Cost-benefit analysis of flood early warning system in the Karnali River Basin of Nepal

Nepal is severely flood-prone and ranks 20th worldwide in terms of flood-affected population. Although it is widely acknowledged that both national and community-based early warning systems (EWS) can reduce the impact of floods, studies quantifying the cost-benefits remain scarce. This study analyzes the costs and benefits of the EWS in the Lower Karnali River Basin in Nepal through 453 household surveys, 30 focus group discussions and 40 key informant interviews. The results show that households found the EWS to be beneficial and reliable, allowing them to save movable property, livestock and vehicles and health costs equivalent to NPR 117,027 (USD 1083) per household during the flood. The benefit-cost ratio is between 24 and 73 depending on different scenarios. 98% of the respondents would be willing to pay an annual fee of NPR 79 (USD 0.70) for five years if the existing flood EWS was to be managed by the community disaster committees. This can generate NPR 694,426 (USD 6430) annually, which would cover the annual maintenance and operating cost of the system. EWS gradually changes behaviors of communities over time as they start to trust the system and lead times are increased, resulting in more social capital and a wider range of early actions that reduce avoidable loss and damage. Improving the forecast lead time by 1 h can increase the current savings by 1.83 times. The results of the cost-benefit analysis can inform the policy-making of state and non-state actors and contribute to securing further funding.