7.3 Assessment Schemes
173
The first point focuses on the weighting of criteria within a CBA. The weighting of
criteria should discriminate one criteria against another, but decision in real world are
made by weighting the considered criteria. The second one focuses on the uncertainty,
the arbitrariness and the feigned accuracy of data. Strong effort has to spend on the
issue of data collection and data processing. There is no universal solution for these issues, but the applied method should be transparent regarding the implementation of data,
the uncertainty and the accuracy. In most projects is less time for comprehensive data
collection and verification. The last point of criticism is focused on the preference of
politicians to decide on hard rather than on soft facts. Aspects which can be monetarized are seen as hard facts, the others as soft facts. Hansjürgens (2004) stated that the
critic is related to the incorrect use of the outcomes of a CBA rather than to the method
itself.
The problem related to the issue of discounting is seen as a limitation to the application
of CBA. Discounting should take cost and benefit of different time periods into account
to enable a comparison (Hampicke, 1991). Economists indicate that discounting should
be applied for periods not longer than 10–20 years because this period includes the time
scale of one generation where the effects may be estimated, but to assess the effects which
might occur for the next generations is impossible (regarding cost and benefit, see, e.g.,
Hampicke 1992; Endres and Holm-Müller 1998).
Conflicts may arise taking societal, economical and ecological aspects into account in
a CBA. Knowing the different points of view it is possible to anticipate potential conflict
reasons by finding new solutions and compromises. Mainly, the applied methods of CBA
try to monaterize goods which value cannot be determined by, for example, market price.
Monetary assessment is mainly done by willingness-to-pay methods. Different methods
exist which can be used trying to investigate how much the customers or users are willing to pay, especially for values which cannot be directly quantified (non-tangible). The
advantages of willingness-to-pay methods are that goods are related to a calculated value
and that they can be integrated in a CBA. The main disadvantage of willingness-to-pay
methods is that these values represent not really the price people would pay for the good –
see, for example, Bateman (1995); Breidert (2005) and Guzman and Kolstad (2007). To
estimate the influence of certain aspects regarding the statements in willingness-to-pay
investigations different methods can be applied.
Figure 7.6 outlines the approach of the total economic value (TEV, Barbier 1990;
Pearce and Turner 1990) which tries to cover all relevant value categories for a comprehensive appraisal. The approach considers different spatial dimensions (e.g., nearby or far
away) as well as temporal dimensions (e.g., short-term or long-term) and it is possible to
demonstrate the total amount of values which are related to the demand of natural goods.
The aim of this approach is not to allocate one calculated figure, but to provide a discussion platform which considers all relevant value categories (e.g., benefit value, functional
value, existence value, etc.). This comprises explicitly the ecological and social services
of the biosphere, and, for example, the natural coastal environment.
173
The first point focuses on the weighting of criteria within a CBA. The weighting of
criteria should discriminate one criteria against another, but decision in real world are
made by weighting the considered criteria. The second one focuses on the uncertainty,
the arbitrariness and the feigned accuracy of data. Strong effort has to spend on the
issue of data collection and data processing. There is no universal solution for these issues, but the applied method should be transparent regarding the implementation of data,
the uncertainty and the accuracy. In most projects is less time for comprehensive data
collection and verification. The last point of criticism is focused on the preference of
politicians to decide on hard rather than on soft facts. Aspects which can be monetarized are seen as hard facts, the others as soft facts. Hansjürgens (2004) stated that the
critic is related to the incorrect use of the outcomes of a CBA rather than to the method
itself.
The problem related to the issue of discounting is seen as a limitation to the application
of CBA. Discounting should take cost and benefit of different time periods into account
to enable a comparison (Hampicke, 1991). Economists indicate that discounting should
be applied for periods not longer than 10–20 years because this period includes the time
scale of one generation where the effects may be estimated, but to assess the effects which
might occur for the next generations is impossible (regarding cost and benefit, see, e.g.,
Hampicke 1992; Endres and Holm-Müller 1998).
Conflicts may arise taking societal, economical and ecological aspects into account in
a CBA. Knowing the different points of view it is possible to anticipate potential conflict
reasons by finding new solutions and compromises. Mainly, the applied methods of CBA
try to monaterize goods which value cannot be determined by, for example, market price.
Monetary assessment is mainly done by willingness-to-pay methods. Different methods
exist which can be used trying to investigate how much the customers or users are willing to pay, especially for values which cannot be directly quantified (non-tangible). The
advantages of willingness-to-pay methods are that goods are related to a calculated value
and that they can be integrated in a CBA. The main disadvantage of willingness-to-pay
methods is that these values represent not really the price people would pay for the good –
see, for example, Bateman (1995); Breidert (2005) and Guzman and Kolstad (2007). To
estimate the influence of certain aspects regarding the statements in willingness-to-pay
investigations different methods can be applied.
Figure 7.6 outlines the approach of the total economic value (TEV, Barbier 1990;
Pearce and Turner 1990) which tries to cover all relevant value categories for a comprehensive appraisal. The approach considers different spatial dimensions (e.g., nearby or far
away) as well as temporal dimensions (e.g., short-term or long-term) and it is possible to
demonstrate the total amount of values which are related to the demand of natural goods.
The aim of this approach is not to allocate one calculated figure, but to provide a discussion platform which considers all relevant value categories (e.g., benefit value, functional
value, existence value, etc.). This comprises explicitly the ecological and social services
of the biosphere, and, for example, the natural coastal environment.