Environmental Benefit of Improving Wastewater Quality: A Shadow Prices Approach for Sensitive Areas

The use of effluents from wastewater treatment plants (WWTPs) as a non-conventional source of water for wetlands in arid and semi-arid regions is becoming the most-often sought solution for maintaining water flow in sensitive wetlands there. However, the managing effluent quality should be a requirement because excess nutrients (mainly nitrogen and phosphorus) can generate eutrophication problems in wetlands. In the Mediterranean area in general, wetlands are strongly vulnerable to eutrophication, which is why they are classified as sensitive areas. Our study uses a data set from 24 WWTPs, effluents of which are discharged to wetlands in the coast of Community of Valencia. We use the shadow prices methodology to quantify the environmental avoided costs and the environmental benefit (both in monetary units) of nitrogen and phosphorus removal in waste-water effluent. The results highlight the importance of reducing these pollutants in WWTP effluents for maintaining the suitable water quality in wetlands. Our study demonstrates the potential for using shadow prices methodology for monetary valuation of environmental externalities in wetlands that use treated wastewater as a non-conventional water source.