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Analytical Methods and Approaches for Water Resources Project Planning 7 Revising Corps of Engineers Planning Studies BENEFIT-COST ANALYSIS AND FEASIBILITY STUDIES One limitation of the federal Principles and Guidelines is its reliance on the benefit-cost test as the key criterion for most water resources planning decisions (ecosystem restoration projects, for example, are not subjected to this criterion). The P&G is based on the presumption that all important costs and benefits related to a planning decision can be quantified and monetized, and that the computation of such should be (and will be used) to determine the fitness of a planning alternative. The P&G thus presumes that water resources planning decisions are largely analytical in nature, as social and cultural issues, for example, are not included as components in the P&G evaluation process. This approach does not adequately reflect the reality of current analytical paradigms or of today’s planning and political realities. Economists have achieved significant advances in monetization techniques since 1983, through the use of travel cost, contingent valuation, and other methods. But economists also acknowledge the limits of such approaches and recognize that public policy decisions should be based on considerations and analyses beyond merely comparing total benefits and costs (see Arrow et al., 1996, as discussed in Chapter 3). Examples of these factors include non-monetized values, uncertainty in forecasts, and equity concerns. Benefit-cost analysis should not be used as the lone criterion in deciding whether a proposed planning or management alternative in a Corps planning study should be approved (Recommendation 5). A more appropriate role for benefit-cost analysis is to serve as a primary source of information concerning the benefits and costs of project alternatives, and the groups who gain most from a project. This separation of the role of benefit-cost analysis from its use as a mechanistic decision criterion would reduce the pressure on Corps analysts to seek a high degree of precision, which does not always reflect a similar degree of accuracy. It would also relieve the pressure placed upon the P&G document
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Analytical Methods and Approaches for Water Resources Project Planning to produce a single and credible numeric figure that no planning framework is capable of reliably producing. Benefit-cost analysis is a useful method for promoting sound public policy and it should continue to be a part of Corps planning studies. However, these benefit-cost analyses in future Corps planning studies would ideally contain clear and concise summary statements, explicitly and succinctly explain key assumptions and models, and be subjected to reviews of independent experts. REVIEW OF PROJECTS AND PLANNING STUDIES Ex Post Studies For much of its history, the Corps used primarily engineering techniques to construct civil works projects. As mentioned, desired project ends were clear and were often single-purpose. Expected project benefits, such as flood control or navigation enhancement, were usually immediate and visible and there were thus few questions about a project’s effectiveness. In this setting, the Corps planned and constructed projects and moved on to the next project (except when maintaining a presence at some projects for operations and maintenance purposes). The idea of revisiting Corps of Engineers projects to identify how well they performed, and using these lessons to improve future planning and management, was not widely considered. Moreover, water resources and other agencies tend to resist reviews of past projects for several reasons, including a preference to allocate resources for actual construction rather than investigations, and a reluctance to have past mistakes identified. For nearly fifty years, one of the nation’s eminent water resources experts, Gilbert White, has pointed to limited evaluations of project results as a key water management shortcoming: We could fill a large room with documents drawing up what are considered the best plans for an analysis of problems in river basins around the world … On the other hand, the literature about what has happened after any of the projects have been carried out can be assembled on one end of a small table. There is no tradition of making retrospective or evaluative studies of the consequences. For example, no evaluation of the Tennessee Valley Authority has been undertaken … we have no satisfactory explanation of why, thirty years after the
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Analytical Methods and Approaches for Water Resources Project Planning TVA was started in order to develop the economy of the region, the major part of the Tennessee Valley is still considered an underprivileged area of Appalachia, deserving special subsidy contributions from the federal government for further improvement (White, 1971). Corps projects today are often operated in very complex legal and social settings, projects are expected to meet the needs of multiple users with shifting preferences, and there is wider recognition of economic and environmental uncertainties associated with water projects. That water resources projects often have a range of unintended consequences, and that operational schemes are likely to require re-adjustments, is also better appreciated. These issues have given rise to planning concepts such as “adaptive management,” which recognizes uncertainties and emphasizes careful monitoring and evaluation of environmental and related outcomes to promote flexible resource management policies that can be adjusted in a changing and unknown future world. The Corps has planning authorities that allow for project operations to be reviewed and adjusted. The two authorities that the Corps uses most frequently for these purposes are a “Section 216” authority from the 1970 Flood Control Act and a “Section 1135” authority from the 1986 Water Resources Development Act. For example, the Corps is conducting its current feasibility study of the Upper Mississippi River-Illinois Waterway under its 1970 Section 216 authority (USACE, 2002b), while the Section 1135 authority is directed more specifically toward ecological restoration projects. Although these authorities allow the Corps to conduct ex post studies, these authorities do not direct the Corps to do so, nor do they appropriate resources for their conduct (see the 216 study report from the coordinating committee for further discussion on a new study authority for the Corps). Better management of existing infrastructure will require more frequent and more extensive reviews of the ecological and environmental outcomes of existing Corps projects (see the 216 study report from the panel on adaptive management for more discussion on post-construction monitoring). A better understanding of the environmental, economic, and social outcomes of Corps projects is essential in helping the agency learn from past successes and failures and to provide information for helping formulate new operations plans. Periodic reviews of completed projects should be a routine part of Corps project planning and management. Congress should provide resources to conduct these ex post evaluations (Recommendation 6).
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Analytical Methods and Approaches for Water Resources Project Planning A Strengthened Reconnaissance Study Corps of Engineers water resources project planning studies are conducted in two stages—a reconnaissance stage and a feasibility stage. The reconnaissance study is conducted to determine if there is a federal interest in a given water resources opportunity or problem. The Corps’ internal guidelines limit reconnaissance studies to one year and limit those studies, which are fully federally-funded, to a cost of no more than $100,000. The large majority—roughly 6 of 7—of Corps planning studies do not proceed beyond a reconnaissance study. The cost and time constraints placed upon reconnaissance studies have several implications. A possible strength of limited reconnaissance studies is that they may be useful in identifying and dismissing nonviable proposed projects for a modest amount of resources. That is, if reconnaissance studies are used primarily to “weed out” sub-par proposals, these limits may be reasonable. On the other hand, these limits may not allow for careful consideration of a broad range of planning or management alternatives, especially with the Corps’ large projects, more controversial projects, or with projects operated in a systems framework (e.g., the Missouri River dam and reservoir system). These limits place pressure on Corps district-level planners and analysts to make a relatively quick decision regarding a given water resources issue. But hastily-conducted reconnaissance studies may not allow the Corps to adequately consider options for addressing a given problem, a problem that may be exacerbated by a local co-sponsor who wants to move quickly through study reconnaissance. The Corps’ role in reconnaissance studies should be to objectively consider a water resources problem in light of the possible alternatives, something that may not always be possible within the one year/$100,000 limits. Moreover, although one year and $100,000 may be adequate for a reconnaissance study of a local project, these limits are inadequate for studies such as the Upper Mississippi River—Illinois Waterway system. The reconnaissance phase of Corps of Engineers reconnaissance studies should be conducted with an expectation that the Corps will identify and examine a broad range of alternatives in order to provide conclusive evidence about the federal interest in a water resources issue. Resources and time allocated for Corps reconnaissance studies should be commensurate with the scale and complexity of the water resources issue at hand (Recommendation 7).
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Analytical Methods and Approaches for Water Resources Project Planning STAKEHOLDER PARTICIPATION The Corps played a leading role in the development of stakeholder involvement/public participation practices. At the same time, it has long been observed that the quality of such practices is inconsistent across Corps projects. Concerns about the unevenness of practices have reemerged with the advent of local cost sharing and a high degree of stakeholder participation. Furthermore, stakeholder involvement has evolved significantly over the past thirty years and the current state-of-the-art emphasizes meaningful two-way communication between stakeholders and project planners. A comprehensive review of stakeholder involvement/public participation procedures at the district level would allow the Corps to determine: a) the balance between Corps and locally-led public participation efforts; b) the level and effectiveness of public participation activities to create meaningful two-way communication between the public and Corps planners. This will allow the Corps to identify opportunities for more effective stakeholder involvement and public participation and to re-assert its leadership in promoting state-of-the-art practices among natural resources and environmental management agencies. Training and reference materials on standards for stakeholder collaboration would help Corps planners achieve more active public participation. This would include meaningful two-way communication and opportunities for direct public inputs into the planning process. Such updated guidance will ensure that Corps projects share common standards for stakeholder involvement/public participation, including expectations that project development processes allow for meaningful public input. The Corps should conduct a comprehensive review of district-level experiences with stakeholder participation procedures and activities. The Corps should also develop training and reference materials on stakeholder participation standards (Recommendation 8). SUMMARY DOCUMENT FOR CORPS PLANNING STUDIES Corps of Engineers planning studies often include an exceptionally large amount of documentation. It is not unusual for a final feasibility study to be hundreds of pages long and include equally large supplemental documents such as environmental impact statements. This mass of documentation poses many problems: outside parties may find it difficult
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Analytical Methods and Approaches for Water Resources Project Planning to locate key assumptions or understand key problems or conclusions; Corps planners themselves may be distracted by computational details and lose sight of “big picture” issues; and external analysts may be challenged to identify key issues they are to provide advice upon. Inclusion of a summary document in all Corps planning studies would be helpful to interested outside parties, and may also prove beneficial to Corps analysts involved in the study. Such a summary document would allow interested parties from outside the Corps to better and more quickly understand alternatives, assumptions, models, and other important issues. The process of creating this document would also require Corps analysts to articulate all important issues and to express them clearly and succinctly. It would cause Corps analysts to think comprehensively about a planning study and would be valuable in the agency’s communication with the public and with interest groups. A summary document that identifies key environmental and social issues, primary assumptions, alternatives considered and evaluated, objectives sought, benefits and costs (monetized and nonmonetized), trade-offs, and stakeholder perspectives and differences—presented with a consistent format across studies—should be a standard in Corps planning studies (Recommendation 9). ENGINEERING METHODS Three aspects of Corps engineering analysis and methods that relate to changing paradigms of U.S. water resources management, and to changing needs of Corps projects and activities, merit close attention in the years ahead. These are (1) systems engineering aspects of water resource planning, (2) impacts of risk and uncertainty on planning, and (3) integrating engineering methods of analysis with ecosystem restoration planning. Systems engineering focuses on interactions among project components, which may significantly amplify both benefits and costs. The analysis of risk and uncertainty in project planning illuminates the possibly unexpected impacts of deviations from “best estimates” in projections of benefits and costs. The development of engineering methods of analysis for ecosystem restoration provides a way to integrate ecological components within more traditional Corps planning analysis and approaches. The Corps should strengthen its programs in the areas of systems engineering aspects of water resources, risk and uncertainty analysis, and the integration of engineering and ecosystem analyses.
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Analytical Methods and Approaches for Water Resources Project Planning Part of this strengthening should include the development of updated design manuals that better reflect contemporary methods and theories. These manuals should be used as general guidance rather than as “cookbooks” to specify a series of steps that must be strictly adhered to (Recommendation 10). INDEPENDENT REVIEW In today’s complex and often politically-charged setting of water resources and environmental management, federal and other agencies vow that management decisions are to be based upon “sound science,” but the Corps manages many projects in large, complex ecosystems (e.g., Mississippi River) in which ecological uncertainties can be reduced only so far by additional data or analyses. In addition to environmental uncertainties, many Corps planning studies include forecasts of variables like waterway traffic levels or forecasts of future economic benefits of a given action, such as benefits of flood damages avoided. Such variables are notoriously difficult to accurately forecast, and there are many examples of water projects that fell short of (or in some cases, exceeded) expectations that existed during project promotion and planning. Given the range of uncertainties and complexities the Corps must cope with in a contemporary planning study, the expertise required to conduct a comprehensive, thorough study may transcend the Corps’ abilities and resources. Experts in economics, environmental sciences, and other fields in the nation’s universities, research centers, and private sector (and, in some cases, from abroad) could provide useful advice on Corps planning studies. The contemporary reality of U.S. water and natural resources management suggests that some degree of input from external experts is essential in ensuring a degree of “quality control.” For example, the 216 study panel on peer review recommended that independent, expert review be conducted in the Corps’ more complex and costly planning studies (NRC, 2002). Not only can independent, expert input be useful in formulating a planning study, advice from external experts can be useful in helping resolve differences of interpretation in post-construction project evaluations. For example, adaptive management principles promote organizational and social learning as part of an iterative process of monitoring outcomes from management and other actions, learning from those outcomes, then using those lessons to adjust future actions. The distillation of clear lessons, however, may founded upon an inability of disparate
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Analytical Methods and Approaches for Water Resources Project Planning interest groups to agree upon results of ecosystem monitoring, economics studies, or other relevant information. Input from external experts, from both physical and social sciences, can be useful in clarifying complex results from environmental, economic, and other investigations and in ensuring the progress of adaptive management programs (Jacobs, 2002). Independent experts can provide fresh perspectives and useful advice on a variety of planning models and approaches, including identification of project alternatives, clarification of key assumptions, economic, engineering, and environmental models, integration of study components and stakeholder perspectives, and evaluation of project impacts and outcomes. Not only can external experts improve Corps planning studies, the use of external experts can stem criticisms of agency self-interest and thereby enhance study credibility. Independent experts from outside the Corps of Engineers should be enlisted routinely to provide advice in Corps programs and planning studies (Recommendation 11).
Representative terms from entire chapter: