Water insurance as climate and land use change adaptation tool for optimization of water permits under water transfer conditions

Abstract

Recent prolonged droughts make the urgent need to revise the criteria for water permits in Brazil, especially in basins under the effects of water transfer. Water risks insurance is an important mitigation tool, but there is no methodology to adapt this technique to assist the water permit instrument, undergoing an analysis of uncertainties and complementing its effectiveness in reducing the losses from extreme events. Hydrological modelling is the basis for development of these tools, as well as climate projections, which carry uncertainties that must be considered in decision-making. The objectives of this project are: i) coupling climatic, hydrologic and water insurance models using historical data and projections in Brazilian basins, for the permit decision process; ii) discuss and simulate scenarios that relate transposed flows, changes in land use and climate, and indicators of insurance models performance through the application of different hydrological models. The methodology addresses the application of distributed hydrological models, MHD-INPE and SWAT-TAMU under climate change scenarios from the climate model Eta-INPE. The outputs of the hydrological models are applied in the insurance model MTRH-SHS for droughts, resulting in the development of damage curves, of risk aversion curves and demand-reliability curves. The methodology will be applied in donor basins of a water transfer system, the Cantareira System. (AU)