dss management consultants inc. · pdf fileeconomics‐based investment decisions in rural...
TRANSCRIPT
Economics‐based Investment Decisions in Rural Non‐point Source Nutrient Management
DSS Management Consultants Inc.
• To provide a brief overview of the PMDSS.
• To describe how the effectiveness, costs and benefits of rural NPS P management are analysed with the PMDSS.
• To discuss where we go from here.
Combined Downstream
Phosphorus Export
High Level Schematic of PMDSS
Rural NPS P Management Investments
PS P Management Investments
Upstream Inflowing Phosphorus
Point Source Phosphorus Export
Non –point Source Phosphorus Export
Drinking Water Impacts
Recreation Impacts
Fisheries & Angling Impacts
Rural Non‐Point Source Phosphorus Forecasting Routine
NPS P Management Investments
• Environment Canada recently commissioned a study inventorying rural NPS P management techniques. That study identified over 50 different techniques.
• The PMDSS has condensed these techniques down to the following generic options:
1. Manure Management• Timing of application• Method of application
2. Conservation Tillage• 30% residual left in the field• 70% residual left in the field
3. Runoff Retention• Filter strips• Sediment traps
Following are five questions that are prominent with integrated watershed management.
1. Where should investments in nutrient management actions be made?
2. How much should be invested in which nutrient management actions?
3. What regulatory limits should be placed on nutrient releases from a given point source?
4. How much should be invested in applied research?
5. How are the benefits and costs of nutrient management distributed among different stakeholders?
Scenario Basin Source Technique Invest
1 ‐ Ag Land Only All Ag NPS Most Cost Effective by
Land Type $100,000/a
2 – Ag Land Only All Ag NPS Most Cost Effective by
Land Type $500,000/a
3 – Ag Land Only All Ag NPS Most Cost Effective by
Land Type $1,000,000/a
The scenario yielding the greatest net benefit answers the question “how much to invest”.
Net Benefit = Gross Benefits – Management Costs
The net present value of each scenario is automatically calculated by the PMDSS for each scenario.
Scenario Source Technique Invest Net Benefit($*1,000/a)
1 ‐ Ag Land Only Ag NPS
Most Cost Effective by Land Type
$100,000/a 5
2 – Ag Land Only Ag NPS
Most Cost Effective by Land Type
$500,000/a 15
3 – Ag Land Only Ag NPS
Most Cost Effective by Land Type
$1,000,000/a 12.5
Uncertainty occurs among all of the data elements.
This uncertainty is due to:• Inherent stochasticity, and/or• Imperfect understanding of system dynamics, and/or• Inadequate data.
Key data elements in the PMDSS are defined by means and probability distributions.
The PMDSS can be run in Monte Carlo simulation mode to estimate the aggregate impact of these uncertainties on forecast outcomes.
Scenario Source Technique Invest Net Benefit ($*1,000/a)
1 – CurrentMean/Uncertainty Range
Ag NPSMost Cost Effective by Land Type
$500,000/a $15 +/‐ $20
2 – Expected Mean/Uncertainty Range
Ag NPSMost Cost Effective by Land Type
$500,000/a $15 +/‐ $10
The PMDSS is testing new waters.
Not only in terms of its comprehensiveness but even more so, through the direct integration of socio‐economic analytical methods with conventional biophysical modelling.
The PMDSS provides a comprehensive and robust framework to identify and prioritise future investments in integrated watershed management.
Repeated application of the PMDSS will lead to continuous improvement.
Well‐targeted research and data collection will also strengthen the system significantly.
The greatest future barriers are:• The unfamiliarity (and lack of comfort) of many water managers with socio‐economic analysis methods, and
• The possibility that PMDSS results may not in all cases support prior management decisions made without access to comparable socio‐economic information.