The Impact of Forest and Non-Forest Land Cover on Potable Water Treatment Costs: Panel Evidence from Ethiopia

Empirical assessment of relationships between land use and land cover (LULC) and drinking water chemical treatment cost is lacking in developing countries. This study is conducted to assess the impact of forest and non-forest land cover on water purification chemical costs using panel data collected from eight drinking water treatment plants in Ethiopia for the period of 2002-2014. Forest cover and LULC data were extracted from Global Forest Change and GlobeLand30 datasets, respectively. A panel fixed effects regression model was applied to analyze the effect of forest cover and non-forest land cover on water treatment chemical costs at the watershed, upstream parts of the watershed, and different buffer distances ranging from 2.5 to 30 kilometers. Findings indicated that forest cover both at watershed and upstream level has a significant effect on water treatment chemical cost. Results showed that watershed forest cover contributes significantly to treatment chemical cost reduction as compared to non-forest land cover, but the contribution to the reduction of treatment cost declines as buffer distance increases. Thus, the findings highlighted that protecting forest enhances water quality and reduces the chemical costs incurred to treat potable water.