Economics and business cases

Introduction

The CRCWSC economics and business cases research has focused on valuing the multiple benefits of water sensitive initiatives. Water sensitive investments can help create cities that are more sustainable, liveable, resilient and productive. However, some of these benefits can be difficult to quantify and are often not factored into business cases or investment decisions.

We have produced several economics and business case tools to help practitioners identify and quantify benefits, and include them in analysis to improve decision making about water sensitive investments.

Research findings and reports

Our research on the benefits of water sensitive investments has identified some interesting findings:

You will find a range of research reports on economics and business cases under the categories below.

Non-market valuation

Willingness to pay

Social preferences

Cost-effectiveness

Economics and flood risk management

Other

Research application

Our research on economics and business cases has been applied to a range of projects, including:

  • A worked example of the BCA Tool and the Value Tool related the Princes Park Stormwater Harvesting project in Melbourne, Victoria.
  • A case study about Belle View Estate (a proposed residential development east of Perth, WA) demonstrated how to identify and monetise non-market values from water sensitive urban design (WSUD).
  • The report about transforming the Subiaco Wastewater Treatment Plant (Perth, WA) into the Subiaco Strategic Resource Precinct demonstrated how to use non-market valuation techniques (such as stated preferences) to estimate people's willingness to pay for recycled water. For a representative organisation, the estimated willingness to pay for recycled water for outdoor use was $112 per megalitre. The report also examined demand for recycled water.
  • The water sensitive business case framework for the Fishermans Bend redevelopment highlighted the need for economic assessments to consider opportunity costs and non-market benefits.
  • Development of an investment framework to re-framing the business case around investments with broader outcomes has been achieved in the Norman Creek catchment.
  • The Greening the Pipeline project used two non-market valuation techniques to estimate the value of improving the Main Outfall Sewer reserve in Melbourne.
  • We estimated the biophysical impacts and economic value produced by urban heat mitigation in a greenfield residential development in Melbourne's west. Urban greening and integrated water management could cool summer temperatures by 2oC, producing economic benefits per household of between $490 and $1,540.
  • We tested South Australia’s Monetised Benefits of WSUD tool, to ensure it is robust and incorporates evidence-based values for WSUD benefits.
  • We are using non-market valuation techniques to analyse the value of properties and understand community views on housing design options in two urban redevelopment areas, Arden Macauley (Vic) and Salisbury East Precinct (SA). We expect to release reports about these case studies in late 2020.

Tools and guidelines

Several tools and guidelines, informed by our economics and business case research, have been developed for use by practitioners including:

Infographics

Infographic 1

Building a business case for a water sensitive city. (CRC for Water Sensitive Cities, 2014. Strategies for preparing robust business cases. Melbourne, Australia: CRC for Water Sensitive Cities, p. 5.)

Infographic 2

Key willingness to pay values (CRC for Water Sensitive Cities, 2017. Valuing the benefits of local stormwater management. Melbourne, Australia: CRC for Water Sensitive Cities, p. 2.)

Infographic 3

Total Economic Value framework showing costs, benefits and examples of WSUD (CRC for Water Sensitive Cities, 2016. Enhancing the economic evaluation of WSUD. Melbourne, Australia: CRC for Water Sensitive Cities, p. 10.)

Infographic 4

Summary of benefits and valuations from CRCWSC research (CRC for Water Sensitive Cities, 2016. Enhancing the economic evaluation of WSUD. Melbourne, Australia: CRC for Water Sensitive Cities,  p. 12.)

Infographic 5

Non-market valuation methods (Catchlove R, 2020. Constructing business cases for water sensitive investments: a handbook for local government. Melbourne, Australia: CRC for Water Sensitive Cities, p. 17.)

Infographic 6

Steps to include non-market outcomes in policy analysis (Iftekhar et al., 2020. INFFEWS Value tool: guideline (version 2). Melbourne, Australia: CRC for Water Sensitive Cities, p. 5.)

Infographic 7

Decision tree to use the Value Tool (Iftekhar et al., 2020. INFFEWS Value tool: guideline (version 2). Melbourne, Australia: CRC for Water Sensitive Cities, p. 34.)

Infographic 8

Comparison of benefits and costs for Taralla Creek (CRC for Water Sensitive Cities, 2020. INFFEWS benefit cost analysis tool: booklet of applied examples Melbourne. Melbourne, Australia: CRC for Water Sensitive Cities, p. 11.)