Trade-off Analysis Basic questions –“Are the solutions that are being suggested as good as possible, i.e., are they on the frontier?” –“How much must I give up to get a little more of what I want most?” –Pareto Optimality

Pareto Attribute 2 Attribute 1 Dominated Alternatives Pareto Superior Alternatives

Trade-off Analysis: Attributes Quantifiable characteristics of the problem “How could / would we define a bad / worse; good / better outcome?” –Reduced cost of service –Improved reliability in delivery –Reduced air emission –Less use of land –No use of Chlorine in the production process

Trade-off Analysis: Uncertainties Events over which the analyst has no control “… it might but then again…” –International economic conditions –International oil prices –Regulatory change –Resource ($; land; human skills …) Availability

Trade-off Analysis: Options Actions that could / can be taken “We can build / buy / legislate / regulate …” –Build a new power plant –Invest in energy conservation / demand side management –Purchase scrubbers for old power plants –Close the power plants and build new clean plants –Move all power generation “off shore”

Trade-off Analysis: Scenarios Combining the options into a set of rational plans that can be analyzed “What could / can actually be done given reality and resource constraints?” –Give growth in demand (and uncertainty) Close the dirtiest power plant, added one new, clean unit and invest $100 million in demand side management. Invest in scrubbers for all old plants and build one new, high efficiency, clean power plant (no DSM)

Trade-Off Analysis: Example Tonnes of So x Emissions Cost $/ kWh Scrubbers on all old units $500 million for DSM $300 million for DSM and 1 new power plant $100 million for DSM close 1 plant, Scrubbers on all others No DSM Close 2; Build 1; Scrubbers on units operating > 35% of the time. Build 2 new nuclear plants

Trade-Off Analysis: Example 2 Tonnes of No x Emissions Cost $/ kWh Scrubbers on all old units $500 million for DSM $300 million for DSM and 1 new power plant $100 million for DSM close 1 plant, Scrubbers on all others No DSM Close 2; Build 1; Scrubbers on units operating > 35% of the time. Build 2 new nuclear plants

Trade-Off Analysis: Example of Uncertainty Tonnes of So x Emissions Cost $/ kWh Increased International Oil Prices

Implementation Impediments Tactical Plan Identify Issues Stakeholder Frames Problem Definition Policy Instruments Cast of Characters Identify the Options Analytic Methods Analyst's Frame Historical Why, How Current Conditions Decision Makers Influence Brokers Definition of Needed Change Definition of Options &Means Definition of Constituency Definition of Strategy Evaluation of The Policy-Making Process Analysis Formulation Identification of Impediments Negotiations RegulationLegislation Enforcement

Policy Analysis: “Truths” Question / challenge the assumptions THE forecast is always wrong Communication is the key: Make it more understandable not more complicated Measure the important variables not the variables that are easy to measure