A REVIEW OF SOCIAL DISCOUNT RATE FOR LIFE CYCLE ASSESSMENT OF WATER DISTRIBUTION SYSTEMS

Abstract

 Much of research to date has analyzed the effect of Social Discount Rate (SDR) on optimization of water distribution systems (WDSs). However, the relevant ministries in Japan have not reviewed the SDR both theoretically and practically over a long term even though SDR dramatically changes the results of analyses. To establish the methods of calibration of SDR and point out the issues that related research in optimization of WDSs must further investigate, this study reviewed a range of research analyzing the influence of SDR in WDSs from both theoretical and practical perspectives. In addition, this study conducted sensitivity analysis of SDR in a Japanese WDS. This study found that (1) current SDR set by Japanese ministries deviates from current interest rates and bond yield periods, (2) some previous studies have adapted inappropriate amortization for greenhouse gas emissions, (3) continuous use of relatively higher SDR causes inequality between cost and environmental burdens borne by later generations. Consequently, this study proposed that Japan's government should calibrate SDR to lower it and adopt declining discount rates after 40 years (i. e. Japan's maximum bond calculation year).