Economic impact assessment indicators of circular economy in a decentralised circular water system - Case of eco-touristic facility.

ABSTRACT

The transition from a linear make-use-dispose model to a Circular Economy (CE) model has gained momentum in recent years. To date, substantive efforts have been put by researchers and practitioners on environmental assessment of circular water systems (CWS). Yet, the economic aspect of CWS has not received the same attention. This research is an attempt to bridge this gap by evaluating the economic viability of a decentralised hybrid rainwater- wastewater-greywater (HRWG) system. For this purpose, a framework of Shadow Pricing- Life Cycle Cost-Benefit (SLCCB) to analyse a CWS is proposed. Shadow pricing could compliment the established Life Cycle Costing (LCC) methods. The main parameters (costs and benefits) of the proposed SLCCB framework are divided into two types Internal and External. The Internal pricing covers the capital expenditure (CAPEX) and operational expenditure (OPEX), while the External pricing covers the environmental and social costs-benefits of implementing CWS. The proposed SLCCB added to the classical Net Present Value (NPV) and Payback Period (PP) calculations could provide a more realistic evaluation of the economic performance of CWS. To demonstrate the efficacy of the new CE model, a new CWS in Greece was studied. A sensitivity analysis was conducted to assess the impact of the reclaimed water tariffs, internal costs, life span of the project, and the annual discount rate on the SLCCB. The results of the study reveal that the SLCCB of CWS is highly sensitive to these parameters. The economic feasibility of CWS boost with increasing discount rate and reclaimed water tariffs, as well as with decreasing project's life span and internal costs. The conclusion of this research demonstrates that investment in CWS is economically viable if External parameters are taken into consideration.