Risk assessment of hydro projects in the face of climate change - a case study

As the IPCC's Climate Change 2007 report made clear, warming of the Climate System is unequivocal. It is also clear that warming of the land surface can significantly affect the hydrological systems of snow-fed rivers. Thus, it is prudent to consider the potential impacts of climate change when conducting cost-benefit analysis of hydro-electric system capital improvements. This paper evaluates the benefits to Seattle City Light, Seattle's municipal utility, of an upgrade to one of its hydro-electric projects, not on the basis, as is common, of historical flow data, but on the basis of modeled flows under a specific climate change scenario. Another novelty of the paper is that the analysis relies not on one 'normal' or average flow, but on an ensemble of flows that reflect the range of hydro conditions that might be anticipated under the climate scenario. Although the nature of the anticipated impacts of climate in the Northwest are such that the results are not markedly different from ignoring them, the paper raises a number of interesting issues that such analysis should typically address. (author)