DISCOVERING SAFE OPERATING SPACES IN DEEPLY UNCERTAIN PATHWAYS: EVALUATING HOW IMPLEMENTATION UNCERTAINTIES SHAPE COOPERATIVE MULTI-CITY WATER SUPPLY PORTFOLIO MANAGEMENT AND INVESTMENT
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, providing additional flexibility in achieving higher levels of supply reliability, and ideally limiting individual and collective financial risks. However, there has been little research that explores how implementation uncertainties in cooperative management and investment pathways shape their robustness and drive counterparty risks. Counterparty risks potentially exacerbate collaborating partners’ vulnerability to the supply and financial challenges they initially sought to mitigate. To address these concerns, this thesis introduces the Safe Operating Spaces for Deeply Uncertain Water Supply Pathways DU_SOS framework. This framework facilitates the formal characterization of the effects of implementation uncertainty within cooperative regional water supply investment and management pathway policies. This thesis demonstrates this framework on the multi-city Sedento Valley benchmarking test case to reveal the path-dependent effects of implementation uncertainties in short-term operational drought mitigation instruments and long-term infrastructure investments. The results clarify safe operating spaces that define operational tolerance regions beyond which cooperating utilities experience a degradation in their robustness and increased vulnerabilities to future uncertainties. The DU_SOS Pathways framework also reveals the impact of implementation uncertainties on region’s infrastructure investment sequences. Results demonstrate the potential for increased regional conflict due to asymmetries between member utilities’ 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). Delineating safe operating spaces can guide utilities’ actual portfolio implementation and stabilize their cooperation between utilities. Overall, this framework is broadly applicable to regional systems seeking to navigate complex cooperative regional water supply investment and management pathway policies.