Combining cost benefit analysis with multi criteria analysis for sustainability assessment of regional water supply policies

• The provision of safe drinking water is of primary importance in society and a prerequisite for public health and economic development. This provision is however threatened by a variety of risks due to e.g. climate change and societal development. To manage these risks the water utilities are facing complex decision situations. Today, decisions on costly investments are being made with limited knowledge of which choices are the most sustainable. In order to achieve a safe and sustainable water supply, a regional perspective on the environmental, social and economic effects of the decisions is increasingly promoted in Sweden. There are, however, few decision support tools adapted to the regional level. Hence, this study focuses on the development of a decision support framework for assessing the sustainability of risk reducing measures by adapting Cost-Benefit Analysis (CBA) and Multi Criteria Analysis (MCA) to a regional perspective. The Gothenburg region serves as a case study for which five measures are evaluated: (1) centralization of water supply production; (2) centralization of water supply organization; (3) shift of the main raw water source (4) maximization of groundwater usage; and (5) use of additional raw water sources. All measures aim to enhance safety by reducing risks. Uncertainties concerning the net present values are analyzed using statistical simulation (Monte Carlo). The CBA results are complemented with environmental and social effects in an MCA, including criteria such as intrinsic values, equity and health. The case study results are then used to design a decision support framework that allows for non-market valuations and economic and ecological tradeoffs under uncertainty, a novelty on the regional scale. In conclusion, it is expected that the results of this study will provide decision makers with a framework that can improve their ability to make well-informed decisions and ensure the society a safe water supply for generations to come.

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