The price of dirty water : pollution costs in the Sebou Basin

_ ~~~~~E N V I R O N M E N T B 3 ~D E P A R T M E N T _ *^ P A P E R S PAPER NO. 038 TOWARD ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT a T ENVIRONMENTAL ECONOMICS SERIES The Price of Dirty Water: Pollution Costs in the Sebou Basin Claudia W. Sadoff June 1996 A Environmentally Sustainable Development The World Bank ESD  Pollution and Environmental Economics Division The Price of Dirty Water: Pollution Costs in the Sebou Basin Claudia W. Sadoff June 1996 Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and discussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank.  Contents Foreword 1. Overview ..........................................................1 The Sebou Basin ..........................................................1 Background .........................................................1I Water Quality .........................................................I Putting a Price on Pollution ..........................................................4 Costs and Values ..........................................................4 Methodology and Assumptions .........................................................4 2. The Cost of Inaction ..........................................................6 Water Treatment Costs ..........................................................6 Health Costs ..........................................................8 Fisheries Costs ......................................................... 13 Agricultural Exports Costs ......................................................... 15 Conclusion ......................................................... 16 References ......................................................... 19 Figures, Tables, and Annexes Figures Figure 1: Pollution Scenarios ..........................................................5 Figure 2: Average Water Treatment Costs ..........................................................7 Figure 3: Pollution Costs by Source ......................................................... 17 Tables Table 1: Sources of Pollution in the Sebou Basin ...................................................... 2 Table 2: Water Quality in the Sebou Basin ...................................................... 3 Table 3: Water Treatment Costs: 1995-2020 ......................................................8 Table 4: Diarrhea Costs: 1995-2020 .......................................................9 Table 5: Cholera Costs: 1995-2020 ...................................................... 11 Table 6: Typhoid Costs: 1995-2020 ...................................................... 13 Table 7: Fisheries Costs: 1995-202 ...................................................... 14 Table 8: Agricultural Exports Costs: 1995-2020 ...................................................... 16 Table 9: Summary of Conservative Pollution Cost Scenarios: 1995--2020 ......................... 18 Environmental Economics Series  The Prce of Dirty Water: Pollution Costs in the Sebou Basin Annexes Water Treatment Costs 1. Scenario 1: Supplementary Surcharge ............................... 21 2. Scenario 2: Pollution Premium ............................... 22 Health 3. Diarrhea Morbidity ............................... 23 4. Diarrhea Mortality ............................... 24 5. Cholera Morbidity: Scenario ............................... 26 6. Cholera Mortality: Scenario 1 ............................... 28 7. Cholera Morbidity: Scenario 2 ............................... 30 8. Cholera Mortality: Scenario 2 ............................... 32 9. Typhoid Morbidity: Scenario 1 ............................... 34 10. TyphoidMortality: Scenario I ............................... 36 11. Typhoid Morbidity: Scenario 2 ............................... 3 7 12. Typhoid Mortality: Scenario 2 ............................... 39 Fisheries 13. Alose Production: Scenario 1 ............................... 40 14. Eel Production Scenarios I and 2 ............................... 41 15. Alose Production: Scenario 2 ............................... 41 Agriculture 16. Crop Refusals ............................... 43 Environment Department Paper  Foreword This report is part of a series of assessments the well-being of the country's human capital. being undertaken on the environmental Preservation of water quality and situation of a major watershed in Morocco, improvement of sanitary conditions of the the Sebou River Basin. A program of population are expected to play a crucial role investments to contain pollution and improve in the development of the country. Accepting conservation of natural resources in this basin or rejecting certain levels of water pollution is now under preparation. The report is an by deferring mitigation investments to the attempt to quantify the cost of pollution in future rather than implementing them in the this basin, defined as the direct economic present is, however, a matter of economics impact of pollution. and social acceptance. The tight budgetary conditions in most countries, and the The issue here is to give an economic conflicting demands on available fiscal dimension to the costs of not taking actions in resources demand that public spending and environmental management. These costs are policy decisions have a convincing economic very often hidden. This report identifies them justification. This study is an attempt to and proposes a methodology to establish the provide a basic yet sometimes difficult extent to which governments can afford a assessment of the economic value of inaction course of inaction in preserving the so that informed and appropriate policy environment. decisions can be made. We are pleased that this report is being issued in the Environment The issues discussed in the report are Department Working Paper Series because common to many countries and are as acute we are confident that the methodology in Morocco as in most arid areas. Water is a proposed and the issues dealt with are of critical economic variable that also affects common interest. Anir Al-Khafaji Chief Private Sector Development, Finance and Infrastructure Division Magrheb and Iran Department Environmental Economics Series  1 Overview The Sebou Basin Water Quality Background Water pollution in the Sebou Basin has overwhelmed the rivers' self-cleansing and The Sebou River Basin in northern Morocco renewal capacity, and, at various points in the runs roughly 500 kilometers in length, from the rivers, water quality is now unsuitable by Middle Atlas Mountains in the east to the international standards for any use.' The Atlantic Ocean in the west. The area of the incidence of water borne diseases is dispro- basin, some 40,000 square kilometers, is portionately high in the Sebou Basin, and fish among the most densely populated regions in populations are all but extinct. For several of Morocco, and home to 4.5 million people -- 18 the past five years Morocco's water authority, percent of the country's population. The Sebou l'Office National de l'Eau Potable (ONEP) has Basin is an important source of water in this been forced to shut down water treatment arid country, accounting for 30 percent of total plants along the Sebou Basin because the water water resources, and more than 70 percent of was too polluted to be treated. Recurrent costs regional water surpluses. The govenmment is for routine water treatment in the basin are now developing plans to transfer approximately roughly three times higher than elsewhere in 470 million cubic meters of surplus water per the country, and rising as pollution increases. It year from the Sebou River Basin to the Bou is estimated that by the year 2020 waste Regreg Basin, a water deficit area discharges will more than double in the Sebou Basin.2 Within the basin there are large urban centers, extensive agricultural areas and both modern In the upper basin, urban domestic waste and and artisanal industries, all of which contribute artisanal industrial waste are the predominant to the basin's water pollution problems. The sources of water pollution. The city of Fes major urban centers in the upper basin are Fes produces large volumes of untreated domestic and Meknes. The lower basin meets the sea waste and artisanal waste such as tanneries' near the cities of Kenitra, Rabat and Sale. chemicals, resulting in particularly severe Agricultural activities center around Gharb pollution downstream from Fes. Preliminary where two million hectares -- 25 percent of the research suggests the Sebou River may be dead country's arable land -- are cultivated. Approximately 200 industries of varying scale operate in the Sebou Basin. There are thus a range of pollution sources; urban, agricultural, Mikiyasu Nakayama, "Water Pollution by Heavy industrial, and artisanal; and a range of organic, Metals in the Sebou Basin." Draft, January, 1995. chemical and heavy metal pollutants. 2 World Bank, "Morocco Water Sector Review." January, 1994. Environmental Economics Series  The Cost of Dirty Water: Pollution Costs in the Sebou Basin Table 1. Sources of Pollution in the Sebou Basin Total for the Sebou Basin Share by Sector Urban Pollution BOD 37,332 59% COD 97,478 627a Phosphorus 8,296 59% Nitrogen 1,867 23% Agicultural Pollution Phosphorus 5,717 40% Nitrogen 5,430 66% Industrial Pollution BOD 25,909 41% COD 60,335 38% Phosphorus 167 1% Nitrogen 908 11% Metals 140 74% Artisanal Pollution BOD 360 1 % COD 600 0% Metals 48 26% Totals BOD 63,601 COD 158,413 Phosphorus 14,180 Nitrogen 8,205 Metals 188 Source: Scandiaconsult, 1993 for the first 100 kilometers outside Fes.3 1970s.5 The primary sources of water Levels of chromiurn and lead in the water pollution in this area are fertilizers and downstream of Fes are 10 to 100 times pesticides, and agro-industrial waste from internationally acceptable levels.4 sugar and olive oil processing facilities. At the Barrage de Garde, north of Kenitra near the The lower Sebou Basin is one of the most Atlantic coast, the water quality is unsuitab]le polluted areas in the kingdom, and has been even for irrigation. The level of water pollution considered critically polluted since the early at Kenitra recently forced authorities to abandon a water transfer scheme between 3lHydraulic Administration, "Annual Water Quality Reports of the Directorate of Research and ONEP, "Regional Seminar on Fresh Water Quality Planning." 1991-1992. and Efficiency: Optimizing Sustainable Beneficial 4Mikiyasu Nakayama, 1995. Use in Arab Countries." October, 1993. 2 Envirornent Department Papers  Overview Table 2. Water Quality in the Sebou Basin Area Water Quality Indicators of Origin Pollution Sebou River between the Fes Bad CF/100 ml: 105 Fes urban waste and Meknes rivers NH4+: 4 mg/I Lower Sebou Basin BadNery bad CF/100 ml: 105 Agro-industry BOD5:160 mg/i COD: 260 mg/i N: 6 mg/l _____ _____ ____ __ __ _____ ____ N H 4+: 4 mg/i R'dom River downstream of BadWery bad CF/100 ml: 105 Urban waste of Meknes and Sidi Kasem BOD5: 20 mg/i Meknes and Sidi COD: 80 mg/l Kasem, and petroleum refinery waste Inaouene River downstream of Bad BOD5: 15 mg/i Taza -rban waste Taza COD: 50 mgA Beht River downstream of Sidi BadNery bad BOD5: 26 mgA Sidi Slimane urban and Slimane COD: 90 mgA agro-industrial industry N: 5 mgA NH4+: 4 mg/i Khemis River downstream of Very bad CF/I 00 ml: 6 .103 Khemisset urban waste Khemisset BOD5: 45 mg/l COD: 100 mg/l NH4+: 5 mgA Sefrou River downstrean of Very bad CF/100 ml: 2.105 Sefrou urban and agro- Sefrou BOD5: 15 mg/A industrial waste COD: 50 mg/i _NH4+: 8 mg/i I Source: Conseil Superieur de l'Eau et du Climat 6eme Session, 1994 Note: N is measured as total nitrogen Kjedahl Kenitra and Casablanca, and enlarge a planned The quality of both surface and ground water in dam to supply Casablanca with water at a the Sebou Basin is declining due to pollution significantly higher cost. from urban, industrial, and agricultural sources. Critical pollution levels have been reached near Ground water sources are also affected. In the cities of Fes, Meknes, Sidi Kacem, Sidi Gharb, saline, chloride and nitrate levels in the Slimane, Taza, Khemisset and Tiflet.7 In the ground water are generally very high. Outside agricultural areas, seasonal increases in agro- Fes, Sidi Slimane, Souk el Arbaa and Si Yahya industrial processing wastes coincide with du Gharb ground water is considered annual low water levels, increasing the hazardous, particularly with regard to nitrate concentration of pollutants and magnifying levels. The ground water of Saiss is evolving their effects. In addition to the organic wastes in the same direction.6 generated by urban areas, bacteriological and toxic wastes also pose serious threats to the local populations. 6Hydraulic Administration, 1991-1992. Ibid. Environmental Economics Series 3  The Cost of Dirty Water: Pollution Costs in the Sebou Basin Putting a Price on Pollution Costs and Values Costs and Values It must be emphasized that a distinction is The costs of pollution are as real as they are drawn here between costs and values. The difficult to calculate. While many consider calculations in this paper refer only to the clean water a luxury of the developed costs of pollution, defined as the direct countries, in fact highly polluted water can be economic impacts of pollution. In this sense, just as costly. The hisconception that dirty labor productivity lost as a result of a water is always cheaper than clean water stems premature polluion-related death, or the loss in part from the fact that the costs of pollution of fisheoes production would be direct are ill-defined and thinly spread arnong a host econohedic costs of pollumon The value of actors over time, whereas treatment costs attached to the loss of a human life to a result in concrete, immediate expenditures. In pollution-related illness, or the value attached the Sebou Basin polluted water has clear to the eradication or extinction of a fish adverse economic impacts on water treatment species IS a more normatveJudgment, and IS costs, human health and productivity, fisheries not captured in these costs. The full value of production and agricultural eamings. losses associated with water pollution go pcwell beyond the scope of this analysis. There are also other less easily quantifiable costs of water pollution. Suffering and loss of losses associated with water treatment costs, life resulting from water bome diseases are health costs, and fisheries costs attributable to substantial costs associated with water the Sebou Basin 's particularly high level of pollution. Tourism is likely to be affected by water pollution. These sums reflect the water pollution in the Sebou Basin, both amount that could reasonably be expected to be traditional tourism which requires large saved by the implementation of an integrated amounts of acceptably clean water, and any river basin clean-up program involving the potential ecotourism. Polluted waters will rehabilitation and improvement of sewerage diminish the recreational and aesthetic benefits and waste water treatment facilities; actions to of the rivers enjoyed by the local population, minimize and prevent industrial pollution, and biodiversity will be threatened by excessive fertilizer and pesticide impacts; and improved pollution levels. These costs, however real, are natural resource management, information difficult to quantify as they deal both with collection and environmental monitoring. A intangible values (suffering, death, aesthetics program of this type, estimated to cost some and species survival), and hypotheticals US$240 million, is now being prepared with (potential tourism). These less tangible costs World Bank assistance. are not quantified in this analysis. The cost calculations assume that pollution Methodology and Assumptions levels in the future would remain constant in the absence of a clean-up program. In reality, The costs of water pollution in the Sebou River pollution levels will almost certainly grow in Basins are identified and estimated over the proportion to the population and economy, and period 1995 to 2020 as the direct economy are likely to more than double by the year 2020. The assumption of constant pollution levels is therefore extremely conservative and will lead 8 to a significant underestimation of the level of The Sebou River Basin is defined, by the______________________ Epidemnilogical Department of the Ministry of Public Sefrou. Ben Slimane, Kh6misset, Rabat, Sale, Health, to include the cities of Kenitra, Sidi Kasem, Dkhirat Temara and Ifrane are catego,zed as M. Ismalia, M. El Menzah, Fes Medina, Fes El an d If r ner Basin. Hajeb, Fes Jdid, Taunate, M. Y. Zouagha, and annexes to the Sebou River Basin. 4 Environment Department Papers  Overview pollution costs actually accrued. The would be generated by the likely increase im assumption is made because there are no data pollution levels in the future, and the amount available on the costs of pollution at higher that may be underestimated as a consequence levels, so projections assuming increasing of the conservative assumptions made here. In levels would require assumptions regarding addition, it is assumed that the establishment of hypothetical relationships between costs and a pollution control program would reduce, but pollution at previously unobserved levels. not elimninate, pollution-related costs. The area Instead, an assumption of constant pollution labeled 'C' represents costs of water pollution levels and actual data regarding costs at that would not be eliminated by a clean-up observed pollution levels are used. prograrn, such as basic treatment costs for water of average pollution levels. Together In the diagramn below, the cost of water these assumptions essentially provide a pollution, as defined in this analysis, is minimum estimate of costs that could be saved represented by the area labeled 'A'. The area by implementation of a pollution control labeled 'B' represents additional costs that programn. Figure 1: Pollution Scenarios U) 0 . ... 0..... e) 0 0 - | -( o E E -- E i E - - i,- i i 0-E -y i - :~~~~~~~~~~. . . . . . . .. .. . . - . . , - , . . . . 0~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~ . . . ............"""''' '' ...'' ' '- @- .N ( (. . . I. _ Enirnmnal Econoic SeriesA_ C~ ~ ~~~~~~~~~~~~........ .... ............. a) o 3 o _N CN bI N 2 Time Enviroinnental Economiics Series 5  2 The Cost of Inaction Water Treatment Cost implementation of an effective pollution control 10 program. Significant costs associated with high levels of water pollution will be found in the additional Water treatment costs in the Sebou Basin were expenses that are imposed by the need for more calculated in two ways. The first scenario intensive water treatment processes. In the calculated the supplementary surcharge Sebou Basin, the cost of water treatment incurred just during the peak pollution period appears to be roughly three times the national of December through March each year. The average cost per cubic meter of water treated in second scenario attempted to capture a Morocco.9 Treatment costs are particularly pollution premium, defined as the share of high December through March, when agro- annual treatment costs attributable to the industrial pollutant releases are at their peak, Basin's high pollution levels year round. Both and seasonal low water levels increase the are conservative estimates in that they assume concentration of all pollutants. During these that treatment plants would not be forced to heavy pollution months, treatment plants in the shut down as they have been in the past, but Sebou Basin have been periodically closed over that water treatment would continue throughout the past five years because the level of the year without the need for costly alternative pollutants in the intake water exceeded sources of water. Furthermore the estimates do treatable levels. When operating during these not attempt to capture the elevated cost of months, the plants required supplementary ground water treatment that is necessitated by chemical reagents and procedures to treat the infiltration of pollutants. The two scenarios are highly polluted water. While basic treatment is schematically represented in the diagram a standard cost entailed in the provision of below. water, the cost of these supplementary measures are effectively a surcharge imposed Scenario 1, which calculates the supplementary by excessive pollution. They are a direct result surcharge incurred during the peak pollution of the unusually high volume of pollutants periods, is particularly conservative because it released into the waters oflthe Sebou Basin, reflects added costs of treatment only during and costs that could be avoided by four months of each year. The actual cost of this type of supplementaiy water treatment- 10 The cost savings in this example will be primarily 9 public savings, while some of the burden of pollution 9These estimates are the best available, but have not control will be shifted to the private sector through been officially confirned by the Government of introduction and regulation of in-plant pre-treatment Morocco. As a consequence, as discussed below, facilities, prevention, reuse and recycling they will be applied extremely conservatively. technologies, etc. 6 Environment Department Papers  The Price of Dirty Water: Pollution Costs in the Sebou Basin Figure 2: Average Water Treatment Costs 1 4 14 :aa~~~~~~~~~~~~~~~~~~~~~.S.;:.... .. ^ v^.{a .... 3f. :g .a:.:. ; cE12 Up plem entary Surharge: ; I 10 . .I::.s. S . ~~~Scenario1 o 10 | u0 8 lil Pollution Premium: Scenario 2 E 4 -- -- ---- ------ 4, 2 Average National Cost of Water Treatment 0 z 0 < s CE