Mini Case Analysis Paper

Mini-case studyYou do not need nor are you permitted to consult any other sources. This includes
Googling, Wikipedia, etc … !
The information in the case study along with the class notes and readings are sufficient
for your analysis. Also note that while this case study is based on factual information,
this is a simulated case and does not necessarily reflect any actual policy situation. Some
of the documents and data are invented. You are to treat them as real, but you may not
invent facts or documents yourself.
MEMO
To:
From:
Date:
Subject: Managing increased risks from hurricanes using seeding
The Administrator of the National Oceanic and Atmospheric Administration (NOAA) has
requested your assistance with a preliminary screening analysis of a pressing public
policy problem of how to manage the increased risks of hurricanes that are anticipated
under climate change scenarios.
After more than two decades of relatively little Atlantic hurricane activity, the past
decade saw heightened hurricane activity and more than $150 billion in damage in 2004
and 2005. Importantly, the 2019 hurricane season was the most expensive in U.S.
history. Any means of reducing the destructive force of hurricanes would therefore have
great economic and safety implications.
Currently, his scientists have been running limited experiments to “seed” hurricanes
with silver iodide crystals. Limited experiments supported by models suggest that
seeding could result in a 15% to 30% reduction in maximum wind speed.
Presently, any seeding of hurricanes that threaten inhabited coastal areas is prohibited
due to uncertainties about the risks. If the seeding of hurricanes threatening inhabited
coastal areas is to be undertaken, it will be necessary to modify the existing policies.
He is asking you to use what you know so far about how to structure “hard” decision
problems to help her understand the decision that he faces and to provide him with a
recommendation on whether to modify the existing policy on seeding hurricanes.
He has scoped the following questions:
1. Is better to seed or not to seed any given hurricane in the face of the economic
damages?
2. Does the potential for government liability for the decision to seed or not to
seed modify the seeding decision?
Attached is background information that has been pulled by his staff. You should restrict
yourself to the information in these documents. Please treat all documents as
confidential.
ANSWER THE FOLLOWING QUESTIONS
1) Understanding the decision maker and decision context
a) Who is the decision maker?
b) What are the decision maker’s values and objectives (What does she care
about)?
c) What is the context for decision? (Why is this a pressing problem now? who may
be demanding action? why?)
2) List all alternatives or options – including ones that she may not have considered
3) Identify the chance events or outcomes that may occur after the decision is taken
(e.g. what happens to the hurricane speed after she decides to seed? What happens to
the hurricane speed after she decides not to seed?)
4) Consequences – remember each objective needs a consequence
5) Structure these alternatives into a decision tree for the following two alternatives.
Be explicit about the decision for the tree.
a) Is better to seed or not to seed any given hurricane in the face of the economic
damages?
b) Is better to seed or not to seed any given hurricane in the face of the economic
damages and government liability?
6) Find (and/or estimate) the values in the background information package to
populate the trees. There may not be one single value.
7) Calculate the expected monetary values (EMV)
8) Develop recommendations for the decision-makers
a) First, you must make one clear recommendation (e.g. seed or don’t seed)
b) Second, are there other features that the decision maker should consider?
Background Information
Hurricanes
A tropical cyclone is a rotating low-pressure weather system that has organized
thunderstorms but no fronts (a boundary separating two air masses of different
densities). Tropical cyclones with maximum sustained surface winds of less than 39
miles per hour (mph) are called tropical depressions. Those with maximum sustained
winds of 39 mph or higher are called tropical storms. When a storm’s maximum
sustained winds reach 74 mph, it is called a hurricane. Hurricane Season begins on June
1 and ends on November 30, but these powerful storms can occur before and after the
official season. A hurricane can be an awesome and destructive force of nature.
The 2017 Atlantic hurricane season will now go down as the most expensive on record.
Two major hurricanes—Harvey and Irma—blasted the U.S. coast with winds exceeding
130 miles per hour (mph), and savage Hurricane Maria rocked Puerto Rico with winds
exceeding 155 mph.
Scientists are wondering whether the summer of 2017 may carry some warning signals
for future hurricane seasons. “It was indeed a remarkable season,” said meteorologist
Kerry Emanuel of the Massachusetts Institute of Technology. But Emanuel noted that “it
is hard to tease out a climate signal with statistical confidence” from the carnage of the
2017 season.
Still, in a recent article published in the Proceedings of the National Academy of
Sciences, Emanuel said human-influenced climate change “is expected to lead to a
greater incidence of high-intensity hurricanes” which, combined with rising sea level,
will increase flooding from hurricane-driven storm surges. Hurricanes also could
produce “substantially more” rainfall as the atmosphere and oceans become warmer,
he said.
Meteorologist Jeff Masters of Weather Underground said 2017 could be a harbinger of
seasons to come. “The brutal 2017 season was an awful reminder of the huge hurricane
vulnerability problem we face, and how unprepared we are for a potential future where
the strongest storms get stronger and push their storm surges inland on top of steadily
rising sea level,” Masters said.
From https://oceanservice.noaa.gov/facts/hurricane.html and
https://news.nationalgeographic.com/2017/11/2017-hurricane-season-most-expensiveus- history-spd/
Information on the Effects of Hurricane Modification
Present results on modifying hurricanes by introducing freezing nuclei into the clouds
surrounding the eye of a hurricane are encouraging but not conclusive. Meteorologists
believe that seeding having no effect on maximum sustained winds is as probable as
seeding causing a substantial reduction in maximum sustained winds. There is no basis
in the past experimental results for believing that properly conducted seeding will make
a storm worse; however, this cannot be ruled out either. Additionally, while it is unlikely
that seeding will cause a hurricane to be worse, it is conceivable that the storm will
become worse following seeding because of the erratic natural behavior of hurricanes.
Hurricanes are notoriously variable and unpredictable. Natural forces may cause the
hurricane to intensify or diminish by an amount larger than the effect of the seeding. On
the basis of present meteorological knowledge about the effects of seeding and the
variability of hurricanes, the following probabilities are assigned for the change in
maximum winds between initiation of seeding and arrival at the coast at twelve hours
thereafter.
Probability of Changes in Maximum Wind Speed for Modified and Natural Hurricanes
Change in wind speeds
Representative
Probability
of
Probability of wind
value
wind change for
change
seeding
seeding
Increase of 25% or more
+32%
0.038
0.054
Increase of 10 – 25%
+16。%
0.143
0.206
Little change (+10 to –
0%
0.392
0.480
Reduction of 10 to 25%
-16%
0.255
0.206
Reduction of 25% or
-32%
0.172
0.054
for
no
10%)
more
Costs and Logistics of Operational and Tactical Hurricane Seeding
•
•
Seeding experiments: Each experiment costs approximately $5 million. These
costs are primarily for the staff and variable costs (e.g. fuel for planes, data
collection and maintenance). The purpose of these experiment is to refine the
probabilities of observing a change in the maximum wind speed that will be
observed at landfall. It is expected that more experiments would refine the
probabilities for the results of the seeding, but it would take several experiments
and not all hurricanes are suitable for experiments.
Operational seeding: Based on the cost of an experiment that include both new
planes as well as staff and other operating requirements, the cost of seeding a
hurricane is estimated at $25 million per seeding. However, we note that there
may be unanticipated requirements – especially for monitoring – that may make
this estimate a lower plausible estimate.
Government liability from seeding hurricanes
After a careful review of the legal precedents, operational (as opposed to experiments)
seeding of hurricanes opens the government to potential liability. While it difficult to
assess monetary damages, we have developed ballpark estimates of the monetary
damages would likely be awarded.
•
•
•
For small increases in hurricane intensity between the time of seeding and
landfall, the government would likely be responsible for approximately 5% of the
total property damages.
For medium increases in hurricane intensity between the time of seeding and
landfall, the government would likely be responsible for approximately 30% of
the total property damages.
For large increases in hurricane intensity between the time of seeding and
landfall, the government would likely be responsible for approximately 50% of
the total property damages.
These damages are not very certain as there is no firm legal basis for operational
seeding and a better legal basis for government seeding activities is likely needed before
hurricane seeding could be considered other than as an extraordinary action. Specific
congressional legislation may be best means of investing a government agency with the
authority to seed hurricanes threatening the cost of the United States.
Further, where the mainland of the U.S. only is intended to be involved, there will
probably be no objections from any nearby foreign government. However, hurricanes
may enter the U. S. and move later into a foreign country. This may lead to more
complex negotiations and liability.
Maximum wind speeds and US hurricane losses
Hurricanes striking the United States cause many of the largest insured losses from
natural hazards. However, actual economic losses produced by hurricanes (and other
extreme events) are difficult to collect. Some scientists have determined the following
point estimates that you can use for your analysis for a representative hurricane.
Change in wind speeds
Representative
Economic damages (in millions of US
value
dollars)
Increase of 25% or more
+32%
33,5800
Increase of 10 – 25%
+16%
191,110
+16%
Little change (+10 to –
0%
100,000
Reduction of 10 to 25%
-16%
46,700
Reduction of 25% or
-32%
16,300
10%)
more
Name
Professor
Course name
Date
Mini-case Study
1) Understanding the decision maker and decision context
a) Who is the decision maker?
b) What are the decision maker’s values and objectives (What does she care
about)?
c) What is the context for decision? (Why is this a pressing problem now? who may
be demanding action? why?)
2) List all alternatives or options – including ones that she may not have considered
3) Identify the chance events or outcomes that may occur after the decision is taken
(e.g. what happens to the hurricane speed after she decides to seed? What happens to
the hurricane speed after she decides not to seed?)
4) Consequences – remember each objective needs a consequence
5) Structure these alternatives into a decision tree for the following two alternatives.
Be explicit about the decision for the tree.
Adding Decision Tree
a) Is better to seed or not to seed any given hurricane in the face of the economic
damages?
b) Is better to seed or not to seed any given hurricane in the face of the economic
damages and government liability?
6) Find (and/or estimate) the values in the background information package to
populate the trees. There may not be one single value.
7) Calculate the expected monetary values (EMV)
8) Develop recommendations for the decision-makers
a) First, you must make one clear recommendation (e.g. seed or don’t seed)
b) Second, are there other features that the decision maker should consider?
Cost of Seeding
minimize
economic
damages
by
reducing
wind speed
Seed
Do not Seed
economic damages (millions of dollars)
0.038
335,800
0.143
191,110
0.392
100,000
0.255
46,700
0.172
16,300
0.054
335,800
0.206
191,110
0.480
100,000
0.206
46,700
0.054
16,300