Cost-Benefit Analysis for Supporting Intermunicipal Decisions on Drinking Water Supply

Journal article, 2019

Several countries promote a regionalization of the drinking water sector; however, few decision support tools are adapted to the intermunicipal level to aid in regional decisions. The aim of this paper is to describe and demonstrate a probabilistic cost-benefit analysis approach to assess the societal effects of regional water supply interventions to constitute support for decision makers. A special focus is given to the quantification of effects on consumers’ health, water supply reliability, and operation and maintenance costs. The uncertainties of the quantified values are represented by probability distribution functions and analyzed by means of Monte Carlo simulations. The proposed approach was demonstrated in the Göteborg region in Sweden, for which five alternative interventions were evaluated. In conclusion, the proposed approach facilitates the identification and prioritization of societal effects so that costs and benefits normally overlooked in evaluation processes can be explicitly considered and addressed. The paper provides a transparent handling of uncertainties and enables a structured approach to improve decision makers’ ability in making informed choices on regional water supply alternatives.