Robust decision-making in the water sector: a strategy for implementing Lima?s long-term water resources master plan

Nidhi Rajiv Kalra, David G. Groves, Laura Bonzanigo, Edmundo Molina Perez, Cayo Ramos, Carter J. Brandon and Iván Rodriguez Cabanillas

No 7439, Policy Research Working Paper Series from The World Bank

Abstract: How can water resource agencies make smart investments to ensure long-term water reliability when the future is fraught with deep climate and economic uncertainty? This study helped SEDAPAL, the water utility serving Lima, Peru, answer this question by drawing on state of the art methods for decision making under deep uncertainty. These methods provide techniques for evaluating the performance of a water system over a wide range of plausible futures and then developing strategies that are robust across these futures. Rather than weighting futures probabilistically to define an optimal strategy, these methodologies identify the vulnerabilities of a system and then evaluate the key trade-offs among different adaptive strategies. Through extensive iteration and collaboration with SEDAPAL, the study used these methods to define an investment strategy that is robust, ensuring water reliability across as wide a range of future conditions as possible while also being economically efficient. First,on completion, the study helped SEDAPAL realize that not all projects included in the Master Plan were necessary to achieve water reliability, and the utility could save 25 percent (more than $600 million) in investment costs. Second, the study helped focus future efforts on demand-side management, pricing, and soft infrastructure, a refocusing that is difficult to achieve in traditional utility companies. Third, the study helped SEDAPAL gain the support of regulatory and budget agencies through the careful analysis of alternatives. Fourth, the study allowed the utility to postpone lower priority investments, and to analyze future options based on climate and demand information that simply is not available now.

Keywords: Town Water Supply and Sanitation; Water Conservation; Water Supply and Sanitation Governance and Institutions; Water Supply and Systems; Water and Industry (search for similar items in EconPapers)
Date: 2015-10-14
New Economics Papers: this item is included in nep-env and nep-ppm
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... rces0master0plan.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:7439

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().