Future Water Resources Allocation and Climate Risk Management.

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Photo by Steve Halama on Unsplash

Photo by Steve Halama on Unsplash

Why is it important?

The McISH model developed by this work opens a new direction for future water resources allocation and climate risk management. The innovative model is in a stochastic hybrid simulation and optimization set up, that uses streamflow forecasts at multiple time scales to address competing objectives. The model considers market instruments such as forward insurable contracts with specified reliability as a tool to address the perceived risk associated with the use of such forecasts in lieu of traditional operation and allocation strategies. The study presents the idea that allows reservoir operators to overcome their concerns as to the appropriate skill of probabilistic forecasts, while providing water users with short‐term and long‐term guarantees as to how much water or energy they may be allocated.