Establishment of water protection areas : comparing benefits of protecting groundwater services to agricultural costs

Abstract: In this study, a CBA of expanding a water protection area and imposing more restrictive protection regulations to safeguard a groundwater source used for drinking water supply was performed. The case study area was a location in the Southern part of Sweden. The aim of the study was to contribute to enabling economically motivated water management decisions and to address the distributional effects of water protection measures. Benefits in terms of enhanced protection and secured provision of good quality drinking water supply and other groundwater services were compared to costs for the agricultural sector. Groundwater services were identified by a novel classification system for biotic and abiotic surface and groundwater services, developed based on an extensive literature review. The protection measure alternative was concluded as profitable compared to the reference alternative with a NPV of SEK 128.9 million. Potential uncertainties and omitted cost and benefit items were examined in a sensitivity analysis, but these factors were not considered to have altered the outcome of the CBA. It was deemed challenging to identify all groundwater services supplied by the groundwater source and to determine the relationship between the protection measure and the impact on these services. More research is required to develop the applicability of the classification system. Another conclusion was that the benefits of protecting a drinking water source to a large extent depend on the number of people using it for their drinking water supply.