is it worth decontaminating groundwater ? lessons from a cost benefit analysis in a french case...
TRANSCRIPT
Is it worth decontaminating groundwater ?
Lessons from a cost benefit analysis in a
French case study
Stéphanie Aulong and Jean-Daniel RinaudoEconomic Research Group
Water DepartmentFrench Geological Survey (BRGM)
> 2World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
Introduction
> The issue• In urban contexts groundwater can be heavily polluted …
• … while it represents a strategic resource
• High remediation / pollution prevention costs
• Are the benefits greater than costs ?
• If so, what quality level should be targeted ?
> This study• Investigate these issues through a French case study
• Assess costs and benefits for different groundwater quality targets
> 3World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
Outlines of the presentation
1. Presentation of the case study
2. Cost of achieving different quality targets Methodology
Main results
3. Benefits of achieving different quality targets Methodology
Main results
4. Conclusion and policy implications
> 4World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
Case study area
> The Upper Rhine valley aquifer : • One of Europe largest
groundwater reserves
> Uses• 50% of industrial water needs
• drinking water supply for 1 millions inhabitants (in France)
> Pollution problems • Nitrates and pesticides
(agriculture)
• Chlorides (mining)
• Chlorinated solvents in urban areas
Rhin Meuse riverbassin district
Rhinevalleyaquifer
Germany
Alsaceregion
2 - Costs 1- Case study 4- Policy & recommendations3- Benefits
4200 km²
> 5World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
> drinking water threshold
substance detected> Chlorinated solvent
pollution levels
• Trichloroethylene (TCE), Tetrachloroethylene (PCE), 111 Trichloroethane (111 TRI).
• 1997 survey: detected in 38% of the 423 (Fr) + 533 (D) monitoring points
> Multiple & dispersed pollution sources • Large industries
• SMEs and small size economic activities
• Households
• Ancient contaminated sites
• Road accidents
Basel
Strasbourg
Karlsruhe2 - Costs 4- Policy & recommendations3- Benefits1- Case study
Challenge No. 1: map pollution and identify areas to be remediated
> 6World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
Cost assessment methodology
1- Definition of environmental
objectives (threshold values)
2- Identification of polluted areas
Groundwater quality
database
3- Typology of activities potentially source of pollution
Economic database
Contaminated
sitesdatabase
4 -Identification of industries and sites
to be considered in the PoM 5- Typology of
measures, assessment of
average unit costs6- Definition of alternative PoM
Assessment of their cost
Monitoring point where DWT is exceeded
Municipalities where pollution prevention and
remediation measures are implemented
2 - Costs 1- Case study 4- Policy & recommendations3- Benefits
S1: drinking water standard
S2: zero pollution
> 7World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
Economic sector Number of enterprises
Number of employees
Turn over (thous. €)
Chemichal 14 1224 592 Electrical and electronic equipements 18 672 161 Car and motorcycle repair workshops 140 727 121 Food and beverage industry 3 20 8 Printing industry 60 770 101 Mecanical industry 117 6897 1682 Industry producing or using paint 46 793 125 Textile industry 5 228 22 Metal coating activities 57 1669 260 Metal cutting and processing industry 6 75 11
Total 466 13075 3081
Number of potential pollution sources
2 - Costs 1- Case study 4- Policy & recommendations3- Benefits
Challenge No. 2 : high number of target sectors & activities
> 8World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
1. Reduction of risk of accidental leakage (soil ceiling / watertight areas under storage tanks, removal of all underground tanks and pipes, pounds to recover solvents in case of accident, etc.)
2. Collecting and recycling used solvents and waste contaminated with solvents
3. Clean technologies reducing use of solvents (recycling equipment)
4. Substitution of chlorinated solvents with other solvents and/or use of technologies which do not require CS
5. Industrial waste water treatment (with activated coal filters of a stripping tower)
6. Impact monitoring measures (Simplified risk assessment study, piezometer downstream risk zones)
7. Remediation of contaminated sites (historical sites and enterprises in activity)
Remediation and prevention actions considered
Collection of used solvents
Technologies not using solvents(here metal degreasing)
Solvent recycling
1- Case study 4- Policy & recommendations3- Benefits2 - Costs
Challenge No. 3: Large range of technical remediation / prevention actions required
> 9World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
Economic sector
Cost of PoM (thous. €)
% of total cost of PoM
Activities producing or using paint and varnishes 11 056 49%
Mecanical industry 3 606 16%
Contaminated sites 2 987 13%
Metal coating industry 1 891 8%
Car and motorcycle repair workshops 1 097 5%
Chemichal industry 881 4%
Printing 378 2%
Textile industry 184 0,8%
Manufacture of electrical and electronical products 166 0,7%
Industrial cleaning industry 60 0,3%
Food and beverage industry 47 0,2%
Metal processing and cutting industry 46 0,2%
Total 22 405 100%
1- Case study 4- Policy & recommendations3- Benefits2 - Costs
Cost estimate
Challenge No. 4 : High cost for private operators, subsidies required.
65%.
= 700% of the turn over of the concerned enterprises !!!
> 10World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
52,1
42,938,1
24,4 24,4 22,4
0,0
10,0
20,0
30,0
40,0
50,0
60,0
0% 20% 40% 60% 80% 100% 120%
Targeted water quality in percentage of drinking water thresholds
Mill
ions
€
Cost as a function of water quality objective
13€/inhabitant
30€/inhabitant
1- Case study 4- Policy & recommendations3- Benefits
S2 S1
2 - Costs
0 2 4 6 8 10 µg/l
Targeted water quality
> 11World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
How to assess multiple benefits of GW protection ?
Groundwater Quality Improvement
Reduces drinkingwater treatmentcost
Decreases cancer risk & related health costs
Reduces ecological impacts on fauna / flora of GW dependentsurface ecosystems
Increases the bequest value of GW considered
as part of natural heritage for future generation
How much are you willing to pay
for these different benefits
2 - Costs 1- Case study 4- Policy & recommendations3- Benefits
> 12World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
• Survey
– Questionnaire mailed to 5000 households , response rate 13% (668 questionnaires)
• Principle: after providing basic information on the current situation, two scenarios are successively presented to respondents:
– Restoration of drinking water quality in the entire aquifer (S1)
– Elimination of all traces and restoration of natural quality (S2)
• Information collected
– Perception the 2 scenarios (qualitative)
– Willingness to pay amount (in €/household / year)
– Reasons underlying WTP (or refusal to pay)
2 - Costs 1- Case study 4- Policy & recommendations3- Benefits
Implementation of the contingent valuation survey
> 13World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
> Perception of the scenarios : • 68% accept to pay through an increase of their water bill for
restoring drinking water quality (S1)
• 57% accept to pay more for restoring natural quality (S2)
> WTP amounts • 42€ / household / year for S1
• 76€ / household / year for S2
> Motivations for paying
Reasons for paying S1 I accept to pay for allowing future use of regional population
67%
I accept to pay for securing my personal use 64% I prefer to pay now for protecting GW than later for treating it
62%
I accept to pay for protecting aquatic life 58%
2 - Costs 1- Case study 4- Policy & recommendations3- Benefits
Public perception of GW quality thresholds
> 14World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
> Total benefit estimate• Average WTP is extrapolated to the entire regional population
• Results:
– Drinking water threshold = 29 millions€
– Natural groundwater quality = 46,5 millions €
> Cost benefit analysis
- 6 millions €7 millions €Net benefit
46,5 millions €29 millions €Estimated groundwater protection benefit
76€/ household/ year during ten years
42 €/ household/ year during ten years
Average Willingness To Pay (stated amount)
BENEFITS
52,1 millions €~30 € / inhabitant
~298 % yearly turn over of concerned enterprises
22,4 millions €~13 € / inhabitant
~727 % yearly turn over of concerned enterprises
Total cost of the program of measures
COSTS
Scenario 2Scenario 1
- 6 millions €7 millions €Net benefit
46,5 millions €29 millions €Estimated groundwater protection benefit
76€/ household/ year during ten years
42 €/ household/ year during ten years
Average Willingness To Pay (stated amount)
BENEFITS
52,1 millions €~30 € / inhabitant
~298 % yearly turn over of concerned enterprises
22,4 millions €~13 € / inhabitant
~727 % yearly turn over of concerned enterprises
Total cost of the program of measures
COSTS
Scenario 2Scenario 1
2 - Costs 1- Case study 4- Policy & recommendations3- Benefits
> 15World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
> Major challenges specific to urban contexts • Monitoring high number dispersed pollution point sources
• High number of target sectors & activities
• High number of technical actions to be implemented simultaneously
• Disproportionate costs for economic actors & historical abandoned sites => need of public finance
> Is it worth protecting groundwater ?• Yes, the population perceives the “threatened opportunity” !
• Restoring Drinking water quality is a desirable option for the society as a whole (net benefit) …
• … but not going back to water quality of pre-historical times !
• Economics can only help addressing the question, it can’t answer it alone !
2 - Costs 1- Case study 4- Policy & recommendations3- Benefits
What did we learn from this case study ?
> 16World Water Congress, 19-24 September 2010, MontrealJ-D. Rinaudo
Thank you for your attention
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