The research group in Environmental Economics (EnvEco) studies the interactions between economic activities and the water environment by applying various economic methods and tools, such as cost-benefit analysis and hydro-economic models. The cluster uses economic principles and approaches with the aim of supporting the sustainable management of water resources. The main research focus of the group is on the economic modeling and valuation of ecosystem services provided by water resources, the assessment of the social welfare changes associated with water use and allocation, both in terms of quantity and quality, and payments for water services.
Economic activities depend upon the availability of water resources, including their quality, and affect the water environment at the same time through water extraction and the emission of pollutants. Many aquatic ecosystem goods and services are used either directly for consumption or serve as inputs in economic production processes. Consumption and production activities lead to environmental pollution and degradation. Due to the public nature of many of the ecosystem goods and services provided by aquatic systems, their costs and benefits are typically not accounted for in existing markets and product prices. This can have serious implications for decision-making towards their sustainable use and management. Economic valuation methods, in particular revealed and stated preference techniques, are applied to estimate the non-market value of the public goods and services provided by water resources. These estimates are integrated into decision-making frameworks such as cost-benefit analysis to ensure optimal water resource use and allocation and support the design of effective policy instruments.
The work of EnvEco relies strongly on interdisciplinary research. The group collaborates closely with scientists from different disciplines at Eawag, including urban water engineers, ecologists, ecotoxicologists, and other natural scientists.