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A Review of the Valuation of Environmental Costs and Benefits in World Bank Projects

Author

Listed:
  • Patricia Silva

    (World Bank)

  • Stefano Pagiola

    (World Bank)

Abstract

The World Bank’s Operational Policy on Economic Evaluation of Investment Operations requires that project evaluations include all the costs and benefits generated by the project, including environmental costs and benefits. Theis review examines the use of environmental valuation in 101 projects in the World Bank’s environmental portfolio approved in fiscal years 2000, 2001, and 2002. It has three broad objectives. First, it examines the extent to which environmental costs and benefits have been incorporated in the economic analysis of projects. Second, it examines how well valuation was used. Third, it seeks to identify areas of weakness so as to feed into plans for capacity building. The results show that the use of environmental valuation has increased substantially in the last decade. Ten years ago, one project in 162 used environmental valuation. In recent years, as many as one third of the projects in the environmental portfolio did so. While this represents a substantial improvement, there remains considerable scope for growth.

Suggested Citation

  • Patricia Silva & Stefano Pagiola, 2005. "A Review of the Valuation of Environmental Costs and Benefits in World Bank Projects," Others 0502007, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpot:0502007
    Note: Type of Document - pdf; pages: 72
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/othr/papers/0502/0502007.pdf
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    References listed on IDEAS

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    2. Shively, Gerald E. & Pagiola, Stefano, 2001. "Poverty, Agricultural Development, And The Environment: Evidence From A Frontier Region Of The Philippines," 2001 Annual meeting, August 5-8, Chicago, IL 20532, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Pattanayak, Subhrendu K. & Kramer, Randall A., 2001. "Worth of watersheds: a producer surplus approach for valuing drought mitigation in Eastern Indonesia," Environment and Development Economics, Cambridge University Press, vol. 6(1), pages 123-146, February.
    4. Churai Tapvong & Jittapatr Kruavan, 1999. "Water Quality Improvements: A Contingent Valuation Study of The Chao Phraya River," EEPSEA Research Report rr1999121, Economy and Environment Program for Southeast Asia (EEPSEA), revised Dec 1999.
    5. Young, R.A., 1996. "Measuring Economic Benefits for Water Investments and Policies," Papers 338, World Bank - Technical Papers.
    6. repec:idb:brikps:22398 is not listed on IDEAS
    7. Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, vol. 84(1), pages 255-270, March.
    8. Rausser, Gordon C. & Small, Arthur A., 2000. "Valuing Research Leads: Bioprospecting and the Conservation of Genetic Resources," Berkeley Olin Program in Law & Economics, Working Paper Series qt4t56m5b8, Berkeley Olin Program in Law & Economics.
    9. Fernando J. Gonzalez & Salman M.A. Salman, 2002. "Institutional Reform for Irrigation and Drainage : Proceedings of a World Bank Workshop," World Bank Publications - Books, The World Bank Group, number 14095, April.
    10. Gordon C. Rausser & Arthur A. Small, 2000. "Valuing Research Leads: Bioprospecting and the Conservation of Genetic Resources," Journal of Political Economy, University of Chicago Press, vol. 108(1), pages 173-206, February.
    11. Shogren, Jason F & Hayes, Dermot J, 1997. "Resolving Differences in Willingness to Pay and Willingness to Accept: Reply," American Economic Review, American Economic Association, vol. 87(1), pages 241-244, March.
    12. Clifford S. Russell & William J. Vaughan & Christopher D. Clark & Diego J. Rodríguez & Arthur H. Darling, 2001. "Investing in Water Quality: Measuring Benefits, Costs and Risks," IDB Publications (Books), Inter-American Development Bank, number 22398, February.
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    Cited by:

    1. Giles ATKINSON & Susana MOURATO, 2007. "Environmental valuation: a brief overview of options," Departmental Working Papers 2007-07, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

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    JEL classification:

    • P - Political Economy and Comparative Economic Systems
    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Z - Other Special Topics

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