The Benefit: Cost Analysis Tool has been updated

Maintaining and updating WSC tools is a key strategy of Water Sensitive Cities Australia’s mission to mainstream water sensitive cities principles and practices.

One of our flagship tools is the INFFEWS (Investment Framework for Economics of Water Sensitive Cities) Benefit: Cost Analysis (BCA) Tool. It applies a structured and systematic process to comparing the benefits and costs of water sensitive projects, to determine whether they are worthwhile. Based on sound economics, it guides users through key steps to define the project, identify options, identify information requirements and gaps, and then undertake the BCA assessment.

The tool’s creator, Professor David Pannell (University of Western Australia), recently updated it to improve its functionality. Changes to the updated version include:

• allowing for more custom benefits and costs
• ranking projects when the budget is constrained, by identifying which costs have budget constraints and which ones don’t
• allowing for benefits to ramp up over time, rather than have them start suddenly
• identifying if the internal rate of return (IRR) might have more than one value
• allowing the discount rate to remain constant over time, or to vary (by specifying a different discount rate for each decade)
• basing the breakeven analysis and sensitivity index calculation on net present value rather than the benefit–cost ratio (BCR) (which avoids complexities created from including 2 alternative versions of the BCR)
• generating 2 new charts showing net benefits over time overall, and for the project organisation
• generating 2 new charts, showing cumulative net benefits over time overall, and for the project organisation
• generating 4 new charts showing the distribution of benefits and costs in different ways.

Head to the Knowledge Platform and follow the links to download the latest version of the tool. You'll also find a detailed explanation of the latest changes, updated guidance for users, as well as other resources about the tool.

To date, the tool has been used extensively nationally and internationally. Examples include:

• assessing the benefits of water sensitive interventions in Townsville (Qld) (e.g. passively irrigated street trees, wider verges and rainwater tanks)
• comparing the benefits and costs of alternative development typologies for infill developments in Norman Creek (Qld), Salisbury (SA) and Knutsford (WA)
• supporting a business case for a stormwater harvesting scheme for Princes Park in Melbourne (Vic)
• assessing flood mitigation responses in China, Thailand and Vietnam that also contribute to creating climate resilient cities
• understanding how the benefits and costs of creating a wetland and naturalising Taralla Creek in Melbourne (Vic) were distributed among different stakeholders
• identifying the benefits of creating a wetland and stormwater harvesting system at Oaklands in Adelaide (SA)
• prioritising investments on passively irrigated street trees in Ballarat (Vic).

If you have any questions about the tool, you can contact us at admin@crcwsc.org.au. Alternatively, you could contact one of our preferred providers.

We will also update the Values Tool in 2022. You can find out more in future editions of Watersense, or by becoming a WSCA partner.