POTENTIAL BENEFITS AND COSTS OF INGROUND STORAGE OF IMPORTED WATER1

ABSTRACT: In the near future, groundwater storage of imported water may become increasingly important as sites for surface storage are less available. This article explores the potential economic costs and benefits of groundwater storage. The costs include capital outlays, maintenance costs, land costs, legal costs, energy costs, and opportunity costs. The benefits include land cost savings, prevention of subsidence, aquifer protection, and higher economic use of surface lands that might be covered by a reservoir.     

Economical assessment of the design,construction and operation of open-bed biofilters for waste gas treatment

A protocol was developed with the purpose of assessing the main costs implied in the set-up, operation and maintenance of a waste gas-treating conventional biofilter. The main operating parameters considered in the protocol were the empty bed residence time and the gas flow rate. A wide variety of investment and operating costs were considered. In order to check its reliability, the protocol was applied to a number of scenarios, with biofilter volumes ranging from 8.3 to 4000 m³. Results show that total annualized costs were between 20?000 and 220?000 €/year and directly dependent, among other factors, on the size of the system. Total investment and operating costs for average-size compost biofilters were around 60?000 € and 20?000 €/year, respectively, which are concordant with actual costs. Also, a sensitivity analysis was performed in order to assess the relative influence of a series of selected costs. Results prove that operating costs are those that influence the total annual costs to a higher extent. Also, packing material replacement costs contribute significantly to the total yearly costs in biofilters with a volume higher than 800 m³. Among operating costs, the electricity consumption is the main influencing factor in biofilters with a gas flow rate above 50?000 m³/h, while labor costs are critical at lower gas flow rates. In addition, the use of a variety of packing materials commonly employed in biofiltration was assessed. According to the results obtained, special attention should be paid to the packing material selected, as it is the main parameter influencing the medium replacement costs, and one of the main factors affecting investment costs.     

A case study on project-level CO2 mitigation costs in industrialised countries: the Climate Cent Foundation in Switzerland

This paper analyses CO₂ emissions reduction costs based on project data from the Climate Cent Foundation (CCF), a climate policy instrument in Switzerland. Four conclusions are drawn. First, for the projects investigated, the CCF on average pays €63/ton. Due to the Kyoto Protocol, the CCF buys reductions only until 2012. This cut-off increases reported per ton reduction costs, as the additional lifetime project costs are set in relation to reductions only until 2012, rather than to reductions realised over the whole lifetime. Lifetime reduction costs are €45/t. Second, correlation between CCF's payments and lifetime reduction costs per ton is low. Projects with low per ton reduction costs should thus be identified based on lifetime per ton reduction costs. Third, the wide range of project costs per ton observed casts doubts on the widely used identification of the merit order of reduction measures based on average per ton costs for technology types. Finally, the CCF covers only a fraction of additional reduction costs. Decisions to take reduction efforts thus depend on additional, non-observable and/or non-economic motives. Any generalisation of results has to consider that this analysis is based on prospective costs of a sub-sample of projects in Switzerland.     

Assessing societal costs associated with environmental impacts

A study of “harmless” odors was utilized as a platform for determining the cost impact of envi‐ronmental effects resulting from management decisions. The cost to society of “harmless” odors eventually leads to internal costs for companies emitting the odors. It is easier to determine societal costs for “harmless” odors than to estimate the internal costs that eventually accrue to a company. However, larger societal costs will lead to larger company costs; larger societal costs prob‐ably also lead to faster company internalization of costs.c 2000 John Wiley & Sons, Inc.     

Transaction costs and community-based natural resource management in Nepal

Transaction costs in community-based resource management are incurred by households attempting to enforce property right rules over common resources similar to those inherent in private property rights. Despite their importance, transaction costs of community-based management of common pool resources (CPRs) are often not incorporated into the economic analysis of participatory resource management. This paper examines the transaction costs incurred by forest users in community forestry (CF) based on a survey of 309 households belonging to eight different forest user groups (FUGs) in the mid hills of Nepal. The analysis reveals that the average 'poor' household incurred Nepalese rupees (NRS) 1265 in transaction costs annually, while wealthier 'rich' households incurred an average of NRS 2312 per year. Although richer households bear higher proportions of such costs, transaction costs for CF management as a percentage of resource appropriation costs are higher for poorer households (26%) than those of middle-wealth (24%) or rich households (14%). There are also village differences in the level of transaction costs. The results show that transaction costs are a major component of resource management costs and vary according to socio-economic status of resource users and characteristics of the community.     

A comprehensive waste collection cost model applied to post-consumer plastic packaging waste

Post-consumer plastic packaging waste (PPW) can be collected for recycling via source separation or post-separation. In source separation, households separate plastics from other waste before collection, whereas in post-separation waste is separated at a treatment centre after collection. There are also two collection schemes, either curb side or via drop-off locations. These different schemes have impact on total costs of collection at the municipal level. It can also influence the facility choices and network design. Therefore, a method which can compare costs of various collection schemes is needed.A comprehensive cost model was developed to compare costs of municipal collection schemes of PPW. The ‘municipal waste collection cost model’ is based on variables including fixed and variable costs per vehicle, personnel cost, container or bag costs as well as on emission costs (using imaginary carbon taxes). The model can be used for decision support when strategic changes to the collection scheme of municipalities are considered. The model takes into account the characteristics of municipalities, including urbanization degree and taxation schemes for household waste management.The model was applied to the Dutch case of post-consumer plastic packaging waste. Results showed that that in general post-separation collection has the lowest costs and curb side collection in urban municipalities without residual waste collection taxing schemes the highest. These results were supported by the conducted sensitivity analysis, which showed that higher source separation responses are negatively related to curb side collection costs. Greenhouse gas emission costs are a significant part of the total costs when collecting post-consumer plastic packaging waste due to the low density to weight ratio of the materials collect. These costs can amount to 15% of the total collection costs.     

AN ANALYSIS OF RISING IRRIGATION COSTS IN THE GREAT PLAINS1

ABSTRACT: Irrigation costs are rising rapidly on the 32 million acres irrigated with ground water. Ground water levels are declining under about 15 million of those acres adding to increased costs. However, from 1975 to 1982, 75 to 80 percent of increased ground water irrigation costs were due to higher nominal energy prices and interest rates. In real dollars, adjusted for inflation, these costs have risen faster than other irrigation costs and the real rise in commodity prices has been very small. A continuation of rapidly rising costs and slowly rising prices will shorten the economic life of those aquifers experiencing declining water levels. That same condition of prices and costs place all ground water irrigators in a disadvantaged position compared to nonirrigators and could cause a decline in ground water irrigation.     

Getting started with environmental cost accounting

Proactive corporations have been looking at methods to determine the real costs of doing business, including environmental costs using environmental cost accounting (ECA) methodology. Many companies do not track or measure environmental costs and therefore do not know their true environmental costs. Unfortunately, conventional accounting practices rarely tease out environmental costs, and the costs associated with environmental compliance remain hidden in general overhead accounts. ECA can bring the world of business and the environment closer. When we have a better handle on environmental costs, we can use this information to better prioritize environmental projects, identify cost improvement projects, and allocate environmental costs to products. In this article we explore how some companies approach ECA and show how to initiate an ECA program.     

Threatened and Endangered Species: At What Cost? The Corps of Engineers Looks at Expenditures and Priorities

Current political conditions, primarily budgetary uncertainty, and the related reluctance to make funding commitments for future generations, have raised questions about the costs of conservation and environmental protection that have not previously been asked. As Federal investments are scrutinized and budgets become ever more constrained, the costs associated with environmental requirements could begin to be of greater importance and to influence decisions on Federal projects. In response to concerns about the U.S. Army Corps of Engineers (Corps) spending under the Endangered Species Act (P.L. 93-205) (ESA), a limited investigation was performed to determine the accuracy of reported Corps expenditures. The investigation showed that, for particular groups of species, actual conservation costs for threatened and endangered species may be twice the amounts previously reported in the annual ESA expenditure reporting to the U.S. Fish and Wildlife Service. In light of this finding, the Corps has sought a means to provide more accurate and consistent reporting of expenditures for addressing threatened and endangered species. A Species Costs Template (template) has been developed to identify the types and magnitude of costs related to the ESA and to counteract the impediments (legal, institutional, and practical) to underreporting costs. The template will be used by the Corps for reporting ESA costs beginning with Fiscal Year 2005 (FY05) (reported in January 2006). Five broad categories of expenditures (effects determination costs, ESA protection and conservation costs, equipment costs, opportunity costs, and other species costs) are identified by the template.     

The Cost of Developing Site-Specific Environmental Regulations: Evidence from EPA's Project XL

The flagship of the Environmental Protection Agency's regulatory reinvention initiative, Project XL has been touted as a regulatory blueprint for a site-specific, performance-based pollution-control system, but widespread complaints about the costs of the program beg the question of whether the costs of tailoring regulations to individual facilities are manageable. To address this question, this paper presents original survey data on a sample of 11 XL projects. We find that the fixed costs of putting in place XL agreements are substantial, averaging over $450,000 per firm. While stakeholder negotiations are widely cited as the principal source for these costs, we find that they actually arise mainly from interaction between participating facilities and the EPA. Moreover, EPA management problems are perceived by our survey respondents as having inflated project development costs. Finally, we find that the key factors that explains differences in costs across XL projects are the scope and complexity of the project proposal. These findings suggest that Project XL favors large firms that can afford to pay significant project development costs, that EPA management problems must be resolved to reduce costs, and that there may be a significant economic bias against complex and innovative proposals—precisely the type of proposals that Project XL was designed to foster in order to improve the efficiency of the regulatory system.     

Optimal hardwood tree planting and forest reclamation policy on reclaimed surface mine lands in the Appalachian coal region

We study the optimal hardwood tree planting decision on reclaimed surface coal mines in the Appalachian region using a mine operator-focused, expected cost model that recognizes costs of preparing the site for tree planting, unit costs of planting seedlings, and opportunity costs of reforestation treatments and the performance bond. We also consider the possibility of failed initial attempts by incorporating the probability of reforestation success, based on empirical seedling ,survival rates and regulated tree survival standards, as well as fixed and unit costs of returning for additional planting. Optimal planting levels from 319 to 780 trees per acre and expected costs from $1049 to $2338 were found using simulations over a range of unit planting costs, fixed costs of replanting, tree survival standards, and interest rates. Further simulations compared optimal planting across un-weathered gray sandstone and weathered brown sandstone substrate materials, finding gray sandstone to be associated with lower expected costs. We conclude that optimal planting density and expected reforestation cost are sensitive to economic parameters, regulations, and planting substrate materials; and those policies influencing these factors may have substantial impact on reforestation outcomes and the choice of post-mining land use by mine operators. Our study provides a framework for understanding forest reclamation decisions that incorporates incentives faced by the mine operators who develop and implement the plans for mine reclamation, including forestry.     

WATER SUPPLY COSTS FOR SMALL PRIVATE UTILITIES1

ABSTRACT: This paper examines the cost of water supply for small and mid-sized private water utilities. An econometric approach was employed in which data on utility costs and characteristics were used to estimate a total water supply cost function from which average and marginal costs were derived. The results suggest that although average and marginal costs decline with output, the rate of decline rapidly approaches zero, and unit costs therefore appear to remain relatively constant over a wide range of output. Implications of the results for pricing policy are examined.     

AN ENGINEERING ECONOMIC ANALYSIS OF A PROGRAM FOR ARTIFICIAL GROUNDWATER RECHARGE1

This study describes and demonstrates two alternate methods for evaluating the relative costs and benefits of artificial groundwater recharge using percolation ponds. The first analysis considers the benefits to be the reduction of pumping lifts and land subsidence; the second considers benefits as the alternative costs of a comparable surface delivery system. Example computations are carried out for an existing artificial recharge program in Santa Clara Valley in California. A computer groundwater model is used to estimate both the average long term and the drought period effects of artificial recharge in the study area. For the example problem, the benefits of reduced average annual pumping lifts and reduced incremental subsidence are greater than the total costs of continuing the existing artificial recharge program. Benefits for reduced subsidence are strongly dependent on initial aquifer conditions. The second analysis compares the costs of continuing the artificial recharge program with the costs of a surface system which would achieve the same hydraulic effects. Results indicate that the costs of artificial recharge are considerably smaller than the alternative costs of an equivalent surface system. In evaluating a particular program, consideration should also be given to uncertainties in future supplies and demands for water as well as to the probability of extreme events such as droughts.     

SOCIAL OVERHEAD CAPITAL COSTS OF IRRIGATION DEVELOPMENT IN WASHINGTON STATE1

ABSTRACT: Increased irrigation as a means of achieving economic development can impose significant social costs on the state or region of growth. The growth in population induced by additional irrigation will require new roads, water and sewage facilities, schools, fire and police protection, etc. Also the increased energy demands due to irrigation and growth in economic activity must be met. Capital investments required to service these needs of new development can become very large. This study attempts to measure such social overhead costs or irrigation development for some specific irrigation project areas of Eastern Washington. It is shown that investment costs in overhead items can reach $2,000 per acre irrigated or $70,000 per job created. Alternatively, the annual costs can equal $180 per acre or $6,700 per worker. These costs must be paid locally through increased taxes, utility rates, or costs for services.     

Copper smelting and refining

Detailed research by the Commodities Research Unit (CRU) reveals a wide variation in direct operating costs at copper smelters and refineries. The cost curve for smelters is almost a straight line, indicating that so far there has been no levelling of costs as there has been in the mining industry. Operating costs at smelters using reverberatory furnaces are well below costs at plants using modern technology, but this apparent paradox is shown to be a reflection of location. CRU argues that costs are an important determinant of smelter/refinery competitiveness, but that other factors such as location and tariffs are also significant. Operating margins world-wide show enormous variations, but companies' increasing interest in their processing operations, coupled with changes in tariffs, are predicted to lead to a much more competitive market.     

The economics of waste disposal in the UK

The author takes a simplified look at the structure of waste disposal costs in the UK. The immediate impression is that landfill costs are so significantly cheaper than other disposal options, on average, that considerable escalation in landfill costs, for whatever reason, would be needed to make it lose its predominance. The analysis also demonstrates that the more futuristic technologies may well have a role to play provided the initial estimates of per tonne costs are borne out by commercial ventures.     

Project coordinators’ views on climate adaptation costs and benefits – justice implications

ABSTRACT

As local climate adaptation activity increases, so does the number of questions about costs, benefits, financing and the role that economic considerations play in adaptation-related decision-making and policy. Through five cases, covering a range of climate risks and types of adaptation measures, this paper critically examines Swedish project coordinators’ perceptions of costs and benefits in already-implemented climate adaptation measures. Our study finds that project coordinators make use of different system boundaries – on temporal, geographical and administrative scales – in their cost/benefit evaluations, making the practice of determining adaptation costs arbitrary and hard to compare. We further demonstrate that the project coordinators interpret costs and benefits in a manner that downplays the intangible environmental and social costs and benefits arising from the adaptation measures, despite their own experience of how such measures negatively impact upon social value. The exclusion of social and environmental costs and benefits has severe implications for justice, as it can bias decisions against people and ecosystems that are affected negatively. Based on the findings, we propose three tentative social justice dilemmas in local climate adaptation planning and implementation: 1. Cost and benefit distribution across scales; 2. The identification and valuation of non-market effects; and 3. The equitable allocation of costs and benefits.     

Transaction costs and the clean development mechanism

The emissions trading provisions of the Kyoto Protocol and its clean development mechanism (CDM) are designed to permit greenhouse gas (GHG) emission reductions at the lowest cost globally. However, to ensure climate integrity, these reductions must pass through vigilant approval, monitoring and evaluation procedures that create additional transaction costs unrelated to the physical process of eliminating GHGs. Moreover, the CDM's additionality criterion creates constraints that magnify the influence of these transaction costs on project viability. If these costs are extreme, they could undermine the success of the CDM, and possibly of the Kyoto Protocol itself. This article describes the trading provisions of the treaty, creates a working definition of transaction costs, and discusses their effects. It then analyzes the process of creating a CDM project to identify the sources of transaction costs, illustrated by an example of a fuel substitution project in Ghana. The conditions for project profitability are analyzed and compared with recent GHG emission credit prices in Europe. The specific Ghanaian results are not generalizable to all CDM projects, but the model does suggest a template that can be used to analyze the effects of project and transaction costs in other contexts.     

Wellhead treatment costs for groundwater contaminated with pesticides: A preliminary analysis for pineapple in Hawaii

In Hawaii, trace concentrations of pesticides used in the production of pineapple were found in the groundwater supplies of Mililani Town in the Pearl Harbor Basin on the island of Oahu. Groundwater serves as the major source of drinking water and residents pay for wellhead treatment of the contaminated water, via their monthly water bill. The agricultural chemical users within the Pearl Harbor Basin do not include these wellhead treatment costs in their production costs. The agricultural industry benefits from using pesticides but does not pay the entire societal cost of using these chemicals. In this study we evaluate the specific financial cost of wellhead treatment, and not the economic value of groundwater. While wellhead treatment costs could conceivably be shared by several parties, this study focuses on the financial impact of the pineapple industry alone. This study factors annual wellhead treatment costs into annual pineapple production costs to measure the effect on annual financial return from pineapple production. Wellhead treatment costs are calculated from the existing granulated activated carbon (GAC) water treatment facility for Millilani Wells I and II. Pineapple production costs are estimated from previous cost of production studies. The inclusion of wellhead treatment costs produces different production-cost results, depending on the scale of analysis. At the local scale, the Mililani wellhead treatment costs can be factored into the production costs of the pineapple fields, which were probably responsible for contamination of the Mililani Wells, without causing a deficit in economic return. At the larger regional scale, however, the return from all of the pineapple grown in the Pearl Harbor Basin can not sustain the cost of wellhead treatmentfor the entire water supply of the basin. Recommendations point to the prevention of groundwater contamination as more cost-effective measure than wellhead treatment.     

Measurement of the scarcity of soil in agriculture

The paper defines the concept of land degradation and costs and effects of soil erosion. Through the concept of optimal levels of soil erosion, a conceptual model of the social costs of soil degradation is elaborated. The discussion focuses on the measurement aspects of the economic scarcity of soil in the agriculture sector. Reliable estimates of the true impacts of soil degradation can only be made if data on marginal damage costs and marginal conservation costs are available. The different scarcity indicators are evaluated and competitive land rental prices are considered as appropriate in indicating soil scarcity in agriculture.