Building on Regine's post about re/House bath, I thought this was interesting -- RMI and the U.S. EPA say that decentralized wastewater treatment makes sense:

[Their report] Valuing Decentralized Wastewater Technologies presents a “catalog” of the economic advantages and disadvantages of decentralized wastewater systems relative to larger scale, centralized solutions. It also discusses techniques that can be used to place economic values on positive and negative impacts brought about by a community’s choice of a wastewater system. “One of the problems with traditional wastewater facility planning is that it doesn’t generally consider the entire system and the costs associated with each part of the system,” said water expert Richard Pinkham. For example, decentralized systems can avoid drawdown of water tables and reductions in stream base flow that can occur because of infiltration, inflow, and other alterations to a watershed water budget caused by sewers.