Compensating Water Service Interruptions to Implement a Safe-to-Fail Approach to Climate Change Adaptation in Urban Water Supply

A city resilient to climate change is characterized by effectively responding to and recovering from the negative impacts of climate hazards. In the city of Santiago, Chile, extreme weather that can be associated with a nascent manifestation of climate change has caused high-turbidity events, repeatedly forcing the main water company to interrupt the supply of drinking water, affecting millions of people. This study proposes a transformative response to reduce harm from extreme events due to climate change. The traditional approach of increasing resilience through large infrastructure works can be complemented by one-off reductions in water use during emergencies, in exchange for economic compensation. This alternative seeks to transfer the individual responsibility of water companies to a collective one, where the community is an active agent that reduces damage in the face of extreme events resulting from climate change. In the assessment of this response, we used a choice experiment to estimate the minimum amount users are willing to accept in compensation for water service interruptions. The results show that willingness to accept compensation is significant (close to 0.6 USD/hour) and decreases when users have experienced additional unplanned interruptions. The aggregate cost of the compensation is lower than infrastructure investments required to avoid service interruptions under various future hypothetical hydroclimatic scenarios associated with climate change impacts. Therefore, compensation-based instruments for water service interruptions could be a more flexible and cost-effective alternative to infrastructure-based measures to cope with future climate hazards.