December 16, 2022

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David Espinoza Coauthored a Paper on Climate Change Risk in Sustainable and Resilient Infrastructure

David Espinoza, Ph.D., P.E. (Maryland) coauthored "Decoupled net present value: protecting assets against climate change risk by consistently capturing the value of resilient and adaptable investments," which was published in the journal Sustainable and Resilient Infrastructure on December 9, 2022.

He was the lead author; his coauthors were Javier Rojo (Sustainability Strategic Advisors, London), William Phillips (Mott McDonald, Toronto), and Andrew Eil (Tata Consultancy Services, New York).

David Espinoza is a Senior Principal Geoenvironmental Engineer who focuses on foundation design over soft soils, design of containment facilities (e.g., municipal solid waste, mining tailings, coal-combustion residuals), closure of containment facilities (e.g., tailing storage facilities) and more recently, financial evaluation of infrastructure investments taking into consideration physical risks such as climate change.

Sustainable and Resilient Infrastructure is an online interdisciplinary journal that focuses on the sustainable development of resilient communities.


There is growing awareness that traditional valuation methods based on discounted cash flows using constant risk-adjusted discount rates struggle to account for climate-related risks when assessing long-term investments in physical assets and infrastructure. Worse yet, such methods fail to consider numerous financial benefits accruing from investment in resilience and adaptation, categorizing such expenditures as sunk costs that reduce investors’ returns. Such traditional valuation methods encourage investors to postpone or forgo investing in resilience and adaptation. The decoupled net present value (DNPV) method incorporates risk and risk-reduction measures into project valuations in clear and compelling financial terms. By quantifying both risk exposures of assets to hazards and the reduction of such exposure through up-front investments, DNPV recasts the financial impact of risk-reduction measures. Thus, the benefits of risk-reducing investments such as adaptation and resilience can be fully valorized in project-level accounting, removing a significant barrier facing such investments today.

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