Benefits of action and costs of inaction in a water reservoir project for agricultural purposes in Azacualpa, Honduras

This study analyses the cost of inaction and the benefits of action in Azacualpa, a small village in the outskirts of Tegucigalpa, the capital City of Honduras, where 27 reservoirs were built as a strategy to face drought, which had been affecting up to 70% of horticultural production; by an alliance involving financial, technical and organizational support from the public sector, the international cooperation and the community itself; to support Azacualpa’s small scale horticultural producers.

In order to account for the cost and the social and economic benefits of action, and the cost of inaction; the analysis compares scenarios before and after the construction of reservoirs, comparing costs and benefits in each scenario, through an analysis of the current value of action and an estimation of its value in ten years’ time (the cost of the reservoirs was apportioned among ten years), including the flow of damages suffered during the ten years of inaction, plus the current value of the cost of adaptation in ten years, and the costs of residual damages from then on. 

The study also makes recommendations for replicability and offers lessons learned.