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Multi-driver ensemble to evaluate the water utility business interruption cost induced by hydrological drought risk scenarios in Brazil

  • Climate change and increasing water demand in urban environments necessitate planning water utility companies' finances. Traditionally, methods to estimate the direct water utility business interruption costs (WUBIC) caused by droughts have not been clearly established. We propose a multi-driver assessment method. We project the water yield using a hydrological model driven by regional climate models under radiative forcing scenarios. We project water demand under stationary and non-stationary conditions to estimate drought severity and duration, which are linked with pricing policies recently adopted by the Sao Paulo Water Utility Company. The results showed water insecurity. The non-stationary trend imposed larger differences in the drought resilience financial gap, suggesting that the uncertainties of WUBIC derived from demand and climate models are greater than those associated with radiative forcing scenarios. As populations increase, proactively controlling demand is recommended to avoid or minimize reactive policy changesClimate change and increasing water demand in urban environments necessitate planning water utility companies' finances. Traditionally, methods to estimate the direct water utility business interruption costs (WUBIC) caused by droughts have not been clearly established. We propose a multi-driver assessment method. We project the water yield using a hydrological model driven by regional climate models under radiative forcing scenarios. We project water demand under stationary and non-stationary conditions to estimate drought severity and duration, which are linked with pricing policies recently adopted by the Sao Paulo Water Utility Company. The results showed water insecurity. The non-stationary trend imposed larger differences in the drought resilience financial gap, suggesting that the uncertainties of WUBIC derived from demand and climate models are greater than those associated with radiative forcing scenarios. As populations increase, proactively controlling demand is recommended to avoid or minimize reactive policy changes during future drought events, repeating recent financial impacts.show moreshow less

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Author details:Diego Alejandro Guzman AriasORCiD, Guilherme Samprogna MohorORCiDGND, Eduardo Mario MendiondoORCiD
DOI:https://doi.org/10.1080/1573062X.2022.2058564
ISSN:1573-062X
ISSN:1744-9006
Title of parent work (English):Urban water journal
Publisher:Routledge, Taylor & Francis Group
Place of publishing:Abingdon
Publication type:Article
Language:English
Date of first publication:2022/03/30
Publication year:2022
Release date:2024/02/16
Tag:Business interruption cost; climate change; droughts; hydrological; urban water; water security; water utility company
Number of pages:15
Funding institution:CAPES-PROEX-PPG-SHS, Pro-Alertas [88887.091743/2014-01]; CNPq; [307637/2012-3, 312056/2016-8, 465501/2014-1]; FAPESP [2014/15080-2,; 2014/50848-9]; Coordination of Superior Level Staff Improvement (CAPES);; Programme of Postgraduate in Hydraulics and Sanitation (PPG-SHS)
Organizational units:Mathematisch-Naturwissenschaftliche Fakultät / Institut für Umweltwissenschaften und Geographie
DDC classification:5 Naturwissenschaften und Mathematik / 55 Geowissenschaften, Geologie / 550 Geowissenschaften
Peer review:Referiert
Publishing method:Open Access / Hybrid Open-Access
License (German):License LogoCC-BY-NC-ND - Namensnennung, nicht kommerziell, keine Bearbeitungen 4.0 International
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