CRC for Water Sensitive Cities has developed an economic evaluation framework and associated tools to identify and quantify economic, environmental and community values of investments in water sensitive practices and systems. It can be applied to business case development and decision making at multiple levels in public and private sector organisations, and contribute towards achieving water sensitive, liveable and resilient cities.
The framework is being developed over three years by researchers at the University of Western Australia, and is underpinned by a strong strategy for stakeholder engagement, and overseen by an end-user-driven steering committee (see list below). The team has closely engaged with 100+stakeholders including participant organisations of the CRC for Water Sensitive Cities (CRCWSC) and other strategically important industry groups, such as water utilities, government agencies, local councils, peak bodies and networks, consultants and state-based regulators and treasuries. Through regular and wide communication and adoption activities, the CRCWSC is helping industry to adopt this standardised economic evaluation framework and improve capacity for economic analysis in decision making.
The attached document can be shared to provide an overview of this research project. The major outputs from the project are described below.
As part of the evaluation framework, IRP2 has developed a set of tools and resources referred to as the Investment Framework For Economics of Water-Sensitive Cities (INFFEWS), including a Benefit:Cost Analysis Tool, a Value Tool, and detailed resources to guide their application and decision making processes.
The INFFEWS Benefit: Cost Analysis (BCA) Tool has been developed by Professor David Pannell to assess investments related to water-sensitive cities. It supports balanced and systematic decision making and provides evidence for use in business cases. The specification of benefits is highly flexible, and it can deal with any type of benefit likely to emerge in a project related to water or green infrastructure. A government agency can focus on benefits and costs for society as a whole, whereas a business, such as a water utility, may choose to focus on benefits and costs to the organisation responsible for the project. It can be used by any organisation interested in the distribution of benefits of a project or investment among multiple stakeholder groups (who pays, who benefits). Should you wish to download and trial the tool and resources, please read the BCA Tool webpage (WP3) for instructions.
The INFFEWS Value Tool has been developed by Dr Sayed Iftekhar and his team. It is a comprehensive database of dollar values for non-market benefits generated by water sensitive systems and practices, and a set of user guidelines that explain how the information in the database can be used to support business case development using benefit transfer. The current version of the tool contains over 700 non-market benefit values from Australian studies. There are 20 different benefit types related to investment in water sensitive cities represented, with a spread of values available for each. Should you wish to download and trial the tool and guidelines, please read the Value Tool webpage (WP2) for instructions.
The INFFEWS beta version was released in 2018 after a lot of research and consultation with the project steering committee, experts and interested members of the CRCWSC Participant organisations. The tools and resources were made available for 12 months, and the feedback received through interviews, teleconferences, meetings, training sessions, workshops and direct communication have further informed the development of the framework. The tools and resources were shared with more than 40 organisations, and an updated version was released in June 2019.
The IRP2 team delivered a national tour of training sessions on the BCA tool and the Value tool and held stakeholder engagement sessions, including NSW and SA Treasury, to build confidence in the framework. There is a growing number of individuals currently applying the framework and the tools in their work, and champion user groups are forming in all the states providing evidence that it is becoming an accepted and well-aligned evaluation framework.
To contact the developer of INFFEWS please email: [email protected]
Economic value of urban heat mitigation
The IRP2 team has undertaken a discrete project on the economic value of urban heat mitigation. Led by Professor Nigel Tapper, this project explored the UHI mitigation produced from different scales of investment in urban greening, combining expertise in economic assessment (UWA and RMCG), UHI modelling (Monash University) and urban design response (E2DESIGNLAB).
Four landscape scenarios were developed, involving the derivation of a range of physical variables critical for modelling (e.g. plan area fraction of paved area, buildings, trees, grass, open water bodies, etc.). CRCWSC’s TARGET was used to model street level air temperature and to provide the UTCI (Universal Thermal Climate Index) outputs to measure thermal comfort. Climate modelling was then undertaken to produce daily average minimum (overnight) and maximum (midday) temperatures for each scenario, and three summer climate condition (cool, mild, and extreme).
A cost: benefit analysis was used to determine dollar value estimates of the urban heat mitigation benefits produced under the different scenarios. Costs were attributed to different temperatures identified in the biophysical modelling work, and where a scenario produced daily temperature reductions compared to baseline, the reduction in heat-related cost reflects a benefit of that scenario. The benefits were related to reduced mortality / morbidity, reduced energy demand and increased productivity.
IRP2 also has another separate work package on finance models and policies being led by Dr James Fogarty. In close collaboration with end users, existing finance model, policies and mechanisms (such as financial incentives) are being critically examined to assess their suitability to foster public and private investment in water sensitive cities.
Local government and industry practitioners are directly involved in developing key inputs and testing INFFEWS to support the acceptance and ongoing adoption from all key stakeholders across Australia.
There are currently five funded case studies being undertaken by the IRP2 team members in Western Australia, Victoria, and South Australia, which are all due to be completed by the end of 2019.