Planning for uncertainty

What can the transport sector learn from the water industry about planning for uncertainty?

The threat of climate change and extended periods of drought have dramatically raised the stakes for water sector planners in recent years. The need to meet the future needs of a growing population in an uncertain environment is driving water providers to consider catering for a range of potential scenarios through the development of contingency plans.

There is increasing recognition that strategic plans and investments need to be agile enough to respond to changing circumstances. In short, planning for uncertainty is becoming a mainstay of prudent water sector planning.

By comparison, transport planners have historically relied on past trends as a predictor of what might happen in the future, with forward planning based on past growth trends plus any additional demand that is expected to be generated from new developments. However, such planning predictions become fraught when there is major disruption – a challenge that has been brought into sharp focus during the COVID-19 pandemic.

As cities locked down, previously established norms of transport planning went out the window. Public transport use plummeted and, despite some recovery, continues to be suppressed while private vehicle use has steadily increased to pre-COVID levels.

So what will happen in the future?

Will things return to pre-COVID norms or will a new normal emerge? Will the drive to decarbonise accelerate the transition to alternative modes? How will this impact future land use planning? What other disruptors could emerge?

Based on a recent survey of consumers, 37% are very likely to consider owning an electrical vehicle in the next five years. What impact will this trend have on future financing of the road network?

How can we create more resilient transport systems?

The big question facing policy makers is what are the right investments to make now to safeguard our future, and how should they go about deciding what to invest in?

Adaptive scenario modelling is a paradigm shift that recognises uncertainty is a given and helps us to interrogate complex problems more deeply. Closely linked to real options assessment, adaptive scenario modelling helps decision makers explore a range of potential future scenarios, the likelihood of them occurring, and the various pathways that can be pursued in response. It also allows decision makers and investment sponsors to maintain as much flexibility in decision making as possible, allowing deferral of major capital spend, while pursuing early interventions that do not preclude the pursuit of future opportunities.

Adaptive Planning Paradigm

Importantly, adaptive scenario modelling recognises that change and disruption can come from many different directions – not just climate change. Broader drivers of change and uncertainty, such as technology advancement, changes in community and consumer behaviour, as well as societal values and changing market conditions, are often overlooked or not thoroughly considered in evaluating potential future scenarios.

Adaptive Scenario Modelling in practice

Consider the two scenarios outlined above. An adaptive scenario approach would weigh up the likelihood and consequences of these different scenarios eventuating, and then seek to prioritise short term responses that have the potential to address more than one future scenario, or at the very least, do not prevent changing direction in the future.

In this example, both scenarios would benefit from prioritising short term demand management measures and encouraging mode shift to active transport. By contrast, in Scenario 2, there is benefit from short term investment in public transport, whereas in Scenario 1 there is not. This is not to say that public transport investment is not important, or should not be pursued, but consideration could be given to the timing of the investment and whether there are more effective means of tackling challenges in the short term, while keeping a wider view of what may be required in the future. The same logic can be applied at corridor level, to understand how a road function might need to adapt to changing needs over time.

Planning problems are wicked problems that demand a flexible approach. By adopting an adaptive pathways approach, strategic thinking, analytics and dynamic scenario modelling can be used to underpin decision making for better targeted infrastructure investments which respond to uncertainty and meet immediate needs. A balanced portfolio approach can deliver long term nation building to support current priorities, delivering real savings while driving economic recovery and community benefit.