Reusing Sewage Water: Evaluating the Benefits

Abstract

Growing concern about water quality and the eutrophication of Australian streams and rivers has prompted the adoption of a variety of remedial strategies by different tiers of government. Given the difficulty of assessing the benefits associated with such strategies, there exists the potential to adopt strategies where the costs imposed upon society exceed the benefits to be derived from such strategies. This article details a specific local government strategy designed to eliminate the discharge of treated sewage water to the Murray River. Values for additional wetland and woodlot areas, to be created as part of this reuse project, are established using the Contingent Valuation Method. While these estimated values suggest that the adoption of such a project imposes a welfare loss upon the local community, there is also evidence that the community places significant value upon environmental amenities created with reclaimed water. Since the study focuses upon the benefits accruing to the local community, no assessment has been made of possible spillover benefits to downstream users. The existence of such benefits does, however, have implications for the funding of such projects.