Feasibility studies for water reuse projects: Economic valuation of environmental benefits

Abstract

Water reuse is emerging as a promising alternative because it enables water resources to be increased and lowers pollution levels by reducing wastewater. In recent decades, significant technological progress has been made in the field of wastewater regeneration; and project feasibility is now mostly subject to just economic assessment. However, the economic aspect is the least addressed aspect of research into water reuse. This is because private costs are generally considered while the external effects are relegated to a series of statements about the advantages of water reuse. Methodologies used to analyze the economic feasibility of these projects usually focus on internal costs. As a result, the true benefits and costs of many projects are not properly evaluated. This paper presents a methodology for assessing the economic feasibility of a water reuse project that takes into account the internal and external impacts. On the other hand, a monetary quantification of the environmental benefits is made. This assessment is made through an estimation of shadow prices for the undesirable outputs of wastewater regeneration. In this way, a useful economic feasibility indicator that includes both internal and external impacts is obtained for water reuse projects. © Springer Science+Business Media B.V. 2011.