Economic valuation of natural resource damages: An application to ground water mining in NCT-Delhi

Natural resources like air, water (including ground water), land and vegetation are valuable resources that are often not valued in market. Economic valuation aids exploration of the value of services provided by these resources, or to estimate damages made to them. A study was carried out in NCT-Delhi to apply economic valuation framework for estimating the costs of mining of ground water i.e., excessive drawal beyond sustainable yield (or, recharge) of ground water, which resulted in a decline in its quality and quantity. This paper presents results from an application of economic valuation framework to the mining of ground water in NCT-Delhi. In the study approach, after examining alternate water supply options, the low cost option was picked with the help of experts. The costs of such water supply provision were estimated using engineering methods; the costs of degradation of ground water quality due to its mining were also valued using remediation costs of mined water using an appropriate treatment technology. These estimates of economic values based on engineering methods provide a basis for rational action by the decision and policy makers through appropriate legal, technical and institutional measures.