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FAQs - Economics of Resilient Infrastructure

Visit their new Website - www.merit.org.nz/merit

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What are the key research questions?

Infrastructure failures occur from time to time. These may be caused by major hazard events such as earthquakes. But “infrastructure-only” outages also happen due to system breakdowns or asset failures within networks.

The Economics of Resilient Infrastructure project addresses the question “What are the economic impacts of infrastructure failure?” Answers will help inform infrastructure resilience considerations by lifeline utilities, government and local authorities.

Why is this important?

Lifeline utilities, central and local government agencies regularly face decisions impacting infrastructure resilience. The gains from good decisions accrue widely to the community, not just to the utility or agency where the options must be resolved.

That means that the decision process should take account of full public costs and benefits. The research project will contribute to understandings on these wider matters.

The model arising from the project, named MERIT, will significantly enhance New Zealand’s economic modelling capability in this key area.

Who will benefit?

MERIT will be available as a test-bed to inform public policy considerations by

• central government, where choices around new infrastructure investment and resilience policy work programmes are being made

• local government, where planning and investment decisions relating to infrastructure are taken as part of spatial and CDEM planning.

MERIT will also be available to lifeline utilities looking to understand the full public value of infrastructure resilience improvements when considering mitigation business cases and the like.

Consumers of infrastructure services, and the economy as a whole, will benefit from improved resilience arising from better-informed decisions by these agencies.

What exactly is MERIT?

Technically, MERIT is an “integrated spatial decision support system”. It can be thought of as a set of inter-related modules.

• A behavioural module contributing information on the nature of business responses to infrastructure outages.

• A spatial module enabling city-wide impacts to be identified at a high level of resolution.

• An economic module, designed on the principles of Computable General Equilibrium (CGE) models, bringing together supply and demand in relevant markets (including labour and capital markets), pricing impacts and other dynamics.

Data on city characteristics, hazards and infrastructure layouts complete the model system.

How will MERIT work? Go to our link

What infrastructure sectors are included?

Ideally we’d like to include all four lifeline sectors: Energy (fuel, gas, power), Water (potable, wastewater, stormwater), Telecommunications (cell, broadcasting, landline), and Transport (roads, rail, ports, airports) plus Buildings.

The degree to which we can include all these sectors and the level of detail will depend on the information available.

What outputs can be expected?

The key output will be a high resolution assessment across space and through time of the economic consequences of infrastructure failure, taking into account business response and recovery options. Specifically, SEDEM will enable

• quantification of the economic implications of vulnerabilities to infrastructure failure from both natural hazards and infrastructure-only events

• exploration of alternative post disaster recovery strategies.

Outputs will describe local, regional and national impacts.

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Who is involved?

The work is being led by a Project Team comprising GNS Science, Market Economics Ltd and Resilient Organisations. Tony Fenwick (Wellington) and Simon Worthington (Christchurch) are also involved.

Auckland Council is an active participant and potential model user.

The Netherlands-based Research Institute for Knowledge Systems (RIKS) will provide the capability for the spatial module.

An independent Advisory Group meets from time to time to guide the work.

Discussions between the Team and key potential users including Auckland Council, the National Infrastructure Unit in Treasury and many others are ongoing.

What will it cost?

Funding of $2.8 m over four years has been granted within the Ministry of Business, Innovation and Employment’s 2012 Investment Round.

How does the project link with other work?

Linkages with the many other research programmes and related activities will be maintained through a variety of formal and informal channels. For example, we will be talking regularly with researchers involved in the Natural Hazards Research Platform who are working in areas with potential alignment with this project.

What results can be expected and when?

The project will deliver two case studies, one on Auckland and one on Christchurch, describing economic impacts arising from infrastructure loss following major natural hazard events (the Auckland one will be a volcanic eruption). We will also deliver Auckland and Christchurch simulations for infrastructure-only failures (results from these will initially be provided to main stakeholders). We expect that these simulations will be completed in 2014 or 2015.

Further simulation results will depend on MERIT’s take-up by lifeline utilities, central and local government agencies.

An initial analysis of Christchurch business survey results will be completed by April 2014 and case studies will be prepared by August 2014.

Research papers will also follow in due course.

How will progress be monitored?

We report regularly to the Ministry of Business, Innovation and Employment and to the Natural Hazards Research Platform. The independent Advisory Group also meets from time to time to guide the work.

Where can I get further information?

Visit www.merit.org.nz/merit

 How can I get involved?

Parties with resources that may assist the project may be approached for support including GIS information, initially for Auckland and Christchurch. This will need to cover a range of infrastructure layouts. We also want to keep in touch with a range of stakeholders. Your input and helpful advice will be most welcome.

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Updated 15 May 2018