Incentivizing Decentralized Sanitation: The Role of Discount Rates

Abstract

In adoption decisions for decentralized sanitation technologies, two decision makers are involved: the public utility and the individual homeowner. Standard life cycle cost is calculated from the perspective of the utility, which uses a market-based discount rate in these calculations. However, both decision-makers must be considered, including their differing perceptions of the time trade-offs inherent in a stream of costs and benefits. This study uses the discount rate as a proxy for these perceptions and decision-maker preferences. The results in two case studies emphasize the dependence on location of such analyses. Falmouth, Massachusetts, appears to be a good candidate for incentivizing decentralized sanitation while the Allegheny County Sanitary Authority service area in Pennsylvania appears to have no need for similar incentives. This method can be applied to any two-party decision in which the parties are expected to have different discount rates.

Sustainability Assessment for Wastewater Treatment Systems in Developing Countries

“…Thereby, NPV informs about today's value of the stream, based on a discount rate, d, that quantifies the time trade-off. The additional parameters (T and d) may be interpreted as proxies for the preferences of the principal [38,39], whereby different choices of the parameter values may result in different decisions: If the discount rate d is low and the time-span T is high, then lower running costs and higher capital costs (for instance to ensure the longevity of technologies) is assessed as more beneficial. Therefore, generally the parameters are taken from guidelines (e.g., funding institutions).…”

A transition management framework to stimulate a circular phosphorus system

“…Urine diversion requires the use of waterless urinals and urine-diverting toilets, which means P can be more efficiently extracted from urine than from wastewater (O'Neal & Boyer, 2013;Jagtap & Boyer, 2020). Urine diversion may be especially valuable to reduce new P loads to wastewater treatment plants, allowing them to increase connections from households on septic systems or new buildings without overloading the plants (Wood et al, 2016). Projections by van Puijenbroek et al (2019), based on historical global patterns of sewerage development, indicate that under five development scenarios in which urban populations grow from 2010 to 2050 from 23 to 45%, sewerage grows from 25 to 77%, levels of wastewater treatment increase, and P discharges in wastewater effluent will increase from 11 to 68%.…”

Factors in homeowners’ willingness to adopt nitrogen-reducing innovative/alternative septic systems

“…Facilitating adoption requires an understanding of the conditions and considerations that drive individual behavior ( Steg, 2016 ), including but not limited to cost, access to technology, policies and regulations, local context, and attitudes and beliefs. Regional efforts have primarily focused on the economic and technical efficiency of nutrient-mitigating technologies, with little emphasis on understanding homeowner decision-making around the adoption of technologies like I/A systems ( Wood et al, 2016 ; Heufelder, 2019 ; Twichell et al, 2019 ). The need for research on behavior change and the ‘social acceptance’ of alternative technologies in the region was identified in a regional 2019 workshop aimed at identifying knowledge gaps and needs to address Cape Cod’s nutrient loading ( Twichell et al, 2019 ) and in prior research on designing solutions for clean water on the Cape ( Perry et al, 2020 ).…”

“…Only a handful of I/A septic system research projects exist within the United States, most of which are implemented at a spatially limited scale 5 ( Buzzards Bay Coalition, 2017 ; Mezzacapo, 2019 ). Few of these have considered aspects of adoption other than nitrogen-reduction efficiency and cost ( Wood et al, 2016 ). For example, an I/A system pilot on Cape Cod identified cost as the most significant factor influencing I/A adoption, stating that participating homeowners wanted systems that were “simple, affordable, reliable, and out-of-sight” ( Buzzards Bay Coalition, 2017 ).…”