Water agencies and utilities wishing to support water-sensitive projects face the challenge of deciding which of the many possible projects they should support with their limited resources. Projects vary greatly in their benefits and costs, so selecting the best projects can make a major difference to the level of benefits that can be generated for a given budget. Key principles for ranking projects, common mistakes to avoid and suitable formulas to use as metrics for ranking projects are developed and explained.

The formulas – designed to strike a balance between theoretical rigour and reasonable simplifications – account for valuation of benefits, the effectiveness of management, time lags, behaviour change, various risks and various costs. Sample templates for project proposals and spreadsheets for ranking projects are provided, to make it easy to put the principles into practice.