Journal
SCIENCE OF THE TOTAL ENVIRONMENT
Volume 408, Issue 4, Pages 953-957Publisher
ELSEVIER
DOI: 10.1016/j.scitotenv.2009.10.028
Keywords
Distance functions; Economic valuation; Environmental benefits; Shadow prices; Undesirable outputs; Wastewater treatment
Categories
Funding
- Spanish Government through NOVEDAR Project [CSD2007-00055]
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Economic research into the design and implementation of policies for the efficient management of water resources has been emphasized by the European Water Framework Directive (Directive 2000/60/EC). The efficient implementation of policies to prevent the degradation and depletion of water resources requires determining their value in social and economic terms and incorporating this information into the decision-making process. A process of wastewater treatment has many associated environmental benefits. However, these benefits are often not calculated because they are not set by the market, due to inadequate property rights, the presence of externalities, and the lack of perfect information. Nevertheless. the valuation of these benefits is necessary to justify a suitable investment policy and a limited number of studies exist on the subject of the economic valuation of environmental benefits. In this paper, we propose a methodology based on the estimation of shadow prices for the pollutants removed in a treatment process. This value represents the environmental benefit (avoided cost) associated with undischarged pollution. This is a pioneering approach to the economic valuation of wastewater treatment. The comparison of these benefits with the internal costs of the treatment process will provide a useful indicator for the feasibility of wastewater treatment projects. (C) 2009 Elsevier B.V. All rights reserved.
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