Cooperation needed! The case of drought management in Austria

By Marlene Palka, research assistant in the IIASA Risk and Resilience Program

Marlene Palka discusses the work done by the IIASA FARM project, which has been investigating drought risk management in Austria for the past three years.

Future climate projections forecast an increase in both the frequency and severity of droughts, with the agricultural sector in particular being vulnerable to such extreme weather events. In contrast to most other climatic extremes, droughts can hit larger regions and often for extended periods – up to several months or even years. Like many other countries, Austria has been and is expected to be increasingly affected, making it necessary to devise a management strategy to mitigate drought damages and tackle related problems. The FARM project – a three year project financed by the Austrian Climate Research Program and run by the IIASA Risk and Resilience and Ecosystems Services and Management programs – kicked off in 2017 and has been investigating agricultural drought risk management both in a broad European context, and more specifically in Austria.

Young sunflowers on dry field © Werner Münzker | Dreamstime.com

Austria represents a good case study for agricultural drought risk management. Despite the agricultural sector’s rather small contribution to the country’s economic performance, it still has value and represents an important part of the country’s historical and cultural tradition. Around 80% of Austria’s total land area is used for agricultural and forestry activities. Equally important is its contribution to the preservation of landscapes, which is invaluable for many other sectors including tourism.

Globally, agricultural insurance is a widely used risk management instrument that is often heavily subsidized. Apart from the fact that the concept is increasingly being supported by European policymakers – the intention being that insurance should play a more prominent role in managing agricultural production risk – more and more voices from other sectors are calling for holistic management approaches in agriculture with the overall aim of increasing the resilience of the system.

There is a well-established mutual agricultural insurance company in Austria, which has high insurance penetration rates of up to 75% for arable land, and comparably high subsidies of up to 55% of insurance premiums. It is also encouraging to note that recent policy decisions support the timeliness of drought risk: in 2013, the Austrian government paid EUR 36 million in drought compensation to grassland farmers and in 2016, premium subsidies of 50% were expanded to other insurance products, including drought, while ad-hoc compensation due to drought was officially eliminated. In 2018, the subsidy rate was further increased to 55%. In light of these prospects, we investigated the management option space of the Austrian agricultural sector as part of the FARM project.

The 2018 Organisation for Economic Co-operation and Development (OECD) report on monitoring and evaluation of agricultural policies claims that efficient (drought) risk management in agriculture must consider the interactions and trade-offs between different on-farm measures, activities of the private sector, and government policies. The report further argues that holistic approaches on all management levels will be vital to the success of any agricultural management strategy.

In the course of our work, we found that agricultural drought risk management in Austria lacks decision making across levels. Although there is a range of drought management measures available at different levels, cooperation that includes farms, public and private businesses, and policy institutions is often missing. In addition, measures to primarily and exclusively deal with drought, such as insurance and irrigation, are not only limited, but (as we found) are also less frequently implemented.

As far as insurance is concerned, products are still being developed, and penetration rates are currently low. Drought risk is also highly uncertain, making it almost impossible to offer extensive drought insurance products. Irrigation is perceived as the most obvious drought management measure among non-agronomists. Simply increasing irrigation to deal with the consequences of drought could however lead to increased water demand at times when water is already in short supply, while also incurring tremendous financial and labor costs and additional stress to farmers. With that said, a large number of agricultural practices may also holistically prevent, cope with, or mitigate droughts. For example, reduced soil management practices are low in operating costs and prevent surface run-off, while simultaneously maintaining a soil structure that facilitates increased water holding capacity. Market futures might also stabilize farm income and therefore allow for future planning such as the purchase of irrigation equipment.

A workshop we held with experts from the Austrian agricultural sector further highlighted this gap. Thinking (not even yet acting) beyond the personal field of action was rare. The results of a survey we conducted showed that farmers were experiencing feelings of helplessness regarding their ability to manage the negative effects of droughts and other climatic extremes despite the implementation of a broad range of management solutions. One way to explain this could be a lack of cooperation across different management levels, meaning that existing efforts – although elaborate and well-proven – potentially reach their limit of effectiveness sooner rather than later.

Due to the more complex effects of any indirect/holistic drought management measure, we need tailored policies that take potential interdependencies and trade-offs into account. With evidence from the FARM project, my colleagues and I would like to emphasize an integrated risk management approach, not only at farm level but also in all relevant agencies of the agricultural sector in an economy. This will help to secure future production and minimize the need for additional public financial resources. Our findings not only contribute to ongoing high-level discussions, but also underpin the resulting claim for more holistic (drought) risk management with bottom-up data from our stakeholder work.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Finding community at the AGU Fall Meeting

By Lu Liu, postdoctoral research associate at Rice University, USA and IIASA YSSP 2016 participant

I have been attending the American Geophysical Union (AGU) Fall Meeting since 2013 when I was working with the Joint Global Change Research Institute. Ever since then, the AGU Fall Meeting has become one of my most anticipated events of the year where I get to share my research and make new friends.

The first time I attended the AGU Fall Meeting, I was overwhelmed with the size and scale of this conference. There are more than 20,000 oral and poster presentations throughout the week, and the topics cover nearly 30 different themes, from earth and space science, to education and public affairs. I was thrilled to see my research being valued and discussed by people from various backgrounds, and I was fascinated by other exciting research and rigorous ideas that emerged at the meeting.

Lu Liu at 2018 AGU poster session

Lu Liu at 2018 AGU poster session

At this year’s AGU, I presented my poster Implications of decentralizing urban water supply infrastructure via direct potable water reuse (DPR) in a session titled Water, Energy, and Society in Urban Systems. In a nutshell, my poster presents a quantitative model that evaluates the cost-benefits of direct potable water reuse in a decentralized water supply system. The concept of decentralization in an urban water system has been discussed in previous literature as an effective approach towards sustainable urban water management. Besides the social and technical barriers in implementing decentralization, there is a lack of analytical and computational tools necessary for the design, characterization, and evaluation of decentralized water supply infrastructure. My study bridges the gap by demonstrating the environmental and economic implications of decentralizing urban water infrastructure via DPR using a modeling framework developed in this study. The quantitative analysis suggests that with the appropriate configuration, decentralized DPR could potentially alleviate stress on freshwater and enhance urban water sustainability and resilience at a competitive cost. More about this research and my other work can be found here: https://emmaliulu.wixsite.com/luliu.

At the AGU Fall Meeting, I engaged in various opportunities to reconnect with old colleagues and build new professional relationships. What’s better than running into my former YSSP supervisors and IIASA colleagues after two years since I left the YSSP? Although my time spent at IIASA was short, I hold IIASA and the YSSP very close to my heart because the influence this experience has had on my professional and personal life is profound.

I will continue to attend the AGU Fall Meeting for the foreseeable future. After all, we all want to feel a sense of belonging and acceptance in a community, and I am glad I already found mine.

 

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Human behavior is the most important factor

By Melina Filzinger, IIASA Science Communication Fellow

Imagine you are heading home from work and are stuck in evening rush hour traffic. You see an opportunity to save time by cutting another driver off, but this will lead to a delay for other cars, possibly causing a traffic jam. Would you do it? Situations like these, where you can benefit from acting selfishly while causing the community as a whole to be worse off, are known as social dilemmas, and are at the heart of many areas of research in economics.

Tum Nhim (left) discusses water sharing with farmers and local authorities in rural Cambodia. © Tum Nhim

The social dilemma becomes particularly important when considering so-called common pool resources such as water reservoirs that are depleted when people use them. For instance, picture several farmers using water from the same river to irrigate their farmland. The river might carry enough water for all of them, but if there is no incentive for the upstream farmers to take the needs of the farmers living further downstream into consideration, they might use more than their share of the water, not leaving enough for the rest of the group. Situations like this are particularly relevant in developing countries, where small-scale farmers that manage the irrigation of their farmland themselves play a significant role in ensuring food security.

Growing up in southwestern Cambodia, YSSP participant Tum Nhim saw how the surrounding farmers shared water among themselves, and how important water was to their livelihoods. Not having enough water often meant that there were no crops for a whole year, and many farmers were forced to take on loans in order to feed their families. “Now that climate change is starting to affect Cambodia, and water scarcity is becoming an even bigger problem, it is more important than ever to investigate fair and efficient ways of sharing water,” explains Nhim.

As a water engineer, Nhim used to design and build water infrastructure. He however soon learned that not considering how human decision making affects the water supply will cause situations where the infrastructure provides enough water, but some farmers are still left high and dry. “I think that human behavior is the most important factor to consider when managing common pool resources,” he says.

To find possible solutions for distributing water in a way that yields an optimal outcome for the community, Nhim and his colleagues from the IIASA Advanced Systems Analysis Program use a bottom-up approach–they model the behavior of a number of individual farmers that interact according to certain rules. The researchers can then look at the collective outcome of these interactions after a certain time and ask questions like, “Will the farmers cooperate?” or, “Will some farmers be left without water?” In their model the researchers take into account both the water itself, a common pool resource, and the water infrastructure, which is not depleted by use.

Several mechanisms can be used to ensure the fair distribution of water. Some of them are formal; like laws and regulations, but it is often difficult to keep people from extracting water, because using a given water resource might be a long-standing cultural tradition or legal right. There are however also more informal mechanisms that can help. For example, individuals often prefer to be good citizens in order to ensure that they have a high social standing in their community that will bring them benefits.

This reputational mechanism is especially relevant in small communities with everyday contact between members. If someone takes too much water, or doesn’t invest in the common water infrastructure, they will gain a bad reputation, which will in turn limit their ability to get support from their neighbors later on.

The main question Nhim is investigating in his YSSP project is if this mechanism can spread across several villages that share a common water resource and irrigation infrastructure, and lead to an outcome where everyone cooperates. If this turns out to be true, the reputational mechanism could be a very inexpensive and natural solution for managing common goods across several communities.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Rice and reason: Planning for system complexity in the Indus Basin

By Alan Nicol, Strategic Program Leader at the International Water Management Institute (IWMI)

I was at the local corner store in Uganda last week and noticed the profusion of rice being sold, the origin of which was from either India or Pakistan. It is highly likely that this rice being consumed in Eastern Africa, was produced in the Indus Basin, using Indus waters, and was then processed and shipped to Africa. That is not exceptional in its own right and is, arguably, a sign of a healthy global trading system.

Nevertheless, the rice in question is likely from a system under increasing stress, one that is often simply viewed as a hydrological (i.e., basin) unit. What my trip to the corner store shows is that perhaps more than ever before a system such as the Indus is no longer confined–it extends well beyond its physical (hydrological) borders.

Not only does this rice represent embedded ‘virtual’ water (the water used to grow and refine the produce), but it also represents policy decisions, embedded labor value, and the gamut of economic agreements between distribution companies and import entities, as well as the political relationship between East Africa and South Asia. On top of that are the global prices for commodities and international market forces.

In that sense, the Indus River Basin is the epitome of a complex system in which simple, linear causality may not be a useful way for decision makers to determine what to do and how to invest in managing the system into the future. Integral to this biophysical system, are social, economic, and political systems in which elements of climate, population growth and movement, and political uncertainty make decisions hard to get right.

Like other systems, it is constantly changing and endlessly complex, representing a great deal of interconnectivity. This poses questions about stability, sustainability, and hard choices and trade-offs that need to be made, not least in terms of the social and economic cost-benefit of huge rice production and export.

An aerial view of the Indus River valley in the Karakorum mountain range of the Basin. © khlongwangchao | Shutterstock

So how do we go about planning in a system that is in such constant flux?

Coping with system complexity in the Indus is the overarching theme of the third Indus Basin Knowledge Forum (IBKF) being co-hosted this week by the International Centre for Integrated Mountain Development (ICIMOD), the International Institute for Applied Systems Analysis (IIASA), the International Water Management Institute (IWMI), and the World Bank. Titled Managing Systems Under Stress: Science for Solutions in the Indus Basin, the Forum brings together researchers and other knowledge producers to interface with knowledge users like policymakers to work together to develop the future direction for the basin, while improving the science-decision-making relationship. Participants from four riparian countries–Afghanistan, China, India, and Pakistan–as well as from international organizations that conduct interdisciplinary research on factors that impact the basin, will work through a ‘marketplace’ for ideas, funding sources, and potential applications. The aim is to narrow down a set of practical and useful activities with defined outcomes that can be tracked and traced in coming years under the auspices of future fora.

The meeting builds on the work already done and, crucially, on relations already established in this complex geopolitical space, including under the Indus Forum and the Upper Indus Basin Network. By sharing knowledge, asking tough questions, and identifying opportunities for working together, the IBKF hopes to pin down concrete commitments from both funders and policymakers, but also from researchers, to ensure high quality outputs that are of real, practical relevance to this system under stress–from within and externally.

Scenario planning

Feeding into the IBKF3, and directly preceding the forum, the Integrated Solutions for Water, Energy, and Land Project (ISWEL) will bring together policymakers and other stakeholders from the basin to explore a policy tool that looks at how best to model basin futures. This approach will help the group conceive possible futures and model the pathways leading to the best possible outcomes for the most people. This ‘policy exercise approach’ will involve six steps to identify and evaluate possible future pathways:

  1. Specifying a ‘business as usual’ pathway
  2. Setting desirable goals (for sustainability pathways)
  3. Identifying challenges and trade-offs
  4. Understanding power relations, underlying interests, and their role in nexus policy development
  5. Developing and selecting nexus solutions
  6. Identifying synergies, and
  7. Building pathways with key milestones for future investments and implementation of solutions.

The summary of this scenario development workshop and a vision for the Indus Basin will be shared as part of the IBKF3 at the end of the event, and will help the participants collectively consider what actions can be taken to ensure a prosperous, sustainable, and equitable future for those living in the basin.

The rice that helps feed parts of East Africa plays a key global role–the challenge will be ensuring that this important trading relationship is not jeopardized by a system that moves from pressure points to eventual collapse. Open science-policy and decision-making collaboration are key to making sure that this does not happen.

This blog was originally published on https://wle.cgiar.org/thrive/2018/05/29/rice-and-reason-planning-system-complexity-indus-basin.

Note: This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Intelligent cooperation

By Valeria Javalera Rincón, IIASA CONACYT Postdoctoral Fellow in the Ecosystems Services and Management and Advanced Systems Analysis programs.

What is more important: water, energy, or food?

If you work in the water, energy or agriculture sector we can guess what your answer might be! But if you are a policy or decision maker trying to balance all three, then you know that it is getting more and more difficult to meet the growing demand for water, energy, and food with the natural resources available. The need for this balance was confirmed by the 17 Sustainable Development Goals, agreed by 193 countries, and the Paris climate agreement. But how to achieve it? Intelligent cooperation is the key.

The thing is that water, energy, and food are all related in such a way that are reliant on each other for production or distribution. This is the so-called Water-Energy-Food nexus. In many cases, you need water to produce energy, you need energy to pump water, and you need water and energy to produce, distribute, and conserve food.

Many scientists have tried to relate or to link models for water, agriculture, land, and energy to study these synergic relationships. In general, so far, there are two ways that this has been solved: One is integrating models with “hard linkages” like this:

© Daniel Javalera

In the picture there are six models (let’s say water, land use, hydro energy, gas, coal, food production models) that are then integrated into just one. The resulting integrated model then preserves the relationships but is complex, and in order to make it work with our current computer power you often have to sacrifice details.

Another way is to link them is using so-called “soft linkages” where the output of one model is the input of the next one, like this:

© Daniel Javalera

In the picture, each person is a model and the input is the amount of water left. These models all refer to a common resource (the water) and are connected using “soft linkages.” These linkages are based on sequential interaction, so there is no feedback, and no real synergy.

The intelligent linker agent

But what if we could have the relations and synergies between the models? It would mean much more accurate findings and helpful policy advice. Well, now we can. The secret is to link through an intelligent linker agent.

I developed a methodology in which an intelligent linker agent is used as a “negotiator” between models that can communicate with each other. This negotiator applies a machine-learning algorithm that gives it the capability to learn from the interactions with the models. Through these interactions, the intelligent linker can advise on globally optimal actions.

The knowledge of the intelligent linker is based on past experience and also on hypothetical future actions that are evaluated in a training process.  This methodology has been used to link drinking water networks, such as Barcelona’s drinking water network.

When I came to IIASA, I was asked to apply this approach to optimize trading between cities in the Shanxi region of China. I used a set of previously development models which aimed to distribute water and land available for each city in order to produce food (eight types of crops) and coal for energy. The intelligent linker agent optimizes trading between cities in order to satisfy demand at the lowest cost for each city.

The purpose of this exercise was to compare the solutions with those from “hard linkages” – like those in the first picture. We found that the intelligent linker is flexible enough to find the optimal solution to questions such as: How much of each of these products should each city export/import to satisfy global demand at a global lower economic and ecological cost? What actions are optimal when the total production is insufficient to meet the total demand? Under what conditions is it preferable to stop imports/exports when production is insufficient to supply the demand of each city?

The answers to these questions can be calculated by the interaction with the models of each city just by the interfacing with the intelligent linker agent, this means that no major changes in the models of each city were needed. We also found that, under the same conditions, the solutions using the intelligent linker agent were in agreement with those found when hard linking was used.

My next challenge is to build a prototype of a “distributed computer platform,” which will allow us to link models on different computers in different parts of the world—so that we in Austria could link to a model built by colleagues in Brazil, for example.  I also want to link models of different sectors and regions of the globe, in order to prove that intelligent cooperation is the key to improving global welfare.

References

Xu X, Gao J, Cao G-YErmoliev YErmolieva TKryazhimskiy AV, & Rovenskaya E (2015). Modeling water-energy-food nexus for planning energy and agriculture developments: case study of coal mining industry in Shanxi province, China. IIASA Interim Report. IIASA, Laxenburg, Austria: IR-15-020

Javalera V, Morcego B, & Puig V, Negotiation and Learning in distributed MPC of Large Scale Systems, Proceedings of the 2010 American Control Conference, Baltimore, MD, 2010, pp. 3168-3173. doi: 10.1109/ACC.2010.5530986

Valeria J, Morcego B, & Puig V, Distributed MPC for Large Scale Systems using Agent-based Reinforcement Learning, In IFAC Proceedings Volumes, Volume 43, Issue 8, 2010, Pages 597-602, ISSN 1474-6670, ISBN 9783902661913, https://doi.org/10.3182/20100712-3-FR-2020.00097.

Morcego B, Javalera V, Puig V, & Vito R (2014). Distributed MPC Using Reinforcement Learning Based Negotiation: Application to Large Scale Systems. In: Maestre J., Negenborn R. (eds) Distributed Model Predictive Control Made Easy. Intelligent Systems, Control and automation: Science and Engineering, vol 69. Springer, Dordrecht

Javalera Rincón V, Distributed large scale systems: a multi-agent RL-MPC architecture, Universitat Politècnica de Catalunya. Institut d’Organització i Control de Sistemes Industrials,Doctoral thesis. 2016. http://upcommons.upc.edu/handle/2117/96332

Note: This article gives the views of the author and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.