Effects of Considering Social Costs in Different Economic Scenarios of Water Systems in Iran

Water systems (WSs) use a large amount of energy and emit greenhouse gas (GHG). Accounting emissions from all phases of a project (construction, operation, and decommissioning) is called a life cycle approach. Energy consumption and GHG emissions are two critical elements in the life cycle of WSs. This paper aims to present a methodology for quantifying the life cycle energy (LCE) and life cycle greenhouse gas (LCGHG) implications of WSs in Iran. The primary objective is to represent a methodology of the cost–benefit analysis and a typology of the different scenarios, which respond to various policies. Future economic scenarios are designed and used to describe subsequent impacts. Results indicate that energy consumption accounts for about 60 percent of GHG emissions in Iran’s water system. The results show that cost–benefit analysis is highly sensitive to the social costs of reducing GHG emissions. Neglecting the social costs leads to economically infeasible scenarios. The benefit cost ratio of scenarios considering social costs is more than two times greater than scenarios without this consideration. Therefore, if a cost–benefit analysis is performed without considering social costs, the financial resources will not be allocated efficiently and in a way that reduces problems of air pollution.