Assessing the Economic Value of Water in Basic Industries for Water Tariff Determination (Case Study: Zayandehroud River Basin)

Document Type : Case Study

Authors

Shahram Ghobadi ¹

Ali Moridi ²

Reza Khalili ²

¹ Department of Civil Engineering, Faculty of Environmental Engineering – Water and Wastewater, University of Tehran, Tehran, Iran.

² Department of Water, Wastewater and Environmental Engineering, Faculty of Civil, Water and Environmental Engineering, Shahid Beheshti University, Tehran, Iran.

https://doi.org/10.22067/jwsd.v12i4.2509-1456

Abstract

Estimating the economic value of water plays a fundamental role in the efficient management of water resources and in making informed decisions for water supply planning. It is regarded as one of the main pillars in resource allocation, the design of pricing systems, and the development of sustainable water markets. In this study, the economic value of water was estimated using the Residual Value Method, based on data from the Statistical Center of Iran’s Census plan for industrial enterprises with 10 or more employees during the years 2002 to 2019. The results indicate that the economic value of water varies significantly across major industrial sectors in the Zayandeh-Rud Basin, with an average value of 5,254,702 rials per cubic meter, based on the producer price index, for the year 2024. These findings can be considered in the economic assessments of water supply projects for large industries in the basin. Furthermore, according to the research results, the average cost of water in the industrial production process was less than 0.2% of total production costs, and the ratio of this cost to the economic value of water estimated to be below 0.02. These findings highlight the necessity for a review of the industrial water pricing system, the enhancement of statistical data quality in the industrial sector, and the incorporation of the true economic value of water into water allocation and investment policies in the country.

Keywords

Water resources management

water scarcity

valuation

Zayandeh Rood basin

large industries

Subjects

• Water Management and Economy

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