environmental analysts, so as to enable reaching a decision. The selection will be
dependent on
1. the possible dangers of the higher emission rates
2. how much funding can society afford and
3. what society is willing to pay to reach this standard.
How much a society can afford or be willing to pay plays a significant role,
precisely because the cost-effectiveness method does not really try to assess the
benefits obtained from achieving a given standard or goal. It is, thus, not impossible
that even the least-cost (or most cost-effective) alternative of satisfying a strict
standard is still unacceptably expensive. This must not justify doing nothing, but
rather suggest that the set target should be relaxed. The experience of other countries
can be used as a guide to both the target level or standards for emissions, and for their
expected costs.
Some general applicable guidelines are:
(i) Determine targets in both developed and developing countries, and the levels
which the World Health Organisation (WHO) recommends and how they are
obtained.
(ii) Assess how critical the environmental impact is likely to be. Is it lifethreatening (e.g. mercury poisoning), a health hazard (e.g. dust and particulates) or merely a nuisance (e.g. certain noise levels).
(iii) Estimate the impact of the most cost-effective method of regulation on the
financial and economic return from the infrastructure project. If the preferred
alternative is so expensive as to annul profitability, the logical route would be to
abandon the project or think again about the pollution control issue. Assess the
implications of annulling the project. Consider the probable impacts of decreasing the levels of pollution control. Are there lessons which can be drawn from
other countries which encountered similar problems?
(iv) Is it possible to strike some compromise which will reduce environmental
damage, without abandoning the project alternative, or through allowing
another option to be built?
To summarise, cost-effectiveness can be a powerful tool but one which needs
careful application. Rigid adherence to unsuitable or very strict standards may entail
high control costs or even abandoning a project. While such extreme measures may
be required in some circumstances, in other cases some compromise can be
established to implement the project while still safeguarding the environment.
When applied sensibly, the cost-effectiveness method enables the provision of
environmental protection at a reasonable cost without hindering the implementation
of infrastructure project activities.
8.4 Using Market Prices to Value Costs
227
dependent on
1. the possible dangers of the higher emission rates
2. how much funding can society afford and
3. what society is willing to pay to reach this standard.
How much a society can afford or be willing to pay plays a significant role,
precisely because the cost-effectiveness method does not really try to assess the
benefits obtained from achieving a given standard or goal. It is, thus, not impossible
that even the least-cost (or most cost-effective) alternative of satisfying a strict
standard is still unacceptably expensive. This must not justify doing nothing, but
rather suggest that the set target should be relaxed. The experience of other countries
can be used as a guide to both the target level or standards for emissions, and for their
expected costs.
Some general applicable guidelines are:
(i) Determine targets in both developed and developing countries, and the levels
which the World Health Organisation (WHO) recommends and how they are
obtained.
(ii) Assess how critical the environmental impact is likely to be. Is it lifethreatening (e.g. mercury poisoning), a health hazard (e.g. dust and particulates) or merely a nuisance (e.g. certain noise levels).
(iii) Estimate the impact of the most cost-effective method of regulation on the
financial and economic return from the infrastructure project. If the preferred
alternative is so expensive as to annul profitability, the logical route would be to
abandon the project or think again about the pollution control issue. Assess the
implications of annulling the project. Consider the probable impacts of decreasing the levels of pollution control. Are there lessons which can be drawn from
other countries which encountered similar problems?
(iv) Is it possible to strike some compromise which will reduce environmental
damage, without abandoning the project alternative, or through allowing
another option to be built?
To summarise, cost-effectiveness can be a powerful tool but one which needs
careful application. Rigid adherence to unsuitable or very strict standards may entail
high control costs or even abandoning a project. While such extreme measures may
be required in some circumstances, in other cases some compromise can be
established to implement the project while still safeguarding the environment.
When applied sensibly, the cost-effectiveness method enables the provision of
environmental protection at a reasonable cost without hindering the implementation
of infrastructure project activities.
8.4 Using Market Prices to Value Costs
227