sustainability oriented feasibility model for construction ......sustainability oriented feasibility...
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Sustainability Oriented Feasibility Model for Construction Decision Making: Water Recycling Cases in Buildings
by
Yue Zhang
A thesis submitted in conformity with the requirements for the degree of Masters of Applied Science
Civil Engineering University of Toronto
© Copyright by Yue Zhang 2009
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Sustainability Oriented Feasibility Model for Construction Decision
Making: Water Recycling Cases in Buildings
Yue Zhang
Masters of Applied Science
Civil Engineering University of Toronto
2009
Abstract
Traditionally, feasibility analysis in the construction sector is limited to financial considerations.
As the concept of sustainability becomes increasingly important, the methods used in a
feasibility analysis have to be reconfigured in a way that incorporates elements of sustainability.
This research uses water recycling systems (within the built environment) as an example to
demonstrate how sustainability factors can be integrated quantitatively in feasibility studies. The
model is structured in a triple-bottom-line framework, which consists of economic,
environmental, and social aspects. Each aspect is measured by a spectrum of parameters, which
evaluate three project outcomes of water recycling systems—water savings, project
requirements, and positive image. Based on the quantified parameters, Green Factor, a decision
making method, is formulated to assist in sustainability oriented feasibility analysis for
construction projects.
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Acknowledgments I would like to thank my supervisor, Professor Tamer E. EI-Diraby for his guidance and support
throughout my Masters study. I want to thank Professor Bryan William Karney, the second
reviewer of this thesis, for his constructive comments and advice on refining this work. I also
want to express my many thanks to Manuel Da Costa, who provided me with valuable data,
helping me complete case studies.
I am grateful to my colleagues Jingyue Zhang, Mahmoud Osman Abou-Beih, Sherif Kinawy,
George Illaszewicz, and Shayan Nahrvar for their great help in many aspects of my life. Other
people who have given me their time and support are Yimin Zhang, Alex Charpentier, Lihong
Shen, Hamid Heidarali, Max Rideout, Mei Rideout, and Tony Lai. Without you, it is impossible
for me to finish this research.
I am forever indebted to my mom, Juying Wang, and relatives in China for their unwavering
understanding and encouragement.
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Table of Contents Chapter 1 INTRODUCTION .................................................................................................. 1
Chapter 2 LITERATURE REVIEW OF METHODOLOGIES.............................................. 3
2.1 Life Cycle Cost Analysis .................................................................................................... 3
2.1.1 Cost Identification................................................................................................... 3
2.1.2 Economic Feasibility .............................................................................................. 5
2.2 Life Cycle Assessment........................................................................................................ 6
2.2.1 Goal and Scope Setting........................................................................................... 7
2.2.2 Inventory Establishment ......................................................................................... 9
2.2.3 Impact Assessment and Result Interpretation....................................................... 12
2.3 Willingness to Pay ............................................................................................................ 13
2.3.1 Market Price Method ............................................................................................ 14
2.3.2 Productivity Method ............................................................................................. 15
2.3.3 Hedonic Pricing Method ....................................................................................... 15
2.3.4 Travel Cost Method .............................................................................................. 16
2.3.5 Damage Cost Avoided, Replacement Cost, and Substitute Cost.......................... 17
2.3.6 Survey Methods: Contingent Valuation and Contingent Choice.......................... 17
2.3.7 Benefit Transfer .................................................................................................... 17
2.4 Chapter Summary ............................................................................................................. 18
Chapter 3 WATER RECYCLING SCENARIOS ................................................................. 20
3.1 Greywater Reuse............................................................................................................... 20
3.1.1 Life Cycle Cost of Greywater Systems................................................................. 21
3.1.2 Life Cycle Assessment of Greywater Systems ..................................................... 29
3.2 Rainwater Harvesting........................................................................................................ 29
3.2.1 Life Cycle Cost of Rainwater Systems ................................................................. 30
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3.2.2 Life Cycle Assessment of Rainwater Systems...................................................... 37
3.3 Combination Scenario....................................................................................................... 37
3.4 Chapter Summary ............................................................................................................. 39
Chapter 4 MODEL FRAMEWORK ..................................................................................... 40
4.1 Economic Analysis ........................................................................................................... 45
4.1.1 Direct Economic Analysis .................................................................................... 45
4.1.2 Indirect Economic Analysis.................................................................................. 49
4.1.3 Macro-economic Impacts on Industry Sectors ..................................................... 57
4.2 Environmental Analysis.................................................................................................... 60
4.3 Social Analysis.................................................................................................................. 65
4.4 Model Discussions ............................................................................................................ 67
4.4.1 Selection of the Indicators .................................................................................... 67
4.4.2 Units of Measurement........................................................................................... 68
4.4.3 Parameter Correlation ........................................................................................... 69
4.5 Decision Making: Green Factor Analysis......................................................................... 72
4.5.1 Decision Making Process...................................................................................... 72
4.5.2 An Application to the Illustrative Greywater Case............................................... 78
4.6 Chapter Summary ............................................................................................................. 82
Chapter 5 Analysis and Discussions...................................................................................... 84
References..................................................................................................................................... 89
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List of Tables Table 3.1 Review of Life Cycle Analyses .................................................................................... 25
Table 3.2 Operation and maintenance cost ................................................................................... 32
Table 3.3 Direct Cost Analysis for Rainwater Harvesting Systems ............................................. 35
Table 3.4 Comparisons of cost components ................................................................................. 38
Table 4.1 Analysis Parameters...................................................................................................... 42
Table 4.2 Parameter Explanations ................................................................................................ 43
Table 4.3 Summary of assessment parameters and their proposed values ................................... 45
Table 4.4 Formulae method of direct cost estimation for greywater systems .............................. 47
Table 4.5 Summary for Indirect Benefits ..................................................................................... 49
Table 4.6 Sensitivity analysis for a cost structure......................................................................... 56
Table 4.7 Macro-economic indicators .......................................................................................... 57
Table 4.8 Six industry sectors that are most affected by reduced infrastructures due to saved
water of 1000 m3........................................................................................................................... 58
Table 4.9 Six industry sectors that are most affected by $1000 investments in equipment and
materials........................................................................................................................................ 59
Table 4.10 Six industry sectors that are most affected by $1000 investments in labors .............. 60
Table 4.11 Macro-economic and Environmental Effects of Water Recycling Systems and
Infrastructures ............................................................................................................................... 61
Table 4.12 Environmental Effects of Pollutants in Monetary Terms ........................................... 62
Table 4.13 Environmental indicators ............................................................................................ 63
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Table 4.14 Environmental impacts of a greywater system for every 1000 m3 saved ................... 64
Table 4.15 Environmental impacts in a greywater system for every $1000 invested in equipment
and materials ................................................................................................................................. 64
Table 4.16 Environmental impacts in a greywater system for every $1000 invested in labors ... 64
Table 4.17 Social Factors.............................................................................................................. 65
Table 4.18 Public health measuring methods ............................................................................... 66
Table 4.19 Parameter correlation.................................................................................................. 69
Table 4.20 Values of indicators in the illustrative greywater case ............................................... 79
Table 5.1 Policy Analysis ............................................................................................................. 84
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List of Figures Figure 2.1 Life Cycle Costs ............................................................................................................ 4
Figure 2.2 Components of an LCA................................................................................................. 7
Figure 2.3 System Boundary Setting .............................................................................................. 8
Figure 2.4 Process Tree of the Production of a 600L Rainwater Tank........................................... 9
Figure 2.5 Methods of Willingness to Pay.................................................................................... 14
Figure 2.6 Methods for sustainability analysis ............................................................................. 19
Figure 3.1 Constituent Parts of Wastewater ................................................................................. 21
Figure 4.1 Sustainability-Oriented Feasibility Model for Construction Decision Making of Water
Recycling Systems ........................................................................................................................ 41
Figure 4.2 Scenarios of water recycling systems.......................................................................... 45
Figure 4.3 Water Use vs. Cumulative Capital Expenditures on Water and Sewage Infrastructures
....................................................................................................................................................... 52
Figure 4.4 Six-Step Procedure of Quantitative Construction Decision Making........................... 72
Figure 4.5 4-D model for the first four steps of decision making................................................. 74
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List of Appendices Appendix 1 Stormwater and Wastewater Recycling ................................................................ 98
Appendix 2 Case Study .......................................................................................................... 115
Appendix 3 Regression Analysis............................................................................................ 151
Appendix 4 A review of the sustainability indictors used in other studies ............................ 158
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Chapter 1 INTRODUCTION
Traditionally, feasibility analysis in the construction sector has been limited to financial
considerations. As the concept of sustainability becomes increasingly important, the
methods used in a feasibility analysis have to be reconfigured in a way that incorporates
elements of sustainability. This research uses water recycling systems (within the built
environment) as an example to demonstrate how sustainability factors can be integrated
in feasibility studies.
The term, water recycling, in this thesis refers to greywater reuse and rainwater
harvesting. Water recycling systems collect greywater/rainwater, treat them to an
acceptable level, and use them in various ways, such as toilet flushing and lawn
irrigation. Besides saving water, water recycling has many other benefits, such as cutting
down public expenditures on water infrastructure expansions and reducing nutrients that
enter natural rivers. These benefits relate to economic, environmental, and social aspects,
making water recycling appealing from a sustainability perspective.
Despite the numerous benefits, water recycling systems are not widely adopted due to the
perception that investments in such systems cannot provide positive financial returns.
However, given that many regions in the world are suffering from water shortage,
investments in such systems can have tremendous benefits. It is important to point out
that even Canada is not immune to water scarcity (Waller 1998), and high-profile water
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shortages in some regions of Canada have been reported (UN-Water 2007). Therefore,
water recycling systems can also be of great benefit to Canada.
Many sustainability models were established to evaluate project feasibility, but few for
water recycling systems (Lundin 1999, Taylor 2005, Lundin, Morrison 2002b, Balkema
et al. 2002). Within a limited number of studies that focus on the sustainability of water
recycling, evaluation indicators are not clearly stated (Najia, Lustig 2006) or are only
qualitatively described, making their application difficult. In order to fill the research gap,
this thesis refines the models established by other scholars, tailoring them to water
recycling applications and facilitating their use by municipal planners. The research
identifies the most relevant and applicable indicators and the methods to quantitatively
evaluate the feasibility of water recycling projects in buildings.
Relevant literature is reviewed in both Chapter 2 and 3. Chapter 2 focuses on
methodologies used in feasibility or sustainability studies, and Chapter 3 focuses on
scenarios of greywater reuse and rainwater harvesting. Chapter 4, the most important part
of the thesis, formulates a sustainability-oriented feasibility model.
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Chapter 2 LITERATURE REVIEW OF METHODOLOGIES
Several methods are typically employed in a sustainability analysis. The methods include
life cycle cost analysis, environmental life cycle assessment (especially input output
analysis), and willingness to pay. This chapter reviews the theories of these methods. The
next chapter reviews their applications to water recycling systems.
2.1 Life Cycle Cost Analysis
A life cycle cost analysis consists of two basic steps: cost identification and economic
feasibility study. The former identifies all the costs incurred over a project’s entire life,
and based on which the latter step decides whether or not the project is economically
feasible. These two steps are reviewed in the following sections.
2.1.1 Cost Identification
Life cycle cost includes initial capital cost, operation and maintenance expenses,
rehabilitation cost, and decommissioning cost (Hudson 1997). As shown in Figure 2.1,
large capital costs are incurred when a water recycling system is constructed. Operation
and maintenance costs are incurred every year in order to keep the system going properly.
When annual maintenance alone can no long make the system work well, the system
needs to be rehabilitated, and the rehabilitation costs are incurred every several years.
When the system reaches the end of its life, a decommissioning cost is incurred to
properly dispose of the system.
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Figure 2.1 Life Cycle Costs (Hudson 1997)
These costs are usually identified in two ways—using historical cost data and generic
cost formulae. Historical costs are the ones that were incurred in previous projects. If
previous projects bear many similarities to the one under study, the historical cost data
can be used. Generic formulae can be employed if proper historical data are not available.
These formulae build up relationships between costs and certain characteristics of system
components. Much research has been done on generating such formulae related to water
systems. For example, Rowe and Abdel-Magid (1995) summarizes the relationships for
water supply and wastewater reclamation projects (Rowe, Abdel-Magid 1995). Richard
(1998) gives the typical unit costs of various components of a recycling system (Richard
1998a). Friedler and Hadari (2006) obtained a few cost functions of greywater reuse
systems through regression analysis (Friedler, Hadari 2006).
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Besides cost components, the economic gains of a project should also be identified in a
life cycle cost analysis. For water recycling systems, economic gains are usually the
water charges that are saved due to reduced use of mains water. This monetary saving
equals to the product of local water price and reduced amount of mains water. If
wastewater charge also drops due to the installation of water recycling systems, this
reduction should be added to the economic gains.
2.1.2 Economic Feasibility
Once major economic costs and gains incurred during a system’s life are identified, an
economic feasibility study can be carried out. Three indicators are normally used. They
are net present value, internal rate of return, and payback period.
1. Net Present Value (NPV) is the total present value of all the investment spent on a
project subtracted from all the revenue gained from the project over a certain time
period. An interest rate is used to discount future spending or revenue into current
value. The following formula shows the way to obtaining a net present value:
∑= +
−=
n
tttt
iCRNPV
0 )1(
where i is the interest rate;
t is the year;
n is the economic life of a system;
Rt is the revenue earned, which is also the water bill reductions in year t;
Ct is the cost of a system in year t, including initial costs, operation costs and
maintenance costs.
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An economically viable project should at least have a positive NPV, because a
negative one means the investor would lose money. NPV is often applied to
compare economic performances between different projects, and the one with the
largest NPV is deemed as the most economically viable one.
2. Internal Rate of Return (IRR) is the interest rate that can make NPV equal to zero.
A project is economically feasible if its IRR is larger than the usual interest rate.
The greater the IRR of a project, the more economically viable the project.
3. Payback period (break-even point) is the year when NPV becomes zero, that is,
when revenue pays back all the costs incurred. After the break-even year, the
NPV stays positive. Many cost studies use this indicator to show whether or not a
project is economically feasible. If the payback period of a project is too long, the
project is less desirable. A profitable project usually has a short payback period.
The three methods reviewed above do not always give consistent results. If discrepancies
exist, the choice of methods is usually in accordance with the objectives of a project.
2.2 Life Cycle Assessment
Life cycle assessment (LCA) investigates the environmental impacts of a product over its
entire life, from raw material acquisition, through construction, transportation, use, to
disposal. This assessment method can trace the production processes of water recycling
systems and the avoided production processes of relevant infrastructures. Life cycle
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assessment was standardized by ISO and was generalized into a four-phase process:
setting goal and scope, establishing life cycle inventory, assessing life cycle impacts, and
interpreting results, as shown in Figure 2.2
Figure 2.2 Components of an LCA (ISO 1997)
2.2.1 Goal and Scope Setting
In the first phase, an LCA practitioner addresses key issues such as identifying and
formulating functional unit and system boundaries. Functional units are defined to
facilitate the comparison of different options and are kept the same for all systems under
consideration. In the water recycling context, this unit is often defined as a certain
amount of recycled water, for example, one million liters.
Because the interactions between different components and phases of a system tend to be
complex, system boundaries need to be set to explicitly define what to be included and
excluded in an assessment. Many previous LCA studies exclude construction and
decommissioning phases from system boundaries of water systems, because researchers
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found that these two phases are insignificant compared to others (Renou et al. 2008,
Racoviceanu et al. 2007). However, this is not always the case. For example, in Memon
et al.’s research (2007), the constructions of reed bed recycling systems induce more than
95% of the environmental impacts on natural resources (Memon et al. 2007).
Given all the studies reviewed, a boundary setting for a water recycling system is
displayed in Figure 2.3. There are two series of processes: one is a capital life cycle, and
the other is a water life cycle. The capital life cycle includes four phases: construction,
use/operation, maintenance, and capital disposal. Capital disposal is usually excluded
from the assessment. In parallel with the capital life cycle, a water life cycle also has
many environmental implications. Raw water that needs to be recycled enters a treatment
train, after which recycled water, sludge, and waste are generated. Recycled water is used
for specific purposes, and sludge and waste may be treated or disposed. Note that
treatment train and use/operation are identical, so they should be counted only once.
Figure 2.3 System Boundary Setting
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2.2.2 Inventory Establishment
Establishing inventory involves identifying input and output flows of a system and
measuring their magnitude. System inputs include materials and energy consumed, and
system outputs are the emissions generated over a life cycle. The outputs can be
measured by various methods including process-based LCA, environmental input output
LCA (EIO-LCA), and hybrid LCA.
Method 1: Process-based LCA
A process-based LCA breaks an entire life cycle of a system into units. These units
interrelate through inputs and outputs. A process tree is often used to facilitate the
identification of these interrelationships. For example, the production of a tank in a
rainwater harvesting system is shown in Figure 2.4 below. The branches of the tree can
be further broken down into smaller components if required data are available. The more
detailed are the branches, the more accurate are the assessment results. However, as
industry sectors are interrelated to each other, this broken-down process can go on
endlessly. An arbitrary system boundary needs to be drawn to stop the broken-down
process. This problem can also be resolved by the input output analysis introduced in the
following section.
Figure 2.4 Process Tree of the Production of a 600L Rainwater Tank (Hallmann,
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Grant & Alsop 2003)
There are three basic ways to obtaining data for a life cycle assessment. The first way is
to get field data, which accurately reflect the characteristics of a system and is thereby
preferred. If field data are not available, relevant data from previous similar studies can
be used. Lastly, data can be obtained from many commercial programs, such as SimaPro
and Giba, which provide numerous datasets to assist LCA-practitioners in establishing
LCA inventories. Since software can never replace human wisdom, an LCA-practitioner
should always check the accuracy of results given by a program before using them to
assist in decision making.
Although a process-based LCA can provide relatively accurate results, it has many
limitations including hard data assembling, expensive and time-consuming workloads,
and arbitrary boundaries (Hendrickson 2006, Hendrickson et al. 1997). In order to
overcome them, an EIO-LCA is usually employed.
Method 2: EIO-LCA
EIO-LCA uses the economic input output table, which was initially developed by
Leontief (Yan 1969), to trace the total economic activities carried out across all industry
sectors and to measure environmental effects. Since its introduction, EIO-LCA has been
adopted by various individuals and organizations to estimate the energy and fuel use,
toxic emissions, greenhouse gas emissions, and so forth (Cicas 2005).
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EIO-LCA has many advantages over process-based LCA. First of all, EIO-LCA can trace
the environmental impacts through direct and indirect sectors in the entire economy, so
the problem of arbitrary truncation in a process-based LCA can be greatly mitigated.
Secondly, with the help of computer, EIO-LCA can get results almost instantly. Thirdly,
data used in EIO-LCA are readily available, because most of them are publicly
accessible. By using these data, programs like Eiolca (Carnegie Mellon University Green
Design Institute 2009) and CEDA (Suh 2004) have made the calculation process easy to
be carried out, which further facilitates the applications of EIO-LCA.
The input output table is the key element in an EIO-LCA. The less aggregated a table is,
the more accurate results can be. All sectors and their descriptions can be found on the
website http://www.eiolca.net/ developed by Carnegie Mellon University. This website is
an EIO-LCA on-line program, including not only the U.S. input output table, but also
from Canada, Spain, Germany, and China.
Although EIO-LCA avoids cumbersome data assembling, its pitfall—highly aggregated
sectors—compromises the accuracy of assessment results. In addition, EIO-LCA can
consider only the phases prior to the use phase. In other words, EIO-LCA alone cannot
go through a project’s entire life. These disadvantages are addressed by the hybrid LCA,
which forms a good marriage between the process-based LCA and EIO-LCA.
Method 3: Hybrid LCA
There are three types of hybrid LCA: tiered hybrid, IO-based hybrid, and integrated
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hybrid analysis. Mostly popular is a tiered hybrid model uses process-based LCA to
analyze the use and disposal, which utilizes EIO-LCA to deal with the rest of the life
cycle and to complete an entire supply chain that complements a process-based LCA
(Suh, Huppes 2005). Many studies applied tiered hybrid models to analyzing water
systems (Racoviceanu et al. 2007, Stokes, Horvath 2006, Tangsubkul et al. 2005).
The three main LCA methods have been introduced in the preceding paragraphs, and a
couple of points related to all of them are addressed in the following. The time horizon of
a water recycling project should be selected in advance, because expected lives of system
components decide the quantity of the materials that would be consumed during the time
period. A life span used in an LCA usually equals to that used in a corresponding life
cycle cost analysis. However, unlike life cycle cost analysis, discount rate is never taken
into account in an LCA, so future environmental impacts are not discounted (Norris
2001). In addition, local data are always preferable in an LCA.
2.2.3 Impact Assessment and Result Interpretation
In the previous step, an inventory of emissions and energy consumption has been
established in physical terms. The results may contain hundreds of different emissions
and resource extraction parameters that may cause significant impacts on the
environment. However, the environmental significance of these parameters is hard to be
understood. To make the results clearer and more understandable, impact assessment is
performed to organize these physical inventory items in an orderly way to facilitate
informed decision making.
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An impact assessment normally consists of five steps: classification, characterization,
normalization, grouping, and ranking. According to ISO 14042, the first two steps are
mandatory, and the rest are optional (PRé Consultants 2008). In the first step, hundreds of
inventory items are classified into several impact categories, such as global warming and
acidification. An item may be included in more than one relevant category. After defining
impact categories, an LCA practitioner needs to assign a weight to each item. The
weights reflect the relative contribution of an item to the category it belongs to. This
weighing step is often called characterization. Normalization, grouping, and ranking
further process inventory data. However, these steps are not mandatory and hence are not
reviewed.
2.3 Willingness to Pay
Economic values of goods or services on a market can be measured by their prices.
However, some goods and services, such as environmental ones, do not exist on an
explicit market. In order to value these non-marketable services, a method called
willingness is used.
Willingness to pay measures how much people are willing to pay to obtain environmental
services. This valuation method has several sub-categories, as shown in Figure 2.5. The
market price method (revealed willingness to pay) uses available market prices, such as
fish prices and travel expenses. The second sub-category is circumstantial evidence (also
called imputed willingness to pay), which measures eco-values by estimating how much
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should be spent to avoid adverse effects if the environmental service under evaluation is
lost. The last method is called expressed willingness to pay, which obtains eco-values
through surveys. Each subcategory includes several approaches, which are reviewed in
the following. Note that Figure 2.5 is just one classification of methods of willingness to
pay and does not include all available approaches.
Figure 2.5 Methods of Willingness to Pay (King, Mazzotta 2000)
2.3.1 Market Price Method
If there is a real market, on which the goods that are highly related to the environmental
services are traded, the demand for these goods at certain price can be used to estimate
the value of corresponding environmental service. For example, the value of wetland can
be derived from the fishery yields of these wetlands. The value of willingness to pay is
the sum of both consumer and producer surplus.
15
2.3.2 Productivity Method
The productivity of some goods such as crops is highly affected by the environment
quality. Polluting the environment may lead to reducing the production of these marketed
goods, so the value of environmental services can be measured by the commercial value
of the productivity reduction. For example, when water quality in wetlands becomes
worse, the productivity of local fishery would go down. The reduction of fishery profits
can represent the wetland value.
2.3.3 Hedonic Pricing Method
The hedonic pricing method is widely used in valuing environmental amenities that
influence the price of surrounding houses. There are two important conditions that would
make a hedonic study work. “(1) The effects of aquatic ecosystems must be observable to
property owners, and (2) there should be minimal correlation between aquatic ecosystem
services that affect sale price of properties and other attributes that affect sale prices”
(National Research Council 2005).
One should always be careful when using property value change to translate this social
value into monetary terms, because property price is determined not only by the
surrounding recreational opportunities and aesthetics. For example, housing prices are
very sensitive to macro-economic situations. If the economy is running well, people are
more willing to invest in housing market, which makes house prices rise regardless of the
quality of recreation and aesthetics. Price fluctuations due to the macro-economic factors
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that are irrelevant to water recycling should be screened out by statistical methods.
Even after screening, the change of property value still cannot precisely represent
recreational and esthetic values. Water recycling projects improve not only the amenity
of a community but also water quality in water ways, so property values also reflect such
improvement of water quality and public health. In addition, people’s perception of water
recycling options also affects property prices. For example, environmental-conscious
people may put higher value on a property with water recycling systems simply because
they think these projects can save water, which has nothing to do with recreation or
aesthetics. Other people may devalue these properties simply because they feel that water
recycling systems are not healthy. Therefore, property values are also highly related to
public perceptions.
Since there are so many factors that influence housing prices, a high degree of statistical
expertise is required to screen out these factors in order to give accurate estimates of
recreational and aesthetic values.
2.3.4 Travel Cost Method
The travel cost method is used to measure the recreational value of ecosystems. The
premise of this method is that people’s willingness to pay to visit an environmental site is
reflected in their travel cost to the site. There are three basic approaches to calculate
travel costs. One is a simple zonal travel cost approach, which uses simple data such as
postal code and number of visitors, to generate a demand curve for trips to a site, from
17
which consumer surplus can be derived. The second approach is using detailed survey.
The last one is random utility approach, which uses both survey and other data.
Complicated statistical techniques are required in the last approach.
2.3.5 Damage Cost Avoided, Replacement Cost, and Substitute
Cost
These methods use the cost of avoiding damage, of replacing services, and of providing
substitute services to value the relevant environmental services. For example, the value of
improved flood protection can be obtained by estimating the damage cost to properties if
flooding were to occur or by summing up all the money property owners have spent to
protect their properties that are likely to be damaged.
2.3.6 Survey Methods: Contingent Valuation and Contingent Choice
The two survey methods can be used to value nearly all types of environmental services.
As their names imply, these two methods are both undertaken through surveys. The main
difference between them is that contingent valuation entails asking people directly how
much they would like to pay, while contingent choice gives people choices based on
hypothetical scenarios.
2.3.7 Benefit Transfer
“Benefit transfer” is not shown in Figure 2.5 but is widely used in valuing ecosystems. If
budget and time is not enough to conduct an original valuation study, valuation
information from other sites can be transferred to analyze the site under study. For
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example, if the recreational values of wetlands in Toronto have been studied before, the
results may be used to study the recreational values of wetlands in other cities of Ontario.
However, benefit transfer should always be carefully applied. Every site has its own
specific characteristics. Researchers should always make sure that the case under study is
very similar to the one whose information is transferred.
On-line databases can help researchers find similar previous cases. These databases
extract crucial data from previous studies and classify the data according to their potential
use. A couple of available databases on the Internet are listed below.
(1) ENVALUE developed by New South Wales government:
http://www.environment.nsw.gov.au/envalue/Default.asp?ordertype=MEDIUM
(2) Environmental Valuation Reference Inventory (EVRI), a Canadian-run database:
http://www.evri.ca/
2.4 Chapter Summary A sustainability analysis usually includes economic, environmental, and social analyses
in a triple-bottom-line framework as shown in Figure 2.6. The three methods reviewed in
this chapter are commonly used to evaluate these sustainability aspects. Life cycle cost
analysis focuses on the economic performance of a project, and life cycle assessment on
the environmental effects. Willingness to pay can be used to study both environmental
and social impacts.
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Figure 2.6 Methods for sustainability analysis
Although both life cycle cost analysis (LCC) and environmental life cycle assessment
(LCA) have the term “life cycle” in their names, their definitions are different. LCC
studies the economic life of a project as a result of investment, so the life cycle starts with
initial investment in a project and ends with decommissioning expenses. The life cycle of
LCC is accompanied by a monetary flow. In contrast, LCA investigates the physical life
of a product or service including the pre-use supply chain (Norris 2001). The results of
this assessment are expressed in physical terms, some of which can be converted to
monetary values. Unlike LCC, future values in LCA are generally not discounted. The
applications of these two methods to water recycling systems are thoroughly reviewed in
the next chapter, from which their differences are further revealed.
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Chapter 3 WATER RECYCLING SCENARIOS
Greywater reuse and rainwater harvesting are the two commonest water recycling
scenarios applied in buildings. These two scenarios are thoroughly reviewed in this
chapter with the focus on life cycle cost and environmental life cycle assessment. Based
on them, more detailed scenarios can be created.
3.1 Greywater Reuse
Greywater refers to the wastewater from bathtubs, showers, laundry machines, and
sometimes kitchen sinks, excluding the wastewater from urinal and toilet (Wiltshire
2005). In other words, greywater is less polluted domestic wastewater. Figure 3.1 depicts
the components of greywater and its relationship with other water sources. Greywater can
be reused in various ways mostly for non-potable purposes, such as landscape irrigation
and toilet flushing (NAPHCC 1992). In some places especially where water is scarce,
greywater can be used as a potable source.
21
Figure 3.1 Constituent Parts of Wastewater (Wiltshire 2005)
Since greywater contains a great number of pathogens, it usually goes through a
treatment process before reused for the sake of public health. The complexity of a
treatment process depends on intended applications and required water quality. For
example, if recycled water is likely to be contacted by human, certain levels of
treatment—secondary or tertiary—are required (NovaTec Consultants Inc. 2004). Pidou
(2007) reviewed several types of treatment technologies, which include simple (coarse
filtration and disinfection), chemical (photocatalysis, electro-coagulation and
coagulation), physical (sand filter, adsorption and membrane), biological (biological
aerated filter, rotating biological contactor and membrane bioreactor), and extensive
(constructed wetlands) systems (Pidou et al. 2007). Although complex treatment makes
recycled water clean, it increases the life cycle cost of a system. A good greywater
system provides required services at a minimum cost without comprising public health.
3.1.1 Life Cycle Cost of Greywater Systems
Life cycle cost is an important indicator to evaluate the performance of greywater
22
systems. The theory of life cycle cost has been reviewed in Chapter 2. In this section, its
application to greywater reuse is summarized.
1. Initial Cost
Initial cost is the sum of the following two items.
(1) Capital cost: it consists of the costs of filters, collection tanks, pumps, electrical
wirings, controls, valves, and collection and distribution pipes. Disinfection dosing
mechanism and cisterns are also included if necessary (Leggett 2001). Capital cost is the
lion’s share of initial cost, and a large part of capital cost is incurred in treatment
facilities. The selection of treatment facilities depends on treatment objectives and
desired effluent quality (Richard 1998b).
(2) Other costs: this part includes the preparation of construction sites and system
installation. Site preparation cost is incurred mainly in excavating holes and trenches for
laying out storage tanks and underground pipes. Installation cost includes the costs of
installing system components and of testing systems to make sure that they are installed
and operated correctly. Most of these costs are related to labor payment and are usually
counted on an hourly basis (Leggett 2001). In addition, installation costs in existing
buildings are often much higher than those in new constructions since retrofit in existing
ones requires a great amount of labor work, which substantially increases the cost.
The total initial cost of greywater systems varies greatly. A Canadian study found that the
cost of an individual treatment system ranges from $64 to $15,000 and that dual
23
plumbing cost ranges from $10,000 for new constructions to $25,000 for retrofit
constructions, which make initial cost up to $40,000 (NovaTec Consultants Inc. 2004).
2. Operation and Maintenance Costs
Operation cost is mostly related to the consumption of treatment consumables and
energy. In most cases, treatment consumables are liquid chlorine disinfectant regularly
added in greywater treatment facilities. Energy cost is incurred in pumping water to its
users and in some treatment processes, such as the use of UV lamps in disinfection
(NAPHCC 1992, Leggett 2001). Maintenance cost involves labor payment and the costs
of repairing and replacing system components. A study estimated that maintenance cost
could account for 2% of total expenditures per year (Friedler, Hadari 2006).
3. Financial Benefits
One of the biggest benefits of using a greywater system is that this system saves water
and hence reduces the expense on water and sewer services. The way to calculating these
bill savings is shown in the following steps.
(1) Estimate the volume of greywater that is collected annually from showers,
washbasins, etc. Then, add these volumes up. A formula for estimating greywater from
showers is given below as an example.
bFDNT = (Memon et al. 2005)
T is the total shower volume per year; b is the shower volume per use; F is the frequency
of shower per person per day; D is the number of days using shower per year; and N is
the number of residents sharing the greywater system. The similar formula can be applied
24
to baths, basins, and so forth.
(2) Estimate the volume of annual demand for greywater, as shown in the formula below.
NDFWCTWC ××= (Memon et al. 2005)
TWC is the total greywater quantity required for toilet flushing; WC is the volume of one
flush; DF is the number of days using toilet per year; and N is the average number of
flushing per day in a residence. Other demands for greywater, such as garden irrigation,
are calculated in the same way.
(3) Calculate annual bill savings by the following formula.
Annual bill savings = Annual volume of saved water x (mains water price + sewerage
price).
Annual volume of saved water is the smaller value of greywater supply and demand. In
order words, if greywater generated in a house is larger than the demand for greywater,
annual volume of saved water equals to the demand value, and vice versa. This formula
can only be applied when drinking water and sewerage fees are charged according to the
volume of water consumed (Leggett 2001).
4. Feasibility Study
In a feasibility study, the economic life of a greywater system needs to be figured out in
the first place. Some research assumed the economic life to be 20 years (NAPHCC 1992,
Brown 2007), while others 15 years (Friedler, Hadari 2006). Table 4 reviews the results
of previous life cycle analyses of greywater systems. Only five out of sixteen cases in
25
Table 3.1 are economically feasible (a system is feasible if its payback period is less than
20 years). The reason for so few feasible projects is that initial costs are usually high and
that financial benefits are relatively small, so a greywater system can hardly have a
payback period less than 20 years.
Table 3.1 Review of Life Cycle Analyses
Name Initial Cost O & M
per year
Water
savings
per year
payback
period
/years
Economi
cally
feasible?
Source
Simple treatment
systems 1 £1195 £50 - - No
(Pidou et
al. 2007)
Simple treatment
systems 2 £1625 £49 - - No Ibid.
Simple treatment
systems in Spain €17,000 €0.75/m3 - 14 Yes Ibid.
Biological treatment
system 3 Aus$5500 Aus$215 Aus$83 - No Ibid.
Biological treatment
system 4 £30,000 £611 - - No Ibid.
Domestic greywater
system 2 £1625
First year
£4; After
£49
£34 - No
(Brewer,
Brown &
Stanfield
2001)
Larger scale £30000 £611 £165.64 - No Ibid.
26
greywater system
(for student
residence)
A New Zealand
system $3,000 - $335 - Yes
(Brown
2007)
An Australian
system $9,388 - $335 - No Ibid.
A retrofitting system
in a forty student
hall
£3345 £128 £516 10-11 Yes
(Surendra
n,
Wheatley
1999)
A new system in a
new forty student
hall
£1720 £128 £516 5 Yes Ibid.
One Occupancy
System - - - 92 No
(Leggett
2001)
Two Occupancy
System - - - 46 No Ibid.
Three Occupancy
System - - - 31 No Ibid.
Four Occupancy
System - - - 23 No Ibid.
Five Occupancy
System - - - 18 Yes Ibid.
27
Note: “-” means the datum is not given in the reference.
There are several ways to making greywater systems more economically favorable.
(1) Increase water price
Low water price leads to few water bill savings, thereby making greywater systems
difficult to justify economically. Thus, water price needs to be raised at least to cover all
the costs incurred during a system’s life cycle (PriceWaterhouseCoopers 2000).
However, raising water price may generate a financial burden on low-income families.
Governments should implement supplementary policies to compensate the people who
are adversely affected by water price increase.
(2) Subsidize Users
To promote the use of greywater reuse systems, governments can subsidize water users
who are willing to install the systems. The subsidy can partly offset the high initial costs,
transferring part of the costs from individuals to governments and thereby making the
systems economically favorable to households.
(3) Improve Technology
Water treatment costs account for a large share of the life cycle cost especially when high
water quality is required. As treatment technology develops, it is expected that future
treatment technologies would provide recycled water of good quality at a low life cycle
cost (Leggett 2001).
28
(4) Relax Regulation
Over-strict regulation is another cause that makes greywater reuse systems expensive.
Under stringent regulations, greywater is prescribed to be treated to a high quality level,
which entails advanced treatment and high treatment costs. Although these strict
regulations are conducive to protecting public health, they increase life cycle costs of
greywater reuse systems, which hold back the wide applications of the systems. Relaxing
the restriction on low-risk uses can help make greywater reuse more economically
feasible (Brown 2007).
(5) Use economies of scale
Economies of scale exist in greywater reuse systems (NovaTec Consultants Inc. 2004,
Dimitriadis 2005, Fane, Ashbolt & White 2002). In other words, large systems have less
capita cost than small systems, because in large systems collection and treatment
facilities are shared by a great number of users. However, if the system becomes too large
and centralized, the economies of scale may disappear and even turn to diseconomies of
scale (Dimitriadis 2005, Fane, Ashbolt & White 2002), because as the number of
connections increases, the cost of water delivery per connection increases as well since
larger pipes with greater volumes are required. Therefore, there is an optimal range of
connection number that has the lowest cost. Scholars believe the optimal range of water
recycling systems to be between 500 and 10,000 or between 1,200 and 12,000 (Fane,
Ashbolt & White 2002). Since greywater systems seldom have thousands of connections,
it is believed that the larger the system, the lower the cost per capital.
29
(6) Consider infrastructure benefits in the analysis
Greywater systems conserve mains water, freeing up the capacity of water
infrastructures, so the investment in these public utilities can be cut down (Racoviceanu
2005). If these savings in infrastructure investment are considered in a life cycle cost
analysis as financial benefits, greywater systems would appear more economical. Note
that the savings are more significant for large systems, because they conserve more water
delivered by infrastructures. Chapter 4 provides a couple of quantitative methods to
estimating this financial benefit.
3.1.2 Life Cycle Assessment of Greywater Systems
Memon et al. (2007) investigated four greywater systems with different treatment
technologies including reed beds, membrane bioreactors (MBR), membrane chemical
reactors (MCR), and green roofs (GROW). Two methods—CML-2 and Eco-indicator-
99—are employed, which are both process-based life cycle assessment. The research
discovered that the two natural treatment technologies—reed beds and GROW—had
lower environmental impacts than the other membrane technologies and that, for all
systems, most of the environmental impacts occurred in the use phase. This study also
found that the larger the scale of the system, the less the impact per unit, which is quite
similar to the theory of economies of scale (Memon et al. 2007).
3.2 Rainwater Harvesting
A rainwater harvesting system collects rainfall from roofs and stores it in large tanks for
future use. Compared to greywater, rainwater contains fewer contaminants that are
30
picked up in catchment areas and hence can be used for some non-potable purposes
without much treatment. However, if high water quality is required, advanced
technologies such as UV disinfection should be involved in a treatment process (Leggett
2001).
The amount of rainwater that can be harvested is highly dependent on local rainfall. Since
rainfall is not as stable as water demand, storage tanks are quite big in a rainwater
harvesting system in order to provide constant harvested rainwater for users. These
storage facilities take up much space and increase system costs. Therefore, there is a
trade-off between system cost and reliability. An optimum storage size should be
carefully designed to reduce the cost and meet water needs at the same time. In addition,
mains water is usually used to supplement harvested rainwater when its storage is not
sufficient.
3.2.1 Life Cycle Cost of Rainwater Systems
1. Initial Cost
Like greywater systems, the initial cost of a rainwater system comprises two parts: capital
costs and other costs including site preparation and installation costs (Leggett 2001). The
initial cost of a rainwater system for a single house varies greatly, ranging from £400 to
£3450 according to Leggett’s research (2001), and some other scholars estimated that the
cost could be over $4000 (Coombes, Kuczera & Kalma 2002). There are a couple of
reasons for this wide range. First of all, installing systems in existing buildings requires
retrofit, entailing much more labor hours than the installation in new constructions. In
31
addition, some systems involve advanced treatment facilities for potable uses, and the
prices of these facilities vary greatly. Therefore, the initial cost of a system should be
estimated on a case by case basis.
(1) Capital Cost
This part includes the costs of tanks, pipes, pumps, and treatment facilities, and the first
two are indispensable for almost all rainwater harvesting systems. Unlike greywater,
which can be generated regularly and frequently, rainfall occurs sporadically. In order to
store enough rainwater for domestic use for a certain time period before the next rain
event, collection tanks in rainwater systems are usually much larger and hence account
for larger share of capital cost than those in greywater systems (Leggett 2001). Another
major part of capital cost is the cost of pipes, which is dependent on the distances from
collection tanks to catchment areas and points of users. The longer are the distances, the
higher are the costs. If the distances are unduly long, the costs of pipes may become high
enough to make the system uneconomical (Leggett 2001). Unlike tanks and pipes, pumps
are not required in some cases. For example, in a garden watering system, it is not
necessary to have a pump if the collection tanks are located higher than the garden
(Diaper 2004). Treatment facility is also not a necessity, because rainwater is clean
enough for some non-potable uses, such as garden irrigation (Leggett 2001, Brewer,
Brown & Stanfield 2001). In some cases, ultra-violet disinfection is used to improve
rainwater quality mostly for potable purposes, and it increases capital and operation costs.
(2) Other costs
Other costs include site preparation and installation costs. Site preparation cost consists
32
of excavating holes and trenches for storage tanks and for underground pipes (Leggett
2001). If rainwater tanks are installed underground, the preparation cost would be
considerably high (Coombes, Kuczera & Kalma 2002). Installation costs are mainly labor
costs, which depend on how much time it takes for a plumber to get the system ready to
use.
2. Operation and Maintenance Costs
Like greywater systems, operation cost of a rainwater system is highly related to
treatment consumables and energy costs of water delivering and of treatment processes
(Leggett 2001). Maintenance cost is incurred in replacing failed pumps and UV bulbs.
The replacement cost can have a significantly impact on the payback period of a system
(Leggett 2001, Brewer, Brown & Stanfield 2001). Table 3.2 displays typical operation
and maintenance costs.
Table 3.2 Operation and maintenance cost (Leggett 2001)
Consumable Rainwater
Pump electricity consumption per cubic
meter
1-3 kWh/m3
£0.06-£0.18/m3
UV-disinfection electricity consumption 120-140 kWh/yr; £7.20-£14.40/yr
Cartridge filters (for 4 filters) £25-£50
Chemical disinfectant Likely to be similar to greywater if used
UV-disinfectant bulb replacement £10-£60
33
3. Financial Benefits
Financial benefits are the savings on water and sewerage bills, which equal the volume of
water saved multiplied by mains water and sewerage costs. Although rainwater use does
not reduce the total discharges to sewers, sewerage fees are still taken into account,
because sewerage services are automatically charged as a certain percentage of water
charges (Leggett 2001).
4. Feasibility Study
An economic feasibility analysis for a rainwater system is similar to that for a greywater
system. Real interest rates previously used in various studies were 5% (Coombes,
Kuczera & Kalma 2002) or 7% (Hallmann, Grant & Alsop 2003), and a life span was 50
years (Coombes, Kuczera & Kalma 2002) or 30 years (Hallmann, Grant & Alsop 2003).
Indicators used for rainwater systems, such as Net Present Value (NPV) and payback
time, are the same as that for greywater systems. A review of previous studies is
presented in Table 3.3.
The payback periods of the systems in Table 3.3 are all longer than 20 years, indicating
that all these systems are not economically feasible. This result is even worse than that of
greywater systems (5 out of 16 feasible). In order to make rainwater systems more
economically feasible, several actions need to be taken. First of all, water prices need to
be increased (Hallmann, Grant & Alsop 2003). Like greywater reuse, low water price
makes rainwater systems difficult to gain enough benefits to pay back costs. Secondly,
systems should be installed where rainfall is sufficient so that enough water can be saved
34
to offset costs (Leggett 2001). Thirdly, the sizes of collection tanks should be carefully
chosen to reduce capital cost. Finally, economies of scale also exist in rainwater
harvesting systems. Small systems can hardly be financially attractive, and large systems
usually have better economic performance. Thus, increasing system scales and catchment
areas is conducive to making rainwater systems financially acceptable (Leggett 2001).
35
Table 3.3 Direct Cost Analysis for Rainwater Harvesting Systems
Name Initial
Costs
Annual
O & M
pump
replacement
annual water
saving
Paybac
k/year Source comments
22 house system £2000-
£3000 - - - - (Leggett 2001) -
Tank capital 600 $593.50 - - - >30
(Hallmann,
Grant & Alsop
2003)
-
Tank capital 2250 $1,268.50 - $529 - >30 Ibid. -
Office Building £7250 £214 £300 £241 267
(Brewer, Brown
& Stanfield
2001)
a system serving 50
occupants
EBM original
catchment area £3200 £26.68 - £13.45 Infinite Ibid.
a system serving 10
staff and visitors
EBM new catchment £3200 £26.68 - £40 246 Ibid. a system serving 10
36
area staff and visitors
EHD non-potable
supply £11854 £110 - £511 30 Ibid. -
EHD potable supply £2507 £49 - £20 Infinite Ibid. -
Maryville house $1,851 $4.86 $200 $70.68 >50
(Coombes,
Kuczera &
Kalma 2002)
Replacement of tank:
$864
High View Junior
School $18,700 $600 - - 17
(Roebuck,
Ashley ) For 680 pupils
37
3.2.2 Life Cycle Assessment of Rainwater Systems
Previous studies showed that rainwater systems did not have good environmental
performance. Bronchi et al. (2002) conducted a life cycle assessment comparing the
environmental impacts caused by domestic clothes washing in rainwater versus drinking
water. The results showed that using rainwater to wash clothes reduces energy
consumption but has bigger negative impacts on aquatic ecosystems and human health.
Hallmann (2003) conducted a comprehensive ELCA for two rainwater harvesting
scenarios and compared their results with the environmental impacts of mains water
provision. The research found that rainwater harvesting significantly reduced water use
and nitrogen emissions but increased energy use and other negative environmental
impacts. The bad environmental performance of rainwater scenarios were mainly caused
by water tank manufacture and system operation, especially when pumps were involved.
Given the facts above, the author recommended that pump size needs to be reduced to be
as small as possible, and pumps should not be used if natural slopes are available.
3.3 Combination Scenario
In some cases, greywater and rainwater are combined together to provide more recycled
water. Combination scenarios have mostly been applied to buildings (Diaper 2004), such
as the famous Millennium Dome (located in the U.K.), in which greywater and rainwater
is recycled for toilet and urinal flushing (Lazarova, Hills & Birks 2003). One advantage
of combination systems over separate single systems is that some facilities in a
combination one are shared by both greywater and rainwater, thereby reducing the
system’s overall cost. For example, if rainwater and greywater are stored in the same tank
38
after treated, they share not only the same tank but also the same distribution pipes. The
costs of these large tanks and pipes in one system are much less than that of two smaller
sets of pipes and tanks that deal with the same amount of water. The two water sources
are usually combined before or after the treatment processes, and their costs are
compared in Table 3.4 below.
Table 3.4 Comparisons of cost components
Combination before treatment Combination after treatment
Capital Costs Shared large collection tanks and
pumps lead to low capital cost.
However, the size of collection tanks
is possibly too big under some
circumstances.
Multiple collection tanks and
pumps lead to high capital
cost. Collection tanks are
sized normally for rainwater
and greywater independently.
Operation and
Maintenance
Costs
All the water should be regarded as
greywater, which increases the costs
of treatment consumables since
disinfectant usage is proportional to
the total amount of flow. Multiple
treatment stages may be required,
increasing the cost as well. However,
shared collection tanks and treatment
facilities entail relatively low
maintenance cost. All in all, this
system requires high operation cost
Low cost of treatment
consumables is incurred since
treating rainwater may not
need disinfectant or other
advanced treatment
technologies. Two separate
collection tanks and treatment
facilities entail relatively high
maintenance cost. All in all,
this system requires low
operation cost but high
39
but low maintenance cost. maintenance cost.
(Leggett 2001, Leggett 2001)
3.4 Chapter Summary
The three previous sections reviewed basic water recycling scenarios applied in
buildings, and they are by no means exhaustive. Based on the basic scenarios, there are
numerous variations in applications. Building developers can create detailed scenarios in
accordance with the requirements under specific circumstances. For example, greywater
can be designed for toilet flushing and rainwater for lawn irrigation in a combination
system.
In addition, as for water recycling in general (not restricted to building applications),
stormwater and wastewater can be recycled usually on grand scales. For example, in a
city, recycling plants can be built to collect, treat, and distribute recycled
stormwater/wastewater. Relevant information about stormwater/wastewater recycling is
reviewed in Appendix 1.
40
Chapter 4 MODEL FRAMEWORK
The model presented here adopts a triple bottom line (TBL) approach to evaluating the
feasibility of water recycling investments in the built environment (see Figure 4.1).
Recycling water in any form has three outcomes: savings in water, increased investments
in installation and operation of recycling facilities (whether new or rehabilitated
facilities), and enhanced image (given that the public views recycling positively
nowadays). Limiting the evaluation to only the investment part neglects the other aspects
of TBL.
The model proposes an approach to cover all project outcomes in line with TBL criteria,
which include the following (see Figure 4.1).
a. Economic evaluation
i. Direct costs: how much is spent or saved by users.
ii. Indirect benefits: economic benefits to governments
iii. Macro economic impacts: investments in recycling facilities can have
impacts on other industries.
b. Environmental evaluation: a set of indicators are used to examine the impacts
of water savings and of investments in materials and labors on the
environment.
c. Social evaluation: many criteria can be included in this category, but only two
are selected as follows.
41
i. Customer comfort
ii. Public health
In each cell of the created matrix (see Table 4.1), several indicators are identified to
evaluate the performance of a construction project. A handful of valuation methods are
developed to measure the values of the indicators. At the end of this chapter, a decision
making process is introduced to illustrate how the model assists in decision making.
Figure 4.1 Sustainability-Oriented Feasibility Model for Construction Decision
Making of Water Recycling Systems
42
Table 4.1 Analysis Parameters
Economic Evaluation Environmental Evaluation Social Evaluation
Macro Economic Impacts on
Industry Sectors
Scenario: Grey Water
Recycling in Office
Buildings
Direct
Costs
/Benefits
Indirect
Benefits Industry 1 2 ... m
Indicator 1 2 ... n Customer
Comfort
Public
Health
Water Savings DC1 IB1 A1 A2 ... Am D1 D2 ... Dn G2
Equipment/
Materials DC2 B1 B2 ... Bm E1 E2 ... En
Project
Require-
ments Labor DC3 IB2 C1 C2 ... Cm F1 F2 ... Fn
Positive Image DC4 G1
Note: all the indicators displayed in this table are explained in Table 4.2 below.
43
Table 4.2 Parameter Explanations
Parameter Definition Assessment
method
Measurement
units
DC Direct Cost
DC1 Direct water bill savings due to reduced
water use
Life Cycle
Analysis
(LCC)
Annual $
DC2 Investments/savings in recycling
equipment and materials
LCC Annual $
DC3 Investments/savings in labor costs LCC Annual $
DC4 Positive image measured by customers’
willingness to pay extra premiums for a
greener facility
Willingness To
Pay (WTP)
Annual
$/capita
IB Indirect Benefits
IB1 Savings in public infrastructure
investments due to reduced water use
Regression
analysis
Annual $
IB2 Tax benefits from labor employment Annual $
Macro Economic Parameters
A
[1 to m]
Economic impacts of water savings of
1000 m3 on related industries (annually)
Input Output
Analysis (I/O)
B
[1 to m]
Economic impacts of $1000 investments
in equipment on related industries
(annually)
I/O Annual $
44
C
[1 to m]
Economic impacts of $1000 investments
in labor on related industries (annually)
I/O Annual $
D
[1 to n]
Environmental impacts of reduced water
use on related indicators for each 1000
m3 savings (annually)
I/O Annual $
E
[1 to n]
Environmental impacts of $1000
investments in equipment on related
indicators
I/O Annual $
F
[1 to n]
Environmental impacts of $1000
investments in equipment on related
indicators
I/O Annual $
G1 Customer comfort
G2 Impacts of public health WTP $
The model presents a framework for evaluating many scenarios of water recycling
systems, for example, within a residential building, an office facility, a neighborhood, or
urban rivers (see Figure 4.2). Estimates of the above parameters are scenario-specific.
The following sections provide details about estimating them for an illustrative case:
greywater recycling in office buildings. Note that some estimates are from literature or
online program, and others are derived from a case study in Galbraith Building at the
University of Toronto. The details of the case study are shown in Appendix 2 for
reference.
45
Social Evaluation Direct Indirect
Industry 1 industry 2 Industry 3 industry 4 industry 5 indicator 1 indicator 2 indicator 3 indicator 4 indicator 5 Health Recreational
Equipment/Material Labour
Economic Evaluation Environmental Evaluation Macro
Outcomes of water recycling facilities
Water Savings
Additional Costs
Positive Image
Residential House
Neighborhood
Office
Urban river
Figure 4.2 Scenarios of water recycling systems
4.1 Economic Analysis
An economic analysis is divided into three parts: direct, indirect, and macro-economic
analyses. A direct economic analysis focuses on the life cycle cost of a project; an
indirect economic analysis studies infrastructure expenditure savings due to reduced
water use; a macro-economic analysis focuses on the macro-economic impacts.
4.1.1 Direct Economic Analysis
Direct economic analysis is also known as life cycle cost analysis, which is widely used
to evaluate economic feasibility of construction projects. A direct economic analysis
considers both the financial costs and benefits that are incurred throughout a system’s
entire life. In other words, it is limited to investments/expenses incurred to build and
operate facilities.
Table 4.3 Summary of assessment parameters and their proposed values
Direct Cost Values Scenario: Grey Water
recycling in office
buildings
Parameter Method 1:
Generic
Method 2:
Empirical data
Method3:
Willingness
46
formulae to pay
Water Savings
DC1
See
discussion
below
$1.9/m3 N/A
Equipment
/Materials DC2
See
discussion
below
See discussion
below N/A
Project
Requirements
Labor DC3 N/A $60-
70/hour/person N/A
Positive Image
DC4 N/A
N/A small-scale,
$1/capita;
large-scale,
$1.8/capita
DC1: Water bill savings due to reduced water use
DC1 equals water price multiplied by the amount of recycled water. For example,
Toronto water price is $1.9/m3, so DC1 is equivalent to 1.9 times the quantity of recycled
water. Appendix 2 introduces various methods to calculate the quantity of recycled water,
and the percentage-based approach is used in this illustrative case. Greywater supply
accounts for 50% of water consumption in residential buildings and 27% in office
buildings. As for greywater demand, 30% of supplied water is used for toilet flushing in
residential buildings, and 63% in office buildings. For more information about the
calculation of water recycling quantity, see Appendix 2.
47
DC2: Investments/savings in recycling equipment and materials
The direct cost of equipment and materials used in a water recycling system can be
derived from both generic formulae and empirical data. Empirical data are always
preferable. However, if they are not available, generic formulae should be employed to
link the cost of every equipment/material to a related physical value. For example, the
cost of pumps is usually related to flow rate. A group of formulae are displayed in Table
4.4 below.
Table 4.4 Formulae method of direct cost estimation for greywater systems (Friedler,
Hadari 2006)
Equipment/materials Cost basis Units Cost function
Pipes Length m C = 6 · L
Storage tanks Volume m3 C = 144 · V0.484
Pump Flow m3/d C = 594 · Q0.0286
MBR (treatment equipment 1) Flow m3/d C = 18,853 + 17,945 · Ln (Q)
RBC (treatment equipment 2) Flow m3/d C = 3,590 · Q0.6776
Chlorination Unit unit C = 1,670
DC3: Investments/savings in labor costs
The cost of a labor in Toronto is $60-70 per hour or approximately $500 per day. The
number of required labors depends on the size and complexity of a system. Generally
speaking, retrofit systems require more labor hours than the systems installed in new
buildings, because pipes and other facilities in new constructions can easily be laid out
48
when drinking water and sewage systems are installed.
Note that DC2 and DC3 are expressed in annual monetary values no matter whether or
not it is initial capital cost or O & M costs. The initial capital cost should be converted to
annual values at a discount rate for an estimated life of a system. The discount rate in this
illustrative case is set at 5%, and the economic lifespan of the system is assumed to be 50
years.
DC4: Positive image
DC4 investigates additional benefits from customers’ willingness to pay extra premiums
for a greener facility. In a willingness to pay study, Blamey et al. (1999) found that
people would like to pay $47 extra to install a water recycling system for outdoor use,
and this value is more suitable for small-scale systems. As for large-scale systems, $103.1
is assigned (Blamey, Gordon & Chapman 1999). Because these values are obtained based
on Australian surveys in 1999, they should be converted to current values in local
currency when applied.
In order to make the measurement of this indicator consistent with others, the data found
in literature need to be converted to annual values. In the illustrative case, system life
span is assumed to be 50 years, and the discount rate is at 5%. As a result, for small-scale
recycling systems, the annual cost is about $1 per capita. For large-scale systems, the
annual cost is about $1.8 per person as shown in Table 4.3.
49
4.1.2 Indirect Economic Analysis
Some benefits do not take place in a project. An indirect economic analysis looks into
these economic savings that happen beyond a project. Such benefits are summarized in
Table 4.5 and are discussed in the following subsections.
Table 4.5 Summary for Indirect Benefits
Methods and Values
Parameter Regression
analysis
Water rate
percentage Delphi Formulae
Water
Savings IB1 $0.15/m3 $0.8/m3
See
below
See
below
Labors IB2 N/A N/A N/A See
below
IB1: savings in public infrastructure investments due to reduced water use
As urban population increases, more water is demanded, which mounts the pressure of
developing water infrastructures. This pressure can be partly relieved by local water
recycling systems as they reduce water demand, which leads to the decrease in the size of
water mains, in the need for additional capacity at pumping stations, and in the associated
energy and manpower demands. In other words, by recycling water locally (at each
facility), indirect savings in public infrastructure investments and operations can be
realized. Likewise, the expenses on wastewater and stormwater infrastructures can also
be reduced through the use of water recycling systems. Little research has been done on
quantitatively estimating indirect economic impacts. In order to fill this research gap, this
50
section explores the methods that can be used to estimate the value of IB1.
Infrastructure expenditure savings arise from three categories:
1. Reduced maintenance/rehabilitation costs of existing infrastructures;
2. Delayed infrastructure replacement/expansion costs;
3. Avoided or delayed infrastructure growth;
Expanding and replacing infrastructures often requires digging up existing roads and
sidewalks, incurring much cost and transportation disruption. In contrast, infrastructure
growth is cheaper, because piping systems can be installed before new roads are
constructed. Research shows that “the cost to install new pipe is approximately 75 per
cent of the cost to replace existing pipe (PIR 2002).” Whether infrastructure expansion
and growth can be avoided or just delayed is mainly dependant on the future increase of
projected population. If population growth rate is so low that the existing infrastructure
along with the use of water recycling systems is able to meet the future needs,
infrastructure expansion and growth can be avoided. Otherwise, the expansion and
growth will be delayed for the time being.
Estimating delayed infrastructure investments and reduced maintenance costs are
straightforward. The general formula is
niDIDISD
)1( +−=
where SD is savings from delay; DI is delayed investment; i is discount rate; and n is
delayed years. For example, if an infrastructure rehabilitation of $1 million is postponed
five years due to the installation of a huge cluster of rainwater harvesting system, the net
51
present value of the savings from this delay is
MMM 25.0$)06.01(
1$1$ 5 =+
− (assume discount rate is 6%)
There are several methods that can be used to estimate the avoided investments.
Method 1 Regression Analysis
Regression analysis was used in this study to find out the relationship between water
consumption (an independent variable) and water infrastructure expenditures (a
dependent variable). The relationship derived from a set of water use data (provided by
Environment Canada) and a set of infrastructure expenditure data (provided by Statistics
Canada) is shown in the equation below. For detailed data and formula derivation, see
Appendix 3.
y = 0.074 x + 5876
(R2 = 0.961 > 95%)
In Figure 4.3, the y-axis is cumulative infrastructure investment, which is the total
amount of investment since a base year. In this research, the base year is 1964, because it
is the earliest data that could be found. The choice of the base year does not affect results’
accuracy, which is proven in Appendix 3. If reduced water use in a water recycling
system is Δx as shown in Figure 4.3, the corresponding infrastructure expenditure saving
is Δy. The infrastructure savings can simply be obtained by multiplied by the value of
slope. In other words,
Infrastructure expenditure savings = 0.074 × Water and sewage savings
If wastewater generated equals water consumed, for every 1m3 water saved, there would
52
be about $0.15 ($0.074 × 2) of infrastructure investment savings.
Water Use vs. Cumulative Capital Expenditures on Water and Sewage Infrastructures
100002000030000400005000060000700008000090000
7000 8000 9000 10000 11000 12000
Water and Sewage Flow (million m3/year)
Cum
ulat
ive
Capi
tal
Exp
endi
ture
s on
Wat
er a
nd
Sew
age
Syst
ems
(Mill
ion
$)
Figure 4.3 Water Use vs. Cumulative Capital Expenditures on Water and Sewage
Infrastructures
Method 2 Water Rate Percentage
Governments would set water rates at the level that revenues from water billings could
cover expenditures on infrastructure and other services. The percentage of expenditure on
water and wastewater infrastructures that are related to capital spending can be used to
estimate how much infrastructure investment can meet the needs of 1m3 water use. For
example, in 2004 Ottawa invested $61.8 million in water and wastewater infrastructures
(Leclair 2004), which accounts for 34.6% of its total expenditure on water and
wastewater related services. Ottawa’s water rate is about $2.4/m3 (including wastewater
surcharge) (City of Ottawa 2009). Therefore, infrastructure investment in supplying water
of 1m3 is about $0.83/m3 (2.4 × 34.6%). The same result can be obtained from
Hamilton’s data. From 2006 to 2009, about 42% of water-related expenditures in
53
Hamilton contribute to capital (City of Hamilton 2009). The water rate in Hamilton is
$2/m3 (including wastewater surcharge) (Horizon Utilities Corporation 2009), so the
infrastructure investment in supplying water of 1m3 is about $0.84/m3 (42% × $2/m3).
Method 3 Delphi Method
In a Delphi method, a group of experts are selected to independently answer questions
related to indirect cost estimation. After a round, experts hand in their answers to a
facilitator who summarizes the overall results, based on which, the experts are asked to
adjust their previous estimations. This process usually repeats several times until
consensus is reached or until certain criteria are met, such as the maximum number of
rounds. The U.S. National Round Table on the Environment and the Economy used this
method when estimating new capital expenditures on municipal water and wastewater
infrastructure (CWWA 1998). The quality of the estimation is highly dependant on the
knowledge of experts. If the selection of experts is appropriate, the results are usually
satisfactory.
Method 4 Formula Method
For some large projects that have big economic impacts, the methods above may not be
accurate enough. More accurate estimations can be obtained by employing formulae for
water and wastewater infrastructure investments. Much previous research has been done
on finding such asset formulae. For example, R. J. Burnside & Associates Limited
conducted an asset cost study for Ontario, which includes an “Asset Replacement Cost
Curves” table (R.J. Burnside and Associates Limited 2005). The formulae in this table
54
were generated by regression analysis and can be used for estimating avoided
infrastructure investment. When applying this method, municipal planners should adjust
the cost formulae in accordance with regional characteristics. In Burnside’s research,
regional multipliers are provided for the municipalities in Ontario (PIR 2002). However,
this method requires enormous data input, so it is not suitable for small projects that have
limited labors and budget. Moreover, finding appropriate data is difficult, and normal
municipalities hardly have access to such database. This method is recommended to be
applied to large projects on grand scales. A structured group of experts should be formed
to address difficult estimation problems.
Summary of Measuring IB1
As shown in the regression analysis, water services of 1m3 require infrastructure
construction costs of $0.15. However, such findings are questionable due to the lack of
clarity in Statistics Canada data. Furthermore, expert input indicates that the costs could
be much higher. For example, the water rates in Toronto, Hamilton and Ottawa range
between $1.7 and $2.4/m3. This includes the wastewater costs too. Assume that the cities
do not make any profit, meaning that these numbers are very close to costs.
Ottawa invested $61.8 million in water and wastewater capital (Leclair 2004) in 2004,
which accounts for 35% of its total expenditure on water and wastewater related services.
In Hamilton, about 42% of water-related expenditures contribute to capital from 2006 to
2009 (City of Hamilton 2009). Therefore, on average, the capital costs account for 40%
55
of the total expenditures. This capital cost may include land purchasing and the cost of
material and labors used in infrastructure construction.
Definitely better data and more research are needed to find out the exact indirect savings
of reduced water usage. It is important to point out here that indirect savings go beyond
the savings in infrastructure. If less water is used, less land will be needed for facilities
(in the long run), less labour/equipment will be needed to operate water and wastewater
facilities, less energy will be needed to operate them, also less chemicals will be needed
and, finally, less debt (and its finance costs) will be needed. One can assume that, at least
at the upper limit, a liter of water saved equal $2 savings (in 2009 prices). However, the
correlation between reduced water and wastewater savings and savings in the above costs
is not straightforward.
There are two major types of costs: fixed and variable costs. Fixed costs, such as initial
capital investment, do not change as the amount of water delivered by infrastructures
changes. In contrast, variable costs are more sensitive to the water quantity infrastructures
serve, reflecting real savings in infrastructure expenditures in a short term. This
sensitivity is analyzed in Table 4.6. In a cost structure, capital costs are at a median level.
Capital costs include initial investment and regular maintenance. The former is fixed
costs, not sensitive to the amount of water service, while the latter is sensitive, because
more frequent use of the system would cause higher maintenance costs. Land is also a
fixed cost, so it is at a low sensitivity level. Operation costs are typical variable costs,
thereby highly sensitive. If all these sensitivity levels could be quantified by percentage
56
values, the real expenditure savings could be obtained by adding up all the products of
costs and corresponding percentages. Future research should be done to complete this
quantification process.
Table 4.6 Sensitivity analysis for a cost structure
Operation
Capital Land Energy Labor Materials
Others
(such as
debt)
Sensitivity
level Median Low High High High Varies
IB2: Benefits from labor employment
A number of labors are employed to install or maintain water recycling systems, and they
have to pay income taxes every year to governments. These taxes are revenue benefits for
the governments and are calculated by income tax formulae. The following is an example
of such formulae for Ontario, Canada in 2009.
• Federal tax formula:
Federal income tax = 15% on the first $40,726 of taxable income + 22% on the next
$40,726 of taxable income + 26% on the next $44,812 of taxable income + 29% of
taxable income over $126,264.
• Ontario provincial tax formula:
Ontario income tax = 6.05% on the first $36,848 of taxable income + 9.15% on the next
$36,850 + 11.16% on the amount over $73,698 (Canada Revenue Agency 2009).
57
4.1.3 Macro-economic Impacts on Industry Sectors
Water recycling systems, especially large ones, have significant impacts on many
industries. For example, greywater reuse systems installed in a large cluster of buildings
may boost the steel pipe production industry because a great amount of steel pipes are
needed in constructing the systems. Moreover, water recycling systems can avoid the
construction of water and sewage infrastructures, making an opposite impact on the
economy. Both of these macro-economic impacts can be measured through an input
output analysis.
Table 4.7 shows the key industries that are positively or negatively influenced by the
implementation of water recycling. Although there are hundreds of sectors affected, only
the top six industry sectors are displayed. All the results in the following input output
analysis are derived from the online program Eiolca (URL: http://www.eiolca.net/)
developed by the Carnegie Mellon University Green Design Institute. The U.S.
Department of Commerce 1997 Industry Benchmark is chosen for the analyses.
Table 4.7 Macro-economic indicators
Input/output Analysis
Water Savings A1 A2 A3 A4 A5 A6
Equipment/Materials B1 B2 B3 B4 B5 B6
Labor C1 C2 C3 C4 C5 C6
58
A series
If 1000 m3 of water are saved, the reduced infrastructure expenditures will have impacts
on other industry sectors. The top six influenced industry sectors are displayed in Table
4.7, in which, not surprisingly, the sector “water, sewer, and pipeline construction” is at
the top of the list. Since economic activities are reduced, they are negative in Table 4.8.
Table 4.8 Six industry sectors that are most affected by reduced infrastructures due
to saved water of 1000 m3
Parameter Sector Economic activity ($/year)
A1 Water, sewer, and pipeline construction -148
A2 Architectural and engineering services -11
A3 Other concrete product manufacturing -6.6
A4 Metal valve manufacturing -4.9
A5 Iron and steel mills -4.8
A6 Metal tank, heavy gauge, manufacturing -4.3
B series
Table 4.9 shows the economic impacts on the top six industries due to the investments of
$1000 in equipment and materials. A couple of interesting observations are made from
Table 4.9.
(1) The first sector “other commercial and service industry machinery manufacturing” is
stimulated by greywater systems the most, and it is almost 8 times as much as the
economic activity in the second place. This sector is primarily related to manufacturing
commercial and service industry equipment, for example, the manufacture of water
59
treatment equipment. In addition, the manufacture of tanks and other equipment required
in a water recycling system are also indirectly related to this sector.
(2) The sectors “Iron and steel mills” and “fabricated pipe and pipe fitting
manufacturing” are related to the manufacture of pipes, pumps, and treatment equipment,
which are important components of greywater systems.
Table 4.9 Six industry sectors that are most affected by $1000 investments in
equipment and materials
Parameters Sector Economic Activity ($)
B1 Other commercial and service industry machinery
manufacturing 931
B2 Wholesale trade 125
B3 Management of companies and enterprises 76
B4 Iron and steel mills 69
B5 Lessors of nonfinancial intangible assets 60
B6 Fabricated pipe and pipe fitting manufacturing 51
C series
Hiring people also boosts many industry sectors. A hiring process sometimes involves
putting job postings on the Internet or hiring professionals to help recruitment. Likewise,
Table 4.10 shows the economic impacts on the top six industries due to investments of
$1000 in labors through input output analysis.
60
Table 4.10 Six industry sectors that are most affected by $1000 investments in labors
Parameters Sector Economic Activity ($)
C1 Employment services 1000
C2 Management of companies and enterprises 35
C3 Monetary authorities and depository credit
intermediation 8
C4 Real Estate 7
C5 Food services and drinking places 5
C6 Telecommunications 5
4.2 Environmental Analysis Water recycling projects have significant environmental implications. On the one hand,
the production and installation of these systems generate pollution and cause other
adverse environmental effects. On the other hand, reduced infrastructure constructions
due to water savings avoid some adverse environmental effects. In order to obtain the
whole picture of a system’s environmental performance, all the positive and negative
impacts should be studied comprehensively through an environmental life cycle
assessment.
Among the three common life cycle assessment methods, EIO-LCA is the most
convenient one, because all the input output and environmental data are made on line.
Thus, this chapter chooses EIO-LCA to demonstrate how a life cycle assessment of a
water recycling system is carried out. Table 4.11 shows these environmental effects along
61
with the macro-economic ones analyzed in Section 4.1.3.
Table 4.11 Macro-economic and Environmental Effects of Water Recycling Systems
and Infrastructures
Effects Water recycling systemsWater and Sewage
Infrastructure Savings
Macro-
economic
Environmental
Note: “+” means positive effects; and “-” means negative effects; “-/+” means there are
negative effects and also positive effects (water saving).
(1) Water recycling systems have positive impacts on the economy, because the
production and use of system components can boost the productivity of industries
through economic supply chains.
(2) On the contrary, water and sewage infrastructure savings have negative impacts on
the economy. Reduced infrastructure capital expenditures lead to reduced production of
materials and equipments in infrastructure constructions, decreasing the economic
activities taking place in other industry sectors throughout supply chains.
(3) Reduced investment in water and sewage infrastructures avoids the production of
62
materials required in infrastructure construction, thereby having a positive impact on the
environment.
(4) The environmental effects of water recycling systems are a little complicated. On one
hand, the production of the components of water recycling systems generates a great
amount of pollution, which is a negative impact on the environment. On the other hand,
water resource is conserved through recycling, which counts as a positive effect on the
environment. Since the positive and negative effects are expressed in different terms, it is
hard to obtain a net effect unless both are expressed in a unified term, such as monetary
values. The monetary values of some pollutants of concern are summarized in Table 4.12
below.
Table 4.12 Environmental Effects of Pollutants in Monetary Terms (Matthews, Lave
2000)
Species No. of studies Median ($/ton) Mean ($/ton)
SO2(1) 10 1800 2000
CO(2) 2 520 520
NOx(3) 9 1060 2800
VOC(4) 5 1400 1600
PM10(5) 12 2800 4300
Global warming potential
(in CO2 equivalent)(6) 4 14 13
Note:
(1) SO2 stands for Sulfur Dioxide.
63
(2) CO stands for Carbon Monoxide.
(3) NOx stands for Nitrogen Oxides
(4) VOC stands for Volatile Organic Compounds.
(5) PM10 stands for Particulate Matter less than 10 microns in diameter.
The air pollutants (1) to (5) are released from the production of system components in all
industry sectors throughout supply chains.
(6) Global Warming Potential (GWP) (MTCO2E): it measures greenhouse gas emissions
including Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O) and
Chloroflurocarbons (CFCs) (Carnegie Mellon University Green Design Institute 2009).
The environmental indicators chosen in the model are displayed in Table 4.13. D [1 to 6]
represents environmental impacts of reduced infrastructures due to reduced water use on
selected indicators. E [1 to 6] represents environmental impacts of investments in
equipment and materials on selected indicators. F [1 to 6] represents environmental
impacts of investments in labors on selected indicators. Table 4.14, 4.15, and 4.16 show
the results derived from the greywater case study in Appendix 3. Since E and F are
negative environmental effects, the physical and monetary values in Table 4.15 and 4.16
are all negative.
Table 4.13 Environmental indicators
Environmental Indicators
SO2
(g)
CO
(g)
NOx
(g)
VOC
(g)
PM10
(g)
GWP
(MTCO2E)
64
Water Savings D1 D2 D3 D4 D5 D6
Equipment and Materials E1 E2 E3 E4 E5 E6
Labor F1 F2 F3 F4 F5 F6
Table 4.14 Environmental impacts of a greywater system for every 1000 m3 saved
Parameters D1 D2 D3 D4 D5 D6
Physical values (×1,000) 9.33 52.4 18.9 32.6 3.59 6.66
Monetary values ($) 0.37 0.55 1.06 1.04 0.31 1.73
Table 4.15 Environmental impacts in a greywater system for every $1000 invested in
equipment and materials
Parameters E1 E2 E3 E4 E5 E6
Physical values (×1,000) -4.22 -6.10 -2.26 -1.02 -0.708 -1.41
Monetary values ($) -8.45 -3.17 -6.33 -1.64 -3.04 -18.28
Table 4.16 Environmental impacts in a greywater system for every $1000 invested in
labors
Parameters F1 F2 F3 F4 F5 F6
Physical values -86 -362 -99 -61 -20 -0.04
Monetary values ($) -0.17 -0.19 -0.28 -0.098 -0.086 -0.54
65
4.3 Social Analysis
Besides good economic and environmental performance, a successful application of a
water recycling system also requires a good social environment. The social factors
adopted in this research are customer comfort and public health as shown in Table 4.17
below. Unlike the economic and environmental ones, social factors are hard to be
quantified, and social analysis is often conducted qualitatively.
Table 4.17 Social Factors
Social Evaluation Scenario: Grey Water Recycling in Office
Buildings Customer Comfort Public Health
Water Savings G2
Equipment/ Materials Project Requirements
Labor
Positive Image G1
G1: Customer Satisfaction
With the growing interest in green systems, having a facility that recycles water can be a
means to achieve customer satisfaction, enhance comfort, and support the creation of new
social ties. However, the quantitative estimation of this indicator is hard.
G2: Public Health
Public health is an overriding social factor, and any system that threatens public health
should be inspected carefully. Many people believe that water recycling, especially
66
greywater reuse, poses high risks to public health because untreated water contains a lot
of pathogens, which may cause people to infect with serious disease and which in many
cases still exist after low level of treatment (A-boal, Lechte & Shipton 1995). If systems
are not maintained and operated properly, the chance of infection would become higher.
This hazard can be measured by the methods in Table 4.18.
Table 4.18 Public health measuring methods
Parameter Value
Method 1: Infection Incident
Valuation $2000 per infection
Water
Savings
G2
Method 2: Precaution Valuation See discussions
Method 1: Infection Incident Valuation
Public health hazard can be measured by potential infection incidents. Fane et al. (2002)
estimated that if someone is infected due to the use of recycled water, $2000 per person is
suggested to monetize the cost of this public health accident. If a great number of people
get ill due to contacting recycled water, the medical cost would be significant. However,
no serious health accident related to water recycling has been reported (Brown 2007,
Yamagata 2003).
Method 2: Precaution Valuation
An alternative way to estimating the impact of public health factor on a macro-economic
scale is through treatment cost. In order to avoid any adverse incident related to public
health, some water recycling systems are equipped with advanced treatment technology,
67
which makes recycled water much cleaner than is required for a specific use. Thus, the
precautionary treatment cost can be regarded as the expenses on public health protection.
This cost should be estimated on a case by case basis.
In addition, the public health issue also influences property values. If water recycling
systems in a property are not properly maintained or operated, causing severe disease, the
value of this property would drop, and even the property values of surrounding areas
would go down as well, because people fear living in places where health is not
protected. Therefore, when the public health factor is evaluated, the change of property
values should also be taken into account. In the Infection Incident Valuation, $2000 may
not consider this indirect effect and may hence be undervalued. More research needs to
be done to make the estimation more accurate.
4.4 Model Discussions
4.4.1 Selection of the Indicators
This chapter discusses what indicators should be included in a sustainability oriented
feasibility model and how to quantitatively measure their values. When indicators are
identified, care is needed to avoid double counting. The identification of indicators is
often subjective, and there is no right or wrong classification. Scholars always have
different opinions on what to be included or excluded and what to be broken down into
smaller ones or combined to form aggregated ones. A list of the factors that are used in
other sustainability models of water systems is shown in Appendix 4 for reference.
68
4.4.2 Units of Measurement
Economic values are mostly measured in dollars, and environmental values are measured
in both physical and monetary terms. In order to make the units of measurement
consistent, some lump sum values are converted to annual ones, such as annualized initial
investments. As a result, the units of almost all indicators are unified in annual dollars.
However, there are several exceptions. Firstly, positive image (DC4) is expressed in
annual dollars per capita. In order to get the total annual amount, DC4 has to be
multiplied by the number of residents in a building or area. Secondly, customer comfort
(G1) is hard to be measured. Finally, public health (G2) is not measured in annual dollars.
It is an incident value, which means G2 has a value only when a health-related incident
happens. Otherwise, G2 is nil.
69
4.4.3 Parameter Correlation
Table 4.19 Parameter correlation
DC1 DC2 DC3 DC4 IB1 IB2 A B C D E F G1 G2
DC1 **** *** *** *** *** ** *** ** ** *** ** ** ** **
DC2 **** ** ** ** * ** *** * ** *** * * *
DC3 **** ** ** *** ** * *** ** * *** * *
DC4 **** * * ** * * ** * * *** ***
IB1 **** * ** * * ** * * - -
IB2 **** * - ** * - - - -
A **** * * ** * * * *
B **** - * ** ** - -
C **** * - - - -
D **** * * * *
E **** ** - -
F **** - -
G1 **** **
70
G2 ****
Note:
****: perfect correlation;
***: strong correlation;
**: relatively strong correlation;
*: limited correlation;
-: not applicable.
71
Table 4.19 above is symmetric, and the blank half can be derived from its symmetric
counterpart. The criteria of categorizing a relationship between two indicators are shown
in the following.
(1) A parameter is obviously perfectly correlated to itself, so elements in the diagonal of
the correlation matrix are all marked as “****”.
(2) If an indicator is calculated directly based on another indicator, these two indicators
are strongly correlated. There is an exception: DC4 and G2 are strongly correlated, which
is judged based on the fact that people are very concerned about their health when it
comes to water recycling systems, so if a system can protect public health, people would
like to pay more.
(3) Relatively strong correlations are identified mostly through transitivity. For example,
if X is strongly correlated to Y, and if Y is strongly correlated to Z, then X has relatively
strong correlation to Z. Note that both original relationships must be strong.
(4) Limited correlations are identified mostly through transitivity as well. For example, if
X is strongly correlated to Y, and if Y is relatively strongly correlated to Z, then X has
limited correlation to Z. In other words, if one of the two original relationships is strong
and the other is relatively strong, the derived relationship is identified as limited
correlation.
(5) If a relationship between two indicators does not belong to any of the above
categories, the relationship is identified as not applicable.
72
4.5 Decision Making: Green Factor Analysis
4.5.1 Decision Making Process
There are six basic steps in a quantitative construction decision making process as shown
in Figure 4.4.
Figure 4.4 Six-Step Procedure of Quantitative Construction Decision Making
1. Set Objectives
The first step is to set objectives in line with local needs. There are usually two types of
objectives: optimizations and constraints. The former sets an optimum target, such as
finding the lowest life cycle cost over a certain time period. The latter sets constraints on
certain factors, for example, to ensure life cycle cost to be no more than one million
73
dollars.
2. Identify Options
The second step is to identify scenario options. “Do nothing” option is always included in
an analysis unless all other options have significant net benefit (Taylor 2005). The
scenarios that clearly cannot meet the objectives should be removed in the first place so
that the workload of assessment becomes less.
3. Identify Indicators
The general indicators used to evaluate water recycling options were identified and
classified in this chapter. For specific cases, these indicators need to be refined from the
following three aspects. First of all, indicators are selected in line with the objectives and
options identified in the first and second steps. Secondly, indicators are chosen according
to their significance. If an indicator is apparently insignificant compared to others, it
should be excluded from the model. Thirdly, the choice of indicators also depends on
local factors (Lundin, Morrison 2002a). For example, for the regions where water is very
scarce, the water consumption indicator is extremely important, but for the regions where
water is relatively abundant, this indicator may not be as important as others.
4. Calculations
The methods to quantifying indicators include life cycle cost analysis, environmental life
cycle assessment, input output analysis, regression analysis, recycled water quantity
analysis, and willingness to pay. These methods are introduced in Chapter 2, reviewed in
74
Chapter 3, and organized in this chapter.
The aforementioned four steps are summarized in the 4-D model in Figure 4.5 below. O1,
O2, ..., On represents a series of objectives; S1, S2, ..., Sn represents a series of scenarios;
F1, F2, ..., Fn represents different factors; and M1, M2, ... represents various methods.
After the first four steps, almost every indicator has a numeric value.
Figure 4.5 4-D model for the first four steps of decision making
5. Decision Making Method: Green Factor Analysis
Traditionally, decisions are made based on direct life cycle costs, which neglect other
aspects of sustainability. In this section, the author proposes a new decision making
method called Green Factor, which compares traditional life cycle outcomes with
sustainability results that take environmental and social factors into account.
A direct economic annual value can be derived from a traditional life cycle cost analysis.
75
The formula is
DE = DC1 + DC2 + DC3 (4.1)
where DE is direct economic annual value; DC1 is the direct benefits from water bill
savings; DC2 and DC3 are the costs of equipment/materials and labors, respectively.
Since DC2 and DC3 are usually negative, this equation also represents the net annualized
financial benefits within a project’s life cycle.
In order to consider all three sustainability aspects, a green annual value is proposed as
below.
∑∑∑∑∑∑∑∑∑===
++++++++=2
1i
2
1
4
1iG F E D C B A IB DC GV
i (4.2)
where GV is the green annual value; ∑=
4
1iDC is the sum of all the direct cost components;
∑=
2
1
IBi
is the sum of all the indirect cost components, which is also the financial benefits
to governments including infrastructure savings and tax revenues; The definitions of
∑A , ∑B , ∑C , ∑D , ∑E , ∑F are shown as follows.
1000/kAA i∑∑ ⋅= ;
1000/lBB i ⋅= ∑∑ ;
1000/pCC i ⋅= ∑∑ ;
1000/kDD i ⋅=∑∑ ;
1000/lEE i ⋅= ∑∑ ;
1000/pFF i ⋅= ∑∑ ;
76
where k is the amount of annual water savings (m3); l is the annual costs of materials and
equipment ($); and p is the annual costs of labors ($). ∑ ∑∑ ++ CBA is net macro-
economic impacts; ∑ ∑∑ ++ FED is net environmental benefits; G∑ is net social
benefits, in which G2 is negative if infection occurs. GV represents the total values of
these benefits. The bigger is the value of GV, the more sustainable is the project.
When a decision is being made, DE and GV should be considered together. DE < 0
means that the project is economically infeasible. GV < 0 means that the project is not
sustainable. If DE < 0 and GV < 0, the project is neither economically feasible nor
sustainable, and this project should never be chosen. Projects with both positive DE and
GV are preferable. In this case, a Green Factor (GF) is introduced to facilitate decision
making.
∑ ∑××
=FEDE) - (GV DE (GF)Factor Green (4.3)
From the equation above, the larger is the traditional life cycle cost DE, the bigger is the
green factor. GV – DE represents the sustainability effects excluding the life cycle cost of
a project. Bigger GV-DE leads to the larger value of the green factor. ∑E and ∑F
stand for environmental costs of equipment/materials and of labors, respectively. The
larger are these costs, the lower is the value of the green factor. Green factor possesses
the merits of both traditional life cycle cost analysis and the novel sustainability analysis
and emphasizes environmental effects in the denominator. When construction projects
are compared, the one with the largest value of the green factor should be chosen.
77
The following indicators derived from the model may also be helpful in decision making.
(1) Environmental Ratio (EnR):
The environmental ratio can be defined as
GVFEDDC ∑∑∑ +++
=1
EnR ,
where DC1 is water savings, which is a major environmental benefit water recycling
systems have. D + E + F is net environmental impact in terms of other selected
indicators. The sum of the previous two parts demonstrates the total net environmental
value. EnR shows how much environmental impact accounts for the total green annual
value. A positive EnR means that a water recycling system is good for the environment.
(2) Social Ratio (SR):
In equation (4.2), G1 + G2 represents net social impact. The social ratio can be defined as
GVG∑= SR ,
which means how much social impact accounts for the total green annual value. This
value is hard to obtain, because G1 and G2 are difficult to be measured. Social ratio is
more or less a theoretical concept.
(3) Economic Ratio (EcR):
GV∑∑∑∑∑ ++++
=C B A IB DC
EcR
∑DC is the net direct economic benefits; ∑ IB is the total indirect economic benefits;
78
∑∑∑ ++ C B A is the net macro-economic benefits. The sum of all these items
represents the total economic effects. Like the previous two ratios, this one demonstrates
how much the total economy-related impact accounts for the green value. A positive EcR
means the project has a positive economic impact.
4.5.2 An Application to the Illustrative Greywater Case
Using the data in Appendix 2, the results shown in Table 4.20 are obtained for the
illustrative greywater case.
79
Table 4.20 Values of indicators in the illustrative greywater case
Economic Evaluation Environmental Evaluation Social
Evaluation
Macro Economic Impacts
Scenario: Grey
Water Recycling in
Office Buildings
Direct
Costs
/Benefits
Indirect
BenefitsIndustry
1 2 3 4 5 6
Indi-
cator
1
2 3 4 5 6 CC1 PH2
Water Savings 13855 955 -148 -10.7 -6.6 -4.9 -4.8 -4.3 0.37 0.55 1.1 1.0 0.31 1.7 0
Equipment/
Materials -2676 932 125 76 69 60 51 -8.5 -3.2 -6.3 -1.6 -3.0 -18
Project
Requi-
rement Labor -4130 620 1000 35 8 7 5 5 -0.17 -0.2 -0.28 -0.10 -0.09 -0.54
Positive Image 1000 N/A
Note:
1. “CC” stands for Customer Comfort.
2. “PH” stands for Public Health.
80
In addition,
k = 6.45 million m3
l = $ 2,676
p = $ 4,130
1000/kAA i∑ ⋅= = -$2,044
1000/lBB i ⋅= ∑ = $5,990
1000/pCC i ⋅= ∑ = $4,378
1000/kDD i ⋅= ∑ = $32.6
1000/lEE i ⋅= ∑ = -$109.5
1000/pFF i ⋅=∑ = -$5.5
G2 = 0 (assume no health-related accident happens)
Therefore,
DE = DC1 + DC2 + DC3
= $ 7049
GV = DC1 + DC2 + DC3 + DC4 + IB1 + IB2 + A + B + C + D + E + F + G1 + G2
= $ 17866
Since both DE and GV are positive, this project is both economical and sustainable.
77.0 EnR =
005.1EcR =
EnR is positive, which means the project is environmentally friendly. EcR is positive,
which means the greywater system has a positive economic effect. SR is not available
81
due to the lack of data.
4.5.3 Policy Implications
(1) Technology improvement
If technology improves, to generate water of the same quality, the costs of
equipment/materials may become less. If this cost declines by 10%, macro-economic
activities decrease, and negative environmental effects are mitigated. For $1000
investments in equipment/materials, 10% decline equals $100 less direct cost, which
would cause about $150 reduction of economic activities in all industry sectors and
environmental improvement of $4 according to Table 4.15. Thus, the change of the green
value due to this 10% investment reduction in equipment/materials is the net value of all
these three parts.
Green value change = $100 - $150 + $4 = -$46
The green value actually decreases, meaning technology improvement is not favorable
from a holistic sustainability perspective, although it is economical for the water
recycling system. This counterintuitive conclusion is partly due to the imbalanced values
of macro-economic impacts and environmental effects. Environmental improvement is
worth only $4, which is minimal compared to macro-economic impacts of $150.
Environmental effects may be greatly undervalued when they are converted from
physical values to monetary values. As environmental issues become more and more
important, people will assign more monetary value to these effects, and the green value
will be also different then.
82
(2) Labor training
If labors receive intensive training in system installation, operation, or maintenance, less
labor hours may be involved, reducing labor costs. If labor costs decline by 10%, for
$1000 investment in labors, the change of green value is shown as follows.
Green value change = $100 - $1070 + $0.1 = -$69.9
Although labor costs are saved in the project, labor training is not beneficial to the whole
economy, which leads to its bad performance from a sustainability perspective. Like the
discussion in the previous section, the underestimated environmental effects are not able
to offset the negative effects of the reduction of macro-economic activities. More
research on monetizing environmental impacts is needed in the future in order to make
the valuation of sustainability more accurate.
4.6 Chapter Summary
Although most indicators in this model were studied in previous research, they were
seldom put together in such an organized and comprehensive way. Moreover, no other
study on water recycling systems quantitatively measured the infrastructure expenditure
savings due to reduced water consumption. This indirect economic benefit links water
use with infrastructure investments, reaching out to economic values on a grander scale.
In addition, putting dollar values on almost every indicator is another distinctive feature
of this research, which paves the way for the Green Factor, a decision making method
that helps evaluate how sustainable a project is.
In the macro-economic analysis, economic activities taking place in a number of industry
83
sectors are analyzed. The results show that some manufacturing industries, such as
“commercial and service industry machinery manufacturing”, benefit the most, as they
provide various products and services for the construction of water recycling systems. On
the other side, the industry sectors that are relevant to water infrastructures, such as
“water, sewer, and pipeline construction”, are hit the hardest, because some water
infrastructure constructions are avoided due to reduced water use. As for environmental
indicators, the values of conventional air pollutants and of greenhouse gas emissions are
not significant in both physical and monetary terms. However, water savings, the biggest
environmental benefit, are quite compelling, making a system live up to its main
function—recycling water.
84
Chapter 5 Analysis and Discussions
This research establishes a sustainability oriented model to assist in construction decision
making for water recycling systems. The methods that are used to quantify sustainability
indicators were introduced in Chapter 2, reviewed in Chapter 3, organized and applied to
an illustrative case in Chapter 4. Moreover, the Green Factor, a sustainability decision
making approach, is developed at the end of Chapter 4. Based on the previous analyses,
relevant policies displayed in Table 5.1 are discussed one by one in the following.
Table 5.1 Policy Analysis
Outcomes of water recycling Technology Policy Public Culture
Water savings New reuse options Regulations
Equipment/Material Green systems Tax incentives Additional
costs Labor Constructability Training
Willingness to
pay extra
Positive image Social web Awards
campaigns
(1) New reuse options
Recycled water is mostly used for non-potable purposes, such as lawn irrigation and toilet
flushing. Although potable uses are available in some arid places, the cost of this kind of
system is quite high, holding back its widespread applications. In order to augment
85
recycled water supply, new technologies need to be developed to make water recycling
systems suitable for more advanced uses such as drinking at a fairly low cost.
(2) Green systems
Water recycling systems are good for the environment in the sense that they can save a
great amount of water. However, the cost of water treatment accounts for a large portion
of a recycling system’s life cycle cost especially when high water quality is required.
Developing new treatment technologies that incur less cost would definitely improve the
wide applications of these green systems. Governments should help fund this kind of
research. However, as shown in Chapter 4, technology improvement that causes 10%
reduction of investment in equipment/materials of $1000 induces $46 reduction in green
value. Therefore, technology improvement may not be beneficial to the sustainability of
water recycling systems. Governments should be cautious when implementing this
policy.
(3) Constructability
Labor cost is the dominant share of the life cycle cost of a retrofit system. In order to cut
down this cost to make water recycling systems more economically viable, construction
technologies should be developed to improve systems’ constructability. In other words,
new technologies should help ease retrofit installations.
(4) Social webs
Social webs, like Facebook, Youtube, and Myspace, prevail in our modern lives. They
86
influence our thoughts and help us exchange new ideas. These webs can be used to
promote the benefits of water recycling, which are still foreign to many people. In such a
way, the positive image of water recycling systems can be improved, and more people
may turn to install them at their own homes.
(5) Regulations
Water recycling systems are encouraged to be used in many places, such as California
and Arizona (Oasis Design 2005). However, encouragement is not enough. Given the
numerous benefits water recycling systems have, I suggest that governments should set
stricter mandatory regulations to force buildings to install such systems. For example,
governments can require a minimum amount of water that must be recycled in a building
construction.
(6) Tax incentives
One of the biggest hurdles to apply water recycling in buildings is that the initial capital
costs are too high. If governments can offer tax incentives to the people who are willing
to use these systems, the high initial cost can be partly offset, and as a result more people
would like to use these water saving devices. Besides, there are two other reasons that
justify tax incentives. First of all, water recycling systems generate expenditure savings
of water and sewage infrastructures, which are beneficial to governments. As shown in
Chapter 4, this benefit could be $0.15 or $0.8 per cubic meter of water saved according to
different methodologies. If a great number of water recycling systems are installed, this
benefit could be considerable. Cutting down taxes on water recycling systems does not
87
result in tightening government budget as long as the amount of annual tax reduction
does not exceed annual infrastructure expenditure savings. Secondly, water recycling
systems boost employment rates, and increased employment would generate more tax
revenue for governments as analyzed in Chapter 4.
(7) Training
As mentioned, labor cost accounts for a large portion of life cycle cost. In order to reduce
the costs of labors spent on maintenance and operation, certain levels of training is
required. With more knowledge related to water recycling systems, operators are more
able to deliver the work productively, which leads to less labor hours and less labor cost.
However, as shown in Chapter 4, labor training that causes 10% reduction in $1000
investment in labors induces the sustainability deterioration of about $70, which is mostly
due to reduced economic activities in many industry sectors.
(8) Awards campaigns
To promote the positive image of water recycling systems, awards can be given to the
facilities that perform the best in terms of sustainability. This award campaign not only
captures the public attention on water recycling but also encourages facilities to seek
ways to operating the systems in a more sustainable way.
(9) Willingness to pay
Public culture plays an important role in applications of water recycling. If people
perceive water recycling in a positive way, they would be more willing to pay extra
88
money to install the systems. As analyzed in Chapter 4, people are willing to pay $1 per
capita every year to install small-scale systems, and $1.8 for large-scale systems, when
the positive image of water recycling systems is well established. This kind of public
culture should be created with the help of governments.
89
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Appendix 1 Stormwater and Wastewater Recycling
Chapter 2 reviewed two basic water recycling scenarios—greywater reuse and rainwater
harvesting—which are mostly applied on small scales. This appendix reviews systems on
large scales, and stormwater and wastewater recycling are cases in point. At the end of
this appendix, possible combination systems are explored.
A1.1 Stormwater Harvesting
Stormwater is defined as rainwater runoff from urban surfaces. Stormwater can be
collected as an alternative to water supply and used for many non-potable and sometimes
potable purposes. The non-potable uses include toilet flushing, lawn watering, industrial
and institutional uses, car washing, agricultural irrigation, fire fighting, environmental
flow provision, esthetic water uses, and groundwater recharge (Hatt, Deletic & Fletcher
2006, Mitchell et al. 2006a). Besides saving drinking water, stormwater harvesting has
many other benefits. For example, using properly treated stormwater can reduce the
amount of flood that needs to be dealt with in a heavy rain event, thereby benefiting the
environment and surrounding communities.
People may get confused about rainwater and stormwater harvesting since both of them
are generated in rain events. However, the differences between these two water recycling
options are quite distinct. First of all, the places where water is harvested are different.
Rainwater harvesting collects water from roofs, while stormwater harvesting collects
rainwater runoff from ground surface. Second, rainwater harvesting systems are mostly
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decentralized, and households can simply install a barrel to harvest water on site. In
contrast, most stormwater harvesting systems are centralized, and the runoff is
transported to a central storage plant and then to be distributed to households.
A typical stormwater harvesting system consists of four major components: collection,
treatment, storage, and distribution, as shown in Figure A1.1 (Mitchell et al. 2006a).
Figure A1.1 Components of a stormwater harvesting system (Radcliffe 2004)
(1) Collection
There are two ways to collecting stormwater. One is through drainage networks, which is
so-called “grey” system, such as gutters, channels, and pipes; the other uses natural
processes known as “green” systems, such as swales, bio-filters, and porous pavement
(Mitchell et al. 2006a). The former is a traditional collection method and has been widely
applied in many cities. However, it has some drawbacks. First of all, the materials used in
this system are not permeable, so almost all the rainwater runoff is collected, which
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causes a large amount of water to be dealt with during heavy rain events. If the capacity
of these traditional systems cannot meet instant needs, excessive untreated stormwater
will be dumped into downstream rivers, leading to a large variety of environmental
problems. Second, the “grey” system does not have any other functions other than
stormwater collection, and treatment facilities are required according to end-use needs.
These two problems can be resolved by a “green” harvesting system. Much stormwater
runoff seeps into the ground, so the total amount that needs to be treated becomes less.
This process is also beneficial to the environment, because the water that goes into the
ground can recharge the ground water, and less untreated water will flow into the river.
Moreover, swales and biofilters can treat stormwater while it goes through entire layers to
collection pipes. Thus, treatment facilities are reduced, so are treatment costs.
(2) Storage
Because rainwater is not generated according to people’s needs, storing excessive
stormwater during rain events for future use is of most importance. Unlike rainwater
harvesting systems using barrels as storage facilities, stormwater storage systems have
much larger capacity. The most frequently used storage facilities are ponds, basins, dams
and reservoirs; and the less frequently used ones include wetlands and aquifers and
groundwater recharge (Hatt, Deletic & Fletcher 2006). A storage system should be
designed to reliably provide sufficient water to meet demand and to minimize risks to
public health and safety (DEC 2006).
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(3) Treatment
Stormwater contains numerous types of pollutants including suspended solids, nutrients
especially nitrogen and phosphorous, metals, oil and grease, bacteria, pesticides, and
herbicides from various sources (MOE 2003). In stormwater management, stormwater
was treated to a certain degree of quality mainly for the purpose of protecting receiving
waters and the surrounding environment. When stormwater is intended to be reused, it
should be treated to a higher level of quality to protect public health and safety.
Therefore, the treatment of stormwater harvesting should be stricter than that of
traditional stormwater management. The level of treatment is primarily determined by the
intended end-use including lawn watering, toilet flushing, fire fighting, ponds for
esthetical use, and environmental flows (Hatt, Deletic & Fletcher 2006). In general, the
reuse that involves body contact requires higher level of treatment; and the higher is the
level of treatment, the more complex and expensive is the system.
Hatt et al (2006) lists the available treatment systems, which include filter and sediment
traps; swales and buffers; wetlands; ponds, basins and lakes; advanced treatment; and
disinfection. Some of these approaches are very traditional treatment techniques such as
advanced treatment and disinfection. Others are more related to natural processes noted
as “green” systems. Since such natural systems usually have multi-functions, for
example, a swale can both be collection and treatment systems, the costs of treatment part
for these natural ones should not be counted twice.
(4) Distribution
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The choice of distribution methods is mainly determined by the end use types. For
example, underground piping systems with sprinklers and drippers are widely installed
for irrigation purposes, and dual reticulation is employed for other non-potable reuse
(Hatt, Deletic & Fletcher 2006). A system for potable uses should provide 24 hour
service, providing more hours of services than those for non-potable uses (Mitchell et al.
2006a). Moreover, if a stormwater harvesting system is designed for fire fighting or other
contingent use, pipes should be designed to be much larger. In addition, cross-
connections between treated stormwater and mains water distribution networks should be
avoided at all costs.
A1.1.1 Life Cycle Cost of Stormwater Recycling Systems
1. Initial capital costs
Initial costs are the sum of the capital and labor costs of the four components mentioned
above. Like other water recycling options, the initial costs of stormwater recycling
systems are usually the lion’s share of the life cycle costs, so careful design to reduce this
cost would benefit the economic performance of a whole project. According to the data
provided in an Australian research, the most significant parts are storage ponds,
centralized pump stations, and pipes for collection and distribution (Mitchell et al.
2006b). However, since each project has its own characteristics, initial cost analysis
should be conducted on a case by case basis. For example, if harvested stormwater is
used for irrigation or some other non-potable uses that pose little public health threat,
treatment facilities can be minimal, which leads to lower overall costs.
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Double count should be avoided in life cycle cost calculation. In a stormwater harvesting
system, one component may have multiple functions. For example, as shown in Figure 1,
porous pavements are included in three categories—collection, treatment, and storage—
but its cost should be counted only once instead of three times.
2. Operation, Maintenance, and Rehabilitation Costs
Operation costs are the ones that are incurred on a daily basis, making systems function
properly. One large part of these costs is energy cost, which can be incurred in every
system component. First of all, energy is needed in every construction, maintenance, and
rehabilitation phases of a project. Second, energy is required when water is treated by
some treatment facilities, such as UV light. Third, in the collection and distribution parts,
a great amount of energy is consumed when gravity force is not large enough to make
water flow towards right directions in pipes. This energy cost is proportionate to the
amount of pumping required, which is dependent on the topography a system passes by,
the volume of water that needs to be pumped, and the energy losses caused by friction in
a distribution system (Mitchell et al. 2006a). In order to reduce this cost, a system should
be designed to use gravity force as much as possible. In addition, other operation costs
such as disinfectant cost should also be taken into account.
The maintenance costs are also incurred on a regular basis. The maintenance costs of a
stormwater harvesting costs are associated with the maintenance of pond and sediment
basin, pump stations, balancing reservoir, and infrequent pipe bursts (Mitchell et al.
2006b). A monitoring program is recommended to be carried out in order to identify the
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spots where maintenance is needed (Mitchell et al. 2006a). The maintenance costs as the
percentage of construction costs are estimated in the following table.
Table A1.1 Estimated annual maintenance costs (SKM 2006)
Stormwater treatment measure Estimated annual maintenance costs
(% of construction cost)
Retention basins and constructed wetlands ~2-6%
Infiltration trench ~5-20%
Sand filters ~11-13%
Vegetated swales ~5-30%
Bio-retention systems ~5-7%
Side entry pit ~30%
Trash racks ~30%
End of pipe devices ~10-25% Gross pollutant trap
Wet vault devices ~7%
Rehabilitation takes place less frequently than maintenance and is incurred when some
components of a system need to be replaced. For example, pumping stations are usually
renewed at least once throughout the life cycle of a system. In this case, the rehabilitation
interval equals to the average life cycle of a pump station, and the rehabilitation costs are
all the costs incurred in this replacement process.
3. Other Costs and Benefits
105
Besides conventional costs discussed above, Taylor (2005) mentioned some other costs
that may be taken into account in a life cycle cost analysis. These costs include “the cost
of the land needed for the stormwater asset; potentially hidden costs, which are associated
with approval delays, environmental permits, environmental monitoring, taxes,
environmental management during construction, insurance, etc.; contingent costs, which
are excessive construction costs, property damage, environmental rehabilitation, legal
expenses, etc. during construction; and organizational values, which are the stormwater
manager’s corporate image and relationship with stakeholders as a result of
construction.”
Like other recycling options, the most prominent financial benefit of stormwater
harvesting is water bill saving. To calculate it, the amount of stormwater runoff needs to
be estimated, which can be obtained from historical rainfall and people’s demand for
recycled water.
4. Economic Feasibility
Once all the financial costs and benefits are obtained, the economic feasibility of a
project can be analyzed using net present value of the cash flow or some other indicators
introduced in Chapter 2. In order to get net present values, the life length of a project and
the discount rate should be decided. If necessary, inflation rate should also be utilized to
adjust discount rates. In an Australian study, the life cycle is set at 50 years; the real
discount rate about 5% per year; and the inflation rate 2% per year (Mitchell et al.
2006b). I used these figures to analyze the projects in Table A1.2, and only two of them
106
are economically feasible.
Table A1.2 Economic Feasibility Analysis of Real Projects
Name Capital
costs
Annual
Recurrent
cost
Annual
Benefits
Payback
period
Feasible
?
Barnwell Park Golf Course, Five
Dock $337,530 $27,000 $2,200 Not exist N
Sydney Smith Park, Westmead $731,827 $45,000 $17,760 Not exist N
Bexley Municipal Golf Course,
Bexley $594,197 $18,000 $97,680 10 years Y
Manly stormwater and reuse
project, Manly $359,780 $39,000 $28,120 Not exist N
Solander Park, Erskineville $544,798 $46,000 $4,000 Not exist N
Taronga Zoo, Mosman $2,200,000 $55,000 $54,000 Not exist N
Riverside Park, Chipping
Norton* $68,234 $5,700 $17,760 7 years Y
Hornsby Shire Council nursery
and parks depot, Hornsby $329,500 $28,000 $1,000 Not exist N
Data source: (DEC 2006)
Note: * The costs in this project relate only to the irrigation head works and pipelines to the existing
irrigation system.
A1.2 Wastewater Reuse
There are two types of wastewater reuse systems: centralized and decentralized ones.
Centralized systems are usually on large scales and used in densely populated areas. In
this system, recycled water is distributed through pipeline systems, which along with the
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water supply pipeline forms a dual reticulation system. Decentralized recycling systems
reuse wastewater “from individual homes, clusters of homes, or isolated communities,
industries, or institutional facilities (Tchobanoglous 1998).” Compared to its centralized
counterpart, a decentralized system is more flexible and can satisfy the water demand of
users in remote areas.
Because wastewater contains more detrimental substances than stormwater, it usually
requires higher level of treatment before being reused, therefore incurring higher
treatment costs. Treated water can be used to meet urban, industrial, and agricultural
water demand, to increase environmental and recreational values, to recharge
groundwater, and to augment potable supplies (US EPA 2004).
A1.2.1 Life Cycle Cost of Wastewater Recycling Systems
Like stormwater harvesting, a wastewater recycling system also consists of four parts:
collection, treatment, storage, and distribution. Treatment costs accounts for a very large
portion of a system’s total costs. In collection and distribution parts, the selection of the
pipe diameters of force mains is noteworthy. If pipe diameters are small, friction heads
will be large, which leads to large pumps, much energy consumption, and severe pipe
abrasion, so operation and maintenance costs will increase. On the contrary, if pipe
diameters are large, capital costs will be large as well, which also increase the total costs
of a recycling system. Therefore, there is a tradeoff between the O&M and capital costs
of force mains, which is vividly shown in Figure A1.2 below. The optimum pipe
diameter has the lowest total costs (Rowe, Abdel-Magid 1995). In addition, like other
108
water recycling options, there are two ways to estimating direct costs: one is to use
generalized formulae, and the other one is to use in-house historical records. Formulae
build up the relationships between the size of a plant and its cost, and these formulae can
be found in the previous research (Rowe, Abdel-Magid 1995, Richard 1998a, Hernández
et al. 2006).
Figure A1.2 Relationship of the annual conveyance costs to the diameter of the force
main (Rowe, Abdel-Magid 1995)
A1.2.2 Life Cycle Assessment of Wastewater Recycling Systems
Tangsubkul et al. (2005) investigated the environmental performance of three water
recycling technologies that are designed for irrigation purposes. The life cycle assessment
focused on two phases: construction and use phases. The inventory was established using
a hybrid model. An input output based technique was used to analyze the construction
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phase, and a process-based analysis was conducted to analyze the use phase of each
technology. The results showed that for most technologies the use phase contributes the
most to environmental impacts due to frequent chemical and energy consumption in
operation (Tangsubkul et al. 2005). This research’s conclusion is consistent with other
studies on the life cycle assessment of water systems (Renou et al. 2008, Racoviceanu et
al. 2007), that is, operation always causes the greatest environmental effects in a system’s
life cycle.
Stokes and Horvath (2006) carried out a life cycle assessment of two California water
recycling systems and compared them with other water supply alternatives including
import and desalination. The study utilized a hybrid LCA model, which employed EIO-
LCA to investigate the environmental effects of the entire material production supply
chain and which used process-based LCA to assess the construction and operation
phases. Three life cycle stages—construction, operation, and maintenance—are studied in
detail. The operation phase contributes the most to the overall environmental effects,
followed by the maintenance phase, and the construction phase causes the least
environmental impacts (Stokes, Horvath 2006). Among the three water supply phases—
supply, treatment, and distribution—distribution contributed the most to green house gas
emissions due to high energy consumed through transporting water from treatment plants
to users. The research also found that desalination cause more environmental effects than
wastewater recycling, so water recycling is a preferable option to supply water where
water resource is scarce (Stokes, Horvath 2006).
110
A1.3 Combination Scenarios
The basic water recycling options are shown in Figure A1.3. This section discusses the
possibility of combining the basic options to form new water recycling scenarios. Table
A1.3 showcases several possible combinations. Note that no option has both greywater
and wastewater at the same time, because wastewater includes greywater according to
their definitions. Table A1.3 also displayed commonly used treatment technologies and
end uses of each basic option, based on which more specific scenarios can be made. For
example, greywater used for toilet flushing can be combined with rainwater used for lawn
watering.
Rai
nfal
l
(3)RainwaterR
ainf
all
(4)S
torm
wat
er
Figure A1.3 Basic Water Recycling Options
The main reason for installing these combined systems is due to severe water scarcity. If
a basic option on its own cannot meet water demand in a building located at a water
scarce place, where mains water is very expensive, combining two or three basic options
together in one system can definitely enlarge the volume of water available, thereby
111
alleviating the water shortage problem.
The first combination in Table A1.3 has been discussed in Chapter 3. The second and
third options are reviewed in the following, and the other four scenarios are not reviewed
due to a lack of relevant references. Note that water recycling systems should always be
analyzed on a case-by-case basis.
1. Rainwater and Stormwater
Rainwater and stormwater are used together in many cases. On a house scale, a house
owner can use a barrel to garner rainwater and utilize permeable paving or reed bed to
catch stormwater runoff. Figure A1.4 shows how this domestic system works. On a
community scale, rainwater can be collected by households, and stormwater is collected
and treated by a centralized system.
Figure A1.4 A Rainwater and Stormwater Combination System (Leggett, Shaffer 2002)
112
2. Wastewater and Stormwater
Combined sewers, which collect both wastewater and stormwater, can be found in many
old cities. If the water delivered by this sewage system is recycled, the pipes that
transport recycled water are considered as the third distribution system besides water
supply mains and combined sewers. Combined sewage system have many problems such
as frequent occurrence of overflows and surcharge conditions (Adams, Papa 2000), so
many cities tend to replace it with separated sewers. In a separated system, stormwater
flows in storm sewers, while wastewater flows in sanitary sewer. These two flows are
treated differently and distributed separately to users. The cost of a separated system is
much higher than a combined system, because two sets of collection, storage, and
distribution systems are needed, which can nearly double the total costs. However,
treatment costs may become less, because stormwater contains less contaminant than
wastewater and hence incurs less treatment costs.
113
Table A1.3 Recycling Options
Treatment End Use Options Possible Scenarios
Rainwater
(a) Without any treatment
(b) filtration
(c) biological treatment
(d) disinfection (Leggett 2001)
(a) Lawn watering
(b) toilet flushing
(c) swimming pool/bathing
water
(d) washing machine water
(e) vehicle washing
(f) drinking (Leggett 2001)
√ √ √ √ √
Greywater
(a) simple
(b) chemical
(c) physical
(d) biological
(e) extensive (Pidou et al. 2007)
(a) Lawn watering
(b) toilet flushing (NAPHCC
1992) √ √ √
Stormwater (a) litter and sediment traps; (a) Lawn watering √ √ √ √ √
114
(b) swales and buffers;
(c) wetlands;
(d) ponds, basins, and lakes;
(e) infiltration systems;
(f) advanced treatment;
(g) disinfection (Hatt, Deletic &
Fletcher 2006)
(b) toilet flushing
(c) Fire fighting
(d) Ponds for esthetical use
(e) environmental flows (Hatt,
Deletic & Fletcher 2006)
Wastewater
Twelve treatment processes in
Table 3.5 (Richard 1998a)
(a) Urban
(b) Industrial
(c) Agricultural
(d) Environmental and
Recreational
(e) Groundwater Recharge
(f) Augmentation of Potable
Supplies (US EPA 2004)
√ √ √
115
Appendix 2 Case Study
In this appendix, two hypothetical water recycling cases are conducted, that is, a
greywater reuse system and a rainwater harvesting system in the Galbraith Building
(GB), where the Civil Engineering Department of the University of Toronto locates. In
2008, 6,312,000 gallon water was consumed in this building, incurring cost of $51,316.
The amount of water that can be conserved is calculated in a water quantity analysis,
based on the results from which the costs of major system components are decided by
empirical formulas or data. The ensuing sustainability analysis is comprised of life cycle
cost analysis, indirect economic analysis, and input output analysis, which includes
macro-economic and environmental analyses. All of them are conducted quantitatively.
A2.1 Water Quantity Analysis
This section reviews the methods to estimating the quantity of recycled greywater and
rainwater in a building. Note that field data are always preferable, but if they are not
available, data from literature are alternatives in estimation.
A2.1.1 Greywater Supply Estimation
Method A2.1.1.1: Based on Percentage
This method uses the percentage of water consumption to estimate greywater supply.
Table A2.1 gives such percentage data. Since the water from WC and kitchen sinks are
not greywater, it is not included in the table. Based on the data in the table, the estimation
can be obtained by the two formulae below.
Greywater supply in homes = V × 50% (or 53%)
116
Greywater supply in office buildings = V × 27%
Where “V” denotes the amount of water consumed in a building.
Table A2.1 Water Consumption Share of Different Components
Type Shower Basin Bath DishwasherWashing
machine
Total Source
homes 5% 9% 15% 1% 20% 50% (Memon et al. 2005)
homes 7% 13% 16% 1% 16% 53% (Leggett 2001)
office 27% 27% (Leggett 2001)
Method A2.1.1.2: Based on the Number of Households
Table A2.2 gives three sets of the estimates of domestic water use for a typical household
in Australia. The amount of greywater that can be generated in a typical household is the
sum of the amount from hand basin, bath, shower, and laundry. Take the Queensland,
Sydney water figures for example. Greywater supply per household = 28 + 193 + 135 =
356L/day. Once the number of households in a building served by a greywater system is
known, the total greywater supply can be obtained by the following formula.
GS = 356 × NH (L/day)
“GS” stands for greywater supply; “NH” stands for the number of households. Note that
besides the data in the second column, the ones in the other two columns can also be used
where appropriate.
Table A2.2 Estimates of domestic water use for a typical household (L/day) (Brennan,
Patterson 2004)
Facility Australia Queensland, Western Australia
117
Sydney Water
Toilet 110 186 100
Hand basin - 28 -
Bath/Shower 145 193 160
Kitchen - 44 -
Laundry 110 135 130
Taps/Other 65 - 110
Total per household 430 586 500
Method A2.1.1.3: Based on the number of people
The estimates of the water consumption per resident in a residential building are shown in
Table A2.3. Therefore,
Greywater supply for residential buildings = 75.96 (or 152) × P (L/day);
Greywater supply for general buildings = 96 × P (L/day), where “P” denotes the number
of people who reside in a building.
Table A2.3 Water Consumption per Person (L/person/day)
Type Basin Sink Bath Shower Laundry Total Source
Residence 25.16 26.2 17.76 6.84 - 75.96 (Butler 1991)
Residence 95 57 152 (Prillwitz, Farwell 1995)
* General 6 - - 56 34 96 (MPMSAA 2008)
* Water from dishwasher and kitchen tap is not included in the table; water from laundry is the sum of the
amount in the categories of dishwasher and laundry tap.
Method A2.1.1.4: Based on the Number of Bedrooms
118
First, count the total number of bedrooms in a household. Then, convert the number of
bedrooms to the number of occupants by the following formula (Prillwitz, Farwell 1995).
Number of occupants = Number of bedrooms + 1
Greywater supply equals the product of the number of occupants and the greywater
supply per occupant, which is given in the previous method. The reason for using the
number of bedrooms instead of the actual number of occupants is that the latter may vary
over time especially in hotels. Note that this method can only be used for residences.
A2.1.2 Rainwater Supply Estimation
The amount of rainwater that can be collected is highly dependent on the local rainfall
and roof area. Three formulae that estimate rainwater supply are shown below. In these
formulae, there are two unknown parameters: roof area and annual rainfall. Roof area can
be found in the drawings of a building. Annual rainfall can be found in meteorology
database. For example, Toronto annual rainfall is 689 mm (Columbus Travel Media Ltd.
2009).
Formula A2.1.2.1 (Hornby Island Groundwater Society 2005):
Rainwater supply (gallons) = Square feet of projected roof area × Rainfall (inches) × 0.52
Formula A2.1.2.2 (Australian Government 2004):
Rainwater supply (liters) = A × (Annual rainfall - B) × Roof area
Where A = 0.8-0.85 (80%-85% efficiency); B = 24 mm per year.
119
Formula A2.1.2.3 (Conservation Technology 2008):
Rainwater supply (gallons) = 0.5 × Rainfall (inches) × Area (square feet)
2.4.3 Recycled Water Demand Estimation
Unlike recycled water supply, water demand is related to end use, such as toilet flushing.
Once end use is decided, the quantity of water demand can be figured out by the similar
methods used in the greywater supply section. Three methods are elaborated in the
following.
Method A2.1.3.1: Based on Percentage
Like Method 2.4.1.1, many studies investigated the percentage of water use for toilet
flushing, for example, 31% (Memon et al. 2005) or 30% (Leggett 2001) in homes. In
office buildings, this figure is much higher—about 43% of water used for WC and 20%
for urinal (Leggett 2001). The quantity of water demand equals the product of the
percentage and the total amount of water consumption.
Method A2.1.3.2: Based on the Number of Households
Like Method 2.4.1.2, water demand (L/day) = NH × 100 (take Australia for example in
Table 5.2), where “NH” stands for the number of households
Method A2.1.3.3: Based on the Number of People
Water demand (L/day) = the number of people × 22 (MPMSAA 2008)
120
The previous methods and processes are summarized in Figure A2.1 on the next page.
The quantity of recycled water is highly dependant on the values of the quantity of supply
and demand. The choice of methods depends on available data.
121
Figure A2.1 Recycled Water Quantity Analysis
122
A2.1.4 Water Quantity Analysis of the Cases
A greywater system and a rainwater system are hypothetically installed in GB. Their water
quantity analyses are carried out in the following.
A2.1.4.1 Water Quantity Analysis of the Greywater System
Recycled greywater is intended to be used only for toilet flushing. The greywater supply and
demand are 1,704,240 and 2,714,160 gallons per year, respectively, as shown in Table A2.4.
Therefore, the recycled greywater quantity = min (supply, demand) = 1,704,240 gallons per year.
Table A2.4 Water Quantity Analysis of the Greywater System in GB
Method Percentage Quantity (gallon/year)
Greywater Supply A2.1.1.1 27% 1,704,240 (27% × 6,312,000)
Greywater Demand A2.1.3.1 43% 2,714,160 (43% × 6,312,000)
A2.1.4.2 Water Quantity Analysis of the Rainwater System
The projected roof are of GB is 3700m2, which equals 39826feet2. Toronto annual rainfall is
about 27.1 inches (Columbus Travel Media Ltd. 2009). Apply Method A2.1.2.2. Rainwater
supply = Square feet of projected roof area × Rainfall × 0.52
= 39826 × 27.1 × 0.52 = 561,228 gallons per year
Since 43% of water is used for toilet flushing in offices (Leggett 2001), and since rainwater
systems can be used only for half a year every year (there is no rainfall in winter), rainwater
demand equals 1,357,080 gallons per year (43% × 50% × 6,312,000 gallons per year). Therefore,
harvested rainwater quantity = min (supply, demand) = 561,228 gallons per year.
123
Due to the limited size of storage tanks in rainwater systems, only 90% of this amount can be
stored, so the actual harvested rainwater quantity is 505,109 gallons per year (90% × 561,228
gallons per year). This 90% discount is explained in the section of life cycle cost analysis of the
rainwater system.
A2.2 Life Cycle Cost Analysis
Capital cost is the sum of the costs of all components, which are explicitly shown in the layout of
a typical system in Figure A2.2 below. Besides capital cost, operation and maintenance costs and
benefits from water savings should be estimated for both the greywater and rainwater systems in
GB.
Figure A2.2 The conceptual layout of a rainwater or greywater system (Leggett 2001)
124
A2.2.1 Life Cycle Cost of the Greywater System
(1) Capital Costs
(a) Tanks
Greywater produced in GB is mostly coming from wash basins. Since people wash their hands
very often, greywater supply is constant. Therefore, storage tanks for greywater do not need to be
as large as those for rainwater harvesting. Research showed that a storage tank of 1 m3 is large
enough for toilet flushing in a building (Friedler, Hadari 2006). This study uses two tanks in the
greywater system: one is for collection situated at the basement and the other one for distribution
located at the top of the building. These two tanks are both 1 m3 in size, and poly tanks of this
size are approximately $200 each, so the capital costs for tanks are $400 in total.
(b) Pipes
Since greywater is separated from black water, there should be another set of pipes to collect
greywater from its sources (washbasins) and to deliver it to the collection tank. In addition, a
second set of pipes need to be placed to convey treated greywater to toilets. Note that horizontal
pipes that need to be installed are negligible compared to their vertical counterparts, because old
horizontal pipes directly connected to toilets can remain. Therefore, only two sets of vertical
pipes should be taken into account.
Each floor is estimated to be about 3.2 meters high. There are five floors in GB including a
basement and four floors above ground. Each floor has one cluster of washrooms. Cast iron pipes
of 6” are used, and ten feet of this kind is $133.52. The total estimated cost of pipes is shown as
follows.
125
The height of the building = 3.2m × 5 = 16m
1402$160.304810
133.522 cost Total =××
×=
(c) Pumps
The cost formula for pumps is 0286.0594 QC ⋅= (Friedler, Hadari 2006), where C is the cost of
pumps, and Q is the greywater flow measured in m3/day. In this case,
Q = greywater quantity per year/365 = 6451/365 = 17.7 m3/day.
Therefore, 645$7.17594594 0286.00286.0 =×=⋅= QC
(d) Treatment facilities
For RBC treatment facilities,
70419$7.171794518853)(1794518853 =×+=⋅+= InQInC (Friedler, Hadari 2006)
(e) Additional expenses
In order to take into account the costs of some small parts, such as fittings and valves, additional
expenses are estimated to be a 5% of the sum of the cost mentioned above.
Additional costs = 5% × (400 + 1402 + 645 + 70419) = $3643
(f) Labor costs
A labor’s wage in Toronto is $60-70 per hour in general, so a labor needs approximately $500
per day to lay out the system. Assume that 5 labors are involved and that they would work for 15
days to finish the retrofit. Therefore,
Labor cost = 5×500×15= $37,500
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(2) O & M Costs
(a) Treatment consumables
The most significant operation cost is the annual cost of disinfectants, which can be estimated by
the following formula.
C = 62.11 × Q = $1100 (Friedler, Hadari 2006), where C is the annual cost of chlorine solution;
Q is the greywater flow, which equals 17.7m3/day in this case.
(b) Electricity
Since there is no specific data related to the energy used in the greywater system in GB, a rough
estimation is derived from a similar case study, in which the electricity consumption of a large-
scale system is 774 kWh per year (Memon et al. 2005). In the GB case study, 800 kWh per year
is used. Toronto’s electricity price is 5.7¢/kWh (Ontario Energy Board 2009). Therefore,
Energy cost = 0.057×800 = $45.6 per year
(d) Labors for operation and maintenance
Labors are needed to clean filters and make sure that the system runs smoothly. Suppose there is
one labor required to operate and maintain the system an hour a week (Friedler, Hadari 2006).
Since a labor working for an hour costs $65, labor cost per year is $3380 ($65 × 52).
(3) Benefits from Water Savings
Greywater reuse can conserve water and hence reduce the cost on water bills. Last year GB
consumed water of 6,312,000 gallons, which incurred the cost of $51,316. As mentioned before,
using greywater for toilet flushing can save up to 27% of total water use, and the financial
127
benefit from which is about $13,855 per year.
(4) Feasibility Analysis
The cost components analyzed in the previous sections are summarized in Table 5.5. If the
system is installed in new buildings, less labor hours will be involved. Thus, instead of 5 labors
working for 15 days, 3 labors for 2 days are probably enough to complete the installation in new
constructions. Labor costs can be significantly reduced to $3,000, and other cost components
remain the same as those in the retrofit case. Assume discount rate to be 5% per year. The
payback periods of both systems can be obtained as shown in the bottom row of Table A2.5. The
payback period of new construction is much shorter than the retrofit one.
Table A2.5 Cost Summary for the Greywater Systems in GB
Item Component Retrofit New
Construction
Tanks 400 400
Pipes 1,402 1,402
Pumps 645 645
Treatment 70,419 70,419
Additional 3,643 3,643
Capital costs ($/year)
Labors 37,500 3,000
Total capital 114,009 79,509
Labors 3,380 3,380 O&M costs ($/year)
Consumables 1,100 1,100
128
Electricity 45.6 45.6
Total O&M ($/year) 4,525.6 4,525.6
Benefit from water savings ($/year) 13,855 13,855
Payback period (years) 19.4 11.4
Treatment costs account for 62% and 89% of the total capital cost in retrofit and new
construction, respectively. If the treatment cost can be reduced, the payback periods of the
greywater system can substantially shorten. An easy way to reducing treatment cost is to use less
advanced treatment processes, which however would compromise water quality. An alternative
way is to develop new treatment technologies that could maintain high water quality at low cost.
A2.2.2 Life Cycle Cost of the Rainwater System
(1) Capital Costs
(a) Tanks
Since rainwater is not provided as constantly as greywater, tank size for rainwater is usually
larger than that for greywater. There are two ways to design the size of rainwater storage tanks.
(i) In order to achieve almost 100 percent utilization of rainwater, tank size is determined by the
following formula.
Tank size = 20 × Recycled water quantity/365 (Leggett 2001)
(ii) In order to achieve almost 90 percent utilization of rainwater, the following formula is used
to decide rainwater tank size.
Tank size = 11.5 × Recycled water quantity/365 (Leggett 2001)
Although the tank decided by the first formula can store all the rainwater, its size is almost twice
the size decided by the second formula. Large tanks are often hard to be located and cost much
129
more than small ones, so the first formula is not practical. The second formula is applied, and
tank size = 11.5 × 561,228/365 = 17,683 gallons. The cost of the tank of this size is about
$7,200. In addition, the 1m3 cistern located at the top of the building for water distribution costs
about $200. The total cost of tanks is $7,400.
(b) Pipes
A set of pipes needs to be set up to collect rainwater from roofs and to deliver it to the collection
tank. In addition, a second set of pipes need to be placed to convey treated water to toilets.
Although most horizontal pipes directly connected to toilets can remain, the ones that collect
rainwater from roofs cannot be neglected. The vertical pipes are estimated to be the same as that
of greywater systems, $1402. The horizontal ones are estimated to be 15% of the vertical ones,
that is, $210. Therefore, the total cost of pipes is $1612.
(c) Pumps
Use the same formula as the one used in the greywater system
0286.0594 QC ⋅= (Friedler, Hadari 2006), where C is the cost of pumps; Q is the greywater flow
measured in m3/day; in this case, Q = 5.24 m3/day. Therefore,
623$24.5594594 0286.00286.0 =×=⋅= QC
(d) Treatment facilities
Since rainwater is not as polluted as greywater, rainwater treatment facilities are usually much
less complex than that of greywater and hence much cheaper. In this study, only filters are
installed, and the treatment installation costs would be approximately $1,000.
130
(f) Additional expenses
Like the greywater system, additional costs = 5% × (7400 + 1612 + 623 + 1000) = $532
(e) Labor costs
Labor cost is estimated to be the same as that of greywater system, that is, $37,500.
(2) O & M Costs
(a) Labors for operation and maintenance
Like the greywater system, one labor working for one hour a week is estimated to be required to
operate and maintain the system. Since rainwater systems are operated for only half a year every
year, the cost is half of its counterpart in the greywater system, that is, $1690 per year.
(b) Electricity
Like what is estimated for the greywater system, the electricity cost is $45.6 per year.
(3) Benefits from Water Savings
Last year 6,312,000 gallons water was consumed in GB, which incurred the cost of $51,316. As
stated before, using rainwater for toilet flushing can save up to 505,109 gallons per year, so the
financial benefit from which is about $4106.5 per year.
(4) Life Cycle Analysis
(a) Retrofit Buildings
The aforementioned costs and benefits of a rainwater system in GB are summarized in Table
A2.6 below. Like the greywater system, labor costs in new construction could significantly be
131
reduced to $3,000 if the rainwater system is installed in a new building. Other cost components
are the same as the retrofit case. The discount rate is also assumed to be 5% per year. As for
retrofit systems, the payback period is infinite, which means the rainwater system is not
economically feasible at all. The payback period for new construction is about 7.3 years, which
is even shorter than its counterpart.
Table A2.6 Cost Summary for the Rainwater Systems in GB
Item Component Retrofit New Construction
Tanks 7,400 7,400
Pipes 1,612 1,612
Pumps 623 623
Treatment 1,000 1,000
Additional 532 532
Capital costs
($/year)
Labors 37,500 3,000
Total capital 48,667 14,167
Labors 1690 1690 O&M costs ($/year)
Electricity 45.6 45.6
Total O&M ($/year) 1735.6 1735.6
Benefit from water savings ($) 4106.5 4106.5
Payback period (years) Infinite 7.3
Compared to the greywater system, the cost of the rainwater system is much less. Treatment
facilities in the rainwater system are not as costly as they are in the greywater system. Since
rainfall is sporadic, the tanks in the rainwater system are usually large and accounts for 15.2% of
132
the total capital cost. In addition, labor cost is still the lion’s share of the initial costs of the
retrofit system and is the main cause of the infinity of the payback period. In new constructions,
since the labor cost goes down, the payback period becomes quite short. Thus, rainwater
system’s payback periods are very sensitive to labor costs.
A2.3 Indirect Economic Analysis
An indirect economic analysis studies the expenditure savings of water and sewage
infrastructures due to reduced water use and sewage generation. Three methods were introduced
to estimate the amount of savings in Chapter 4. As for greywater and rainwater systems, the
regression analysis is the most convenient one. The regression formula is Δy = 0.0740325 × Δx,
where Δx is the avoided amount of water and sewage services, and Δy is the corresponding
amount of infrastructure expenditure savings as shown in Figure A2.3.
Water Use vs. Cumulative Capital Expenditures on Water and Sewage Infrastructures
100002000030000400005000060000700008000090000
7000 8000 9000 10000 11000 12000
Water and Sewage Flow (million m3/year)
Cap
ital E
xpen
ditu
res
on
Wat
er a
nd S
ewag
e S
yste
ms
(Mill
ion
$)
Figure A2.3 Water Use Savings vs. Infrastructure Expenditure Savings
A2.3.1 Indirect Economic Analysis of the Greywater System
Δy
Δx
133
Annual water saved in GB was 1,704,240 gallons, which equals to 6451.25 cubic meters. Note
that reusing greywater not only save mains water but reduce wastewater by the same amount as
well. In other words, one liter of greywater used corresponds to one liter of fresh water saved and
one liter of wastewater avoided. Therefore, Δx = 6451.25 × 2 = 12902.5m3. The annual saving of
water and sewage infrastructure expenditures, Δy = 0.0740325 × 12902.5 = $955.
Taking this indirect benefit into account, the payback periods on the city level can be obtained in
Table A2.7. The new payback periods are almost 3 years and 1.5 years earlier than the ones
without taking indirect cost into account in the retrofit and new constructions, respectively.
Table A2.7 Payback Periods of the Greywater Systems with Indirect Benefits
Items Retrofit New construction
Capital costs ($) 114,009 79,509
O & M costs ($/year) 4,525.6 4,525.6
Benefits ($/year) 14810 (13,855 + 955) 14810 (13,855 + 955)
Payback period (years) 17.0 10.0
A2.3.2 Indirect Economic Analysis of the Rainwater System
Like greywater reuse, rainwater harvesting not only saves mains water but reduce stormwater by
the same amount. Therefore, annual reduced water and sewage services, Δx = 1912.05 × 2 =
3824.1m3. The annual saving of water and sewage infrastructure expenditures, Δy = 0.0740325 ×
3824.1 = $283.1.
The new payback periods on the city level are shown in Table A2.8. Since the life of the system
is usually less than 50 years, the economic benefit of the retrofit system is still economically
134
infeasible. However, the payback period for new construction is only 6.4, which is quite
economically appealing.
Table A2.8 Payback Periods of the Rainwater Systems with Indirect Benefits
Items Retrofit New construction
Capital costs ($) 50,542 14,167
O & M costs ($/year) 1735.6 1735.6
Benefits ($/year) 4389.6 (4106.5 + 283.1) 4389.6 (4106.5 + 283.1)
Payback period (years) 62.3 6.4
A2.4 Input Output Analysis
The first step of an input output analysis is to find appropriate industry sectors in an input output
table. This research uses the US Department of Commerce 1997 Industry Benchmark, which has
491 industry sectors in total. The selected sectors for different components of greywater and
rainwater systems are shown in Table A2.9 and A2.10, respectively. Only the construction and
use phases are considered in the analysis. Assume that the life cycles of both greywater and
rainwater systems are 50 years.
Table A2.9 Input Output Sectors of the Greywater System
System components Cost Naics code Sector name
Initial Capitals (Construction Phase)
Plastic Tanks $400 326199 All other plastics products
Treatment equipment $70,419 333319 Other Commercial and
135
Service Industry Machinery
Manufacturing
Pumps $645 333911 pump and pumping
equipment manufacturing
Steel Pipes $1,402 331210 Iron, steel pipe and tube from
purchased steel
Additional (mostly fittings) $3,643 332996 Fabricated Pipe and Pipe
Fitting Manufacturing
Operation and Maintenance (Use Phase)
Treatment chemicals $1,100/year 32518 Other basic inorganic
chemical manufacturing
Electricity $45.6/year 22111 Power generation and supply
Water and Sewage Infrastructure Savings (Indirect Effects)
Infrastructures $955/year 230240 water, sewer, and pipeline
construction
Table A2.10 Input Output Sectors of the Rainwater System
System components Cost Naics code Sector name
Initial Capitals (Construction Phase)
Plastic Tanks $7,400 326199 All other plastics products
Treatment equipment $1,000 333319
Other Commercial and
Service Industry Machinery
Manufacturing
136
Pumps $623 333911 pump and pumping
equipment manufacturing
Steel Pipes $1,612 331210 Iron, steel pipe and tube from
purchased steel
Additional $532 332996 Fabricated Pipe and Pipe
Fitting Manufacturing
Operation and Maintenance (Use Phase)
Electricity $45.6/year 22111 Power generation and supply
Water and Sewage Infrastructure Savings (Indirect Effects)
Infrastructures $283.1/year 230240 water, sewer, and pipeline
construction
A2.4.1 Macro-economic Analysis
A2.4.1.1 Macro-economic Analysis of the Greywater System
Initial capital costs are measured in dollars, while the other two categories are measured in
dollars per year. Reduced infrastructure expenditures reduce economic activities, so the values in
the column of infrastructure expenditure savings are negative as shown in Table A2.11. The
greywater system is assumed to work for 50 years, and the O & M cost and infrastructure
expenditure savings accumulate during these years. The net values are the sum of all the costs
and benefits during the system’s lifespan. In other words, “net value” column = “initial capital”
column + (“O & M” column + “infrastructure expenditure savings” column) × 50.
Table A2.11 Total economic effects of the greywater system (Carnegie Mellon University Green
Design Institute 2009)
137
Initial
Capital
(million $)
O & M
(thousand
$/year)
Infrastructure
Expenditure Savings
(thousand $/year)
Net Value in
50 years
(million $)
Total Economic
activity 0.182 2.36 -2.04 0.197
The initial costs of the system cause economic activities in numerous industry sectors. This
economic stimulation takes place in large amount at the beginning of the project. The top 10
sectors that have the biggest economic activities caused by initial investment in the system are
shown in Table A2.12 in descending order of total economic activities.
Table A2.12 Top 10 Sectors in descending order of total economic activities caused by initial
costs of the greywater system (Carnegie Mellon University Green Design Institute 2009)
Order Sector Total Economic (thousand
$)
1 Other commercial and service industry machinery
manufacturing 71.3
2 Wholesale trade 9.57
3 Management of companies and enterprises 5.82
4 Iron and steel mills 5.28
5 Lessors of nonfinancial intangible assets 4.58
6 Fabricated pipe and pipe fitting manufacturing 3.90
7 All other electronic component manufacturing 3.30
138
8 Metal valve manufacturing 2.39
9 Motor and generator manufacturing 2.17
10 Semiconductors and related device manufacturing 2.10
Unlike initial costs, O & M costs and infrastructure expenditure savings take place every year, so
their economic effects would last at least 50 years. The O & M costs have positive impacts on
the economy, while the infrastructure expenditure savings have negative impacts. Their net
impacts on each industry sector are ordered according to the values of total economic activities.
Table 5.10 and 5.11 show the top 10 and bottom 10 sectors, respectively. The top 10 sectors are
the ones that benefit the most from the use of the greywater system, while the bottom 10 are the
ones that are hit the hardest.
Table A2.13 Top 10 sectors in descending order of total economic activities caused by O & M
costs and infrastructure expenditure savings of the greywater system (Carnegie Mellon
University Green Design Institute 2009)
Order Sector Total Economic ($/year)
1 Other basic inorganic chemical manufacturing 1161
2 Power generation and supply 102
3 Management of companies and enterprises 87
4 Lessors of nonfinancial intangible assets 45
5 Scientific research and development services 22
6 Industrial process variable instruments 19
7 Copper, nickel, lead, and zinc mining 18
139
8 Oil and gas extraction 18
9 Wholesale trade 17
10 Other nonmetallic mineral mining 15
Table A2.14 Bottom 10 sectors in descending order of total economic activities caused by O &
M costs and infrastructure expenditure savings of greywater systems (Carnegie Mellon
University Green Design Institute 2009)
Order Sector Total Economic ($/year)
1 Water, sewer, and pipeline construction -955
2 Architectural and engineering services -69
3 Other concrete product manufacturing -42
4 Metal valve manufacturing -31
5 Iron and steel mills -31
6 Metal tank, heavy gauge, manufacturing -28
7 Concrete pipe manufacturing -27
8 Machinery and equipment rental and leasing -23
9 Fabricated structural metal manufacturing -16
10 Retail trade -14
A2.4.1.2 Macro-economic Analysis of the Rainwater System
The following analysis is similar to what was applied to the greywater system above. The
relevant results are shown in the tables below. Table A2.15 reveals that the long term macro-
economic impact of the rainwater system installed in GB is negative.
140
Table A2.15 Total economic effects of the rainwater system (Carnegie Mellon University Green
Design Institute 2009)
Initial
Capital
(thousand $)
O & M
($/year)
Infrastructure
Expenditure Savings
($/year)
Net Value in
50 years ($)
Total Economic
activity 25.8 78.9 -605.8 -529.7
Table A2.16 Top 10 sectors in descending order of total economic activities caused by initial
costs of the rainwater system (Carnegie Mellon University Green Design Institute 2009)
Order Sector
Total Economic
(thousand $)
1 Plastics plumbing fixtures and all other plastics products 7.60
2 Iron, steel pipe and tube from purchased steel 1.72
3 Plastics material and resin manufacturing 1.26
4 Wholesale trade 1.15
5 Other commercial and service industry machinery
manufacturing 1.01
6 Iron and steel mills 0.84
141
7 Management of companies and enterprises 0.72
8 Pump and pumping equipment manufacturing 0.64
9 Other basic organic chemical manufacturing 0.59
10 Fabricated pipe and pipe fitting manufacturing 0.55
Table A2.17 Top 10 sectors in descending order of total economic activities caused by O & M
costs and infrastructure expenditure savings of the rainwater system (Carnegie Mellon University
Green Design Institute 2009)
Order Sectors Total Economic ($/year)
1 Power generation and supply 42.4
2 Coal mining 2.76
3 Pipeline transportation 0.806
4 Other maintenance and repair construction 0.602
5 Turbine and turbine generator set units manufacturing 0.0327
6 Support activities for other mining 0.0206
7 Colleges, universities, and junior colleges 0.0175
8 Tortilla manufacturing 0.0000456
9 Hunting and trapping 0
10 New residential 1-unit structures, nonfarm 0
Table A2.18 Bottom 10 sectors in descending order of total economic activities caused by O &
M costs and infrastructure expenditure savings of the rainwater system (Carnegie Mellon
University Green Design Institute 2009)
142
Order Sector Total Economic ($)
1 Water, sewer, and pipeline construction -283
2 Architectural and engineering services -26.8
3 Wholesale trade -17.8
4 Metal valve manufacturing -12.8
5 Other concrete product manufacturing -12.6
6 Iron and steel mills -12.2
7 Truck transportation -9.72
8 Metal tank, heavy gauge, manufacturing -8.23
9 Concrete pipe manufacturing -8.16
10 Machinery and equipment rental and leasing -8.14
A2.4.2 Environmental Analysis
A2.4.2.1 Environmental Analysis of the Greywater System
First of all, the most significant environmental benefit of the greywater system is the water
saving of 1,704,240 gallons per year. On top of that, the environmental benefits also include
reduced environmental effects caused by avoided infrastructure constructions. On the other hand,
the initial construction and the operation and maintenance cause adverse impacts on the
environment. The net effects of all these aspects are shown in Table A2.19. Note that since
avoided infrastructure construction reduces potential pollution, the values in this column are
negative.
Table A2.19 Environmental Effects of the Greywater System (Carnegie Mellon University Green
Design Institute 2009)
143
Environmental Category Initial
Capital
O&M for 50
years
Avoided
infrastructure
for 50 years
Net
SO2 121 445 -60 505
CO 501 315 -338 478
NOx 106 197 -122 181
VOC 68 70 -210 -73
Lead 0.16 0 -0.048 0.116
Conventional
Air Pollution
(kg)
PM10 61 34 -23 72
Global Warming Potential
(MTCO2E) 47.6 140 -42.9 145
Total Energy (GJ) 584 226 -549 2296
Total Releases/Transfers of
Toxic Substances(kg) 127 427 -33 522
Some environmental values, except for lead, global warming potential, and total toxic releases,
can be translated into monetary terms. Table A2.20 displays this translation for the greywater
system, and the total environmental monetary cost is about $3843.
Table A2.20 The monetary value of some environmental effects of the greywater system
(Carnegie Mellon University Green Design Institute 2009)
Category Environmental
Externality ($/t)* Amount (t) Value ($)
144
SO2 2000 0.505 1010
CO 520 0.478 249
NOx 2800 0.181 506
VOC 1600 -0.073 -117
PM10 4300 0.072 308
GWP 13 145 1888
Total 3842
* The data in the second column is referenced to (Matthews, Lave 2000).
A2.4.2.2 Environmental Analysis of the Rainwater System
The environmental analysis of the rainwater system is similar to what is done to the greywater
system. Besides the effects listed in Table A2.21, the rainwater system can save water of up to
505,109 gallons per year. In addition, the similar monetary translation is also applied to the
rainwater system in Table A2.22, and the total environmental monetary cost is $612.
Table A2.21 Environmental Effects of the Rainwater System (Carnegie Mellon University Green
Design Institute 2009)
Environmental Category Initial
Capital
O&M for 50
years
Avoided
infrastructure
for 50 years
Net
SO2 22 123 -18 0.128
CO 89 13 -100 1.172
Conventional
Air Pollution
(kg) NOx 21 59 -36 43
145
VOC 19 2.04 -62 -40.9
Lead 0.018 0 -0.014 3.58
PM10 11 3.06 -6.87 7.13
Global Warming Potential
(MTCO2E) 9.6 23.9 -12.7 20.8
Total Energy (GJ) 119 276 -163 232
Total Releases/Transfers of
Toxic Substances(kg) 18.6 5.49 -9.65 14.5
Table A2.22 The monetary value of some environmental effects of the rainwater system
(Carnegie Mellon University Green Design Institute 2009)
Category Environmental
Externality ($/t)* Amount (t) Value ($)
SO2 2000 0.128 256
CO 520 0.00117 0.61
NOx 2800 0.0430 121
VOC 1600 -0.0409 -66
PM10 4300 0.00713 31
GWP 13 20.8 270
Total 612
* The data in the second column is referenced to (Matthews, Lave 2000).
A2.5 Discussion and Conclusion
146
This chapter studied a hypothetical greywater system and rainwater system in Galbraith Building
from mainly economic and environmental aspects through life cycle and input output analyses.
In order to aid decision making, numerous aspects of the two systems are compared in Table
A2.23, from which several conclusions can be drawn as follows.
Table A2.23 Comprehensive comparison between greywater and rainwater systems
Category Greywater
System Rainwater System
Retrofit 19.9 Does not exist
New 11.4 7.4
Retrofit Indirect 17 62.3 Payback (Years)
New Indirect 10 6.4
Infrastructure Expenditure Savings ($/year) 955 283.1
Net Total Economic Activity (thousand $) 197 -530
Water savings
(gallons) 1,704,240 505,109
VOC (kg) -73 -41
SO2 (kg) 505 128
CO (kg) 478 1.17
NOx (kg) 181 43
Lead (kg) 0.117 0.00358
PM10 (kg) 72 7.13
GWP (MTCO2E) 145 20.8
Environmental
Effects
Energy (GJ) 2296 232
147
Total Rel/Trans (kg) 522 14.5
Overall Monetary
Value ($) 3843 612
(1) Systems installed in new buildings generally have much shorter payback periods than those
retrofitted because retrofit requires much more manpower. The installation of water recycling
systems should be well planned in the design phase of a building construction.
(2) The retrofit greywater system has shorter payback periods than the retrofit rainwater system,
because rainwater systems are sensitive to expensive labor costs. However, in new constructions,
the rainwater system has shorter payback period, because the treatment costs in rainwater system
are much less than those in greywater systems. Greywater systems can be more economically
appealing if new technology of low costs emerges.
(3) Infrastructure expenditure savings justify government subsidies for installing water recycling
systems in buildings. The subsidies can be in the form of tax credits to building developers or
users. As long as subsidies are less than the infrastructure expenditure savings, governments still
take advantage of the financial benefits. For example, the hypothetical greywater system in GB
can save up to $955 per year for governments. If they reimburse $400 every year to the ones who
bear the costs of installing the system, they still hold the benefit of $555 per year. If the
government gives out all the $955 every year throughout the system’s entire life, all the benefits
are returned to the ones who bore the installation cost. Rather than paying users every year,
governments can subsidize building developers with a lump sum of money, which should be
equivalent to the sum of the net present values of infrastructure expenditure savings throughout
148
the entire life of a system. Moreover, subsidies also promote the applications of water recycling,
thereby saving precious water resources for future use.
(4) As for net total economic activities taken place in all industry sectors, the greywater system
contributes much more than the rainwater system to the economy. Most of the contributions of
the greywater system happen in the construction phase. The rainwater system has a negative net
value, which means that the system does not benefit the economy in the long term.
(5) As shown in Figure A2.4, the rainwater system outperforms the greywater one. To make the
comparison more explicit, Figure A2.4 shows the percentage of all environmental factors. Note
that the values of Volatile Organic Compounds (VOC) are negative in both systems but are
shown in the same percentage format as other positive factors. The factors to the left of the
dotted line (water savings and VOC) are the only two factors in which the greywater system
outperforms its counterpart.
149
Figure A2.4 Environmental Comparisons between the Greywater and Rainwater Systems
(6) Water recycling systems increase employment opportunities, which increase government
revenue due to income tax increase. The details of this statement are discussed in the following.
The installation and maintenance of water recycling systems require labors, helping increase the
employment rate. The labor hours needed to install a retrofit system are 3000 (5 × 15 × 40) hours
and to install a system in new buildings are 240 (3 × 2 × 40) hours. The labor hours required to
operate and maintain a greywater system is about 52 hours per year, which lasts for 50 years; and
the labor hours to operate and maintain a rainwater system is 26 hours per year for 50 years.
On the other side, avoided infrastructure constructions reduce the required number of labors.
This employment decline can be estimated through an input output analysis. The on-line program
Eiolca gives the total number of employees required for an economic activity throughout supply
chains. As the greywater system reduces infrastructure expenditure of $955 per year, 0.0182
employee can be laid off, which is equivalent to 37.9 hours per year. Likewise, the rainwater
system saves $283.1 per year in infrastructure construction, 10.7 labor hours can be avoided
every year. All these data are summarized in Table A2.24.
Table A2.24 Labor hours required in the water recycling systems
Greywater (hours) Rainwater (hours) Items
retrofit New Retrofit New
Upfront (hours) 3000 240 3000 240
150
O & M 52 /year 52 /year 26 /year 26 /year
Indirect -37.9 /year -37.9 /year -10.7 /year -10.7 /year
Net labor hours
for 50 years 3703 943 3767 1007
From Table A2.24, a couple of conclusions can be drawn as follows.
(a) Retrofit systems increase the employment opportunities much more than the systems installed
in new buildings.
(b) The net labor hours of the greywater system are quite close to its counterpart, so these two
systems stimulate employment to the same degree.
(c) Since more employment means more income tax, government can earn more revenues due to
the implementation of water recycling, which reinforces the claim that government should
reimburse some money back to the users or fund research on improving the system so that fewer
labors are required.
151
Appendix 3 Regression Analysis
Regression analysis is a statistic technique that uses several sets of data to find out the
relationships between independent and dependent variables. An independent variable is the one
that can be actively changed and that determines the value of dependent variables. In the case of
water recycling, since reduced water use leads to the reduction of expenditures on water
infrastructures, water saving can be regarded as an independent variable, and infrastructure
expenditure saving is a dependent variable. In order to study the correlation between these two
variables, a linear regression analysis is adopted.
The foremost concern of a regression analysis is data quality, which affects the accuracy of a
regression result. Data of high quality should come from reliable sources and should be
processed properly. Although data used in this study are all from reliable sources such as
Environment Canada and Statistics Canada, many problems such as missing or inconsistent data
still exist. Therefore, properly processing these data becomes one of the most important things in
the regression analysis.
Water use data are provided by Environment Canada and are not consistent in many aspects.
First of all, data are not available for every year. Environment Canada carried out Municipal
Water and Wastewater Surveys (MWWS) only in 1983, 1986, 1989, 1991, 1994, 1996, 1999,
2001, and 2004, so the water use data are available only for these years. Secondly, the
measurements of the same sets of data are not consistent. In the surveys from 1983 to 1999, the
unit of water and wastewater flow is average daily flow (ADF), while in the surveys of 2001 and
2004 the unit is total annual water flow. Thirdly, the definitions of municipalities are not
152
consistent in different surveys. For example, in 1996’s survey, the population served by water
infrastructures in Toronto is recorded as 653,734, but in 1999’s survey, the population of
Toronto in 1996 is recorded as 2,385,421, which is likely caused by the changing definition of
the Toronto area. Lastly, the data of wastewater flow in the survey of 2001 are missing.
The data of capital investments on water infrastructures provided by Statistics Canada have
comparatively less problems. First of all, the data are available every year since 1964, which
makes data relatively abundant. In addition, there is no missing datum, and the measurements in
different years are the same. However, some problems also exist, for instance, the changing
definitions of some infrastructure categories due to the termination of an important periodical.
From 1964 to 1991, the expenditures on construction were published in Construction in Canada,
and water infrastructures were under the section of “waterworks and sewage systems”, which
includes “tile drains, drainage ditches, and storm sewers”, “water mains, hydrants and services”,
“water pumping stations and filtration plants”, and “water storage tanks(Statistics Canada 1964-
1991)” and which breaks the total expenditures into two types: new construction and repairs.
However, in 1992, this periodical was terminated, and this section was moved to another
periodical named Capital Expenditures by Type of Asset. The new periodical no long distinguish
new construction and repairs and divide the original one category into two—“waterworks
engineering construction” and “sewage engineering construction (Statistics Canada 1994).” The
former includes “reservoirs including dams”, “trunk and distribution mains”, “treatment plants
and pumping stations”, “storage tanks”, and “other waterworks construction (Statistics Canada
1994).” The latter includes “sewage treatment and disposal plants”, “sanitary and storm sewers”,
“lagoons”, and “other sewage system construction (Statistics Canada 1994).”
153
In the light of both datasets, original data were processed through the following steps.
(1) Capital expenditures on water infrastructure construction:
• Since the distinction of water and sewage infrastructures are not clear in the dataset of capital
expenditure from 1964 to 1991, the expenditures on the two infrastructures from 1991 to 2007
were summed up in each year.
• Get cumulative capital expenditures by adding up all the expenditure data of previous years
since 1953. For example, the cumulative capital expenditure in 1989 equals to the sum of all
the expenditures incurred from 1953 to 1989. The reason for doing this is explained later on.
After the two steps above, capital expenditures on water and sewage infrastructures are
consistently available on provincial or national scale from 1964 to 2007.
(2) Water use
• Water use data are given on a municipal scale, different from infrastructure expenditure data,
which are on a national or provincial scale. Therefore, the water use data should be adjusted to
the provincial or national level. In this study, data of all municipalities in the same series were
summed up and were transformed to the national level. The byproduct of this step is that it
makes water use data get around the problem of the changing definitions of some
municipalities.
• Since the dataset of capital expenditure is adjusted for both water and sewage infrastructures,
the water use data need to go through the same change. That is, sum up water and sewage
flows in each year.
• As stated before, from 1983 to 1999 the unit of water and sewage flow is average daily flow
(ADF), while from 2001 to 2004 the unit is total annual water flow. In order to make them in
line with each other, the data measured in average daily flow were changed to total annual
154
flow by multiplying by 365 days.
• To fill the missing data of sewage flow in 2001, the corresponding data in the two adjacent
years, that is, 1999 and 2004, were averaged. In other words,
Sewage flow in 2001 = 0.5 × (Sewage flow in 1999 + Sewage flow in 2004)
After the four steps above, water use data are consistently available on national level in year
1983, 1986, 1989, 1991, 1994, 1996, 1999, 2001, and 2004. The adjusted datasets are presented
in Table A3.1.
Table A3.1 Data for Regression Analysis
Year Water and Sewage Flow
(million m3/year)
Cumulative Capital Expenditures on Water
and Sewage Infrastructures (Million $)
1983 7310 22557
1986 7701 29586
1989 8798 36936
1991 9353 42521
1994 9539 49100
1996 10285 54574
1999 10686 63394
2001 10926 68827
2004 11378 79511
Run a simple linear regression. The relationship between Canada’s water use and cumulative
capital expenditures on water and sewage infrastructures is shown in the formula and Figure
A3.1 below.
155
y = 0.074 x + 5876
and R2 = 0.961 > 95%
Water Use vs. Cumulative Capital Expenditures on Water and Sewage Infrastructures
100002000030000400005000060000700008000090000
7000 8000 9000 10000 11000 12000
Water and Sewage Flow (million m3/year)
Cap
ital E
xpen
ditu
res
on
Wat
er a
nd S
ewag
e S
yste
ms
(Mill
ion
$)
Figure A3.1 Water Use vs. Cumulative Capital Expenditures on Water and Sewage
Infrastructures
Water saving in a water recycling system is Δx in Figure A3.2, and infrastructure expenditure
saving is Δy. Therefore, the infrastructure saving can simply be obtained by multiplied by the
value of slope, and only the slope of the formula is used. In other words,
Infrastructure expenditure savings = 0.0740325 × Water savings in a recycling system
This also explains why cumulative capital expenditures are calculated in the second step of data
processing for annual capital expenditures on water and sewage infrastructures. In addition, since
the slope is the only useful result obtained from this regression, the lack of data before year 1953
does not affect the accuracy of the slope, which is proved in the following.
156
Linear regression: ∧∧
+= 01 ββ xy , where ∧
1β is the best estimated value of the unknown parameter
1β , and ∧
0β is the best estimated value of the unknown parameter 0β . In an Ordinary Least
Squares (OLS), ∧
1β is expressed as follows.
∑∑
−
−−=
∧
21 )())((
xxyyxx
i
iiβ (*)
Suppose the cumulative value of capital expenditures before 1953 is a. Let ayy ii +=' . Replace
iy with 'iy in Formula (*).
ayn
nayny
y ii +=+
== ∑∑ ''
The slope '1
∧
β taking capital expenditures before 1953 into account is shown below.
∧∧
=−
−−=
−
+−+−=
−
−−=
∑∑
∑∑
∑∑
12221 )())((
)()]()[(
)()'')((
' ββxx
yyxxxx
ayayxxxx
yyxx
i
ii
i
ii
i
ii
Therefore, the slope keeps the same no matter how much capital expenditures before 1953 were.
157
Water Use vs. Cumulative Capital Expenditures on Water and Sewage Infrastructures
100002000030000400005000060000700008000090000
7000 8000 9000 10000 11000 12000
Water and Sewage Flow (million m3/year)
Cap
ital E
xpen
ditu
res
on
Wat
er a
nd S
ewag
e S
yste
ms
(Mill
ion
$)
Figure A3.2 The slope of the formula
Δy
Δx
158
Appendix 4 A review of the sustainability indictors used in other
studies This appendix reviews the sustainability indicators used in other studies and gives comments on
the indicators. In order to make comments clear and succinct, repeated comments are categorized
in five groups as follows.
(a) The indicators are hard to be measured;
(b) Their impacts are not significant compared to other factors;
(c) The indicators are not important for decision making;
(d) The technologies are not widely used in water recycling systems;
(e) The indictors are subsumed under some factors in the model.
Comments refer to their initial letters when applicable.
Table A4.1 Sustainability indicators used in previous studies
Indicators that are used in other models
Included
in the
model?
Comments
From (Hernández et al. 2006)
Reuse of nitrogen in agriculture (kg of N) No (b)
Reuse of phosphorous in agriculture (kg
of P) No (b)
Reuse of sludge in agriculture and
gardening (kg) No (b)
Reuse of thermal energy (Watt) No (d) Energy recovery is not
159
widely used in water recycling
systems
Increases the quantity of water available
(m3) Yes (e)
Guarantees supply in times when there is
a shortage (% confidence) No (a)
Water quality adapted to different uses is
obtained (kg waste) Yes (e)
Avoids constructing facilities to capture
and store freshwater (€) Yes (e)
Avoids water purification costs (€) Yes (e)
Avoids constructing pipes and water
distribution costs (€) Yes (e)
Biological risks associated to wastewater
reuse (People exposed) Yes (e)
Chemical risks associated to wastewater
reuse (People exposed) Yes (e)
Increase in the level of rivers (m3) No (b)
Avoids overexploitation of water-bearing
resources (Aquifer level, m) No (b)
Avoids water pollution (Waste
eliminated, kg) Yes (e)
Allows wetland and river habitat to be No (a)
160
recovered (Users)
Increase in pollution due to smell and
noise (Number of people) No (a)
Decrease in the value of land nearby (€) Yes (e)
Raises social awareness of a new water
culture (Number of people) No (c)
From (Urkiaga et al. 2008)
Substantial alteration of land use No (a)
Conflict with the land use plans or
policies regulations No (a)
Adverse impact on wetlands Yes (e)
Affection of endangered species or their
habitat Yes (e)
Populations displacement or alteration of
existing residential areas No (b)
Anthagonistic effects on a flood-plain or
important farmlands No (b)
Adverse effect on parklands, reserves, or
other public lands designated to be of
scenic, recreational, archaeological, or
historical value
No (b)
Significant contradictory impact upon
ambient air quality, noise levels, surface
Partially
Yes (e)
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or groundwater quality or quantity
Substantial adverse impacts on water
supply, fish, shellfish, wildlife, and their
actual habitats
No (e)
OECD indicators related to water quality and resources (Lundin 1999)
Oxygen and nitrate content in selected
rivers Yes (e)
Sewerage connection rates Yes (e)
Public expenditure on wastewater
treatment Yes (e)
Withdrawal of freshwater Yes (e)
Intensity of use for irrigation, households
and industry No (b)
Prices for public water supply Yes (e)
UNCSD indicators related to urban water systems (Lundin 1999)
Rate of growth of urban population No (b)
Annual energy consumption Yes (e)
Annual withdrawal of
freshwater/annually available volume Yes (e)
Domestic water consumption Yes (e)
Population growth in coastal areas No (b)
Releases of N and P Yes (e)
Use of fertilizers Yes (b)
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Use of agricultural pesticides No (b)
Irrigated portion of arable land No (b)
From (Balkema et al. 2002)
• Economical indicators:
Costs; Labour Yes (e)
• Environmental indicators
Accumulation; Biodiversity/land fertility
Dissication; Export of problems in time
and space; Extraction; Integration in
natural cycles; Land area required/space
Odour/noise/insects/visual; Optimal
resource utilisation/reuse; Water
Nutrients; Energy; Raw materials;
Pathogen removal/health; Pollution
prevention; Emissions; BOD/COD
Nutrients; Heavy metals; Others;
Sludge/waste production; Use of
chemicals
Partially
Yes (e)
• Technical indicators
Durability; Ease of construction/low tech
Endure shock loads/seasonal effects;
Flexibility/adaptability; Maintenance
Reliability/security; Small
No (a)
163
scale/onsite/local solution
• Social–cultural indicators
Awareness/participation;
Competence/information requirements
Cultural acceptance; Institutional
requirements; Local development
Responsibility
No (b) or (c)