Korean Journal of Construction Engineering and Management (한국건설관리학회논문집)

Korea Institute of Construction Engineering and Management (한국건설관리학회)
권호 표지
DOI QR코드

DOI QR Code

Economic Assessment for Flood Control Infrastructure under Climate Change : A Case Study of Imjin River Basin

기후변화를 고려한 홍수방재시설물의 경제성분석 : 임진강 유역사례

  • Kim, Kyeongseok (Department of Civil & Environmental Engineering, Yonsei University) ;
  • Oh, Seungik (Department of Civil & Environmental Engineering, Yonsei University)
  • Received : 2017.01.31
  • Accepted : 2017.02.22
  • Published : 2017.03.31
Download PDF
⟨ Previous Next ⟩

Abstract

In Imjin River basin, three floods occurred between 1996 and 1999, causing many casualties and economic losses of 900 billion won. In Korea, flood damage is expected to increase in the future due to climate change. This study used the climate scenarios to estimate future flood damage costs and suggested a real options-based economic assessment method. Using proposed method, the flood control infrastructures in Imjin River basin were selected as a case study site to analyze the economic feasibility of the investment. Using RCP (Representative Concentration Pathway) climate scenarios, the future flood damage costs were estimated through simulated rainfall data. This study analyzed the flood reduction benefits through investment in the flood control infrastructures. The volatility of flood damage reduction benefits were estimated assuming that the RCP8.5 and RCP4.5 climate scenarios would be realized in the future. In 2071, the project option value would be determined by applying an extension option to invest in an upgrading that would allow the project to adapt to the flood of the 200-year return period. The results of the option values show that the two investment scenarios are economically feasible and the project under RCP8.5 climate scenario has more flood damage reduction benefits than RCP4.5. This study will help government decision makers to consider the uncertainty of climate change in the economic assessment of flood control infrastructures using real options analysis. We also proposed a method to quantify climate risk factors into economic values by using rainfall data provided by climate scenarios.

임진강 유역은 1996년부터 1999년까지 3번의 대규모 홍수가 발생하여 많은 인명피해와 9천억원의 재산피해를 입었다. 우리나라는 기후변화로 인하여 홍수피해가 앞으로 증가할 것으로 예상된다. 본 연구는 기후시나리오를 활용하여 미래의 홍수피해를 예측하고, 실물옵션 기반 경제성분석 방법을 제시하였으며, 임진강유역의 홍수방지시설물 투자사업의 사례연구를 통해 경제성분석을 실시하였다. RCP (Representative Concentration Pathway) 기후시나리오에서 모의된 강수량 자료를 활용하여 홍수피해액을 계산하고, 홍수방지시설물 투자에 의한 저감이익을 분석하였다. 향후 RCP8.5와 RCP4.5 기후시나리오가 실현되는 조건을 가정하여 홍수피해 저감이익의 변동성을 구하고, 2071년에 200년 재현주기에 적응하도록 하는 확장을 위한 투자를 할 수 있는 확장옵션을 적용하여 프로젝트의 옵션가치를 구했다. 옵션가치 분석결과, 두 가지 시나리오 하에서 경제성을 확보하고 있음을 확인하였고, RCP8.5 기후시나리오가 실현될 때가 RCP4.5의 경우보다 홍수피해 저감이익이 더 많이 발생하였다. 본 연구는 정부 의사결정권자가 실물옵션분석방법을 활용하여 홍수방재시설물의 경제성분석에 기후변화 불확실성을 고려할 수 있도록 도와줄 것으로 기대되며, 기후시나리오에서 제공하는 강우자료를 활용하여 기후위험요소를 경제적 가치로 정량화하는 방법을 제시하였다.

Keywords

References

  1. Amram, M., and Kulatilaka, N. (1999). "Real options." Harvard Business School Press, Boston, Massachusetts.
  2. Choi, C. K., Kim, G. H., Yeo, K. D., Shim, M. P., and Choi, Y. S. (2013). "Optimal Size Determination of Flood Mitigation Facilities in a Watershed Using Geo-Spatial Information System and Economic Analysis: Focused on Dam Height Raise Project." Journal of the Korean Association of Geographic Information Studies, KAGIS, 16(4), pp. 64-78. https://doi.org/10.11108/kagis.2013.16.4.064
  3. Choi, H., and Ahn, C. H. (2007). "Economic Analysis of Floodplain Forecast using GIS and MD-FDA." Journal of the Korean Society of Surveying, Geodesy, Photogrammetry and Cartography, 25(6-2), pp. 599-611.
  4. Choi, H., and Ahn, C. H. (2008). "Economic Analysis of Typhoon Surge Floodplain that Using GIS and MDFDA from Masan Bay, South Korea." Journal of the Korea Institute of Information and Communication Engineering, 12(4), pp. 724-729.
  5. Copeland, T. E., and Antikarov, V. (2003). "Real options: A practitioner's guide." Cengage Learning, NY, NY.
  6. Gersonius, B., Ashley, R., Pathirana, A., and Zevenbergen, C. (2013). "Climate change uncertainty: building flexibility into water and flood risk infrastructure." Climatic change, 116(2), pp. 411-423. https://doi.org/10.1007/s10584-012-0494-5
  7. Heo, B. Y., Yu, S., and Kim, S. W. (2013). "Economic Impact Analysis of Disaster Mitigation Projects in Hazardous Areas." Economic and Environmental Geology, 46(3), pp. 247-256. https://doi.org/10.9719/EEG.2013.46.3.247
  8. Intergovernmental Panel on Climate Change (IPCC) (2014). "Climate change 2014: Synthesis report." IPCC, Geneva, Swiss.
  9. Jang, M., Ku, Y., Choi, H., Kwon, T. H., Kim, J., and Kim, J. (2015). "A study on the Multiple Real Option Model for Evaluating Values based on Real Estate Development Scenario." Korean Journal of Construction Engineering and Management, KICEM, 16(5), pp. 114-122. https://doi.org/10.6106/KJCEM.2015.16.5.114
  10. Jang, Y., Lee, D., and Oh, H. (2011). "Valuation of Renewable Energy using Real Options Analysis." Proceedings of Korean Institute of Industrial Engineers, pp. 549-554.
  11. Jeong, I. C., Kim, J. H., and Kim, S. K. (2014). "An Evaluation of the Economic Value of Outsourcing of Water Supply Services Considering Uncertainty of Water Price." Korean Management Science Review, 31(3), pp. 95-111. https://doi.org/10.7737/KMSR.2014.31.3.095
  12. Jeong, W. Y., Chae, W. Y., and Choi, M. S. (2015). "A Real Options Approach to Testing the Validity of Contribution to the Budget of the United States Forces Korea." Journal of Korean Institute of Industrial Engineers, 41(3), pp. 287-295. https://doi.org/10.7232/JKIIE.2015.41.3.287
  13. Jeuland, M., and Whittington, D. (2014). "Water resources planning under climate change: Assessing the robustness of real options for the Blue Nile." Water Resources Research, 50(3), pp. 2086-2107. https://doi.org/10.1002/2013WR013705
  14. Jun, J. B., Lee, J. S., and Lee, S. S. (2011). "Default Risk Mitigation Effect of Financial Structure and Characteristic in BOT Project Finance." Korean Journal of Construction Engineering and Management, KICEM, 12(2), pp. 76-082.
  15. Kim, B., and Kim, C. (2016). "A Real Option Perspective to Evaluate Purchase Decisions of Construction Materials with High Price Volatility." Korean Journal of Construction Engineering and Management, KICEM, 17(1), pp. 121-132.
  16. Kim, G., Choi, C., Yi, C., and Lee, J. (2012). "Cost-Effective Analysis for Evaluating Utility of River Levee in Policy Aspects." Korean Society of Hazard Mitigation, KOSHAM, 12, pp. 247-254.
  17. Kim, K., Ha, S., and Kim, H. (2017). "Using real options for urban infrastructure adaptation under climate change." Journal of Cleaner Production, 143, pp. 40-50. https://doi.org/10.1016/j.jclepro.2016.12.152
  18. Kim, S. M., and Kwon, Y. J. (2007). "Dynamic Valuation of the G7-HSR350X Using Real Option Model." Journal of the Korean society for railway, 10(2), pp. 137-145.
  19. Korea Meteorological Administration (KMA) (2017). "Climate Scenarios of Korea." (Jan. 15, 2017).
  20. Kontogianni, A., Tourkolias, C. H., Damigos, D., and Skourtos, M. (2014). "Assessing sea level rise costs and adaptation benefits under uncertainty in Greece." Environmental Science & Policy, 37, pp. 61-78. https://doi.org/10.1016/j.envsci.2013.08.006
  21. Lim, K. S., Lee, D. J., Kim, K. H., and Oh, H. S. (2006). "Valuation and Optimal Timing of the Investment in Next Generation Telecommunication Service Using Real Options." Journal of the Korean Institute of Industrial Engineers, KIIE, 32(3), pp. 180-190.
  22. Mayer, C., Breun, P., and Schultmann, F. (2017). "Considering risks in early stage investment planning for emission abatement technologies in large combustion plants." Journal of cleaner production, 142, pp. 133-144. https://doi.org/10.1016/j.jclepro.2016.05.089
  23. Ministry of Land, Infrastructure and Trasport (MOLIT) (2011). "Study for Improvement and Supplementation of Design Rainfall." MOLIT, Sejong, Korea.
  24. Ministry of Public Safety and Security (MPSS) (2015). "2014 Disaster Annual Report."MPSS, Sejong, Korea.
  25. Ministry of Public Safety and Security (MPSS) (2015). "2015 Ministry of Public Safety and Security Statistics Annual Report." MPSS, Sejong, Korea.
  26. Mun, J. (2002). "Real options analysis: Tools and techniques for valuing strategic investments and decisions." John Wiley & Sons, Hoboken, NJ.
  27. Park, T., Kim, C., and Kim, H. (2014). "Valuation of drainage infrastructure improvement under climate change using real options." Water resources management, 28(2), pp. 445-457. https://doi.org/10.1007/s11269-013-0492-z
  28. Seo, I., and Shin, S. (2013). "Estimation and Comparison of Benefits of Disaster Prevention Facilities at the Masan Port with CVM and MD-FDA." Journal of Korea Port Economic Association, 29(4), pp. 289-323.
  29. The Board of Audit and Inspection of Korea (BAI) (2005) . "Construction Project of Hantan River Dam." BAI, Seoul, Korea.
  30. Trigeorgis, L. (1996). "Real options: Managerial flexibility and strategy in resource allocation." MIT Press, Cambridge, MA.
  31. Woodward, M., Kapelan, Z., and Gouldby, B. (2014). "Adaptive flood risk management under climate change uncertainty using real options and optimization." Risk Analysis, 34(1), pp. 75-92. https://doi.org/10.1111/risa.12088