How to calculate present value damages

The Damage Calculator tool can interpolate damages from multiple simulation results from multiple scenarios to determine present value damage (PVD) figures (for each property and an overall total). Furthermore, these data can be compared to user specified market values and capped if PVD exceeds these values, thus producing capped total PVD figures.

PVD data are calculated by combining the calculated annual average damage (AAD) values for a series of scenarios, e.g. current year plus one or more future climate scenarios within a user specified appraisal period. For each year within the appraisal period additional AAD values are interpolated – multiple interpolation methods are available (stepped, linear and a combination of these two). Each AAD value is then discounted back to a present-day value using user specified discount rates (which can vary across the specified appraisal period). All yearly values are then summed to calculate the overall PVD value. The user then can choose to cap this value to a user specified market value (which can be set by property type or on a per property basis). It should be noted that the user should select scenarios for their initial flood modelling produces AAD values at the key points within the appraisal period to enable the selected distribution to be defined, e.g. at step points for a stepped interpolation. Damage Calculator can help reduce the number of flood depth grids required for this analysis as it allows the same grid to be re-used in multiple scenarios (representing a different return period / AEP in each, e.g. 100yr RP / 1% AEP grid in 2017 might be used as the 10yr RP / 10% AEP grid in 2050).

See the section entitled How to calculate property damages from a flood depth grid for details on the general operation of the Damage Calculator tool. This section describes the full PVD calculation process, however it only provides details for the additional procedures related specifically to PVD calculation:

1. PVD calculation requires AAD data from multiple scenarios. To calculate AAD for a scenario, you will need to have flood depth grids (in ASCII format – with extension “.asc”) calculated from multiple simulations (i.e. minimum of 2) each representing a different flood AEP / scenario combination. If you have these loaded in your Flood Modeller project, they can be automatically loaded into the Damage Calculator tool when you access it from the Flood Modeller toolbox (post-processing tools section). In addition, you can also specify a property data file to be pre-loaded if it is in point shapefile format and you have it loaded in your Flood Modeller project.
2. To generate results for all scenarios might require a significant number of simulations. This number can be reduced if you can re-use flood grids in multiple scenarios, e.g. a 100yr return period (1% AEP) result in 2018 scenario could be used to represent 20yr return period (5% AEP) in 2068 scenario. Flood Modeller provides tools to create copies of grids, e.g. Grid Calculator using the expression “original grid x 1” would achieve this. However, Damage Calculator includes functionality that enables you to use the same grid multiple times, i.e. no need to copy.
   After loading the depth grids created by your modelling, highlight a row and click the adjacent Copy button. The selected row(s) will be repeated in the table, but with the scenario and AEP fields left blank. These fields must then be filled in by clicking on a field and typing a value (note scenario and return period fields must have integer entries, but not the AEP field).
   
3. Once you have data from multiple scenarios loaded in the Depth Grids table the PVD calculation options will be available. Tick the Calculate PVD checkbox and the associated PVD settings will be enabled.
   
   Settings to be specified for PVD calculation are:
   1. Appraisal Period – should be set to number of years between earliest and latest specified scenario.
   2. Apply capping – tick box to compare calculated PVDs against market value for each property. If PVD for a property exceeds its market value, then PVD is capped to market value. By default, the PVD analysis will include capping, so untick the box to not cap.
      If you want to include capping in your analysis, market values for properties must be set up in advance of using Damage Calculator. This is done by adding an extra field to your property dataset (csv text file or shapefile) entitled “MarkVal”. The tool will automatically pick this up and compare the entered value against calculated PVD for the associated property. If you have an existing market value field in your data with a different attribute name, you can tell the tool this is the market value field in the Field Mappings pop-up window. 
      Note

      Damage Calculator reports which property PVDs are capped in an analysis together with the capped and uncapped PVD values.
   3. Interpolation Method – PVD is calculated by interpolating AAD values calculated for each specified scenario to give AAD values for every year of the appraisal period. You need to choose an interpolation method for this calculation, options are:
      • Linear – assumes straight lines joining modelled scenario AAD points leading to varying AAD values throughout appraisal period.
      • Stepped – assumes constant AAD between modelled AAD points, with a step in distribution occurring at each scenario within appraisal period.
      • Combined – assumes a linear distribution between the first and second scenario, followed by a stepped distribution between subsequent scenarios.
   4. Discount Rates – The PVD calculation uses discount rates to transform calculated AAD values for future scenarios back to equivalent present values. Discount rates can vary with time within the appraisal period. The Settings tab provides two table of discount rates that the analysis can use. The ‘Standard Rates’ table is applied to direct property damages, vehicle damages, evacuation and accommodation damages and indirect non-residential damages. The ‘Other Rates’ table is applied Emergency Services Costs, Risk to Life and Mental Health Damages. Both tables are pre-populated with values that are the standard rates assumed in UK analyses. (ref. The Green Book 2018: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/685903/The_Green_Book.pdf)
      However, you have the option of editing these to create a custom discount rate distribution:
      
4. After reviewing all PVD settings you can proceed with your damage analysis as normal, i.e. click Run on the Calculation Information tab or upper menu bar.
   Note

   You can also save the analysis you’ve defined, together with all settings, to a Calculation file (xml format text file). Click File > Save Calculation and provide a suitable filename and location. This will enable you to repeat the analysis in a future session if required.
5. If the defined appraisal period extends beyond the final scenario year, then the following warning is displayed. If you select to continue with the calculations, then the tool will extrapolate beyond the final input scenario in order to calculate PVD. The nature of extrapolation depends on the selected interpolation method; linear will continue the slope between the final two points (in the interpolated zone) whereas stepped will continue horizontally at the level of the final scenario AAD.
   
6. When the calculation has completed the inclusion of PVD analysis will lead to some additional outputs:
   • Additional column in the table displayed in the Results tab showing PVD for each property.
   • Additional summary csv (filename is calculation name + “_allPVDValues.csv”) – this details AAD calculated for each property for each year of appraisal period. Also shows capped and uncapped PVD values, an extra field that states if capping was applied for a property and selected property metadata taken from property dataset.
   • PVD values for any additional damages included in your analysis – per property values as well as overall PVD totals for each additional damage type.
   • Damage calculation log file includes all PVD settings used for analysis.