With a few liters of clean drinking water : a Cost Benefit Analysis of the socio-economic effects from implementing new clean drinking water technologies in rural India

Abstract: In 2010, Airwatergreen AB started testing their new technology, the Airwaterwell, an atmospherical water generator of their own design that is running on solar heat, with a production capacity of three litres of water per day and m2. The purpose was to focus on foreign aid organizations as main purchasers for project investments towards rural communities in developing countries that suffer from lack of, or compromised quality of drinking water. In order to further understand if this technology would bring a positive impact in the developing countries, the company contacted the Swedish University of Agriculture for a socio-economic study of the Airwaterwells’ potential. The authors elected Cost benefit analysis as the appropriate method for conducting the study and India became the study region because of its many problems with water related issues such as diseases as well as insufficient water supply for households. The regions that this study is based on are Gujarat, Haryana and Uttar Pradesh given their differences in income, health situation and poverty rate. A model was constructed to estimate the primary benefits such as health related benefits and benefits from time saved from fetching water in these regions. To diversify the study, two other project alternatives was included. A representative heat pump, Electrolux Oxy-3, theoretically converted to an Air-water generator was added as a project alternative, capable of producing 2,1 litres per day. Also the already established solar-disinfection field is represented by the 10 litre Solvatten unit, has been included. The Solvatten disinfection bottle addresses all the variables problems formulated in the model except for the time to fetch water. In order to study the impact of the implementation of the project alternatives, the benefits for providing households with clean drinking water was measured. After benefits and costs have been added, Net Social Revenue for the project alternatives was compared. In order to address the inherent uncertainty of a multi-variable model, a thorough sensitivity analysis was performed. Lastly, the necessary cost-level for a future implementation of the Airwaterwell was analysed and discussed, given the cost-levels of the other project alternatives. In the analysis, it was found that Uttar Pradesh was the best region for investment, where Airwaterwell yielded a return on investment of 4,66 (0,87-19,0) times the initial amount. At current cost level, it was not able to match the performance of the Solvatten unit, but out-performed the more technologically related Electrolux Oxy-3 heatpump. With the model constructed in this analysis, the return on investment is higher in regions with a higher proportion of children. Conversely, if Airwarerwell units are distributed to children only, return on investment is increased to 8,4 times the initial amount.