Life-Cycle Cost Analysis of Infrastructure Projects - Governing the Nexus: Water, Soil and Waste Resources Considering Global Change - page 117

risk in a particular location due to a particular event. In the event of risk, Eq. 2 could
be written as:

(

f X

n
t¼1 pvf xt CapExhw xt ; CapExsw xt ; CapManEx xt ; CoCap xt ;

LCC xt ¼ ð

ð 3 Þ

DsCost xt ; IDsCost xt Þ ; OpEx xt ; CoCEExt xt Psf xt ½ g

where
Psf xt Probability of risk

This formulation is more appropriate in the case of WASH services, as the
dependence on groundwater is quite substantial. In this case, the total life cycle cost is
modelled as a random variable that is the sum of several cost items. Of these variables,
the CapManEx is a random variable. The randomness or the probability of failure
could be estimated using the observed values from the real life costing in different agro
climatic locations. These observations can be complemented with expert opinions.
Risk and uncertainty analysis is often carried out using the scenario building.
Different scenarios are built using assumptions pertaining to the expected risks.
Scenario building gives a band or range of possible options to choose from. Sim-
ulation models are used to arrive at scenarios.

4 Mainstreaming LCA into Policy

Environmental issues are increasingly gaining attention of policy makers in
developing countries, though they are yet to get into the top priority list. Political
economy factors constrain the promotion of environmental issues as a priority. As a
result, environmental issues are often pushed through “ command and control reg-

ulation policy instruments. The experience with the implementation of these

command and control instruments has not been encouraging in the absence of
complementary inter-sectoral policies. Of late, voluntary approaches are being
considered as effective policy instruments to complement the traditional command
and control measures (Iraldo et al. 2014 ). The increasing demand from consumers
for environmentally safe products and services is pushing the industry to address
environmental issues voluntarily. Others include the use of incentive and dis-
incentive structures for promoting or polluting the environment and through
negotiated agreements with private sector.
There is an urgent need to promote environmental issues into the foreground in
developing countries. Some of the environmental impacts are clearly resulting in
unsustainable and irreversible damages (water, forestry and other common pool
resources). Climate change impacts have further hastened the process of degrada-
tion. The degradation of resources coupled with the inter-linkages between different

”