A relevant example comes from Australia, where the Serpentine Dam was constructed in 1961 to supply water to the city of Perth. At the time, Serpentine Dam had a 98% assured yield of 51 million cubic meters per year but its yield has since been de-rated on three occasions down to 15 million cubic meters per year. Indeed, by 2006 it was mostly a dry dam basin with a yield of just five million cubic meters per year. For another example, the Governor of California recently declared a statewide drought emergency. State officials say California's water supply remains critically low because of three dry winters in a row, restrictions on water pumped from the Sacramento-San Joaquin River Delta and a population that has grown by 9 million since the last drought in 1991. Mandatory water rationing may be implemented this summer for the first time in history.

Climate change will likely increase the demand for fresh water and further disrupt existing water supply resources. Temperatures are expected to increase by 0.3 deg C per decade.7 Results from Australia, from the Melbourne Water Climate Change Study, estimate that this increase will cause an 8% reduction or possibly as high as an 11% reduction in rainfall by 2020. Climate change is expected to increase the ratio of rain to snow, delay the onset of the snow season, accelerate the rate of spring snowmelt and shorten the overall snowfall season, leading to more rapid and earlier seasonal runoff. According to the United Nations Intergovernmental Panel on Climate Change, “increases in average atmospheric temperature accelerate the rate of evaporation and demand for cooling water in human settlements, thereby increasing overall water demand.” In addition, rising sea levels may exacerbate seawater intrusion problems in coastal aquifers or rivers that communities currently depend on for water.

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