Optimizing Use of Environmental Information in Decision Making:Beta Testing Information Products

EEA/USEPA23 September 2004BrusselsMary Altalo

HOW ENVIRONMENTAL INFORMATION PRODUCTS CONTRIBUTE TO SUSTAINABLE DEVELOPMENT

INFORM POLICY

GUIDE MARKETPLACE DECISIONS

MANAGE NATURAL RESOURCES

The sustainability of each nation is tied to the development and best practices management of economies , the fair governance and protection of societies and the cultivation of a habitable environmentOnly when all aspects of national well being are addressed will Nations thrive in the Global context. Allowing the observing system products to inform national policy, to guide market decisions, and safeguard the environment will engender the support of governments and businesses This will change the focus from designing a sustained observing system to an observing system for sustainable development.

Flow Charting Environmental Information in Policy Decisions

DATAINFORMATIONKNOWLEDGEACTIONOUTCOMESIMPACTSSOLUTIONS

Example: Weather Information Flow on the Decision Process and Value Chain in the Utilities Industryscheduling and load balancingasset management and replacemententerprise wide contingency and financial planningdemand reduction and price responsive loadsenvironmental dispatchcongestion managementNMSOtherWeather DataCollectionPresentValue-AddedService ProvidersWeatherDataFormattingWeather Data Analysis and IT Services: Quantify, source, cost and reduce weather data errorShortMidLong termLoad Forecasting WeatherDataPre-ProcessingDATAINFORMATIONKNOWLEDGEACTIONOUTCOMESIMPACTSLoad Model Error Analysis: ImproveSoftware and SupportEconomic/Performance Valuation of Weather Error ImpactsDecision Analysis, Dependencies and Support ToolsWeatherInformationIntegrationWeatherInformation EvaluationImproved profitIncreased EfficiencyImproved reliabilityIncreased safetyDecreased LiabilityDecreased RiskDecreased ExposureWeatherDecision SupportOperational Decisions

The Information Trial?An alternate way to assign value

Economic Cost-Benefit Analysis---ORIndustry/Policy Trials or Performance AssessmentUser-Supplier Partnership Environmental Forecasts becomes Business ForecastsImproved Skill of Environmental Forecast increases Skill of the Business Forecast, thus Demand PullRequires Integrated Information from Ocean, Weather, terrestrial and Climate Observing Systems at all scalesGuides Marketplace Decisions and StrategyInforms National Policy and StrategyPrioritises National S & T Strategy for Observing system design, implementation and operational decisions

VG3Return on InvestmentThere are many approaches to estimating value of Information from Observing SystemsThe first is through a cost benefit analysis approach, examples of which will be presented later this afternoon by my Colleague from NOAA Rodney Wehier.The second, rather different, but complementary approach is through what I will call an Business or Policy Trial where a Business End Use Partner and a Science Information Product Provider team to run a performance assessment in a real life situations Here, the environmental information product from the observing system is inserted into an operational business model and is transformed into a business or policy decision tool.The business models are run with and without the environmental information, scenarios are generated, consequences analysed, cost factors applied and performance assessed. As the skill of the forecast product increases so too does the skill of the business and policy forecastThus the Demand grows for the information productThis approachRequires Information from ALL the observing systems-Ocean, terrestrial, weather and climateThe trial approach actively engages the end user and the organizationThe outcomes are used to guide marketplace decisions, to inform national policy and to prioritize the S & T strategies for nations

Information Trial Approach

Situation AssessmentStarts with the Function of Decision MakingID Organisational Units making the decision into which environmental information fitsID business forecast models (tool set), formats, portalsID critical path from environmental information to business decision Gap AnalysisAssemble information to answer a questionGenerate scenariosAnalyse optionsEvaluate consequences (fiscal and risk)Feedback to Information Provider

The Method for this approach is a generic one, a template or roadmap which is portable to all policy makers in business and governmentsIt can be applied to all of the observing systems, ocean , atmospheric or terrestrialAnd can assess all products whether a historical data base or a forecast It begins with identifying the Decision to be made , problem to be solved, the method to be developed- that is the function for the informationIt identifies the organisational unit within a nation or business that needs the environmental informationIt precisely identifies the business models and formats and the portals where data can enterTogether the provider and user tailor the information to the needThey assimilate the informationGenerate the business or policy scenarios with and without the new informationThey analyze the options and evaluate the consequencesThe evaluation can be in the form of a fiscal one- how much money can be savedIt can also be in the form of risk to reputation in the public view

Applicable to the Value Chain Structures of Governments as well as Industry

INDUSTRY

GOVERNMENTS

MINISTRIES/AGENCY

This value chain organization applies equally to industry, governments and nations and thus environmental information generated must enable the organization to function more efficiently, cost effectively, more safely

INFORMATION TRIALS Environmental Information Product Performance Assessment in Business Operations and Policy Development

Utilities-Energy Pricing & 4hr forecasts of temp./ sea breeze - Scottish PowerOil and Gas- Regional Energy infrastructure master planning and climate/ocean conditions - BPConstruction- Building codes & standards with 20 year heat/ precipitation/sea level forecasts- Building Research EstablishmentLeisure - Revenue projections and seasonal temperature/ppt forecasts The Starwood Group, Europe/AfricaFinance Financial Risk Rating Index and air/water quality and climate forecasts- SERM Rating AgencyHealth and EM- Coastal metropolitan health alert planning and met/AQ forecasting

The business and policy trials which we are commencing are associated with 6 European regions and industries.The overall Purpose is to assess the performance of weather, climate, and ocean information in the tactical operation and strategic planning decisions of the major sectors of the EU economyApproach : is to infuse the new information into the business models and measure how the increase skill of the business projection increases with the increased accuracy of the environmental informationThe 1st trial is in the utilities sector Our industry host is Scottish power. They assimilate weather forecast information in the pricing models and will assess the need for higher resolution information in these modelsThe 2nd trial is in the oil and Gas hosted by British Petroleum in which regional energy management plans will be developed with and without climate projectionsThe 3rd is in the Construction industry hosted by the Building research Establishment where the input of environmental conditions predictions will be assessed in the development of where building codes and bridge design standardsThe 4th is in the recreation and tourism industry in the accommodations sector hosted by Starwood to assess the value of seasonal forecast in revenue projectionsThe 5th is in the financial services sector, hosted by SERM, a Risk Rating Agency, where new water/air quality and climate information will be assessed in the financial risk rating of companies The sixth is in the health and emergency management sector hosted by NERI where real time met and AQ data will be evaluated in the Emergency Management strategies of large citiesI will go through two of the case study, Business trials in Detail One in the toruism sector and one n the construction industry

BRE Trial to Inform Sustainable Construction Policy

Q? Can the improved regional decadal scale climate forecasts of heat, ppt and wind improve the codes and standards for urban construction in Southern Europe resulting in more sustainable shelter?

In as second trial, we wish to team with the construction industry to examine the impact of using regional decadal scale forecasts of ppt, heat and wind to setting codes and standard for construction materials and design of shelter in Southern Europe.Our host partner is the Building Research Establishment, a NFP solely owned subsidiary of the Foundation for the Built environmentIt is a national leading centre of expertise on building and construction, risk sciences and the prevention and control of fire. It Helps Set European and International loading standards, design philosophy and structural safety and a major contributor to the Structural Eurocodes, and ISO standardsIt is responsible for bridge standards and development of software for bridge design and port infrastructure It is a Testing facility with large laboratories for the assessing the performance of structures and materialsIt is also an Implementing body--for the European Construction Products Directive (CPD) through certification and training

We are working with the Project Manager, for Risk and InsuranceShe is responsible for the developing BREs business plan for the insurance industry, She reports her findings to the standards setting bodies of the EU and other nations. The test scenario will focus on an area in the southern Mediterranean region where insulation against heat flow to the inside is an important factor. The interaction of various weather parameters in addition to seismic, volcanic, wild fire and periodic flooding risks, are factored into the model to determine minimum resilience levels of building structures. From the conclusions drawn from the running of the model with forecast environmental conditions, an assessment of the need for new or revised building codes can be made. The information will be obtained from the national weather services along with the ECMWF Information on seismic and vegetation (for fire risk) predictions will be obtained from the terrestrial observing networks and programs. The ocean information such as sea level changes and wave height/storm prediction will be obtained from EuroGOOS with consultation from the newly formed MAMA program.The environmental information will be used to set up initial conditions for design testingNew information will be accommodated in the scenario runs and software will be developed to ensure that the data and information from the providers is in a format readily assimilated by the testing models. The uncertainties associated with the forecast will also be built in to the model runs. Once the environmental predictions are incorporated, scenarios can be run for different building materials. Information on the best format for the variable can be valuable feedback to the forecast provider.The increased accuracy of the forecast will allow a greater safety margin to be built into the designs of the structures which can save lives in the future. In addition, better design will be more cost efficient with fewer repairs or retrofits.Information, such as the optimal scales of the forecasts, both geographically as well as temporally can be of value to the observing system provider community so as to optimally configure observing systems for optimal future construction industry considerations.

Building Industry Decisions Requiring Environmental InformationSeismic/soilAir/water QualitySea Level/beachSSTRed tidesPpt/tempClimate, ppt, temp, windsFire riskStorm surgeWindsSea breezePrecipitation

T,humidity,cloud cover, pptAir qualityEmissions/air and water

The Power of Linking Decision Support Tools to get a Solution Set

Severe Weather/Climate/Ocean Forecast + Impact Assessment on Operations + Emergency Power Dispatch Management

Decision Support Tools Analyze and Inform Decision Making

Electricity Visualization and Modeling at the Distribution Level is EssentialUsing the existing GIS from utilities and state & federal agenciesImport Electrical DataIdentify Critical CustomersAssess ConsequencesImprove Mitigation Approaches

The Solution: Linking Weather Forecast Simulation Tools with Emergency Response Simulation Tools for Severe Weather Emergency Energy ManagementStorm Tracking with simulation tool- predict hurricane landfallEmergency preparedness with CATS(consequence assessment tool set)Locate critical energy assets, estimate damage and position for reliefExpert GridManagement Situational Awareness and Power RestorationManagement ToolData-InformationKnowledgeAction and Outcomes

Chem-Bio Weather Forecasts and Dispersion Models Predict Hazards and Allows Mitigation

Using Environmental Information for Operational And Policy Advantage

I. Introduction: Driving principles for managing with environmental informationWeather/climate impacts on global market segments Framework A. Framework for Problem IdentificationRole of weather on business/government processes-Use of environmental information in the business/government value chain ,B. Framework for Problem SolvingTranslating weather data into business or policy solutions Deriving a Business/ Policy SolutionA. From Data to InformationConverting data to knowledge process Global Observing SystemStatistical measurements, pattern analysis B. From Information to Knowledge (of risks and impacts on business/policy performance)Actions to outcomes to impacts to solutionsEconomic valuation of weather riskAssessing vulnerability to riskDiagnostic approach to assessing vulnerabilityManaging information to hedge risk C. From Knowledge to Action/Decision Strategic decisionsRe-engineering business processes for managing with environmental information Leadership issuesPlanning decisionsRisk hedging financial/insurance decisionsTactical Decisions Selecting decision tools (was producing a decision tool)Scenario analysis--Academic reading: Decision treesLinking decision tools to get a solution Case: Western Energy D. Implementation and EvaluationThe audit process Satisficing/ scrutiny

Topics Introduced Driving Principles for Managing with Environmental InformationWeather/Climate Impacts on Global Market SegmentsRole of Weather on Business ProcessesUse of Environmental Information in Business Value ChainTranslating Weather Data into Business SolutionsConverting Data to Knowledge ProcessGlobal Observing System DataEconomic Valuation of Weather RiskAssessing Vulnerability to RiskDiagnostic Approach to Assessing VulnerabilityManaging Information to Hedge RiskRe-engineering Business Processes for Managing with Environmental Information Leadership IssuesRisk Hedging financial/insurance decisionsSelecting a Decision ToolScenario AnalysisLinking Decision Aids to get a Solution Set The Audit Analysis Satisficing/ Scrutiny- when is there enough information

Value Chain Organization of CONOCO: Engages the Business Units & Functional

Strategic planningRisk assessment -Political -Safety/environ. -Social impact -Economic Host gov negotiation

Field development planRisk assessment next level Sustainable development plan next levelProduction wells -Land based pads -Offshore platforms -Supply systemsField processingTransportation system

Crude oil gathering systemsTerminals and trucks Overland crude oil pipelines Offshore underwater pipelines FPSO & shuttle tankers Inland waterway bargesTankers design

Oil refineriesFloating processing tankersFixed platform processingDeepwater tension leg platformsNatural gas processingCarbon fibers Natural gas refiningSafety, environment, and social issues

Liquid product pipelinesGas pipelinesLPC pipelinesProduct terminalsTruckingInland waterway bargesProduct tankersEnvironment/ social issues

Business strategyDemand forecasting - Economic growth - Energy switching - Weather/ climateSupply forecastingHedging and futuresTransportation and inventory

Seismic evaluation Land prospect Underwater prospect Risk assessments Sustainable development plan Exploration and drilling Economic assessment Strategic alliances

Listen-Understand Balance Quality, Flexibility,CostSafety & Environment NIMBYCompetition

Cross Cut Functions: Planning, compliance, risk, accounting,

Here we look at the structure of a major oil company CONOCO which exemplifies this value chain organizational structurestructureThe Business Units at CONOCO are organized around their supply chain. These are shown in greenEach business unit functions in a specific role in the overall performance of the corporationThere are certain functions that are unique to a business unit such as govt negotiations and accessThere are other functions which are cross cutting such as strategic planning, compliance reporting, operations management, risk management, fiscal accounting Each of the Business unit functions on this vugraph require some environmental information for decision makingMany are formalized in models such as demand and supply forecasting

Project ObjectivesIdentify optimal NOAAproduct definitions supportingEnergy industry planningrequirementsProject ObjectivesIdentify optimal NOAAproduct definitions supportingEnergy industry planningrequirementsPlanning RequirementsLoad forecastShort-term pricingLoad flow managementPower purchasesPlanning RequirementsLoad forecastShort-term pricingLoad flow managementPower purchasesCostMarginal Benefits/DecisionsAttractiveProductsNot AttractiveProductsSupply CurvePractitionersPanelNE ISOCon EdisonPJMSUNYPractitionersPanelNE ISOCon EdisonPJMSUNYData Providers(NOAA NWS, OAR,ARL, FSL,, EPA, NCEP, NASA)Data Intermediaries(EarthSat, WNI, AWS)Project ObjectivesIdentify optimal NOAAproduct definitions supportingEnergy industry planningrequirementsProject ObjectivesIdentify optimal GOOSproduct definitions supportingthe industry planningrequirementsTask 1.Base CaseSituation AssessmentProject InitiationDefine Current PracticeDefine Planning NeedsEvaluate current dataStrengths and weaknessesTask 1.Base CaseSituation AssessmentDefine Current PracticeDefine Planning NeedsEvaluate current dataStrengths and weaknessesTask 2.Gap AnalysisApply Perfect CaseIdentify GapsEvaluate NOAA PrototypesTask 2.Gap Analysis/Test Case Apply Perfect CaseIdentify GapsEvaluate GOOS PrototypesTask 3.Cost-BenefitIdentify costs and benefitsReview and select methodologyApply MethodologyRecommend Ideal/Most Optimal ProductTask 3.Cost-BenefitIdentify costs and benefitsReview and select methodologyApply MethodologyRecommend Ideal/Most Optimal ProductPlanning RequirementsLoad forecastShort-term pricingLoad flow managementPower purchasesEnergyPlanning RequirementsLoad forecastShort-term pricingLoad flow managementPower purchasesCostMarginal Benefits/DecisionsAttractiveProductsNot AttractiveProductsEnvironmental InformationSupply CurvePractitionersPanelNE ISOCon EdisonPJMSUNYPractitionersPanelBPScottish PowerStarwoodBREData Providers(Eurogoos,ECMWFNWS, Ifremer, NCEP, ODINData Intermediaries

Starwood Hotel TrialMarbella, Spain

Can seasonal environmental information improve the accuracy of Revenue Forecasting in the Iberian Peninsula?

In the first case, we are working with the hotel and accommodation industry in SpainThe specific property with which we are working is The Westin La Quinta Golf Resort in Marbella, SpainThe organizatinal chart is shown here It is part of Starwood Hotels & Resorts Worldwide, Inc., owners of the Westin and Sheraton chainIt operates in 80 countries and employing 120,000 peopleThe Starwood Group sets standards for all its properties, and ensures adherence to a number of policies and procedures. such as the Environmental Risk/Disaster Preparedness procedures Every business unit in the Starwood group uses environmental information to some degree in its decisions and operationsWe are working with the hotel's Revenue Manager who is responsible for proper yielding, implementation of Revenue Management strategies, demand and capacity forecasting,and market analysisHe is responsible for the revenue projections for the resort as well as is in the group He reports his findings to the president to the shareholdersThe business planning model that he uses is yield management modelSpecifically he calculates Revenue per available room (Rev PAR) for different time periodsRevPAR is one of the industry performance metrics that allows the shareholders to judge the companies performanceIt is a pricing model which is influenced by tourist demand (forecasting)

The performance question that we want to answer by the trials is can the improved seasonal forecast of temperature and ppt, surf and ocean conditions result in better demand forecasting for the property and the region?They have agreed to prepare the business forecast models to incorporate the new environmental data are on 2 scales: the regional and the local scaleThe various scenarios that are generated will be compared and evaluated in terms of the resulting impacts on the actions to be taken by the hotel management.These assessments will be assigned a monetary value by the revenue manager for the purpose of weighing the consequences of incorporating the environmental information into the scenarios. The information will be fed back to the observing system-partner for consideration.

Value Chain Organization of Starwood: Business Units & Functions Requiring Environmental Information

Here we look at the structure of a major oil company CONOCO which exemplifies this value chain organizational structurestructureThe Business Units at CONOCO are organized around their supply chain. These are shown in greenEach business unit functions in a specific role in the overall performance of the corporationThere are certain functions that are unique to a business unit such as govt negotiations and accessThere are other functions which are cross cutting such as strategic planning, compliance reporting, operations management, risk management, fiscal accounting Each of the Business unit functions on this vugraph require some environmental information for decision makingMany are formalized in models such as demand and supply forecasting

Starwood Hotel TrialMarbella, Spain

Can seasonal environmental information improve the accuracy of Revenue Forecasting in the Ibearian Penninsula?

In the first case, we are working with the hotel and accommodation industry in SpainThe specific property with which we are working is The Westin La Quinta Golf Resort in Marbella, SpainThe organizatinal chart is shown here It is part of Starwood Hotels & Resorts Worldwide, Inc., owners of the Westin and Sheraton chainIt operates in 80 countries and employing 120,000 peopleThe Starwood Group sets standards for all its properties, and ensures adherence to a number of policies and procedures. such as the Environmental Risk/Disaster Preparedness procedures Every business unit in the Starwood group uses environmental information to some degree in its decisions and operationsWe are working with the hotel's Revenue Manager who is responsible for proper yielding, implementation of Revenue Management strategies, demand and capacity forecasting,and market analysisHe is responsible for the revenue projections for the resort as well as is in the group He reports his findings to the president to the shareholdersThe business planning model that he uses is yield management modelSpecifically he calculates Revenue per available room (Rev PAR) for different time periodsRevPAR is one of the industry performance metrics that allows the shareholders to judge the companies performanceIt is a pricing model which is influenced by tourist demand (forecasting)

The performance question that we want to answer by the trials is can the improved seasonal forecast of temperature and ppt, surf and ocean conditions result in better demand forecasting for the property and the region?They have agreed to prepare the business forecast models to incorporate the new environmental data are on 2 scales: the regional and the local scaleThe various scenarios that are generated will be compared and evaluated in terms of the resulting impacts on the actions to be taken by the hotel management.These assessments will be assigned a monetary value by the revenue manager for the purpose of weighing the consequences of incorporating the environmental information into the scenarios. The information will be fed back to the observing system-partner for consideration.

Leisure Industry Needs

.

Minutes

Hours

Days

6 10 Days

8 14 Days

Months

Seasons

Years

Forecast Uncertainty

Forecast Uncertainty

Forecast Lead Time

Building energy mngt.Disaster risk mngt.Daily staff briefingsDaily guest informationIntelligent infrastructureCruiseship positioningSnowmaking

Fuel supply procurementBackup generation plansMarketing (brochure , radio, ) developmentAnnual insurance reviewInventory managementCruiseline destination planningConvention biddingPremium/deductible setting

Hotel group managementCruise ship routing & ETAOutdoor activities planning Transportation logisticsMaintenance schedulingStaff schedulingConditions forecasts

Sales/earnings forecastingStock pricingFood service/supply procurementGroup properties budgetingUnit price setting Rev par estimationSeasonal occupancy forecastsDelivery rate settingCompliance reporting

Infrastructure designLandscape designAccess planningRegional infrastructure planNew hotel capacity plansMitigation strategy designInfrastructure sitingBuilding code settingDevelopment Master planning and revisit\Regional Policy plansFederal Policy Development

Recreation/ Tourism Operations Aided by Reductions in Environmental Forecast Uncertainty

The specific operational needs of the Recreation and Tourism sector for weather, climate and ocean forecast information are shown on a time line extending from minutes to decades.At every scale of forecast product, there are business and policy models in this industry which can ingest the information to improve an operation or decisionFor example, the proper function of the building engineers in HVAC control requires short term forecasts on less than a day time frameCruise ship positioning requires ocean condition forecasts on the 1 to 2 week time scaleSales and earnings of the hotel industry require month ahead forecast inputsProcuring the fuel supplies for convention and resort facilities requires seasonal forecast informationAnd new recreational boating facilities planning requires 5 to 10 year forecasts of sea level, ppt, temperatureAs the skill of the environmental forecast information improves so too does the correctness of the business or policy decisionIt is in the Starred are of the upper left hand box that our business trial is taking place, requiring monthly, seasonal and annual forecast information

The sustainability of each nation is tied to the development and best practices management of economies, the fair governance and protection of societies and the cultivation of a habitable environment. Only when all aspects of national well-being are addressed will Nations thrive in the Global context. Allowing the observing system products to inform national policy, to guide market decisions, and safeguard the environment will engender the support of governments and businesses. This will change the focus from designing a sustained observing system to an observing system for sustainable development. What does this refocusing mean? NEW PERFORM METRICS, NEW AWARENESS, NEW TEAMS, new productsNew metrics as to the value of a product? Sustainability Indicators- GRI, Moody, Standard and PoorWhat is success in this old context?- answered research needsNew context- answers economies and societies needsThis focusing of the product development to serve the needs of societies and economies as well as the research needs of the environmental community, make each a valued customer of the information.It actually raises the potential value of the product and the responsibility of applying itNew products will be robust and dual use

As the ocean observing system network becomes mature and information flow is enhanced, knowledge of the business and policy applications of the information will guide further design improvements.

Data sources, reliability, GOOS, COOP, value added

Morph

Next stp is info to amoact piecr of info flowOrganism as control adaptve mechEnergy flow theough biol sys= moroPattern analysis and probabilThere are many approaches to estimating value of Information from Observing Systems.The first is through a cost benefit analysis approach, examples of which have been done on a number of observing systems in various countries. In our estimate it underestimates the value if product is new or not recognizedThe second, rather different, but complementary approach is through a Industry trialIt is a Proactive approach where a Business End Use Partner and a Science Information Product Provider team to run a performance assessment in a real life operations Here, the environmental information product from the observing system is inserted into an operational business model and is transformed into a business or policy decision tool.The business models are run with and without the environmental information, scenarios are generated, consequences analysed, cost factors applied and performance assessed. As the skill of the forecast product increases so too does the skill of the business and policy forecast. Thus the Demand grows for the information product.This approach requires Integrated Information from ALL the observing systems-ocean, terrestrial, weather and climate. The trial approach actively engages the end user and the organizational unit in which he functions The outcomes are used to guide marketplace decisions, to inform national policy and to prioritize the S & T strategies for nations.

Starts with the decision to be made and why the decision is often wrong- ie busts the energy load forecast because of on set of seabreeze, power on or off, open dam, Looks at historical trends an doverlaysOrganizational unit impt because profitability reporting structureTool set usedEntry points for environmental info- interdependencies of operation on

Roadmapping demand pullCritical pathway analysisWhat I want to do is to define or the critical path by which the information enters , is assimilates goes into the decision aid and catalyzes an action To do this, I have developed a process Generic concept portable to all governments, industries, observing systems and productsIt is an Approach which Addresses the common needs of Organizational structures-It is important that the observing system products be used to address the common governance issues of governments, ministries, businesses, and societies. Nations are an Organization of Organizations. As such, all have cross cut management and governance activities. All have strategic planning and tactical planning activities for operations. All have infrastructure concerns. All have fiscal concerns and resource allocation activities. All have technical and safety concerns. All have stock holders, regulators or the public to which they report and are held accountable for the investment returns.Organizational structure usually reflects the value chain and these cross cut issues apply to all of the divisions of government and business units.This value chain organization applies equally to industry, governments and nations and thus environmental information generated must enable the organization to function more efficiently, cost effectively, more safely. This value chain organization applies equally to industry, governments and nations and thus environmental information generated must enable the organization to function more efficiently, cost effectively, more safely.

The business and policy applications that we present here are associated with 6 European regions and industries. The overall purpose has been to assess the performance of weather, climate, and ocean information in the tactical operation and strategic planning decisions of the major sectors of the EU economy. The approach is to baseline/benchmark how environmental information is currently used in each of the operations and develop a roadmap for the infusion of the new information into the business models and measure how the increase skill of the business projection increases with the increased accuracy of the environmental information. The 1st trial is in the utilities sector. Our industry host is Scottish Power. They assimilate weather forecast information in the pricing models and will assess the need for higher resolution information in these models. The 2nd trial is in the Oil and Gas hosted by British Petroleum in which regional energy management plans will be developed with and without climate projections. The 3rd is in the Construction industry hosted by the Building Research Establishment where the input of environmental conditions predictions will be assessed in the development of where building codes and bridge design standards. The 4th is in the Recreation and Tourism industry in the accommodations sector hosted by Starwood to assess the value of seasonal forecast in revenue projections. The 5th is in the financial services sector, hosted by SERM, a Risk Rating Agency, where new water/air quality and climate information will be assessed in the financial risk rating of companies . The 6th is in the health and emergency management sector where real time met and AQ data will be evaluated in the Emergency Management strategies of large cities. Impossible to show all so will show FINANCIAL SERVICES, R&T AND CONSTRUCTIONIn a third trial, we are to team with the construction industry to examine the impact of using regional decadal scale forecasts of ppt, heat and wind to setting codes and standard for construction materials and design of shelter in Southern Europe.Our host partner is the Building Research Establishment, a NFP solely owned subsidiary of the Foundation for the Built environmentIt is a national leading centre of expertise on building and construction, risk sciences and the prevention and control of fire. It Helps Set European and International loading standards, design philosophy and structural safety and a major contributor to the Structural Eurocodes, and ISO standardsIt is responsible for bridge standards and development of software for bridge design and port infrastructure It is a Testing facility with large laboratories for the assessing the performance of structures and materialsIt is also an Implementing body--for the European Construction Products Directive (CPD) through certification and training

We are working with the Project Manager, for Risk and InsuranceShe is responsible for the developing BREs business plan for the insurance industry, She reports her findings to the standards setting bodies of the EU and other nations. The test scenario will focus on an area in the southern Mediterranean region where insulation against heat flow to the inside is an important factor. The interaction of various weather parameters in addition to seismic, volcanic, wild fire and periodic flooding risks, are factored into the model to determine minimum resilience levels of building structures. From the conclusions drawn from the running of the model with forecast environmental conditions, an assessment of the need for new or revised building codes can be made. The information will be obtained from the national weather services along with the ECMWF Information on seismic and vegetation (for fire risk) predictions will be obtained from the terrestrial observing networks and programs. The ocean information such as sea level changes and wave height/storm prediction will be obtained from EuroGOOS with consultation from the newly formed MAMA program.The environmental information will be used to set up initial conditions for design testingNew information will be accommodated in the scenario runs and software will be developed to ensure that the data and information from the providers is in a format readily assimilated by the testing models. The uncertainties associated with the forecast will also be built in to the model runs. Once the environmental predictions are incorporated, scenarios can be run for different building materials. Information on the best format for the variable can be valuable feedback to the forecast provider.The increased accuracy of the forecast will allow a greater safety margin to be built into the designs of the structures which can save lives in the future. In addition, better design will be more cost efficient with fewer repairs or retrofits.Information, such as the optimal scales of the forecasts, both geographically as well as temporally can be of value to the observing system provider community so as to optimally configure observing systems for optimal future construction industry considerations.

If we look at another industry, we see some of the changing responsibilities of the companies which intensify their need for environmental information. There is need for the incorporation of New Environmental Information into the Financing, Construction, and Operation of Construction Projects. BOVIS Lend Lease is a leading global construction companies are expanding their operations to include not only the construction phase of the project. This companys value chain now spans from the financing of a project through the land development and facility design phase , through the construction phase and into new territory, the operations and maintenance of the property.These added responsibilities are increasing their need for environmental information so as to decrease their risk and vulnerability. BOVIS can minimize the financial risk to investment by incorporating new environmental forecast information such as regional temperature, air quality, winds, precipitation, seismic, frost levels, etc estimates out to 30 years. This enables Lend-Lease investment portfolios to be compiled which have in them scientifically-based environmental predictions about the future conditions of the building site (before , during and after the construction phase), often used for insurance purposes as well.BOVIS can incorporate environmental forecast information into all phases of the construction siting, design, materials, scheduling and compliance reporting of a project. For example, 1.Appropriate materials: - development of new materials in response to changing climate conditions - use of appropriate (i.e. fit for purpose) materials to withstand weather and climate conditions (how will climate change affect these?) (e.g. plastic is more durable than wood in damp conditions)- help companies / developers get out of the mindset of always going for the least cost option, e.g. on equipment such as boilers, chillers, etc. (= an awareness raising / training program?)Siting:- weather and climate, together with other (economic) factors, influences the location decisions of structures (from hotels to office blocks to residences)-also impacts the orientation of the building on the site3. Designa. energy efficiency through design solutions (natural air flows; shade, shelter; fuel type and usage; generation of emissions; use of natural systems4. Scheduling:a. drafting construction contracts: weather, climate and ocean information & construction schedules (completion dates, penalty clauses, building durability, QC)b. budgeting (e.g. incorporate days delay due to possible unfavorable conditions) 5. Compliance:a. compliance with building regulations; insurers requirements; and HSE requirements, which are largely weather and climate determinedb. building codes development, updating & testing; consultancy services provision to inform developers of codes in an area where they are going to buildBOVIS can factor in the real time, and seasonal to interannual weather and climate predictions into the operations and management phase of the Business such as heating and cooling, procurement, staffing, property maintenance, and insurance. For example,1. Real-time energy management for cost savings: using real-time environmental information of temperature, humidity, in building design and construction to make buildings run more efficiently, safely and economically2. Building air quality conditions monitoring and modification (recycled vs. continuous air intake regimes) : using ambient weather/climate, (e.g. through sensors linked to software for key parameters temp. humidity, air quality (such as SOX, NOX, PM, Ozone and even biohazards detection)3. Procurement Process Factor: using the 3-6 month , local forecasts of temperature, icing, precipitation, for bulk items such as salt for freezing/snow conditions; plywood for use in hurricane conditions; fertilizer applications carried out only under specific weather conditions4. Building maintenance regimes : factoring the 1 month to 1 year regional climate forecasts such as in coastal areas factors such as salt erosion, high winds, sand battering leading to rapid deterioration of structures- determining renovation and materials replacement schedules5. Preventive maintenance or retrofit :for example, toxic mould may arise largely as a result of climatic conditions interacting with unsuitable construction materials (presents a health hazard, and a liability on the part of the owners/managers) 6. Staffing levels: to some extent are dependent on the activities and operations scheduled to be carried out, some of which are weather influenced. Advanced accurate warning of conditions can render greater efficiencies in deployment of staff resources7. Insurance: Insurers maintenance requirements are influenced by prevailing weather and climate conditions8. Emergency/Risk Management Procedures: Real time hazardous conditions monitoring and forecasting so as to inform the required emergency management plans of the building sites.

This method helps map the critical infrastructure with environmental forecasts for disaster management. The work helps emergency managers to identify, prioritize and coordinate the protection of critical infrastructure. The results of models are shown here. A succession of chemical release toxic clouds (clockwise from center above) 20,000 pounds of dynamite placed at Union Station in Washington DC a three-dimensional blast model showing the effects that buildings have on mitigating the explosion an accidental or intentional release of a toxic material into a river and the down-stream water intakes that must be protected and interior view of a building and the spread of a toxic through the ventilation system and sensors that help to monitor all these kinds of hazards, some developed by SAIC and others integrated by SAIC into comprehensive emergency management systems.You can run the industry trial in a business unit- the easiest waythe structure of a major oil company CONOCO, a major international oil and gas company that operates in 40 countries around the world, exemplifies the importance of environmental information in this value chain organizational structure. The Business Units at CONOCO are organized around their supply chain (Parker, D. 2001.) that are shown along the top of the Figure. Each business unit functions in a specific role in the overall performance of the corporation. There are certain functions that are unique to a business unit such as government negotiations, which are the primary responsibility of the Access Business Unit. There are other functions which are cross cutting such as long range planning, compliance reporting, operations management, risk management, fiscal accounting. Each unit performs these cross cutting functions. Each of the Business unit functions on this figure require some environmental information for decision making. Many are formalized in models such as demand and supply forecasting. Others are more ad hoc such as crisis management in the event of a natural disaster. Viewing the information needs in this way attaches the informtion to a structureThe methodology set out as a project plan with specific deliverables and objectivesShows the feedbacks and the deliverablesWe have done a number of sector specific needs assessment reports which have outlined the t/s requirements for climate weather and ocean information in business decisions. These are on the GOOS web site for energy and r and t.In the first case, we are working with the hotel and accommodation industry in SpainThe specific property with which we are working is The Westin La Quinta Golf Resort in Marbella, SpainThe organizatinal chart is shown here It is part of Starwood Hotels & Resorts Worldwide, Inc., owners of the Westin and Sheraton chainIt operates in 80 countries and employing 120,000 peopleThe Starwood Group sets standards for all its properties, and ensures adherence to a number of policies and procedures. such as the Environmental Risk/Disaster Preparedness procedures Every business unit in the Starwood group uses environmental information to some degree in its decisions and operationsWe are working with the hotel's Revenue Manager who is responsible for proper yielding, implementation of Revenue Management strategies, demand and capacity forecasting,and market analysisHe is responsible for the revenue projections for the resort as well as is in the group He reports his findings to the president to the shareholdersThe business planning model that he uses is yield management modelSpecifically he calculates Revenue per available room (Rev PAR) for different time periodsRevPAR is one of the industry performance metrics that allows the shareholders to judge the companies performanceIt is a pricing model which is influenced by tourist demand (forecasting) The performance question that we want to answer by the trials is can the improved seasonal forecast of temperature and ppt, surf and ocean conditions result in better demand forecasting for the property and the region?They have agreed to prepare the business forecast models to incorporate the new environmental data are on 2 scales: the regional and the local scaleThe various scenarios that are generated will be compared and evaluated in terms of the resulting impacts on the actions to be taken by the hotel management.These assessments will be assigned a monetary value by the revenue manager for the purpose of weighing the consequences of incorporating the environmental information into the scenarios. The information will be fed back to the observing system-partner for consideration.

It is interesting to see where the property fits on the RADAR SCREEN OF THE STARWOOD HODING COMPANYAGAIN THE ORG CHART AND SPECIFIC FUNCTIONS NEEDING ENVIRON INFOWHILE A TRIAL COULD BE RUN AT ANY SITE OF THE 190 While the hotel example demonstrates the need for info, the industry is diverse and the needs greatThe specific operational needs of the Recreation and Tourism sector for weather, climate and ocean forecast information are shown on a time line extending from minutes to decades.At every scale of forecast product, there are business and policy models in this industry which can ingest the information to improve an operation or decisionFor example, the proper function of the building engineers in HVAC control requires short term forecasts on less than a day time frameCruise ship positioning requires ocean condition forecasts on the 1 to 2 week time scaleSales and earnings of the hotel industry require month ahead forecast inputsProcuring the fuel supplies for convention and resort facilities requires seasonal forecast informationAnd new recreational boating facilities planning requires 5 to 10 year forecasts of sea level, ppt, temperatureAs the skill of the environmental forecast information improves so too does the correctness of the business or policy decisionIt is in the Starred are of the upper left hand box that our business trial is taking place, requiring monthly, seasonal and annual forecast information

To this end, we have launched an effort at the IOC to engage the business community in the observation partnershipDual purposeWe see that the purpose is of awareness raof the business community of what observ products can do for themWhat the business community can do to for the science provider- focused product, levergaed investment, a voice, a lobby, a visability, a purposePrepare the business community to receive the informtion products and to maximize its utilityAnd in the eords ofd Kofi annan- this is not an optiom it is a necessary step to global peace and social justiceThank you for your attention