Dynamic Hedging Rule for Natural Lake Restoration Through Modified Reallocation Scheme

Ever increasing municipal, agricultural, and industrial water demands has drastically reduced the inflow to some existing natural lakes and ecologically important water bodies. The inflow reduction may be further affected by the climate changes which may result in significant changes in lakes' water elevations. To restore the damaged natural lakes, this paper presents a holistic approach for development of a near optimal water management strategy and re-allocation scheme to be followed by different stakeholders. The approach proposes a hedging rule specifically tailored for lake restoration in an object oriented simulation model in a system dynamic template. Implementation of the model shows how the proposed hedging rule may efficiently be used to restore the lakes' water level and guarantee its variation within specified range for different possible hydrological conditions. The performance of the model is tested using data from Uromieh Lake in Iran which has experienced dramatic drop in its water level during the last decade. Its application shows that the lake may be restored with minimal conflicts between the stakeholders and ecological negative impacts.