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Mixed water portfolio helps thirsty cities

Posted by: Maven on January 20, 2010 at 4:28 pm

From Physorg.com:

” (PhysOrg.com) — Computer simulations for drought-prone areas reveal that when urban water planners combine three approaches of buying water — permanent rights, options and leases — the city avoids surplus water and high costs, and reduces shortages, according to civil engineers.

“Just like with stock portfolios, if you buy diverse stocks, you diversify your risk,” said Patrick Reed, associate professor of civil engineering, Penn State. “Right now, cities don’t necessarily diversify their risk through the ways in which they buy water.”

Reed and his colleagues are trying to understand the benefits and trade-offs associated with buying water using a mix of market instruments in the Lower Rio Grande Valley of southern Texas. Those models incorporated the various purchasing options, along with variables such as cost, amount of surplus water and the probability of water shortages. … “

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January 20, 2010 · Filed Under Water Rights

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