World Resources 1996-97
(A joint publication by The World Resource Institute, The United
 Nations Environment Programme, The United Nations Development
 Programme, and the World Bank)
(Data edited by Dr. Róbinson Rojas)

5. Urban Priorities for Action

Box 5.3 Costs and Benefits of Water and Air Pollution
                 Controls in Santiago

The metropolitan region of Santiago, Chile, must cope with significant air and water pollution problems. But do the economic costs of pollution merit large investments in pollution controls? A recent analysis by the World Bank found significant benefits from investments in both water and air pollution controls (1).

Sanitation services in Santiago are well developed--most urban households have access to potable water and adequate sewerage--but the disposal of collected wastewater is inadequate. Except for a small pilot plant that treats about 4 percent of the city's wastewater, most sewage is dumped untreated into open watercourses.

Contaminated surface water has been used to irrigate about 130,000 hectares of farmland, including about 7,000 hectares used to grow vegetables for raw consumption, resulting in high rates of typhoid, hepatitis, and a 1991 outbreak of cholera in Chile. In response to the cholera outbreak, Chilean authorities imposed a series of emergency measures: a ban on vegetables grown with wastewater irrigation and restrictions on selling irrigated vegetables and fruits outside of Santiago; stepped-up water quality monitoring; chlorination of irrigation water in canals; a public information campaign about the risks of eating raw vegetables; and a ban on serving raw vegetables in restaurants.

These measures helped control the cholera outbreak and significantly reduced the incidence of typhoid and hepatitis. Typhoid cases, which averaged over 3,500 per year from 1985 to 1990, dropped to under 500 in 1991; hepatitis cases dropped to 1,430 cases in 1992, from more than 4,000 per year before. From 1985 to 1991, 45 to 70 percent of all typhoid cases in Santiago were attributable to wastewater irrigation; in 1992 only two cases--less than 1 percent of all cases--were traced to wastewater irrigation.

By their nature, however, these measures rely on the cooperation of farmers and the public, as well as the political will to continue monitoring, enforcement, and outreach. Already, public vigilance and inspections have lapsed as the threat of cholera fades from memory. Recognizing that the only long-term and guaranteed solution is wastewater treatment, the World Bank conducted a cost-benefit analysis to determine to what extent investment in full wastewater treatment is justified on the basis of public health considerations.

The World Bank study found that full wastewater treatment would cost about $78 million annually. However, annual benefits could range from one third to almost all of the cost of treatment, with the wide range resulting from different assumptions about the probability of a cholera epidemic occurring under current conditions. These numbers greatly understate the true benefits, because they do not include the health costs of other gastroenteric diseases such as hepatitis and diarrhea, the amenity values of improved coastal water quality, the impact on fish and shellfish production, or the value of water-use rights for Santiago's treated effluents. Nor does the study consider the impact of future outbreaks of cholera or typhoid on the growth of fruit exports or on tourism.

Santiago suffers from significant emissions of particulates (e.g., PM-10, or particles less than 10 microns in diameter), sulfur oxides (SOx ), nitrogen oxides (NOx ), volatile organic compounds (VOCs), and carbon monoxide (CO). Vehicles account for about 85 percent of NOx emissions, 69 percent of VOCs, and 94 percent of CO. Vehicles, industrial boilers, and residential wood-burning all contribute to emissions of particulates (in addition to street dust, a sizable component that was not fully assessed in the study). Industrial boilers account for more than half of SOx emissions, with vehicles accounting for another one fourth. Particulates are by far the most serious pollutant. It is estimated that a 1-metric-ton reduction in PM-10 emissions would yield health benefits more than 10 times those resulting from similar reductions in all other pollutants combined.

Out of a short list of pollution reduction measures, the World Bank study selected four as part of a control strategy: emissions standards for light-duty gasoline vehicles; a requirement that new trucks be equipped with diesel engines meeting 1991 U.S. emissions standards; the use of compressed natural gas for buses in place of diesel engines; and the conversion of wood- burning industrial sources to distillate fuel. The study then developed a dispersion model to simulate the strategy's impact on air quality, particularly in heavily populated and highly polluted areas. The study also used a model to estimate the improvements in public health resulting from the air quality improvements; a valuation of health benefits in terms of fewer lost work-days; and a cost-benefit comparison. The study concluded that the benefits of the control strategy would outweigh costs by a factor of 1.7 and that investing $50 million to $100 million in pollution controls would be cost-effective. Because these estimates are considered conservative, it is likely that substantially larger investments would also be cost- effective. For example, the health valuation accounts only for lost productivity and treatment costs, while the estimate of health effects considers only acute effects and not cumulative and long-term effects.

References and Notes

1. Box is based on The World Bank Environment and Urban Development Division, Chile--Managing Environmental Problems: Economic Analysis of Selected Issues, Report No. 13061-CH (The World Bank, Washington, D.C., 1994), pp. viii, x-xi, 39-41, 50-59, 83-85, 96-98.

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