Resilient California water portfolios require infrastructure investment
partnerships that are viable for all partners
Abstract
Water scarcity is a growing problem around the world, and regions such
as California are working to develop diversified, interconnected, and
flexible water supply portfolios. To meet their resilient water
portfolio goals, water utilities and irrigation districts will need to
cooperate across scales to finance, build, and operate shared water
supply infrastructure. However, planning studies to date have generally
focused on partnership-level outcomes (i.e., highly aggregated mean
cost-benefit analyses), while ignoring the heterogeneity of benefits,
costs, and risks across the individual investing partners. This study
contributes an exploratory modeling analysis that tests thousands of
alternative water supply investment partnerships in the Central Valley
of California, using a high-resolution simulation model to evaluate the
effects of new infrastructure on individual water providers. The
viability of conveyance and groundwater banking investments are as
strongly shaped by partnership design choices (i.e., which water
providers are participating, and how do they distribute the project’s
debt obligation?) as by extreme hydrologic conditions (i.e., floods and
droughts). Importantly, most of the analyzed partnership structures
yield highly unequal distributions of water supply and financial risks
across the partners, limiting the viability of cooperative partnerships.
Partnership viability is especially rare in the absence of groundwater
banking facilities, or under dry hydrologic conditions, even under
explicitly optimistic assumptions regarding climate change. These
results emphasize the importance of high-resolution simulation models
and careful partnership structure design when developing resilient water
supply portfolios for institutionally complex regions confronting
scarcity.