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Publication - Guidance


Published: 2 Jun 2016

Appraisal guidance to support the development of flood protection initiatives

73 page PDF


73 page PDF


14. Glossary

73 page PDF


14. Glossary




An action may consist of a single intervention (e.g. build a storage reservoir) or could be two or more interventions, where the presence of one is essential to the success of another (e.g. demountable defences and flood warning system).

Above-design-standard benefits

The benefits from reductions in flood losses from flood events which exceed the design standard of protection, expressed as an annual average benefit.

Annual Average Damages ( AAD)

Depending on its size or severity, each flood will cause a different amount of damage to a flood prone area and we can calculate the cost of this damage. Annual Average Damages for an area are the average costs per year that would occur from flooding over a very long period of time.

Annual exceedance probability ( AEP)

Probability that a flood event of specified magnitude will be equalled or exceeded in any year (also see 'return period').


The process of defining objectives, examining options and weighing up the costs, benefits, risks and uncertainties before a decision is made.


Positive quantifiable and unquantifiable changes that an action will produce.

Benefit-cost ratio

The ratio of the present value of benefits to the present value of the costs. If the ratio is greater than one then the project is deemed to be economically viable.

Contingent valuation method

A valuation methodology which uses questionnaire techniques to elicit valuations using respondents' willingness to pay for an environmental improvement.

Cost effectiveness analysis

Analysis that compares the costs of alternative ways of producing the same or similar outputs.

Direct damages

Defined in the appraisal process as immediate damages to the receptor as a result of flooding (e.g. damages to the fabric or content of buildings, clean-up costs).


The procedure used to arrive at the sum of either costs or benefits over the lifetime of an action using a discount rate to scale down future benefits and costs. The effect of using a discount rate is to reduce the value of projected future costs or benefits to their values as seen from the present day.

Flood extent

The area that has been affected by flooding, or is at risk of flooding from one or more sources.

Flood hazard

In terms of the Flood Risk Management (Scotland) Act 2009, hazard refers to the characteristics (extent, depth, velocity) of a flood.

Flood risk

A measure of the combination of the likelihood of flooding occurring and the associated impacts on people, the economy and the environment.

Incremental benefit-cost ratio

The ratio of the additional benefit to the additional cost, when two options with different standards of protection are compared.

Indirect damages

Defined in the appraisal process as damages incurred due to the knock on effects of flooding such as disruption, evacuation, costs to emergency services, loss of income or earnings/industrial production. (See also 'direct damages').

Intangible impacts

Those costs and benefits that are not traded in a market (i.e. non-material and/or emotional impacts) and are difficult to assess in monetary terms.

Market price

The price for which a good is bought and sold in a market. If restrictive conditions are satisfied, this price may be used to estimate the economic value of the good. Otherwise, the market price may need to be corrected, and a 'shadow price' derived, in order to estimate the economic value of the good.

Natural flood management

A set of flood management techniques that aim to work with natural processes (or nature) to manage flood risk.

Natura sites

Natura is the term given to Special Areas of Conservation ( SACs) and Special Protection Areas ( SPAs). These internationally important sites are designated under the EC Habitats and Birds Directives.

Non-residential properties

Properties that are not used for people to live in, such as shops or other commercial or industrial type buildings.

Net present value ( NPV)

The stream of all benefits net of all costs for each year of the option's life discounted back to the present date.


An option is a combination of one or more flood risk management actions, developed to meet an objective.

Post project evaluation

A procedure to review the performance of a project with respect to its original objectives and the manner in which the project was carried out.

Present value

The value of a stream of benefits or costs when discounted back to the present time.

Property level protection

Property level protection includes flood gates, sandbags and other temporary barriers that can be used to prevent water from entering individual properties during a flood.


Refers to the entity that may be impacted by flooding (a person, property, infrastructure or habitat). The vulnerability of a receptor can be modified by increasing its resilience to flooding.

Residential properties

Properties that are used for people to live

Residual risk

The risk that remains after risk management and mitigation. This may include risk due to very severe (above design standard) storms or risks from unforeseen hazards.

Return period

A measure of the rarity of a flood event. It is the statistical average length of time separating flood events of a similar size: a 100-year flood will occur on average once in every 100 years. The longer the return period, the rarer the event. (Also see 'Annual exceedance probability').

Risk assessment

Consideration of the risks inherent in a project, leading to the development of actions to control them.

Sensitivity analysis

Analysis of the effects on an appraisal of varying the projected values of important variables.

Standard of protection

The flood event return period above which significant damage and possible failure of the flood defences could occur.

Sunk costs

A cost incurred in the past and which cannot be recovered whatever decision is taken now. Consequently, sunk costs are omitted in benefit-cost analyses.

Sustainable flood risk management

The sustainable flood risk management approach aims to meet human needs, whilst preserving the environment so that these needs can be met not only in the present, but also for future generations. The delivery of sustainable development is generally recognised to reconcile three pillars of sustainability - environmental, social and economic.

Transfer payment

A payment which has no impact in terms of an economic analysis (see Appendix 1). Examples are most tax payments and general subsidies.

Wave overtopping

Wave overtopping occurs when water passes over a flood wall or other structure as a result of wave action. Wave overtopping may lead to flooding particularly in exposed coastal locations.

Whole-life costs

The total costs associated with an action for its full design and potential residual life span, taking proper account of all aspects of design, construction, maintenance, and (where significant) disposal. A particularly useful approach in helping to determine economic sustainability when used to compare the relative costs of long-life actions such as flood defences, and where decisions need to be made between short-term capital costs and long-term maintenance costs.

Willingness to pay

The amount an individual is prepared to pay in order to obtain a given improvement in utility, expressed through the contingent valuation method.