Risk and wishful thinking

Driving back from a meeting in Sacramento with a economist colleague from the midwest, I mentioned that post-Katrina, the Sacramento area was now the national number one flood catastrophe risk. This morning I found a note from Froude Reynolds tucked under my windshield wiper:

This happens all over. It is entirely predictable, a known way that humans respond, and it is pure bulls**t. Local officials have too many cross-incentives to be allowed any authority over local flood designations.

Midwest flood victims feel misled by feds

Juli Parks didn’t worry when water began creeping up the levee that shields this town of about 750 from the Mississippi River — not even when volunteers began piling on sandbags.

After all, local officials had assured townspeople in 1999 that the levee was sturdy enough to withstand a historic flood, and FEMA had agreed. In fact, some relieved homeowners dropped their flood insurance, and others applied for permits to build new houses and businesses.

Then on Tuesday, the worst happened: The levee burst and Gulfport was submerged in 10 feet of water. Only 28 property owners were insured against the damage.

“They all told us, `The levees are good. You can go ahead and build,'” said Parks, who did not buy flood coverage because her bank no longer required it. “We had so much confidence in those levees.”

Communities protected by the 52-mile Sny levee, along the Mississippi River near Quincy , Ill. , worked hard to persuade FEMA in 2004 to accredit the levee, rebuilt after failing in 1993, as providing protection against a 100-year flood. FEMA relented, even though the decision was based on 1979 data and an unpublished Army Corps of Engineering study indicated that elevations in the river had risen substantially. Now, the Sny is in danger of failing and many people no longer have flood insurance.

There has been ample warning, of course; note the date on this item. Misled by the Feds? Betrayed by FEMA? No, friends. You were betrayed by your local officials. FEMA told you your levees weren’t good enough, and you went on an all-out campaign to pressure them into allowing you to build behind your inadequate levees. FEMA told you that the actual cost of the risk of flood in your floodplain was at least four hundred dollars a year. You said that you couldn’t afford four hundred dollars a year of flood insurance, so FEMA must be wrong about the risk. Based on thirty-five-year-old data, you and your local officials pressured FEMA into accrediting your levees.

This is wrong on two fronts. First, your thirty-five year old data about old river hydrologies is simply not the truth about your river anymore. The Army Corps of Engineers calls this year’s inundation a 500 year flood (a flood that has a one-in-five-hundred chance of happening every year based on hydrologic records), but now that our climate has changed, we have no idea what a big flood is, or how often it will occur. This might be a seventy year flood now. Second, when knowledgeable people come knocking on your door to tell you that you are in danger, DO NOT CONVINCE THEM OTHERWISE.

Listen, people, when FEMA comes to tell you that your levees will not hold, the problem is NOT that FEMA gave you bad news that will stop development. The problem is that you are putting people at risk of losing their homes and pets and lives by building houses on unsafe floodplains. The problem is that the river is big and expensive to contain. You can address this, if you want. You can build your housing developments on stilts. Better yet, you can not put anything important in the way of rushing waters. Or you can build really good levees, bigger and more expensive than the ones you already have. Those are options. The only crappy option is to overrule the messenger. But way too often, that’s what local officials try to do first.

The problem is that local officials have too many incentives to ignore or fight the bad news, like, um, continuing to have a town to be the mayor of. It is hard to face upfront costs, like lost revenue from permitted-but-not-built development or like vastly increased costs to improve flood protection infrastructure. It is hard to really believe and understand risk. Humans aren’t good at that, especially for threats that aren’t visible or are periodic. Humans believe that what they are used to is somehow valid, vested and protected by the magic of daily ordinariness. This isn’t true, not now that global warming is literally changing the world around us, but people will resent and fight the new costs.

It is time to include these human behaviors in our understanding of flood systems. We can model the river and we can model levees. We also know, in the aggregate, how humans will act as well. Humans will cling to their places unto the third flood or tornado. Humans will not buy adequate insurance, because they will max-out their means in other aspects of their lifestyles. Humans will base their risk assessments on looks (“That looks like a house and houses mean safety. That looks like a levee and I’ve never seen a levee break. Matter of fact, it looks pretty dry around here today.) and looks are wrong. Local officials will defend status quo ferociously. Status quo got them elected, after all. Knowing all this means that we can design flood systems to accommodate human behavior. The first step of that is holding firm to levee accreditation standards and making locals face the realities of living on a floodplain.

Author: Michael O'Hare

Professor of Public Policy at the Goldman School of Public Policy, University of California, Berkeley, Michael O'Hare was raised in New York City and trained at Harvard as an architect and structural engineer. Diverted from an honest career designing buildings by the offer of a job in which he could think about anything he wanted to and spend his time with very smart and curious young people, he fell among economists and such like, and continues to benefit from their generosity with on-the-job social science training. He has followed the process and principles of design into "nonphysical environments" such as production processes in organizations, regulation, and information management and published a variety of research in environmental policy, government policy towards the arts, and management, with special interests in energy, facility siting, information and perceptions in public choice and work environments, and policy design. His current research is focused on transportation biofuels and their effects on global land use, food security, and international trade; regulatory policy in the face of scientific uncertainty; and, after a three-decade hiatus, on NIMBY conflicts afflicting high speed rail right-of-way and nuclear waste disposal sites. He is also a regular writer on pedagogy, especially teaching in professional education, and co-edited the "Curriculum and Case Notes" section of the Journal of Policy Analysis and Management. Between faculty appointments at the MIT Department of Urban Studies and Planning and the John F. Kennedy School of Government at Harvard, he was director of policy analysis at the Massachusetts Executive Office of Environmental Affairs. He has had visiting appointments at Università Bocconi in Milan and the National University of Singapore and teaches regularly in the Goldman School's executive (mid-career) programs. At GSPP, O'Hare has taught a studio course in Program and Policy Design, Arts and Cultural Policy, Public Management, the pedagogy course for graduate student instructors, Quantitative Methods, Environmental Policy, and the introduction to public policy for its undergraduate minor, which he supervises. Generally, he considers himself the school's resident expert in any subject in which there is no such thing as real expertise (a recent project concerned the governance and design of California county fairs), but is secure in the distinction of being the only faculty member with a metal lathe in his basement and a 4×5 Ebony view camera. At the moment, he would rather be making something with his hands than writing this blurb.