NHI, the National Center for Atmospheric Research, and the Stockholm Environment Institute have collaborated to develop tools that contribute to crafting a policy-relevant narrative for climate change. Capitalizing on recent advances in water resource modeling capability that allow natural hydrologic processes to be dynamically coupled with the hydraulic infrastructure of heavily engineered watersheds, NHI has begun to explore the water resource tradeoff landscape associated with climate change. The analytical framework generated by this project has been included in the current investigation of potential climate change impacts in California called for by Governor Schwarzenegger.