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Stéphanie Aulong and Jean-Daniel Rinaudo Economic Research Group Water Department

Is it worth decontaminating groundwater ? Lessons from a cost benefit analysis in a French case study. Stéphanie Aulong and Jean-Daniel Rinaudo Economic Research Group Water Department French Geological Survey (BRGM). Introduction. The issue

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Stéphanie Aulong and Jean-Daniel Rinaudo Economic Research Group Water Department

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  1. Is it worth decontaminating groundwater ? Lessons from a cost benefit analysis in a French case study Stéphanie Aulong and Jean-Daniel Rinaudo Economic Research Group Water Department French Geological Survey (BRGM)

  2. Introduction • The issue • In urban contexts groundwater can be heavily polluted … • … while it represents a strategic resource • High remediation / pollution prevention costs • Are the benefits greater than costs ? • If so, what quality level should be targeted ? • This study • Investigate these issues through a French case study • Assess costs and benefits for different groundwater quality targets

  3. Outlines of the presentation • Presentation of the case study • Cost of achieving different quality targets • Methodology • Main results • Benefits of achieving different quality targets • Methodology • Main results • Conclusion and policy implications

  4. The Upper Rhine valley aquifer : One of Europe largest groundwater reserves Uses 50% of industrial water needs drinking water supply for 1 millions inhabitants (in France) Pollution problems Nitrates and pesticides (agriculture) Chlorides (mining) Chlorinated solvents in urban areas Rhin Meuse river bassin district Alsace region Germany Rhine valley aquifer 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Case study area 4200 km²

  5. Chlorinated solvent pollution levels Trichloroethylene (TCE), Tetrachloroethylene (PCE), 111 Trichloroethane (111 TRI). 1997 survey: detected in 38% of the 423 (Fr) + 533 (D) monitoring points Multiple & dispersed pollution sources Large industries SMEs and small size economic activities Households Ancient contaminated sites Road accidents > drinking water threshold substance detected 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Karlsruhe Strasbourg Challenge No. 1: map pollution and identify areas to be remediated Basel

  6. S1: drinking water standard S2: zero pollution Groundwater quality database 2- Identification of polluted areas 3- Typology of activities potentially source of pollution Economic database 4 -Identification of industries and sites to be considered in the PoM Contaminated sitesdatabase 5- Typology of measures, assessment of average unit costs 6- Definition of alternative PoMAssessment of their cost Monitoring point where DWT is exceeded Municipalities where pollution prevention andremediation measures are implemented 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Cost assessment methodology 1- Definition of environmental objectives (threshold values)

  7. 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Number of potential pollution sources Challenge No. 2 : high number of target sectors & activities

  8. 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Remediation and prevention actions considered • Reduction of risk of accidental leakage(soil ceiling / watertight areas under storage tanks, removal of all underground tanks and pipes, pounds to recover solvents in case of accident, etc.) • Collecting and recycling used solventsand waste contaminated with solvents • Clean technologies reducing use of solvents(recycling equipment) • Substitution of chlorinated solventswith other solvents and/or use of technologies which do not require CS • Industrial waste water treatment(with activated coal filters of a stripping tower) • Impact monitoring measures(Simplified risk assessment study, piezometer downstream risk zones) • Remediationof contaminated sites (historical sites and enterprises in activity) Collection of used solvents Technologies not using solvents(here metal degreasing) Challenge No. 3: Large range of technical remediation / prevention actions required Solvent recycling

  9. 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Cost estimate 65%. = 700% of the turn over of the concerned enterprises !!! Challenge No. 4 : High cost for private operators, subsidies required.

  10. 30€/inhabitant 13€/inhabitant S2 S1 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Cost as a function of water quality objective 0 2 4 6 8 10 µg/l Targeted water quality

  11. Reduces drinkingwater treatmentcost Decreases cancer risk & related health costs Reduces ecological impacts on fauna / flora of GW dependentsurface ecosystems Increases the bequest value of GW considered as part of natural heritage for future generation How much are you willing to pay for these different benefits 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations How to assess multiple benefits of GW protection ? Groundwater Quality Improvement

  12. 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Implementation of the contingent valuation survey • Survey • Questionnaire mailed to 5000 households , response rate 13% (668 questionnaires) • Principle: after providing basic information on the current situation, two scenarios are successively presented to respondents: • Restoration of drinking water quality in the entire aquifer (S1) • Elimination of all traces and restoration of natural quality (S2) • Information collected • Perception the 2 scenarios (qualitative) • Willingness to pay amount (in €/household / year) • Reasons underlying WTP (or refusal to pay)

  13. 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations Public perception of GW quality thresholds • Perception of the scenarios : • 68% accept to pay through an increase of their water bill for restoring drinking water quality (S1) • 57% accept to pay more for restoring natural quality (S2) • WTP amounts • 42€ / household / year for S1 • 76€ / household / year for S2 • Motivations for paying

  14. 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations • Total benefit estimate • Average WTP is extrapolated to the entire regional population • Results: • Drinking water threshold = 29 millions€ • Natural groundwater quality = 46,5 millions € • Cost benefit analysis

  15. 1- Case study 2 - Costs 3- Benefits 4- Policy & recommendations What did we learn from this case study ? • Major challenges specific to urban contexts • Monitoring high number dispersed pollution point sources • High number of target sectors & activities • High number of technical actions to be implemented simultaneously • Disproportionate costs for economic actors & historical abandoned sites => need of public finance • Is it worth protecting groundwater ? • Yes, the population perceives the “threatened opportunity” ! • Restoring Drinking water quality is a desirable option for the society as a whole (net benefit) … • … but not going back to water quality of pre-historical times ! • Economics can only help addressing the question, it can’t answer it alone !

  16. Thank you for your attention For additional information jd.rinaudo@brgm.fr

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