Environmentally adjusted efficiency of municipal water suppliers

This chapter provides a comprehensive literature review of efficiency studies in the water sector, and then focuses on the literature on environmentally adjusted efficiency methodologies. In this direction, a specific interest is in the extent of water leaks in the supply network. This chapter takes into account different points of view. One of them is the economic point of view, which considers that water leaks are non-revenue water with a negative impact on sector efficiency. From an environmental point of view, leakages cause inefficient energy use in the water supply network, and may also affect water quality by increasing susceptibility to contamination under low-pressure conditions. The chapter evaluates the efficiency of municipal water suppliers in terms of water leakages, with the aim of demonstrating how inefficiency in the supply process can negatively affect urban water users. It also presents different methodologies that allow us estimate the efficiency level of municipal water suppliers.