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Although hydrologic models provide hypothesis testing of complex dynamics occurring at catchments, fresh-water quality modeling is still incipient at many subtropical headwaters. In Brazil, a few modeling studies assess freshwater nutrients, limiting policies on hydrologic ecosystem services. This paper aims to compare freshwater quality scenarios under different land-use and land-cover (LULC) change, one of them related to ecosystem-based adaptation (EbA), in Brazilian headwaters. Using the spatially semi-distributed Soil and Water Assessment Tool (SWAT) model, nitrate, total phosphorous (TP) and sediment were modeled in catchments ranging from 7.2 to 1037 km(2). These head-waters were eligible areas of the Brazilian payment for ecosystem services (PES) projects in the Cantareira water supply system, which had supplied water to 9 million people in the Sao Paulo metropolitan region (SPMR). We considered SWAT modeling of three LULC scenarios: (i) recent past scenario (S1), with historical LULC in 1990; (ii) current land-use scenario (S2), with LULC for the period 2010-2015 with field validation; and (iii) future land-use scenario with PES (S2 + EbA). This latter scenario proposed forest cover restoration through EbA following the river basin plan by 2035. These three LULC scenarios were tested with a selected record of rainfall and evapotranspiration observed in 2006-2014, with the occurrence of extreme droughts. To assess hydrologic services, we proposed the hydrologic service index (HSI), as a new composite metric comparing water pollution levels (WPL) for reference catchments, related to the grey water footprint (greyWF) and water yield. On the one hand, water quality simulations allowed for the regionalization of greyWF at spatial scales under LULC scenarios. According to the critical threshold, HSI identified areas as less or more sustainable catchments. On the other hand, conservation practices simulated through the S2 + EbA scenario envisaged not only additional and viable best management practices (BMP), but also preventive decision-making at the headwaters of water supply systems.
Multi-year index-based insurance for adapting Water Utility Companies to hydrological drought
(2020)
The sustainability of water utility companies is threatened by non-stationary drivers, such as climate and anthropogenic changes. To cope with potential economic losses, instruments such as insurance are useful for planning scenarios and mitigating impacts, but data limitations and risk uncertainties affect premium estimation and, consequently, business sustainability. This research estimated the possible economic impacts of business interruption to the Sao Paulo Water Utility Company derived from hydrological drought and how this could be mitigated with an insurance scheme. Multi-year insurance (MYI) was proposed through a set of "change" drivers: the climate driver, through forcing the water evaluation and planning system (WEAP) hydrological tool; the anthropogenic driver, through water demand projections; and the economic driver, associated with recent water price policies adopted by the utility company during water scarcity periods. In our study case, the evaluated indices showed that MYI contracts that cover only longer droughts, regardless of the magnitude, offer better financial performance than contracts that cover all events (in terms of drought duration). Moreover, through MYI contracts, we demonstrate solvency for the insurance fund in the long term and an annual average actuarially fair premium close to the total expected revenue reduction.