevention and Control
    • Preliminary Report on the 2012 Wildfire Season
      • Historic per-fire suppression costs
    • Strategic Plan for Supporting Colorado’s Fire Agencies
      • Statewide annual suppression costs

 

Economic Impacts 
Which sectors of the economy does this analysis cover?

This analysis examines seven sectors:

  • Buildings (flood and wildfire)
  • Bridges (flood)
  • Crops (drought)
  • Cattle (drought)
  • Skiing (drought)
  • Rafting (drought)
  • Suppression (wildfire)

While these sectors are not comprehensive of Colorado's future risks, they are representative of the diversity of Colorado’s economy. With the development of additional datasets, it could be possible to incorporate other sectors into future analyses.

These sectors were each selected because:

  • The sector is vulnerable to at least one of the natural hazards considered
  • There is a scientific relationship between climate change, the frequency and or severity of the hazard, and the impacts of that hazard on the sector
  • There exists sufficient publicly available data to quantify these relationships
  • Monetary impacts of the hazard on that sector can be produced using reasonable methods, assumptions, and data
How did the team calculate damages due to current and future flood, drought, and wildfire hazards?

The team developed statistical models to quantify the physical relationships between climate variables and hazard severity under historical conditions, as well as the relationship between hazard severity and economic damages. Those interactions were re-calculated using climate change and population growth scenarios to assess how damages might change in the future. In each case, we calculated expected annual damages over a window of time (e.g., 20-30 years) representative of baseline or future conditions, and expressed damages as “expected annual damage” over that window.

What are “expected annual damages”?

Impacts from natural hazards are episodic, with some years having little or no damages, and other years having significant economic impacts. The expected annual damage (EAD) integrates all of the annual damage values from a series of these events over multiple years to characterize the severity of the hazard damages. To learn more about EAD, click here.

Is there a difference between the terms “cost”, “loss”, or “damage”?

The terms “loss and damage” are commonly used together in risk management fields. When communities cannot fully avoid or adapt to shifting climate patterns or natural hazards, “loss and damage” (L&D) occur. “Losses” refer to a complete loss of something (e.g. human and animal life). “Damages” can be repaired (e.g. roads and homes). Loss and Damage is inexorably linked to climate justice, as our most vulnerable communities and individuals are often those without the financial means or resources to prepare for disaster or rebuild after. In the context of this study, costs are the quantifications of historical damages or projected future damages. Indirect or intangible losses such as life, community structure, or mental health we not quantified at this time.

Are dollar values adjusted for inflation?

All EAD results are presented in nominal 2019 dollars. For input data that were expressed in a different dollar year, we used the Consumer Price Index to adjust for inflation from the base year to 2019 (www.bls.gov). However, we do not attempt to incorporate potential future changes in prices for the different commodities and services and then discount back to a base year value.

What discount rate was used calculate these values?

This analysis does not include discounting. We believe assuming price changes and discounting rates would add a level of complexity and uncertainty to our analyses that would detract from the anticipated impacts of climate change, particularly if a range of real discount rates were used. In addition, our analysis does not include an assessment of the level and timing of expenses associated with any adaptive or mitigation measures. Should future work look to more directly address those activities (i.e., by quantifying benefit-cost ratios for specific adaptations) then discounting would be particularly relevant because of the need to compare current adaptation expenses to a stream of future avoided costs.

How are future commodity and building prices accounted for?

Our approach considers how 2050 climate and population projections may affect Colorado’s economy given current conditions. We do not project changing economic parameters, such as supply, demand, prices, or technology, out to 2050. Our analyses do not consider how asset prices (e.g., housing replacement values, crop prices, lift ticket costs, etc.) may change in the future. Instead, we assume that current asset prices remain constant (today’s economy, tomorrow’s climate and population).

Sector Impacts
Agriculture sector: How were EAD estimates derived for crops?

Our damage approximations for crops are simply the product of modeled production anomaly and commodity price. Production anomalies are defined relative to “normal” production, which we defined as county-level average crop production between 1990-2019. We multiply production anomalies by a 2011 commodity base price to estimate differences in revenue, relative to normal conditions. In this sense, our estimates of damages simply reflect lost revenues, and do not account for additional costs.

Other factors, such as increased water costs or increased pest/weed control were not considered.

Recreation sector: Did the drought analysis base economic impacts on lost consumer surplus or lost receipts to vendors?

Our recreation analysis is based purely on lost receipts from recreational activities and associated expenditures caused by reduced visitation from reduced snow cover or streamflow. Losses in consumer surplus are not accounted for.

Recreation sector: Did the analyses account for substitution activity effects?

An example of substitution effects: If an individual can’t ski, they might opt for a substitute activity that is of lesser utility, or the same activity but substitute a different location.

We did not account for substitution effects. A linear model was created to related historical user days to season length. Using this model, we estimate changes in user days based on predicted changes in season length, and we multiply the change in user days by user expenditures to calculate damages. We note that while some local residents may shift away from skiing or other snow-dependent sports if conditions deteriorate over time, there may be others who travel to Colorado as a projected “refuge” for future skiing. For those participants, total benefits to the Colorado economy are potentially higher than local participants because their total expenditures are likely to be higher; however, this level of economic analysis was beyond the scope of this study.