Putting the economics in its place: decision-making in an uncertain environment

This paper describes a decision-making process for meeting the water supply-demand balance in urban centres. This is a complex sustainability iss ue, with strong elements of risk and uncertainty, resource and ecological limits, economic constraint s, the potential for conflict and an overarching need for the community to be engaged in the decision-making process. A worked example is used to illustrate the process, which em ploys several different component methods, each of which has been applied before, but not in c ombination. This decision-making process is likely to have relevance to a wide variety of other applications, in particular those relating to urban infrastructure. Integrated resource planning is used in the analysi s of supply- and demand-side options for meeting the long-term supply demand balance for water supply systems. These options can all be costed on the basis of their relative capital and o perating costs and their contribution to reducing the supply-demand deficit within the planning horiz on. An essential prior step is scoping the ecological boundedness of the system. In the case o f urban water supply a major focus is the consideration of environmental flows and their impa ct on supply availability. Greenhouse gas emissions are also an important externality of wate r supply systems, and attributing a cost to these emissions is an appropriate planning response. The process of decision-making also needs to consider a range of issues which do not lend themse lves to easy quantification, which in this process are categorised under the headings: environ ment; social; risk and feasibility. To accomplish this, a process was developed that us ed modified multi-criteria decision-making within a deliberative space. The unique characteris tics of the process were the fact that it did not attempt to mix the relatively easily quantified eco nomic criteria with the other, less readily quantified criteria. The qualitative criteria were weighted, scored and ranked by stakeholders in a deliberative process, and these results used to fil ter or ‘screen’ options from the portfolio, thus deriving the cost impact of decisions to include an d exclude options, based on the qualitative multi-criteria decision process.