Transcript Presentation

Societal Benefits Analysis of Earth
Observation
Richard Bernknopf, Department of
Economics University of New Mexico
GEO Work Programme Symposium
Geneva, 2-4 May 2016
Richard Bernknopf, Department of Economics
University of New Mexico
Regulating water pollution with
Landsat (USGS 2001)
Drought monitoring with
GRACE (NASA/JPL Caltech 2013)
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CD 03: Assess the benefits from EOs and estimate their
socioeconomic value
The goals of this task are to:
1. Assess the socioeconomic benefits and impacts of information on
decisions and society for GEO Societal Benefit Areas
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Biodiversity and Ecosystem Sustainability
Disaster Resilience
Energy and Mineral Resources Management
Food Security and Sustainable Agriculture
Infrastructure and Transportation Management
Public Health Surveillance
Sustainable Urban Development
Water Resources Management
2. Better understand intuitively and quantitatively the Impacts of
information on decisions
3. Focus is to develop methodologies, develop case studies and
examples of use cases that can be broadly understood, and conduct
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training
Value of EO as an Economic Commodity
Background and Definition
• Intermediate good that provides a link between economic sectors in an
economy and can have many uses simultaneously
• Requires translation to information for systematic use in decisions
• Derives value by delivering unique, economically consequential, and
strategically relevant information to decision makers
• Changes to the economy are made by modeling the outcome for a specific
introduction of EO compared to a baseline
Private good with a market price or public good with a societal benefit
Both types exist:
• Private good: EO collected by contractual and / or license agreement and is
available in the marketplace and is specific information
• Public good (one individual’s use of the data does not degrade the value to
another): EO collected by the public sector and is general information midlevel resolution imagery are pertinent to a variety of societal and market
decisions
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Quantitative Policy Analysis of EO
Policy analysis - analytical activity to support a decision that must be made.
Policy research – involves problems in which scientific and engineering issues
(e.g., experimental and operational EO) are important to the policy questions.
“A traditional view holds that the science and engineering community should lay
out the facts making it clear what is known and what is not known. Then the
politicians can take over and decide what to do… But in many problems successful
policy development requires more than a list of what we do and don’t know (Morgan
and Henrion 1990).”
Careful analysis, synthesis, and interpretation is required if the policy-making
process can use the available science and technology adequately.
Good policy research and analysis includes empirical testing, documentation
and the reproducibility of results, explicit reporting of uncertainty, and peer
review.
Decisions with EO:
• Involve some level of uncertainty in scientific measurement and statistical
variability affects its informational value
• Value is dependent on whether the EO reduces the variance (uncertainty)
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in outcomes.
Objective: Increase the use of EO in decisions
Challenge: To measure the incremental value of EO for
policy and financial decisions
Economic Analysis – Expected benefits of a decision with and without EO
• Low hanging fruit – cost savings applications: Societal benefits are the
potential cost savings to society accruing from the presence of EO.
• Innovation applications: Societal benefits are the incremental value of new
uses of EO.
• Case studies for innovation applications of EO.
– Driven by specific decisions that take advantage of the spatiotemporal
attributes of EO.
– Value Of Information (VOI) – Retrospective analyses
• Landsat - Agricultural land management and regulation of
groundwater contamination
• Gravity Recovery and Climate Experiment (GRACE) Enhanced Drought
Severity Index – Eligibility for drought disaster assistance
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EO technology informs decisions that promote economic
growth and environmental protection
$A
$C
$B
QA
QB
Economics foundation for analysis:
Production Possibilities of an
economy are represented by
combinations of goods produced if
the economy fully uses all available
resources. Production possibilities of
an economy are limited because
resources used to produce goods and
services are limited.
A production possibilities frontier
(PPF) is a graph of alternative
production bundles of agricultural
production and survival of
groundwater resources.
EO helps to creates a new PPF (PPF0 to
PPF1) by expanding the value of
agricultural production while
maintaining potable groundwater
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aquifers (B to C).
Case Study Objective: Estimate the VOI of EO (Moderate
Resolution Land Imagery) for agricultural land management
R. Bernknopf, W. Forney, R. Raunikar, and S. Mishra
Drivers:
• US Energy Policy Act 2005 and Energy Independence and Security Act
2007 – Biofuels supply requirement and subsidies
• USEPA Health Standard - Drinking water cannot exceed 10.0 mg/L for
nitrate.
– Nitrate reacts with other chemicals to form carcinogenic compounds
Context:
Economic justification for investment in the Landsat Data Continuity Mission
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Unforeseen consequences: Impacts to crop rotations and
increased groundwater vulnerability
Waterloo
Iowa
Trends in corn and soybean
acreage in 35-county
northeastern Iowa study
region, 2001-2010 (Source
data: USDA NAS-CDL)
Unforeseen Consequence of Energy
Policy: Impacts to crop rotation and
groundwater quality
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Innovation: Apply Landsat archive in a retrospective analysis
to locate agricultural production to reduce nutrient leaching
that can pollute drinking water aquifers
• EO (Landsat and Advanced Wide Field Sensor) provides the
population of land uses, while traditional techniques focus on only a
sample of land uses
• EO facilitates spatiotemporal analysis of the impact of nitrates on
groundwater resources
• Landsat archive is critical because groundwater pollution
accumulates from nonpoint sources over time
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Iowa case study
• 5.4
million hectares in 35 counties
• Corn (114 lb/acre
of N) & soybean (3 lb/acre
of N) are largest crops
• USDA Cropland Data
Layer based on MRLI
provided corn & soybean production
estimates for 2001 - 2010
• 80% of Iowa drinking water
is from
groundwater
• 32,000 wells ranging from just below the
surface to 1,220 meters
• 603 watersheds
(sub-basins) with a median
of 7,910 Hydrologic Response Units (HRU).
HRUs are areas within a watershed that
respond similarly to given input
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Challenge: Measure the incremental economic value of EO
to assess the impacts of environmental pollution based on
farm activities in the agricultural sector of Iowa
Approach:
• Demonstrate how regional resource management can be improved and
public health maintained by coupling EO with agricultural, geospatial, and
hydrogeologic models
• Target groundwater vulnerability from nutrients
• Couple individual producers and regional resource managers by using
spatiotemporal information from markets and natural systems to aid in
maximizing agricultural production and not decrease groundwater quality.
Implementation:
• Use EO archive of land use information as a baseline for analysis
• Develop statistical survival model to estimate nitrate accumulation in
subsurface
• Apply model in a regulatory decision to evaluate the impacts of agriculture
on groundwater quality
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The steps to turn EO data and science
into geospatial information for an
environmental regulatory decision
Nitrate accumulation
Nitrate loading from fertilizer leaches through the
vadose zone, is transported through stratigraphic
layers, and can accumulate in and contaminate
aquifers.
Transform
EO into
geospatial
information
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What was measured in the case study
• Contribution of EO is an input to revise regional land use to maximize the
value of agricultural production and conserve potable groundwater
resources
• Spatiotemporal nitrogen loading and agrochemical transport at specified
distances from fields to specific wells for 35 Iowa counties and 2 aquifers
• Impact of EO for the management of major land uses in the region—
production of corn and soybeans and their effects on groundwater quality
(corn , soybeans )
• During the 10-year period (2000 – 2010) some groundwater wells are
threatened by nitrate contamination and could fail to maintain drinkingwater quality in the next 10 years due to topography, soils, well
characteristics (such as depth and operations), and surficial geology.
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Case study results
• EO contributes as an input to revise land use to maximize the value of
agricultural production and preserve potable groundwater resources.
• Maximum estimated VOI for EO is an annualized $858M ± $197M / yr
(in $2010) and has a net present value of $38.1B ± $8.8B for
northeastern Iowa
• 1% improvement in reallocating land use with EO is an annualized
$43.0M / yr (in $2010) and has a net present value of $1.91B for
northeastern Iowa.
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Objective: Estimate the VOI of the NASA Gravity Recovery
and Climate Experiment (GRACE) satellite mission
R. Bernknopf, Y. Kuwayama, D. Brookshire, M. Macauley, B. Zaitchik, A. Thompson,
and P. Vail
Drivers:
• US Agricultural Act 2014 – Payments to eligible livestock producers due to
drought (Livestock Forage Disaster Program)
• USDA Farm Service Agency Emergency Designation and Declaration –
Emergency loans to eligible producers suffering losses due to drought Secretarial Disaster Designation Process 7 CFR Part 759
– US Drought Monitor (USDM) drought severity classification is used to
determine eligibility
Context:
Policy maker’s preference is to reduce uncertainty in disaster relief decisions
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Challenge: What is the economic value of information from
GRACE for drought monitoring?
What is the risk associated with management actions
informed by the USDM?
USDM:
• Expert-based probabilistic risk map to
communicate the severity of droughts
weekly by county in the US
• Informs drought management decisions eligibility for federal drought assistance
programs and emergency declarations
GRACE:
• Measures global gravity and change in
water stored on land
GRACE Data Assimilation (GRACE-DA) System:
• Disaggregates GRACE
• Produces 3 weekly drought indicators: surface soil moisture, root zone soil
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moisture, groundwater (wetness percentiles relative to the period 1948-present)
Case study results
Econometric Analysis:
Statistical tests showed that the three GRACE-DA indicators increased the
correlation between farm income and the U.S. Drought Monitor
Outcome:
• Societal cost of misclassifying farmer eligibility for financial assistance is
reduced with the addition of GRACE to the USDM by about $13.3 billion for
2002 – 2013 or about $1.1 billion per year
• Improved classification increases the efficiency of management decisions
Policy Implication:
• USDA's Livestock Assistance Grant Program is a State by State block fund for
recovering forage production losses due to a 2006 summer drought
• $50 million for eligible counties; a county is eligible if it has experienced
USDM D4 or D3 between 3/7 and 8/31
• How would county eligibility have been affected if more GRACE-DA
information were taken into account?
• About $16 million of the $50 million distributed would have been allocated to
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different States
Summary: Earth observation is infrastructure that supports many
societal activities and decisions
Science,
Technology & Economics
Socioeconomic
& Cultural
DECISION or
POLICY
Laws
& Regulations
International
Politics
Morals
& Ethics
Domestic
Politics
Why do these studies?
• New technologies provide better information - e.g., population statistics
rather then sample statistics to reduce decision risk – that lead to
improvements in government and business operations
• VOI case studies:
– Affirm the efficiency of research and technology investment choices
– Utilize quantitative analysis to value EO in specific decisions
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– Connect information products to operational applications
What are some potential GEO Use Cases?
Use cases illustrate the interaction of various stakeholders
with a decision process.
Thank you
[email protected]
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