Cost allocation of river water quality management based on the Separable Cost Remaining Benefit (SCRB) method

This paper presents a cost allocation method that applies the cooperative game theory and the Separable Costs Remaining Benefit method to a project that involves two local governments in water quality management in South Korea. The total project cost was estimated by using a parametric estimation method for reduction loads in accordance with the Total Pollution Load Management system. As a result, the cost allocation ratios between the City of Gwangju and Jeonnam Province are suggested to be 69.85% and 30.15% of the total project cost. The final cost allocation confirms the benefits to both governments and illustrates the cooperative game theory.