Potential policy projects for decreasing fluoride concentrations in the groundwater of Aguascalientes, Mexico : a cost-benefit analysis

Abstract: Reductions in groundwater quality due to aquifer depletion is a growing issue globally and will become more prominent with continued climate change and population growth. Dry regions are particularly vulnerable to this issue due to their reliance on groundwater for water supply. Therefore, urgent attention to improving groundwater management in such areas is essential in regional budgets and policy agendas. This thesis aims to provide insight and initial estimates on the potential net social benefits associated with two policy projects intended to increase the groundwater quality in the semi-arid state of Aguascalientes, Mexico. The focus lies on the aquifer of Valle de Aguascalientes, where fluoride contamination due to aquifer overdraft is becoming increasingly problematic. The projects evaluated are the installation of fluoride removal units using electrocoagulation (Project A), and the implementation of centre pivot irrigation systems (Project B). Policy evaluation is performed using cost-benefit analysis. The results show that Project A is associated with a net present value (NPV) of 159 262 033.17 USD and Project B with an NPV of -123 864 575.35 USD. However, due to the uncertainty associated with these estimates, the resulting recommendation is to not accept either project until the certainty of the policy evaluation is increased. Nevertheless, the information provided in this thesis may be helpful in planning for future studies.