Economic Valuation of Wastewater – The Cost of Action and the Cost of No Action

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Economic Valuation of Wastewater – The Cost of Action and the Cost of No Action

Economic Valuation of Wastewater – The Cost of Action and the Cost of No Action

The United Nations Environment Program (UNEP) has recently released a report tiled Economic Valuation of Wastewater – The Cost of Action and the Cost of No Action. The 72-page report reviews different methods to analyze the costs and benefits of wastewater management. It proposes methodology to estimate value of the benefits, comparing the financial costs of collection and treatment, with the environmental and health costs of releasing untreated wastewater.

According to the report, 330 km3 of municipal wastewater is produced globally each year, which is enough to irrigate 40 million hectares - equivalent to 15 per cent of all currently irrigated land - or to power 130 million households through biogas generation.

The report says that the globally-produced municipal wastewater contains the equivalent of 25 per cent of the nitrogen and 15 per cent of the phosphorus applied as chemical fertilizers. It can also carry large amounts of iron, chloride, boron, copper and zinc. In just one day, a city of 10 million flushes enough nitrogen, phosphorus and potassium to fertilize about 500,000 hectares of agricultural land.

In Pakistan, for seeking approval to a wastewater treatment plant proposal, the proponent has to justify the benefits. The sale of treated wastewater and dried sludge, which is easy to quantify, is shown as the financial benefits. Pollution prevention and health benefits could not be quantified in economic terms.

The executive summary of the report says:

“Although economic valuation of wastewater management is complex, it remains an important tool to guide policymakers and investors to take informed decisions. A financial analysis of wastewater management looks at its private costs and benefits and can underpin decision making from a business or treatment plant operator standpoint. Economic analysis looks at the broader costs and benefits for society, providing information for public policy decisions to support improvements in wastewater management. Adequate wastewater collection, treatment, and safe use or disposal can lead to significant environmental and health benefits. However, because some of these benefits do not have a market price, they have not traditionally been considered in the financial analysis of wastewater treatment projects, therefore underestimating total benefits.”

The report recommends recovery of phosphorus, which adds multiple values to the environmental benefits as the treatment plant operators can reduce maintenance costs while recovering a valuable fertilizer. This recommendation is, somewhat, contradictory to another recommendation, which says:

“Where space is not a limiting factor, pond systems and constructed wetlands are two of the most common extensive technologies with significant cost advantage compared to the more energy demanding intensive systems like the activated sludge process. Since energy consumption is a main operational cost factor and electricity cuts a key risk factor for temporary or a lasting breakdown, minimizing energy consumption in WWTPs should be a key consideration in all countries with irregular electricity supply.”

It will not be quite possible to recover phosphorus using pond system, or constructed wetlands.

The report is useful and interesting. The picture on the cover is captivating. The picture on pp. 10 is, probably, that of Ganges River, India. The report is available at:

F H Mughal

F H Mughal (Mr.)
Karachi, Pakistan
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