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Reducing CO2 emissions from drinking water treatment plants: A shadow price approach

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  • Molinos-Senante, María
  • Guzmán, Catalina

Abstract

The water industry is currently facing the challenge to reduce its carbon footprint. Although the majority of previous studies have focused on wastewater treatment energy issues, a non-negligible quantity of energy is consumed in drinking water treatment plants (DWTPs). To develop environmental policies aimed to reduce CO2 emissions, it is essential to estimate the shadow price of CO2 because this can provide information about the marginal abatement cost of CO2. This paper computes the shadow price of CO2 for a sample of Chilean DWTPs using directional distance function estimation. The potential reduction of CO2 emissions for each DWTP is also calculated. Finally, applying a non-parametric hypothesis test, factors that affect CO2 shadow prices are investigated. The results indicated that the Chilean DWTPs evaluated have notable room to reduce CO2 emissions. Moreover, the average shadow price of CO2 for DWTPs is 5.7% of the drinking water price. The methodology and results of this study are of great interest for water companies and policy makers to introduce incentives for promoting the transition towards an urban water cycle with a low carbon footprint.

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  • Molinos-Senante, María & Guzmán, Catalina, 2018. "Reducing CO2 emissions from drinking water treatment plants: A shadow price approach," Applied Energy, Elsevier, vol. 210(C), pages 623-631.
    • Handle: RePEc:eee:appene:v:210:y:2018:i:c:p:623-631
    DOI: 10.1016/j.apenergy.2016.09.065
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    3. Ramón Sala-Garrido & Manuel Mocholí-Arce & María Molinos-Senante & Alexandros Maziotis, 2021. "Comparing Operational, Environmental and Eco-Efficiency of Water Companies in England and Wales," Energies, MDPI, vol. 14(12), pages 1-14, June.
    4. Sala-Garrido, Ramon & Mocholi-Arce, Manuel & Maziotis, Alexandros & Molinos-Senante, María, 2023. "The carbon and production performance of water utilities: Evidence from the English and Welsh water industry," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 292-300.
    5. Wu, Yinyin & Yu, Jie & Song, Malin & Chen, Jiandong & Hou, Wenxuan, 2021. "Shadow prices of industrial air pollutant emissions in China," Economic Modelling, Elsevier, vol. 94(C), pages 726-736.
    6. Ramon Sala-Garrido & Manuel Mocholi-Arce & Maria Molinos-Senante & Michail Smyrnakis & Alexandros Maziotis, 2021. "Eco-Efficiency of the English and Welsh Water Companies: A Cross Performance Assessment," IJERPH, MDPI, vol. 18(6), pages 1-17, March.
    7. Cui, Lixin & Dong, Ruxue & Mu, Yunguo & Shen, Zhiyang & Xu, Jiatong, 2022. "How policy preferences affect the carbon shadow price in the OECD," Applied Energy, Elsevier, vol. 311(C).
    8. Borge-Diez, David & Godoy-Déniz, Juan Manuel & López-Rey, África & Colmenar-Santos, Antonio, 2021. "Pico turbines, the solution to self-supply energy to the water supply network. A case study in Las Palmas de Gran Canaria," Energy, Elsevier, vol. 229(C).
    9. Sala-Garrido, Ramon & Mocholi-Arce, Manuel & Molinos-Senante, Maria & Maziotis, Alexandros, 2021. "Assessing the marginal cost of reducing greenhouse gas emissions in the English and Welsh water and sewerage industry: A parametric approach," Utilities Policy, Elsevier, vol. 70(C).
    10. Shayan Jamil & Saimar Pervez & Fiza Sarwar & Rameesha Abid & Syed Umair Ullah Jamil & Hassan Waseem & Kimberley A. Gilbride, 2023. "Lifecycle Assessment of Two Urban Water Treatment Plants of Pakistan," Sustainability, MDPI, vol. 15(23), pages 1-21, November.

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