Dynamic flood retention and risk sharing. On the implementation of local compensation schemes

Abstract

This article analyzes the socio-economic consequences of water storage policies, implemented by the French Flood Prevention Action Programmes (PAPI). These policies are designed to reduce flood risks at the basin level for example by reallocating risks from the most vulnerable to the least vulnerable areas, usually from urban to rural areas. Water basin managers are legally held to account for excess-damages. Since existing national indemnification schemes for natural hazards do not apply in the same way when PAPIs are implemented, farmers require that specific local compensation funds be set-up. This article summarizes the findings of an exhaustive survey of all PAPI basins in France and analyses how such compensation funds should be designed in order to ensure financial sustainability and local acceptability. It shows why the new flood management programmes may not be sustainable and it proposes alternative solutions, based on a better coordination between local water managers, insurance companies and public authorities.