AWWA JAW39256

As water utilities incorporate integrated resource planning in their management processes, it it necessary to incorporate the concept of externalities. This is particularly important as methods evolve of evaluating the costs and benefits of water conservation programs. The purpose of this article is to provide an introduction to the issues surrounding externalities, including their definition, methods of internalizing externalities, and a survey of ways to estimate costs and benefits of externalities. Although most discussions of externalities emphasize negative effects on the environment, this article will illustrate both positive and negative externalities associated with practicing water conservation. Includes 18 references.