An economic analysis of the Waffle

Abstract

The Red River of the North has a long history of flooding. A host of physical characteristics and man-made factors contribute to widespread flooding in the basin. Attempts to mitigate flood damage in the basin have been limited to using dikes/levees and waterways/diversions. Other flood mitigation strategies are insufficient by themselves to make meaningful reductions in flood damages, and spring flooding continues to cause damage. Another option to mitigating flood damages in the Red River basin is the concept of using hundreds or thousands of ‘micro-basin’ storage areas, called the Waffle, comprised of roads and adjacent lands throughout the region. This study employs net present value analysis to evaluate the economic feasibility of using the Waffle to reduce flood damages in the basin. Net benefits are positive in 130 of the 132 scenarios evaluated. Eighty-five percent of the scenarios resulted in over $300 million in net benefits, and nearly 68% have net benefits in excess of $400 million. The large positive net benefits from the Waffle suggest that policy makers should compare the cost-effectiveness of Waffle-type and structural flood protections. There are likely flood-prone areas that nonstructural flood protection alone or in combination with structural measures will be economically preferred to structural measures alone.