Download Estimating the Value of Water-Use Efficiency in the by David G. Groves PDF

By David G. Groves

This record provides an fiscal framework for estimating a water agency1s shunned expenses and environmental advantages of accelerating water-use potency. The record demonstrates this framework by way of comparing the advantages of Denver Water's potency courses and makes use of an exploratory modeling method of accommodate major uncertainty. The research highlights the significance of contemplating either lengthy- and short-run expenditures and merits.

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Recall that the nominal factors yielded a result of $10,300 per mgal. The lower-bound estimate is 73 percent of the nominal estimate, and the upper bound is 214 percent of the nominal estimate. In this case, a majority of alternative cases (reflecting different plausible values of the uncertain factors) lead to higher estimates for the SR avoided costs. 2 1 We use a Latin hypercube sampling scheme to randomly choose values for the uncertain parameters across their plausible ranges while ensuring that the sample is reasonably uniform.

2 For our Denver Water case study, we consider riparian and wetlands habitat, fish habitat, air-quality impacts from energy use in water distribution and treatment, and nonangling river recreation (services) as sources of recreational benefits. 1 lists each service and valuation method, impact metric, and valuation metric used. These are explained in the text following the table, and Appendix B provides more detail on each valuation-estimation procedure. 1 Environmental Service, Valuation Methodology, Impact Metric, and Valuation Metric Considered in the Case Study Environmental Service Valuation Methodology Impact Metric (service/flow) Valuation Metric (value/service) Riparian and wetlands Property value as proxy for ecosystem value Acres/mgd $/acre (annualized) Trout fisheries (recreational benefit of angling) Air-quality impacts from water pumping River recreation (nonangling) Economic impact attribution $/mgd [value/flow]a Market analysis Tons of NOX /mgd $/tons of NOX Modified travel-cost method User-days/mgd $/user-day a Note that, for trout fisheries, we do not estimate both the service per fl ow and value per service; instead, we estimate the value of the flow directly.

The many power plants covered under this rule are likely to have lower-cost pollution-control opportunities than would a smaller area, such as Denver. Therefore, although the true cost of NOX pollution control remains uncertain, these estimates provide a plausible range. 9 We tested for a historical relationship between annual commercial river use and seasonal discharge (corresponding to the rafting season) for the Blue River and the South Platte River. The data we used (Colorado River Outfitters Association, undated) did not include figures for the Fraser River, so we did not include this river in our analysis.

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