Urban water management in response to prolonged droughts and urban growth

Demand for water is inelastic. As a consequence of this, the prospective returns to supply augmentation of urban water may vary widely with seasonal conditions, population growth and water savings over time. Prolonged drought conditions in the first decade of the new millennium placed urban water supplies under stress. Substantial investments followed to augment the water supplies of each of Australia s mainland state capitals. Present judgements on whether the investments in individual cities were justified may be driven by current seasonal conditions rather than longer term analysis of supply and demand.