Cost-benefit analysis of water-reuse projects for environmental purposes: A case study for Spanish wastewater treatment plants

Water reuse is an emerging and promising non-conventional water resource. Feasibility studies are essential tools in the decision making process for the implementation of water-reuse projects. However, the methods used to assess economic feasibility tend to focus on internal costs, while external impacts are relegated to unsubstantiated statements about the advantages of water reuse. Using the concept of shadow prices for undesirable outputs of water reclamation, the current study developed a theoretical methodology to assess internal and external economic impacts. The proposed methodological approach is applied to 13 wastewater treatment plants in the Valencia region of Spain that reuse effluent for environmental purposes. Internal benefit analyses indicated that only a proportion of projects were economically viable, while when external benefits are incorporated all projects were economically viable. In conclusion, the economic feasibility assessments of water-reuse projects should quantitatively evaluate economic, environmental and resource availability. (C) 2011 Elsevier Ltd. All rights reserved.