The Economics of Fruit and Vegetable Production Irrigated with Reclaimed Water Incorporating the Hidden Costs of Life Cycle Environmental Impacts

Kledja Canaj, Andi Mehmeti and Julio Berbel
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Kledja Canaj: Department of Management, Finance and Technology, LUM Giuseppe Degennaro University, S.S. 100—Km 18, 70010 Casamassima, Italy
Andi Mehmeti: International Center for Advanced Mediterranean Agronomic Studies (CIHEAM-Bari), Via Ceglie 9, Valenzano, 70010 Bari, Apulia, Italy
Julio Berbel: Water, Environmental and Agricultural Resources Economics (WEARE) Research Group, Universidad de Córdoba, 14014 Córdoba, Spain

Resources, 2021, vol. 10, issue 9, 1-13

Abstract: The estimation and quantification of external environmental costs (hidden costs) are crucial to sustainability assessments of treated wastewater reuse projects. These costs, however, are rarely considered in economic analysis studies. In this work, monetized life cycle assessment (LCA) and life cycle costing (LCC) were combined into a hybrid model to calculate cradle-to-farm gate external environmental costs (EEC) and internal costs (IC) of producing 1 t of plant-based product irrigated with reclaimed water in a Mediterranean context. The total cost was calculated by combining monetized LCA and LCC results. The results for the crops under consideration were 119.4 €/t for tomatoes, 344.4 €/t for table grapes, and 557 €/t for artichokes. Our findings show that there are significant hidden costs at the farm level, with EEC accounting for 57%, 23%, and 38% of the total cost of tomatoes, table grapes, and artichokes, respectively. Electricity use for water treatment and fertilization generated most of the EEC driven by the global warming, particulate matter, acidification, and fossil resource scarcity impact categories. When compared to groundwater, the higher internal costs of reclaimed water were offset by lower external costs, particularly when supported by low-energy wastewater treatment. This demonstrates that incorporating EEC into economic analyses might generate a better understanding of the profitability of treated wastewater reuse in crop production. In Italy and the Mediterranean region, research on the sustainability of water reuse in irrigation through life cycle thinking is still limited. Using a multi-metric approach, our analysis brought new insights into both economic and environmental performance – and their tradeoff relationships in wastewater reuse for irrigation of agricultural crops. In future research, it would be of interest to use different monetization methods as well as to investigate social externalities to explore their size and role in the total external costs.

Keywords: life cycle assessment (LCA); total cost; monetization; cost accounting; agricultural irrigation; reclaimed wastewater; water reuse (search for similar items in EconPapers)
JEL-codes: Q1 Q2 Q3 Q4 Q5 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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