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leasing or selling water to those with perennial crops at up to four times the normal price; transplanting valuable crops to regions with senior water rights; and weather modification activities costing $400,000.

As the season advanced, the bureau revised its forecast, and by May, long after most of these adjustments had been made, it announced that junior rights holders would, in fact, receive 50 percent of their allocations. By the end of the summer, it was clear that water supplies had been almost 83 percent of normal and that junior rights holders had received 70 percent of normal allocations—more than enough to protect crops and orchards against drought damage without dramatic adjustments. Farmers were sufficiently angry about having spent large sums on unnecessary adjustments in response to the bureau's erroneous forecast that they sued the bureau for more than $20 million in compensation—a suit that never went to trial.

Glantz discusses several specific problems with the bureau's forecast, including estimation errors in the original prediction (they had failed to include return flow), poor communication of uncertainties, and lack of openness about errors in the forecast. Long-standing institutional water rights arrangements also created a very difficult situation for junior rights holders faced with a drought forecast. Several lessons can be drawn from the Yakima study. The most striking is that responses based on acceptance of erroneous forecasts can have serious economic, distributive, and legal consequences. The case also suggests the need to check forecasts very carefully for errors before releasing them, to clearly communicate uncertainties and the message that forecasts evolve during a season, and to consider how institutional frameworks can redistribute the impacts of a forecast as well as the event.

ENSO-based Forecasts in Northeast Brazil, 1991-1992 and 1996

Droughts sometimes associated with El Niño have often caused serious agricultural losses and human suffering in northeast Brazil, a region where there is widespread poverty and vulnerability to climatic variations. In addition, the cold phase of ENSO, La Niña, is associated with abundant rainfall over the region, sometimes leading to floods that also disrupt the region's economy. Researchers in climate modeling have used the onset of El Niño to forecast drought in the region up to 6 months in advance and, more recently, have learned that droughts in northeastern Brazil are even more strongly correlated with Atlantic sea surface temperature. Therefore, accurate prediction of ENSO and Atlantic sea surface temperature has the potential to improve well-being in the region by providing policy makers with information on anticipated climate variations.