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COVID-19 is a wicked problem for policy makers internationally as the complexity of the pandemic transcends health, environment, social and economic boundaries. Many countries are focusing on two key responses, namely virus containment and financial measures, but fail to recognise other aspects. The systems approach, however, enables policy makers to design the most effective strategies and reduce the unintended consequences. To achieve fundamental change, it is imperative to firstly identify the “right” interventions (leverage points) and implement additional measures to reduce negative consequences. To do so, a preliminary causal loop diagram of the COVID-19 pandemic was designed to explore its influence on socio-economic systems. In order to transcend the “wait and see” approach, and create an adaptive and resilient system, governments need to consider “deep” leverage points that can be realistically maintained over the long-term and cause a fundamental change, rather than focusing on “shallow” leverage points that are relatively easy to implement but do not result in significant systemic change.

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Water supply and demand planning is often conducted independently of social and economic strategies. There are presently no comprehensive life-cycle approaches to modelling urban water balances that incorporate economic feedbacks, such as tariff adjustment, which can in turn create a financing capacity for investment responses to low reservoir levels. This paper addresses this gap, and presents a system dynamics model that augments the usual water utility representation of the physical linkages of water grids, by adding interconnected feedback loops in tariff structures, demand levels and financing capacity. The model, applied in the southeast Queensland region in Australia, enables simulation of alternatives and analysis of stocks and flows around a grid or portfolio of bulk supplies including an increasing proportion of rain-independent desalination plants. Such rain-independent water production plants complement the rain-dependent sources in the region and can potentially offer indefinite water security at a price. The study also shows how an alternative temporary drought pricing regime not only defers costly bulk supply infrastructure but actually generates greater price stability than traditional pricing approaches. The model has implications for water supply planners seeking to pro-actively plan, justify and finance portfolios of rain-dependent and rain-independent bulk water supply infrastructure. Interestingly, the modelling showed that a temporary drought pricing regime not only lowers the frequency and severity of water insecurity events but also reduces the long-run marginal cost of water supply for the region when compared to traditional reactive planning approaches that focus on restrictions to affect demand in scarcity periods.

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