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Wastewater Reuse to Mitigate the Risk of Water Shortages: An Integrated Investment Appraisal

Author

Listed:
  • Foroogh Nazari Chamaki

    (Department of Banking and Finance, Eastern Mediterranean University, North Cyprus)

  • Hatice Jenkins

    (Department of Banking and Finance, Eastern Mediterranean University, North Cyprus)

  • Majid Hashemipour

    (Department of Economics, Queens University, Kingston, Ontario, Canada)

  • Glenn P. Jenkins

    (Department of Economics, Queens University, Kingston, Ontario, Canada, K7L3N6 and Cambridge Resources International Inc.)

Abstract

This paper evaluates the financial and economic costs of reusing wastewater with reverse osmosis (R.O.) purification systems to mitigate the risks of near potable quality water shortages in an urban water system. A distributional analysis is also undertaken to identify those who bear the externalities of the system. A rich data set is available to conduct an ex-post analysis of such a system operating in Cyprus for several years. The levelized financial cost of the R.O. system if it operates at a 75% utilization rate is USD 1.18/m3, while the levelized economic cost that includes all the externality impacts is USD 1.20/m3. However, the closeness of these two values hides a large set of externalities that affect different groups in society in disparate ways. The analysis shows that reusing wastewater in conjunction with a system of R.O. is a very effective way to mitigate the risks of water shortages in a more extensive water system. It also highlights the importance of the nature of the electricity system that generates the electricity to power the R.O. plant in determining the ultimate economic cost of reusing wastewater.

Suggested Citation

  • Foroogh Nazari Chamaki & Hatice Jenkins & Majid Hashemipour & Glenn P. Jenkins, 2022. "Wastewater Reuse to Mitigate the Risk of Water Shortages: An Integrated Investment Appraisal," Development Discussion Papers 2022-15, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4596
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    File URL: http://cri-world.com/publications/qed_dp_4596.pdf
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    References listed on IDEAS

    as
    1. Bicak, H.A. & Jenkins, G.P., 1999. "Costs and Pricing Policies Related to Transporting Water by Tanker from Turkey to North Cyprus," Papers 689, Harvard - Institute for International Development.
    2. Heinrich Zozmann & Christian Klassert & Bernd Klauer & Erik Gawel, 2022. "Heterogeneity, Household Co-Production, and Risks of Water Services — Water Demand of Private Households with Multiple Water Sources," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 1-38, January.
    3. Bahramian, Pejman & Jenkins, Glenn P. & Milne, Frank, 2021. "A stakeholder analysis of investments in wind power electricity generation in Ontario," Energy Economics, Elsevier, vol. 103(C).
    4. Strand, Jon, 2010. "The full economic cost of groundwater extraction," Policy Research Working Paper Series 5494, The World Bank.
    5. Bicak, Hasan Ali & Jenkins, Glenn P. & Ozdemirag, Ali, 2002. "Water flow risks and stakeholder impacts on the choice of a dam site," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(2), pages 1-21.
    6. Harberger, Arnold C, 1971. "Three Basic Postulates for Applied Welfare Economics: An Interpretive Essay," Journal of Economic Literature, American Economic Association, vol. 9(3), pages 785-797, September.
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    Cited by:

    1. Foroogh Nazari Chamaki & Glenn P. Jenkins & Majid Hashemipour, 2023. "Financial, Economic, and Environmental Analyses of Upgrading Reverse Osmosis Plant Fed with Treated Wastewater," Energies, MDPI, vol. 16(7), pages 1-23, April.

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    Keywords

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    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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