Ambika Markanday, A. Markandya, E. S. de Murieta, I. Galarraga
Abstract This paper sets out to explore to what extent integrating employment effects, equity, and risk aversion within cost–benefit analysis (CBA) affect the economic appraisal of a climate change adaptation project designed to protect against flood risk in a region of Bilbao (Basque Country, Spain). Four CBAs are conducted: (i) a standard CBA; (ii) a standard CBA considering equity; (iii) a standard CBA considering equity and employment; and (iv) a standard CBA considering equity, employment and risk aversion. All CBAs are conducted using a time frame of 2014–2080 and considering a 100-year return period under a middle of the road emission scenario (RCP4.5). A sensitivity analysis is also undertaken. Results suggest that the economic efficiency of the adaptation investment is contingent on what types of considerations are included within CBA. Integrating elements of employment, equity and risk aversion can strengthen or weaken the case for action (leading to higher or lower net-present values) and (depending on the discount rate chosen) may even be the deciding factor for determining whether a particular action should be carried out or not (whether the net-present value is positive or negative).
{"title":"Accounting for the Effects of Employment, Equity, and Risk Aversion in Cost–Benefit Analysis: An Application to an Adaptation Project","authors":"Ambika Markanday, A. Markandya, E. S. de Murieta, I. Galarraga","doi":"10.1017/bca.2020.32","DOIUrl":"https://doi.org/10.1017/bca.2020.32","url":null,"abstract":"Abstract This paper sets out to explore to what extent integrating employment effects, equity, and risk aversion within cost–benefit analysis (CBA) affect the economic appraisal of a climate change adaptation project designed to protect against flood risk in a region of Bilbao (Basque Country, Spain). Four CBAs are conducted: (i) a standard CBA; (ii) a standard CBA considering equity; (iii) a standard CBA considering equity and employment; and (iv) a standard CBA considering equity, employment and risk aversion. All CBAs are conducted using a time frame of 2014–2080 and considering a 100-year return period under a middle of the road emission scenario (RCP4.5). A sensitivity analysis is also undertaken. Results suggest that the economic efficiency of the adaptation investment is contingent on what types of considerations are included within CBA. Integrating elements of employment, equity and risk aversion can strengthen or weaken the case for action (leading to higher or lower net-present values) and (depending on the discount rate chosen) may even be the deciding factor for determining whether a particular action should be carried out or not (whether the net-present value is positive or negative).","PeriodicalId":45587,"journal":{"name":"Journal of Benefit-Cost Analysis","volume":"25 1","pages":"313 - 334"},"PeriodicalIF":3.4,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82274439","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Biodiversity points are a quantitative measure for biodiversity. For over a decade, biodiversity points are being applied in the Netherlands for measuring the impact of roads, enclosure dams, and other water management projects on the non-use value of biodiversity. Biodiversity points are quite similar to the quality-adjusted life years used for cost-effectiveness analysis of healthcare treatments. Biodiversity points can be calculated by multiplying the size of the ecotope (e.g., number of hectare), the ecological quality of the ecotope (0–100 %), and the ecological scarcity of each type of ecotope. For many infrastructure projects, the impact on the non-use value of biodiversity can be a principal purpose or a major co-benefit or trade-off, for example, for a park, a fish sluice, a road, an ecoduct, an enclosure dam, or a marine protected area. Biodiversity points are a simple, transparent, and standardized way to aggregate and quantify the qualitative or ordinal assessments by ecological experts. For measuring the non-use value of biodiversity, they are also more informative than valuation by revealed or stated preferences methods. This paper provides the first overview of the application of this method in the Dutch practice of cost–benefit analysis. It also discusses its merits and limitations. The calculation and use of biodiversity points are illustrated by four case studies.
{"title":"Quantifying the Non-Use Value of Biodiversity in Cost–Benefit Analysis: The Dutch Biodiversity Points","authors":"F. Bos, A. Ruijs","doi":"10.1017/bca.2020.27","DOIUrl":"https://doi.org/10.1017/bca.2020.27","url":null,"abstract":"Abstract Biodiversity points are a quantitative measure for biodiversity. For over a decade, biodiversity points are being applied in the Netherlands for measuring the impact of roads, enclosure dams, and other water management projects on the non-use value of biodiversity. Biodiversity points are quite similar to the quality-adjusted life years used for cost-effectiveness analysis of healthcare treatments. Biodiversity points can be calculated by multiplying the size of the ecotope (e.g., number of hectare), the ecological quality of the ecotope (0–100 %), and the ecological scarcity of each type of ecotope. For many infrastructure projects, the impact on the non-use value of biodiversity can be a principal purpose or a major co-benefit or trade-off, for example, for a park, a fish sluice, a road, an ecoduct, an enclosure dam, or a marine protected area. Biodiversity points are a simple, transparent, and standardized way to aggregate and quantify the qualitative or ordinal assessments by ecological experts. For measuring the non-use value of biodiversity, they are also more informative than valuation by revealed or stated preferences methods. This paper provides the first overview of the application of this method in the Dutch practice of cost–benefit analysis. It also discusses its merits and limitations. The calculation and use of biodiversity points are illustrated by four case studies.","PeriodicalId":45587,"journal":{"name":"Journal of Benefit-Cost Analysis","volume":"17 1","pages":"287 - 312"},"PeriodicalIF":3.4,"publicationDate":"2021-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79897001","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Although a carbon value has often been integrated in the frameworks established to guide public decision-making, benefit-cost analysis (BCA) has played no more than a minor role in the design of climate policies. It is urgently necessary to promote BCA in this area, and there is currently a unique opportunity for doing so. Major countries are designing new packages in order to meet their commitments, as illustrated by the European Green Deal, recent decisions on the part of the Biden Administration, and the creation of a Chinese national carbon market. These constructive processes must be based on BCA. BCA is absolutely necessary in order to achieve net-zero emissions by 2050 at a reasonable cost. Indeed, abatement costs across and within sectors, and across and within countries, are extremely heterogeneous, and many of the policy instruments in use (subsidies, feed-in tariffs, technical standards, etc.) overlap inefficiently. The instrumental debate between carbon pricing and other instruments is sterile if it merely remains at the level of stating principles. BCA can help on this point too, by specifying comparisons between alternatives, identifying complementarities, and selecting the most relevant combinations of instruments. Its scope should therefore range from setting benchmarks for carbon pricing to assessing, e.g., green investments or measures to enhance carbon sinks. When applied to decarbonization policies, BCA requires firstly the selection of a carbon value, in order to monetize the climate benefits of investments and policies. However, the whole assessment framework must be updated, including the time horizon, the discount rate, the cobenefits of climate mitigation actions, and the pricing of climate risks. We show that such an updated framework leads to an upward revision in the assessment of the climate benefits of mitigation actions, and that combining the valuation of damages and cost-effectiveness approaches is necessary in order to meet the needs of policy assessment. Finally, there is a need to extend analysis beyond the efficiency criterion in order to deal with other dimensions of climate policies, particularly their distributive impacts. This requires specific analyses, which should be articulated with BCA and carried out at an early stage for a better implementation of climate policies than we have seen to date.
尽管碳价值经常被纳入指导公共决策的框架中，但效益成本分析(BCA)在气候政策设计中所起的作用并不大。在这一领域推广BCA是迫切需要的，目前有一个独特的机会。主要国家正在设计新的一揽子计划，以履行其承诺，例如《欧洲绿色协议》(European Green Deal)、拜登政府最近的决定以及中国建立全国性碳市场。这些建设性进程必须以BCA为基础。为了在2050年之前以合理的成本实现净零排放，BCA是绝对必要的。事实上，部门之间和部门内部、国家之间和国家内部的减排成本是极不相同的，许多正在使用的政策工具(补贴、上网电价、技术标准等)重叠的效率很低。如果仅仅停留在陈述原则的层面上，碳定价与其他工具之间的工具性辩论将是徒劳的。在这一点上，BCA也可以提供帮助，具体说明备选方案之间的比较，确定互补性，并选择最相关的工具组合。因此，其范围应从设定碳定价基准到评估，例如绿色投资或加强碳汇的措施。当应用于脱碳政策时，BCA首先要求选择碳价值，以便将投资和政策的气候效益货币化。但是，必须更新整个评估框架，包括时间范围、贴现率、气候缓解行动的协同效益以及气候风险的定价。我们表明，这种更新的框架导致对缓解行动的气候效益的评估向上修正，并且为了满足政策评估的需要，有必要将损害评估与成本效益方法相结合。最后，有必要将分析扩展到效率标准之外，以便处理气候政策的其他方面，特别是其分配影响。这需要具体的分析，这些分析应该与BCA明确表达，并在早期阶段进行，以便比我们迄今为止看到的更好地实施气候政策。
{"title":"Benefit-Cost Analysis for Climate Action","authors":"D. Bureau, A. Quinet, Katheline Schubert","doi":"10.1017/bca.2021.11","DOIUrl":"https://doi.org/10.1017/bca.2021.11","url":null,"abstract":"Abstract Although a carbon value has often been integrated in the frameworks established to guide public decision-making, benefit-cost analysis (BCA) has played no more than a minor role in the design of climate policies. It is urgently necessary to promote BCA in this area, and there is currently a unique opportunity for doing so. Major countries are designing new packages in order to meet their commitments, as illustrated by the European Green Deal, recent decisions on the part of the Biden Administration, and the creation of a Chinese national carbon market. These constructive processes must be based on BCA. BCA is absolutely necessary in order to achieve net-zero emissions by 2050 at a reasonable cost. Indeed, abatement costs across and within sectors, and across and within countries, are extremely heterogeneous, and many of the policy instruments in use (subsidies, feed-in tariffs, technical standards, etc.) overlap inefficiently. The instrumental debate between carbon pricing and other instruments is sterile if it merely remains at the level of stating principles. BCA can help on this point too, by specifying comparisons between alternatives, identifying complementarities, and selecting the most relevant combinations of instruments. Its scope should therefore range from setting benchmarks for carbon pricing to assessing, e.g., green investments or measures to enhance carbon sinks. When applied to decarbonization policies, BCA requires firstly the selection of a carbon value, in order to monetize the climate benefits of investments and policies. However, the whole assessment framework must be updated, including the time horizon, the discount rate, the cobenefits of climate mitigation actions, and the pricing of climate risks. We show that such an updated framework leads to an upward revision in the assessment of the climate benefits of mitigation actions, and that combining the valuation of damages and cost-effectiveness approaches is necessary in order to meet the needs of policy assessment. Finally, there is a need to extend analysis beyond the efficiency criterion in order to deal with other dimensions of climate policies, particularly their distributive impacts. This requires specific analyses, which should be articulated with BCA and carried out at an early stage for a better implementation of climate policies than we have seen to date.","PeriodicalId":45587,"journal":{"name":"Journal of Benefit-Cost Analysis","volume":"16 1","pages":"494 - 517"},"PeriodicalIF":3.4,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85039582","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The idea of assessing the costs and benefits of public and private projects is not new to Europe, dating back to studies at the Ecole des Ponts et Chaussees (Paris) in the XIX century. Later on, in the last century, Benefit-Cost Analysis (BCA) in its current form has been more extensively used in the United States than in Europe. In the last two decades, however, there has been a rapid increase in its use in a number of European countries and at the European Union (EU) level. European governments often undertake tasks that would be done by private companies in the United States, such as the provision of transport, energy, water and waste management, health services, etc. In the United States the focus of BCA has often been regulatory impact analysis, rather than public project evaluation. One might, therefore, expect that Europeans might approach some things differently from their American counterparts and that new insights might result from these efforts. The articles in this symposium, taken from the recent European Society for Benefit-Cost Analysis (SBCA) conference in Toulouse, illustrate some of these differences and some converging themes.
评估公共和私人项目的成本和收益的想法对欧洲来说并不新鲜，可以追溯到19世纪巴黎高等学校(Ecole des pont et Chaussees)的研究。后来，在上个世纪，效益成本分析(BCA)以其目前的形式在美国比在欧洲得到了更广泛的应用。然而，在过去二十年中，在一些欧洲国家和欧洲联盟(EU)一级，其使用迅速增加。欧洲各国政府经常承担本应由美国私营公司完成的任务，例如提供运输、能源、水和废物管理、卫生服务等。在美国，BCA的重点往往是监管影响分析，而不是公共项目评估。因此，人们可能会期望欧洲人处理某些事情的方式与美国人不同，这些努力可能会产生新的见解。本次研讨会的文章摘自最近在图卢兹举行的欧洲效益-成本分析学会(SBCA)会议，阐述了其中的一些差异和一些共同的主题。
{"title":"European and International Perspectives on Benefit-Cost Analysis: Symposium Introduction","authors":"M. Florio","doi":"10.1017/bca.2020.35","DOIUrl":"https://doi.org/10.1017/bca.2020.35","url":null,"abstract":"Abstract The idea of assessing the costs and benefits of public and private projects is not new to Europe, dating back to studies at the Ecole des Ponts et Chaussees (Paris) in the XIX century. Later on, in the last century, Benefit-Cost Analysis (BCA) in its current form has been more extensively used in the United States than in Europe. In the last two decades, however, there has been a rapid increase in its use in a number of European countries and at the European Union (EU) level. European governments often undertake tasks that would be done by private companies in the United States, such as the provision of transport, energy, water and waste management, health services, etc. In the United States the focus of BCA has often been regulatory impact analysis, rather than public project evaluation. One might, therefore, expect that Europeans might approach some things differently from their American counterparts and that new insights might result from these efforts. The articles in this symposium, taken from the recent European Society for Benefit-Cost Analysis (SBCA) conference in Toulouse, illustrate some of these differences and some converging themes.","PeriodicalId":45587,"journal":{"name":"Journal of Benefit-Cost Analysis","volume":"17 1","pages":"55 - 63"},"PeriodicalIF":3.4,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77724721","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I calibrate an eco-epidemiological age-structured Susceptible-Infected-Recovered (SIR) model of the B.1.1.7 covid variant on the eve of the vaccination campaign in France, under a stop-and-go lockdown policy. Three-quarters of the welfare benefit of the vaccine can be achieved with a speed of 100,000 full vaccination per day. A 1-week delay in the vaccination campaign raises the death toll by approximately 2500, and it reduces wealth by 8 billion euros. Because of the large heterogeneity of the rates of hospitalization and mortality across age classes, it is critically important for the number of lives saved and for the economy to vaccinate older people first. Any departure from this policy has a welfare cost. Prioritizing the allocation of vaccines to the most vulnerable people save 70,000 seniors, but it also increases the death toll of younger people by 14,000. Vaccine nationalism is modeled by assuming two identical Frances, one with a vaccine production capacity and the other without it. If the production country vaccinates its entire population before exporting to the other, the global death toll would be increased by 20 %. I also measure the welfare impact of the strong French anti-vax movement, and of the prohibition of an immunity passport.
{"title":"The Welfare Cost of Vaccine Misallocation, Delays and Nationalism.","authors":"Christian Gollier","doi":"10.1017/bca.2021.4","DOIUrl":"10.1017/bca.2021.4","url":null,"abstract":"<p><p>I calibrate an eco-epidemiological age-structured Susceptible-Infected-Recovered (SIR) model of the B.1.1.7 covid variant on the eve of the vaccination campaign in France, under a stop-and-go lockdown policy. Three-quarters of the welfare benefit of the vaccine can be achieved with a speed of 100,000 full vaccination per day. A 1-week delay in the vaccination campaign raises the death toll by approximately 2500, and it reduces wealth by 8 billion euros. Because of the large heterogeneity of the rates of hospitalization and mortality across age classes, it is critically important for the number of lives saved and for the economy to vaccinate older people first. Any departure from this policy has a welfare cost. Prioritizing the allocation of vaccines to the most vulnerable people save 70,000 seniors, but it also increases the death toll of younger people by 14,000. Vaccine nationalism is modeled by assuming two identical Frances, one with a vaccine production capacity and the other without it. If the production country vaccinates its entire population before exporting to the other, the global death toll would be increased by 20 %. I also measure the welfare impact of the strong French anti-vax movement, and of the prohibition of an immunity passport.</p>","PeriodicalId":45587,"journal":{"name":"Journal of Benefit-Cost Analysis","volume":"12 2","pages":"199-226"},"PeriodicalIF":3.4,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8410749/pdf/S219458882100004Xa.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"39411863","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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