FINAL REPORT - International Joint Commission

ANNEX 2
Importance of the Stochastic Analysis
The 50,000-year stochastic supply sequence was used to generate reliable estimates of average annual
damages for the Lake Ontario and lower St. Lawrence River flooding performance indicators. As part of
the analysis, each flooding event was considered to be independent, and the long supply sequence gives a
good representation of the possible range of water levels for the various plans. For the Lake Ontario erosion
and shore protection maintenance performance indicators, there is a serially dependent component to the
economic calculation due to the need to measure the amount of erosion or undercutting that occurs along
a section of the shoreline over time. On the advice of the economic advisors, the ability of a plan to delay
erosion or shore protection maintenance damages was required to be evident in the evaluation. As a result,
the 50,000-year stochastic supply sequence was broken up into 495 sequences of 101 years, and each plan
evaluated using all the sequences. The average damage was determined for each quarter-month using
the 495 supply sequences, and the results were discounted to a present value to represent the impact of
postponing the damages. As recommended by the economic advisors, a discount rate of 4% over a
thirty-year period was used.
Analysis
Riparian interests around Lake
Ontario are most sensitive to high
water levels associated with
particular regulation plans. The
estimated impacts are further
influenced by wave energy and
wave height conditions, which
tend to vary around the Lake and
throughout the year but are
generally greatest during the
spring and fall (see Figure C-5).
Thus, the timing of high water
levels during the spring and fall
can have a considerable impact on
plan results. Plans that tend to
keep lake levels lower in the late
fall and early spring will result in
Figure C-5: Monthly normal wave energy comparisons
(1961-2000) for Niagara County
conditions more favourable for the riparian interest. In addition, regulation plans in which the annual peak
water level consistently occurs in the June, July, and August period will generally minimize coastal impacts.
Analysis revealed that the shore protection maintenance performance indicator was the most sensitive to
changes in a regulation plan on Lake Ontario. There are two particular factors contributing to the increased
sensitivity. First, existing shore protection represents a large investment around the perimeter of the Lake
(estimated value of $497 million) and postponing the maintenance of that shore protection can be economically
beneficial. Second, shore protection maintenance is very sensitive to the impact of waves and is therefore
affected by changes in the timing of levels as discussed above. In particular, high water levels occurring
during periods of high waves will cause overtopping failures in a very short period of time, and the shore
protection module of FEPS allows shore protection to fail multiple times during a simulation period (generally
101 years).
Absolute average annual damages for the shore protection maintenance performance indicator occur
predominantly in counties along the south shore of Lake Ontario. Figure C-6 shows the distribution of plan
damages (%) for Plan 1958-DD based on the stochastic supplies. The relative distribution of damages
among counties is consistent among the various plans evaluated.
64 Options for Managing Lake Ontario and St. Lawrence River Water Levels and Flows