Was having a yarn on FB about the costs of a large scale desal scheme in Australia. I did some BOTE calcs as follows.
So let’s assume a pessimistic scenario: that climate change is so dire that within 50 years (ie by 2069) we have to commit to sourcing all urban and major regional water supplies from desal, leaving the surface water and bore water solely for argiculture and rural communities.
This is a pretty dire, worst case scenario, because in reality it is thought that it is expected that northern rainfall will increase, so the problem could be partly ameliorated by relocation, but let’s go with this dire scenario.
So Australia has a GDP of 1.83 trillion 2019AUD. Its long term real growth rate is 3% pa but let’s make a further pessimistic assumption that it declines to 2.5% pa in the future. This means that over the interval in question, Australia’s economic product will be about 178 trillion 2019AUD. Overall taxation has bopped around in the vicinity of 26% for a while so going by that, there will be 46 trillion 2019AUD federal revenue on that interval.
48% of Perth’s water is supplied by desalination plants and a dedicated offset wind farm. The cost of the desal PLUS the wind farm that powers it was 570 million AUD but allowing for inflation 640 million 2019AUD. We don’t need to reaccount for the cost of electricity as the power supply was paid for upfront, and the running costs are negligible.
This operation covers a population of 1.95 million people, and allowing for the 48%, this means this size of operation provides water for 0.93 million people.
Australia’s population is 25 million and it is growing at 1.6% pa. If this keeps up, the population will be 55 million at the end of this interval. Let’s ballpark that Australia will be even more heavily urbanised by then and that 50 million of these people are in urban and major regional centres.
So we would expect that that cost for the desalination plants and the electricity to supply them will be 34 billion dollars.
It’s about half the cost of the NBN. This represents less than one part in 5000 of Australia’s product during this interval. It’s less than one part in 1000 of federal taxation revenues.
You’re asking “who’ll pay for it”: it almost doesn’t matter because it is just in the noise. You could allocate that 0.1% out of general revenue, you could put a 0.1% climate change levy on it that no one would even notice, you could do it through market mechanisms so that the water and electricity charges were 0.1% higher. Whatever.
I’ve made pessimistic assumptions throughout: median assumptions would result in lower estimates of the costs.