Could Insurance Markets Help Water Utilities Respond to Drought? | Circle of Blue WaterNews

http://www.circleofblue.org/waternews/2016/world/could-insurance-markets-help-water-utilities-respond-to-drought/

Here’s a market solution to consider, President Trump

Researchers propose a new financial tool. Implications for Great Lakes?

I am quoting from an article written by Bret Walton for Circle Blue. He lays out the problem of water shortages out west and introduces the idea of “water insurance” just as we have car or flood insurance.
Greg Characklis, professor at UNC at Chapel Hill, further explains the notion in the following paragraphs:

“Utilities need to change their business models to adapt to 21st-century conditions. In an era of conservation, argues Greg Characklis, water utilities must become more sophisticated financial managers. One way they are doing this is by changing their rate structures so that they earn more revenue from “fixed” fees that do not fluctuate with the amount of water sold.

Characklis, a professor in the department of environmental sciences and engineering at the University of North Carolina, Chapel Hill, has another idea: insurance markets. Farmers buy crop insurance to protect against unpredictable weather and drivers purchase accident protection, but no similar product exists for water utilities. Characklis and his colleagues are assessing the viability of the new financial tool.”

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