Cost-Benefit Analysis and the Environment

by Hanley, Nick; Spash, Clive L.

• ISBN13: 9781852789473
• ISBN10: 1852789476
• Edition: Reprint
• Format: Paperback
• Copyright: 1995-04-01
• Publisher: Edward Elgar Pub

Summary

This work provides a discussion of the key issues surrounding the incorporation of environmental factors into modern cost-benefit analysis. The book, intended for undergraduates and postgraduates in environmental economics, reinforces its thesis with case studies.

Table of Contents

Acknowledgements	viii
Preface	ix
PART I: THEORY AND METHODS
Introduction
About this book	3	(1)
A short history of cost-benefit analysis	4	(4)
The structure of a cost-benefit analysis	8	(12)
A preview of major problem areas	20	(6)
Example of a Simple CBA	22	(4)
The Welfare Foundations of CBA
Consumer welfare theory	26	(14)
Producer welfare theory	40	(5)
Aggregation of supply and demand	45	(2)
Welfare measures and social choice	47	(3)
Conclusions	50	(3)
Valuing Environmental Goods (1): The Contingent Valuation Method
Introduction	53	(1)
Theoretical basis	53	(1)
The application of CVM	54	(4)
Problem areas associated with CVM	58	(7)
CVM and non-use values	65	(1)
Conclusions	66	(8)
The Contingent Ranking method	69	(5)
Valuing Environmental Goods (2): The Hedonic Pricing Method
Introduction	74	(1)
The characteristics theory of value	74	(1)
How the method works	75	(3)
Problems with the HP method	78	(3)
Conclusions	81	(2)
Valuing Environmental Goods (3): The Travel Cost Method
Introduction	83	(1)
The basic method	83	(3)
Problems with the TCM	86	(5)
The hedonic TCM	91	(2)
Conclusions	93	(5)
TCM data for Blacktoft Sands	94	(4)
Valuing Environmental Goods (4): Production Function Approaches
Introduction	98	(1)
The avoided cost approach	99	(4)
Dose-response functions	103	(5)
Conclusions	108	(3)
How Good are our Valuation Methods?
Introduction	111	(3)
Repeatability	114	(2)
Validity	116	(5)
What do our value measures measure?	121	(2)
Conclusions	123	(4)
CVM Reference Operating Conditions	124	(3)
Discounting and the Environment
Introduction	127	(1)
The choice of a discount rate	128	(7)
Intergenerational transfers: equity and ethics	135	(9)
Political choice of the social discount rate	144	(1)
Conclusions	145	(7)
Risk and the Discount Rate	146	(6)
Irreversibility, Ecosystem Complexity, Institutional Capture and Sustainability
Introduction	152	(1)
Irreversibility	153	(4)
Ecosystem complexity	157	(3)
Institutional capture	160	(4)
CBA and sustainable development	164	(4)
Conclusions	168	(5)
PART II: CASE STUDIES
Tropospheric Ozone Damage to Agricultural Crops
Introduction	173	(1)
Tropospheric ozone pollution	173	(2)
Defining dose	175	(3)
Deriving dose-response functions for crops	178	(1)
Response functions in economic assessments	179	(2)
Regional economic assessments of crop loss	181	(6)
Economically important aspects of response functions	187	(1)
Conclusions	188	(5)
Costs and Benefits of Controlling Nitrate Pollution
What is nitrate pollution?	193	(4)
Cost of controlling nitrate pollution	197	(6)
The benefits of reducing nitrate pollution	203	(5)
Conclusions	208	(3)
Valuing Habitat Protection
Introduction	211	(1)
Lowland heaths	211	(8)
The protection of ancient woodlands	219	(8)
The preservation of wetlands	227	(11)
Cost-Benefit Analysis and the Greenhouse Effect
Scientific background	238	(3)
Physical impacts	241	(4)
CBA of greenhouse gas control	245	(6)
Responsibilities to future generations	251	(4)
Conclusions	255	(6)
Environmental Limits to CBA?
Introduction	261	(1)
The case against	261	(7)
The case in favour	268	(5)
Conclusions	273	(2)
Index	275