8. Decision support tools

Question 1

What are decision support tools?

Answer 1

Decision tools are techniques and instruments that can be used to identify, gather, organize and analyze the most important criteria that a decision maker takes into account to make a decision.

Question 2

Why do we use decision support tools?

Answer 2

We use them to get people together and to think about solving problems in a structured way.

Question 3

What is a CBA?

Answer 3

Cost-Benefit Analysis: assessing alternative scenarios based on monetary values

Question 4

What is an MCA?

Answer 4

Multi-Critera Analysis: assessing alternative scenarios based on a number of qualitative or quantitative criteria

Question 5

Why do CBAs sometimes have a discount rate?

Answer 5

Because they include a temporal dimension.

Question 6

What does a SCBA show?

Answer 6

SCBA provides an overview of the effects, risks and uncertainties and the resulting costs and benefits for society as a whole.

Question 7

Name at least 4 of the 8 steps of doing an (S)CBA

Answer 7

1. Problem analysis
2. Establish baseline
3. Define alternatives
4. Determine effects and benefits
5. Determine costs
6. Analyze variants and risks
7. Overview of costs and benefits
8. Presentation of results

Question 8

Why do we only count final services in a CBA?

Answer 8

We don’t want to count double.

Question 9

Name two ways in which one can measure quantitative effects for a CBA.

Answer 9

1. Business cases - case-based evidence
2. Empirical information - literature estimates on causal relationships
3. Dose-reponse functions - health effects of increase in air pollution
4. Experiments - flower beds on borders of farmland to increase pollination and productivity
5. Valuation of effects: economic valuation methods
6. Long term costs and benefits: choosing an appropriate discount rate

Question 10

What is the rule of thumb for deciding if an investment is economically viable?

Answer 10

When Net Present Value (NPV) is more than 0.

Question 11

What is a standard discount rate?

Answer 11

3% per year

Question 12

Name 2 potential problems of including final benefits only in a CBA.

Answer 12

• Assumption of linear relationships; in reality: tipping point leads to hysteresis
• It takes long to return to natural state
• Measuring final benefits only may obscure underlying negative trends in intermediary services
• Decline in biodiversity may not have direct effects now, but existence of tipping point may imply sharp decline in benefits later
• Measuring intermediary services, and getting insight into their roles in production functions of ESS is crushed

Question 13

Can MCAs have both quantitative and qualitative criteria?

Answer 13

Yes, measurable criteria can be both qualitative or quantitative and do not need to be in monetary terms.

Question 14

When do you include stakeholders in an MCA?

Answer 14

In each step of the MCA there is potential to include stakeholders.

Question 15

How does the inclusion of certain stakeholders affect the results of an MCA?

Answer 15

The choice of who to involve, when to involve them and to what extent will impact the results of the MCA

Question 16

What is an effects table?

Answer 16

In an MCA, the effects table shows the scoring of criteria of different alternatives.

Question 17

Name at least two ways criteria can be scored in MCAs.

Answer 17

• Ratio scale (euros; travel time)
• Interval scale (degrees C)
• Ordinal scale (—-/+++)
• Binary scale (Y/N)

Question 18

What is a potential problem when scoring for MCAs?

Answer 18

Subjectivity.

Question 19

Why is there weighting involved in MCA scoring? Name two reasons.

Answer 19

• Assuming equal importance can lead to unrealistic or skewed analysis.
• Important to consider which criteria matter most for the scope of the problem or goal

Question 20

What is a sensitivity analysis in MCAs?

Answer 20

A test to see to what extend are the results sensitive to assumption

Question 21

Name one similarity and three differences between MCAs and (S)CBAs.

Answer 21

• Both involve criteria selection, ranking, and evaluation
• MCA includes more stakeholders
• MCA has fewer rules
• MCA uses weighting
• MCA does not use time per se
• SCBA looks at population affected
• SCBA is concerned with monetary expressions
• SCBA always includes time

Question 22

Name at least 4 of the 7 steps in making an MCA.

Answer 22

1. Problem definition
2. Stakeholder analysis & engagement (continues throughout process)
3. Definition of alternatives
4. Definition of criteria
5. Weighting of criteria
6. Prioritization of alternatives
7. Policy implementation