A robust outcome from this work is that one must consider different risk layers for which specific instruments are required. Extreme cases of droughts and floods most often belong to the category of catastrophic risks, and thus require some form of government intervention. An efficient definition of the boundaries between catastrophic and non-catastrophic risk is a challenging exercise in the context of climate change that tends to increase the variance in water availability (OECD, 2014). The boundaries become a moving target in the context of non-stationary climate.