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Reza Taheriattar
Supervisor: Prof. David Carmichael
Infrastructure Adaptability andSustainability
13th ACCARNSI National Early Career Research Forum and WorkshopUniversity of New South Wales – Manly Vale, 20-22 February, 2017
Outline
Research Significance
Research aim/approach
Research method
Case example
Concluding remarks
Research significance
Infrastructureobsolescence
Warragamba dam
Adaptation
• enormous costs• resource consumption/
waste production• disruption to services
Look-ahead approach
Uncertainty Design forAdaptability
adaptable infrastructure value – sustainability viewpoint
Designed-in adaptation
Fortuitous adaptation
Extra upfrontcost/effort !
1
Collaroy beach protection
Climatechange
Research aim/approach
Establish viability of adaptable infrastructure
• Designed-in adaptability features• Possible future adaptation
Estimation
Design
Analysis
Comparative study – two forms of adaptation: A and NA
Costs, social and environmental issues
Financial: Real options analysis (ROA)Social/Environmental: Life cycle assessment (LCA),
Social/Environmental costing(SEC)
2
Carmichael and Balatbat (2010); Carmichael (2014)
• Use of second order moment approach in DCF analysis
• Carmichael Equation: OV=×UV
1n
0i
n
1ijji
jin
0i2ii
n
0ii
i
1m
1k
m
1kltltk
m
1ktkt
m
1ktkt
2
r1
]X,Cov[X2
r1
]Var[XVar[PW]
r1
]E[XE[PW]
]Y,Cov[Y2]Var[Y]Var[X
]E[Y]E[X
a/6)(cVar[]P)/64M(OE[]
• Sensitivity analysis – discount rate (r) and adaptation time (T)
Research method
Financial analysis – ROA
3
Options analysis – only looks at differences at time T
Adaptability value = ×UV
Research method
Financial analysis – ROA
TTT ANAX
E[XT ] = E[NAT ]− E[AT ]
2][][][ TTT AVarNAVarXVar
E[PW] = E[XT ]
(1+ r)T
2TT
r)(1]Var[X
Var[PW]
4
ISO (2006); UNEP/SETAC (2009)
• Identify relevant social/environmental issues• Quantify the issues (inventory flows)• Compare NA and A (times 0, T)
Research method
Social/Environmental analysis – LCA
5
Research method
6
Sustainability analysis – ROA-SEC
Research method
7
Sustainability analysis – ROA-SEC
• Policy tools (taxes, fines), Insurance cost, Pollution control cost, …• Health/safety cost, Loss of productivity , Delay cost, …• Replacement cost, Remediation cost, Waste treatment costs, …
SEC techniques – shadow price estimation methods
i
iSET,iSET,FT,FT,T )A(NA)A(NAX
i
iSET,iSET,FT,FT,T ]E[A]E[NA]E[A]E[NA]E[X2
iiSET,iSET,FT,FT,T ]Var[A]Var[NA]Var[A]Var[NA]Var[X
E[PW] = E[XT ]
(1+ r)T
Var[PW] = Var[XT ]
(1+ r)2T
Adaptability value = ΦM
Design
NCCOE (2012a); Burcharth (2014)
NA)
A)
Designed-in adaptability features in A form• Build primary layer of larger armour units• Build parapet wall of stronger foundation
Future adaptation in NA form• Add bigger armour units on seawall face• Strengthen parapet wall foundation
Case example – rock seawalls
8
Estimation – differences between A and NA forms
9
Construction activities consideredTime A - Designed in form NA - Non-designed in formt = 0 Build armour layer of bigger rocks
Construct parapet wall foundation ofbigger size
t = T Add rocks – on the crest Add bigger rocks – on the crest andslope; in front of the toe
Enlarge parapet wall – drilled anchorsfor wall; reinforced concrete
Enlarge parapet wall – drilled anchors forwall and foundation; reinforced concretePavement – remove and rebuild
0 . . . . T
NAA
Schematic cash flowdiagram
Case example – rock seawalls
Financial analysis – results
Change in adaptability value with r (p.a.). T = 35 yrs.
Change in adaptability value with T. r = 5% p.a.
(A) extra upfront cost ≈ $60k
10
Case example – rock seawalls
Social/Environmental analysis – LCA results
SLCA LCA
Sustainability issue At t = 0 At t = T Combined t = 0 and T(A-NA)
Env
iron
. Materials consumption (t) 664 -2,536 -1,872Energy use (GJ) 185.1 -447.4 -262.3Emissions (tonne CO2-e) 20.2 -32.1 -11.9Solid wastes (t) 29.3 -122.9 -93.6Water pollution (kg) 35 -160 -125
Soci
al
Worker employment (h) 213 -855 -475Safety incidents (injuries no.) 0.0070 -0.0282 -0.0212Health damage (dBh) 4,933 -35,605 -30,672Traffic disruption (veh.h) 155 -686 -531
11
Case example – rock seawalls
12
Sustainability issue Adopted SEC methodsMaterials consumption -Energy use -Emissions Abatement cost (carbon tax), Damage costSolid waste production* Waste treatment costWater pollution Remediation costWorker employment Contribution to society, Comfort valueSafety incidents Insurance value, Loss of contributionHealth (noise pollution) Loss of productivityTraffic disruption Replacement cost, Delay cost
Social/Environmental analysis – ROA-SEC
Case example – rock seawalls
Treatment of intangibles uncertainty
n
1iii ]E[xwE[X]
n
1ii
2i ]Var[xwVar[X]
Change in adaptability value with r (p.a.). T = 35 yrs.
Change in adaptability value with T. r = 5% p.a.
13
(A) extra upfront costOnly-Financial – $60k
Potential for further encouraginginvestment in adaptability
Sustainability – $100k
Social/Environmental analysis – ROA-SEC results
Case example – rock seawalls
• An easy-to-use method for financial valuation of investment in adaptableinfrastructure presented.
• LCA could indicate whether infrastructure adaptability is sustainable… andwhether inclusion of environmental/social criteria enhances viability.
• Sustainability incorporated in options analysis – ROA-SEC captures intangiblesuncertainty and indicates to what extent environmental/social criteria enhanceviability… potential for further encouraging investment.
• Methods application demonstrated … no general conclusions on the viability –need for individual analysis.
14
Concluding remarks
Thank you for your attention
Infrastructure Adaptability andSustainability