Evaluating Implementation Uncertainties and Defining Safe Operating
Spaces for Deeply Uncertain Cooperative Multi-City Water Supply
Investment Pathways
Abstract
Urban water utilities are increasingly exploring cooperative regional
water supply investment and management strategies due to climate change
and growing demands. Theoretically, regional cooperative agreements
promise improved resource efficiency by realizing economies of scale,
adding flexibility for achieving improved supply reliability, and,
ideally, limiting individual and collective financial risks. However,
there has been little research exploring how implementation
uncertainties in the partners’ cooperative actions shape infrastructure
investment and management pathways’ robustness and drive counterparty
risks. Counterparty risks potentially exacerbate collaborating partners’
vulnerability to the supply and financial challenges they initially
sought to mitigate through cooperation. To address these concerns, we
introduce the Safe Operating Spaces for Deeply Uncertain Water Supply
Pathways (DUSOS Pathways) framework. The framework, demonstrated on the
multi-city Sedento Valley benchmarking test case, facilitates the formal
characterization of the effects of implementation uncertainty within
cooperative regional water supply investment and management policy
pathways. Results demonstrate the path-dependent effects of
implementation uncertainties in short-term operational drought
mitigation instruments and long-term infrastructure investments. Our
analysis further reveals the potential for increased regional conflict
due to asymmetries between partners’ vulnerabilities to the actions of
cooperating partners that can be exacerbated by other deeply uncertain
factors that reduce their robustness (e.g., demand growth rates). The
study finally delineates safe operating spaces, beyond which utilities
experience robustness degradation and increased vulnerabilities to
future uncertainties to guide implementation of cooperative policy
pathways. Overall, this framework is broadly applicable to regional
systems seeking to navigate complex cooperative regional water supply
investment and management policy pathways.