Climate change due to global warming will reduce river flows across much of Australia and reduce the yield of existing urban and rural water systems. These reductions are additional to yield reductions that have flowed from the allocation of more water for environmental flows under national water reforms, and the severity of the 2001-2007 drought in southern Australia. Australian water authorities are adapting to these changes by implementing extensive water savings programs and by developing new water sources including water reuse, stormwater and desalination as well as traditional river and groundwater sources. The paper describes two case studies and discusses how stochastic analysis of system scenarios can help identify drought and climate change risks and the economic benefits of water reuse.

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