Marginal cost curves (MCCs) are popular decision-support tools for assessing and ranking the cost-effectiveness of different options in environmental policy and management. However, conventional MCC approaches have been criticized for lack of transparency and disregard for complexity; not accounting for interaction effects between measures; ignoring ancillary benefits and costs; and not considering intertemporal dynamics. In this paper, we present an approach to address these challenges using a system dynamics (SD)-based model for producing dynamic MCCs. We describe the approach by applying it to evaluate efforts to address water scarcity in a hypothetical, but representative, Swedish city. Our results show that the approach effectively addresses all four documented limitations of conventional MCC methods. They also show that combining MCCs with behavior-over-time graphs and causal-loop diagrams can lead to new policy insights and support a more inclusive decision-making process. 

As water serves as a necessary and often irreplaceable input in a range of goods and services, a disruption in water supply can cause lost production and sales for businesses. Thus, large benefits may be generated by reducing the risk of water disruptions. To enable selection of economically viable risk mitigation measures, the investment costs should be weighed against the benefits of risk mitigation. Consequently, quantitative estimates of the consequences of disruptions need to be available. However, despite the importance of water to businesses, the literature on their financial losses due to short and long-term water disruptions is still scarce. The aim of this paper is to estimate time-dependent water supply resiliency factors for economic sectors, i.e., a metric focusing on the level of output that businesses can uphold during a disruption, to contribute to better decision support for water supply planning and risk management. An online survey was used to gather data from 1405 companies in Sweden on consequences of complete and unplanned water supply outages. Results show that Food and beverage Manufacturing and Accommodation and food services are the two most severely affected sectors over all analyzed disruption durations. © 2021 by the authors

Hur påverkas företag i olika branscher vid avbrott i vattenförsörjningen? Projektet har samlat in information från drygt 1 400 svenska företag. Baserat på enkätsvaren har resiliensfaktorer beräknats för 35 olika näringsgrenar. Faktorerna ger ett mått på hur stor andel av företagens verksamhet som kan upprätthållas vid avbrott. De kan användas exempelvis för att beräkna avbrottsrisker och uppskatta nyttor av riskreducerande åtgärder. De ger också underlag för fördjupad dialog mellan dricksvattenproducenter och företag.

The project used an online survey to gather data from 1,405 Swedish companies on consequences of complete and unplanned water supply disruptions. Based on survey results, resiliency factors were estimated for 35 sectors and six disruption durations. The results can be used for economic impact assessments and evaluations of risk reduction measures, facilitating the managing of risks at the least cost to society.

Society’s large dependence on water, in combination with climate, socio-economic and demographic changes, places a massive pressure on our freshwater resources. As a result, water crisis, defined as a significant decline in the available quality and quantity of freshwater, is now considered to be among the most critical global risks to society. The overall aim of this thesis is to increase the understanding of how decision support methods based on risk, cost-benefit and multi-criteria decision analyses can be used to facilitate our collective action towards water security. In the thesis, a sustainability assessment model is presented which can rank alternative drinking water options from the most preferred to the least preferred within each of the social, environmental and economic sustainability domains and with regards to all domains. The thesis further presents a marginal abatement cost curve to provide a common starting point for cross-sectoral dialogue on water scarcity mitigation. It enables a comparison of the cost-effectiveness of alternative mitigation measures, providing guidance for businesses, households, farmers and water utilities. Furthermore, a scenario-based risk assessment approach is presented to enable a comprehensive view on risk when evaluating water supply systems and risk reduction options. The approach allows for thorough analyses of economic losses under a range of water supply disruption scenarios, facilitating prioritizations on measures that aim to reduce the overall risk rather than individual risks. The provided methods are all exemplified in Swedish case studies, demonstrating different ways of evaluating and comparing management responses to the water-related challenges we face. In conclusion, the methods can help us strengthen the ongoing discussions regarding challenges and opportunities while providing structure and transparency to decision-making, and by that contribute to an enhanced water security.

Access to a reliable water supply is central for a well-functioning society. However, water supply systems are subject to a wide range of threats which may affect their ability to provide water to society. This paper presents a novel risk assessment approach that enables thorough analyses of economic losses and associated uncertainties under a range of water supply disruption scenarios. The purpose is to avoid sub-optimization when prioritizing between risk reduction measures, by integrating the full range of possible outcomes from low to high probability events. By combining risk analysis with cost-benefit analysis, additional information is provided on measures for leveraging investments in managing and reducing the risks. This enables the identification of the most economically profitable risk reduction alternatives and enables decision makers to build strategic capacity for operating in difficult and uncertain futures. The presented approach is exemplified on the island of Gotland, one of the most water scarce areas of Sweden. © 2020 by the authors. Licensee MDPI, Basel, Switzerland.

Several countries promote a regionalization of the drinking water sector; however, few decision support tools are adapted to the intermunicipal level to aid in regional decisions. The aim of this paper is to describe and demonstrate a probabilistic cost-benefit analysis approach to assess the societal effects of regional water supply interventions to constitute support for decision makers. A special focus is given to the quantification of effects on consumers’ health, water supply reliability, and operation and maintenance costs. The uncertainties of the quantified values are represented by probability distribution functions and analyzed by means of Monte Carlo simulations. The proposed approach was demonstrated in the Göteborg region in Sweden, for which five alternative interventions were evaluated. In conclusion, the proposed approach facilitates the identification and prioritization of societal effects so that costs and benefits normally overlooked in evaluation processes can be explicitly considered and addressed. The paper provides a transparent handling of uncertainties and enables   a structured approach to improve decision makers’ ability in making informed choices on regional water supply alternatives.

As water scarcity and drought become more common, planning to avoid their consequences becomes crucial. Measures to prevent the impact of new climate conditions are expected to be extensive, costly and associated with major uncertainties. It is therefore necessary that policymakers and practitioners in both the public and private sector can compare possible mitigation measures in order to make economically rational investment decisions. For this to be successful, decision-makers need relevant decision support. This paper presents a novel approach of constructing marginal abatement cost curves for comparing water scarcity mitigation measures while taking the underlying uncertainties into account. Uncertainties in input variables are represented by probability distributions and calculations are performed using Monte Carlo simulations. This approach is applied on the island of Gotland, one of the most water-stressed parts of Sweden, to provide the first marginal abatement cost curve in Europe for water scarcity mitigation in which municipal, agricultural, industrial and household measures are compared. The results show that the agricultural measure of on-farm storage has the greatest potential to increase water availability on the island. Among municipal measures, increased groundwater extraction and desalination offer the greatest potential, although desalination is almost 25 times more costly per cubic meter. The most cost-effective measure is linked to hot water savings in the hotel industry. The approach presented provides a quantitative visualization of the financial trade-offs and uncertainties implied by different mitigation measures. It provides critical economic insights for all parties concerned and is thus an important basis for decision-making.

Access to good quality water in sufficient quantity is essential for people’s everyday life and for most businesses and economic sectors. However, water scarcity and drought are emerging as some of the most important global risks to society with both short-term and long-term effects on people, ecosystem services, biodiversity and the economic activities that depend on a reliable water supply. This is a global problem, and Sweden is not spared. The low precipitation and high summer temperatures that hit Sweden for three consecutive years between 2016 and 2018, caused a vastly reduced access to water and led to major consequences for the Swedish society.In most Swedish regions, however, there is usually more than enough water to meet the growing needs of society and at the same time maintain a good environmental status even during drought. But to ensure a long-term sustainable water supply, all parties, i.e. households, water-dependent businesses and authorities, need to take measures. Drought and water scarcity are challenges that do not only affect, or can be solved by, the municipal drinking water supply. Each and everyone who uses and is dependent on water, regardless of whether the water is supplied through public or private systems, is part of the problem and should therefore also be part of the solutions.This report provides information and material to help companies contribute to a better water situation in areas with low water availability. The report describes the water usage and water availability in Sweden today and how they are expected to change in the future. Incentives and driving forces for water savings are described as well as methods for identifying inefficient water usage and improvement measures. A review of studies from various countries provides information on challenges as well as good examples of water scarcity mitigation measures in various economic sectors. Examples of decision support methods that can be used to evaluate and prioritize between alternative measures are also described. Finally, potential implementation barriers are discussed and examples of policy instruments which can facilitate implementation of beneficial measures are given.

The Island of Gotland (3000 km2), east of mainland Sweden, suffers from insufficient water availability each summer. Thin soils and lack of coherent reservoirs in the sedimentary bedrock lead to limited reservoir capacity. The feasibility of Managed Aquifer Recharge (MAR) is explored by identifying suitable areas and estimating their possible contribution to an increased water availability. MARis compared to alternative water management measures, e.g., increased groundwater abstraction, in terms of costs and water availability potential. Results from GIS analyses of infiltration areas and groundwater storage, respectively proximity to surface water sources and surface water storage were classified into three categories of MAR suitability. An area of ca 7700 ha (2.5% of Gotland) was found to have good local conditions for MAR and an area of ca 22,700 ha (7.5% of Gotland) was found to have moderate local conditions for MAR. These results reveal the MAR potential on Gotland. The water supply potential of MAR in existing well fields was estimated to be about 35% of the forecasted drinking water supply and 7% of the total water demand gap in year 2045. It is similar in costs and water supply potential to increased surface water extraction. © 2019 by the authors.

To cope with present and future challenges, a growing number of water utilities in Sweden, Europe and elsewhere initiate various forms of inter-municipal cooperations creating a new regional level of drinking water governance. In order to reach viable decisions of alternative ways forward, there is an international consensus that sustainability needs to be addressed in water supply planning, design and decision-making. There are, however, few decision aids focusing on assessing the sustainability of inter-municipal cooperations and the inter-municipal policies and interventions that regional decision-makers are faced with. This paper presents a decision support model based on a combination of cost-benefit analysis and multi-criteria decision analysis for assessing the sustainability of regional water supply interventions, including formations of inter-municipal cooperations. The proposed decision support model integrates quantitative and semi-quantitative information on sustainability criteria. It provides a novel way of presenting monetized benefits and costs, capturing utilitarian aspects of alternative interventions, with non-monetized social and environmental effects, capturing aspects based in the deontological theories of moral ethics. The model is based on a probabilistic approach where uncertainties are defined by statistical probability distributions. A case study is used to exemplify and evaluate model application in decision situations regarding regionalization, (de)centralization, source water quality and redundancy. All evaluated alternatives were expected to contribute to a slightly improved social sustainability, whereas the results were more varying in the economic and environmental domains. A structured and transparent treatment of uncertainties facilitates a better understanding of the results as well as communication between decision-makers, stakeholders and the community.