Development of Methodologies to Evaluate the Environmental, Financial and Social Benefits of Water Reuse Projects

Project ID: 4180
Principal Investigator: Anna Hoag
Research Topic: Desalination and Water Treatment
Priority Area Assignments: 2014 (Advanced Water Treatment)
Funded Fiscal Years: 2014
Keywords: water reuse, cost evaluation, environmental benefit, financial benefit, social benefit

Research Question

Water recycling and reuse is a commonly employed method of conserving and extending potable water supplies to meet increasing water demands. Within the state of Texas, many planned water reuse projects have been halted due to a lack of funding or inability to justify the significant capital expenditures required. There is a need to develop a clear, well-defined economic and financial evaluation approach that can be used by entities and funding agencies to justify (or reject) water reuse projects relative to other water supply strategies. Triple bottom line (TBL) analyses are very useful for evaluating water reuse in comparison to other water supply options because TBL analyses expands upon traditional cost/benefit analysis by looking at a wide range of environmental, economic and social effects. There is no standard method for implementing the TBL approach. Therefore, more work appears to be needed in this area to: (1)Make sure triple bottom line tools are effective and up-to-date and can be used to evaluate the magnitude of environmental, economic, and social impacts when reuse options are included in community and regional water supply portfolios and wastewater management efforts; (2)Evaluate how changes in the three TBL components can best be compared to each other when evaluating water reuse relative to other water supply strategies; and (3)Compile examples and guidance for how to objectively evaluate reuse alongside other community/regional alternatives. In addition to helping states and local communities better advance reuse projects, this type of analysis would especially be useful to Federal mandates within the latest Principles and Requirements for Federal Investments in Water Resources (P&Rs), which intends to provide a common framework for analyzing a diverse range of water resource projects. The P&R's are essentially a TBL approach to evaluating water projects, incorporating environmental and social aspects into the traditional cost/benefits analysis.

Need and Benefit

In communities all around the world, water supplies are coming under increasing pressure as population growth, climate change, pollution, and changes in land use affect water quantity and quality. To address existing and anticipated water shortages, many communities are working to increase water conservation and are seeking alternative sources of water. Water reuse for beneficial purposes such as drinking, irrigation, or industrial uses—is one option that has helped some communities significantly expand their water supplies. In many cases in the arid western states, recycling and reuse is the only viable alternative to meet demands.

However, water providers and ratepayers alike often ask the question of whether reuse is worth the financial investment compared to other strategies. Nonpotable water reuse (i.e., for irrigation) often requires construction of new or expanded treatment and conveyance systems in urbanized areas, which may be costly because of the large spatial distribution of demands and the high costs of dual-piping systems (Dietrick et. al, 2011; Tchobanoglous and Leverenz, 2012). Potable reuse (i.e., for drinking purposes) often provides benefits through the avoidance of the additional costs associated with dual-piping system, but come with non-monetary challenges such as consumer concerns about reliability and public health.

Although great strides have been made to decrease the cost of reuse and resolve the non-monetary concerns with reuse, the benefits of reuse are still not well-defined. The benefits of water reuse, such as source reliability, watershed protection, local economic development, improved public health, etc. are not readily quantified by traditional cost benefit techniques. The benefits are also usually fragmented among a number of agencies and the public, and are not easily assigned. As a result, water reuse projects are often undervalued when compared to other projects, and significant opportunities for beneficial reuse are lost. As such, the state of Texas recently identified TBL tool development for water reuse as a priority research topic in its Texas Water Reuse Research Agenda (2011).

This scoping study will take needed steps to assess how beneficial reuse is valued in current markets. Understanding the value associated with reuse project is necessary before a "standardized" TBL tool can be developed to evaluate the environmental, financial, and social benefits of water reuse projects. In turn, water resource managers at all levels may use this tool to make important funding decisions, such as those make under a capital improvement program, and to help educate the public/rate payers on the numerous benefits of reuse.

Contributing Partners

Contact the Principal Investigator for information about partners.

Research Products

Bureau of Reclamation Review

The following documents were reviewed by experts in fields relating to this project's study and findings. The results were determined to be achieved using valid means.

Development of Methodologies to Evaluate the Environmental, Financial and Social Benefits of Water Reuse Projects (final, PDF, 521KB)
By Steve Piper and Anna Hoag
Report completed on November 07, 2014

This scoping study provides an assessment of how water reuse projects are currently valued as part of a traditional economic or financial analysis and the potential for applying a Triple Bottom Line (TBL) accounting framework to water reuse projects. Despite potential problems with using TBL, three possible approaches are identified which should be considered as part of a case study in follow-up research.

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Last Updated: 6/22/20