Valuing flexibilities in the design of urban water management systems.

Climate change and rapid urbanization requires decision-makers to develop a long-term forward assessment on sustainable urban water management projects. This is further complicated by the difficulties of assessing sustainable designs and various design scenarios from an economic standpoint. A conventional valuation approach for urban water management projects, like Discounted Cash Flow (DCF) analysis, fails to incorporate uncertainties, such as amount of rainfall, unit cost of water, and other uncertainties associated with future changes in technological domains.