Fluvial of property level protection is on average

Fluvial flooding in the UK is
worth 40% of UK Expected Annual Damages, a total of £560m, whereas coastal
flooding is worth 24%, a total of £320m (Sayers et al., 2015). As flood risk to residential properties increases from
860,000 in 2015 to 1.2 million at risk by the 2080s, this signals a need for
better government intervention (Sayer et
al., 2015).

The UK government recognises that
current flood risk management strategies (FRMS) and flood defences, identified
largely as a local public good due to their non-rivalrous and non-excludable
nature, are currently “ineffective, inefficient, and fragmented” (UK
Parliament, 2017). Current policy doesn’t encourage the widespread use of
catchment scale approaches (UK Parliament, 2017).

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Geaves and Penning-Rowsell (2016)
recognised that flood warning systems (FWS) were categorically a non-private
good, deciding that FWS are a public good due to being non-excludable and
non-rivalrous. Government intervention is warranted due to correct previous
government errors and a need to distribute initial rights and install better
policies for land management between land owners in upland ecosystems who can
better manage land for downstream members and homeowners.

Lack of effective FRMS creates
negative externalities, such as impacts on third parties or downstream
homeowners by damage to homes and businesses. Positive externalities exist through
effective land management, e.g. afforestation increasing biodiversity, nutrient
deposition on floodplains farmland. As flooding can be subsidised through flood
insurance, appropriate level of government intervention would be at a local
level, e.g. Powys County Council, to determine appropriate actions (Geaves and
Penning-Rowsell, 2016).

While command-and-control (CAC) of
flooding through introducing a system of guidelines and building permits or the
banning of certain land management practices or inefficient building equipment
may work, it would use a “one size fits all” approach (Harrington and
Morgenstern, 2007). A key disadvantage of CAC approaches are that it doesn’t
account for individual differences in landowners or land management making it
economically inefficient. As a result this reduces the individual incentive to
address flooding as an issue, either through investigating methods of flood
reduction or private flood defence measures individuals can purchase as a
private good. These measures often exclude the poorest of society, as the cost
of property level protection is on average £4922 per property (Geaves and
Penning-Rowsell, 2016). 

Instead other economic
instruments such as incentives should be utilised. Incentives are often seen as
flexible lower cost alternatives to CAC practices that require less input from
the regulator (ELC, 2017). Economic instruments are often more efficient than CAC
and provide a continual incentive to address the cause of flooding, e.g.
purchasing land and leasing back to farmers subject they comply with FRMS
(Harrington and Morgenstern, 2007; Beedell et
al., 2012).

As free-riders cannot be avoided,
for new policy to be adopted the government is subjected to a period of
lobbying flood risk towns or previous victims through rent seeking media appeals
to help gain votes. The fine workings of the policy would only appeal to
engineering companies and environmentalists who may ‘win’ contracts from the
government, whereas the general public will vote to elect politicians lobbying with
the most ‘desirable’ flood risk management strategy. A problem of politics is
the willingness of the public to pay for FRMS, meaning that any charge through
taxes that the government introduces would be too much and lose the political
party votes (Geaves and Penning-Rowsell, 2016).

While government intervention in
UK flooding is warranted to address the collective action problem of politics,
there needs to be utilisation of both CAC for regulations on developments on
floodplains and incentives to encourage landowners to use catchment conscious
land management strategies. 


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