A speech delivered at the presentation of Lýðræði með raðvali og sjóðvali (Democracy with sequential choice and fund voting) by Björn S. Stefánsson on 22 August 2003 (abridged and slightly rephrased).
Preparing a master plan for the exploitation of hydro and thermal energy sources the individual possibilities are weighted against a number of independent parameters. During the work on Stage I the Project Management has entrusted the technical assessment to four groups with experts in the relevant fields. Expert Group I covers nature and archeological heritage, Expert Group II covers outdoor activities and extra resources, Expert Group III analyses economic influences on tourism, and Expert Group IV deals with the power stations themselves, the investment costs and the profits. Finally the Project Management shall compare the findings of the four expert groups to rank the energy sources.
It is not obvious how to evaluate the factors to be dealt with, and it is even less obvious how to rank the power plant possibilities with reference to such an array of unrelated things, some of which may be compared on basis of their financial value, but there are other things, such as unspoiled natural habitats, rare species, and pristine landscapes, that have subjective value and are rarely appraised financially.
When it was time to decide upon the appropriate approaches for the expert groups and the Project Management, experts in various fields, such as operations research, decision theory and test theory, were contacted. Among the procedures recommended for testing was the fund voting method developed by Björn S. Stefánsson. His approach may, however, be better suited for project management than expert groups as it is based on voting carried out by individuals. The expert groups need to base on defined subjects and grades with reference to generally recognized guidelines to the extent that these are to be found in monies, the legislation, international treaties and conventions. Such procedures would have to be transparent and traceable, and rigid enough to ensure that assessment teams applying the same methods would come up with similar conclusions.
So far the Project Management has weighted and compared the expert groups’ conclusions only as regards determining the indices of (1) the environmental impact, (2) the present value of the total proceeds over 50 operational years, and (3) the return on equity capital. These indices form an easily accessible database that may be used for identifying and ranking the available power plant possibilities to meet the specific energy demands required for some large-scale industrial scheme in a given location in Iceland, in order to establish whether it is advisable (1) to put a prospective power plant on ice while exploiting other choices, (2) to rank various possibilities regarding power plant erection in a given location or (3) to preserve a potential power plant site because of natural treasures in the area. For any such decision making fund voting would be highly appropriate, considering the method’s inherent advantages when it comes to weighting and comparing conflicting views and interests as well as to suppressing excesses when dealing with the issues.
With all these things in mind, a test was carried out among eight National Energy Authority employees, using fund voting to decide which power plant and preservation choices to prioritize. Through their work, the employees were thoroughly familiar with the sites. Stefánsson made good use of the experience thus amassed for the section on the exploitation of natural resources in his book, the one being presented here today. That experience bodes well for the use of fund voting when the time comes to make decisions based on the provisional assessment provided by the master plan.