Cost-Benefit Analysis of Environmental Change

Front Cover
Cambridge University Press, Aug 27, 1993 - Business & Economics - 232 pages
This book is an advanced text in applied welfare economics and its application to environmental economics. The author goes far beyond the existing literature on the valuation of environmental benefits, deriving sets of cost-benefit rules which can be used to assess private and public sector projects which affect the environment. He explains how valuation studies can be augmented so as to yield the information necessary for decision-making, showing how externalities, taxes, unemployment, risk, irreversibilities, flow and stock pollutants, discounting, and intergenerational distribution should be treated in social cost-benefit analysis. Drawing on a number of empirical illustrations, this book will be of interest not only to those taking advanced courses in environmental economics, welfare economics, and public economics, but also as a reference for those undertaking project evaluations in government and business.
 

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Contents

Introduction
1
12 Plan of the study
3
Some basic concepts
7
22 Firms
9
23 Markets general equilibrium and Pareto optimality
10
24 Public goods
11
25 The social welfare function
15
26 Some illustrations of social welfare functions
17
72 Project evaluations
115
73 Compensation tests
118
74 Pragmatic views on the aggregation problem
121
an infinitehorizon model
122
76 Overlappinggenerations models
124
77 Future generations transfers in kind and impure altruism
126
78 On the treatment of altruism in costbenefit analysis
128
Costbenefit rules in a risky world
133

27 Concluding remarks
21
Consumer surplus measures
24
32 On the properties of money measures
27
33 Environmental quality and market data
30
34 Complex changes
33
35 On pathdependency of money measures
38
Appendix
42
Valuing public goods practical methodologies
46
42 Closedended techniques
52
43 Utility functions and demand equations
55
44 The travel cost method
57
45 Hedonic prices
59
46 A useful interpretation of WTP measures
62
General equilibrium costbenefit rules
65
51 Producer surplus measures
66
52 General equilibrium costbenefit rules
71
53 Assessing large projects
74
54 Some further interpretations
77
55 The treatment of taxes
81
56 Unemployed resources
84
Appendix
86
Costbenefit rules national income accounts and sustainable development
90
62 Intertemporal costbenefit rules
95
63 An illustration of a costbenefit analysis
98
64 Natural resources
101
65 National accounts and sustainable development
104
Appendix
110
Valuation and aggregation intragenerational and intergenerational issues
113
71 The social welfare function
114
81 Uncertain supply or quality of an environmental asset
134
82 Option value
139
83 A simple intertemporal extension
142
84 Assessing changes in future environmental quality
145
85 Some further notes on costbenefit rules in a risky world
147
Appendix A
150
Appendix B
153
Valuing changes in access conditions health risks and information
156
91 Access value
157
92 Valuing changes in health risks
158
93 Some further notes on the value of health changes
160
94 Valuing health benefits from air pollution abatement
163
95 The value of information and quasioption values
167
96 Policy choices time inconsistency and credibility
171
97 Irreversibility uncertainty and the social profitability of an investment
174
Empirical applications
178
102 Preservation of fragile forests
180
103 Preservation of endangered species
183
104 Social cost of environmental quality regulations
189
105 The BrownHammack model for allocation of prairie wetlands
192
106 Accounting for natural resource depletion
197
Policy instruments and international environmental problems
200
112 International pollution
206
113 The acid rain game
209
Notes
214
References
217
Index
228
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