Social cost–benefit analysis of natural treatment systems in India: implications for benefits model and governance

The economic costs and benefits of decentralized natural treatment systems have been calculated based on a primary survey of 18 systems treating wastewater spread across different regions of India. The study reveals that almost all systems are less profitable financially than economically, due to their generating positive externalities. Systems with a capacity of higher than 40 kilolitres per day are more cost-efficient than mechanized treatment systems. However, the higher land costs of natural treatment systems may reduce their cost advantages. A lower shadow price of water may turn relatively cost-efficient systems into ones with inadequate net economic returns.