PROBABILISTIC-BASED HURRICANE RISK ASSESSMENT AND ...

assumed, between now and 2080, it could add $5.6 to $7.6 billion, assuming thatgovernment agencies adapt infrastructure to changing conditions.1.1.2 Uncertainty, Risk, and Probabilistic AnalysisThere is a great uncertainty in hurricane risk assessment (Li and Ellingwood 2006), inparticular under the impact of climate change (Stainforth 2005). Despite the uncertaintyon the possible change of wind speeds in the U.S., information is available from otherlocations. Australian Greenhouse Office (AGO) (2007) and Walsh et al (2002) suggestthat there will be an increase in wind speed of 5% to 10% by 2050 in Queensland,Australia. A recent study by Vickery et al. (2009) indicates that 5% to10% increase inwind speeds in the U.S. may be possible.Two groups of uncertainty, i.e. aleatoric uncertainty and epistemic uncertainty, can beidentified within hurricane risk assessment. Aleatoric uncertainty arises because of theunpredictable, random nature of the physical system under study. On the other hand,epistemic uncertainty is due to the lack of knowledge of the system in respect toquantities and processes within the system. Aleatoric uncertainty cannot be reduced onlyidentified and quantified, while epistemic uncertainty can be reduced through morecomprehensive study. Epistemic uncertainties can be quantified through a thoroughsensitivity analysis.Within the research, the aletoric uncertainties include the frequency and intensity ofhurricane wind speeds and the magnitude of hurricane-induced surge, because of theinherent randomness within these parameters. The epistemic uncertainties are foundwhere assumptions are made within this research, such as increase in annual maximumwind speed in 50 years, increase in surge heights, the vulnerability functions, annualhouse growth rate, building inventory within a region, assumed discount rate, and nonuniformhousing prices of a region.There is also uncertainty with regards to the potential changes in storm surge height. Aspreviously stated, the IPCC (2007) indicated that an increase in surge height of 40 cm ispossible by the end of the century. While the Climate Change Advisory Task Force(2008) of Miami-Dade County estimates that surge heights may increase by 90 to 150 cm5