Will we all be Rooned without a Desal Plant? Hanrahan’s Lament and the Problem of Urban Water Planning under Climate Change

Abstract

Given the uncertainty of climate forecasts there is a danger of overly pessimistic forecasts justifying overly large and early investment in desalination plants. If the recent weather patterns turn out to be just a drought, water utilities will find themselves with redundant desalination plants or, worse still, a commitment to pay high costs to desalinate water when dams are regularly spilling. A case study of Western Australia argues that the construction of the touted second desalination plant will mean dams will spill significantly one year in two if the climate follows the average patter of the years 1975-2006. Further, the climate assumptions that are used to justify the plant imply a long-run cost potentially high enough to eliminate the demand for the water supplied by the plant.