Skip links and keyboard navigation

Cost considerations

Cost is an important factor when identifying suitable treatment systems or a treatment train for a particular site. It is critical to assess the full range of costs prior to the detailed design phase of the project. Scale, efficiency and cost are all important considerations when planning treatment systems or treatment trains in agricultural production systems.

Quick facts

Treatment
systems for nutrient removal can be cheaper than on-farm practices[2], as can restoring marginal agricultural land to wetlands[5].
If you have
any additional information on treatment systems or suggestions for additional technologies contact us via the feedback link at the bottom of the page.

The effectiveness of a treatment system or treatment train depends on its ability to intercept water from an agricultural production area and the subsequent level of removal of target pollutants. Each type of treatment system varies in terms of its capacity to intercept water (scale of treatment), efficiency in removing specific pollutants and also in its costs. The costs involved in designing, constructing, operating and maintaining a treatment system and any opportunity cost (i.e. foregone agricultural production from the site) need to be considered early on in the planning process, as this can determine the feasibility of a treatment system. Treatment systems often incur a mixture of one-off costs (e.g. design costs) and on-going costs (e.g. maintenance costs) that arise over the project lifetime. All costs arising in the future should be estimated and valued upfront (i.e. discounted to present value) and added to one-off up-front costs to produce the total cost (called total present value cost) for the project as a whole[1].

 

Burdekin cane farm. Source: Queensland Government

Cost-effectiveness

Cost-effectiveness of treatment systems can be calculated by dividing the total costs by the physical quantities of target pollutants removed. A single treatment system can be designed to deliver reductions for a single pollutant (e.g. dissolved inorganic nitrogen), however, it is also possible for a treatment system to deliver reductions of several pollutants (e.g. dissolved inorganic nitrogen and phosphorus). Calculating the cost-effectiveness of the former type of treatment system is more straightforward compared to the latter. For example, if it can be determined that a particular treatment system is designed to remove a specified amount of dissolved inorganic nitrogen (DIN), then the cost-effectiveness is expressed as $/kg DIN removed. If a single treatment system delivers reductions of multiple pollutants, then the calculation and presentation of cost-effectiveness becomes more complex. A methodology for calculating the cost-effectiveness when bundles of pollution reductions are delivered from a single project has recently been proposed[3]. In situations where it is difficult to quantify the specific type of pollutant(s) reductions delivered by the treatment system, but the area of the catchment treated can be reasonably determined, then cost-effectiveness could be expressed as $/ha of catchment area treated.

Importance of scale

The scale of the treatment system (i.e. the catchment area treated) is an important consideration when determining cost-effectiveness. Some systems will be relatively cheap and effective at removing certain pollutants but will only treat surface runoff or groundwater from a small catchment area on a farm (e.g. only part of a paddock or block). These types of systems are often located immediately adjacent to the production footprint (e.g. edge of field) and have minimal operating requirements and hence fewer ongoing costs.

Under specific spatial and temporal conditions, it could potentially be cheaper to construct a single large treatment system (i.e. treating run-off from multiple blocks/paddocks or properties) than multiple smaller systems[4], reflecting economies of scale. A large or regional scale treatment system may be capable of delivering reductions of multiple pollutants, with the costs potentially able to be spread across multiple landowners or regional authorities. The figure below shows key considerations when assessing the costs of small and large scale treatment systems.

 

Disclaimer

In addition to the standard disclaimer located at the bottom of the page, please note the content presented is based on published knowledge of treatment systems. Many of the treatment systems described have not been trialled in different regions or land uses in Queensland. The information will be updated as new trials are conducted and monitored. If you have any additional information on treatment systems or suggestions for additional technologies contact us via the feedback link at the bottom of the page.


References

  1. ^ Boardman, AE, Greening, DH, Vining, AR & Weimer, DL 2001, Cost-benefit analysis: concepts and practice, Pearson, Prentice Hall, Upper Saddle River, New Jersey, USA.
  2. ^ Christianson, L, Tyndall, J & Helmers, M 2013, 'Financial comparison of seven nitrate reduction strategies for Midwestern agricultural drainage', Water Resources and Economics, vol. 2-3, pp. 30-30–56, <https://www.sciencedirect.com/science/article/pii/S2212428413000194>.
  3. ^ Rolfe, J, Windle, J, McCosker, K & Northey, A 2018, 'Assessing cost-effectiveness when environmental benefits are bundles: Agricultural water management in Great Barrier Reef catchments', The Australian Journal of Agricultural and Resource Economics, vol. 59, pp. 1-21.
  4. ^ United States Environmental Protection Agency 2000, Constructed wetlands treatment of municipal wastewater: manual., US Environmental Protection Agency, Ohio.
  5. ^ Waltham, NJ, Wegscheidl, CJ, Smart, JCR, Volders, A, Hasan, S & Waterhouse, J 2017, Scoping land conversion options for high DIN risk, low-lying sugarcane, to alternative use for water quality improvement in Wet Tropics catchments. Report to the National Environmental Science Programme., Reef and Rainforest Research Centre Limited, Cairns, <https://nesptropical.edu.au/index.php/final-reports-round-2/>.

Last updated: 5 October 2018

This page should be cited as:

Cost considerations, WetlandInfo 2018, Department of Environment and Science, Queensland, viewed 11 February 2019, <https://wetlandinfo.des.qld.gov.au/wetlands/management/treatment-systems/for-agriculture/cost-considerations/>.

Queensland Government
WetlandInfo   —   Department of Environment and Science