(4) Compensation and Mitigation Mechanisms

Institutional mitigation and adaptations include interstate and bi-national agreements for coordinated operations of reservoir storage, together with new rules for managing surpluses and shortages, incentives for system efficiency improvements, and commitments to ecosystem restoration. Investments in infrastructure include the operation of desalination plants, conservation measures, and reservoir intakes. In the context of prolonged drought conditions, environmental flow requirements in the Delta have received additional attention, culminating in 2012 in "Minute 319" (updated in 2017 in "Minute 323"), an agreemen<sup>t</sup> made under the 1944 Treaty, coordinating US and Mexico's water storage and delivery options to enhance water supply reliability for Mexican water users and the Delta ecosystem [106].

Looking forward, the annual average cost of reducing shortage risks is projected to approach up to US\$6 billion in 2060, reflecting a lingering bias toward supply-side solutions including the importation of water from other basins [105]. Much of these costs involves alternative water supplies (desalination) or importation, rather than improved water allocation, which is lower cost but concentrated on powerful agricultural user groups. Even restricting mechanisms to demand-side solutions will require substantial investment to sustain water security and safeguard the economic activities, urban centers, and ecosystems that depend on the river in a changing climate.
