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Title: WATER SCARCITY, WASTEWATER REUSE AND THE ECONOMIC VALUE OF WATER

Author: I. Heinz

Year: 2009

Publisher: European Water Resources Association (EWRA)

Description:

Wastewater reuse is one of the most promising measures to stabilize water availability in arid and semi-arid areas. Wastewater reuse projects can be made more effective and widespread by applying economic approaches. Under specific conditions farmers, cities and the environment can gain from water reclamation and intersectoral water transfers. In particular, farmers should be motivated by adequate economic incentives to reuse treated wastewater rather than by charging them with the full cost of water reclamation. It has been often suggested to charge farmers with the true value of water at catchment areas, so that the application of treated wastewater will pay for them. However, such a pricing policy may discourage farmers to replace conventional resources with reclaimed water. Furthermore, multi-stakeholders platforms at watershed levels appear to be preferable over compulsory regulations in achieving economically efficient intersectoral water transfers. Water agencies and providers of treated wastewater should involve farmers in structured negotiations to argue them into the benefits of water reclamation. In agriculture, cost savings due to reduced use of chemical fertilizers, increases in yields and revenues due to nutrient-rich reclaimed water and improved water supply are the dominant positive economic impacts. From the viewpoint of cities, the additional supply of freshwater conserved by farmers engaged in reuse can lead to benefits, including reduced costs associated with groundwater  overexploitation, transmission of remote water resources or seawater desalination. If the expenditures needed for wastewater reuse and intersectoral water transfer are small relative to the benefits, water exchange between the agricultural community and cities will be worthwhile. Scarce water resources can be used more effectively and further impairments to nature due to water shortage will be prevented. The economic value of water for non-agricultural uses plays a crucial role. The additional freshwater volumes conserved, evaluated with domestic water prices, may indicate the benefits of improvements in municipal water supply. Non-monetary benefits, such as restoration of groundwater tables, prevention of wastewater recharge into rivers and conservation of eco-systems are to be taken additionally into consideration.