Peter Larsen, "Estimating Future Costs of Alaska Public Infrastructure at Risk to Climate Change"
Peter Larsen, Senior Policy Advisor on Climate Change & Energy for the Nature Conservancy and formerly a Research Associate and Adjunct Professor at the University of Alaska Anchorage
Summary: Mr. Larsen discussed the Institute of Social and Economic Research at the University of Alaska Anchorage (ISER-UAA) creation of a policymaking tool called the Comprehensive Infrastructure Climate Lifecycle Estimator (ICICLE) that utilizes an infrastructure database, climate projections, a useful life matrix, current replacement cost assumptions, and statistical uncertainties to calculate future additional infrastructure replacement costs due to climate change.
Mr. Larsen’s presentation, “Estimating Future Costs of Alaska Public Infrastructure at Risk to Climate Change” shared his task of researching the economics of climate change in Alaska. A quote that caught his eye while working on this project was from a 200 page report by the US Arctic Research Commission. “Expected values of [infrastructure] relocation and rehabilitation can be developed, given estimates of per-mile design and construction costs. A master plan of climate-change-induced major relocation and rehabilitation projects can be formed with this information.” This one paragraph influenced him more than any other piece of literature on this subject. The Institute of Social and Economic Research at the University of Alaska Anchorage (ISER-UAA) built an experimental policymaking tool to estimate the additional replacement costs to public infrastructure due to climate change. Their model, based on summer 2007 knowledge gives preliminary estimates – not actual figures – of a plausible range of costs by infrastructure type and area and is meant to spur more research and debate on the issue of how climate change can impact structures. He found in doing this model that a significant number of Alaskan infrastructures are at risk due to climate change but it is not something that is unmanageable. Under any scenario, the cost of Alaska infrastructure at risk to climate change could total at least several billion of today’s dollars over the next few decades. Another caveat mentioned is that he had to build the ISER Alaska Public Infrastructure Database from scratch because there weren’t other resources in the state to use and while not perfect, the database is a start.
The ISER-UAA’s economic analysis factors in climate projections and the economic uncertainties due to climate change. It factors in economic activity and societal well-being. Any ethical economist will say that you can’t equate economics to well being – just because there are additional benefits doesn’t mean a person is more “well off.” The economic analysis entails a preliminary estimate of costs, depreciation and lifespan of buildings. With a state this size there are no estimates on the ground on what things will cost as structures change due to climate change. While climate projections may bring debate on the causes, there is no denying that average annual temperatures are significantly increasing in the arctic. The graph showed a large increase in the 1970s that has been a cause of debate among scientists as to its cause. Is it a positive phase of “Pacific Decadal Oscillation” or is it global warming? A map of the increase in average annual temperatures from 1949 to 2005 showed an increase of 3.5 °F statewide.
Other anomalies exist such as there are some places where sea levels are actually subsiding rather than the expected rising. Their economic analysis factors in the expected impacts on structures due to thawing permafrost (creating sink holes and other hazards), accelerated coastal erosion (half the village of Newtok, Alaska is predicted to be inundated by 2027 due to erosion) and an increased likelihood of “extreme events” (or “storm events.”) An impact not yet factored into their model is the inundation of coastal and river communities from sea ice reduction and changes in sea-level.
ICICLE uses climate projections from the National Center for Atmospheric Research (NCAR) and climate projections from the Program for Climate Model Diagnosis and Inter-comparison (PCMDI) that includes average annual temperatures and precipitation for each community. Using a grid, they mapped the infrastructures to each grid section. They use the statistics from the climate projections to put some preliminary probabilities around those projections of what we think the future precipitation and temperature will be. ICICLE then incorporated two forms of statistical uncertainties including a range of Atmospheric Ocean General Circulation Model (AOGCM) projections (warm, warmer, warmest) and the historical climate variability observed in each region. Incorporating statistical uncertainties helps correct biases and errors that occur when doing climate models. ICICLE also utilizes a Useful Life Adjustment Matrix or “depreciation matrix” that includes infrastructure class, topography, permafrost factors, increase in annual temperature and increase in annual precipitation to help them put a financial value to the changes that will come from climate change.
Then ICICLE calculates the exposure of Alaskan Infrastructure to climate changes in order to determine how climate change will shorten the lifespan of the infrastructure (such as coastal erosion, thawing permafrost, flooding) causing it to be replaced more frequently. The final calculation determined the additional replacement costs from climate change basically subtracting the adjusted useful life due to climate change from the baseline replacement costs. The formula is based on the assumption that planners will adapt structures to changing climates (as opposed to builders using current building standards and techniques). Without adaptation, they came up with an extra $4-7 billion dollars in additional costs. If planners include an adaptation cost of +5% it will bump the structures to the original replacement cost timeline. The state will need to set aside an additional $3.6 to $6.1 billion depending on the variable of temperature change (warm, warmer, warmest) for the additional replacement costs of public structures by 2030. Additional costs are projected to be highest (24-30%) for roads, airports and water and sewer systems with moderate climate warming by 2030.
In conclusion, Mr. Larsen stated that:
- Effects of climate change are being observed in many parts of Alaska. Every model he was given access to showed warming now and in the future.
- In addition to public infrastructure, other social and natural systems may be vulnerable to climate change. Future projections show a consensus of significant changes in the foreseeable future, particularly for the Northern and Western parts of Alaska.
- Damages to infrastructure could be large (i.e. several billions in today’s dollars), but there is little reliable information “on the ground” detailing the degree and location of impacts.
- Overall, ICICLE estimates that Alaska public infrastructure costs could increase +10 to +20% over the next few decades from climate change assuming some level of adaption.
- This research was sponsored by the University of Alaska Foundation, the National Commission on Energy Policy, Alaska Conservation Foundation and Rural CAP.