Séminaire CGDD Monétarisation des biens environnementaux : Quelles utilisations pour les politiques publiques et les décisions privées? la valorisation des externalités positives des services d eau potable et d assainissement Vers un nouveau modèle économique pour l eau Mathieu TOLIAN Department RSE 13 décembre 2012
Contents I. Background Karolinenhöhe CEV Roadtest II. Veolia Water s Ecosystem Valuation Program III. Screening IV. CEV Case Studies Crépieux-Charmy catchments' field CCED Sanitation System 1. Scoping 2. Planning 3. Valuation 4. Application 5. Embedding 2
Background Karolinenhöhe CEV Roadtest(2010) Q? How to optimize the financial & societal benefits of land and water use? Irrigate the site and grow energy crops Inform an option appraisal Ensure greater shared value creation Explore potential for PES 3
Veolia s Ecosystem Valuation Program (EVP - since 2011) Objectives: Develop expertise on ES and Water Activities Concentrate efforts where the biggest potential values are and where our influence is the more significant (criteria of choice) Choose site and make valuation study (apply) Use the values to Help decision making at site level Investigate the potential of PES at corporate level
Screening Based on the first EVP outputs, the main criteria of choice for Drinking water production activities are : Protection scope of the site > 40ha which includes an ecological management and: Concerns important water resources Is associated with recreational activities The catchments field is part of a floodplain or close to an urban area liable to flooding Wastewater treatment activities are : High performance treatment playing a key role for the aquatic ecosystem quality downstream Significant retention capacity in an area sensitive to flooding Natural tertiary wastewater treatment associated including high level of biodiversity, access to the public in a dense urban area Reuse of treated wastewater
CEV Stage 1 Scoping Crépieux-Charmy Water Context Located east of Lyon (France) Largest catchments' field in Europe (375 ha) Provide drinking water to 90% of the Grand Lyon (1.3M inhabitants) 5 years ecological management plan No public access ES of interests: Water purification service (regulation) Natural Heritage of the site (cultural) Recreational services (cultural) Carbon sequestration (regulation) CEV Business case: Assess the positive externalities linked to the ES influenced by theecological management in place at the site 6
CEV Stage 1 Scoping CCEDWastewater Context Located in Normandy (France), at the estuary of the river Dives High performance membrane filtration process Construction of 6 buffer ponds Forthcoming reuseof treated wastewater in project ES and Other Env. Externalities of interests: Tourism (Cultural) Nautical activities (Cultural) Natural heritage value of the preserved ecosystem (Cultural) Flood control (Regulation) Reuse of treated wastewater and compost (Regulation& Provisionning) CEV Business case: Assess the positive externalities linked to the ES influenced by the newsanitation system 7
CEV Stage 2 -Planning Information gathering: On-site meetings, Public statistic databases, Interview, phone call and mail with Veolia operations, Municipality services, and other local stakeholders (Regional Conservatory of Natural Areas, National Forest Office, Naturalist association and Tourist sector) Team: Veolia Water: 1 project manager Crépieux-Charmy and CCED : 1 project coordinator (each) Ecowhat (consultancy): 1 environmental economics expert & 1 project assistant Time frame: ~40 days over ~6 months 8
CEV Stage 3 Crepieux Charmy Valuation Water purification service (regulation) Avoided treatment costs (catchmentfield protection vs. water treatment) Natural heritage value associated to biodiversity reserve of the site (cultural) WTP transfer from contingent valuation Carbon sequestration (regulation) Market prices Hunting, fishing and other recreational activities near by (cultural) Qualitative valuation only (due to the lack of data, but initially planning to do market price value transfer) 9
CEV Stage 3 CrepieuxCharmyValuation Results (1) Total economic benefits from ecosystem services associated with Crépieux-Charmy Heritage Value Carbon storage Water purification Societal benefits (external) Financial benefits (internal) Tangibility
CEV Stage 3 CrepieuxCharmyValuation Results (2) Financial X 16 X 2 80% Financial Benefits Ecological management cost Total cost (excluding licence fee) Total cost water agency fees chemicals, electricity and renewal costs staff and ecological costs Benefits associated with the water purification service (avoided treatment costs) represent between 0.8 and 16 times the costs of Crépieux-Charmy
CEV Stage 3 CrepieuxCharmyValuation Results (3) Economic X 45 X 5 X 2,3 Economic Financial Benefits Ecological management cost Total cost (excluding licence fee) Total cost water agency fees chemicals, electricity and renewal costs staff and ecological costs Total benefits associated with the ecosystem services of the site (including carbon sequestration and non use values associated with the natural heritage), represent between 2.3 and 45 times the management costs of Crépieux- Charmy
CEV Stage 3 CCED Valuation Tourism (Cultural) => Market prices Nautical activities (Cultural) => Market prices Natural heritage value of the preservedecosystem (Cultural) => WTP transfer from contingent valuation Flood control (Regulation) =>Avoided damages costs Reuse of treated wastewater and compost(regulation/provisioning) Due to the lack of data, changes on the ecosystem services were not observable => Other associated environmental externalities has been valued with the avoided cost method 1 3
CEV Stage 3 CCED Valuation Results (1) Total external benefits associated with the new CCED sanitation system Tourism 91,4% Heritage value 4,7% Nautical activities 0,3% Reuse Compost 0,7% 1,2% Flood control 1,7% There is no financial values, that strictly benefits to the water utility (internal). All values are economic as they benefits to the whole society (external)
CEV Stage 3 CCED Valuation Results (2) Total external benefits vs. Additionnal cost of the CCED new sanitation system 73% External Benefits Financial costs of investment Additional operating costs Total benefits associated with the ecosystem services represent 3/4 of the additional costs generated by the new sanitation system
CEV Stage 4 - Application Awareness raising: Employees and other stakeholders Improve decision making: Use in discussions with the Grand Lyon in the context of contract renewal Improve Crépieux-Charmy management: Favor actions that enhance benefits brought to light Integrate ES benefits in long term management choices 1 6
CEV Stage 5 Embedding Promote the CEV approach Use of the case study as an example Investigate the potential of ES to renew our business model Internalization of our positive externalities Payment for Ecosystem Services True Value of Water 1 7
THANK YOU 1 8