Is it worth decontaminating groundwater ? Lessons from a cost benefit analysis in a French case...

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


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


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


> 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


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


S1: drinking water standard

S2: zero pollution


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


Challenge No. 2 : high number of target sectors & activities


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


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 !!!


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


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



• 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)


Implementation of the contingent valuation survey


> 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%


Public perception of GW quality thresholds


> 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



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





Total cost of the program of measures

COSTS

Scenario 2Scenario 1



> 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 !


What did we learn from this case study ?


Thank you for your attention

[email protected]

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