Economic valuation of hydrogeological information when managing groundwater drawdown

Journal article, 2019

A procedure is presented for valuation of information analysis (VOIA) to determine the need for additional information when assessing the effect of several design alternatives to manage future disturbances in hydrogeological systems. When planning for groundwater extraction and drawdown in areas where risks—such as land subsidence, wells running dry and drainage of streams and wetlands—are present, the need for risk-reducing safety measures must be carefully evaluated and managed. The heterogeneity of the subsurface calls for an assessment of trade-offs between the benefits of additional information to reduce the risk of erroneous decisions and the cost of collecting this information. A method is suggested that combines existing procedures for inverse probabilistic groundwater modelling with a novel method for VOIA. The method results in (1) a prior analysis where uncertainties regarding the efficiency of safety measures are estimated, and (2) a pre-posterior analysis, where the benefits of expected uncertainty reduction deriving from additional information are compared with the costs for obtaining this information. In comparison with existing approaches for VOIA, the method can assess multiple design alternatives, use hydrogeological parameters as proxies for failure, and produce spatially distributed VOIA maps. The method is demonstrated for a case study of a planned tunnel in Stockholm, Sweden, where additional investigations produce a low number of benefits as a result of low failure rates for the studied alternatives and a cause-effect chain where the resulting failure probability is more dependent on interactions within the whole system rather than on specific features.