Direct and Indirect Cost-and-Benefit Assessment of Climate Adaptation Strategies for Housing for Extreme Wind Events in Queensland Mark G. Stewart 1 ; Xiaoming Wang 2 ; and Garry R. Willgoose 3 Abstract: The intensity of tropical cyclones and severe storms is likely to increase due to climate change. Brisbane and the northeast coast of Queensland are regions where design wind specifications may be inadequate under either current or likely future climate conditions. An appropriate adaptation strategy may be one that increases wind classifications for new houses, which leads to a reduced vulnerability of new construction. The present paper will assess the damage risks, adaptation costs, and cost-effectiveness of these adaptation measures for res- idential construction in Cairns, Townsville, Rockhampton, and South East Queensland, assuming time-dependent changes in the frequency and intensity of cyclonic and noncyclonic winds to 2100. Loss functions are also developed for direct and indirect losses. It was found that increasing design wind loads for new houses in Brisbane and South East Queensland will lead to a net benefit [net present value (NPV)] of up to $10.5 billion by 2100, assuming a discount rate of 4%, which includes approximately 95% of a direct benefit and 5% of an indirect benefit. The benefits are highest for Brisbane due to its large population and the high vulnerability of existing residential construction, and have a 90–100% likelihood of achieving a net benefit by 2100. DOI: 10.1061/(ASCE)NH.1527-6996.0000136. © 2014 American Society of Civil Engineers. Author keywords: Risk; Climate change; Climate adaptation; Housing; Cyclones; Wind; Decision making; Cost-benefit analysis. Introduction Losses from tropical cyclones and thunderstorms in Australia are significantly higher than from other natural hazards [Bureau of Transport Economics (BTE) 2001], and most damage caused by recent cyclones arose from damage to houses built before enhanced building standards were implemented in North Queensland from the early to mid-1980s (Ginger et al. 2007). Climate change re- searchers suggest that significant alteration in severe wind intensity and frequency is possible within the lifetime of existing buildings and infrastructure [e.g., Commonwealth Scientific and Industrial Research Organisation (CSIRO) 2007; Abbs 2010]. More extreme wind events will result in more severe damage to infrastructure, particularly housing, considering that current design practice as- sumes a stationary climate. This is an international trend because climate change is predicted to increase wind-related losses from hurricanes in the United States and Europe by up to 75% by 2080 and 38% by 2100, respectively [Association of British Insurers (ABI) 2005; Donat et al. 2011]. Relatively little attention has been paid to quantifying the costs and benefits of climate adaptation strategies (retrofitting, strengthening, and enhanced designs to reduce vulnerability of new and existing infrastructure), and assessing at what point in time climate adaptation becomes economically viable. Importantly, there has also been significantly more emphasis on impact (loss and consequence) modeling than climate adaptation engineering modeling. This has led the Australian Academy of Technological Sciences and Engineering (ATSE) to conclude that there “is a need to assess the impact of climate change on Australia’ s physical infrastructure on a regional basis by using risk assessment methods to provide overviews of the likelihood, consequence, risk and adaptation capacity of Australia’ s physical infrastructure” and that “information in the form of probability distributions is required for the capacity of infrastructure components after adaptation” (ATSE 2008). For this reason, there is a need for system and probabilistic modeling that integrates the engineering performance of infrastructure with stochastic modeling, structural reliability, and decision theory. A large body of research has focused on predicting the impact (damage risks) of cyclones assuming a stationary climate (e.g., Harper 1999; Huang et al. 2001; Jain and Davidson 2007; Cechet et al. 2010; Waters et al. 2010). Stewart et al. (2003) and Stewart (2003) developed a cost-benefit analysis decision- making framework to assess the economic viability of strengthened construction and other damage mitigation strategies for U.S. and Australian wind hazards. Recent work has looked at climate change (e.g., Nishijima et al. 2012), and Stewart and Li (2010), Li and Stewart (2011), and Bjarnadottir et al. (2011a, b) have assessed the cost-effectiveness of retrofitting old construction for houses in North Queensland and Florida, subject to tropical cyclones or hurricanes for climate scenarios to 2050. The Australian standard AS 4055-2006, “Wind Loads for Houses, ” (Standards Australia 2006) is based on the Australian standards for wind loads AS 1170.2 (Standards Australia 2002) and AS/NZS 1170.2:2011 (Standards Australia 2011) and is used to determine the appropriate wind classification for the design of 1 Australian Professorial Fellow, Professor and Director, Centre for Infrastructure Performance and Reliability, Univ. of Newcastle, New South Wales, Callaghan 2308, Australia (corresponding author). E-mail: mark .stewart@newcastle.edu.au 2 Principal Scientist and Theme Leader, Sustainable Cities and Coasts, Commonwealth Scientific and Industrial Research Organisation Climate Adaptation Flagship, Highett 3190, Australia. 3 Professor and Director, Centre for Climate Impact Management (C2IM), Univ. of Newcastle, New South Wales, Callaghan 2308, Australia. Note. This manuscript was submitted on August 27, 2012; approved on June 4, 2013; published online on December 18, 2013. Discussion period open until November 18, 2014; separate discussions must be submitted for individual papers. This paper is part of the Natural Hazards Review, © ASCE, ISSN 1527-6988/04014008(12)/$25.00. © ASCE 04014008-1 Nat. Hazards Rev. Nat. Hazards Rev. 2014.15. Downloaded from ascelibrary.org by California State University - Long Beach on 04/16/15. Copyright ASCE. For personal use only; all rights reserved.