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Keywords	Sustainable Water Resources Management, Economic Incentives, Full-Cost Pricing of Water, Risk-Based Decision Analysis, Pollution Charges, Groundwater Remediation
Abstract	A risk-based decision analysis methodology is presented, that can be used as a water policy tool in the design of economic incentive instruments, under conditions of uncertainty. A contaminated groundwater resource system with unknown hydrogeological parameters is used as a case study. The polluter has to select the policy to be followed among a series of alternatives, ranging from the extreme and environmentally risky scenario of paying pollution charges as long as the aquifer will remain polluted, up to the conservative option in terms of reduced environmental risks policy of safely rehabilitating the groundwater system. The full-cost price of water, including direct, opportunity, and environmental costs, both actual and probabilistic, as well as the risks of failure of the alternative scenarios due to the uncertainty, as they result from stochastic simulation, are embedded in a risk-cost-benefit decision model, developed for the evaluation of the alternatives. The pollution charges to be imposed by the local water authority are determined through the appropriate development of this model and the use of a proposed algorithm, in a way that these charges can act as incentives to the polluters, forcing them, or the authorities, to select the most environmentally sustainable water policy, namely that of safely restoring the aquifer.
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Source link	http://www.gnest.org/Journal/Vol1_No3/Mylopoulos.pdf
Included Refrences	18 References (List...)
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Name	Affiliation	Home page	e-mail	Total pubs
Mylopoulos YA	Department of Civil Engineering, Aristotle University of Thessaloniki, Thessaloniki, GR 541 24, Greece		mylop@civil.auth.gr	23
Mylopoulos NA	Aristotle University of Thessaloniki, Department of Civil Engineering, Division of Hydraulics and Environmental Engineering, 541 24 Greece		nikitas@civ.uth.gr	13