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Adaptive planning for resilient urban water systems under an uncertain future

There is now widespread recognition across Australian water businesses that a generational shift is required away from conventional deterministic planning towards more flexible and adaptive planning and management. This shift is being driven by the need to maintain water security in the face of increasing uncertainty in key determinants of water businesses, as well as by increasing determination to broaden the objectives that a water system should meet. For example, the recent dry period highlighted that the role of water in a city is wider than that of a commodity. In addition, there is an opportunity for the water sector to play a larger role in actively shaping the future of our cities.

Planning framework

In response, the Options Assessment FrameworkPlanning for Resilient Water Systems – was developed to assist the Melbourne metropolitan water industry in planning for the future in the context of uncertainties such as climate, population growth, economic activity and unexpected shocks. The framework provides a process and methodology that specifically:

  • Incorporates the vision of the water businesses and the multiple values of water into the decision making process by setting clear objectives to ensure that the investment strategies contribute to a sustainable, liveable, prosperous and healthy city;
  • Prioritises portfolios of supply side, as well as demand side, options that are least cost to the community in the broadest sense by providing methods to assess measures against social, environmental and economic criteria;
  • Prioritises portfolios of measures or options through the use of investment strategies that are resilient to future uncertainty by assessing their flexibility and robustness against a range of scenario paths;
  • Provides a clear and transparent process that clearly communicates the outcomes and basis of the assessment to key decision makers; and
  • Involves stakeholders in the process of setting the objectives, identifying viable measures and in developing viable investment strategies.

Key innovations

In broad terms, this framework comprises three significant innovations in thinking:

  1. The first innovation is to characterise the uncertainties as trends or shocks in order to distinguish and better respond to the impacts of these uncertainties. Uncertainty can manifest as either a trend (such as reduced run-off or demand growth) or a shock (such as unexpected step changes in the trends). The framework distinguishes trends and shocks, and analyses their impacts separately. Adaptive management through flexible responses deals well with changing trends. Together with flexible responses, robust responses deal well with shocks. Therefore, responses that are both flexible and robust deliver resilience.
  2. The second innovation is the idea of ‘scenario paths’. A scenario path brings together a specific combination of trends (or drivers), and considers the impact of that combination on the supplydemand balance i.e. whether or not a shortfall exists. The scenario path approach draws on the richness of scenario analysis methods and integrates it into water planning. The water sector has to contend with multiple trends in various combinations. Increasing the number and combinations of potential trends has an exponential effect on the number of scenarios and analyses required, which generally leads to numerical optimisation, such as probabilistic approaches. The quality of the outcomes of these approaches is determined by the quality of the inputs and calibre of the models, both of which are not well established in practice and are questionable for the water sector at this time. ‘Scenario paths’ is a reasonable and practical way forward at this stage.
  3. The third innovation is the framework’s focus on ‘investment strategies’. Investment strategies set the hierarchy for sequencing of types of measures. Investment strategies should be drawn from current policies. In order to set the sequence in which the types of measures are chosen, an investment strategy (such as invest first in small scale recycling) nominates thresholds and triggers for new measures (e.g., invest in local recycling where it helps to avoid construction of additional potable transfer capacity); predecessors and constraints where necessary (e.g., local recycling works best in new growth areas); and lead times before the benefit of a measure can be realized (e.g., time for construction and uptake of new residential development).

This project was a key input into the development of a 50 year strategy for Melbourne’s water resources based on the principles of Integrated Water Cycle Management. It demonstrated the value of considering a wide range of uncertainties when planning for the future.

For additional information on this project see the Options Assessment Framework

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