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MERIT Infrastructure Resilience Economic Modeling Platform

Solution Overview

The Wellington Lifelines Regional Resilience Project utilized MERIT (Modelling the Economics of Resilient Infrastructure Tool), an advanced economic simulation platform developed through the 2012-16 MBIE-funded Economics of Resilient Infrastructure research programme.[3][5] This integrated spatial decision support system was deployed to evaluate infrastructure investment options across the Wellington region, enabling high-resolution assessment of economic consequences from infrastructure failure, business response, and recovery options.[3][4] The collaborative initiative brought together all 16 Wellington utility providers and local government to identify an accelerated programme of infrastructure investments designed to protect the regional economy from major seismic events.[2]

Technical Components

MERIT represents a joint partnership between GNS Science, Market Economics (MEResearch), and Resilient Organisations, functioning as a state-of-the-art economic modelling tool developed specifically to estimate the economic impacts of infrastructure disruption.[1][4] Central to this platform is a multi-sectoral, multi-regional, and fully dynamic economic model designed to imitate the core features of a Computable General Equilibrium (CGE) model.[3] The system differs from standard CGE models in that it is formulated as a System Dynamics model using finite difference equations.[3] The platform runs comfortably over a 50-year time horizon, with the first 15 years calibrated against real-world data.[1] Impact modelling was conducted on nine different lifeline utilities in the Wellington metropolitan area to quantify the benefits achievable through proposed investments.[5] Resilient Organisations led the development of behavioural assumptions underpinning the economic modelling, drawing on data from the Canterbury earthquakes, international disaster events, and a series of workshops with key Wellington stakeholders to develop model assumptions around likely population and business behaviours following a Wellington Fault earthquake.[4] The time-stamped service outage maps and tables produced from this analysis formed essential inputs to evaluate and demonstrate the impact of proposed resilience initiatives on regional and national economies.[5]

Implementation Details

This project was commissioned by the Wellington Region Lifelines Group, with Resilient Organisations partnering with Market Economics and GNS Science to carry out economic modelling of a Wellington Fault event.[4] The preferred programme of investment comprises 25 resilience projects at an estimated total capital cost of $3.9 billion.[3] The programme includes projects across the fuel, transport, electricity, telecommunications, water, and gas sectors.[3] Projects have been scheduled across a 20-year time horizon and have been arranged so that interdependencies between projects and other lifeline services are considered.[3] The initial capital expenditure of $3.9 billion represents the largest single component of the programme cost at 73 percent, with whole-of-life programme costs including capital expenditure and initial operational expenditure estimated at $5.3 billion.[3] The estimated funding for the programme comes to $1.9 billion, covering 36 percent of the programme cost.[3] The funding shortfall for Phase 1 of the programme covering Years 0-7 is $580 million.[3] Wellington Lifelines published a report with the key findings from this project, titled "Protecting Wellington's Economy Through Accelerated Infrastructure Investment Programme Business Case," in October 2019.[4]

Benefits and Impacts

Modelling of the recommended programme resulted in a $6.16 billion reduction in GDP loss following a 7.5 magnitude Wellington Fault event, assuming all projects included within the preferred programme have been implemented.[3] With the preferred programme of investments, the MERIT modelling demonstrated multi-billion-dollar reductions in economic losses and improved community outcomes in the event of a major seismic event in Wellington.[2] The modelling assessed disruption impacts to the economy associated with the earthquake over a 5-year timeframe following a quake event, assuming that the event takes place at the present time.[3] Fuel, road, and electricity projects were found to provide the greatest resilience benefit to other projects within the investment portfolio.[3]

Climate Adaptation Relevance

This approach directly addresses seismic hazard resilience by enabling quantitative assessment of infrastructure vulnerability and economic consequences from major earthquake events. The modelling framework supports strategic investment decisions that reduce community exposure to catastrophic infrastructure failures following natural disasters. By evaluating interdependencies across multiple utility sectors, the system enables comprehensive resilience planning that accounts for cascading impacts from climate-related and geological hazards.

Business Analysis

The preferred programme represents approximately $3.9 billion in capital investment, with analysis demonstrating that this expenditure could prevent $6.16 billion in GDP losses from a single major seismic event.[3] The economic modelling framework provides decision-makers with quantitative evidence to support infrastructure investment prioritization, enabling cost-benefit analysis across multiple sectors and time horizons. The 36 percent funding coverage identified through existing sources highlights the need for additional financing mechanisms to address the $580 million Phase 1 shortfall.[3] The MERIT platform itself represents an extension of the Economics of Resilient Infrastructure research programme, with ongoing development under the Resilience to Nature's Challenges initiative, indicating sustained government support for advanced infrastructure resilience modelling capabilities.[2]

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