Fusing strategic risk and futures methods to inform long-term strategic planning: case of water utilities

Risks and futures methods have complementary strengths as tools for managing strategic decisions under uncertainty. When combined, these tools increase organisational competency to evaluate and manage long-term risks, improving the flexibility and agility of the organisation to deal with gross uncertainties. Here, we set out a framework to guide the assessment of strategic risks for long-term business planning, based on its application at Portugal’s largest water utility, Empresa Portuguesa das Águas Livres. Our approach extends strategic risk assessment by incorporating scenario planning—a futures approach used to help the utility move beyond single point forecast of risks to focus on critical dimensions of uncertainty that are fundamental to the resilience of corporate objectives and their vulnerability to external pressures. We demonstrate how we combine two complementary approaches—risk and futures—and use them to assess (i) how a set of baseline strategic risks for a water utility evolves under alternative futures, (ii) the aggregate corporate-level risk exposure, and (iii) the process and responses needed to manage multiple, interdependent strategic risks. The framework offers a corporate approach to evolving strategic risks and improves a utility’s (i) knowledge of uncertainties, (ii) ability to assess the impacts of external developments over long time horizons and the consequences of actions and (iii) degree of flexibility to adapt to possible future challenges. The framework supports risk managers in their long-term strategic planning, through the appraisal and management of multiple, interdependent long-term strategic risks and can be replicated in other organisational contexts to bridge operational and corporate perspectives of enterprise risk.

     

Regional electricity transmission planning and SEA: The case of the electricity company ScottishPower

Since 21 July 2004, formal strategic environmental assessment (SEA) requirements are in place for certain plans and programmes in European Union member states. Many public plans and programmes have been identified to fall under these requirements, and there has been a range of research activities particularly in land use and transport planning. However, the way in which SEA is to be applied in the private sector has remained largely unclear. Furthermore, to date there has been comparatively little reported private sector experience and the concrete benefits that SEA may deliver to private companies have not yet been discussed to any large extent. In order to address this shortcoming, the paper looks at SEA application in electricity transmission planning, taking the specific case of the privatized company ScottishPower as an example. Based on the evidence obtained, it is suggested that a structured SEA process can strengthen the environmental component and improve private sector decision-making processes. Corporate governance can be improved, if SEA is applied in a tiered system, addressing different issues and tasks at distinct stages in a clearly defined decision making hierarchy.     

Multi-criteria analysis for improving strategic environmental assessment of water programmes. A case study in semi-arid region of Brazil

Multi-criteria analysis (MCA) is a family of decision-making tools that can be used in strategic environmental assessment (SEA) procedures to ensure that environmental, social and economic aspects are integrated into the design of human development strategies and planning, in order to increase the contribution of the environment and natural resources to poverty reduction. The aim of this paper is to highlight the contribution of a particular multi-criteria technique, the analytic hierarchy process (AHP), in two stages of the SEA procedure applied to water programmes in developing countries: the comparison of alternatives and monitoring. This proposal was validated through its application to a case study in Brazilian semi-arid region. The objective was to select and subsequently monitor the most appropriate programme for safe water availability. On the basis of the SEA results, a project was identified and implemented with successful results. In terms of comparisons of alternatives, AHP meets the requirements of human development programme assessment, including the importance of simplicity, a multidisciplinary and flexible approach, and a focus on the beneficiaries' concerns. With respect to monitoring, the study shows that AHP contributes to SEA by identifying the most appropriate indicators, in order to control the impacts of a project.     

Development of a Methodology for Strategic Environmental Assessment: Application to the Assessment of Golf Course Installation Policy in Taiwan

Some countries, including Taiwan, have adopted strategic environmental assessment (SEA) to assess and modify proposed policies, plans, and programs (PPPs) in the planning phase for pursuing sustainable development. However, there were only some sketchy steps focusing on policy assessment in the system of Taiwan. This study aims to develop a methodology for SEA in Taiwan to enhance the effectiveness associated with PPPs. The proposed methodology comprises an SEA procedure involving PPP management and assessment in various phases, a sustainable assessment framework, and an SEA management system. The SEA procedure is devised based on the theoretical considerations by systems thinking and the regulative requirements in Taiwan. The positive and negative impacts on ecology, society, and economy are simultaneously considered in the planning (including policy generation and evaluation), implementation, and control phases of the procedure. This study used the analytic hierarchy process, Delphi technique, and systems analysis to develop a sustainable assessment framework. An SEA management system was built based on geographic information system software to process spatial, attribute, and satellite image data during the assessment procedure. The proposed methodology was applied in the SEA of golf course installation policy in 2001 as a case study, which was the first SEA in Taiwan. Most of the 82 existing golf courses in 2001 were installed on slope lands and caused a serious ecological impact. Assessment results indicated that 15 future golf courses installed on marginal lands (including buffer zones, remedied lands, and wastelands) were acceptable because the comprehensive environmental (ecological, social, and economic) assessment value was better based on environmental characteristics and management regulations of Taiwan. The SEA procedure in the planning phase for this policy was completed but the implementation phase of this policy was not begun because the related legislation procedure could not be arranged due to a few senators’ resistance. A self-review of the control phase was carried out in 2006 using this methodology. Installation permits for 12 courses on slope lands were terminated after 2001 and then 27 future courses could be installed on marginal lands. The assessment value of this policy using the data on ecological, social, and economic conditions from 2006 was higher than that using the data from 2001. The analytical results illustrate that the proposed methodology can be used to effectively and efficiently assist the related authorities for SEA.     

Integrating Strategic Environmental Assessment with Industry Planning: A Case Study of the Pasquai-Porcupine Forest Management Plan,Saskatchewan, Canada

Strategic environmental assessment (SEA) is gaining widespread recognition as a tool for integrating environmental considerations in policy, plan, and program development and decision-making. Notwithstanding the potential of SEA to improve higher-order decision processes, there has been very little attention given to integrating SEA with industry planning practices. As a result, the benefits of SEA have yet to be fully realized among industrial proponents. That said, SEA practice is ongoing, albeit informally and often under a different label, and is proving to be a valuable tool for industry planning and decision-making. Based on a case study of the Pasquai-Porcupine forest management plan in Saskatchewan, Canada, this paper illustrates how an integrated approach to SEA can contribute to industry environmental decision-making and can enhance the quality and deliverability of industry plans.     

Planning for future sea-level rise in Swedish municipalities

A warmer climate leads to rising sea levels. Despite uncertainties about how rapid and substantial future sea-level rise (SLR) will be, society needs to prepare and adapt. This study examines the state of planning for future SLR in Sweden by surveying 33 coastal municipalities in southern Sweden and interviewing local, regional and national authorities with relevant accountability. The results reveal that there are considerable gaps in current planning for SLR. Almost one-third of municipalities lack guiding planning documents for SLR, and more than two-thirds do not discuss SLR beyond 2100. We argue that the prevailing uncertainty and ambiguity in assessments of future SLR is problematic within a traditional “predict-then-act” paradigm, and that robust approaches, such as scenario planning, can reduce many of these problems.     

A Level‐of‐Service Concept for Planning Future Water Supply Projects under Probabilistic Demand and Supply Framework

One of the most challenging tasks of water supply utilities is planning the timing and quantity of new water supply sources as demand for water consumption grows. Many water supply utilities target on meeting 100% of their customers' needs based on scenario‐based deterministic demand projections numbers even though there are uncertainties in both supply and demand values. This may result in under or overly conservative approach in assessing future needs. In this article, a level‐of‐service concept is introduced to capture a utility's willingness to accept a given level of risk, plan for it, and invoke a management strategy during extreme events than build a facility to accommodate those in planning for new water supply sources. Accounting for uncertainties in both supply and demand help quantify reliability by achieving a prescribed level of service. The major benefit of such an approach for planning future water supply is that it allows policy makers to evaluate the use of adaptive water management strategies and develop supply in an incremental fashion as demand warrants it. For example, if a given level of service cannot be reliably met with the existing system at a future time t, an incremental water supply project would come online to bring the required reliability level up but no more.     

Enhancing environmental integration in strategic environmental assessment (SEA): insight from sensitivity analysis

This paper explores the potential of sensitivity analysis to improve the Strategic Environmental Assessment (SEA) process and enhance environmental integration. It applies the Sensitivity Model Prof. Vester® to the England SEA process, following two objectives: (1) establishing how different strategic environmental assessment (SEA) elements affect environmental integration; and (2) establishing the sensitivity of the SEA process in terms of response to change. The findings showed that no single element was critical to enhancing environmental integration. Several elements, acting as sources of uncertainty, leverage or stability in the process, were also identified, highlighting their potential as priority targets for process improvement. It is concluded that sensitivity analysis can supplement current expert-led approaches to SEA improvement by (1) identifying elements likely to influence environmental integration and (2) testing the likely performance of recommendations for process improvement.     

Corporate strategy and viable future land use: planning for closure from the outset of mining

This paper provides an overview of the environmental impact of mining on viable future land use and underlines the imperative of improved environmental management and closure planning. It argues that pollution prevention, through planning for closure, can lead to cost-effective strategies for sustainable minerals development and viable future land use. This seems to be most true for greenfield sites since, generally, the earlier closure planning and pollution prevention is built into a project, the more cost-effective and environmentally benign closure will be. Further, for greenfield sites, pollution prevention techniques can be employed from the outset, at the stages of exploration and mine development, and then monitored and improved through the operation stage to closure, and can be kept in place to manage future land use.
The paper discusses how global changes in the industry, following the liberalisation of investment regimes, and mergers and strategic alliances between key firms, has, by virtue of the diffusion of new technology, led to further opportunities to prevent pollution and optimise future land use through planning for closure from the outset. The objectives and components of closure plans are also reviewed as the paper draws on case studies to highlight some of the possible constraints and challenges to pollution prevention that may be faced at the level of both public policy and corporate strategy. The article concludes by suggesting a forward-looking approach to integrated environmental management and viable future land-use planning based on a dynamic model for environmental management.     

Trends in future N₂O emissions due to land use change

Better insight in the possible range of future N?O emissions can help to construct mitigation and adaptation strategies and to adapt land use planning and management to climate objectives. The Dutch fen meadow landscape is a hotspot of N?O emission due to high nitrogen inputs combined with moist peat soils due to land use change. Socio-economic developments in the area are expected to have major impacts on N?O emission. The goals of this study are to estimate changes in N?O emissions for the period 2006-2040 under three different scenarios for the Dutch fen meadow landscape (rural production, rural fragmentation, and rural multifunctionality) and to quantify the share of different emission sources. Three scenarios were constructed and quantified based on the Story-And-Simulation approach. The rural production and the rural fragmentation scenarios are characterized by globalization and a market-oriented economy; in the rural production scenario dairy farming has a strong competitive position in the study region, while under the rural fragmentation scenario agriculture is declining. Under the rural multifunctionality scenario, the global context is characterized by regionalization and stronger regulation toward environmental issues. The N?O emission decreased between 2006 and 2040 under all scenarios. Under the rural production scenario, the N?O emission decreased by 7%. Due to measures to limit peat mineralization and policies to reduce agricultural emissions, the rural multifunctionality scenario showed the largest decrease in N?O emissions (44%). Under the rural fragmentation scenario, in which the dairy farming sector is diminished, the emission decreased by 33%. Compared to other uncertainties involved in N?O emission estimates, the uncertainty due to possible future land use change is relatively large and assuming a constant emission with time is therefore not appropriate.     

Case studies of scenario analysis for adaptive management of natural resource and infrastructure systems

Management of natural resources and infrastructure systems for sustainability is complicated by uncertainties in the human and natural environment. Moreover, decisions are further complicated by contradictory views, values, and concerns that are rarely made explicit. Scenario analysis can play a major role in addressing the challenges of sustainability management, especially the core question of how to scan the future in a structured, integrated, participatory, and policy-relevant manner. In a context of systems engineering, scenario analysis can provide an integrated and timely understanding of emergent conditions and help to avoid regret and belated action. The purpose of this paper is to present several case studies in natural resources and infrastructure systems management where scenario analysis has been used to aide decision making under uncertainty. The case studies include several resource and infrastructure systems: (1) water resources (2) land-use corridors (3) energy infrastructure, and (4) coastal climate change adaptation. The case studies emphasize a participatory approach, where scenario analysis becomes a means of incorporating diverse stakeholder concerns and experience. This approach to scenario analysis provides insight into both high-performing and robust initiatives/policies, and, perhaps more importantly, influential scenarios. Identifying the scenarios that are most influential to policy making helps to direct further investigative analysis, modeling, and data-collection efforts to support the learning process that is emphasized in adaptive management.     

Handling uncertainty through adaptiveness in planning approaches: comparing adaptive delta management and the water diplomacy framework

Planners and water managers seek to be adaptive to handle uncertainty through the use of planning approaches. In this paper, we study what type of adaptiveness is proposed and how this may be operationalized in planning approaches to adequately handle different uncertainties. We took a comparative case study approach to study two planning approaches: the water diplomacy framework (WDF) and adaptive delta management (ADM). We found that the approaches differ in their conceptualization of uncertainty and show that different types of adaptiveness are used in the approaches. While WDF builds on collaborative adaptive management as a set of ongoing adjustments and continuous learning to handle uncertainty, ADM deliberately attempts to anticipate future adaptations through a set of tools which allows for seizing opportunities and avoiding lock-in and lock-out mechanisms. We conclude that neither of the approaches is fully able to account for different uncertainties. Both approaches may benefit from specific insights in what uncertainty and adaptiveness entail for the development of water management plans.     

A spatially explicit backcasting approach for sustainable land-use planning

General backcasting as a decision support and planning method starts from desired future states and simulates developments backwards until reaching the present state. Development pathways that reveal steps to be taken to reach a certain future state, and milestones that serve as interim goals, are created during the process. Backcasting has hitherto only been applied in workshops or as a theoretical framework and no spatially explicit backcasting model has previously been established. This paper presents the development of a spatially explicit backcasting model. The proposed model first creates a future scenario utilizing an agent-based model and then simulates backwards. It is implemented using the programming language Python. The model has been applied to a case study for sustainable land-use planning in Salzburg, Austria. The results of the model run show a successful backcasting of land-use classes from a future state back to the present, in 10 year time steps.     

Scenario-based stakeholder engagement: incorporating stakeholders preferences into coastal planning for climate change

Climate change poses many challenges for ecosystem and resource management. In particular, coastal planners are struggling to find ways to prepare for the potential impacts of future climate change while dealing with immediate pressures. Decisions on how to respond to future risks are complicated by the long time horizons and the uncertainty associated with the distribution of impacts. Existing coastal zone management approaches in the UK either do not adequately incorporate changing stakeholder preferences, or effectively ensure that stakeholders are aware of the trade-offs inherent in any coastal management decision. Using a novel method, scenario-based stakeholder engagement, which brings together stakeholder analysis, climate change management scenarios and deliberative techniques, the necessary trade-offs associated with long term coastal planning are explored. The method is applied to two case studies of coastal planning in Christchurch Bay on the south coast of England and the Orkney Islands off the north coast of Scotland. A range of conflicting preferences exist on the ideal governance structure to manage the coast under different climate change scenarios. In addition, the results show that public understanding of the trade-offs that have to be made is critical in gaining some degree of public support for long term coastal decision-making. We conclude that scenario-based stakeholder engagement is a useful tool to facilitate coastal management planning that takes into account the complexities and challenges of climate change, and could be used in conjunction with existing approaches such as the Shoreline Management Planning process.     

RATES,RIGHTS, AND REGIONAL PLANNING IN THE METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA1

ABSTRACT: The Metropolitan Water District of Southern California has for more than 70 years shaped the development of an immense urban region. The district's current strategic planning process therefore could have substantial effects on regional water planning and management. The rate restructuring phase of the planning process has produced a multiple component, cost of service based framework. This paper describes that framework as well as some criticisms that have been directed toward it. The rate restructuring was shaped, and for a while stalled, by old disputes among member agencies over rights to water supplied by Metropolitan. That controversy has diverted attention from the resource management implications of the rate structure. This paper presents an alternative future focused approach to regional integrated water resource planning for Southern California based on projections of current trends and anticipation of future events. This discussion raises the question of how regional integrated water resources planning of this sort may proceed, and what role Metropolitan will play in that process.     

土地利用规划战略环境影响评价浅探

本文在介绍国内外规划环境影响评价发展概况的基础上，提出了土地利用规划环境影响评价的重要意义。初步探讨了土地利用规划战略环境影响评价的范畴、体系、指标体系与评价方法，并建议应深入开展土地利用规划战略环境影响评价理论研究，健全相关制度，尽快出台相关技术规程。     

Water Supply Planning Considering Uncertainties in Future Water Demand and Climate: A Case Study in an Illinois Watershed

Ensuring an adequate, reliable, clean, and affordable water supply for citizens and industries requires informed, long-range water supply planning, which is critically important for water security. A balance between water supply and demand must be considered for a long-term plan. However, water demand projections are often highly uncertain. Climate change could impact the hydrologic processes, and consequently, threaten water supply. Thus, understanding the uncertainties in future water demand and climate is critical for developing a sound water supply plan. In Illinois, regional water supply planning attempts to explore the impacts of future water demand and climate on water supply using scenario analyses and hydrologic modeling. This study is aimed at developing a water supply planning framework that considers both future water demand and climate change impacts. This framework is based on the Soil and Water Assessment Tool to simulate the watershed hydrology and conduct scenario analyses that consider the uncertainties in both future water demand and climate as well as their impacts on water supply. The framework was applied to water supply planning efforts in the Kankakee River watershed. The Kankakee River watershed model was calibrated and validated to observed streamflow records at four long-term United States Geological Survey streamflow gages. Because of the many model parameters involved, the calibration process was automated and was followed by a manual refinement, resulting in good model performance. Long-range water demand projections were prepared by the Illinois State Water Survey. Six future water demand scenarios were established based on a suite of assumptions. Climate scenarios were obtained from the Coupled Model Intercomparison Projection Phase 5 datasets. Three representative concentration pathways (RCPs), RCP2.6, RCP4.5, and RCP8.5, are used in the study. The scenario simulation results demonstrated that climate change appears to have a greater impact on water availability in the study area than water demand. The framework developed in this study can also be used to explore the impacts of uncertainties of water demand and climate on water supply and can be extended to other regions and watersheds.     

EIA application in China's expressway infrastructure: clarifying the decision-making hierarchy

China's EIA Law came into effect in 2003 and formally requires road transport infrastructure development actions to be subject to Environmental Impact Assessment (EIA). EIAs (including project EIA and plan EIA, or strategic environmental impact assessment, SEA) have been being widely applied in the expressway infrastructure planning field. Among those applications, SEA is applied to provincial level expressway network (PLEI) plans, and project EIA is applied to expressway infrastructure development 'projects' under PLEI plans. Three case studies (one expressway project EIA and two PLEI plan SEAs) were examined to understand currently how EIAs are applied to expressway infrastructure development planning. Through the studies, a number of problems that significantly influence the quality of EIA application in the field were identified. The reasons causing those problems are analyzed and possible solutions are suggested aimed at enhancing EIA practice, helping deliver better decision-making and ultimately improving the environmental performance of expressway infrastructure.     

Sustainability Appraisal in neighbourhood planning in England

The preparation of strategic environmental assessment (SEA) inclusive sustainability appraisals (SAs) for neighbourhood plans (NPs) in England may be required when significant environmental effects are expected to arise from an NP. In this paper, we report on the result of a Ph.D. project, conducted between 2012 and 2015, in which all 15 NP SEA inclusive SAs that had been completed at the time were evaluated. In this context, the quality of SA practice was found to differ substantially. SAs were prepared either ‘in-house’ (i.e. by neighbourhood planning steering groups) or by consultants. The quality of SAs was found to be associated with their overall perceived degree of influence on the underlying NPs. Whilst the focus of this paper is on practice in England, findings are expected to be of interest to a wider international audience, in particular to those experimenting with voluntary neighbourhood/local level plan SA/SEA.     

Strategic Environmental Assessment of the Effects of European Union's Regional Development Plans in Doñana National Park (Spain)

The European Union's Structural Funds are implemented by means of Regional Development Plans (RDP), whose regionally scoped environmental assessment is required. We highlight the deficiencies faced by this approach when subregional areas with high conservation natural values are involved and illustrate it with the case of the RDP of Andalusia region on Doñana National Park area (Spain). Commissioned by the World Wildlife Fund, a Strategic Environmental Assessment (SEA) of the Andalusian RDP was carried out focusing on Doñana and its area of influence. This is a complex space where some of the most environmentally valuable features in the continent coexist with a surrounding intense and multi-sector economic activity, threatening its conservation. In the absence of an established sustainability framework in the Region, a “trickle-down” SEA approach evidenced the need to produce a set of environmental, economic and social guidelines for sustainable management of land, against which the RDP objectives were tested for coherence. An “incremental” SEA approach was also tested, which involved the identification of 79 measures and actions stemming from the RDP provisions and other concurrent planning documents reviewed and the qualitative assessment of their individual and cumulative potential impacts on Doñana environments. In the light of the results, a set of complementary mitigating measures was proposed for inclusion in tiered stages of the planning process. Measures to avoid, reduce, remedy and monitor the major types of impact were proposed, including provisions for public participation. SEA emerges as an instrument for non-governmental organizations (NGOs) to carry out independent assessment of public development initiatives.