Increasingly, water agencies and utilities have an obligation to consider the broad environmental impacts associated with investments. To aid in understanding water cycle interdependencies when making urban water supply investment decisions, an ecosystem services typology was augmented with the concept of integrated water resources management. This framework is applied to stormwater harvesting in a case study catchment in Adelaide, South Australia. Results show that this methodological framework can effectively facilitate systematic consideration and quantitative assessment of broad environmental impacts of water supply investments. Five ecosystem service impacts were quantified including provision of 1) urban recreational amenity, 2) regulation of coastal water quality, 3) salinity, 4) greenhouse gas emissions, and 5) support of estuarine habitats. This study shows that ignoring broad environmental impacts can underestimate ecosystem service benefits of water supply investments by a value of up to A$1.36/kL, or three times the cost of operating and maintenance of stormwater harvesting. Rigorous assessment of the public welfare impacts of water infrastructure investments is required to guide long-term optimal water supply investment decisions. Numerous challenges remain in the quantification of broad environmental impacts of a water supply investment including a lack of peer-reviewed studies of environmental impacts, aggregation of incommensurable impacts, potential for double-counting errors, uncertainties in available impact estimates, and how to determine the most suitable quantification technique.

Item Type:	Refereed Article
Research Division:	Economics
Research Group:	Applied Economics
Research Field:	Environment and Resource Economics
Objective Division:	Environment
Objective Group:	Environmental and Natural Resource Evaluation
Objective Field:	Economic Incentives for Environmental Protection
Author:	Hatton MacDonald, D (Associate Professor Darla Hatton MacDonald)
ID Code:	103151
Year Published:	2014
Web of Science® Times Cited:	10
Deposited By:	Tasmanian School of Business and Economics
Deposited On:	2015-09-23
Last Modified:	2018-03-20
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