Protection of the Ground Water Resource in the Cachment Area for Solhoj Well Field What is the price

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Protection of the Ground Water Resourcein the
Cachment Area for Solhoj Well FieldWhat is the
price and who pays?

• Case - Financial CEA
• Klaus Weber M.Sc.
• A collaboration between County of Copenhagen and
  NIRAS
• WaterCost Seminar 9. June 2006

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Why use economic models

• Tool to support prioritizing alternative measures
  during the planning process
• Decision support on political level
• Dialog with and commitment from stakeholders
• Budgeting
• Price setting on water (consumers additional
  charge for cost recovery)

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Effect and ambition level

• When are protective measures adequate?

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Groundwater Protection Plan Catchment area for
Solhoj Well Field
Well field

• Extraction of 6 million cubic meters per year
  (15 of the total water extraction in
  Copenhagen County)

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Catchment Area SolhojOther interests on land use

• Major transport corridor to Copenhagen
• Border region to industrial area
• Important area for extraction of sand and gravel
• Controlled landfill sites
• Intensive agriculture usage
• Area for future elevation of residential areas
• Regional recreative interests

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Catchment Area SolhojVulnerability of the aquifer
Old groundwater
Young ground-water
Overburden of moraine till and alluvial
sand. Limestone aquifer approx. 15 20 m
bg. Water extracted is a mixture of old reduced
groundwater and younger oxidized groundwater
impacted from anthropogenic activities.
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Catchment Area SolhojMain risks

• Risk of contamination from point sources
  (chlorinated solvents)
• Impact from agricultural activities and
  plantations (nitrate, pesticides)
• Deterioration of water quality due to dense water
  extraction (nickel)

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Catchment Area SolhojPotential protective
measures

• Remediation of contaminated sites (chlorinated
  solvents from tannery and MTBE from gas station)
• Regulation of the use of pesticides
• Well field management (reduction of drawdown to
  prevent elevated nikkel konc. due to oxidation of
  limestone aquifer)
• Upgrading of private wells
• Sustainable agriculture (EU - subsidized farming)
• forestation
• Uncontrolled dumps
• Targeted inspections on industrial sites
• Public information (use of pesticides in gardens
  and allotments)
• Monitoring of groundwater quality (early warning)

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Catchment Area SolhojFinancial CEA

• Targeted effect Ensure a stable and good water
  quality below threshold values.
• Inkremental CEA
• Costs (known, estimated or assumed) are expressed
  as net present values (NPV) as- total costs, -
  costs per m3 water produced and - costs
  allocated to stakeholders
• Side effects are described qualitatively

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Catchment Area Solhoj - Financial CEAImportant
parameters

• Calculation discount rate here 3
• Calculation horizon here 50 years
• Model boundaries

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Catchment Area Solhoj - Financial CEAModel
boundaries

• Included costs are
• Construction, operation, maintenance, monitoring
  and subsidies to landowners
• Excluded costs are
• Stakeholderes time consumption
• Investments before implementation of plan
• Private costs due to legal requests, e.g. clean
  ups on contaminated sites

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Calculation tool
Costs - stakeholders
Detailed economyfor each measure
Preventive measures
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Catchment Area Solhoj - Financial CEACosts
preventive measures

• 
  Mill. DKK (NPV)
• Remediation contaminated site (PCE/TCE) 38,5
• Pesticides (BAM) Action Plan 0,4
• MTBE Action Plan 0
• Well field management (Nickel) 0,5
• Environmental friendly farming 9,5
• Wells improved standard 0,4
• Monitoring 11,1
• Forestation 13,2
• Uncontrolled dumps 0,1
• Targeted inspections 0
• Public information 0
• Total costs 73,7

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Catchment Area Solhoj - Financial CEACosts -
stakeholders
Treatment for pesticides (BAM) (horizon 20-80
years) 0,44 DKK pr m3
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Catchment Area Solhoj - Financial CEAPossitive
effects

• Coordination/dialog between regional and local
  groundwater interests.
• Land use and indoor climate benefits from
  remediation of contaminated sites
• Flora and fauna benefits from forestation and
  environmental friendly farming
• Forestation gives recreative values and potential
  higher prices in neighbor residential areas

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Catchment Area Solhoj - Financial CEA Negative
effects

• Lost agricultural outcome due to environmental
  friendly farming and forestation
• Reduced land prices on farms
• Restrictions on land use
• Use of resources (water, energy and materials) to
  clean up on contaminated sites

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Catchment Area Solhoj - Financial CEA
Alternative scenarios

• There is no exact value of groundwater.
• The GW protection plan was therefore compared to
  two
• alternatives (no matter if they are
  political/legally
• acceptable or not)
• No remediation of a 35 million kr. tannery site.
  Special water treatment for chlorinated solvents
  at water works (horizon gt 100 years).
  Anticipated to start in 2010.
• Abandon of existing well field. Construction and
  operation of a new well field on southern part of
  Sealand.

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Catchment Area Solhoj - Financial CEA Most
economic choice?

• GW Protection Plan 0,53 kr. pr m3 (NPV)
• Alternatives
• 1. No remediation of tannery site (PCE/TCE).
  Water treatment for chlorinated solvants starting
  from 2010 0,70 kr. pr m3 (NPV)
• 2. Construction of a new well fields on the
  southern part of Sealand 1,5 kr. pr m3 (NPV)

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Catchment Area Solhoj - Financial CEA Conclusions

• Implementation of protective measures (74 million
  DKK) is acceptable (0,54 DKK/m3) compared to the
  value of the resource
• The GW protection plan is proportional compared
  to alternative scenarios.
• All stakeholdes know the consequences and there
  economic commitment
• The CEA has also highlighted side effects

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Catchment Area Solhoj - Financial CEA
Perspectives

• Operational tool to prioritize preventive
  measures
• Integration of the economic analyses in
  negotiations and the development of the GW
  protection plan.
• A strengthening connection between investments
  and effects
• Transparency of the economic consequences among
  politicians, stakeholders and public