Working paper

Green-Gray Assessment: how to assess the costs and benefits of green infrastructure for water supply systems

Water Green infrastructure Water supply Cost-benefit analysis Brazil Mexico

Executive summary

A growing body of research shows that healthy watersheds are a vital component of a well-functioning water supply infrastructure system. When green infrastructure is used to complement, substitute, or safeguard traditional gray infrastructure, it can achieve optimal service delivery and save water suppliers (and water customers) money. The strategic protection, management, and restoration of natural systems within watersheds (often referred to as green infrastructure) can, for example:

  • better moderate sediment and nutrient fluxes and improve downstream water quality, thereby helping water suppliers meet water quality standards
  • lower costs for water suppliers compared to gray infrastructure options and recover investment costs
  • help mitigate the impacts of climate change and natural hazards (e.g., droughts and floods) to avoid service disruptions and failures; and
  • generate numerous co-benefits for local communities and society such as recreation, public health improvement, and carbon sequestration.


  • The Green-Gray Assessment (GGA) is a six-step methodology that can be used for investigating and valuing the costs and benefits of integrating green (or natural) infrastructure into existing water supply systems to improve their performance.
  • Quantifying the costs of green infrastructure investments in upstream watersheds and benefits for urban water supply systems can inform important investment decisions of water suppliers, water regulators, and land conservation and restoration organizations.
  • Before conducting a GGA, one should first understand local contextual conditions, engage stakeholders, and ensure the right skill set for the GGA analysis team. These preassessment steps facilitate data collection and help ensure that GGA results reach targeted decision-makers and financiers.
  • This document provides step-by-step guidance for how to conduct a GGA, including pre-assessment steps, and integrates experiences from four GGAs that examined the return on investment of upstream forest restoration and conservation for urban water suppliers in Brazil (Rio de Janeiro, São Paulo, Vitória) and Mexico (Monterrey).
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