Tine Compernolle

GROUNDWATER REMEDIATION AND THE COST EFFECTIVENESS OF PHYTOREMEDIATION

In 1999, phytoremediation was applied at the site of a Belgian car factory to contain two BTEX plumes. This case study evaluates the cost effectiveness of phytoremediation compared to other remediation options, applying a tailored approach for economic evaluation. Generally, when phytoremediation is addressed as being cost effective, the cost effectiveness is only determined on an average basis. This study however, demonstrates that an incremental analysis may provide a more nuanced conclusion. When the cost effectiveness is calculated on an average basis, in this particular case, the no containment strategy (natural attenuation) has the lowest cost per unit mass removed and hence, should be preferred. However, when the cost effectiveness is determined incrementally, no containment should only be preferred if the value of removing an extra gram of contaminant mass is lower than €320. Otherwise, a permeable reactive barrier should be adopted. A similar analysis is provided for the effect determined on the basis of remediation time. Phytoremediation is preferred compared to ‘no containment’ if reaching the objective one year earlier is worth €7 000.

The option to abandon: stimulating innovative groundwater remediation technologies characterized by technological uncertainty.

Many studies on technology adoption demonstrate that uncertainty leads to a postponement of investments by integrating a wait option in the economic analysis. The aim of this study however is to demonstrate how the investment in new technologies can be stimulated by integrating an option to abandon. Furthermore, this real option analysis not only considers the ex ante decision analysis of the investment in a new technology under uncertainty, but also allows for an ex post evaluation of the investment. Based on a case study regarding the adoption of an innovative groundwater remediation strategy, it is demonstrated that when the option to abandon the innovative technology is taken into account, the decision maker decides to invest in this technology, while at the same time it determines an optimal timing to abandon the technology if its operation proves to be inefficient. To reduce uncertainty about the effectiveness of groundwater remediation technologies, samples are taken. Our analysis shows that when the initial belief in an effective innovative technology is low, it is important that these samples provide correct information in order to justify the adoption of the innovative technology.

Bioremediation: How to deal with removal efficiency uncertainty? An economic application

Bioremediation is a remediation strategy, which has considerable strength but also certain limitations. Complex and uncertain relationships among biomass, contaminants, and nutrients lead to an uncertain level of removal efficiency. The uncertainty inherent to a bioremediation strategy should be addressed in the remediation selection process. In order to evaluate the bioremediation strategy economically, this study takes into account the reversibility of a decision. A decision tree structures the different remediation strategies, thus giving the possible courses of action open to the decision maker. The option value indicates the importance of having the possibility to reverse a previously made decision. Compared with conventional economic evaluation tools, more information to ground the selection made is revealed.