Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting
This paper demonstrates a comprehensive methodology for assessing the viability of an environmental management plan that has long-run economic and ecological impacts. The case study under consideration is the implementation of a water resource management plan in a water-scarce region of the world, n...
| Main Authors: | , , |
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| Format: | Artículo preliminar |
| Language: | Inglés |
| Published: |
International Food Policy Research Institute
2009
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10568/161823 |
| _version_ | 1855521608012136448 |
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| author | Birol, Ekin Koundouri, Phoebe Kountouris, Yiannis |
| author_browse | Birol, Ekin Koundouri, Phoebe Kountouris, Yiannis |
| author_facet | Birol, Ekin Koundouri, Phoebe Kountouris, Yiannis |
| author_sort | Birol, Ekin |
| collection | Repository of Agricultural Research Outputs (CGSpace) |
| description | This paper demonstrates a comprehensive methodology for assessing the viability of an environmental management plan that has long-run economic and ecological impacts. The case study under consideration is the implementation of a water resource management plan in a water-scarce region of the world, namely Cyprus. Specifically, this plan proposes to replenish a depleting aquifer with treated wastewater. The proposed methodology first identifies the key stakeholder groups (farmers and the general public) who are hypothesized to derive economic values (benefits) from implementation of this plan, and then uses stated-preference methods to capture the total economic value of these benefits. Benefits are aggregated over the relevant populations of these stakeholder groups and weighed against the total costs of implementing the plan in a long-run cost-benefit analysis (CBA). An econometrically estimated time-declining trajectory of discount rates is used for the CBA in order to assess the long-run sustainability of the plan. The results reveal that the net benefit trajectory estimated with the time-declining discount rate takes one and a half to three times as long to come to a plateau compared to the constant discount rates of 3.5 and 6 percent, emphasizing the importance of using declining discount rates and capturing the entirety of the benefits generated by such plans. This methodology is particularly recommended for providing much needed information to support the implementation of the EU Water Framework Directive, which advocates the use of CBA with consideration of the notion of sustainability for achieving the "good water status" for all European waters. |
| format | Artículo preliminar |
| id | CGSpace161823 |
| institution | CGIAR Consortium |
| language | Inglés |
| publishDate | 2009 |
| publishDateRange | 2009 |
| publishDateSort | 2009 |
| publisher | International Food Policy Research Institute |
| publisherStr | International Food Policy Research Institute |
| record_format | dspace |
| spelling | CGSpace1618232025-11-06T05:51:31Z Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting Birol, Ekin Koundouri, Phoebe Kountouris, Yiannis aquifers wastewater treatment econometrics experimental design This paper demonstrates a comprehensive methodology for assessing the viability of an environmental management plan that has long-run economic and ecological impacts. The case study under consideration is the implementation of a water resource management plan in a water-scarce region of the world, namely Cyprus. Specifically, this plan proposes to replenish a depleting aquifer with treated wastewater. The proposed methodology first identifies the key stakeholder groups (farmers and the general public) who are hypothesized to derive economic values (benefits) from implementation of this plan, and then uses stated-preference methods to capture the total economic value of these benefits. Benefits are aggregated over the relevant populations of these stakeholder groups and weighed against the total costs of implementing the plan in a long-run cost-benefit analysis (CBA). An econometrically estimated time-declining trajectory of discount rates is used for the CBA in order to assess the long-run sustainability of the plan. The results reveal that the net benefit trajectory estimated with the time-declining discount rate takes one and a half to three times as long to come to a plateau compared to the constant discount rates of 3.5 and 6 percent, emphasizing the importance of using declining discount rates and capturing the entirety of the benefits generated by such plans. This methodology is particularly recommended for providing much needed information to support the implementation of the EU Water Framework Directive, which advocates the use of CBA with consideration of the notion of sustainability for achieving the "good water status" for all European waters. 2009 2024-11-21T09:58:33Z 2024-11-21T09:58:33Z Working Paper https://hdl.handle.net/10568/161823 en Open Access application/pdf International Food Policy Research Institute Birol, Ekin; Koundouri, Phoebe; Kountouris, Yiannis. 2009. Assessing the economic viability of alternative water resources in water-scarce regions. IFPRI Discussion Paper 908. https://hdl.handle.net/10568/161823 |
| spellingShingle | aquifers wastewater treatment econometrics experimental design Birol, Ekin Koundouri, Phoebe Kountouris, Yiannis Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting |
| title | Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting |
| title_full | Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting |
| title_fullStr | Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting |
| title_full_unstemmed | Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting |
| title_short | Assessing the economic viability of alternative water resources in water-scarce regions: Combining economic valuation, cost-benefit analysis and discounting |
| title_sort | assessing the economic viability of alternative water resources in water scarce regions combining economic valuation cost benefit analysis and discounting |
| topic | aquifers wastewater treatment econometrics experimental design |
| url | https://hdl.handle.net/10568/161823 |
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