Trade-offs Between Equity and Efficiency in Prioritizing Critical Infrastructure Investments: A Case of Stormwater Management Systems

Critical infrastructures in many countries face the problem of aging and, thus, require significant upgrades to continue serving their purpose for the next few decades, especially in the face of extreme weather events caused by global climate change. Given the urgent need for such improvements and the substantial funding gaps being experienced, prioritizing investments in critical infrastructures is a challenging task for governments. Furthermore, the need to assure equitable solutions, as well as to consider deep uncertainty due to climate change, adds to the complexity of the problem. We seek to address this complexity by developing a set of models that explicitly consider both horizontal and vertical equity, along with efficiency, in prioritizing stormwater infrastructure improvement projects. While horizontal equity seeks to provide equal resources to everyone, vertical equity aims to allocate relatively more resources to vulnerable groups who are disproportionately susceptible to shocks and are more likely to fall into chronic poverty. By differentiating between losses in horizontal equity and vertical equity due to efficiency considerations, the models provide a practical approach to find the right balance among efficiency, horizontal equity, and vertical equity. The initial models are then extended into regret-based optimization models to help address the issue of deep uncertainty. A case study of stormwater infrastructure improvement in the City of Miami is presented, through which the performance of the models is explored both with and without the projected sea-level rise scenarios. The findings highlight the value of the proposed approach in promoting equity while maintaining efficiency.