1. Presentation of the case study

Cost and benefits of reaching different threshold values

The case of chlorinated solvents in the Upper Rhine valley

Stéphanie Aulong and Jean-Daniel Rinaudo Economic Unit

Water Department, Brgm

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Outlines of the presentation

1. Presentation of the case study

2. Estimating the cost of programs of measures for different threshold values

9 Methodology 9 Main results

3. Assessment of economic benefits of groundwater protection with different threshold values

9 Methodology 9 Main results

4. Conclusion and policy implications

1 – Presentation of the case study area

> The Upper Rhine valley aquifer :

•

Quaternary alluvial aquifer

•

4200 km² from Basel to Karlsruhe (2750 km² in France)

•

Focus on the French part ~ 40%

of the area covered in WP4 case study

> ^Uses

•

50% of industrial water needs

•

drinking water supply for 1 millions inhabitants (in France)

> Pollution problems

•

Nitrates and pesticides (agriculture)

•

Chlorides (mining)

•

Chlorinated solvents

Rhin Meuse river bassin district

Rhine valley aquifer Germany Alsace

region

>4

>drinking water threshold substance detected

Basel

Strasbourg Karlsruhe

> Chlorinated solvent pollution levels

•

trichloroethylene (TCE),

tetrachloroethylene (PCE), 111 trichloroethane (111 TRI).

•

1997 survey: detected in 38% of the 423 (Fr) + 533 (D) monitoring points

> Pollution sources

•

Large industries

•

SMEs and small size economic activities

•

^Households

•

Ancient contaminated sites

•

Road accidents

> Objectives of the case study

•

Assess the cost of measures required to reduce pollution to different levels: what level of environmental protection can we afford ?

•

Assess the benefits of different groundwater protection level : is it worth protecting groundwater for economic

considerations?

•

Compare costs and benefits of different protection levels: what is the economically optimum pollution level ?

2- Cost of programs of measures for different

threshold values

2- Estimating the cost of the program of measures

> Methodology

1- Definition of environmental

objectives (threshold values)

2- Identification of polluted areas Groundwater

quality database

3- Typology of activities potentially

source of pollution Economic

database Contaminated

sites database

4 -Identification of industries and sites

to be considered

in the PoM 5- Typology of

measures, assessment of average unit costs 6- Definition of

alternative PoM Assessment of their

Monitoring point where DWT is exceeded cost

Municipalities where pollution prevention and remediation measures are implemented

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2- Estimating the cost of the program of measures

> ^Results:

•

Number of (fixed) enterprises concerned (for DW threshold)

•

+ 975 mobile enterprises (painting, industrial cleaning)

•

+ 41 historical contaminated sites

Economic sector

Number of enterprises

Number of employees

Chemichal 14 1224

Electrical and electronic equipements 18 672

Car and motorcycle repair workshops 140 727

Food and beverage industry 3 20

Printing industry 60 770

Mecanical industry 117 6897

Industry producing or using paint 46 793

Textile industry 5 228

Metal coating activities 57 1669

Metal cutting and processing industry 6 75

Total 466 13075

> Typology of measures (preventive and remediation):

1. Reduction of risk of accidental leakage (soil ceiling / watertight areas under storage tanks, removal of all

underground tanks and pipes, pounds to recover solvents in case of accident, etc.)

2. Collecting and recycling used solvents ^{and waste}

contaminated with solvents

3. Clean technologies reducing use of solvents

(recycling equipment)

4. Substitution of chlorinated solvents with other solvents and/or use of technologies which do not require CS

5. Industrial waste water treatment (with activated coal filters of a stripping tower)

6. Impact monitoring measures (Simplified risk assessment study, piezometer downstream risk zones, etc)

7. Remediation of contaminated sites (historical sites and enterprises in activity)

2- Estimating the cost of the program of measures

Collection of used solvents

Technologies not using solvents (here metal degreasing)

Solvent recycling

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2- Estimating the cost of the program of measures

> Cost estimate

•

Distribution per type of activity

Economic sector Cost of PoM (thous. €)

% of total cost of PoM Activities producing or using paint and varnishes 11 056 49%

Mecanical industry 3 606 16%

Contaminated sites 2 987 13%

Metal coating industry 1 891 8%

Car and motorcycle repair workshops 1 097 5%

Chemichal industry 881 4%

Printing 378 2%

Textile industry 184 0,8%

Manufacture of electrical and electronical products 166 0,7%

Industrial cleaning industry 60 0,3%

Food and beverage industry 47 0,2%

Metal processing and cutting industry 46 0,2%

Total 22 405 100%

2- Estimating the cost of the program of measures

Clean technology (using solvents)

11%

Recycling &

elimination of used solvents

12%

Reduction of risk of accidental

leakage 2%

Use of substitution

product or technology (no

solvents) 35%

Effluent treatment (GAC)

1%

Remediation of contaminated sils and water

26%

Risk assessment &

site surveillance 13%

> Cost estimate

•

Distribution per type of measure

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2- Estimating the cost of the program of measures

> Cost sensitivity to threshold value

52,1

42,9

38,1

24,4 24,4 22,4

0,0 10,0 20,0 30,0 40,0 50,0 60,0

0% 20% 40% 60% 80% 100% 120%

Targeted water quality in percentage of drinking water thresholds

Millions €

13€/inhabitant 30€/inhabitant

3- Economic benefits of groundwater protection with different threshold

values

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2- Economic benefits of groundwater protection

> How to assess multiple benefits of GW protection ?

Groundwater Quality Improvement

Reduces drinking water treatment cost

Decreases cancer risk

& related health costs

Reduces ecological impacts on fauna / flora of GW

dependent

surface ecosystems

Increases the bequest value of GW considered as part of natural

heritage for future generation

How much are you willing to pay for these different benefits

> Implementation of the contingent valuation survey

•

Principle: after providing basic information on the current situation, two scenarios are successively presented to respondents:

–

Restoration of drinking water quality in the entire aquifer (S1)

–

Elimination of all traces and restoration of natural quality (S2)

•

Information collected

–

Perception the 2 scenarios (qualitative)

–

Willingness to pay amount (in €/household / year)

–

Reasons underlying WTP (or refusal to pay)

•

Implementation

–

Questionnaire mailed to 5000 households , response rate 13%

(668 questionnaires)

–

Statistical analysis of the results

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> Public perception of GW quality thresholds

•

Perception of the scenarios :

–

68% accept to pay through an increase of their water bill for restoring drinking water quality

–

57% accept to pay more for restoring natural quality

•

WTP amounts

–

^42€ / household / year for S1

–

^76€ / household / year for S2

•

Motivations for paying

Reasons for paying S1

I accept to pay for allowing future use of regional population

67%

I accept to pay for securing my personal use 64%

I prefer to pay now for protecting GW than later for treating it

62%

I accept to pay for protecting aquatic life 58%

> Total benefit estimate

•

Average WTP is extrapolated to the entire regional population (after sampling bias correction)

•

^Results:

–

Drinking water threshold = 29 millions€

–

Natural groundwater quality = 56,5 millions €

> Cost benefit analysis

-6 millions € 7 millions €

Net benefit

46,5 millions € 29 millions €

Estimated groundwater protection benefit

76€/ household/ year during ten years 42 €/ household/ year

during ten years Average Willingness To Pay

(stated amount) BENEFITS

52,1 millions €

~30 € / inhabitant

~298 % yearly turn over of concerned enterprises 22,4 millions €

~13 € / inhabitant

~727 % yearly turn over of concerned enterprises Total cost of the program of

measures COSTS

Scenario 2 Scenario 1

-6 millions € 7 millions €

Net benefit

46,5 millions € 29 millions €

Estimated groundwater protection benefit

76€/ household/ year during ten years 42 €/ household/ year

during ten years Average Willingness To Pay

(stated amount) BENEFITS

52,1 millions €

~30 € / inhabitant

~298 % yearly turn over of concerned enterprises 22,4 millions €

~13 € / inhabitant

~727 % yearly turn over of concerned enterprises Total cost of the program of

measures COSTS

Scenario 2 Scenario 1

4- Conclusion and

policy implications

> Concerning the case study

•

Restoring Drinking water threshold is a desirable option for the society as a whole (net benefit)

•

But entails disproportionate costs for polluters: need for financing measures through transfers

•

Civil society recognizes the non use value of GW and is willing to protect GW for itself (not only for protection associated ecosystems and sources of drinking water supplies)

> Concerning the methodological approach

•

A practical approach for assessing the cost implication of various threshold values : what quality level can we afford ?

•

Need for a desegregation of benefits to trigger debate: CV is not a panacea but can we do better ?

•

Uncertainties remain …

–

Concerning the effectiveness of the program of measure (based on expert judgment)

–

Concerning the Willingness to pay estimates

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Thank you for your attention

For additional information, see deliverable D25 or contact

jd.rinaudo@brgm.fr

> What threshold values do we consider ?

Substance Priority Substance

Dir.

86/280 QS surface water

Drinking Water Directive

French SEQ –

groundwater

WHO Threshold values

considered in this study 1 2 Dichloroethane Yes 10 µg/l 3 µg/l 3 µg/l 3 µg/l Tetrachloroethylene

+ Trichloroethylene

No 10 µg/l 10 µg/l 10 µg/l

Tetrachloroethylene No 10 µg/l 10 µg/l 10 µg/l

Trichloroethylene No 10 µg/l 10 µg/l 10 µg/l

Vinyl chloride No 0,5 µg/l 0,5 µg/l

Chloroform Yes 12 µg/l 10 µg/l 12 µg/l

Dichloromethane Yes 20 µg/l Not

considered Carbon

tetrachloride

No 12 µg/l 2 µg/l 4 µg/l 4 µg/l

12 Dichloroethylene No 50 µg/l 50 µg/l

111

Trichloroethane

No 200 µg/l 2000

µg/l

2000 µg/l

Threshold values considered range between 0 and 100% of drinking water threshold values

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2- Estimating the cost of the program of measures

> Cost acceptability

Activity Total cost

(thous. €)

Cost / Turn over

Cost / added value

Cost/

employee

Car and motorcycle repair workshops 4 422 18,3 83,5 820

Chemichal industry 4 408 0,7 3,8 54

Food and beverage industry 421 55,2 229,3 911

Food and beverage industry 'essential oils) 49 6,5 27,2 108

Furniture industry 1 154 1,9 6,5 48

House painting and decoration 10 685 42,9 150,5 1103

Industrial cleaning industry 60 0,2 0,2 4

Manufacture of electrical and electronical

products 396

0,4 1,5

58

Mecanical industry 13 769 0,2 0,8 9

Metal coating industry 5 566 1,2 4,0 53

Metal processing and cutting industry 340 4,6 16,2 55

Printing 1 439 4,8 14,1 134

Production of paint and varnishes 170 0,5 1,6 12

textile industry 924 10,7 31,2 401

Wood impregnation 30 0,2 0,9 6

Total entreprises 43 838 0,5 2,0 24

For scenario 2 (restoring natural GW quality)