Project Appraisal and Valuation of the Environment: General Principles and Six Case-Studies in Developing Countries

318 Pages·1996·16.88 MB·English

by  Peter Abelson (auth.)

Project Appraisal
and Valuation
of the
Environment
DDDDDDD
General Principles
and Six Case-Studies
in Developing Countries
edi
Peter Abelson
PROJECT APPRAISAL AND VALUATION
OF THE ENVIRONMENT
Also by Peter Abelson
COST-BENEFIT ANALYSIS AND ENVIRONMENTAL PROBLEMS
PRIVATISATION: An Australian Perspective (editor)
THE ECONOMIC EVALUATION OF ROADS IN AUSTRALIA
Project Appraisal and
Valuation of the
Environment
General Principles and Six Case-Studies
in Developing Countries
Peter Abelson
Associate Professor of Economics
Macquarie University
Sydney, Australia
First published in Great Britain 1996 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS
and London
Companies and representatives
throughout the world
A catalogue record for this book is available
from the British Library.
ISBN 978-1-349-39516-3 ISBN 978-0-230-37474-4 (eBook)
DOI 10.1057/9780230374744
First published in the United States of America 1996 by
ST. MARTIN'S PRESS, INC ..
Scholarly and Reference Division,
175 Fifth Avenue,
New York, N.Y. 10010
ISBN 978-0-312-12984-2
Library of Congress Cataloging-in-Publication Data
Abelson, P. W.
Project appraisal and valuation of the environment : general principles
and six case-studies in developing countries I Peter Abelson.
p. em.
Includes bibliographical references and index.
ISBN 978-0-312-12984-2 (cloth)
I. Economic development projects-Developing countries
-Evaluation. 2. Economic development projects-Developing
countries---{::ost effectiveness. 3. Economic development projects
-Environmental aspects-Developing countries. I. Title.
HC59.72.E44.A24 1996
333.7'09172'4--dc20 95-42137
CIP
© Overseas Development Institute 1996
Softcover reprint of the hardcover 1st edition 1996 978-0-333-63916-0
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence pennitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham Court
Road, London WI P 9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
10 9 8 7 6 5 4 3 2
05 04 03 02 01 00 99 98 97
To Jeanne, David, Julian and Antonia
This page intentionally left blank
Contents
List of Tables viii
~~~~ X
Preface xi
Acknowledgements xii
Environmental Issues: An Overview 1
2 Cost-Benefit Analysis 15
3 Valuation Methods: General Principles 38
4 Valuation Methods for the Environment 57
5 Valuing Water Quality in Wuxi, China 88
6 Valuing Electricity and the Environment in Bangladesh 119
7 Valuing Urban Slum Improvements in Visakhapatnam, India 146
8 Valuing Mass Transit and the Environment in Lagos 179
9 Valuing Tropical Forests in Kenya 21 0
10 Valuing Soils in the Tropical Lowlands of Eastern Bolivia
(with Penny Davies) 240
11 Valuing the Environment: Main Conclusions 268
References 281
Index 294
vii
List of Tables
1.1 Major fonns of environmental degradation and main
consequences 11
3.1 Taxonomy of valuation methods 49
4.1 Productive effects of some environmental changes 58
4.2 Estimates of consumer surplus 70
4.3 Examples of defensive expenditures 72
4.4 Required sample sizes based on usable responses 78
4.5 Applications of valuation methods 85
5.1 Average water quality in Wuxi waterways 95
5.2 Summary of capital and operating costs to year 2000 98
5.3 Class summary of canal water quality 100
5.4 Survey record: observations of amenity quality 107
5.5 Cost-benefit analysis of wastewater collection in Wuxi 112
5.6 Cost-benefit analysis of expanded Wuxi sewerage
treatment works ll3
5.7 Benefit percentages in various studies 116
6.1 Estimated externality costs of electricity generation
in existing power plants 125
6.2 Estimated externality costs of electricity generation in new
power plants 126
6.3 Summary of system statistics for Bangladesh 127
6.4 Greater Dhaka electricity statistics 129
6.5 Bangladesh power sector improvements, 1985-90:
economic evaluation 134
6.6 Dhaka electricity distribution improvements, 1985-90:
economic evaluation 140
7.1 Main physical achievements 152
7.2 Direct ODA-funded expenditures 155
7.3 Housing and environment 157
7.4 Health care and status 159
7.5 Education, employment, income and assets 160
7.6 Summary of project inputs, outputs and benefit measures 163
7.7 Summary of project costs 167
7.8 Summary of slum improvement programme costs and
benefits 170
7.9 Economic analysis of slum improvements 172
viii
List of Tables ix
7.10 Evaluation of training courses 174
8.1 Estimated rail capital and operating costs 191
8.2 Costs of buses and busways 191
8.3 Consultant forecasts of metro passenger trips 193
8.4 Accident costs in the north-south Lagos corridor 196
8.5 Forecast emission levels over project life 200
8.6 Noise levels in Lagos and some UK research results 203
8.7 Summary of economic evaluation 204
8.8 Proposed Lagos railway: summary economic spreadsheet 205
8.9 Proposed Lagos railway: other costs and benefits 206
9.1 Estimated product value of Kakamega forest in 1991 218
9.2 Estimated product value of Arabuko Sokoke forest in 1991 222
9.3 Carbon release due to deforestation 231
9.4 Present value of damages per tonne of C0 233
2
9.5 Estimated forest values 236
9.6 Impacts of conservation programmes compared with
no-change strategies 237
IO.l Summary for slash and bum farm in Yapacani 252
10.2 Summary of results for expansion zone large
commercial farms 254
lOA. I Evaluation of peasant farming in South Yapacani,
Santa Cruz 263
10A.2 Evaluation of commercial farms in the expansion zones
east of Santa Cruz 266
11.1 Selected environmental impacts and valuations 269
11.2 A taxonomy of valuation methods 273