The economics of a circular urban water system

Abstract In many water-scarce locations, cities will need to reduce their freshwater withdrawals in order to adapt to the changing climatic conditions of the Anthropocene, reduce the risks of ‘Day Zeros,’ and reduce the disruption to the global hydrological cycle. This paper shows that it is possible for water utilities to make dramatic reductions in raw water withdrawals without proportionally large increases in system-wide costs. A simulation model is built that characterizes the piped water and wastewater network of an urban water utility in a hypothetical high-income city and the costs at nodes and links of the system. This simulation model is used to estimate the effects of four interventions—leakage reduction, demand reduction, potable reuse, and desalination—on raw water withdrawals and system-wide costs. We illustrate the effects of both individual interventions and policy mixes. Compared to the assumed baseline urban water and sanitation system, policy mixes can reduce raw water withdrawals by 74% with only modest increases in system-wide costs.