PRIMARY AND SECONDARY IMPACTS OF A WATER RESOURCE DEVELOPMENT PROJECT1

ABSTRACT: At a time in history when water resource development in the United States is being condemned as both economically inefficient and an environmental disaster, perhaps economists need to look back at previous development to see what the fruits of water development (be they sweet or sour) have been. The Boise Project of south-western Idaho is 70 years old and to some people it represents a gross error in resource use, while to others it represents a means of livelihood and well being. A recent research project at the University of Idaho attempted to measure not only the direct economic income benefits of the project (from irrigation), but also the indirect or secondary income benefits (from the food processing industry). Periodic regional input-output tables were constructed to assess the income generated from irrigation and food processing over the period from 1946 to 1970. Input-output analysis allowed researchers to evaluate the direct and indirect impacts of both the irrigation sector and the food processing sector and to compare their growth over time.     

MEASURING INTANGIBLE BENEFITS -SOME NEEDED RESEARCH1

ABSTRACT. Society has long sought to maximize the welfare of its members by allocating its limited resources so as to provide maximum satisfaction. As long as all of the values that society gains or loses are measured in the market place in terms of price, the process of maximizing through economic models is relatively straightforward. In fact, however, the total value that society receives from the use of its resources is not completely measured through the private market transactions. There are some values created which are external to the market system. The resulting underinvestment in natural resources by the private sector necessitates the entry of the public sector. The presence of intangible benefits and intangible costs has long been recognized, but completely satisfactory methods for including these in the quantitative analysis of benefit-cost have not been developed. Some progress has been made in including recreational values in project analysis via the expenditures method, the Gross National Product method, consumer surplus method, cost method, market value method, and monopoly and discriminating monopoly methods, but little has been done in the area of aesthetic values. Techniques for including such values in project evaluation need to be further researched. Tradeoff models developed by market researchers, the advertising industry, social psychologists and sociologists may have some applicability. Methodology for including proposed multiple objective functions in project analysis is also a critical need.     

Cost‐benefit analysis of soil remediation in Israeli industrial zones

Industrial zones are the main source of soil pollution in Israel. Due to the upcoming approval of the bill on soil contamination and remediation in Israel, it is important to assess the economic feasibility of soil remediation. This study examines the economic feasibility of an extensive remediation project of all contaminated industrial zones in Israel. The estimated economic benefits include both direct benefits, resulting from the increase in the land value of the contaminated site, and indirect benefits, arising from the increase in nearby property values. A cost‐benefit analysis showed a cost benefit ratio of 1:14. Nonetheless, the direct benefits were found to be lower than the costs. Thus, the question of funding requires collaboration between government and the private sector.     

The benefits and costs of reducing emissions from the electricity sector

Recent federal policy proposals to reduce emissions of sulfur dioxide (SO(2)), nitrogen oxides (NO(x)), and mercury from the US electricity sector promise important improvements in air quality and reductions in acid deposition. The cost of achieving these reductions depends on the form and stringency of the regulation. In this research, we analyze the economic benefits and costs of the US Environmental Protection Agency's (EPA's) Clean Air Interstate Rule (CAIR) as characterized in the supplemental rule proposed in June 2004, and the Clean Air Mercury Rule (CAMR) as proposed in February 2004. The assessment integrates a model of the electricity sector, two models of atmospheric transport of air pollutants, and a model of environmental and public health endpoints affected by pollution. We model explicitly the emissions of SO(2), NO(x), mercury and carbon dioxide (CO(2)) and the effects of changes in emissions of SO(2) and NO(x) on environmental and public health. The manner in which mercury emissions are regulated will have important implications not only for the cost of the regulation, but also for emission levels for SO(2) and NO(x) and where those emissions are located. We find the economic benefits of CAIR and CAMR are far greater than the costs. Recent estimates of benefits of reductions in mercury and acidification indicate that our model captures the lion's share of quantifiable benefits. We also find that the EPA would have been justified on economic grounds in pursuing additional SO(2) emissions reductions beyond the requirements of CAIR.     

Creating sustainable environmental health conditions by redefining municipal roles and responsibilities: experiences from Tunisia and Ecuador

The multiple and interlinked problems that plague most peri-urban communities can only be successfully addressed and resolved if roles and responsibilities of all actors in the urban setting are redistributed. This will require fundamental changes in the way municipalities work and define their accomplishments. Behaviour needs to change at all levels, beginning with public sector institutions responsible for communities. Without changes at the municipal level, requisite changes at the community level to remedy the root causes of environment-related illness, do not occur. Public sector institutions and communities, working as partners with clearly defined roles and responsibilities, and, most importantly, with mutual trust, can together make real progress toward improving health and well-being in peri-urban settlements. This article discusses two recent projects sponsored by the Environmental Health Project of the U.S. Agency for International Development (USAID): an 18-month pilot project to improve peri-urban environmental health in two cities in Tunisia, and a project in Ecuador to support the Ministry of Health in combating cholera in affected provinces. The following examples, methodology, and results may be useful to officials and donor organizations in designing environmental health projects.     

Project coordinators’ views on climate adaptation costs and benefits – justice implications

ABSTRACT

As local climate adaptation activity increases, so does the number of questions about costs, benefits, financing and the role that economic considerations play in adaptation-related decision-making and policy. Through five cases, covering a range of climate risks and types of adaptation measures, this paper critically examines Swedish project coordinators’ perceptions of costs and benefits in already-implemented climate adaptation measures. Our study finds that project coordinators make use of different system boundaries – on temporal, geographical and administrative scales – in their cost/benefit evaluations, making the practice of determining adaptation costs arbitrary and hard to compare. We further demonstrate that the project coordinators interpret costs and benefits in a manner that downplays the intangible environmental and social costs and benefits arising from the adaptation measures, despite their own experience of how such measures negatively impact upon social value. The exclusion of social and environmental costs and benefits has severe implications for justice, as it can bias decisions against people and ecosystems that are affected negatively. Based on the findings, we propose three tentative social justice dilemmas in local climate adaptation planning and implementation: 1. Cost and benefit distribution across scales; 2. The identification and valuation of non-market effects; and 3. The equitable allocation of costs and benefits.     

A double‐edged sword: Realities of artisanal and small‐scale mining for rural people in the Alaotra region of Madagascar

A growing number of people are entering the artisanal and small‐scale mining (ASM) sector worldwide. In Madagascar, millions of individuals depend on this informal activity. Through a case study in the Alaotra‐Mangoro region of Madagascar, our research aimed to understand the “bottom‐up” dynamics and ripple effects of the sector, by looking at the realities for rural communities where inhabitants are both directly and indirectly affected by ASM. We were interested in community members' and miners' perceptions of the socio‐economic and environmental impacts of ASM, and in identifying the factors attracting people living in one of the country's agricultural hubs to this activity. Our results show a wide diversity of push and pull factors leading people to enter the sector. Although many positive impacts of ASM exist for miners and communities within the vicinity of mines, most miner participants considered themselves worse off since starting to mine, highlighting the high risk and low probability of return of ASM. ASM's potential for local and national development will remain squandered if its negative impacts continue to go unmanaged. Accounting for local contexts and the ripple effects of ASM will be crucial in achieving safety and security for miners, and to tap into the benefits it may offer communities while minimising environmental damage.     

Myanmar under reform: Emerging pressures on water,energy and food security

Myanmar's water‐related sectors are subject to intensive changes, as the country's abundant land and water resources provide substantial scope for development. Recent steps towards economic reform in Myanmar have led to a surge of foreign investment directed towards intensified natural resource extraction. Both the agricultural and the energy sector are increasingly affected by foreign investments that will impact the status of water, energy and food security in the country. With these on‐going developments, Myanmar's future is largely dependent on how its natural resources are managed and how the benefits from the resource extraction are shared. With various institutional changes and new actors welcomed to the sectors, existing livelihoods and ecosystems dependent on the land and water resources are to face increasing competition for the shared resources, while lacking secured access to them. There are increasing concerns that this sectoral development is occurring at the expense of environmental and social sustainability. As one way to tackle these challenges, the water‐energy‐food nexus approach could help in finding synergies and co‐benefits across sectors by addressing the imbalances along the nexus and externalities derived from the on‐going intensification.     

Implementing gender policy in the water and sanitation sector

Using a case study approach, this article examines how the gender aspects of policy are implemented. It presents examples of gender policy implemented by different types of organizations, with particular emphasis on the water and sanitation sector. Implementing agencies include a UN agency, developing country governments, bilateral donors, and local and international NGOs. Observations from project implementation in the water and sanitation sector reveal the degree of effectiveness of the gender policies applied. Cases were chosen to provide interesting examples, rather than illustrate lessons that can be generalized. Much more research is needed before that can be done. The article also addresses project implementation strategy considerations, including how policies and implementation address women's needs, whether gender issues are treated separately or mainstreamed, and what factors are linked to successful implementation. Problems of coordination between different project implementation aspects/agents are endemic in the water and sanitation sector. Thus physical installation work is typically completed by engineers, while NGOs mostly deal with social aspects of projects, and the two groups often do not communicate effectively.     

Adding public value: The limits of corporate responsibility

It is suggested that natural resource companies undertaking large-scale projects may be expanding the scope of corporate social responsibility by working to enhance the capabilities of the public sector. Naturally companies are concerned to protect their investments, and to ensure their viability. They will therefore invest in necessary infrastructure and facilities of all types, where those are lacking. Such investment often provides benefits to the wider community, but with a few exceptions these are normally incidental byproducts rather than inherent objectives. The motivation for companies to provide resources of all types in order to enhance the capabilities of the public sector to provide public services is usually an expectation is that the tangible benefits will exceed the costs, rather than altruism. One driving force is to secure and maintain a company's social licence to operate. More recently competition from Chinese firms is prompting private sector companies to offer comparable investments in infrastructure. It is unclear whether investment in public sector capabilities is cyclical and liable to cutbacks when market conditions deteriorate. Changing market conditions affect not just corporate willingness to spend but also host countries’ bargaining strengths. In boom periods host countries will be more able to secure straightforward financial benefits through higher tax receipts than when markets are weak. Beyond the specific needs of individual projects corporate policies are strongly influenced by the beliefs of senior managers. External pressures both from international institutions and from NGOs also drive corporate behaviour. The success of investment in public sector capabilities relies in the end on the responses of host countries, and on how closely the objectives and interests of the government are aligned with maximising the nation's long term wealth and welfare. Where they are not corporate resources may be frittered away. There are also questions over the legitimacy of corporate investments, especially by foreign-owned companies. They have a right to offer advice and protect their legitimate interests, but these may not always coincide with those of their host countries. There is a range of questions about the appropriate role of companies, which lead on to feasible and effective ways of improving weak governance.     

Needs-based sewerage prioritization: alternative to conventional cost-benefit analysis

This paper presents an empirical approach to select and prioritize sewerage projects within set budgetary limitations. The methodology includes a model which quantifies benefits of a sewerage project as an index or dimensionless number. The index considers need and urgency of sewerage and other project goals. Benefit is defined as the difference in anticipated impact between the current condition (without the project) and the expected condition with the project. Anticipated benefits primarily include reduction in environmental pollution, reduction of human diseases and morbidity, and other tangible and intangible improvement. This approach is a powerful decision tool for sewerage prioritization and an effective alternative to conventional cost-benefit analysis. Unlike conventional analysis, this approach makes no attempt to convert project benefits and other impacts into a monetary measure. This work recognizes that the decision to provide sewerage based solely on net benefits is not practical. Instead, benefit-cost ratios (B/C) are calculated utilizing cost-effectiveness approach. Using these ratios, 16 unserviced areas of Ensenada, Mexico are ranked. The prioritization rankings produced by this method must be further scrutinized and carefully reviewed for logic, accuracy of input data, and practicality of implementation. A similar framework may also be useful for prioritizing other public works projects.     

EVALUATING DIRECT BENEFIT ESTIMATION PROCEDURES FOR IRRIGATION PROJECTS: A SIMPLIFIED APPROACH1

ABSTRACT: An integral part of evaluating the net benefits generated by an existing or proposed irrigation project is the assessment of the associated impacts in commodity markets. Traditionally, these impacts have been measured by either assuming no change in commodity prices and calculating net returns to project farmers, or by allowing commodity prices to fall in accordance with a given elasticity of demand and subtracting commodity production costs from the associated area under the commodity demand curve. In either case, it is implicitly assumed that supply is perfectly inelastic. This article establishes that traditional approaches to measuring direct benefits are biased. Formulae are presented for calculating the maximum absolute and relative error which may result from using these techniques as a function of project size. Direct benefit estimates are then evaluated for three irrigation projects in Nebraska, illustrating how these results can be used to improve project evaluation procedures.     

Exploring the origins of ‘social license to operate’ in the mining sector: Perspectives from governance and sustainability theories

In the mining sector, local communities have emerged as particularly important governance actors. Conventional approaches to mineral development no longer suffice for these communities, which have demanded a greater share of benefits and increased involvement in decision making. These trends have been spurred by the growth of the sustainable development paradigm and governance shifts that have increasingly transferred governing authority towards non-state actors. Accordingly, there is now widespread recognition that mineral developers need to gain a ‘social license to operate’ (SLO) from local communities in order to avoid potentially costly conflict and exposure to social risks. A social license can be considered to exist when a mining project is seen as having the ongoing approval and broad acceptance of society to conduct its activities. Due to the concept's relatively recent emergence, however, only a limited body of scholarship has developed around SLO. Drawing on examples from northern Canada, this paper uses governance and sustainability theories to conceptualize the origins of SLO in the mining sector and describe some of the associated implications. Further research is needed to determine governance arrangements which help facilitate establishment of SLO in different mineral development contexts.     

The cost of crop damage caused by ozone air pollution from motor vehicles

The effects of ozone air pollution on the agricultural sector are an important environmental challenge facing policy makers. Most studies of the economic impact of air pollution on agriculture have found that a 25% reduction in ambient ozone would provide benefits of at least $1–2 billion annually in the United States. This paper extends existing research by estimating the benefits of a reduction in emissions from a major source of ozone formation: motor-vehicle emissions. An agricultural production model is combined with an analysis of motor-vehicle emissions and air quality to estimate the impacts of emissions from six different motor-vehicle classes, at both the regional and national level. The benefits to the agricultural sector from completely eliminating ozone precursor emissions from motor vehicles ranges between $3·5 and $6·1 billion annually.     

Conversion of a Missouri River Dam and Reservoir to a Sustainable System: Sediment Management1

Abstract: A present and future challenge for water resources engineers is to extend the useful life of our dams and reservoirs. Ongoing reservoir sedimentation in impoundments must be addressed; sedimentation in many reservoirs already limits project benefits and effective project life. Sustainability requires that incoming sediment be moved downstream past the impounding dam. We use Lewis and Clark Lake, the most downstream of the six Missouri River main stem reservoirs, to demonstrate how a reservoir in advanced stages of its project life could be converted to a sustainable system with local benefits exceeding costs by a factor of 1.5. Full consideration of benefits would further enhance project justification. The proposed strategy involves four phases that will take about 50 years to complete. Cost estimates for this potential project range from the quantitative to the plausible, but it is clear that the results justify a full engineering, environmental, and economic study of this model project. If implemented, the project will create scientific knowledge and develop technologies useful for achieving sustainability at many other reservoirs in the Mississippi River basin and beyond.     

Impact assessment of a hydroelectric project on the flora in the Western Himalayan region based on vegetation analysis and socio-economic studies

This study provides an overview of the impacts of a proposed hydroelectric power project in the Western Himalayan region in India, using a primary database on floristic diversity and vegetation analysis. The remote sensing data revealed that in the submergence zone only mixed deciduous forest that occupies 807.5 ha area and has a wood biomass volume of 4,027,503 m³ is likely to be lost due to impoundment. A total of 165 plant species found in the submergence zone also occur in the influence and free draining catchment area of the project. In the influence zone of the project area only one tree species (Acer oblongum) is found under conservation threat category, which is also present in the free draining catchment of the project. The project affected population (6716 people) residing in the submergence and influence zone depend upon the surrounding forests for fuel wood, fodder, wild edibles etc., and most likely they will settle in the nearby areas, thus mounting more pressure on residual forests of the influence zone for various forest products. Further, from the vegetation analysis it is evident that several tree species (e.g. Lannea coromandelica, Terminalia alata, T. bellerica etc.), may face more pressure from exploitation as they provide a number of useful products and are represented in lower numbers in the forests of the project area. To compensate for the loss of various goods and services provided by the forests falling in the submergence zone and to offset the increased pressure of the project affected families on the forests of influence zone, a biodiversity management plan is suggested incorporating socio-economic considerations.     

Private participation in isolated grids in Mozambique

This article presents a case study from Mozambique of the electrification of two selected towns under a World Bank financed project. Low-cost electricity services were extended to the two isolated areas after an enabling framework had been created for private sector participation. The World Bank project also demonstrates that the private sector can be attracted to participate in rural electrification schemes even in a poor country. The example shown in this article is one of the few of its kind in SubSaharan Africa.     

Indirect and Avoided Environmental Consequences in Project Evaluation

The paper focuses on indirect environmental consequences, namely the environmental consequences of the production of project inputs. In addition, we introduce the term 'avoided environmental consequences', i.e. the environmental consequences associated with diversion of production factors from alternative use. The former are always relevant, while the avoided consequences are only relevant in cases involving fully-employed production factors that would otherwise be used in production. The inclusion of indirect and avoided environmental consequences may considerably affect the outcome of traditional project evaluation. In this paper it is suggested how the indirect and avoided environmental consequences may be described using the input-output system in combination with environmental coefficients.     

HIV and AIDS: Responding to a threat to education for sustainable development

The article seeks to sensitize the development community, particularly outside the education sector, about the issues surrounding education as a vehicle for promoting sustainable development in an AIDS environment in Africa. By illustrating how the epidemic impacts education sector staff as well as parents and students at all levels, the article intends to suggest how national authorities, NGOs and donor agencies can work out strategies to enhance the role of education in promoting sustainable development in Africa. Analysis will demonstrate how the AIDS epidemic weakens the education sector, particularly in countries with a generalized epidemic (defined as more than 3% of the adult population being HIV‐positive), undermining the sector's ability to contribute to general literacy and sustainable development. The article will demonstrate that HIV and AIDS is still not fully accepted as an educational issue, which has hampered efforts to deal with its ravages in the educational sector. The need for holistic policy frameworks for supporting teachers and administrators living with HIV and AIDS will be discussed as well as how changes in curriculum and better relations with the community are important in addressing the needs of students. The article will highlight options for developing innovative responses to HIV and AIDS in African education, showing how different forms of education can serve as vehicles for responding to the challenges of the epidemic. The examples emphasize the importance of learner‐centered instruction and partnerships with the health sector and other resources needed in an AIDS‐affected environment. Key messages of the article are that the HIV and AIDS epidemic is a multi‐sectoral problem and that responding to it effectively in the education sector requires coherent responses that address the needs of learners and instructors, including those who are personally affected or infected by HIV and AIDS. Adapting the Education for Sustainable Development initiative to address the challenges posed by the epidemic must be supported by policy development, leadership and advocacy. Diverse partnerships are essential, as the education sector alone cannot deal with the challenge of HIV and AIDS to sustainable development.