Kalra, Nidhi Rajiv; Groves, David G.; Bonzanigo, Laura; Perez, Edmundo Molina; Ramos Taipe, Cayo Leonidas; Cabanillas, Ivan Rodriguez; Brandon, Carter J.. 2015. Peru – Robust decision-making in the water sector : a strategy for implementing Lima’s long-term water resources master plan. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/2015/06/24701804/peru-robust-decision-making-water-sector-strategy-implementing-lima’s-long-term-water-resources-master-plan
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? We 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 methods identify the vulnerabilities of a system and then evaluate the key tradeoffs among different adaptive strategies. Through extensive iteration and collaboration with SEDAPAL, we 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. Upon completion, the study helped SEDAPAL realize that not all projects included in the Master Plan were necessary to achieve water reliability, and that it could save 25% (over $600 million) in investment costs. Second, it helped focus future efforts on demand side management, pricing, and soft infrastructure, a refocusing that is difficult to achieve in traditional utility companies. Third, it helped SEDAPAL gain the support of regulatory and budget agencies due to the careful analysis of alternatives. Fourth, it allowed them to postpone lower priority investments, and to analyze future options based on climate and demand information that simply is not available now.
