Triple Bottom Line Discussion Scott Struck, Ph.D. Senior Professional Geosyntec Consultants
http://water.epa.gov/action/importanceofwater/upload /Importance-of-Water-Synthesis-Report.pdf EPA Report Says Value of Water To Economy Significant but Elusive' Nancy Stoner, EPA acting assistant administrator for water, said Nov. 6 at 2013 American Water Summit. EPA report's purpose is to raise awareness of water's importance, and to summarize information that public and private policy makers can use to sustainably manage the nation's water resources. EPA found that quantifying the economic value of water was difficult because of a lack of good empirical data on the value of water in different uses.
Triple Bottom Line (TBL) Overview Framework for valuing the 3Ps: Profit: economic impact People: social impact Planet: environmental impact Uses Cost Benefit Analysis (CBA) to compare and value a given project (or set of project options) Allows for thorough analysis of many costs and benefits that may result from project implementation. 3
Triple Bottom Line (TBL) Overview TBL used in a community context can: Inspire behavior change Garner stakeholder support Address diverse interests Engage relevant actors 4
Triple Bottom Line (TBL) & Integrated Planning Allows one to evaluate a range of scenarios which consider multiple permit requirements and quantify social, economic and environment impacts Maximize effectiveness of funds through analysis and selection of actions needed to address human health and water quality related challenges Evaluate and address community impacts and consider disproportionate burdens resulting from current approaches and proposed approaches 5
Consider Alternatives and Trade-Offs 6 Define potential alternatives Evaluate the tradeoffs between each alternative Use TBL to consider alternatives with common currency Evaluates impacts and benefits on more than one objective but uses common, understandable metric to assist in decision making Look at LONG TERM costs and benefits, not just initial start-up period (e.g., construction) Make decisions on community needs and benefits
Important Questions 7 How does one find the right (cost-effective) balance of economic expenditures to adequately meet community and regulatory objectives? When do costs of other environmental and social considerations justify different alternative solutions? Are there differing accounting measures that can be used to valuate the economics (e.g. costs/benefits per unit)? How do the decisions fit into integrated planning and project decisions?
Trade-Off Considerations Cost vs. Benefit 14 Alternative 1 Alternative 2 Alternative 3 Benefit ($) 12 10 8 6 4 2 0 0 1 2 3 4 5 Cost ($) Alternative 1 Alternative 2 Alternative 3 8
Trade-Off Considerations Time to Implement vs. Time to Benefit Alternative 1 Alternative 2 Alternative 3 Time to Benefit (Years) 14 12 10 8 6 4 2 0 0 1 2 3 4 Time to Implement (Years) Alternative 1 Alternative 2 Alternative 3 9
Examples of Triple Bottom Line Valuation Gain a more complete understanding of the Triple Bottom Line (TBL) implications of green and traditional infrastructure approaches in terms of their respective ability to provide environmental, social, public health, and other economic values.
Example TBL Criteria Economic Job creation Direct economic savings Property value increase Business value added Environmental Water Air emissions Land-use Biodiversity Climate change mitigation and adaptation Social Quality of life Environmental Justice Recreation Human health Regional collaboration 11
TBL Results Distribution of City-wide present value benefits of key CSO options: Cumulative through 2049
Example (Calculated) TBL Results Job creation: Present worth of $2.9 million over 20 years Annual reduction of $220,000 in social costs Green infrastructure: 66 to 77 percent reduction in per unit storage costs 11-acre increase in recreation area Improved aesthetics, including property value increase of $2.7 million 435 acre-feet of reduced runoff per year 68 tons of reduced sediment loading per year Operation & Maintenance: Reduced pumping costs, present worth savings of $46,000 over 20 years 13 Carbon Sequestration: Energy Use: Reduction of 156 tons of carbon dioxide over 20 years equivalent to annual carbon emissions from 2,652 automobiles and 1,318 single family homes Reduction of 128,000 kwh in energy use over 20 years from shade and insulation
Exeter Example
WISE - Indicator Options for Evaluation We have identified ten (10) indicators across the three TBL categories (social, economic and environmental) that: Represent important issues for WISE stakeholders Are quantifiable May be evaluated with readily available data or relatively low cost collection of data 15
Economic Indicator Options Benefit Metric Methodology New Construction Number of direct jobs created. Data available to calculate number of jobs created based on the type of project and dollars invested. Business Starts Number of businesses in improved areas Determine the number and type of new business starts 16 Reduced Infrastructure Cost Reduction in direct operation and maintenance cost over project life Data on current infrastructure costs to be collected from municipalities
Environmental Indicator Options 17 Benefit Metric Methodology Reduced Stormwater Volume and Localized Flooding Reduced Sediment/Pollutant Loading Increased Groundwater Recharge Increased Green Space and other pervious surfaces Volume reduction Volume or weight of sediment or pollutant Volume of groundwater recharge Measured in Area (acres) Baseline data collected from individual projects or USGS gauge stations Baseline data collected from city and state environmental departments Data collected on change in area of permeable surfaces based on HSG Data collected on change in number of green space and pervious acres over time
Social Indicator Options Benefit Metric Methodology Improved Community Change in property values Information through municipal property assessment and property sale prices Increased Recreational Opportunities Reduction in Illness (water and vectorborne diseases) 18 Additional recreational user days, use of existing resources, or Willingness to Pay (WTP) for increased recreational opportunities. Improved access to trails and outdoor activities. Number of water-borne gastrointestinal diagnoses; hospital visits Data collected from entrance to parks; new trails built; Note: WTP requires surveys which may exceed the scope of this project Data collected from regional hospitals; approximate reduction in healthcare costs
Prioritizing Indicators The project team would like to narrow down and prioritize indicators based on regional interests (about 4-5) Ideally balanced across TBL categories environmental social economic Indicators should represent stakeholder priorities 19
Similar Studies in the Watershed Climate Adaptation Plan for Exeter (CAPE) Evaluating losses due to climate change impacts associated with flooding. Primary focus is town resource, environmental, social and infrastructure vulnerability and resiliency Development of a Plan for the Town to advise Planning, Emergency Preparedness and Budget decision. 20