Climate Impact Risks and Climate Adaptation Engineering

for Built Infrastructure

Mark G. Stewart 1 and Xiaoli Deng 2
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Abstract: A changing climate may increase the frequency or intensity of natural hazards, resulting in increased infrastructure damage. The
paper will describe how risk-based approaches are well suited to optimising climate adaptation strategies related to the construction, design,
operation, and maintenance of built infrastructure. Climate adaptation engineering involves estimating the risks, costs, and benefits of climate
adaptation strategies and assessing at what point in time climate adaptation becomes economically viable. Stochastic methods are used to
model infrastructure performance, risk reduction, and effectiveness of adaptation strategies, exposure, and costs. These concepts will be
illustrated with recent research on risk-based life-cycle assessments of climate adaptation strategies for Australian housing subject to extreme
wind events. This will pave the way for more efficient and resilient infrastructure, and help future proof new and existing infrastructure to a
changing climate. DOI: 10.1061/AJRUA6.0000809. © 2014 American Society of Civil Engineers.
Author keywords: Risk; Climate change; Cost-benefit analysis; Infrastructure; Climate adaptation.

Introduction shows that business-as-usual CO2 emissions continue to track at

A changing climate may result in more intense tropical cyclones
and storms, more intense rain events and flooding, and other
climate-related hazards. Moreover, increases in CO2 atmospheric
concentrations, as well as changes in temperature and humidity,
may reduce the durability of concrete, steel, and timber structures
(Bastidas-Arteaga et al. 2010, 2013; Wang et al. 2012; Stewart et al.
2011b, 2012a; Nguyen et al. 2013; Peng and Stewart 2014; Wang
and Wang 2012). The impact of climate change on infrastructure
performance is a temporal and spatial process, but most existing
models of infrastructure performance are based on a stationary cli-
mate. Hence, there is a need to quantify the costs and benefits of
adaptation strategies. Climate adaptation engineering involves es-
timating the risks, costs, and benefits of climate adaptation strate-
gies and assessing at what point in time climate adaptation becomes
economically viable. Climate adaptation measures aim to reduce
the vulnerability or increase the resiliency of built infrastructure
to a changing climate; this may include, for example, enhancement
of design standards, retrofitting or strengthening of existing struc-
tures, utilization of new materials, and changes to inspection and
maintenance regimes. Engineers have a unique capability to model
infrastructure vulnerability, and these skills will be essential to
modeling future climate impacts and measures to ameliorate these
losses.
The climate change literature places more emphasis on impact
modeling than climate adaptation engineering modeling. This is to
be expected when the current political and social environment is
focused on mitigating (reducing) CO2 emissions. Latest research
1
Australian Professorial Fellow, Professor and Director, Centre for
Infrastructure Performance and Reliability, Univ. of Newcastle, NSW 2308,
Australia (corresponding author). E-mail: mark.stewart@newcastle.edu.au
2
Senior Lecturer, School of Engineering, Univ. of Newcastle, NSW
2308, Australia.
Note. This manuscript was submitted on April 8, 2014; approved on
July 29, 2014; published online on August 27, 2014. Discussion period
open until January 27, 2015; separate discussions must be submitted for
individual papers. This paper is part of the ASCE-ASME Journal of Risk
and Uncertainty in Engineering Systems, Part A: Civil Engineering,
© ASCE, 04014001(12)/$25.00.
the high end of emission scenarios, with mean temperature
increases of 4–5°C more likely by the year 2100 (Peters et al.
2013). The impacts on people and infrastructure may be consider-
able if there is no climate adaptation engineering to existing and
new infrastructure. Some posit that climate change may even be
a threat to national security, but Stewart (2014a) suggests that cli-
mate change threats to U.S. national security are modest and man-
ageable. On the other hand, higher temperatures in higher-latitude
regions such as Russia and Canada can be beneficial through higher
agricultural yields, lower winter mortality, lower heating require-
ments, and a potential boost to tourism (Stern 2007).
There is seldom mention of probabilities, or quantitative mea-
sures of vulnerability, or the likelihood or extent of losses in risk
and risk management reports on climate change and infrastructure.
While useful for initial risk screening, intuitive and judgement-
based risk assessments are of limited utility to complex decision-
making since there are often a number of climate scenarios,
adaptation options, limited funds, and doubts about the cost-
effectiveness of adaptation options. In this case, the decision-maker
may still be uncertain about the best course of action, and so a de-
tailed risk analysis is required [e.g., AS 5334 (Standards Australia
2013)]. For this reason, there is a need for sound system and prob-
abilistic modeling that integrates the engineering performance of
infrastructure with the latest developments in stochastic modeling,
structural reliability, and decision theory.
The paper will describe how risk-based approaches are well
suited to optimizing climate adaptation strategies related to the de-
sign, construction, operation, and maintenance of built infrastruc-
ture. An important aspect is assessing when climate adaptation
becomes economically viable, if adaptation can be deferred, and
decision preferences for future costs and benefits (many of them
intergenerational). Stochastic methods are used to model infrastruc-
ture vulnerability, effectiveness of adaptation strategies, exposure,
and costs. The concepts will be illustrated with a case study that
considers climate change and cost-effectiveness of designing
new houses in Sydney, Australia to be less vulnerable to severe
storms. To be sure, there are other case studies assessing the
efficiency and cost-effectiveness of climate adaptation strategies
for built infrastructure; for example, floods and sea-level rises

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ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng., 2015, 1(1): 04014001
 (e.g., Hinkel et al. 2010; Hall et al. 2012; Botzen et al. 2013;
Kundzewicz et al. 2013; Holden et al. 2013; Val et al. 2013), cyclo-
nes and severe storms (Bjarnadottir et al. 2011a, b; Nishijima et al.
2012; Li and Stewart 2011; Stewart et al. 2012b), and corrosion of
reinforced concrete (Stewart and Peng 2010; Bastidas-Arteaga and
Stewart 2013). This and other research will help future proof built
infrastructure to a changing climate.
Key Issues
There are a number of issues and questions that need addressing.
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These include
1. Cost neglect:
• Who pays?
• When?
• Who benefits?
2. Probability neglect—how confident are we about extreme
events in the current climate?
• How confident are we in changes to future climate?
• Changes in impact and loss?
3. Risk aversion:
• Is action needed now, is there no time to lose?
4. Acceptable risk:
• What risk from weather/climate is acceptable?
• Is risk reduction worth the cost?
These are issues without easy answers, but the questions need to
be asked. They are also similar to other controversial and emotive
issues such as terrorism and homeland security (Mueller and
Stewart 2011a, b). All too often, climate change studies assume
there is certainty about the future, and so suffer from probability
neglect, as well as cost neglect by ignoring the large costs involved
to mitigate CO2 emissions.
Climate Change Impact
The 2014 Intergovernmental Panel for Climate Change (IPCC) fifth
assessment report (AR5) concluded that the “warming of the cli-
mate system is unequivocal” (IPCC 2014). What is less certain is
the impact that rising temperatures will have on rainfall, wind pat-
terns, sea-level rise, and other phenomena. The latest IPCC AR5
report released in 2014 describes the following changes to climate
by the year 2100 (IPCC 2014):
1. Temperatures to increase from 1990 levels by anywhere from
1 to 6°C;
2. Sea-level rise of 20–80 cm;
3. More intense tropical cyclones and other severe wind events;
4. Enhanced monsoon precipitation.
The IPCC (2014) then suggests with a high or very high con-
fidence level that these changes to climate will increase drought-
affected areas, with hundreds of millions of people to be affected
by coastal flooding and increases in the risk of fire, pests, and dis-
ease outbreak. There will also be significant consequences for food
and forestry production and food insecurity, and so on. These
impacts will not be sudden, but gradual in their appearance. The
observed increase in weather-related losses in the United States
and elsewhere is more a function of increased exposure with more
people moving to vulnerable coastal locations than climate-change
increases in wind speed or flood levels (Crompton and McAneney
2008; IPCC 2012). For instance, hurricane wind speeds are pre-
dicted to increase at worst by 10% in 50 years due to climate
change, or a low 0.2% per year (Bjarnadottir et al. 2011a). This
suggests that there will be time to adapt to a changing climate.
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The 2006 review by economist Nicholas Stern (Stern 2007) pre-
dicts that if no action is taken against climate change, the mean loss
of GDP would be 2.9 and 13.8% each year (“now and forever”) by
years 2100 and 2200, respectively. This is equivalent to worldwide
losses of up to $10 trillion each year by 2200. Not surprisingly,
some consider it to be highly pessimistic in its assumptions (Lomborg
2006; Mendelsohn 2006). However, the Australian Garnaut Review
predicted that unmitigated climate change would reduce Australian
GDP by approximately 8% by 2100 (Garnaut 2008).
These losses, however, do not reflect wealth creation, human
capital, and new improved technologies. Goklany (2008) states that
these “often reduce the extent of the human health and environmen-
tal ‘bads’ associated with climate change more than temperature
increases exacerbate them.” Fatality rates and economic losses re-
lated to weather and climate are also 3–10 times higher in developing
countries (IPCC 2012). Clearly then, if people are wealthier in the
future, their well-being will be higher, and “the argument that we
should shift resources from dealing with the real and urgent problems
confronting present generations to solving potential problems of
tomorrow’s wealthier and better positioned generations is unper-
suasive at best and verging on immoral at worst.” (Goklany 2008).
CO2 Mitigation versus Adaptation
The cost to mitigate CO2 emissions is considerable. Stern (2007)
estimates that to stabilize CO2 levels to 550 ppm (by reducing total
emissions to three-quarters of today’s levels by the year 2050)
would cost −1.0 to 3.5% of GDP, with a central estimate of approx-
imately 1%. The mean estimate would result in an annual mitiga-
tion cost of approximately $720 billion.
Lomborg (2009) assembled a group of experts who found that
climate change action ranked very low when compared with other
hazard and risk-reducing measures. In this case, the benefit-to-cost
ratio for CO2 mitigation was only 0.9 (not cost-effective), but
increased to 2.9 for a mix of mitigation and adaptation strategies.
Yohe et al. (2009) found that a global investment of $18 billion
per year in “R&D and mitigation” can halve business-as-usual
CO2 emissions by the year 2100. Such action would reduce the
impact of climate change by at least 60%.
Some of the more dire predictions of food and energy insecurity,
and mass migration can be ameliorated by funding climate-
adaptation measures in the developing world. Adaptation measures
to reduce vulnerability of infrastructure, coastal zones, agriculture,
forestry, fisheries, and human health to climate change hazards
would include: flood control dikes and levees, dams, cyclone shel-
ters, storm-resistant and flood-resistant housing, improved commu-
nication infrastructure, resettlement of populations to lower risk
zones, and improved health care. The World Bank (2010) estimated
that the cost to the developing world of adapting to an approxi-
mately 2°C warmer world by the year 2050 is approximately
$75 billion per year. This represents less than 0.2% of global
GDP. Clearly, investing in targeted adaptation measures has the
potential to dramatically reduce the impact of climate change.
Mitigation costs may be high, and the benefits of reduced CO2
levels will take many decades to accrue. Modest and sustained in-
vestments in R&D, CO2 mitigation and adaptation will lessen the
worst impacts of climate change. Hence, a mix of mitigation and
adaptation is desirable to cope with a changing climate.
Modelling Climate Hazards
Atmosphere-ocean general circulation models (AOGCMs) are
currently the main tool for climate change studies (IPCC 2012).
ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng.
 However, they are computationally demanding, which limits their
spatial resolution. Downscaling is possible to grids of 25–50 km,
but the resulting models are still too large to capture extreme events
such as tornadoes or extreme rainfall. Uncertainties associated with
future emission scenarios are usually not quantified, and future cli-
mate projections are produced separately for individual scenarios
(Stewart et al. 2014). Not surprisingly, uncertainties in climate projec-
tions are considerable. This makes impact and adaptation modeling
even more challenging. For more details, see Stewart et al. (2014).
A major climate hazard is coastal flooding induced by extreme
water level events along low-lying, highly populated coastlines due
to presently and continuously rising sea levels. Statistical analysis
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based on extreme value theory has been employed to estimate prob-
abilities of extreme water levels and assess suitable design levels.
Estimating the average recurrence interval (ARI) and the annual
exceedance probability (AEP) needs sea-level measurements over
a long period greater than 30 years, traditionally observed at tide
gauges. Over the last five decades, several statistical analysis meth-
ods for estimating the ARI and AEP have been developed (cf.
Haigh et al. 2010). There is, however, no universally accepted
method available at transnational or even national scales. There-
fore, the most applicable method has to be chosen based on differ-
ent stretches of coastline and length of sea-level records.
Over regions where long periods of tide-gauge data are not
available or the spatial distribution of tide-gauge sites is sparse
along coastline, modeling of extreme sea levels can be made from
sea level fields produced by ocean circulation models. A 2D depth-
averaged barometric ocean circulation model is usually configured
over coastal oceans. The mode is driven by tidal and atmospheric
forcing. The tidal component including the Earth geocentric tide
and other nonlinear tidal constituents are simulated using existing
global tidal modes and the harmonic analysis algorithm. The storm
surge component is simulated through the model driven by wind
stress and the atmospheric pressure at the sea level, for which
the wind stress calculated from the wind velocity at 10 m above
the sea surface and the sea level pressure can be taken from the
climate forecast system reanalysis fields. To achieve the fine struc-
ture of the wind and pressure associated with tropical storms, the
reanalysis field is enhanced by adding the idealized wind and pres-
sure profiles during cyclones (e.g., Zhang and Sheng 2013). The
total sea levels due to the combination of tides and storm surges
use Monte Carlo simulation methods.
In recent years, satellite data with high resolution and homo-
geneous global coverage have already played an important role
in monitoring extreme sea levels, especially storm surges. How-
ever, advanced satellite products such as wind speed, wind direc-
tion from high resolution scatterometry, and sea state information
from coastal altimetry are not yet widely used in modeling extreme
sea levels. Since these satellite data have been collected for more
than 20 years, assimilating them into numerical models will have
the potential to improve estimation of extreme sea level. (e.g., Cheng
et al. 2012; Deng et al. 2011, 2013; Idris et al. 2014). Nonetheless,
uncertainties are considerable, and remote sensing technologies are
increasingly relied upon for measuring and predicting sea-level rise
and other phenomena. Wind speed projections also face distinct
measuring and prediction challenges (e.g., Harper 2013).
Risk-Based Decision Support
Definition of Risk
Risk for a system exposed to a climate hazard is
X structural damage or other losses and are derived from engineer-
EðLÞ ¼ PrðCÞ PrðHjCÞ PrðDjHÞ PrðLjDÞL ð1Þ
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where PrðCÞ = annual probability that a specific climate scenario
will occur; PrðHjCÞ = annual probability of a climate hazard
(wind, heat, etc.) conditional on the climate; PrðDjHÞ = probability
of infrastructure damage or other undesired effects conditional on
the hazard (also known as vulnerability or fragility) for the baseline
case of no extra protection (i.e., business-as-usual); PrðLjDÞ =
conditional probability of a loss (economic loss, loss of life,
etc.) given occurrence of the damage; and L = loss or consequence
if full damage occurs. In some cases, ‘damage’ may equate to ‘loss’
and so PrðLjHÞ ¼ PrðDjHÞPrðLjDÞ. The summation sign in
Eq. (1) refers to the number of possible climate scenarios, hazards,
damage levels, and losses.
If we modify Eq. (1) where ΔR is the reduction in risk caused by
climate adaptation measures, then expected loss after climate adap-
tation is
X
Eadapt ðLÞ ¼ ð1 − ΔRÞEðLÞ − ΔB ð2Þ
where ΔR = reduction in risk caused by climate adaptation (or
other protective) measures; EðLÞ = business-as-usual risk given
by Eq. (1); and ΔB = cobenefit of adaptation such as reduced losses
to other hazards, increased energy efficiency of new materials, etc.
Costs of adaptation, timing of adaptation, discount rates, future
growth in infrastructure, and spatial and time-dependent increases
in climate hazards need to be included in any risk analysis. Fig. 1
summarizes the major steps in developing risk-based decision
support for assessing the risks, costs, and benefits of climate-
adaptation measures.
Future climate is projected by defining carbon emission sce-
narios in relation to changes in population, economy, technol-
ogy, energy, land use and agriculture—a total of four scenario
families, i.e., A1, A2, B1, and B2 are defined (IPCC 2000) and
used in the IPCC’s Fourth Assessment Report in 2007 (IPCC
2007). The A1 scenarios indicate very rapid economic growth,
a global population that peaks in midcentury and declines there-
after, and the rapid introduction of new and more efficient tech-
nologies, as well as substantial reduction in regional differences
in per capita income. The B1 scenarios are of a world more in-
tegrated and more ecologically friendly with reductions in
material intensity and the introduction of clean and resource ef-
ficient technologies. The IPCC AR5 (2014) uses Representative
Concentration Pathways (RCPs) where RCP8.5, RCP6.0, and
RCP4.5 are roughly equivalent to A1FI, A1B, and A1B to
B1 CO2 emissions, respectively. For more details see Stewart
et al. (2014)
The estimation of PrðCÞ may be based on expert opinion about
the likelihood of each emission scenario, and multiple AOGCMs
may be used to infer the probabilistic characterisation of PrðHjCÞ
for future climate projections. Fig. 2 describes the projection of
CO2 concentrations based on the Model for Assessment of Green-
house-Gas Induced Climate Change, known as MAGICC (Wigley
et al. 1996), specifically related to A1FI, A1B, and 550 ppm CO2
stabilization scenarios. The variability increases for projection of
temperatures (Fig. 3).
The stochastic modeling of infrastructure vulnerability (or
fragility) is PrðDjHÞ and is the probability of damage conditional
on the occurrence of a specific hazard
PrðDjHÞ ¼ PrðRðXÞ − H < 0Þ ð3Þ
where RðXÞ = function for resistance or capacity; X = vector of all
relevant variables that affect resistance; and H = known hazard
level. The performance functions can be expressed in terms of
ing models (e.g., Stewart and Melchers 1997). The reliability
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Fig. 1. Flowchart of decision-support framework for assessing cost-effectiveness of adaptation measures

modeling of structural systems is well developed for engineered
constructions such as commercial buildings, bridges, towers, etc.
where materials are uniform, and workmanship is subject to quality
control measures. However, nonengineered infrastructures, particu-
larly houses, are very complex systems comprising hundreds to
thousands of components and connections between differing ma-
terials. Poor detailing and workmanship issues contribute to most
damage—so the engineering and stochastic models need to con-
sider these variables—such as screw fasteners being spaced too
far apart, or some not connected to purlins and battens, etc. Insur-
ance or building performance data may also be used to derive vul-
nerability models. For example, Fig. 4 shows a vulnerability model
for Australian houses subject to floods.
Exposure and loss data relates to direct and indirect loss or con-
sequences due to location and extent of infrastructure damage, for
existing exposure and future projections. Most existing studies con-
sider direct losses related to building damage and contents losses.
Indirect losses caused by business interruption, clean-up, loss dur-
ing reconstruction, extra demands on social services, and changes
to demand and supply of intermediate consumption goods, post-
disaster inflation, etc. can also be significant (e.g., NAS 1999;
Hallegatte 2008; Walker 2011). Indirect losses were estimated
for Hurricane Katrina as $42 billion or 39% of direct losses,
and could have exceeded 100% of direct losses for a damaging
event twice as bad as Hurricane Katrina (Hallegatte 2008). An
Australian assessment of direct and indirect costs shows indirect

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 1100 200%
low
CO2 Concentration (ppm) 1000 mid
high
900 Direct + Indirect Loss
A1FI
800

Pr(L|D)
700 100% Direct Loss
A1B
600
550 ppm
500

400
Year 2000 CO2 level
300
0
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2000 2020 2040 2060 2080 2100

0 10 20 30 40 50 60 70 80 90 100
Year Vulnerability Pr(D|H) (%)
Fig. 2. Projected low, mid, and high estimates of CO2 concentrations
Fig. 5. Direct and indirect costs as function of wind vulnerability (data
from Stewart et al. 2013)

24

23 A1FI Risk reduction (ΔR) may result from reduced vulnerability

A1B
550 ppm
PrðDjHÞ, PrðLjDÞ, or exposure (L). For instance, changes to plan-
22 ning may reduce the number of new properties built in a flood plain
Temperature (°C)

Year 2000
which will reduce L, or more stringent design codes may reduce the
21
vulnerability of new infrastructure. Systems and reliability model-
20 ing are essential tools to quantify the level of risk reduction, and the
extent of risk reduction due to adaptation measures will depend on
19 the hazard, the location, and the timing of adaptation.
The cobenefits of adaptation (ΔB) may include reduced embod-
18
ied energy and reduced carbon footprint over the life cycle of the
17 facility. This might consider the initial embodied energy associ-
2000 2020 2040 2060 2080 2100 ated with the dwelling including footings, structure and fit-out
Year together with the recurrent embodied energy associated with refur-
Fig. 3. Projected median temperatures for the lowest and highest GCM bishment over the life cycle and the operational energy needed
predictions for the A1FI, A1B, 550 ppm, and year 2000 emission sce- to operate a building.
narios for Sydney (Australia)
Cost-Effectiveness of Adaptation Strategies
Two criteria may be used to assess the cost-effectiveness of adap-
100
tation strategies:
90 1. Net present value (NPV); and
80 2. Probability of cost-effectiveness or PrðNPV > 0Þ.
Vulnerability Pr(D|H) (%)

70 The benefit of an adaptation measure is the reduction in dam-

ages associated with the adaptation strategy, and the ‘cost’ is the
60
cost of the adaptation strategy. The net benefit or net present value
50 (NPV) is equal to benefit minus the cost, which is also equivalent to
Single Storey
40 the present value or life-cycle cost of an adaptation strategy (sum of
30 Two Storey damage and adaptation costs) minus the business-as-usual or do-
(lower floor partial use as garage) nothing present value. The decision problem is to maximize NPV
20
10 X
NPV ¼ EðLÞΔR þ ΔB − Cadapt ð4Þ
0
-1 0 1 2 3 4 5 6
Water Depth Above Floor Level (m) where Cadapt = cost of adaptation measures including opportunity
costs that reduces risk by ΔR; ΔB = cobenefit; and EðLÞ =
Fig. 4. Flood vulnerability curves for residential construction in business-as-usual risk given by Eq. (1). Fig. 6 shows how adapta-
Brisbane (data from Mason et al. 2012) tion costs increase with risk reduction, while benefits increase. The
optimal adaptation occurs when NPV is a maximum, leading to an
optimal risk reduction. Other notations and formulae can be used to
provide optimal adaptation (e.g., Hall et al. 2012), but ultimately
costs of 9–40% of direct losses for bushfires, cyclones, and floods these also mostly rely on maximizing NPV.
(BTE 2001). Fig. 5 shows a typical loss function for wind vulner- Confidence bounds of NPV can then be calculated if input
ability, where indirect losses start to accumulate for damages that parameters are random variables. The probability that an adaptation
exceed 20%, and total losses are twice the direct losses for a cata- measure is cost-effective, denoted herein as PrðNPV > 0Þ, may
strophic event where PrðDjHÞ ¼ 100%. also be inferred. The previously given equations can be generalized

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 $
Max. NPV
Benefit
Optimal
Adaptation Adaptation
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Cost
0% 100%
Risk Reduction (%)
Fig. 6. Schematic of net present value (NPV) showing optimal
adaptation
for any time period, discounting of future costs and more detailed
spatial and time-dependent cost and damage consequences.
The vulnerability, loss, and adaptation costs are subject to con-
siderable uncertainty due to lack of available data and models. For
this reason, calculations of risks, costs, and benefits will be impre-
cise. Hence, a break-even analysis may be useful where minimum
risk reduction or maximum cost of adaptation necessary for adap-
tation to be cost-effective is selected such that there is 50% prob-
ability that benefits equal cost—i.e., meanðNPVÞ ¼ 0. In other
words, if the actual cost of adaptation exceeds the predicted
break-even value, then adaptation is not cost-effective. Decision-
makers can then judge whether an adaptation strategy meets these
break-even values.
Governments and their regulatory agencies normally exhibit
risk-neutral attitudes in their decision-making, as described by
Eq. (4). This is confirmed by the U.S. Office of Management
and Budget (OMB) (OMB 1992), and also by many practitioners
and researchers (e.g., Sunstein 2002; Faber and Stewart 2003;
Ellingwood 2006). This entails using mean or average estimates
for risk and cost-benefit calculations, and not worst-case or pessi-
mistic estimates. Probability neglect is a form of risk aversion as
decision-makers are clearly averse to events of large magnitude
irrespective of the probability of it actually occurring. Utility theory
can be used if the decision maker wishes to explicitly factor risk
aversion or proneness into the decision process (e.g., Stewart
et al. 2011a).
Case Study: Strengthening New Houses in Sydney
against Extreme Wind
Severe storms have caused annual insured losses (1967–2005) of
nearly $300 million in the Australian states of Queensland, New
South Wales, and Victoria (BITRE 2008). These losses account
for nearly 25% of all losses from natural disasters in Australia.
Southern Australian contemporary housing generally comprises
a detached dwelling on a 600–800 m2 block, one or two storeys
high, timber construction with brick veneer cladding, and a tiled
or metal sheeting roof (Fig. 7). The wind vulnerability of this hous-
ing type will not be too dissimilar to that for housing in the United
States, Canada, and New Zealand.
The Australian Standard for wind loads [AS/NZS1170.2
(Standards Australia 2011)] is the reference standard for design
of all structures, including housing. The Australian Standard
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Fig. 7. Typical Australian truss roof and timber frame houses (images
by Mark G. Stewart)
Wind Loads for Houses AS4055 (Standards Australia 2012) is based
on AS/NZS1170.2 (Standards Australia 2011) and is used to deter-
mine the appropriate wind classification for design of residential
(domestic) housing. In this case, residential housing is designed
to resist wind speeds with annual probability of exceedance of 1
in 500. The standard AS4055 (Standards Australia 2012) classifies
design loads on houses into categories N1–N6 for noncyclonic
regions. Each increase in noncyclonic wind classification (e.g., N1
to N2) raises the design wind speed that is equivalent to at least a
50% increase in design wind pressure. These wind classifications are
then used by building codes to determine appropriate deemed-to-
comply sizing and detailing requirements for residential construction.
To reduce housing damage in the future, one option may be to
strengthen or retrofit existing construction. However, Stewart and
Wang (2011) found such strategies often failed to be cost-effective,
and if cost efficient, then only marginally so. Other adaptation strat-
egies may restrict construction of new housing in vulnerable
(exposed) locations. A more feasible adaptation strategy may be
one that increases design wind loads for new houses leading to long-
term reduction of vulnerability (and damages) of houses (Stewart
et al. 2013; Stewart 2014b). It is important to note that AS4055
(Standards Australia 2012) (as well as many other Australian
and international building standards) is based on limited experi-
mental and field data and expert judgement by committee mem-
bers, and has not been subject to risk or cost-benefit analyses
(Walker and Musulin 2012). Hence, existing design requirements
may be suboptimal even for the current climate.
The case study herein applies break-even (risk neutral) and
risk-averse analyses to compare the risks, costs, and benefits of
climate adaptation strategies for new housing in the Australian
coastal city of Sydney. Sydney is the largest city in Australia with
a population of nearly 5 million (about 20% of the total population
of Australia). Sydney is located in South-East Australia where
wind hazard is dominated by noncyclonic winds (thunderstorms
and east-coast lows). For more details of this case study, see
Stewart (2013).
04014001-6 ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng.
 Wind Hazard Modelling
The annual probability of winds PrðHjCÞ is derived from the Gum-
bel distribution to model the annual probability of exceedance of
noncyclonic winds (winds not associated with tropical cyclones
that occur in northern Australia) (Wang et al. 2013). Unless noted
otherwise, wind speed is the gust wind speed at 10 m in terrain
category 2. Climate projections by the Australian Commonwealth
Scientific and Industrial Research Organisation (CSIRO) suggest
that for noncyclonic winds, the mean wind speed may increase
by up to 20% by the year 2070 along the east coast of Australia
(CSIRO 2007). If the relationship between mean wind speed
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and peak gust wind speed is constant, then proportional increases

in gust wind and mean wind speeds are identical. Since there are
still many uncertainties to properly define the future trend of
extreme winds in Australia, three possible climate scenarios (C) Fig. 8. Probability distribution of change in wind speeds to year 2070
are considered: (1) no change, (2) B1, and (3) A1FI emission
scenarios. The variability of current peak wind loads is significant
with COV of up to 50%.
CSIRO (2007) suggest the average annual change in mean wind
speed is projected to decrease by 1% in Sydney by the year 2070,
100
with 10 and 90% of −15 and þ12%, respectively, for the A1FI
(high) emission scenario, and 10th and 90th percentiles of −8 to 90

þ6% for the B1 (medium) emission scenario (Table 1). Projected 80

Vulnerability Pr(D|H) (%)

N1 N2 N3 N4
changes in wind speeds for Brisbane are higher than for Sydney. 70
Note that climate projections are relative to levels in the year 1990. 60
Truncated normal distributions are used to represent uncertainty of
50
changes in wind speeds where 10 and 90% bounds provided by
CSIRO (2007) allow the standard deviation of the two truncated 40

normal distributions each with cumulative probabilities of 50% 30

to be calculated, Fig. 8. A time-dependent linear change in wind 20
speed for all emission scenarios is assumed. 10
0
20 30 40 50 60 70 80 90 100
Wind Vulnerability and Loss Function Peak Gust Wind Speed (m/s)

Australian contemporary housing in South-East Australia is typical Fig. 9. Wind vulnerability curves for Sydney, for contemporary resi-
of that shown in Fig. 7. The housing is weaker than those designed dential housing in South-East Australia
for cyclonic (northern) regions of Australia where Australian
Standards dictate more stringent design requirements. A wind vul-
nerability function expresses building damage or loss as a function
of wind speed. Vulnerability curves developed by Geoscience Adaptation Strategy: Strengthen New Housing
Australia and James Cook University (Wehner et al. 2010) The adaptation strategy considered herein is to design new houses
representative of contemporary housing in Sydney are shown in by enhanced design codes, in this case, increasing the current
Fig. 9. These vulnerability curves are quite uncertain, but provide Australian Standard AS4055 (Standards Australia 2012) wind clas-
a useful starting point. sification by one category (Table 2). For example, for Sydney this
The loss function includes direct and indirect losses, and is means that new construction would be designed for wind classifi-
shown in Fig. 5. House replacement value is clearly variable cation N2 rather than the current requirement of N1 for nonfore-
and depends on the location, type, size, age, and condition shore locations. For example, this would mean that the number of
of the house. The average insured value of a house and its nails for a roof batten to roof truss connection should increase from
contents is approximately 25% higher than house replace-
ment value. The loss L is equal to insured value of the house
and its contents, normalised to L ¼ 1.25 of house replacement
Table 2. Adaptation Measure Showing Proposed Increase in Wind
value.
Classification
Adaptation measure:
Existing specifications proposed increase
Table 1. Change in Wind Speeds to Year 2070
(AS4055-2012) in wind classifications
B1 emission scenario A1FI emission scenario
Design Design
10th Mean 90th 10th Mean 90th Wind gust wind Wind gust wind
Location (%) (%) (%) (%) (%) (%) Location classification speed (m=s) classification speed (m=s)
Brisbane −1 þ3 þ10 −2 þ6 þ19 Sydney — — — —
Sydney −8 0 þ6 −15 −1 þ12 Foreshore N2 40 N3 50
Melbourne −9 −1 þ6 −18 −1 þ12 Nonforeshore N1 34 N2 40

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ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng., 2015, 1(1): 04014001
 100
percentage change in risk caused by the adaptation strategy
Reduction in Vulnerability (%) 90 is ΔR ¼ 50 − 65%.
80 The NPV for a single house built to enhanced standards at time
70
tadapt for a given climate change scenario Cs (no change, B1, or
N1 to N2
A1FI) is
60
50
N2 to N3
XT
ΔR × EðtÞ Cadapt
NPVðTjCs Þ ¼ t−2018
− ð5Þ
40
t¼tadapt ð1 þ rÞ ð1 þ rÞtadapt −2018
30
20 where NPV is expressed as percentage of replacement value of the
10 house; Cadapt = cost of the adaptation strategy expressed as percent-
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age of house replacement value; EðtÞ = damage risk per house

0
0 10 20 30 40 50 60 70 80 90 100 110 120
associated with current wind classification (business as usual risk);
Peak Gust Wind Speed (m/s) ΔR = reduction in risk associated with increasing the current wind
classification by one category (e.g., from N2 to N3); and r =
Fig. 10. Reduction in vulnerability for new housing with increase of discount rate. Cobenefits are assumed as ΔB ¼ 0.
wind classification, for Sydney

Results: Scenario-Based Analysis

one plain shank nail to two plain shank nails, or a single deformed The models described herein are the best available models, but as
shank nail should replace a single plain shank nail [AS 1684.4 described previously, have their limitations and uncertainties. For
(Standards Australia 2010)]. This means that new construction this reason, a break-even analysis is conducted.
has increased strengths of structural components and connections, Any proposal to change building regulation within the Building
leading houses to have significantly reduced wind vulnerability. Code of Australia would take some time. Hence, we assume the
These enhanced building requirements will result in additional earliest time of adaptation is by the year 2018. Results are calcu-
costs of new construction (Cadapt ) of 1–2% of the value of a house, lated using Monte-Carlo event-based simulation methods. Costs
or approximately $2,500 to $5,000 (AGO 2007). and benefits are calculated for the 52 year period 2018–2070 as
Fig. 10 shows percentage reduction in vulnerability as a function 2070 is the limit of projections of wind hazard provided by CSIRO
of wind speed for Sydney. It is evident that designing new houses to (2007). Costs are in 2012 Australian dollars and the discount rate is
enhanced wind classification will reduce vulnerability often by 4%. The stochastic variability of wind speed means that NPV is
more than 50% for Sydney. The reduction in vulnerability reduces variable. The probability distribution of NPV is highly nonGaussian
only for very high wind speeds where damages asymptote to 100% and so Monte-Carlo methods are well suited to this type of analysis.
resulting in reduced relative reductions in vulnerability. Vulnerabil- In this scenario-based approach, PrðCs Þ ¼ 100%.
ity reduction is higher for nonforeshore locations due to lower wind Figs. 11 and 12 show the maximum adaptation cost Cadapt for the
speeds than foreshore locations. Similarly, vulnerability reduction adaptation measure (per new house) to be cost-effective for risk
will decrease as climate change becomes more severe and wind reductions of 10–100% for foreshore and nonforeshore locations
speeds increase. The overall reduction in risk calculated as in Sydney. These figures show

20% 20%

No change No change
B1 B1
15% A1FI 15% A1FI
Break-Even Adaptation Cost

Break-Even Adaptation Cost

10% 10%

5% 5%

0% 0%
10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
(a) Risk Reduction R (b) Risk Reduction R

Fig. 11. (a) Break-even adaptation costs for foreshore locations in Sydney; (b) break-even adaptation costs for nonforeshore locations in Sydney

© ASCE 04014001-8 ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng.

ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng., 2015, 1(1): 04014001
 20%
No change
B1
15% A1FI
Maximum Adaptation Cost
for Pr(NPV>0)=90%
10%
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5%
0%
10% 20% 30% 40% 50% 60% 70%
(a) Risk Reduction R
Fig. 12. (a) Maximum adaptation costs to ensure PrðNPV > 0Þ ¼ 90% for foreshore locations in Sydney; (b) maximum adaptation costs to ensure
PrðNPV > 0Þ ¼ 90% for nonforeshore locations in Sydney
1. The break-even cost of adaptation [i.e., maximum cost for
meanðNPVÞ ¼ 0, risk neutral]; and
2. The maximum cost of adaptation to ensure that there is 90%
surety that benefits exceed the cost (i.e., a risk-averse decision
maker may prefer a small likelihood of a net loss).
Fig. 11 shows that if risk reduction is over 50% and there is no
change of climate, the break-even analysis shows that adaptation is
cost-effective if the adaptation cost is less than 9.3 and 5.5% of
house replacement cost for foreshore and nonforeshore locations,
respectively. The effect of a changing climate on break-even adap-
tation costs is negligible, as this will increase the break-even adap-
tation cost to 9.7 and 5.7% for foreshore and nonforeshore
locations, for the A1FI emission scenario. Hence, even if climate
projections are wrong, adaptation measures still satisfies a no re-
grets or win-win policy (Susskind 2010).
On the other hand, the maximum cost of adaptation to ensure
that there is 90% surety that benefits exceed the cost will be less
than the break-even costs (Fig. 12). In this case, the adaptation is
preferable if the risk reduction exceeds 50% and the adaptation cost
is less than 6.8 and 4.0% of house replacement cost for foreshore
and nonforeshore locations, respectively, and assuming no change
in climate. As there is significant uncertainty associated with wind
hazard projections for B1 and A1FI emission scenarios, the vari-
ability of NPV is higher for these scenarios. Hence, the maximum
cost of adaptation to ensure that there is 90% surety that benefits
exceed the cost will be up to 3% lower than for no climate change.
This suggests that even a risk averse decision-maker would adopt
the adaptation measure since the anticipated cost of adaptation is
very low (1–2%) and risk reduction exceeds 50%.
The cost of adaptation for Sydney is likely to be 1.1% for
foreshore locations (N2 to N3), and less for nonforeshore locations
(N1 to N2). If we adopt a cost of adaptation of 1.1 and 1.0% for
these locations, and no change of climate, then the break-even risk
reduction must exceed 6 and 9% for foreshore and nonforeshore
locations, respectively, to be 50% certain that NPV > 0 for all
climate projections. The minimum risk reductions increase to
ensure 90% certainty that NPV > 0. For example, for the medium
© ASCE
ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng., 2015, 1(1): 04014001
20%
No change
B1
15% A1FI
Maximum Adaptation Cost
for Pr(NPV>0)=90%
10%
5%
0%
80% 90% 100% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
(b) Risk Reduction R
(B1) emission scenario, minimum risk reduction must exceed 11
and 17% for foreshore and nonforeshore locations, respectively.
Given that the previous section shows that risk reductions of
50–65% can be achieved for Sydney based on the vulnerability
models described herein, then it is likely that designing new hous-
ing to enhance wind classifications is a cost-effective adaptation
strategy for Sydney.
Clearly, more research is needed to improve the confidence of
wind hazard and vulnerability modeling. Nonetheless, preliminary
results show that vulnerability reduced at a modest cost can lead to
a cost-effective adaptation measure.
Discount Rates
There is some uncertainty about the level of discount rate, particu-
larly for climate change economic assessments [e.g., Dasgupta
(2008), for more details see Stewart (2013)]. A high discount rate
reduces the cost-effectiveness of adaptation strategies because the
benefit of reduction in damages into the future is reduced, thus
reducing NPV and lowering the break-even adaptation costs. None-
theless, a 7 or 10% discount rate will still produce break-even adap-
tation costs for Sydney of 3–6%, which are likely to be higher than
actual adaptation costs. Discount rates of 1.35 and 2.65% as used
by Garnaut (2008) result in higher break-even values (7–15%),
which increase the likelihood of adaptation being cost-effective.
These relatively low discount rates were selected so as to not under-
estimate climate impacts on future generations. However, others
suggest higher discount rates when assessing economic impacts
of climate change (e.g., Nordhaus 2007).
Time of Adaptation
The effects of a changing climate tend to worsen into the future so
benefits of adaptation in the next decade or so are lower compared
to those later in the century. Hence, deferring time of adaptation is
an option worth considering. There is also the benefit of reduced
present (discounted) value of adaptation cost if this cost is deferred.
04014001-9 ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng.
 Stewart et al. (2013) and Stewart (2014b) have shown that while
adaptation that is implemented as early as possible has the highest
NPV, deferred adaptation of 5–20 years also yields a high NPV and
high likelihood that adaptation is cost-effective.
Results: Likelihood of Climate Scenarios
The previous section described results for a scenario-based analysis
by assuming that the probability of climate scenario PrðCs Þ is
100%. However, there is unlikely to be such certainty about any
climate scenario. The IPCC Special Report on Emissions Scenarios
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Nonetheless, it illustrates how this may affect uncertainty and vari-
ability of NPV, and its effect on decision-making.
Further Work
This paper highlights that a risk-based approach to optimizing
adaptation requires the following information:
1. Effect of climate scenarios on frequency and intensity of
hazards;
2. Vulnerability of infrastructure to hazards;

3. Loss functions;
(SRES) states that probabilities or likelihood are not assigned to 4. Risk reduction for adaptation measures; and
individual SRES scenarios (IPCC 2000). One approach is to esti- 5. Cost of adaptation measures.
mate the relative likelihood of the occurrence of each climate sce- The break-even approach to economic assessment of the costs
nario, such as by expert opinion, Bayesian probability updating and benefits of adaptation is used due to considerable modeling and
when new data/models are available, etc. The overall NPV at time parameter uncertainty of these variables.
T is calculated as More accurate predictions of hazard, vulnerability, risk reduc-
tion, and economic assessment are challenging. A key challenge,
X
S at least for engineers, is the development of vulnerability models
NPVðTÞ ¼ PrðCs ÞNPVðTjCs Þ ð6Þ for damage prediction. This will utilize reliability and probabilistic
s¼1 modeling in time and space to model damage initiation and pro-
gression. There is much work on predicting reliabilities for the ul-
where S = total number of climate scenarios considered timate limit state where life-safety is the major criterion. However,
(S ¼ 3); Cs ¼ sth climate scenario; and NPVðTjCs Þ is given modeling of damage and serviceability limit states is a less tractable
by Eq. (5). problem as this requires information about damage progression,
IPCC (2007) states that anthropogenic forcing is likely to have load sharing, and redistribution of loads of failed components or
contributed to changes in wind patterns. The term likely is associ- connections, and other spatial and time-dependent processes. There
ated with a probability that exceeds 67%. It follows that the is also difficulty in modeling the vulnerability of housing and other
likelihood of no change in wind patterns is 33%, leading to nonengineered forms of construction where there is high variability
Prðno changeÞ ¼ 33%. If emissions scenarios B1 and A1FI are of construction materials, processes, and structural systems, high
considered equally likely, then PrðB1Þ ¼ PrðA1FIÞ ¼ 33%. variability of connection capacities (e.g., nailed connections, roof
For sake of illustration, the effect of climate scenario likelihood sheeting fasteners), less code compliance, and other variabilities
is assessed for nonforeshore locations in Sydney and 50% risk and uncertainties that are less evident in reinforced concrete, steel
reduction, as shown in Table 3. As expected, climate scenario like- and other forms of engineered construction.
lihood has little effect on the break-even adaptation cost as this
metric is less sensitive to the climate scenario. However, the maxi-
mum adaptation cost to be 90% certain that adaptation is cost-
effective is sensitive to the climate scenario. In this case, a weighted
Conclusions
average of NPV given by Eq. (6) reduces variability of NPV, The performance of new and existing infrastructure will degrade if
resulting in higher 10th percentiles of NPV and so higher maxi- subject to more extreme climate-related hazards or accelerated cli-
mum adaptation costs. For example, if there is 100% certainty mate-change induced degradation of material properties. Climate
of no change, the maximum adaptation cost is 4.0% for adapta- adaptation engineering involves estimating the risks, costs, and
tion to be preferred, however, this falls to 3.5% if there is equal benefits of climate adaptation strategies and assessing at what point
likelihood of all scenarios, and reduces further to 2.6% if PrðB1Þ ¼ in time climate adaptation becomes economically viable. This
PrðA1FIÞ ¼ 50%. paper has described how risk-based approaches are well suited
Eq. (6) and Table 3 are clearly a simplification of what is a chal- to optimizing climate adaptation strategies for built infrastructure.
lenging issue of degree of belief in climate scenarios and how it The concepts were illustrated with a state-of-the-art application of
might influence the cost-effectiveness of adaptation policy options.
risk-based assessment of climate adaptation strategies for Austral-
ian housing subject to extreme wind events. It was found that wind
vulnerability of new housing in Sydney can be reduced by 50–65%
Table 3. Effect of Climate Scenario Likelihood on Maximum Cost of at modest cost, and can be shown to be a cost-effective adaptation
Adaptation, for 50% Risk Reduction and Nonforeshore Exposure in measure.
Sydney
Probability of Maximum adaptation costs for
climate scenario adaptation to be preferred option
Acknowledgments
Pr (no Pr Pr Mean PrðNPV > 0Þ
change) (%) (B1) (%) (A1FI) (%) (NPV > 0) (%) ¼ 90% (%) The authors appreciate the financial support of the Common-
100 0 0 5.5 4.0 wealth Scientific and Industrial Research Organisation (CSIRO)
0 100 0 5.5 3.0 Flagship Cluster Fund through the project Climate Adaptation
0 0 100 5.7 1.9 Engineering for Extreme Events in collaboration with the Sustain-
33.3 33.3 33.3 5.6 3.5 able Cities and Coasts Theme, the CSIRO Climate Adaptation
0 50 50 5.6 2.6
Flagship.

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ASCE-ASME J. Risk Uncertainty Eng. Syst., Part A: Civ. Eng., 2015, 1(1): 04014001
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