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Book part
Publication date: 15 August 2002

Andreas Kontoleon, Richard Macrory and Timothy Swanson

The paper focuses on the question of the extent to which individual preference-based values are suitable in guiding environmental policy and damage assessment decisions…

Abstract

The paper focuses on the question of the extent to which individual preference-based values are suitable in guiding environmental policy and damage assessment decisions. Three criteria for “suitableness” are reviewed: conceptual, moral and legal. Their discussion suggests that: (i) the concept of economic value as applied to environmental resources is a meaningful concept based on the notion of trade-off; (ii) the limitations of the moral foundations of cost-benefit analysis do not invalidate its use as a procedure for guiding environmental decision making; (iii) the input of individual preferences into damage assessment is compatible with the basic foundations of tort law; (iv) using individual preference-based methods provides incentives for efficient levels of due care; (v) determining standing is still very contentious for various categories of users as well as for aggregating non-use values. Overall, the discussion suggests that the use of preference-based approaches in both the policy and legal arenas is warranted provided that they are accurately applied, their limitations are openly acknowledged and they assume an information-providing rather than a determinative role.

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An Introduction to the Law and Economics of Environmental Policy: Issues in Institutional Design
Type: Book
ISBN: 978-0-76230-888-0

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Article
Publication date: 13 June 2016

Dani Aoun

The purpose of this paper is to design a preservation policy aimed at safeguarding the Ehden Natural Reserve, a reserve providing shelter to a substantial number of…

Abstract

Purpose

The purpose of this paper is to design a preservation policy aimed at safeguarding the Ehden Natural Reserve, a reserve providing shelter to a substantial number of endangered species.

Design/methodology/approach

The current paper, offers an approach which merges contingent valuation and cost-benefit analysis (CBA) to design a preservation policy aimed at safeguarding the reserve. Contingent valuation is used to estimate the expected benefits from the reserve for both local residents and tourists visiting Ehden, while using a certainty analysis approach to explore the problem of hypothetical bias. A CBA is then applied to the findings to evaluate a ten year plan to preserve the protected area through a non-profit foundation.

Findings

Findings from the analysis support the feasibility of a project of this nature, which shows a positive NPV within the studied period and at an acceptable social discount rate (SDR). The balance between benefit and cost is thus always positive, except in some pessimistic cases when analyzing the sensitivity of the model’s critical variables, particularly the number of visitors, the different WTPs for visitors and locals and the different SDRs.

Originality/value

The paper adds to the scarce research available on the sustainability of protected areas in the Middle East region.

Details

Management of Environmental Quality: An International Journal, vol. 27 no. 4
Type: Research Article
ISSN: 1477-7835

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Book part
Publication date: 16 October 2007

Daniel H. Cole

Government agencies have endeavored, with limited success, to improve the methodological consistency of regulatory benefit–cost analysis (BCA). This paper recommends that…

Abstract

Government agencies have endeavored, with limited success, to improve the methodological consistency of regulatory benefit–cost analysis (BCA). This paper recommends that an independent cohort of economists, policy analysts and legal scholars take on that task. Independently established “best practices” would have four positive effects: (1) they would render BCAs more regular in form and format and, thus, more readily assessable and replicable by social scientists; (2) improved consistency might marginally reduce political opposition to BCA as a policy tool; (3) politically-motivated, inter-agency methodological disputes might be avoided; and (4) an independent set of “best practices” would provide a sound, independent basis for judicial review of agency BCAs.

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Research in Law and Economics
Type: Book
ISBN: 978-1-84950-455-3

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Book part
Publication date: 14 October 2009

Rune Elvik, Alena Høye, Truls Vaa and Michael Sørensen

Abstract

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The Handbook of Road Safety Measures
Type: Book
ISBN: 978-1-84855-250-0

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Abstract

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The Handbook of Road Safety Measures
Type: Book
ISBN: 978-1-84855-250-0

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Article
Publication date: 1 February 2021

Mohammad Khodabakhshi and Mehdi Ahmadi

The paper aims to present an approach to cost-benefit analysis with stochastic data. Determining the type and the values of alternative’s factors are probably the most…

Abstract

Purpose

The paper aims to present an approach to cost-benefit analysis with stochastic data. Determining the type and the values of alternative’s factors are probably the most important issue in this approach. Therefore, in the proposed approach, a competitive advantage model was built to measure the values of alternative’s factors. Then, a satisfactory cost-benefit analysis model with random data was proposed to evaluate the alternatives. The cost-benefit analysis of each alternative was carried out to obtain the real and satisfactory cost-benefit of the decision-maker.

Design/methodology/approach

This paper is orientationally expressed as a mathematical problem in which the optimization problem needs to analyze the approach. This paper is written based on uncertainty linear optimization. Optimization under uncertainty refers to this branch of optimization where there are uncertainties involved in the data or the model and is popularly known as stochastic optimization problems.

Findings

As was seen in the purpose part, in this paper, an approach is presented to cost-benefit analysis by the use of competitive advantage with stochastic data. In this regards, a stochastic optimization problem to assess competitive advantage is proposed. This optimization problem recognizes the values of alternative’s factors which is the most important step in cost-benefit analysis. An optimization problem is proposed to cost benefit analysis, as well.

Practical implications

To investigate different aspects of the proposed approach, a case study with random data of 21 economic projects was considered.

Originality/value

Cost–benefit analysis is a systematic approach to estimating the strengths and weaknesses of alternatives used to determine options which provide the best approach to achieving benefits while preserving savings. Cost–benefit analysis is related to cost-effectiveness analysis. Benefits and costs are expressed in monetary terms and are adjusted for the time value of money; all flows of benefits and costs over time are expressed on a common basis in terms of their net present value, regardless of whether they are incurred at different times. As seen the paper using competitive advantage tries to determine the values of alternative’s factor. As competitive advantage model analyze the advantages and disadvantages of alternatives, this paper by the use of this idea tries to determine the costs and benefits. Two stochastic optimization problems in the middle of this approach are proposed, which assess competitive advantage and cost–benefit analysis, respectively.

Details

Journal of Modelling in Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5664

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Article
Publication date: 1 July 1999

Carsten Helm, Thomas Bruckner and Ferenc Tóth

In this paper, we critically review cost‐benefit analysis, cost‐effectiveness analysis and the guard‐rail approach as decision‐support tools for the choice of climate…

Abstract

In this paper, we critically review cost‐benefit analysis, cost‐effectiveness analysis and the guard‐rail approach as decision‐support tools for the choice of climate protection strategies. Our main focus is on the central role of value judgments, which arise from the need to value; first, uncertain environmental benefits from climate protection relative to other goods; second, the consumption of the present relative to future generations; and third the consumption of “poor” relative to “rich” people. Each of the three approaches analyzed has its shortcomings. Cost‐benefit analysis requires a complete and transitive preference ordering, which stands in sharp contrast to scientific uncertainties and valuation problems. Cost‐effectiveness analysis suffers from the difficulty of setting an appropriate climate protection target. Finally, the usefulness of the guard‐rail approach for decision‐makers depends on the extent to which it is possible to limit the choice set.

Details

International Journal of Social Economics, vol. 26 no. 7/8/9
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 March 1988

Steven E. Kraft

The use of natural resources and the policy environment surrounding this use are informed by concepts derived from economic theory, extant technology, past uses, common…

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Abstract

The use of natural resources and the policy environment surrounding this use are informed by concepts derived from economic theory, extant technology, past uses, common law, statutory regulations, and descriptive ethics influenced by past and present social mores. As such, the uses of natural resources tend to reflect where society has been rather than where it is going. This is especially the case if we consider that existing laws and regulations controlling the allocation and utilisation of natural resources such as land, air, surface water, and groundwater are largely based on utilitarianism reflecting a worldview dating back to Greek antiquity. Given that utilitarianism and a worldview in which nature is perceived as immutable have become part of our legal foundation, technological changes now present ethical and economic problems that threaten part of this foundation. Within a market economy such as that of the United States, the legal environment regulating decisions regarding the use of natural resources contains contradictions that adversely affect the efficiency of allocative decision making. On the one hand, users of resources are urged to find the highest and best use of the resources and are supported by case law and legal precedent, while on the other, statutes based on alternative ethics increasingly prohibit certain uses of natural resources. Additionally, recent legislation, for example, the 1985 Food Security Act, is changing entitlement rules. Concurrently, legal doctrines such as public trust are challenging assumed private property rights. In this article I describe some of these ethical and economic problems while relating them to existing and emerging natural resources law and litigation. While doing so, I review the critical works of Jonas and Rawls. As opposed to utilitarians justifying their actions based on the intrinsic goodness or badness of the end(s) resulting from the action, Jonas and Rawls are ethical formalists seeking rules of right conduct that everyone performs as a matter of principle; see Taylor. In addition, I review the Public Trust Doctrine, and the manipulation of entitlement rules, as “tools” being used to address issues of environmental quality and resource utilisation. For example, see Calabresi and Melamed and Bromley.

Details

International Journal of Social Economics, vol. 15 no. 3/4
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 2 October 2007

Serafeim Polyzos and Dionissios Minetos

Non‐marketable natural coastal resources such as beaches, sand‐dune systems and cliff sides have an economic value deriving not least from the various services which they…

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Abstract

Purpose

Non‐marketable natural coastal resources such as beaches, sand‐dune systems and cliff sides have an economic value deriving not least from the various services which they provide as well as the human demand for consuming some of these services. Coastal defence projects designed to protect the coast against erosion and flooding by the sea have often caused irreversible degradation to coastal natural resources. The main aim of this article is to investigate whether the joint use of cost‐benefit analysis and environmental resource valuation techniques can give any insights toward the sustainable use of the coast. Design/methodology/approach – This paper employs cost‐benefit analysis (CBA) in order to assess the justifiability of carrying out coast protection works in a particular location. This paper also uses contingent valuation methodology (CVM) to estimate the economic values of non‐marketable coastal environmental services. In particular, this paper employs willingness to pay (WTP) technique and try to elicit satisfaction values from beach users by conducting an on‐site questionnaire survey. Findings – his paper argues that there are many advantages in approaching shoreline protection project appraisal both from an environmental as well as an economics point of view. However, when conducting a cost‐benefit analysis the monetary value of environment elicited by contingent valuation techniques has very limited use in it self. It can set the financial budget within which likely coast protection options should be considered but it cannot determine which option is more sustainable. What the decision‐maker needs is to give real meaning to this value by translating it into people's specific preferences and behavioural characteristics. The next step should be setting out pragmatic project characteristics to accommodate the above preferences. Practical implications – Knowledge‐based planning and scheduling as well as informed coastal protection decisions is central to achieving sustainability in the coastal zone. Prior to managing a coastal area, the baseline information needed is the economic value of services that the coastal location in question provides. Originality/value – Generally speaking, the economic value of non‐marketable natural coastal resources such as beaches is closely associated with the way in which society perceives the environment. Both use and non‐use values that are placed upon the environment by individuals have an anthropocentric basis. In this respect, it could be argued that these values often reflect multiple coastal zone uses, conflicts of human interests, levels of environmental education, environmental awareness and environmental appreciation.

Details

Management of Environmental Quality: An International Journal, vol. 18 no. 6
Type: Research Article
ISSN: 1477-7835

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Book part
Publication date: 15 August 2002

Richard B. Stewart

Strong versions of the Precautionary Principle (PP) require regulators to prohibit or impose technology controls on activities that pose uncertain risks of possibly…

Abstract

Strong versions of the Precautionary Principle (PP) require regulators to prohibit or impose technology controls on activities that pose uncertain risks of possibly significant environmental harm. This decision rule is conceptually unsound and would diminish social welfare. Uncertainty as such does not justify regulatory precaution. While they should reject PP, regulators should take appropriate account of societal aversion to risks of large harm and the value of obtaining additional information before allowing environmentally risky activities to proceed.

Details

An Introduction to the Law and Economics of Environmental Policy: Issues in Institutional Design
Type: Book
ISBN: 978-0-76230-888-0

1 – 10 of over 2000