The Value of Water—Estimating Water-Disruption Impacts on Businesses

Abstract

As water serves as a necessary and often irreplaceable input in a range of goods and services, a disruption in water supply can cause lost production and sales for businesses. Thus, large benefits may be generated by reducing the risk of water disruptions. To enable selection of economically viable risk mitigation measures, the investment costs should be weighed against the benefits of risk mitigation. Consequently, quantitative estimates of the consequences of disruptions need to be available. However, despite the importance of water to businesses, the literature on their financial losses due to short and long-term water disruptions is still scarce. The aim of this paper is to estimate time-dependent water supply resiliency factors for economic sectors, i.e., a metric focusing on the level of output that businesses can uphold during a disruption, to contribute to better decision support for water supply planning and risk management. An online survey was used to gather data from 1405 companies in Sweden on consequences of complete and unplanned water supply outages. Results show that Food and beverage Manufacturing and Accommodation and food services are the two most severely affected sectors over all analyzed disruption durations.