1. Is it worth decontaminating groundwater ? Lessons from a cost benefit analysis in a French case study Stéphanie Aulong and Jean-Daniel Rinaudo Economic Research Group Water Department French Geological Survey (BRGM)

2. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 2 Introduction > The issue In urban contexts groundwater can be heavily polluted … … while it represents a strategic resource High remediation / pollution prevention costs Are the benefits greater than costs ? If so, what quality level should be targeted ? > This study Investigate these issues through a French case study Assess costs and benefits for different groundwater quality targets

3. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 3 Outlines of the presentation 1.Presentation of the case study 2.Cost of achieving different quality targets Methodology Main results 3.Benefits of achieving different quality targets Methodology Main results 4.Conclusion and policy implications

4. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 4 Case study area > The Upper Rhine valley aquifer : One of Europe largest groundwater reserves > 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 in urban areas Rhin Meuse river bassin district Rhine valley aquifer Germany Alsace region 2 - Costs 1- Case study 4- Policy & recommendations3- Benefits 4200 km²

5. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 5 > drinking water threshold substance detected > 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 > Multiple & dispersed pollution sources Large industries SMEs and small size economic activities Households Ancient contaminated sites Road accidents Basel Strasbourg Karlsruhe 2 - Costs4- Policy & recommendations3- Benefits 1- Case study Challenge No. 1: map pollution and identify areas to be remediated

6. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 6 Cost assessment 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 cost Monitoring point where DWT is exceeded Municipalities where pollution prevention and remediation measures are implemented 2 - Costs 1- Case study4- Policy & recommendations3- Benefits S1: drinking water standard S2: zero pollution

7. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 7 Number of potential pollution sources 2 - Costs 1- Case study4- Policy & recommendations3- Benefits Challenge No. 2 : high number of target sectors & activities

8. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 8 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) 7.Remediation of contaminated sites (historical sites and enterprises in activity) Remediation and prevention actions considered Collection of used solvents Technologies not using solvents (here metal degreasing) Solvent recycling 1- Case study4- Policy & recommendations3- Benefits 2 - Costs Challenge No. 3: Large range of technical remediation / prevention actions required

9. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 9 1- Case study4- Policy & recommendations3- Benefits 2 - Costs Cost estimate Challenge No. 4 : High cost for private operators, subsidies required. 65%. = 700% of the turn over of the concerned enterprises !!!

10. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 10 Cost as a function of water quality objective 13€/inhabitant 30€/inhabitant 1- Case study4- Policy & recommendations3- Benefits S2 S1 2 - Costs 0 2 4 6 8 10 µg/l Targeted water quality

11. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 11 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 2 - Costs1- Case study4- Policy & recommendations 3- Benefits

12. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 12 Survey – Questionnaire mailed to 5000 households, response rate 13% (668 questionnaires) 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) 2 - Costs1- Case study4- Policy & recommendations 3- Benefits Implementation of the contingent valuation survey

13. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 13 > Perception of the scenarios : 68% accept to pay through an increase of their water bill for restoring drinking water quality (S1) 57% accept to pay more for restoring natural quality (S2) > WTP amounts 42€ / household / year for S1 76€ / household / year for S2 > Motivations for paying 2 - Costs1- Case study4- Policy & recommendations 3- Benefits Public perception of GW quality thresholds

14. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 14 > Total benefit estimate Average WTP is extrapolated to the entire regional population Results: – Drinking water threshold = 29 millions€ – Natural groundwater quality = 46,5 millions € > Cost benefit analysis 2 - Costs1- Case study4- Policy & recommendations 3- Benefits

15. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 15 > Major challenges specific to urban contexts Monitoring high number dispersed pollution point sources High number of target sectors & activities High number of technical actions to be implemented simultaneously Disproportionate costs for economic actors & historical abandoned sites => need of public finance > Is it worth protecting groundwater ? Yes, the population perceives the “threatened opportunity” ! Restoring Drinking water quality is a desirable option for the society as a whole (net benefit) … … but not going back to water quality of pre-historical times ! Economics can only help addressing the question, it can’t answer it alone ! 2 - Costs1- Case study 4- Policy & recommendations 3- Benefits What did we learn from this case study ?

16. World Water Congress, 19-24 September 2010, Montreal J-D. Rinaudo > 16 Thank you for your attention jd.rinaudo@brgm.fr For additional information