A Bottom-up Approach to Environmental Cost-Benefit Analysis

TY - UNPB

T1 - A Bottom-up Approach to Environmental Cost-Benefit Analysis

AU - Carolus, Johannes Friedrich

AU - Hanley, Nick

AU - Olsen, Søren Bøye

AU - Pedersen, Søren Marcus

PY - 2018

Y1 - 2018

N2 - Cost-Benefit Analysis is a method to assess the effects of policies and projects on social welfare. CBAs are usually applied in a top-down approach, in the sense that a decision-making body first decides on which policies or projects are to be considered, and then applies a set of uniform criteria to identifying and valuing relevant cost and benefit flows. This paper investigates the possible advantages, prerequisites and limitations of applying CBA in what may be considered an alternative, “bottom-up”. Instead of starting out with a pre-defined policy option, the suggested approach begins with the underlying environmental problem, and then assesses costs and benefits of various strategies and solutions suggested by local and directly affected stakeholders. For empirical case studies concerning two river catchments in Sweden and Latvia, the bottom-up CBA approach utilises local knowledge, assesses plans which are not only developed for local conditions but are also likely to be more acceptable to local society, and sheds additional light on possible distributional effects. By not only benefitting from, but also supporting participative environmental planning,bottom-up CBA is in line with the growing trend of embedding stakeholder participation into environmental policy and decision-making.

AB - Cost-Benefit Analysis is a method to assess the effects of policies and projects on social welfare. CBAs are usually applied in a top-down approach, in the sense that a decision-making body first decides on which policies or projects are to be considered, and then applies a set of uniform criteria to identifying and valuing relevant cost and benefit flows. This paper investigates the possible advantages, prerequisites and limitations of applying CBA in what may be considered an alternative, “bottom-up”. Instead of starting out with a pre-defined policy option, the suggested approach begins with the underlying environmental problem, and then assesses costs and benefits of various strategies and solutions suggested by local and directly affected stakeholders. For empirical case studies concerning two river catchments in Sweden and Latvia, the bottom-up CBA approach utilises local knowledge, assesses plans which are not only developed for local conditions but are also likely to be more acceptable to local society, and sheds additional light on possible distributional effects. By not only benefitting from, but also supporting participative environmental planning,bottom-up CBA is in line with the growing trend of embedding stakeholder participation into environmental policy and decision-making.

M3 - Working paper

T3 - Discussion Papers in Environment and Development Economics

BT - A Bottom-up Approach to Environmental Cost-Benefit Analysis

PB - University of St. Andrews

ER -