Traffic engineers know that capacity improvements on a highway can only work as far as adjacent intersections also allow for a higher throughput. The network’s weakest link determines network capacity. Similarly, a transportation network facing a hazard is only as resilient as its least resilient critical link. For example, reinforcing a bridge after a disaster is much more urgent if the bridge is critical to help people and businesses perform regional activities.
The Fourth National Climate Assessment (NCA4) of 2018 reviewed 60 studies that assessed transportation vulnerability. Most of these studies dealt only with isolated transportation infrastructure assets. System-wide approaches remain the exceptions. Similarly, among the small number of studies that determined costs and benefits, most did not do so in a system-wide manner.
The field of “resilience economics” is still in its infancy. Properly applied, resilience economics consists of techniques that enable planners to gain an appreciation of resilience from a system-wide economic perspective. A more resilient bridge can increase system redundancy and thereby help avoid significant economic impacts of catastrophic events. Or, a more resilient highway can have system-wide impacts for people and businesses, as well as emergency rescuers and restoration work crews during recovery efforts.
In a system-wide approach, those elements most critical to the system deserve the most attention with regards to resilience. This can be assessed by determining the cost of their hypothetical failure in case of a catastrophic event: In the short-term, infrastructure critical to rescue and service restoration would be unavailable, increasing the costs and duration of recovery efforts. In the long run, with much larger portions of the network affected, businesses and people that rely on critical infrastructure would be forced to make detours or would not be able to make a trip at all. These longer or foregone trips come with a cost.
An important variable is the duration for which an element is out of use. Not only do costs accrue with every additional day, but, for both people and businesses, there are limits to how much individual cost they can bear. This is particularly true for small businesses that often do not have the resources to stay in business for very long, especially when suppliers or customers cannot access them. According to the Federal Emergency Management Agency (FEMA), almost 40 percent of small businesses never reopen their doors after a disaster. Next to lack of financial resources, the inability to restart their businesses and create cash flow is the biggest impediment to their recovery.
The following figure shows that the magnitude of the impact of a disaster depends on how much of the network functionality is lost through a catastrophic event and how long it takes to recover. In a project for the German Federal Highway Research Institute (BASt), our affiliate, EBP (www.ebp.ch), conducted a workshop to demonstrate that it is possible to determine both network functionality loss and recovery time through estimations of subject matter experts.
Resilience economics is the technique that connects the dots. On one side, we have the vulnerability of elements of the transportation system and the potential impacts of a catastrophic event, and on the other side we have investment packages that aim, among other things, to make the transportation system more resilient. Resilience economics lets resilience planning and infrastructure planning communicate in the same language – through the system-wide benefits, costs, and impacts occurring from investments in a network.