Goal-based water trading expands and diversifies supplies for enhanced resilience

• Published in: Nature sustainability 2019-02, Vol.2 (2), p.138-147
• Main Authors: Gonzales, P., Ajami, N. K.
• Format: Article
• Language: English
• Subjects: 704/242; 704/844; 706/2805; Analysis; Cost reduction; Earth and Environmental Science; Environment; Hydrologic cycle; Sustainable Development; Water availability; Water scarcity; Water supply; Water utilities
• ISSN: 2398-9629; 2398-9629
• DOI: 10.1038/s41893-019-0228-z

In response to rising water scarcity concerns around the world, water utilities are expanding and diversifying their water supply portfolios, including attempting to value and reuse every drop throughout the water cycle. This transition is creating new hybrid infrastructure systems that combine centralized and decentralized sources at various scales. To help strategize and manage these emerging hybrid systems, we introduce a flexible goal-based water-trading framework using a combination of regulatory and market incentives. We apply this framework in a simulation of the San Francisco Bay Area, and test the effects of policy parameters, local preferences and collaboration between utilities. Results show that the option of engaging in an open trading scheme can lead to a more strategic and holistic path to higher regional resiliency through increased diversity in water portfolios, at lower costs than if utilities were tasked with pursuing goals independently. Highest benefits are observed when utilities cooperate in the exchange of information, which highlights the importance of transparency and trust operating in conjunction with regulatory and market forces. Water utilities worldwide are diversifying their portfolios of water supplies to smooth growing variation in water availability. This simulation finds that the option of engaging in an open water-trading scheme in the San Francisco Bay Area could promote regional resiliency and lowers costs.