Journal Article

Institutional Dynamics Impact the Response of Urban Socio‐Hydrologic Systems to Supply Challenges

Azizi, Koorosh, Wiechman, Adam, Anderies, John M., Garcia, Margaret, Alonso Vicario, Sara, Hornberger, George

2024

Overview

Designing urban water systems to respond to the accelerating and unpredictable changes of the Anthropocene will require changes not only to built infrastructure and operating rules, but also to the governance arrangements responsible for investing in them. Yet, inclusion of this political‐economic feedback in dynamic models of infrastructure systems and socio‐hydrology has lagged behind operational feedback concerns. We address this gap through a dynamical systems application of the Coupled Infrastructure Systems (CIS) Framework, which provides the conceptual building blocks for analyzing social‐ecological systems through various classes of infrastructure and the flows of material and information among them. In the model, political‐economic feedback involves three decisions—infrastructure investment, rate‐setting, and short‐term demand curtailment—and each decision is constrained by institutional friction, the aggregation of decision and transaction costs associated with taking action. We apply the model to three cities in the Phoenix Metropolitan Area to compare how institutional friction interacts with a city's water resource portfolio and financial position to determine its sensitivity, or the degree to which its performance (e.g., providing sufficient supply to meet demand) changes given reductions in Colorado River water availability. We find that the slowing effect of institutional friction on investment and rate‐setting decisions can increase the sensitivity of a city's supply, but it can also promote objectives that compete with over‐response (e.g., rate burden). The effect is dependent on the initial operating capacity of the CIS and flexibility within the institutions, highlighting the need to consider political‐economic and operational feedback together when evaluating infrastructure systems. Plain Language Summary Urban water systems must grapple with accelerating social and environmental change that requires them to not only consider future infrastructure needs, but also, the configuration of decisions responsible for infrastructure investment. Unfortunately, inclusion of political‐economic feedback has lagged behind operational feedback in models that examine water systems response to changing environments. We present a modeling approach to trace the flow of water, information, and investment in a general urban water system that must make three annual decisions: infrastructure investment, rate‐setting, and short‐term demand curtailment. Each decision is influenced by costs to taking action and the flexibility involved in setting action magnitudes. We apply the model to three cities in the Phoenix Metropolitan Area to compare how these institutional constraints interact with existing infrastructure and finances to affect their sensitivity, or the degree to which their performance (e.g., providing sufficient supply to meet demand) changes given reductions in Colorado River water. We find that when institutional barriers to action increase, cities are more sensitive to supply shocks, but such barriers can benefit other objectives like rate burden. The effect is dependent on the presence of redundant supplies, demand growth, and decision‐making flexibility, highlighting the need to consider both political‐economic and operational concerns when evaluating water systems. Key Points Having sufficient supply redundancy can outweigh the negative effect of slow institutions on a city's ability to address supply shocks The supplies of cities with institutions that require more stress to act are more sensitive to shocks, but their rates are less sensitive Adding flexibility to institutions can ease the burden of large investments on ratepayers and improve the reliability of slow institutions

• Publisher: John Wiley & Sons, Inc,Wiley
• Subject: Aggregation / Anthropocene / Anthropocene epoch / Arizona / Changing environments / Cities / Colorado River / Constraints / Costs / coupled infrastructure systems / Decision making / Decisions / Dynamic models / Dynamical systems / dynamical systems modeling / Economic models / Economics / Environmental changes / Feedback / Flexibility / Friction / Governance / Hydrologic systems / Hydrology / Infrastructure / Institutional constraints / institutional dynamics / Investment / Metropolitan areas / Politics / River water / Rivers / robustness / Sensitivity / Social interactions / Social-ecological systems / socio‐hydrology / Systems analysis / urban water systems / Water availability / Water resources / Water supply systems