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I N C LU S I V E G R E E N G R O W T H: T H E PAT H WAY TO S U S TA I N A B L E D E V E LO PM E N T

BOX 7.5

Using robust decision making in water planning in southern California water

Planners have traditionally used historical stream flow data and weather patterns to develop seasonal water forecasts. But because climate change is expected to change weather patterns, air temperature, and precipitation patterns in an as yet unpredictable fashion at the local scale, planners are now seeking methods to incorporate the impacts of climate change into their planning processes. In 2006, the RAND Corporation worked with the Inland Empire Utility Agency (IEUA), in Chino Hills, California, to test its robust decision-making framework. In 2005, IEUA released its Regional Urban Water Management Plan (UWMP), in response to a projected population increase of 800,000 to 1.2 million people by 2030. The document outlined a plan to meet future water demands by improving water use efficiency and developing local resources. The robust decision-making analysis took the UWMP as its initial strategy, used climate information from the National Center for Atmospheric Research, and employed a planning system from the Stockholm Environment Institute to assess how different policy levers would perform under a variety of possible futures. The fi rst run of the model evaluated the proposed management plan under four climate scenarios. Its fi ndings generally indicated that if the impacts of climate change were minimal, the UWMP would meet its supply goals for 2030. However, if climate change were to cause signifi cant warming and drying, the

UWMP could perform poorly and miss many of its goals, causing economic losses. Additional runs of the model, using more than 200 scenarios and 8 additional management strategies, were then performed. In 120 of the scenarios, cost was 20 percent higher than expected. The analysis revealed that UWMP was particularly vulnerable when future conditions were drier, access to imported water more limited, and natural percolation of the groundwater basin lower. Strategies ranged from increasing water use effi ciency, recycling storm water to replenish groundwater, and developing the region’s water recycling program. In all cases, augmenting the UWMP with additional management strategies reduced both costs and vulnerability. The analysis concluded that local solutions should not be overlooked when developing ways to mitigate the impacts of climate change. Local policies and management opportunities may be more cost effective, reliable, and feasible than other options. Under the robust decision-making analysis, the best management plan was found to be adaptive and to include near-term implementation of more water use efficiency techniques. Presented with these results, water managers expressed increased confi dence that they could plan for the effects of climate change despite the uncertainty of forecasts. Source: For more information, see http://www.cakex.org/case-studies/1029.

making approach makes it possible to combine different performance criteria. It is thus useful for the design of green growth policies, which are based largely on the identification of synergies across policy goals. Both robust and optimal techniques are necessary elements in a decision-making process involving significant uncertainties. Analyses focused on optimality are vulnerable to overconfidence bias. Robust approaches dwell on consequences and eschew risky behavior. Managed risk-taking, however, is an essential part of development and inseparable from innovation.

One critique of robust approaches is their sensitivity to the worst-case scenario. This tendency is not an artifact of the methodology; rather, it reflects the reality of some choices; in other cases, decision makers can judge that hedging about a worst-case scenario is too expensive and not worth it. Robust processes deal with this issue through stakeholder participation and exchanges with experts. The choice of the worst-case scenario is thus a negotiated, participatory process that plays a key role in determining which policy options will eventually be implemented.

Inclusive Green Growth  

As the global population heads toward 9 billion by 2050, decisions made today will lock countries into growth patterns that may or may not b...