Economic valuation of environmental benefits from wastewater treatment processes: An empirical approach for Spain

• Published in: The Science of the total environment 2010-01, Vol.408 (4), p.953-957
• Main Authors: Hernández-Sancho, Francesc, Molinos-Senante, María, Sala-Garrido, Ramón
• Format: Article
• Language: English
• Subjects: Applied sciences; Conservation of Natural Resources - economics; Conservation of Natural Resources - legislation & jurisprudence; Cost engineering; Cost-Benefit Analysis; Distance functions; Earth sciences; Earth, ocean, space; economic analysis; Economic valuation; Economics; Ecosystem; ecosystem services; Engineering and environment geology. Geothermics; Environment; Environmental benefits; environmental impact; Environmental Monitoring; European Union; Exact sciences and technology; Externalities; Marketing; Markets; Policies; Pollution; pollution control; Pollution, environment geology; Shadow prices; Spain; Undesirable outputs; Waste Management - economics; Waste Management - methods; Wastewater treatment; Water Pollution - economics; Water Pollution - prevention & control; Water resources; Water Supply - economics; Water Supply - legislation & jurisprudence; Water treatment and pollution
• ISSN: 0048-9697; 1879-1026
• DOI: 10.1016/j.scitotenv.2009.10.028

Economic research into the design and implementation of policies for the efficient management of water resources has been emphasized by the European Water Framework Directive (Directive 2000/60/EC). The efficient implementation of policies to prevent the degradation and depletion of water resources requires determining their value in social and economic terms and incorporating this information into the decision-making process. A process of wastewater treatment has many associated environmental benefits. However, these benefits are often not calculated because they are not set by the market, due to inadequate property rights, the presence of externalities, and the lack of perfect information. Nevertheless, the valuation of these benefits is necessary to justify a suitable investment policy and a limited number of studies exist on the subject of the economic valuation of environmental benefits. In this paper, we propose a methodology based on the estimation of shadow prices for the pollutants removed in a treatment process. This value represents the environmental benefit (avoided cost) associated with undischarged pollution. This is a pioneering approach to the economic valuation of wastewater treatment. The comparison of these benefits with the internal costs of the treatment process will provide a useful indicator for the feasibility of wastewater treatment projects.