Resiliency or Short-Term Thinking, Forgetting & Opportunism?

by | Aug 7, 2013 | Uncategorized

What is meant by the resiliency of infrastructure? The word resiliency is straightforward enough. And when politicians talk about infrastructure resiliency, usually after a disaster, standing in front of TV cameras and devastated infrastructure, everyone knows what they mean. Resilient infrastructure is strong and able to withstand the more volatile and dangerous weather that climate change has wrought in recent years. Resiliency is the ability to bounce back, to recover quickly.

The UK government has done some thinking in this area with reports on making infrastructure resilient to climate-related risks and I highlight some key items from these reports in another post.

A related post looks at whether we should leave the case for resiliency to chance.

Another post will get into the operational difficulties with trying to nail down this elusive concept in design standards.

In this episode I explore a couple of reasons people do not invest in the optimal amount of infrastructure. Short-term thinking is one reason. Another is people forget.

Resilient infrastructure is, from this economist’s point of view, a risk mitigation or insurance policy – it involves building redundant infrastructure – just in case. But the word redundant immediately raises red flags in our austere budget-constrained times. Do we really want superfluous infrastructure? And with a huge infrastructure deficit already, are people willing to pay more for more, stronger, and less-used infrastructure?

When disaster strikes, people – mainly politicians – talk about spending more on infrastructure but I think the reality is that they would prefer to be seen helping during a disaster rather than spending to prevent one. A harsh political reality is that spending on things that will rarely be used is a tough sell.

“To address the short-term vs long-term trade-off, it is important that economic regulators and infrastructure companies work together to plan strategically how to adapt at the right replacement cycle and right price review. This will help reduce the risk of ‘over-adapting’.”[1]

This short-term thinking and focus on immediate costs is a barrier to resiliency. Also impeding resiliency is that people forget.

Frequency and Memory

In terms of risk, people have short memories. And they are particularly sensitive to recent events. If something has not happened for a while, why spend money on it? Risk professionals see this all the time. I can add some personal anecdotes from conducting risk analyses to add some color.

After quantifying the earthquake risk of a bridge in Alaska, the building where the meeting was being held, in Anchorage, shook with an earthquake centered 60 miles away. The group, that included local residents used to these unsettling events, decided to re-visit the risk we had just quantified to increase it.

When, at a similar meeting in California, the Sacramento Bee newspaper ran a front page story on the results of a survey of the number of local fish, the risk of a project’s impact on water quality was elevated. The fish in question, the Delta Smelt is listed as threatened under the federal Endangered Species Act. It lives for just one year and is a key barometer of the Sacramento-San Joaquin Delta estuary’s environmental health.

The Californian environmentalists quantifying the risk, just as the Anchorage residents, knew the risks. But the “news” reminded them and they increased their professional opinion about the probability of occurrence.

People discount risk too much. Just as a lack of long-term planning stops our politicians from spending on resilient infrastructure, so too a lack of long-term memory creates an inefficient level of adaptation and hence a less than optimal amount of investment in infrastructure.

We can’t rely on natural disasters or news of advances in scientific evidence to jog people’s memories and get them to open up their wallets to spend on adaptation. Instead we have to look at the full value that infrastructure brings, in fair weather and foul. This amounts to building a case for the insurance that resiliency brings.

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