Toward sustainability and resilience in Chilean cities: Lessons and recommendations for air, water, and soil issues

Achieving sustainability and resilience depends on the conciliation of environmental, social, and economic issues integrated into a long-term perspective to ensure communities flourish. Many nations are transitioning toward both objectives, while at the same time addressing structural concerns that have not allowed them to look after the environment in the past. Chile is one of these nations dealing with such challenges within a particular administrative context, an increasing environmental awareness, and a set of unique and complex geophysical boundaries that impose a plethora of hazards for cities, ecosystems, and human health. This paper presents recent accomplishments and gaps, mostly from an environmental perspective, on issues related to air pollution, the urban water cycle, and soil contamination, in the path being followed by Chile toward urban sustainability and resilience. The focus is on the bonds between cities and their geophysical context, as well as the relationships between environmental issues, the built environment, and public health. The description and diagnosis are illustrated using two cities as case studies, Temuco and Copiapó, whose socioeconomic, geographical, and environmental attributes differ considerably. Particulate matter pollution produced by the residential sector, drinking water availability, wastewater treatment, stormwater management, and soil contamination from the mining industry are discussed for these cities. Overall, the case studies highlight how tackling these issues requires coordinated actions in multiple areas, including regulatory, information, and financial incentive measures. Finally, the policy analysis discusses frameworks and opportunities for Chilean cities, which may be of interest when conceiving transitional paths toward sustainability and resilience for other cities elsewhere.

Agricultural products from algal biomass grown in piggery wastewater: A techno-economic analysis

The intensification of livestock activities lead to an increase in waste generation with high content of nutrients, as is the case of piggery wastewater. However, this type of residue can be used as culture media for algae cultivation in thin-layer cascade photobioreactors to reduce its environment impact and produce a valorizable algal biomass. Biostimulants were produced by enzymatic hydrolysis and ultrasonication of microalgal biomass, using membranes (Scenario 1) or centrifugation (Scenario 2) as harvesting methods. The co-production of biopesticides by solvent extraction was also evaluated using membranes (Scenario 3) or centrifugation (Scenario 4). The four scenarios were analyzed by a technoeconomic assessment estimating the total annualized equivalent cost and the production cost, i.e., the minimum selling price. Centrifugation provided biostimulants approximately 4 times more concentrated than membranes, but with higher expense due to the cost of the centrifuge (contribution of 62.2 % in scenario 2) and the electricity requirements. The biopesticide production resulted the highest contribution to investment cost in scenarios 3 and 4 (34 % and 43 % respectively). The use of membranes was also more advantageous to produce biopesticides, although it was 5 times more diluted than using centrifuge. The biostimulant production cost was 65.5 €/m³ with membranes and 342.6 €/m³ by centrifugation and the biopesticide production cost was 353.7 €/m³ in scenario 3 and 2122.1 €/m³ in scenario 4. Comparing the treatment of 1 ha of land, the cost of the biostimulant produced in the four scenarios was lower than the commercial one (48.1 %, 22.1 %, 45.1 % and 24.2 % respectively). Finally, using membranes for biomass harvesting allowed economically viable plants with lower capacity and longer distance for biostimulant distribution (up to 300 km) than centrifuge (188 km). The algal biomass valorization for agricultural products production is an environmentally and economically feasible process with the adequate capacity of the plant and distribution distance.

Increasing resilience through nudges in the urban water cycle: An integrative conceptual framework to support policy decision-making

Relevant challenges associated with the urban water cycle must be overcome to meet the United Nations Sustainable Development Goals (SDGs) and improve resilience. Unlike previous studies that focused only on the provision of drinking water, we propose a framework that extends the use of the theory of nudges to all stages of the overall urban water cycle (drinking water and wastewater services), and to agents of influence (citizens, organizations, and governments) at different levels of decision making. The framework integrates four main drivers (the fourth water revolution, digitalization, decentralization, and climate change), which influence how customers, water utilities and regulators approach the challenges posed by the urban water cycle. The proposed framework, based on the theory of nudges first advanced by the Nobel Prize in behavioral economics Richard H. Thaler and Cass R. Sunstein (Thaler and Sunstein, 2009), serves as a reference for policymakers to define medium- and long-term strategies and policies for improving the sustainability and resilience of the urban water cycle. Finally, we provide new insights for further research on resilience approaches to the management of the urban water cycle as an element to support the more efficient formulation of policies.

Energy efficiency of drinking water treatment plants: A methodological approach for its ranking

Drinking water treatment systems (DWTSs) are energy intensive facilities, and are an example of the water-energy nexus. Benchmarking energy efficiency is a valuable tool for improving the economic and environmental performance of such facilities. Data envelopment analysis (DEA) is typically used to assess efficiency, allocating flexible weights (FSW) to variables that maximise energy efficiency scores for each DWTS (DEA-FSW). It means that different conditions are applied to each DWTS. Moreover, the DEA-FSW approach has finite discriminatory power which limits cross-unit comparison of energy efficiency hindering the benchmarking of DWTSs. To overcome these limitations, our study explored the effect of estimating the energy efficiency scores of DWTSs by allocating common sets of weights (CSW) within DEA (DEA-CSW). This approach was applied empirically on a sample of 146 DWTSs. Evaluated DWTSs had poor energetic performance based on both DEA-FSW and DEA-CSW estimates (low energy efficiency scores: 0.329 and 0.163, respectively). Even in the optimistic scenario, the average energy efficiency score was low (0.220), with potential electricity savings of 78 % by DWTPs when energy efficient. Unlike DEA-FSW, DEA-CSW allowed energy efficient DWTSs to be distinguished from the 146 facilities. Significant differences in the weights allocated to electricity and pollutants removed from raw water were reported for both approaches, and contributed to diverging energy efficiency scores. In conclusion, this study demonstrated the relevance of using suitable methods to generate comparable results for water companies, allowing the energy performance of DWTSs to be objectively evaluated for benchmarking purposes.

Challenges and opportunities for drinking water treatment residuals (DWTRs) in metal-rich areas: an integrated approach

The physicochemistry and production rate of drinking water treatment residuals (DWTRs) depends on the raw water composition and the plant operational parameters. DWTRs usually contain Fe and/or Al oxyhydroxides, sand, clay, organic matter, and other compounds such as metal(oids), which are relevant in mining countries. This work proposes a simple approach to identify DWTRs reuse opportunities and threats, relevant for public policies in countries with diverse geochemical conditions. Raw water pollution indexes and compositions of DWTRs were estimated for Chile as a model case. About 23% of the raw drinking water sources had moderate or seriously contamination from high turbidity and metal(loid) pollution If the untapped reactivity of clean DWRTs was used to treat resources water in the same water company, the 73 and 64% of these companies would be able to treat water sources with As and Cu above the drinking water regulations, respectively. Integrating plant operational data and the hydrochemical characteristics of raw waters allows the prediction of DWTRs production, chemical composition, and reactivity, which is necessary to identify challenges and opportunities for DWTRs management.

Eco-efficiency assessment of municipal solid waste services: Influence of exogenous variables

Improving the eco-efficiency of municipalities in the provision of municipal solid waste (MSW) services is fundamental in the context of a circular economy. This study evaluates the eco-efficiency of a sample of Spanish municipalities, integrating the total cost as input, recyclable waste as desirable output, and unsorted waste as undesirable output. Following a pioneering approach, the weighted Russell directional distance model (a non-radial data envelopment analysis model) was employed, which allowed us to obtain a global inefficiency score and individual inefficiency scores for each variable integrated in the model. In the second stage of analysis, the potential factors affecting the previously computed inefficiency scores were investigated. The results indicated that one third of the municipalities evaluated were eco-efficient in the provision of MSW services with the total cost being the variable in which the municipalities exhibited the best performance. Moreover, the size of the municipalities, population served, population density, tourism, and availability of containers for separative collection of paper, glass, and plastic significantly affect the eco-efficiency of the municipalities. The findings of this study provide detailed information to support decision-making for the policy makers to improve the eco-efficiency of the municipalities in managing MSW.

Evaluation of economies of scale in eco-efficiency of municipal waste management: an empirical approach for Chile

In the circular economy context, improving the eco-efficiency of the management of municipal solid waste (MSW) occupies a prominent role. The aim of this study was to evaluate the eco-efficiency of MSW services provided by a sample of 142 Chilean municipalities using data envelopment analysis (DEA), a method that integrates both economic and environmental variables into a single performance index. This study also investigated whether the MSW facilities are affected by economies of scale. In a second stage of analysis, the effects of some exogenous variables on the eco-efficiency of MSW services were explored. The results demonstrated that 92.3% of the municipalities evaluated were not eco-efficient and presented notable room for improvement as the average eco-efficiency score was 0.58. In addition, 40.4% of the municipalities presented negative economies of scale; i.e. their operational size was not optimum and joint organization of MSW management systems should be promoted. Finally, the population served, population density, tourism and waste generated per capita were shown to have a significant impact on the eco-efficiency of MSW services. The results of this study will be beneficial for policymakers to formulate effective public policies to make the provision of MSW services more cost- and environmentally effective.

Estimating technical efficiency and allocative distortions of water companies: evidence from the English and Welsh water and sewerage industry

Regulated water industries need to improve their technical efficiency and allocate their resources efficiently. This is the case of the water industry in England and Wales which was privatized in 1989, and the method of price cap regulation was implemented. This study uses an input distance function system approach to estimate the technical efficiency and distortions in the choice of input mixes for the English and Welsh water and sewerage companies (WaSCs) over the years 1991-2016. The results indicated that an average WaSC was 75.3% technically efficient which means that inputs could be reduced by 24.7% keeping the level of output constant. On average, the input mix was considered to be allocated inefficiently as there was an over-utilization of capital and other inputs relative to employment. Moreover, the low degree of substitutability among inputs implied that reducing allocative inefficiency could be costly. The findings of our study is of interest to policy makers who want to implement effective policies to improve efficiency in the water industry.

A composite indicator approach to assess the sustainability and resilience of wastewater management alternatives

Evaluating the sustainability of wastewater management alternatives is a challenging task. This paper proposes an innovative methodology to assess and compare the sustainability of four wastewater management alternatives: a) centralised water resource recovery facility (WRRF) based on activated sludge (AS); b) centralised WRRF with membrane bioreactors (MBR); c) decentralised WRRFs with upflow anaerobic sludge blanket reactors and trickling filters; d) centralised-decentralised hybrid system. In doing so, a composite indicator embracing total annual equivalent costs, carbon emission intensity, eutrophication and resilience (based on robustness and rapidity metrics) was developed using the analytic hierarchy process (AHP) method. The results show that decentralised and hybrid systems contribute less to carbon emission and eutrophication because of energy and fertilizer harvest and with a trade-off of higher costs of 7-17% than the ones of AS and MBR. In addition, decentralised and hybrid systems are more resilient, contributing to lower environmental impacts facing natural disasters. Based on the weights obtained by AHP, the decentralised alternative appears to be the most sustainable option due to its best performance in terms of carbon emission intensity and resilience. By contrast, the MBR alternative appeared the least sustainable evaluated wastewater management alternative. However, this alternative is sustainable option when the eutrophication criterion is heavily prioritized. The proposed approach contributes to the selection of the most sustainable wastewater management alternative from a holistic perspective.

The cost of reducing unplanned water supply interruptions: A parametric shadow price approach

Water companies are responsible for supplying water to customers 24 h per day. However, due to extreme natural events and/or anthropogenic actions, water companies suffer from unplanned water supply interruptions, which directly impact customers and incur expenses by the companies. In this study, for the first time, we estimated the shadow price (or implicit cost) of unplanned water supply interruptions using stochastic frontier techniques for a sample of 21 Chilean water companies over the period of 2007-2017. The results indicate that, on average, the Chilean water company needed to spend an extra 2.547€ in operating expenditures to avoid 1 h of interruption. Average shadow price of unplanned water supply interruptions was higher for concessionary and full private companies than public ones. These findings demonstrate that the regulatory agency may need to promote effective policies and incentives to ensure and improve the continuity of the water supply. This is very relevant to the Chilean water industry, where there is an ongoing policy debate regarding the use of penalties and compensations as an incentive to avoid unplanned water supply interruptions.

Evaluating trends in the performance of Chilean water companies: impact of quality of service and environmental variables

In monopoly services that provide drinking water, it is of paramount importance to evaluate the total factor productivity (TFP) change of water companies. Most of the previous studies have computed the Malmquist productivity index (MPI) by applying non-parametric methods. By contrast, following a pioneering approach, in this study, we estimated the MPI using a parametric method that allows us to decompose TFP change into a larger number of drivers, including exogenous and quality of service variables. An empirical application for the Chilean water industry over 2007-2015 was conducted. We found that productivity change estimates were variable across years, differentiating a first period (2007/11) in which productivity declined and a second period (2011/15) in which TFP notably improved. In both periods, scale efficiency change and input mixed effect were the main drivers of productivity change, illustrating the importance of operation scale in water companies' performance. The decomposition of the TFP change in a large number of drivers is essential to propose incentives and measures to promote productivity across time.

Factors affecting eco-efficiency of municipal waste services in Tuscan municipalities: An empirical investigation of different management models

The efficient provision of municipal solid waste (MSW) services is essential from an economic and environmental perspective. This paper investigates the effect of ownership type on the eco-efficiency of MSW management in Tuscan municipalities. In the first stage of the analysis, the authors use a data envelopment analysis metafrontier approach with the integration of unsorted waste as an undesirable output. Three different clusters of municipalities are created based on the ownership type of the municipal waste operators: public, private, and mixed. In the second stage of analysis, the paper investigates factors affecting eco-efficiency in order to provide new knowledge that can be used by policy and decision makers to improve eco-efficiency. The results show that eco-efficiency is higher for municipalities that entrust the delivery of waste services to publicly owned firms compared to municipalities with delivery by mixed and private firms. Moreover, eco-efficiency in MSW management is higher for municipalities with younger residents, a larger population, and an overall higher population density. Smaller municipalities and those with less tourism manage their waste services more eco-efficiently than do bigger municipalities and those with more tourism. The results indicate that policy-makers should improve communication and engagement activities with older residents in smaller, less densely populated areas. In municipalities featuring heavy tourism, eco-taxes could be used to support these activities, avoiding any impact on residents.

Benchmarking energy efficiency of water treatment plants: Effects of data variability

This study evaluates, for the first time, the energy efficiency of a sample of drinking water treatment plants (DWTPs) using the data envelopment analysis (DEA) tolerance method, which is based on the simulation of scenarios to integrate data variations. The integration of data uncertainty in energy efficiency estimation changes drastically results for approximately one-third of the DWTPs evaluated. The results showed that, even in the best-case scenario, most of the DWTPs evaluated are inefficient and may therefore, be able to reduce the energy used to treat raw water. From a policy perspective, the findings of this study reveal that omitting data variability in benchmarking would involve critical repercussions when efficiency scores are used by regulators to set water tariffs. Omitting the degree of data uncertainty is likely to result in biased conclusions; in the scenarios evaluated, the inclusion of this information altered the rankings of some energy-efficient DWTPs.

A metastochastic frontier analysis for technical efficiency comparison of water companies in England and Wales

Evaluating the performance of water companies is of great importance for both water utilities and water regulators. This paper explores comparative levels of technical efficiencies and technology gap ratios with the metafrontier concept by estimating an input distance function using stochastic frontier techniques. The metafrontier framework is employed in the water services of water and sewerage companies (WaSCs) and water-only companies (WoCs) in England and Wales. The results show that the English and Welsh water industry is an efficient industry, with WaSCs more efficient than WoCs. On average, a water company can increase its technical efficiency by operating in more densely populated areas and by investing in technology to reduce bursts in water mains. We also link the efficiency results with the regulatory cycle to assess the impact of regulation on the efficiency levels of water companies.

Assessing the quality of service for drinking water supplies in rural settings: A synthetic index approach

In rural settings, the presence of water supply infrastructure does not guarantee that people will have access to dependable and high-quality drinking water. To evaluate deficiencies, an assessment of quality of service of rural drinking water supply systems (RDWSS) should be examined from a multi-criteria perspective, one that integrates economic, technical, administrative, and operational components of supplying water, which includes a variety of stakeholders to integrate their preferences in the development of a synthetic index. In this study, we followed a pioneering approach to evaluate the quality of service for RDWSS based on analytic hierarchy process (AHP) and Monte Carlo simulations. We empirically applied the approach to 40 RDWSS in Chile. The weights of a set of 14 performance indicators were allocated by representatives of the communities that manage the RDWSS and experts on technical and administrative issues revelling the different preferences of decision-makers. We found that there are significant differences in the quality of service provided by the RDWSS evaluated. The information provided by the synthetic indicator would be very helpful in supporting decision makers needing to prioritize investments among drinking water supplies in rural settings.

Impact of environmental variables on the efficiency of water companies in England and Wales: a double-bootstrap approach

An important aspect of the regulatory process is the performance comparison of regulated firms. This exists in regulated industries where tariffs are determined through a benchmarking process such as the English and Welsh water industry. A double-bootstrap data envelopment analysis (DEA) approach was applied to overcome the uncertainty in efficiency scores and to reveal the influence of environmental variables on 18 water companies in England and Wales during the 2001-2016 period. The results showed that bias and bias-corrected efficiency scores lead to changes in the water companies' rankings. This reveals the importance of using reliable methodologies to support the decision-making process. Higher levels of average pumping head, leakage, and abstraction of water from reservoirs lead to lower efficiency. In contrast, increased population density leads to larger efficiency. We also link the results from the efficiency of water companies with the regulatory cycle. Our findings can be useful to policy makers for them to better understand water utilities' performance and to aid them in reshaping their current policies and practices to improve efficiency and provide better service to customers.

Measuring the eco-efficiency of wastewater treatment plants under data uncertainty

Eco-efficiency assessment is a useful tool for improving the sustainability of wastewater treatment plants (WWTPs). However, it is a complex task that requires the integration of several performance indicators into a single index. Data envelopment analysis (DEA) is established as a highly effective methodology for achieving this as it permits the integration of the service value, resource consumption and environmental impact variables as the desirable outputs, inputs and undesirable outputs, respectively. However, traditional DEA models omit uncertainties in the data that are likely to result in biased conclusions. This study pioneers the assessment of the eco-efficiency of WWTPs while accounting for the data uncertainty and integrating the greenhouse gas emissions as an undesirable output. The DEA-tolerance model was applied to compute the eco-efficiency scores for 729 scenarios for each facility tested for identifying the best- and worst-case scenarios. The WWTPs were also ranked based on their eco-efficiency scores. The results demonstrated the importance of integrating data uncertainty in eco-efficiency assessments; the performances of the WWTPs change notably based on the evaluated set of scenarios. The proposed methodological approach provides a reliable and robust framework for supporting decision-making processes.

The Economics of Wastewater Treatment Decentralization: A Techno-economic Evaluation

The existing wastewater treatment infrastructure has not adequately established an efficient and sustainable use of energy, water, and nutrients. A proposed scheme based on source separation and water-efficient use is compared to the current wastewater management paradigm (one largely based on activated sludge) using techno-economic terms. This paper explores the economic viability of adopting more sustainable management alternatives and expands the understanding of the economics of decentralization and source-separation. The feasibility of three different potential types of source-separation (with different levels of decentralization) are compared to the conventional centralized activated sludge process by using recognized economic assessment methodologies together with widely accepted modeling tools. The alternatives were evaluated for two common scenarios: new developments and retrofit due to the aging of existing infrastructures. The results prove that source-separated alternatives can be competitive options despite existing drawbacks (only when countable incomes are included), while the hybrid approach resulted in the least cost-effective solution. A detailed techno-economic evaluation of the costs of decentralization provides insight into the current constraints concerning the paradigm shift and the cost of existing technologic inertia.

Evaluation of the influence of economic groups on the efficiency and quality of service of water companies: an empirical approach for Chile

The privatization of water and sewerage services (WSS) has led to the foundation of water economic groups, which integrate several water companies and have gained notable importance at the global level. In the framework of benchmarking studies, there are no prior studies exploring the impact that economic groups have on the efficiency and quality of service provided by water companies. This study investigates, for the first time, whether the membership of water companies in an economic group influences their performance. Quantity- and quality-adjusted efficiency scores were computed using data envelopment analysis models. An empirical application was developed for the Chilean water industry since most of their water companies are private and belong to an economic group. The results show that independent water companies provide WSS with better quality than do water companies that belong to an economic group. From a statistical point of view, it was evident that membership in an economic group impacts both the quantity- and quality-adjusted efficiency scores of water companies. The results of this study illustrate that applying the model-firm regulation to the Chilean water industry has significant drawbacks that should be addressed by the water regulator to promote the long-term sustainability of the water industry.

Energy intensity modeling for wastewater treatment technologies

Wastewater treatment plants (WWTPs) are energy intensive facilities; therefore increased pressure has been placed on managers and policy makers to reduce the facilities' energy use. Several studies were conducted to compare the energy intensity (EI) of WWTPs, which showed large dispersion in EI among the facilities. In the present study, the degree EI influenced WWTPs was tested using a set of technical variables by modeling the EI of a 305 WWTP sample grouped into five secondary treatment technologies. Results indicated the following two major findings: i) WWTPs using conventional activated sludge, extended aeration, trickling biofilters, and biodisks exhibited significant economies of scale in energy use; and ii) pollutant removal efficiency demonstrated low impacts on WWTP EI. The methodology and results of this study are of value to policy makers in planning new WWTPs and developing management plans to improve energy efficiency of wastewater treatment.

Selecting appropriate wastewater treatment technologies using a choosing-by-advantages approach

Selecting the most sustainable wastewater treatment (WWT) technology among possible alternatives is a very complex task because the choice must integrate economic, environmental, and social criteria. Traditionally, several multi-criteria decision-making approaches have been applied, with the most often used being the analytical hierarchical process (AHP). However, AHP allows users to offset poor environmental and/or social performance with low cost. To overcome this limitation, our study examines a choosing-by-advantages (CBA) approach to rank seven WWT technologies for secondary WWT. CBA results were compared with results obtained by using the AHP approach. The rankings of WWT alternatives differed, depending on whether the CBA or AHP approach was used, which highlights the importance of the method used to support decision-making processes, particularly ones that rely on subjective interpretations by experts. This paper uses a holistic perspective to demonstrate the benefits of using the CBA approach to support a decision-making process when a group of experts must come to a consensus in selecting the most suitable WWT technology among several available.

Optimal fresh water blending: A methodological approach to improve the resilience of water supply systems

Climate change and socioeconomic factors have increased the complexity of urban water supply systems. Thus, fresh water sources are being gradually diversified to improve the reliability and resilience of the systems. However, as the number of source blending options grows, optimization tools are needed to design drinking water supply systems that comply with indicators of cost, resilience, and water quality. This paper proposes a pioneering methodological approach, based on an ant-colony-optimization (ACO) algorithm, to optimize the blending of drinking water from different sources to minimize operational costs of a given system originating from a number of impaired water sources while complying with water quality standards. To evidence the potential of the ACO algorithm to solve such a system, a virtual case study was designed that considers eight fresh water sources, including seawater desalination and potable reuse. Seven scenarios were developed with different weightings to service outage, water conveyance and treatment costs while complying with water quality goals in regard to total organic carbon, nitrates, and total dissolved solids. It was shown that the cost per volumetric unit of water can vary considerably depending on the weightings of the three cost items. This paper provides a rigorous scientific approach to propose a methodology supporting the decision-making process of selecting a mixture of different sources to achieve the overall lowest system cost. Hence, this work contributes to improving the resilience and sustainability of urban water supplies.

Benchmarking the efficiency of the Chilean water and sewerage companies: a double-bootstrap approach

Benchmarking the efficiency of water companies is essential to set water tariffs and to promote their sustainability. In doing so, most of the previous studies have applied conventional data envelopment analysis (DEA) models. However, it is a deterministic method that does not allow to identify environmental factors influencing efficiency scores. To overcome this limitation, this paper evaluates the efficiency of a sample of Chilean water and sewerage companies applying a double-bootstrap DEA model. Results evidenced that the ranking of water and sewerage companies changes notably whether efficiency scores are computed applying conventional or double-bootstrap DEA models. Moreover, it was found that the percentage of non-revenue water and customer density are factors influencing the efficiency of Chilean water and sewerage companies. This paper illustrates the importance of using a robust and reliable method to increase the relevance of benchmarking tools.

Assessing the productivity change of water companies in England and Wales: A dynamic metafrontier approach

The assessment of productivity change and its drivers across water companies and over time is a powerful tool for both regulators and companies when setting water tariffs. Water and sewerage companies (WaSCs) and water only companies (WoCs) provide different services. Hence, their productivity change cannot directly be evaluated jointly. In this paper and for the first time, we provide a pioneering approach to assess and compare the dynamics of productivity change of WaSCs and WoCs. To achieve this, both the traditional Malmquist productivity index and the metafrontier Malmquist productivity index and its components are computed to assess the productivity change for a sample of English and Welsh water companies over the period 2001-2014. The findings from both indices indicate that productivity for both WaSCs and WoCs did not improve during this period, mainly due to the negative shift in the production frontier which offset the positive effect of efficiency change. It is also reported that the performance of the WoCs over time was slightly better than that of the WaSCs. Finally, our study provides some insights into the relationship between productivity change and the regulatory cycle. This information is essential to improve the regulation of water and sewerage services, contributing to the long-term sustainability of the urban water cycle.

Impact of regulation on English and Welsh water-only companies: an input-distance function approach

The assessment of productivity change over time and its drivers is of great significance for water companies and regulators when setting urban water tariffs. This issue is even more relevant in privatized water industries, such as those in England and Wales, where the price-cap regulation is adopted. In this paper, an input-distance function is used to estimate productivity change and its determinants for the English and Welsh water-only companies (WoCs) over the period of 1993-2009. The impacts of several exogenous variables on companies' efficiencies are also explored. From a policy perspective, this study describes how regulators can use this type of modeling and results to calculate illustrative X factors for the WoCs. The results indicate that the 1994 and 1999 price reviews stimulated technical change, and there were small efficiency gains. However, the 2004 price review did not accelerate efficiency change or improve technical change. The results also indicated that during the whole period of study, the excessive scale of the WoCs contributed negatively to productivity growth. On average, WoCs reported relatively high efficiency levels, which suggests that they had already been investing in technologies that reduce long-term input requirements with respect to exogenous and service-quality variables. Finally, an average WoC needs to improve its productivity toward that of the best company by 1.58%. The methodology and results of this study are of great interest to both regulators and water-company managers for evaluating the effectiveness of regulation and making informed decisions.

How much should customers be compensated for interruptions in the drinking water supply?

Water supply interruptions directly affect customers, and customers should be compensated accordingly. However, few water regulators have applied compensation policies given the difficulty of estimating the economic value of compensation to customers. In this study, a pioneering approach based on the concept of shadow prices is proposed to determine the compensation that customers should receive for unplanned water interruptions. The Chilean water industry was selected as a case study because there is an ongoing policy discussion between the use of penalties or compensation as an incentive to prevent water supply interruptions. The estimated results indicate that for 2014, the value of compensation ranges between 2.4% and 35.4% of the fixed charge of the water tariff. The methodology and findings of this study are of great relevance to water regulators in defining incentives to prompt water companies to provide reliable water service.

Estimating the environmental and resource costs of leakage in water distribution systems: A shadow price approach

Water scarcity is one of the main problems faced by many regions in the XXIst century. In this context, the need to reduce leakages from water distribution systems has gained almost universal acceptance. The concept of sustainable economic level of leakage (SELL) has been proposed to internalize the environmental and resource costs within economic level of leakage calculations. However, because these costs are not set by the market, they have not often been calculated. In this paper, the directional-distance function was used to estimate the shadow price of leakages as a proxy of their environmental and resource costs. This is a pioneering approach to the economic valuation of leakage externalities. An empirical application was carried out for the main Chilean water companies. The estimated results indicated that for 2014, the average shadow price of leakages was approximately 32% of the price of the water delivered. Moreover, as a sensitivity analysis, the shadow prices of the leakages were calculated from the perspective of the water companies' managers and the regulator. The methodology and findings of this study are essential for supporting the decision process of reducing leakage, contributing to the improvement of economic, social and environmental efficiency and sustainability of urban water supplies.

Performance of fully private and concessionary water and sewerage companies: a metafrontier approach

As many countries have privatized their water industries, there is increasing interest in comparing the efficiency of public and private water and sewerage companies (WaSCs). However, previous studies have not considered that privatization can be carried out following two main approaches: fully private WaSCs, which involve the sale of utilities to the private sector, and concessionary WaSCs, in which only the operation of the services is privatized. This paper investigates, for the first time, the impact of both privatization approaches on the efficiency of WaSCs. In doing so, data envelopment analysis (DEA) was applied. However, unlike traditional models, the metafrontier concept was used in this research as it cannot be assumed that fully private and concessionary WaSCs share the same production frontier. The empirical application focused on the Chilean water industry as it was privatized from 1998 to 2004 following the two approaches described. The results suggest that the performance of fully private WaSCs is better than that of concessionary WaSCs. The conclusions of this study will be of great interest to water authorities worldwide facing the challenge of water industry privatization.

Are participants in markets for water rights more efficient in the use of water than non-participants? A case study for Limarí Valley (Chile)

The need to increase water productivity in agriculture has been stressed as one of the most important factors to achieve greater agricultural productivity and sustainability. The main aim of this paper is to investigate whether there are differences in water use efficiency (WUE) between farmers who participate in water markets and farmers who do not participate in them. Moreover, the use of a non-radial data envelopment analysis model allows to compute global efficiency (GE), WUE as well the efficiency in the use of other inputs such as fertilizers, pesticides, energy, and labor. In a second stage, external factors that may affect GE and WUE are explored. The empirical application focuses on a sample of farmers located in Limarí Valley (Chile) where regulated permanent water rights (WR) markets for surface water have a long tradition. Results illustrate that WR sellers are the most efficient in the use of water while non-traders are the farmers that present the lowest WUE. From a policy perspective, significant conclusions are drawn from the assessment of agricultural water productivity in the framework of water markets.

Optimal management of substrates in anaerobic co-digestion: An ant colony algorithm approach

Sewage sludge (SWS) is inevitably produced in urban wastewater treatment plants (WWTPs). The treatment of SWS on site at small WWTPs is not economical; therefore, the SWS is typically transported to an alternative SWS treatment center. There is increased interest in the use of anaerobic digestion (AnD) with co-digestion as an SWS treatment alternative. Although the availability of different co-substrates has been ignored in most of the previous studies, it is an essential issue for the optimization of AnD co-digestion. In a pioneering approach, this paper applies an Ant-Colony-Optimization (ACO) algorithm that maximizes the generation of biogas through AnD co-digestion in order to optimize the discharge of organic waste from different waste sources in real-time. An empirical application is developed based on a virtual case study that involves organic waste from urban WWTPs and agrifood activities. The results illustrate the dominate role of toxicity levels in selecting contributions to the AnD input. The methodology and case study proposed in this paper demonstrate the usefulness of the ACO approach in supporting a decision process that contributes to improving the sustainability of organic waste and SWS management.

Efficiency assessment of wastewater treatment plants: A data envelopment analysis approach integrating technical, economic, and environmental issues

The assessment of the efficiency of wastewater treatment plants (WWTPs) is essential to compare their performance and consequently to identify the best operational practices that can contribute to the reduction of operational costs. Previous studies have evaluated the efficiency of WWTPs using conventional data envelopment analysis (DEA) models. Most of these studies have considered the operational costs of the WWTPs as inputs, while the pollutants removed from wastewater are treated as outputs. However, they have ignored the fact that each pollutant removed by a WWTP involves a different environmental impact. To overcome this limitation, this paper evaluates for the first time the efficiency of a sample of WWTPs by applying the weighted slacks-based measure model. It is a non-radial DEA model which allows assigning weights to the inputs and outputs according their importance. Thus, the assessment carried out integrates environmental issues with the traditional "techno-economic" efficiency assessment of WWTPs. Moreover, the potential economic savings for each cost item have been quantified at a plant level. It is illustrated that the WWTPs analyzed have significant room to save staff and energy costs. Several managerial implications to help WWTPs' operators make informed decisions were drawn from the methodology and empirical application carried out.

Estimating the cost of improving service quality in water supply: A shadow price approach for England and wales

Service quality to customers is an aspect that cannot be ignored in the performance assessment of water companies. Nowadays water regulators introduce awards or penalties to incentivize companies to improve service quality to customers when setting prices. In this study, the directional distance function is employed to estimate the shadow prices of variables indicating the lack of service quality to customers in the water industry i.e., written complaints, unplanned interruptions and properties below the reference level. To calculate the shadow price of each undesirable output for each water company, it is needed to ascribe a reference price for the desirable output which is the volume of water delivered. An empirical application is carried out for water companies in England and Wales. Hence, the shadow price of each undesirable output is expressed both as a percentage of the price of the desirable output and in pence per cubic meter of water delivered The estimated results indicate that on average, each additional written complaint that needs to be dealt with by the water company includes a service quality cost of 0.399p/m(3). As expected, when looking at the other service quality variables which involve network repair or replacement, these values are considerably higher. On average, the water company must spend an extra 0.622p/m(3) to prevent one unplanned interruption and 0.702p/m(3) to avoid one water pressure below the reference level. The findings of this study are of great importance for regulated companies and regulators as it has been illustrated that improvements in the service quality in terms of customer service could be challenging and therefore ongoing investments will be required to address these issues.

Assessment of wastewater treatment alternatives for small communities: An analytic network process approach

The selection of the most appropriate wastewater treatment (WWT) technology is a complex problem since many alternatives are available and many criteria are involved in the decision-making process. To deal with this challenge, the analytic network process (ANP) is applied for the first time to rank a set of seven WWT technology set-ups for secondary treatment in small communities. A major advantage of ANP is that it incorporates interdependent relationships between elements. Results illustrated that extensive technologies, constructed wetlands and pond systems are the most preferred alternatives by WWT experts. The sensitivity analysis performed verified that the ranking of WWT alternatives is very stable since constructed wetlands are almost always placed in the first position. This paper showed that ANP analysis is suitable to deal with complex decision-making problems, such as the selection of the most appropriate WWT system contributing to better understand the multiple interdependences among elements involved in the assessment.

Assessing the relative efficiency of water companies in the English and Welsh water industry: a metafrontier approach

The assessment of relative efficiency of water companies is essential for managers and authorities. This is evident in the UK water sector where there are companies with different services such as water and sewerage companies (WaSCs) and water-only companies (WoCs). Therefore, it is a critical limitation to estimate a common production frontier for both types of companies, as it might lead to biased efficiency estimates. In this paper, a robust and reliable methodology, the metafrontier model, is applied to compare the efficiency of water companies providing different services. The results illustrate the superior performance of WaSCs compared to WoCs. It also confirms the presence of economies of scope in the UK water industry. The methodology and results of this study are of great interest for both regulators and water utility managers to make informed decisions.

The role of environmental variables on the efficiency of water and sewerage companies: a case study of Chile

This paper evaluates the efficiency of water and sewerage companies (WaSCs) by introducing the lack of service quality as undesirable outputs. It also investigates whether the production frontier of WaSCs is overall constant returns to scale (CRS) or variable returns to scale (VRS) by using two different data envelopment analysis models. In a second-stage analysis, we study the influence of exogenous and endogenous variables on WaSC performance by applying non-parametric hypothesis tests. In a pioneering approach, the analysis covers 18 WaSCs from Chile, representing about 90% of the Chilean urban population. The results evidence that the technology of the sample studied is characterized overall by CRS. Peak water demand, the percentage of external workers, and the percentage of unbilled water are the factors affecting the efficiency of WaSCs. From a policy perspective, the integration of undesirable outputs into the assessment of WaSC performance is crucial not to penalize companies that provide high service quality to customers.

Economic feasibility study for improving drinking water quality: a case study of arsenic contamination in rural Argentina

Economic studies are essential in evaluating the potential external investment support and/or internal tariffs available to improve drinking water quality. Cost-benefit analysis (CBA) is a useful tool to assess the economic feasibility of such interventions, i.e. to take some form of action to improve the drinking water quality. CBA should involve the market and non-market effects associated with the intervention. An economic framework was proposed in this study, which estimated the health avoided costs and the environmental benefits for the net present value of reducing the pollutant concentrations in drinking water. We conducted an empirical application to assess the economic feasibility of removing arsenic from water in a rural area of Argentina. Four small-scale methods were evaluated in our study. The results indicated that the inclusion of non-market benefits was integral to supporting investment projects. In addition, the application of the proposed framework will provide water authorities with more complete information for the decision-making process.

Assessing the sustainability of small wastewater treatment systems: a composite indicator approach

The assessment of the sustainability of wastewater treatment (WWT) systems has gained interest in recent years. However, most previous studies have focused on environmental and/or economic dimensions ignoring social aspects. Moreover, they tend to be based on sets of indicators rather than providing a holistic assessment. To overcome this limitation, this paper proposes an innovative methodology to assess the sustainability of WWT systems based on the development of a composite indicator embracing economic, environmental and social issues. Subsequently, the global sustainability of seven WWT technologies for secondary treatment in small communities is compared. The joint application of the analytical hierarchical process (AHP) to assign weights to each indicator allows the incorporation of the preferences of experts. Initially, the global sustainability of the WWT technologies evaluated is quite similar. However, a scenario analysis illustrates that constructed wetlands technology is the most sustainable in five out of the seven scenarios evaluated. Moreover, extended aeration and rotating biological contactors are identified as the technologies with the lowest variability in their sustainability. Hence, in an uncertain context, they might be considered the preferred options. The proposed approach contributes to ease of interpretation of a complex problem such as the selection of the most sustainable WWT alternative.

Economic valuation of environmental benefits of removing pharmaceutical and personal care products from WWTP effluents by ozonation

Continuous release of pharmaceutical and personal care products (PPCPs) present in effluents from wastewater treatment plants (WWTPs) is nowadays leading to the adoption of specific measures within the framework of the Directive 2000/60/EC (Water Framework Directive). The ozonation process, normally employed for drinking water production, has also proven its potential to eliminate PPCPs from secondary effluents in spite of their low concentrations. However, there is a significant drawback related with the costs associated with its implementation. This lack of studies is especially pronounced regarding the economic valuation of the environmental benefits associated to avoid the discharge of these pollutants into water bodies. For the first time the shadow prices of 5 PPCPs which are ethynilestradiol, sulfamethoxazole, diclofenac, tonalide and galaxolide from treated effluent using a pilot-scale ozonation reactor have been estimated. From non-sensitive areas their values are -73.73; -34.95; -42.20; -10.98; and -8.67 respectively and expressed in €/kg. They represent a proxy to the economic value of the environmental benefits arisen from undischarged pollutants. This paper contributes to value the environmental benefits of implementing post-treatment processes aimed to achieve the quality standards required by the Priority Substances Directive.

Economic feasibility study for intensive and extensive wastewater treatment considering greenhouse gases emissions

Economic feasibility assessments represent a key issue for selecting which wastewater treatment processes should be implemented. The few applications that exist focus on the positive economic value of externalities, overlooking the existence of negative externalities. However, wastewater treatment plants (WWTPs) consume a significant amount of energy, contributing to climate change. In this context, as a pioneering approach, greenhouse gas emissions (GHG) have been incorporated as a negative externality of wastewater treatment. Within this framework, this study aims to compare the economic feasibility of five technologies, both intensive and extensive, for small communities. The results show that both the investment and operation costs are higher for intensive than for extensive technologies. Moreover, significant differences in the value of negative externalities were observed. This study demonstrates that from an economic perspective, constructed wetland is the most suitable option for treating wastewater in small agglomerations.

Assessment of wastewater treatment plant design for small communities: environmental and economic aspects

The preliminary design and economic assessment of small wastewater treatment plants (less than 2000 population equivalent) are issues of particular interest since wastewaters from most of these agglomerations are not covered yet. This work aims to assess nine different technologies set-up for the secondary treatment in such type of facilities embracing both economic and environmental parameters. The main novelty of this work is the combination of an innovative environmental decision support system (EDSS) with a pioneer approach based on the inclusion of the environmental benefits derived from wastewater treatment. The integration of methodologies based on cost-benefit analysis tools with the vast amount of knowledge from treatment technologies contained in the EDSS was applied in nine scenarios comprising different wastewater characteristics and reuse options. Hence, a useful economic feasibility indicator is obtained for each technology including internal and external costs and, for the first time, benefits associated with the environmental damage avoided. This new methodology proved to be crucial for supporting the decision process, contributing to improve the sustainability of new treatment facilities and allows the selection of the most feasible technologies of a wide set of possibilities.

Economic feasibility study for new technological alternatives in wastewater treatment processes: a review

The concept of sustainability involves the integration of economic, environmental, and social aspects and this also applies in the field of wastewater treatment. Economic feasibility studies are a key tool for selecting the most appropriate option from a set of technological proposals. Moreover, these studies are needed to assess the viability of transferring new technologies from pilot-scale to full-scale. In traditional economic feasibility studies, the benefits that have no market price, such as environmental benefits, are not considered and are therefore underestimated. To overcome this limitation, we propose a new methodology to assess the economic viability of wastewater treatment technologies that considers internal and external impacts. The estimation of the costs is based on the use of cost functions. To quantify the environmental benefits from wastewater treatment, the distance function methodology is proposed to estimate the shadow price of each pollutant removed in the wastewater treatment. The application of this methodological approach by decision makers enables the calculation of the true costs and benefits associated with each alternative technology. The proposed methodology is presented as a useful tool to support decision making.

Cost-benefit analysis of water-reuse projects for environmental purposes: a case study for Spanish wastewater treatment plants

Water reuse is an emerging and promising non-conventional water resource. Feasibility studies are essential tools in the decision making process for the implementation of water-reuse projects. However, the methods used to assess economic feasibility tend to focus on internal costs, while external impacts are relegated to unsubstantiated statements about the advantages of water reuse. Using the concept of shadow prices for undesirable outputs of water reclamation, the current study developed a theoretical methodology to assess internal and external economic impacts. The proposed methodological approach is applied to 13 wastewater treatment plants in the Valencia region of Spain that reuse effluent for environmental purposes. Internal benefit analyses indicated that only a proportion of projects were economically viable, while when external benefits are incorporated all projects were economically viable. In conclusion, the economic feasibility assessments of water-reuse projects should quantitatively evaluate economic, environmental and resource availability.

Environmental and economic profile of six typologies of wastewater treatment plants

The objective of wastewater treatment plants (WWTPs) is to prevent pollution. However, it is necessary to assess their sustainability in order to ensure that pollution is being removed, not displaced. In this research, the performance of 24 WWTPs has been evaluated using a streamlined Life Cycle Assessment (LCA) with Eutrophication Potential (EP) and Global Warming Potential (GWP) as environmental indicators, and operational costs as economic indicators. WWTPs were further classified in six typologies by their quality requirements according to their final discharge point or water reuse. Moreover, two different functional units (FU), one based on volume (m(3)) and the other on eutrophication reduction (kg PO(4)(3-) removed) were used to further determine sustainability. A correlation between legal requirements and technologies used to achieve them was found: Organic matter removal plants were found to be less costly both in environmental and economic terms if volume was used as the functional unit, while more demanding typologies such as reuse plants showed a trade-off between lower EP and higher cost and GWP; however, this is overcome if the second FU is used instead, proving the sustainability of these options and that this FU better reflects the objectives of a WWTP.

Assessing disproportionate costs to achieve good ecological status of water bodies in a Mediterranean river basin

Water management is becoming increasingly important as the demand for water grows, diversifies, and includes more complex environmental concerns. The Water Framework Directive (WFD) seeks to achieve a good ecological status for all European Community water bodies by 2015. To achieve this objective, economic consideration of water management must be given to all decision-making processes. Exemption (time or level of stringency) from the objectives of the EU Directive can be justified by proving that the cost of implementing measures is disproportionate to the benefits. This paper addresses the issue of disproportionate costs through a cost-benefit analysis (CBA). To predict the costs, the function costs method is used. The quantification of environmental benefits is more complex, because they are not determined by the market. As an alternative to stated preference methods, we use the distance function approach to estimate the environmental benefits of improving water quality. We then apply this methodological approach to a Mediterranean River Basin in Spain. The results show that the achievement of good status could not be rejected based on the criterion of disproportionate costs in this river basin. This paper illustrates that CBA is a useful tool to inform policy and decision making. Furthermore, it is shown that economics, particularly the valuation of environmental benefits, plays a crucial role in fulfilling the environmental objectives of the WFD.

Energy efficiency in Spanish wastewater treatment plants: a non-radial DEA approach

Wastewater treatment plants (WWTPs) are energy-intensive facilities. Thus, reducing their carbon footprint is particularly important, both economically and environmentally. Knowing the real operating energy efficiency of WWTPs is the starting point for any energy-saving initiative. In this article, we applied a non-radial Data Envelopment Analysis (DEA) methodology to calculate energy efficiency indices for sampling of WWTPs located in Spain. In a second stage analysis, we examined the operating variables contributing to differences in energy efficiency among plants. It is verified that energy efficiencies of the analyzed WWTPs were quite low, with only 10% of them being efficient. We found that plant size, quantity of organic matter removed, and type of bioreactor aeration were significant variables in explaining energy efficiency differences. In contrast, age of the plant was not a determining factor in energy consumption. Lastly, we quantified the potential savings, both in economic terms and in terms of CO(2) emissions, that could be expected from an improvement in energy efficiency of WWTPs.

Economic feasibility study for phosphorus recovery processes

Phosphorus recovery from wastewater has become a necessity for sustainable development because phosphorus is a non-renewable essential resource, and its discharge into the environment causes serious negative impacts. There are no economic incentives for the implementation of phosphorus recovery technologies because the selling price of rock phosphate is lower than phosphorus recovered from sewage. The methodologies used to determine the feasibility of such projects are usually focused on internal costs without considering environmental externalities. This article shows a methodology to assess the economic feasibility of wastewater phosphorus recovery projects that takes into account internal and external impacts. The shadow price of phosphorus is estimated using the directional distance function to measure the environmental benefits obtained by preventing the discharge of phosphorus into the environment. The economic feasibility analysis taking into account the environmental benefits shows that the phosphorus recovery is viable not only from sustainable development but also from an economic point of view.

Economic feasibility study for wastewater treatment: a cost-benefit analysis

Water resource management should be made from a multidisciplinary perspective. In this sense, economic research into the design and implementation of policies for the efficient management of water resources has been emphasized by the European Water Framework Directive (WFD). Cost-benefit analysis (CBA) is one of the more widely accepted economic instruments since it is a rational and systematic decision-making support tool. Moreover, the wastewater treatment process has significant associated environmental benefits. However, these benefits are often left uncalculated because they have no market value. In this paper, using the concept of shadow price, a quantification of the environmental benefits derived from wastewater treatment is made. Once the environmental benefits are estimated and the economic costs of the treatment processes are known, a CBA is made for each of the wastewater treatment plants (WWTPs) under study. In this way, a useful economic feasibility indicator is obtained for WWTP operation.

Economic valuation of environmental benefits from wastewater treatment processes: an empirical approach for Spain

Economic research into the design and implementation of policies for the efficient management of water resources has been emphasized by the European Water Framework Directive (Directive 2000/60/EC). The efficient implementation of policies to prevent the degradation and depletion of water resources requires determining their value in social and economic terms and incorporating this information into the decision-making process. A process of wastewater treatment has many associated environmental benefits. However, these benefits are often not calculated because they are not set by the market, due to inadequate property rights, the presence of externalities, and the lack of perfect information. Nevertheless, the valuation of these benefits is necessary to justify a suitable investment policy and a limited number of studies exist on the subject of the economic valuation of environmental benefits. In this paper, we propose a methodology based on the estimation of shadow prices for the pollutants removed in a treatment process. This value represents the environmental benefit (avoided cost) associated with undischarged pollution. This is a pioneering approach to the economic valuation of wastewater treatment. The comparison of these benefits with the internal costs of the treatment process will provide a useful indicator for the feasibility of wastewater treatment projects.