Disproportionate cost analysis in the EC water framework directive: an application to lake Nørre Søby in Odense river basin in Denmark
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Vestergren Thomsen, Susanne1, Forfatter
Jacobsen, Brian1, Vejleder
Hasler, Berit1, Vejleder
1Det Biovidenskabelige Fakultet, København, Danmark, diskurs:18              
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 Abstract: The Water Framework Directive seeks to achieve enhancement of aquatic ecosystem quality for all waters across Europe. However, it recognizes the need to accommodate economic and social considerations so deadlines can be extended or less stringent objectives can set where costs are judged to be disproportionate. So far no practical guidelines or common understanding exist on how disproportionate costs should be carried out in practice or what the criteria for disproportionality should be. From an economic efficiency viewpoint it is clearly a case for cost-benefit analysis (CBA) albeit in a WFD context costs need to exceed benefits by an appreciable margin before considered disproportionate. Ultimately the judgment on this will be a political decision. The main objective of this thesis has been to contribute with a case example of how a cost-benefit analysis could be prepared in a disproportionate cost analysis context in practice. The eutrophied Lake Nørre Søby in Odense River Basin on Fyn was chosen as case study object due to the relatively high costs of programme of measures (PoM) to achieve good ecological status (GES) in the lake and presumptions that benefits would be comparatively low. Unit value transfer was chosen as the method to estimate the non-market benefit values. Costs of implementation of the PoM were directly transferred from the Odense Pilot River Basin project albeit with inclusion of a measure for lake restoration and requirements for P fertilization. The PoM for the lake mainly consists of measures such as afforestation and wetlands, and measures related to fertilization. The value of the direct water related impacts was estimated from the transfer of benefits from relevant studies. The estimated economic value show large variation with total (mainly) non-use benefits (no access to the lake) varying from 8 to 55.6 million DKK. The estimates are very much affected by the size of the population chosen as beneficiaries. The non-water related benefits, i.e. amenity and recreational value and reduced emissions of climate gasses and ammonia, amount to 44 million DKK rising to 178 million if 50% of afforestation is established in urban areas. The total benefit value is estimated to 60 to 114 million DKK which is compared to the total costs of the PoM of 100 million DKK. In a situation of public access the total benefits increase to 74 to 209 million DKK. The main conclusion is that benefits seem large enough to suggest that GES in the lake should be achieved. However, use of benefit transfer to value improvements in lake quality in DK is highly dependent on either a better methodology to adjust for differences between study sites and policy site, or that new primary research is carried out. Non-use value transfer should be given more attention since it is likely to become important. The increased amenity and recreational (non-water related) benefits of measures has the potential to be an argument to sustain the objective of GES in water bodies irrespective of the value of the water quality improvement. The large focus on the assessment of benefits may overshadow thorough cost assessments in CBAs in a DCA context. However, if results from the CEA are not carefully evaluated the results of the DCA could be biased from the start. Finally, integrated river basin management planning is likely to make it a complicated task to ensure that decisions on exemptions are based on cost and benefit estimates related to the water body in question.
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 Type: Speciale
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Sprog: English - eng
 Datoer: 2008
 Sider: 194 pages
 Publiceringsinfo: København, Danmark : Fødevareøkonomisk Institut
 Indholdsfortegnelse: -
 Note: The Master of Science Programme in Environmental and Natural Resource Economics, Environmental and Natural Resource Economics
 Type: Speciale
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