Efficient or Fair? Operationalizing Ethical Principles in Flood Risk Management: A Case Study on the Dutch-German Rhine

Flood risk management decisions in many countries are based on decision-support frameworks which rely on cost-benefit analyses. Such frameworks are seldom informative about the geographical distribution of risk, raising questions on the fairness of the proposed policies. In the present work, we propose a new decision criterion that accounts for the distribution of risk reduction and apply it to support flood risk management decisions on a transboundary stretch of the Rhine River. Three types of interventions are considered: embankment heightening, making Room for the River, and changing the discharge distribution of the river branches. The analysis involves solving a flood risk management problem according to four alternative formulations, based on different ethical principles. Formulations based on cost optimization lead to very poor performances in some areas for the sake of reducing the overall aggregated costs. Formulations that also include equity criteria have different results depending on how these are defined. When risk reduction is distributed equally, very poor economic performance is achieved. When risk is distributed equally, results are in line with formulations based on cost optimization, while a fairer risk distribution is achieved. Risk reduction measures also differ, with the cost optimization approach strongly favoring the leverage of changing the discharge distribution and the alternative formulations spending more on embankment heightening and Room for the River, to rebalance inequalities in risk levels. The proposed method advances risk-based decision-making by allowing to consider risk distribution aspects and their impacts on the choice of risk reduction measures.     

Tax reform: Dreaming about tough realities

This paper discusses four papers concerned with tax reform. It is concluded that tax reform has had a rather limited impact on behaviour so far but that governments should press ahead with gradual improvement and not expect dramatic results.