Cost-effectiveness analysis of risk-reduction measures to reach water safety targets

Journal article, 2011

Identifying the most suitable risk-reduction measures in drinking water systems requires a thorough analysis of possible alternatives. In addition to the effects on the risk level, also the economic aspects of the risk-reduction alternatives are commonly considered important. Drinking water supplies are complex systems and to avoid sub-optimisation of risk-reduction measures, the entire system from source to tap needs to be considered. There is a lack of methods for quantification of water supply risk reduction in an economic context for entire drinking water systems. The aim of this paper is to present a novel approach for risk assessment in combination with economic analysis to evaluate risk-reduction measures based on a source-to-tap approach. The approach combines a probabilistic and dynamic fault tree method with cost-effectiveness analysis (CEA). The developed approach comprises the following main parts: (1) quantification of risk reduction of alternatives using a probabilistic fault tree model of the entire system; (2) combination of the modelling results with CEA; and (3) evaluation of the alternatives with respect to the risk reduction, the probability of not reaching water safety targets and the cost-effectiveness. The fault tree method and CEA enable comparison of risk-reduction measures in the same quantitative unit and consider costs and uncertainties. The approach provides a structured and thorough analysis of risk-reduction measures that facilitates transparency and long-term planning of drinking water systems in order to avoid sub-optimisation of available resources for risk reduction.