Journal cover Journal topic
Hydrology and Earth System Sciences An interactive open-access journal of the European Geosciences Union
https://doi.org/10.5194/hess-2017-615
© Author(s) 2017. This work is distributed under
the Creative Commons Attribution 4.0 License.
Research article
20 Nov 2017
Review status
This discussion paper is a preprint. It is a manuscript under review for the journal Hydrology and Earth System Sciences (HESS).
Economic impacts of drought risks for water utilities through Severity-Duration-Frequency framework under climate change scenarios
Diego A. Guzmám1,2, Guilherme S. Mohor1, Denise Taffarello1, and Eduardo M. Mendiondo1 1Department of Hydraulics and Sanitation – Sao Carlos School of Engineering, University of Sao Paulo – Sao Carlos, SP, 13566-590, Brazil
2Department of Civil Engineering, Pontificia Bolivariana University, Bucaramanga, STD, 681007, Colombia
Abstract. Climate variability and increasing water demands prioritize the need to implement planning strategies for urban water security in the long and medium term. However, actions to manage the drought risk impacts entail great complexity, such as the calculation of economic losses derived from the combination of severity, duration and frequency under uncertainties in the climate projections. Thus, new approaches of risk aversion are needed, as an integrated framework for resilience gap assessment, for water utilities to cope with droughts, thereby linking drivers of climate, hydrology and human demands. This paper aims to present the economic impacts of risk aversion for water utilities through a framework linking severity, duration and frequency (SDF) of droughts under climate change scenarios. This new model framework addresses the opportunity cost that represent the preparedness for risk aversion to cope with potential future impacts of droughts, involving a set of options for planning of water resources, under different demands and climate projections. The methodology integrates the hydrological simulation procedures, under radiative climate forcing scenarios RCP 4.5 and 8.5, from a regional climate model Eta-INPE, with time horizons of 2007–2040, 2041–2070, and 2071–2099, linked to Water Evaluation and Planning system (WEAP) hydrologic model and under stationary and non-stationary water supply demand assumptions. The model framework is applied to the Cantareira Water Supply System for Sao Paulo Metropolitan Region, Brazil, with severe vulnerability to droughts. By using hydrological simulations with WEAP, driven by Eta-INPE Regional Climatic Model base line scenarios (1962–2005), were characterized the SDF curves. On the one hand, water tariff price associated to calibrated and modelled scenarios constitute supply/demand proxies of the water warranty time delimited by drought duration. Then, profit loss analysis scenarios are assessed for the regional water utility. On the other hand, for drought resilience gap, results show water utility profit losses per period between 1.3 % and 10.3 % of the regional GDP in 2016. Although future economic impacts vary in a same order, non-stationary demand trends impose larger differences in the drought resilience gap, when the future securitization are linked to regional climate outputs.

Citation: Guzmám, D. A., Mohor, G. S., Taffarello, D., and Mendiondo, E. M.: Economic impacts of drought risks for water utilities through Severity-Duration-Frequency framework under climate change scenarios, Hydrol. Earth Syst. Sci. Discuss., https://doi.org/10.5194/hess-2017-615, in review, 2017.
Diego A. Guzmám et al.
Diego A. Guzmám et al.
Diego A. Guzmám et al.

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Short summary
Climate variability and increasing water demands prioritize the need to implement planning strategies for urban water security. Within the context of managing the financial resilience, we have explored how to evaluate the water utility company economic profit losses to face the hydrological drought impacts. Thus, the main objective of this work is propose a methodology to integrate the coevolution of anthropogenic factors and climate, which directly influence water availability.
Climate variability and increasing water demands prioritize the need to implement planning...
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