DELTA ISB: Decision-making under deep uncertainty: What is it and why is it useful?

The Delta is constantly changing and predicting these changes has become a difficult task. As California’s climate changes in sometimes unexpected ways, looking to what has happened in the past is no longer adequate.  New methods approaches to managing the Delta will be necessary.  But how will the Delta change in the future, and how can we be prepared?

The series continues on Wednesday, June 14. Click here to view the flyer.

To deal with the increasing uncertainty of future conditions, the Delta Independent Science Board has taken on a project to raise awareness about scientific tools and concepts that can aid management and policy decision-making.  As part of this project, the board is hosting a webinar series called “Decision-making Under Deep Uncertainty.” The first webinar featured Alice Hill, a senior fellow for energy and the environment at the Council on Foreign Relations.  Ms. Hill discussed the challenges and advantages of planning for extreme events, and identified effective ways to organize government entities around these issues.

What do we mean by the term deep uncertainty?  Basically, it implies unpredictability; we don’t understand the likelihood of certain future events, outcomes can’t be well characterized with existing data and models, and the uncertainty can’t be easily reduced by collecting more data, explained Dr. Lisa Wainger, chair of the Delta Independent Science Board.  And importantly, stakeholders may not agree on the consequences of actions.  So this webinar series is an opportunity to explore these types of uncertainties.

Decision-making under deep uncertainty is a decision support system to evaluate these unpredictable and often ignored future events.  It encompasses a variety of tools that can be used in both small ways and very comprehensive and more time-consuming ways.

There are four steps:

  • Scenario development:  Developing scenarios is a key way to explore unpredictable events.  Scenarios can be informed by careful data analysis of past events, modifying them to represent changing conditions, and looking to the horizon for things that may indicate changing conditions.  “Even if we’re uncertain, we might want to bring that into our scenarios,” said Dr. Wainger.
  • Exploratory modeling:  Modeling is used to stress test management solutions.   “We might have our best guess or an idea of what the future will look like, and we’ve created a management solution for that best guess.  But we may want to explore how frequently that approach leads to regret when the future varies from what our prediction is.  So stress testing is used to understand how robust a solution is to uncertainty.”
  • Vulnerability assessment: Identifying the vulnerabilities and tipping points where the optimal solution fails and things to be monitored or watched.
  • Adaptive planning: When do we need to change the approach as we see changing conditions?  It includes strong stakeholder engagement and deliberative approaches to overcome the different perspectives on what might be happening in the future.

The cones in the graphic represent projections in time.  We understand the range of variability associated with historic evidence, and we’re trying to project into the future to look at what the variability could be.  We tend to focus on the green cone, the more probable futures, or the central tendencies.

“Each dot represents a scenario in this cone, and it may be worthwhile to think about how to push the system into a more preferred solution or just wildcard events that may change how we want to plan for the future,” said Dr. Wainger.  “So the idea of this scenario planning is to go beyond the probable to the plausible and the possible.”

This approach has been used in California before.  One example is the ARkSTORM scenario, which assembled a team of 117 different scientists, engineers, policy experts, and first responders to develop a strategy for responding to a sequence of severe winter storms, similar to what occurred in 1861-62, which dumped an equivalent of 10 feet of water in the form of rain and snow over 43 days.

“This scenario was based on a scientific convergence of temperature and precipitation very similar to that event, followed by an examination of secondary hazards like landslides and flooding, physical damages to the built environment, and social and economic consequences,” said Dr. Laurel Larsen, Delta Lead Scientist.  “As a result of coming together and figuring out how they would deal with such a scenario as it unfolded, one of the things that I’ve heard is that agencies have felt much more prepared to deal with situations like we experienced in this recent wet season.”

The ARkSTORM is now in its second phase of development.  A team is putting together a historical and warmer future scenario that is rigorously quantitative using the top 3 30-day precipitation accumulations in current and warmer climate across a swath of GCMs.

The tools and approaches to decision-making under deep uncertainty can be integrated into a robust strategy that begins with developing the scope of the analysis through structured discussions with stakeholders.  Then, performance measures are developed for the actions, key uncertainties are identified, and mathematical and qualitative relationships among the different factors are analyzed.

From there, strategies can be evaluated across futures through simulations with agencies or modeling, and decisions assessed as to how they work under various future conditions.  Then, statistical tools are used to develop a vulnerability analysis that identifies the factors that would lead strategies to perform poorly and would need a different strategy to achieve acceptable outcomes.

“This is an iterative process which would reengage stakeholders to define what those new futures and strategies should be, based on both the vulnerability analysis and a trade-off analysis,” said Dr. Larsen.  “And new futures would basically be defined to expand the range of uncertainties or to focus on more specific combinations of uncertainties that are relevant to the choice of strategy in order to identify a set of robust strategies.”

There are several benefits of applying these approaches.  “We’ve had some recent examples where we could have used a more enhanced perception of changing conditions,” said Dr. Wainger.  “Such as the fact that the runoff yield from the snowpack changed dramatically after the extended drought in ways that weren’t incorporated in the models and that created some management challenges.  So that’s an issue we see that might be overcome by new types of anticipating future change.  And I think there’s a variety of benefits.  And hopefully, by the end of the seminar series, you will agree that this provides a nice structure for anticipating and managing uncertainty and associated risks and being better prepared for the future.”

The speaker for this webinar is Alice Hill, currently the David Rubenstein Senior Fellow for Energy and the Environment at the Council on Foreign Relations.  She served as a special assistant to President Barack Obama and Senior Director for Resilience Policy on the National Security Council, where she led the development of a national policy to build resilience to catastrophic risks, including climate change and biological threats.  That work included leading the Department of Homeland Security’s effort to develop its first-ever climate adaption plan.  Ms. Hill is the co-author of Building a Resilient Tomorrow: How to Prepare for the Coming Climate Disruption.  In this Q&A, she shares insights from the book and her vast experience working on climate resilience.

Q: Tell us a little more about how you became involved in climate adaptation planning, which led to the illustrious career that was highlighted.

Alice Hill: I didn’t start my career in climate.  I started my career in law – actually, in California.  I was chief of the Major Fraud Unit, which is the White Collar Crime Unit at the US Attorney’s Office in Los Angeles.  I was chasing bad guys.  Mostly it was guys with briefcases who were stealing from banks and others.  Then I went on to the Los Angeles Municipal and Superior Courts.

My career advice for those who wonder how you go from being a State of California judge to a policymaker in the federal government is to be nice to those you sit next to in law school.  I had sat next to Janet Napolitano.  She was the governor of Arizona at the time she called me when she was invited by President Obama to become the Secretary of the Department of Homeland Security.  And she asked, do you want to join me in Washington?  So eventually, I said yes, and my family and I moved to Washington, DC.  And I started as her senior counselor.

The Department of Homeland Security is the third largest agency in the federal government.  It’s right behind the Department of Veterans Affairs and the Department of Defense, but it’s larger than all the other agencies.  It’s a huge sprawling security agency born out of the events of 9/11.  It includes Customs and Border Protection, Immigration Services, FEMA, TSA, the Secret Service, and Coast Guard – a whole range of different mission sets.  It was a shotgun wedding after 9/11, which forced all these agencies to work together.

So when I arrived at the Department of Homeland Security in 2009, President Obama signed an executive order requiring all agencies to cut their emissions and, for the first time, to do adaptation planning.   Unfortunately, in Washington, DC, at that time, working on climate change was not viewed as a career enhancer but more as a politically toxic football.  I was the new person, so it was ‘give it to her; she’s new.’  So I was tasked with figuring out what this very large security agency should do about planning for climate change.

I assembled an agency task force, and within the group, there was a high degree of skepticism about why they should even be working on climate change when so many other issues were front and center.  So as we embarked on our work, we first asked ourselves, does the Department of Homeland Security even care about climate adaptation in 2009?  We heard from climate scientists across the federal government that the Department should care deeply.  We had an ‘aha’ moment when we realized how climate impacts – flooding, extreme heat, drought, sea level rise – you name it, affect everything that the Department does.

So we wrote this first climate adaptation plan.  As a result, when Janet Napolitano left to run the University of California system, I was invited to join the White House, where I eventually did oversee the resilience directorate in the National Security Council.  I worked directly on adaptation policies for climate change for the federal government.

Since leaving the Obama administration, I’ve been in think tanks where I continue to focus on ways that we can do better in understanding the risks that are already here and, importantly, those that are destined to arrive to better prepare our infrastructure and our systems to withstand those impacts so we can thrive in a warming world.  It remains a challenge.  I think our adaptation efforts here in the United States are not where they need to be to protect us from the changing world.

Q: What do you see as the state’s role in planning for climate change under increasing uncertainty about the future?  Does a state like California have the opportunity to provide leadership?

California has already provided significant leadership, and I anticipate it will continue to do so.  New York is also another example of a state providing leadership.

Unfortunately, climate change leadership typically falls on whether it’s primarily a Democrat-run state or a Republican state as to the level of climate planning.  It’s not that the red states don’t have resilience planning, but they might not have the planning that calls for considering climate risks.  And that is, in my opinion, absolutely essential for any resilience plan because if you don’t look at future risks but only look in the rearview mirror looking at the past risk, you will be deeply unprepared.

Unfortunately, climate change leadership typically falls on whether it’s primarily a Democrat-run state or a Republican state as to the level of climate planning.  It’s not that the red states don’t have resilience planning, but they might not have the planning that calls for considering climate risks.  And that is, in my opinion, absolutely essential for any resilience plan because if you don’t look at future risks but only look in the rearview mirror looking at the past risk, you will be deeply unprepared.

So to answer your question, state governments are very important in showcasing best practices for innovation and protecting their own populations and economies going forward.  An early example from California that, frankly, the federal government has not been able to truly match is Cal Adapts.  It had an interactive GIS interface – you could just go down and look at a particular area and get a sense of what’s ahead for that area.  I remember looking at that when I was at the White House and saying we’ve got to get to that for the United States.  And it still remains a challenge for us to have that kind of granularity for people to understand what’s ahead and engage in these discussions.

With housing, density issues are usually framed as affordability of housing, but with climate change, we also need to increase density to get people into safer areas, as we’re learning that some areas are prone to destined to burn or flood.  So states can continue to drive resilience, but I think that states can’t do it alone.  We need to have regional planning.  And sometimes that plan is going across state lines.  The federal government could assist with that in ways of providing money for regional planning and providing incentives that could drive further action rather than just leaving it up to the States alone to solve these problems where they have a shared water source, for example, or when one state’s wildfire risk becomes another state’s wildfire risk.

Q: One of the arguments against making decisions or planning for improbable circumstances is the high cost of managing for extreme risks.  When is it a net benefit for governments to plan for these low-probability but high-impact events?  How should governments weigh the cost-benefit of planning for these extreme scenarios?  Because obviously, it takes a lot of resources to do so.  And we can’t plan for every type of extreme.

Absolutely, we’ll never capture all the events that will occur.  And it was Eisenhower, who led troops in World War II, who said planning is essential, but plans are useless.  So just the fact of planning for a scenario that resembles what happened in the 1860s in California can help build relationships, increase awareness, and drive greater preparedness, so planning is a good idea.

With climate change, I think that it’s no longer a high-risk, low-frequency event.  These events are occurring rapidly.  The scientists I speak to generally say that what has surprised them is not that these things have unfolded just as predicted but they have unfolded more quickly.  So to treat this as a ‘gray rhino’ or a ‘black swan,’ I just don’t think it is appropriate anymore.

This poses a major challenge for policymakers and scientists because we’re really confronting a problem that no one in recorded history has confronted at this scale.  The problem does not require any human intervention, such as with nuclear or cyber, which are catastrophic threats.  There’s no human intelligence to see what’s going to happen or what the nuclear arsenal is for a different country.  This is happening on its own because of the burning of fossil fuels.  Some events are very certain to occur, such as sea level rise and heat.  So not planning for them seems to me that we are just ignoring the white swans now out there.

So we should put aside the thought that these are uncertain risks.  We don’t know exactly how they’ll unfold, but we do know they are ahead.  We should plan for a range of risks because we know they will compound.  They don’t have to be as big, but we could have multiple of them, which could cause even more damage than just one big event.  So we need to start forcing our imaginations so that we can work on creating the plans, which we may not execute in their fullness, but at least we’ll have started the process to be better prepared.

With our cognitive biases, people don’t know what to do.  And it’s been such a highly politicized topic, but going forward, to not consider climate risk for any investment or decision about land use, in my opinion as a former judge, at some point it will cross into the area of negligence.  Because you need to consider what will happen over the service life of any infrastructure investment or any decision that you’re making that involves investments.

Q: What tools have been successful at getting people to make progress?  Is the decision-making under deep uncertainty?  Is that a useful tool?  What elements within that have you found most useful?

When I was in the White House, some of our international aid agencies requested help.  They said, ‘We are handing out a lot of money to countries, and we don’t have any idea whether the investments we’re making will withstand the future impacts of climate change.’  So I was assigned to assemble a task force to decide what we should do.

Eventually, President Obama issued an executive order that addressed international development aid and climate risk.  And through that work, we determined that any decision regarding a major investment should be screened for climate risks.  So if you’re going to build a road somewhere, you need to consider whether the road will be subject to flooding.  Will it be subject to extreme heat, where the asphalt will buckle?  And any variety of things, such as sea level rise.  Then you should make sure that you account for those going forward.

Just this week, I ran into somebody who was at USAID.  That executive order was not pulled by Trump, so USAID took it, and they have implemented that approach throughout all their programming.  So they are confident that when they’re making an investment overseas, that investment will withstand the impacts.

Now, there’s an important question that should be a follow on, but we did not get that to that in our work.  It is, should you build the road in the first place?  That is a critical issue for state governments when they’re investing in infrastructure, and it’s highly politicized.  But we need to prioritize the investments we’re making.  And an investment might not make sense.

We see this on the East Coast: huge investments in bridges to barrier islands.  Well, those barrier islands may be wiped out.  So what’s our expected service life for that bridge?  What’s the expected usage for that barrier island with rapid sea level rise and coastal erosion?  But we aren’t to the point in the United States where we’re having those discussions yet.  In my opinion, if we had a national adaptation plan, that would help us get to those difficult decisions.

So with international development, we went to the World Bank, which was going through the same thing.  They had a screening tool that they shared with us.  So USAID used the screening tool to check all the different impacts and make it easy for officers not to have to be experts in climate change but be able to work through what the risks were.  So it’s a matter of piecing these things together in a way useful for those who aren’t climate experts to help support their decisions.

Q: How did that risk information inform the investments?

“It helped them make sure that whatever they did, they wouldn’t be putting more money in an area that would likely be flooded in the near future or the floodplain.  They would move it off. … It’s easier politically for us to say no, we don’t want to build something in another country than it is for us to say no, we don’t want to build something in the United States.  Take my barrier island example – those islands and the elected officials depend highly on tourism dollars to sustain their communities.  So to cut them off with no bridge means that that community will atrophy and suffer severe economic consequences.

The system we have right now in the United States was described to me by the former head of the Army Corps of Engineers as essentially spreading a very thin layer of peanut butter in all of our investments, but we don’t make the choices about which investments are of the most value to protecting the most people or whatever metric we use.  We haven’t gotten there yet.

Q: In your ideal world, how would we use these economic factors to prioritize these investments?

There are economic factors and equity factors.  And certainly, FEMA, the Federal Emergency Management Administration, has been criticized for solely looking at economic factors such as property value.  But if you only look at the value of the property, because of historical discrimination and other factors, the white communities own more highly valued property, and so Black, Hispanic, Latino, and Asian communities are left out.  We need to come up with different metrics.  FEMA has begun to work on that.  It can’t be solely on economic metrics.

Given our wealth, we are remarkably unprepared in the United States for what’s ahead.  Over half of the states in the United States do not have a disaster resilience code, and that’s just resilient to the types of events we’ve experienced in the past – it’s not to future climate events.  And some of those states are in our Gulf states, which are heavily influenced by sea level rise, heat, and bigger storms.

It’s a question of emphasizing the gains from greater investments in risk reduction measures.  We don’t have really sound economic modeling on this, and our cost-benefit analysis is not as strong as it should be, but through FEMA and the National Institute Institute of Building Sciences, we’ve come up with a metric that measures the value of certain federal programs in reducing risk.  And we found that, for example, if you have stronger building codes, for every dollar you spend, you save $11 in disaster recovery costs.  Over all the programs, it’s about $4-6 for every dollar invested.  So if you look at the choices you’re making now, if you’re looking to reduce future risk, you’ll have a big payoff.  It’s very important to keep that in mind.

It’s a real challenge – I’m not going to downplay it.  We don’t have the building codes yet that account for climate risk.  We have infrastructure guidelines; we don’t have infrastructure standards.  And we have an overlay of political noise that sometimes makes it difficult for some groups to progress on these issues.

Given our wealth, we are remarkably unprepared in the United States for what’s ahead.  Over half of the states in the United States do not have a disaster resilience code, and that’s just resilient to the types of events we’ve experienced in the past – it’s not to future climate events.  And some of those states are in our Gulf states, which are heavily influenced by sea level rise, heat, and bigger storms.

Q: With regard to the context of investment, it seems like insurance availability needs to be aligned with climate risk beyond public investment and infrastructure.  How do we do that?

I chair a working group for the California Department of Insurance focused on climate change and insurance.  As far as we know, we’re the only group out there within the 50 states.  We issued a number of recommendations, some of which California has already acted on, but honestly, the availability of property insurance is going to be a challenge going forward with climate change.  You’ve already experienced that in California with wildfires.  Because insurance companies only write insurance policies on an annual basis.  If there’s a really bad year, they can move away and just stop writing.

They can leave the state, of course; California is the sixth-largest economy in the world and the fourth-largest insurance market, so insurance companies aren’t going to walk away lightly.  But it is a problem that it will not be available.  The number of people that can’t get private insurance and are going to the backup plan sponsored by the government is growing.

Another challenge is that California requires insurers to look at the losses in the past 20 years when deciding how to price their policies; they can’t use forward-looking models.  So during the 2017 wildfires, the insurance industry lost about 22 years of profits in that single year.  Florida, Texas, and Louisiana insurance commissioners are already warning that a crisis is occurring as insurance prices increase in response to the growing risk.

Behind the insurance companies are reinsurers, the big international companies that spread risk across the globe.  Six years ago, one of those heads said it’s uninsurable if we have a three-degree Celsius world.   Just last month, the head of the largest insurance brokerage in the United States testified before Congress that climate change was destabilizing the property insurance market.  It will be a major challenge because if you charge prices that reflect the true risk, the cost of insurance will go up.

When it comes to wildfire, an individual homeowner can’t necessarily significantly mitigate their own risks to justify a major reduction in their premium because some of the risk is community-based.  If your neighbor has a whole bunch of dead wood around their property, a wood shake roof, and many other things, the flames may catch your property even though you’ve removed all the vegetation, have a fireproof roof, and have taken other measures.  We just don’t know enough about the dynamics of wildfire to be able to stop it at the line of a neighbor’s property.

Q:  Some of your previous answers underscored the role of economic modeling and decision-making under deep uncertainty, particularly economic modeling linked to climate change forecasts.  That really illustrates a potential role for scientists in the field of decision-making under deep uncertainty.  How can scientists facilitate the adoption of these practices by the government?  And is there a role that’s currently untapped or poorly explored?

Scientists need to be communicators, not for their peers in the scientific community, but for the average person to understand it.  That can be a challenge for various reasons, particularly for academic scientists who are making their way towards tenure and have to be concerned about how they’re viewed among their peers and not stepping out and talking about fields for which they’re not the known expert.

But concerning what role they can play, you could pick any area as a scientist with knowledge and be helpful.  You can choose land use or building codes – figuring out how you downscale the modeling to make it relevant for the decision levels involved.  It could be exploring ways to share data in a manner that people can more readily understand.   We are just beginning this journey, and we simply don’t have enough applied science to help communities make the decisions they need to make.

Universities are beginning to take a much more interdisciplinary approach with this – and it is an interdisciplinary problem.  That adds to the challenge.  Because people make their careers within one discipline, but this problem requires you to look across disciplines and work with people across disciplines to find solutions.  So to the extent that scientists work to bridge those gaps and communicate science that’s relevant to those who need to make these decisions about what their future land use will be, what their investments will be, where people will live, where they’ll work, and what their infrastructure looks like.  So you can pick any area, and it needs scientific acumen to improve the choices being made.

Q: We’re looking at trillions of dollars for redoing water infrastructure built in California after World War  II that is coming to the end of its useful life.  How would you advise policymakers to engage in prioritizing?  What about equity?   Infrastructure has been prioritized based on who has the most economic value, so small communities and those without much economic value don’t have the infrastructure.  How do we balance all these things?

It is a very difficult problem because there are a lot of politics involved with this.  But at a minimum, you need to pull together the projects in play.  Then you need to establish the shared metrics; it could be the number of people served, the longevity of the project, or a whole host of metrics that would need to be worked through on a policy level and probably discussed with communities to make sure that you are getting to the concerns that should be present in any decision.

I think the most important thing is to figure out a framework for doing this.  A state like California which has been so forward-leaning and progressive in trying to find solutions to climate change, could be a model for figuring it out.  Then you have the overlay of the federal money because the metrics the federal government uses, even between agencies, may not match up.

Start with what are the projects we want in this pot?  And then what are the metrics we’re going to measure those against?  Then what is our list?  And then, you publicize the list.

As with any other program, we’re going to have to look at how many people are served or whatever the interests are;  we don’t want to be building the bridge to nowhere just because it’s a resilient bridge.  Thinking through those things is not an easy task.  But it calls for leadership.  And the first iterations will shape what occurs in many places going forward because this problem will have to be solved if we want to build successfully in a resilient way.

Q: I have been advocating for modeling flood flows that are higher than the existing flood system capacity, and even getting that for the San Joaquin River, where we know that the system capacity will be exceeded, has been very difficult.  Many people want to make investments based on earmarks rather than prioritizing based on modeling.  So how can you handle it when a group of large and powerful stakeholders is averse to even considering the modeling?

This is a broad area.  Because it’s going to involve change, and people are nervous about change.  Some people will perceive that they’re losing as a result of choices being made.  The political arena, the special interests, and the skepticism about climate scientists – all make this an extremely hard area to navigate.  My response would be that we need to continue to navigate it.

When I was in the White House, I had my aha moment when I realized that climate change would affect everything and that we needed to desperately change our approach.  One day somebody stopped by my office and said, Oh, Alice, you’re getting a reputation.  And I said, for what?  And they said, for caring too much about climate change.  And I said, what that mostly tells me is that that person hasn’t been exposed to the risks of climate change.

So we have cognitive biases.  We have a lot of politicization.  But at the end of the day, what can guide us is the science and the knowledge that there are lives to be saved and property to be preserved if we make better choices.  So we’re going to have to continue to discuss and find ways to move forward even in the face of barriers and obstacles.

That’s what I chose to do, even though I was getting a reputation.  And that’s okay.  Let them come at me because I knew that the science told me that we should be acting now to save us all.  So that’s my message: you may get discouraged by the opposition you may encounter, but it doesn’t mean we should stop.  It means we can find another way.

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