The Appraisal of Projects with Environmental Impacts. Efficiency and Sustainability
AbstractIt is usually assumed that the appraisal of the impacts experienced by present generations does not entail any difficulty. However, this is not true. Moreover, there is not a widely accepted methodology for taking these impacts into account. Some of the controversial issues are: the appropriate value for the discount rate, the choice of the units for expressing the impacts, physical or monetary units —income, consumption or investment— and the valuation of tangible and intangible goods. When approaching the problem of very long term impacts, there is also the problem of valuing the impacts experienced by future generations, through e.g., the use of an intergenerational discount rate. However, if this were the case, the present generation perspective would prevail, as if all the property rights on the resources were owned by them. Therefore, the sustainability requirement should also be incorporated into the analysis. We will analyze these problems in this article and show some possible solutions.
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Bibliographic InfoPaper provided by Department of Applied Economics at Universitat Autonoma of Barcelona in its series Working Papers with number wpdea0704.
Length: 15 pages
Date of creation: Sep 2007
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-20 (All new papers)
- NEP-ENV-2007-10-20 (Environmental Economics)
- NEP-PPM-2007-10-20 (Project, Program & Portfolio Management)
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