Economic Evaluation for Regional IWM

Understanding the benefits of integrated water management in regional centres


We worked with water practitioners in regional Victoria to improve their capacity to undertake economic evaluations of integrated water management (IWM) projects.

This project was supported by the then Victorian Government Department of Environment, Land, Water and Planning (now the Department of Environment, Energy and Climate Action).

View the recording and presentations from our recent webinar


IWM investments offer a broader range of benefits and costs compared with business-as-usual water management approaches. It is just as relevant for regional cities and towns as it is for metropolitan centres. The water cycle challenges affecting regional cities and towns include water supply, wastewater management, drainage/flooding and waterway health outcomes. The IWM benefits in regional cities and towns extend to liveability, biodiversity, community health and wellbeing, as well as cost savings for utilities, councils and catchment management authorities.

Understanding these benefits is an important factor in designing a good project, and in securing the funding to implement it. It is key to identifying which projects to fund – whether from an organisation’s budget or via a grant process.

A business case or grant application that is unclear about a project’s benefits, or overall merit, is unlikely to be successful. Economic evaluation provides a robust and repeatable way of comparing costs and benefits to determine if a project is worth doing, or to identify which option gives you the ‘best bang for your buck’.

What we did

The project focused on adapting existing economic evaluation tools and approaches to suit the context and needs of regional practitioners, and provided a range of capacity building activities support their use. It comprised 5 stages:

  • identifying the benefits of IWM to regional towns, via focus groups from different regions of Victoria
  • delivering a 4-module masterclass on benefit–cost analysis (BCA)
  • providing tools to guide the valuation of non-market benefits for regional IWM projects
  • developing case studies to demonstrate the principles, processes and tools
  • developing guidance resources.

How it will help

The project generated several useful outcomes:

  • Visibility of barriers to (good) economic evaluations in the regions, such as:
    • time constraints
    • limited awareness of how to capture intangible benefits (e.g. liveability) in economic assessment
    • difficulty finding appropriate non-market values for regional IWM projects
    • limited experience in applying BCA
  • Values for common regional IWM benefits, such as:
    • ecological improvement and biodiversity
    • improved opportunities for recreation
    • improved aesthetics
    • improved wastewater management
    • improved water stewardship
    • Traditional Owner values
  • Improved practitioner capacity.
  • Guides and resources to facilitate rapid BCA, including guidelines and case studies

The CRCWSC has produced research, guidelines and
tools related to the following topics:

Integrated Urban Flood

Climate change


Economics and
business case

Flood resilience
Green Infrastructure
Urban heat