MORE THAN PROFIT: Network Economies

4.2. Tool: NIST Economic Decision Guide Software

The link to the digital tool:

https://nvlpubs.nist.gov/nistpubs/SpecialPublications/NIST.SP.1197.pdf 

The Economic Decision Guide Software (EDGe$) Tool brings to your fingertips a powerful technique for selecting cost-effective community resilience projects. This decision support software is designed to support those engaged in community-level resilience planning, including community planners and resilience officers, as well as economic development, budget, and public works officials. It provides a standard economic methodology for evaluating investment decisions required to improve the ability of communities to adapt to, withstand, and quickly recover from natural, technological, and human-caused disruptive events. The tool helps to identify and compare the relevant present and future resilience costs and benefits associated with new capital investment versus maintaining a community’s status quo. The benefits include cost savings and damage loss avoidance because enhancing resilience on a community scale creates value, including co-benefits, even if a hazard event does not strike.

Introduction

‘Economic Guide’ develops economic decision guidance for the evaluation of alternate investments designed to improve community resilience through strengthening the ability to respond, withstand, and recover from disruptive events. It is designed to implement the principles and attributes of resilient communities upon which enhanced resilience may be developed, evaluated, and implemented. A common attribute of resilient communities is risk management through an integrated approach to managing threats and opportunities for decision-making that is balanced and informed. Developed at the National Institute of Standards and Technology (NIST), this guide will assist users of the Community Resilience Planning Guide for Buildings and Infrastructure Systems (‘Planning Guide’) in understanding the benefits, costs, and tradeoffs involved in making capital improvements to the built environment for increased resilience, recognizing the key roles buildings and infrastructure systems play in supporting the social functions of a community. The guidance follow industry-standard economic methods, ensuring that different analyses of alternative infrastructure investments can be compared with each other and to a business-as-usual baseline.

Purpose

There is an abundance of research focused on topics related to community resilience, including best practices for community assessment; however, guidance is needed to evaluate the economic

ramifications of investment decisions into capital infrastructure to improve community resilience. The purpose of this report is to provide a standard economic methodology for evaluating investment decisions aimed at improving the ability of communities to adapt to, withstand, and quickly recover from disasters.

The Economic Guide frames the economic decision process by identifying and comparing the relevant present and future streams of costs and benefits to a community—the latter realized through cost savings and damage loss avoidance—associated with new capital investment into resilience to those generated by the status-quo. This report provides a means to increase the capacity of communities to objectively and effectively compare and contrast capital investment projects through consideration of benefits and costs while maintaining an awareness of system resilience. Topics related to non-market values and uncertainty are also explored.

Approach

The guidelines in this report are designed for use in conjunction with the Planning Guide by providing a mechanism to prioritize and determine, based on supporting community social needs, the efficiency of resilience actions. The Planning Guide provides a methodology for communities to develop long-term plans by engaging stakeholders, establishing performance goals for buildings and infrastructure systems, and developing an implementation strategy.