Economics of Managed Aquifer Recharge

Managed aquifer recharge (MAR) technologies can provide a variety of water resources management benefits by increasing the volume of stored water and improving water quality through natural aquifer treatment processes. Implementation of MAR is often hampered by the absence of a clear economic case for the investment to construct and operate the systems. Economic feasibility can be evaluated using cost benefit analysis (CBA), with the challenge of monetizing benefits. The value of water stored or treated by MAR systems can be evaluated by direct and indirect measures of willingness to pay including market price, alternative cost, value marginal product, damage cost avoided, and contingent value methods. CBAs need to incorporate potential risks and uncertainties, such as failure to meet performance objectives. MAR projects involving high value uses, such as potable supply, tend to be economically feasible provided that local hydrogeologic conditions are favorable. They need to have low construction and operational costs for lesser value uses, such as some irrigation. Such systems should therefore be financed by project beneficiaries, but dichotomies may exist between beneficiaries and payers. Hence, MAR projects in developing countries may be economically viable, but external support is often required because of limited local financial resources.