The document discusses optimizing rate allocation for compressing hyperspectral images using JPEG2000. It proposes using the discrete wavelet transform instead of the Karhunen-Loeve transform for decorrelation due to lower computational complexity. A mixed model is used for rate distortion optimal bit allocation instead of experimentally obtained rate distortion curves. Comparisons show the mixed model approach results in lower mean squared error than traditional bit allocation schemes, while having lower implementation complexity than prior methods.