Financial Cost-benefit Analysis Research Articles

Climate policy as social policy? A comprehensive assessment of the economic impact of climate action in the UK

AbstractCo-benefits are central to the case for climate action but are side-lined in many economic analyses. This paper presents an evaluation of three dimensions of the costs and benefits of climate change interventions in six urban regions of the UK. Findings indicate that meeting the UK’s 2033–2037 climate targets could yield £164 billion in total benefits. Notably, only 13% of these benefits are financial, in contrast to the 79% of which are social benefits. These social benefits include improvements in public health, reduced traffic congestion, and increased thermal comfort in homes. These results underscore the need for economic evaluations to expand their scope and move beyond the narrow financial cost–benefit analysis that predominates. Moreover, the magnitude of the social benefits underscores the need for integrating social and climate challenges in policymaking. Concurrently, the results demonstrate the sensitivity of the social benefits of climate actions to the normative aspects of empirical analysis. Determining whether emissions reductions in the transport sector, for example, should be achieved through the deployment of electric cars, expansion of public transport, and/or increases in walking and cycling requires both technical analysis and value-based decision making. Ensuring that decision-making processes are deliberate and transparent in empirical analysis is therefore critical. We conclude by suggesting that institutions such as the UK Climate Change Committee and Scottish Climate Intelligence Service should take the opportunity to be more explicit in the normative decisions embedded in their empirical work to demonstrate best practice for the wider research community.

Providing doula support to publicly insured women in central Texas: A financial cost-benefit analysis.

Disparities in birth outcomes continue to exist in the United States, particularly for low-income, publicly insured women. Doula support has been shown to be a cost-effective intervention in predominantly middle-to-upper income White populations, and across all publicly insured women at the state level. This analysis extends previous studies by providing an estimate of benefits that incorporates variations in averted outcomes by race and ethnicity in the context of one region in Texas. The objectives of this study were to determine (1) whether the financial value of benefits provided by doula support exceeds the costs of delivering it; (2) whether the cost-benefit ratio differs by race and ethnicity; and (3) how different doula reimbursement levels affect the cost-benefit results with respect to pregnant people covered by Medicaid in central Texas. We conducted a forward-looking cost-benefit analysis using secondary data carried out over a short-term time horizon taking a public payer perspective. We focused on a narrow set of health outcomes (preterm delivery and cesarean delivery) that was relatively straightforward to monetize. The current, usual care state was used as the comparison condition. Providing pregnant people covered by Texas Medicaid with access to doulas during their pregnancies was cost-beneficial (benefit-to-cost ratio: 1.15) in the base model, and 65.7% of the time in probabilistic sensitivity analyses covering a feasible range of parameters. The intervention is most cost-beneficial for Black women. Reimbursing doulas at $869 per client or more yielded costs that were greater than benefits, holding other parameters constant. Expanding Medicaid pregnancy-related coverage to include doula services would be cost-beneficial and improve health equity in Texas.

A Financial Cost-benefit Analysis of Forest Plantation for Restoration Program in Shan State of Myanmar

A Financial Cost-benefit Analysis of Forest Plantation for Restoration Program in Shan State of Myanmar

Constructed Wetlands Suitability for Sugarcane Profitability, Freshwater Biodiversity and Ecosystem Services

Freshwater ecosystems, such as wetlands, are among the most impacted by agricultural expansion and intensification through extensive drainage and pollution. There is a pressing need to identify ways of managing agricultural landscapes to ensure food and water security without jeopardising biodiversity and other environmental benefits. Here we examine the potential fish biodiversity and landholder financial benefits arising from the integration of constructed lagoons to improve drainage, flow regulation and habitat connectivity within a sugarcane dominated catchment in north Queensland, Australia. A hybrid approach was used, combining the findings of both fish ecological surveys and a financial cost-benefit analysis. We found that the constructed lagoons supported at least 36 native freshwater fishes (over half of all native freshwater fishes in the region), owing to their depth, vegetated margins, moderate water quality and high connectivity to the Tully River. In addition to biodiversity benefits, we estimated that surrounding sugarcane farms would have financially benefited from reduced flooding of cropland and the elevation of low-lying cropland with deposited spoil excavated from lagoon construction. Improved drainage and flow regulation allowed for improvement in sugarcane yield and elevated land increased gross margins from extending the length of the cane production cycle or enabling a switch from cattle grazing to cane production. Restoring or creating wetlands to reduce flooding in flood-prone catchments is a globally applicable model that could improve both agricultural productivity and aquatic biodiversity, while potentially increasing farm income by attracting payments for provision of ecosystem services.

Ex-post design, operations and financial cost-benefit analysis of mini-grids in Ghana: What can we learn?

This paper adopted an integrated scenario modelling approach using HOMER and financial cost-benefit analysis to investigate design accuracy, power supply challenges and financial viability of two existing mini-grids in Ghana. It also examined the economic competitiveness of grid extension relative to the mini-grid plants, and offered learnings for future improvement with broader application to other developing countries. Results of the techno-economic analysis points to over-dimensioned mini-grids which should ideally be able to supply power reliably without any issues. However, altered operating decisions led to capacity constraints which is made worse by degraded batteries. Two reasons were identified to account for the oversized plants: initial load over-estimation and the influence of grant. Cost of electricity supply was found to be considerably higher than the applied tariffs making it impossible for the recovery of even operations and maintenance cost at current levels of consumption. The analysis also show that efficiently designed tariffs, coupled with the application of existing tariff regulations can significantly improve financial performance to guarantee sustainability of the mini-grid plants. The mini-grids were observed to be cost-ineffective compared to grid extension mainly due to unsuitable siting distances. Beyond efficient tariff design, other learnings from the investigation included; (1) the need to couple in-depth surveys with modular mini-grids construction to avoid over-design, (2) the need to use diesel support to mitigate cost in systems aiming for high reliability, (3) that grants can have an expansionary effect on system dimensioning and needs to be monitored, (4) that cost-cutting measures must be an integral part of mini-grid development programmes to narrow viability gap, and that, (5) overcapacity can lead to altered operating plans with consequences.

Cost-Benefit Analysis of Implementing Circular Economy in a Portuguese Company: From a Case Study to a Model

Purpose: This work was carried out in a company of the upholstery sector in northern Portugal to demonstrate that Investment in Preventive Measures, within the scope of Environmental Management and supported by a Circular Economy approach, is a significant investment decision, with transversal benefits to the entire organization. Methodology/Approach: This study focuses on an interview, a financial cost-benefit analysis and a sensitivity analysis. The company is in line with concerns about the Circular Economy. Findings: The findings support that the cost-benefit analysis is a valuable tool for decision-making and for identifying the potential benefits that can arise from implementing measures from the Circular Economy perspective. An action plan was structured with several recommendations in a logic of action priorities. A case study was carried out in the company and a model was designed. Research Limitation/Implication: The studied company is still at an embryonic stage. Nevertheless, it was possible to identify all environmental aspects, namely, impacts, consumption. The study in question was carried out only in one company. It can be extended to many more companies. Originality/Value of paper: The measures to be implemented, in addition to bringing economic and financial benefits to the Company, will contribute to a better and greater environmental sustainability and a better intervention at a social level.

Are the Risks and Uncertainties as Constraints to Investing in Climate-Smart Innovations a Red Herring? Financial Cost-Benefit Analysis Evidence from 11 Countries in Africa and Asia

Are the Risks and Uncertainties as Constraints to Investing in Climate-Smart Innovations a Red Herring? Financial Cost-Benefit Analysis Evidence from 11 Countries in Africa and Asia

Financial losses and cost benefit analysis of controlling anestrus in dairy animals of Punjab

The main objective of this study was to evaluate the financial losses associated with anestrus and cost benefit analysis of various factors controlling this disease in dairy animals of Punjab region. The overall economic loss incurred by dairy farmers due to anestrus irrespective of species of animals was ` 24,362. The mean economic losses per animal per year was almost same in crossbred cattle (` 27,511.48±1,227.60) and buffaloes (` 27,038.69±1,128.05) and lower in indigenous cattle (` 18,296.95±1,317.53). When the average annual losses due to different components were estimated, the largest component was due to replacement cost followed by milk yield loss cost, future calf reduction and veterinary charges. Among different agro-climatic zones (ACZs), highest loss was observed in Central Plain Region (` 27,384.63±2,407.03) and the least affected zone was Flood Plain Region (` 19,135.6±4,326.50). While controlling anestrus at farm level through different control measures, the overall benefit cost ratio was estimated to be 5.33. The projected loss in Punjab state due to anestrus in dairy animals was estimated to be ` 2135.79 crore. It may be concluded that the mean economic losses per animal per year was higher in crossbred cattle and buffaloes, where the largest component was due to replacement cost followed by milk yield loss, future calf reduction and veterinary charges. In order to control economic losses due to anestrus, it is important to improve all aspects related to heat detection, and to provide appropriate preventive or therapeutic measures.

Development of a Novel Helical-Ribbon Mixer Dryer for Conversion of Rural Slaughterhouse Wastes to an Organic Fertilizer and Implications in the Rural Circular Economy

Organic wastes of rural slaughterhouses in developing countries comprise of blood and undigested rumen contents harboring infectious microbial pathogens and having impermissible BOD5 and COD values. Previously we demonstrated valorization of blood and rumen contents through drying and conversion to an efficacious organic fertilizer which was free from infectious pathogens and heavy metals. Here we describe fabrication of a novel helical-ribbon mixer dryer for transition from the current small-scale household cooking to equipment-driven sustainable production. Blood and rumen digesta mixed in a 3:1 ratio, having initial moisture of 85%, were dried at 90–110 °C for 3–4 h to attain 15.6% final moisture-containing organic fertilizer. Energy consumption and moisture extraction rate were 49.4 MJ per batch and 18.9 kg h−1 respectively. Using this method, small abattoir owners could emerge as multi-product producers to enhance earnings while farmers could source the fertilizer locally for organic farming. The two activities can be complementary to each other and become a sustainable circular economy model. We applied a spreadsheet-based model for calculation of cash flow, breakeven point and conducted financial cost–benefit analysis on the projected operation of the dryer. Fertilizer production parallel with the meat trade should be profitable for slaughterhouse owners and farmers apart from generating local employment opportunities.

Evaluating treatment pathways for managing packaging materials from construction of a solar photovoltaic power station.

The reuse of end-of-life packaging materials (EOLPM) on site represents, particularly for remote sites, an important contribution to sustainable business practice because it provides a higher value end use when used to develop on-site mulch to enable soil improvement, thereby reducing transport emissions (in relation to the least preferred option of off-site disposal to landfill), lowering costs and offering employment to local contractors. The objective of the study was to demonstrate a local application of the circular economy for EOLPM to a utility-scale solar electricity (USSE) construction site. Although the principles of the circular economy could not be applied fully at the site, it was possible to demonstrate that EOLPM can be reused on site for a higher value than off-site disposal would give. Given the common occurrence of these materials in the rapidly growing renewable energy sector, this represents an important step forward for the sector internationally. The study is the first of its type reported, and the methods used for characterization of the EOLPM included a range of organic and inorganic chemical analyses and phytotoxicity testing, which were followed by an environmental and financial cost-benefit analysis. The selected option of on-site reuse of the materials as a mulch had a global warming potential of 58 t CO2e compared with the business as usual option (transport to landfill) of 3145 t CO2e. The results also demonstrated the broader potential for using EOLPM from USSE sites for soil improvement at remote locations rather than transporting these materials off site for disposal or reuse.

An Evaluation of the Financial Cost-Benefit Analysis and Acbr of Obesity Treatment in the Bamenda Municipality

According to the WHO report of 2014, 5 people die every minute and 7,671 persons die each day from obesity related complications in the world [36]. Overweight and obesity are the fifth leading risks for global deaths. In June 2013, the American Medical Association recognized obesity as an epidemic. In Cameroon, the prevalence in 2014 stood at 9.6%, second highest in CEMAC after Gabon 15% (WHO 2014). Following this background, the main objective of this paper is to assess the financial cost and benefits and the Average Cost-Benefit Ratio (ACBR) of obesity treatment in the Bamenda Municipality. Specifically, this paper compares the cost and benefit of obesity treatment and calculates the average cost-benefit Ratio of obesity treatment. To ascertain this objective, use is made of exploratory, descriptive and primary and secondary data is employed. Primary data was collected from 100 hypertensive and 100 diabetes individuals age 20 and above from the Bamenda general hospital. Used was also made of information collected during a six month participatory observation at 2 separate gyms. Secondary data was gotten from WHO and National Cancer Institute. Results show a yearly cost of obesity treatment of 492,000 and a yearly benefit of obesity treatment of 6,677,250 giving a net benefit of 6,185,250fcfa for treating obesity annually. The results also give an ACBR of 0.07 indicating a weight loss project is worthwhile. From the findings we recommend a massive sensitization on the consequences of obesity and the creation of an obesity rehabilitation centre for those who lack motivation and discipline needed to treat obesity.

Cultural heritage in sustainable development

PurposePreservation of historic structures meets ecological criteria of sustainable development. In Mount Lebanon, the traditional house is a cultural asset built of native stone one-meter thick double-wythe walls. Today, lack of public policies is causing those environmental assets to approach extinction. The paper aims to discuss this issue.Design/methodology/approachThe methodology uses multivariate regression on 128 data points. A mathematical model is developed and empirically tested on public attitudes toward restoration. Independent variables represent the need for protectionist policies, X1; contribution of restoration to environmental sustainability, X2; contribution to culture, X3; and financial benefits, X4.FindingsIt is found that stone houses transfer heat significantly slower than modern construction. There is a statistically significant and positive correlation with X1, X2, and X3, but negative with X4, most likely due to favoring return on investment of multistory buildings over the attractiveness of stone houses.Research limitations/implicationsAs future research implications, the undergirding of urban planning policies need to be revisited. Current policies neither protect heritage, nor offer legal means to restore heritage houses.Practical implicationsPractical implications include revisions to building laws in Mount Lebanon, as they marginalize old stone structures. Environmental valuation techniques, use value and existence value, are recommended.Social implicationsSocial awareness needs to be built about valuation techniques to account for complex assets that cannot be approximated through short-term real estate market price. Social rather than financial cost-benefit analysis must be performed to quantify environmental assets.Originality/valueThis research illustrates a pilot restoration project with critical issues faced by heritage stone houses. These assets are underrepresented in building laws which warrants social and environmental activism.

A financial cost-benefit analysis of eradicating virulent footrot

In 2008, virulent footrot was detected in sheep in south-west Norway. Footrot is caused by Dichelobacter nodosus, and the outbreak was linked to live sheep imported from Denmark in 2005. A large-scale program for eradicating the disease was implemented as a joint industry and governmental driven eradication project in the years 2008–2014, and continued with surveillance and control measures by the Norwegian Food Safety Authority from 2015. The cost of the eradication program including surveillance and control measures until 2032 was assumed to reach approximately €10.8 million (NOK 90 million). A financial cost-benefit analysis, comparing costs in the eradication program with costs in two simulated scenarios, was carried out. In the scenarios, designated ModerateSpread (baseline) and SlowSpread, it was assumed that the sheep farmers would undertake some voluntary measures on their own that would slow the spread of the disease. The program obtained a positive NPV after approximately 12 years. In a stochastic analysis, the probabilities of a positive NPV were estimated to 1.000 and to 0.648 after 15 years and to 0.378 and 0.016 after ten years, for the ModerateSpread and SlowSpread scenarios respectively. A rapid start-up of the program soon after the detection of the disease was considered crucial for the economic success as the disease would have become more widespread and probably raised the costs considerably at a later start-up.

Analysis of Good Agricultural Practices in an Integrated Maize-based Farming System

ABSTRACTProfitability due to use of good agricultural practices (GAPs) is important for improving farmer return on investment. Although GAPs are theoretically expected to be profitable, actual returns accrued to farmers may not necessarily be realized due to shortfalls in profit to farmers after harvest. Farmers cultivate vegetables because of their high farmgate values and profitability per unit area compared to field crops. However, farmers sometimes experience reduced profits due to lack of awareness and technical know-how on improved technologies, lack of bargaining power at market, and lack of access to market information and high-value markets. The objective of the study was to measure gross margin of GAPs introduced to farmers using a financial cost–benefit analysis approach. In 2013, a field survey of 45 randomly selected farm households was administered to elicit enterprise data on production practices including Tomato (Solanum lycopersicum L.) and other crops before intervention of GAPs. A similar survey was carried out in the GAP intervention area in 2014 from 55 randomly selected farm households. Integrating GAPs within existing maize-based farming systems yielded an average gross margin of US$1870·ha−1 for vegetable producers who primarily produce tomato, African Eggplant (S. aethiopicum L.), cv. DB3, and Amaranth (Amaranthus spinosus L.), cv. Madiira 1, compared to standard farmer practices that yielded a gross margin of US$1846·ha−1 during the study. Profit from the introduced GAPs was not statistically different from traditional practices within the short time duration. Whether the introduced GAPs could enhance farmer net crop income and livelihood over the long term needs to be determined.

Financial cost-benefit analysis of investment possibilities in district heating system on wood residues

The purpose of this research is to provide feasibility analysis of a long-term sustainable development concept for district heating based on wood residues. In this paper, the experimental study has been conducted starting from the data collected by field researches in municipality of Trstenik ( town in Serbia with district heating system currently based on heavy fuel oil and lignite). Using the method of Financial Cost-Benefit Analysis, this study evaluates financial efficiency of investment in district heating plant based on wood residues and energy savings in district heating system. Findings show that such investment could be profitable from the financial point of view: Net Present Value of investment is positive, Financial Rate of Return is high (30.69%), and the pay-back period is relatively favourable (7 years). Moreover, the presented SWOT indicates that there are realistic prospects of implementation of district heating based on wood residues. However, this does not mean everything will go smoothly and easily, keeping in mind a number of challenges that each new concept of district heating contains immanently. Nevertheless, the results of this research could provide useful inputs for the decision makers when selecting appropriate models for improving performance of municipal district heating systems.

Assessing the economic profitability of fodder legume production for Green Biorefineries – A cost-benefit analysis to evaluate farmers profitability

Fodder legumes play a major role in developing sustainable agricultural production systems and contain a range of compounds, which can be utilized to produce a wide spectrum of materials currently manufactured from petroleum-based sources. Hence, if associated with Green Biorefinery technology, the use of fodder legumes brings about significant advantages in terms of overall environmental sustainability. Since fodder legume production in Europe is currently very low, the objective of this study is to assess if a new value chain generated by Green Biorefineries can make fodder legume production profitable for farmers, and therewith increase cultivation numbers. We conducted a financial cost-benefit analysis of producing biomass from agricultural land in the federal state of Brandenburg (Germany) in three different production scenarios at two farm size levels. Costs, benefits, expected profits and risks between the scenarios were quantified. Fodder legume production for traditional fodder production was already able to increase the internal rate of return, while the production of feedstocks for Green Biorefineries, depending on prices paid for the legume juice showed an even higher profit potential. Therefore, in future agricultural production systems, fodder legumes should be part of crop rotations again.

A Reliability-Cost–Benefits (RCB) Model for the Addition of DG to Independent Micro-Grid Networks

Interest in alternative energy sources has been increased due to improved public awareness about the high energy cost and the adverse environmental impact of the conventional energy sources. This has caused a transition to a new market-based power network which, among other characteristics, allows more flexible incentives based demand-response-programs (DRP). Reliability aspects have been more challenging in remotely operated Independent-Microgrid-Networks (IMGN) mainly due to weather dependence. Such stochastic behavior has influenced the market prices of electricity and has created real time challenges for trade. The success of such uncertain energy systems depends to a large extent on new technical and financial tools. This requires to consider together the reliability and the financial cost–benefit analysis for every stakeholder of the deregulated electricity market. A novel decision making strategy for relating the system's reliability with cost-benefit incentives under IMGN paradigm has been proposed with an application of economic and signaling-game-theory (SGT).A relationship has been formulated with the consideration of maximizing the profit expectation of each player in the presence of the independent multi-generation resources with different penetration levels. This proposed model can be used as a tool for task scheduling problems and demand side management under the real time pricing schemes. The basic idea is to deal with the uncertainties involved to improve the reliability of renewable power systems. A simulation methodology for reliability evaluation and cost assessment in IMGN has also been developed. Results are discussed in comparison with the Time-of-Use (ToU) price rates.

The Norwegian Healthier Goats programme – A financial cost–benefit analysis

The aim of this study was to evaluate the profitability to dairy goat farmers of participating in the Healthier Goats disease control and eradication programme (HG), which was initiated in 2001 and is still running. HG includes the control and eradication of caprine arthritis encephalitis (CAE), caseous lymphadenitis (CLA) and paratuberculosis (Johne's disease) in Norwegian goat herds.The profitability of participation was estimated in a financial cost–benefit analysis (CBA) using partial budgeting to quantify the economic consequences of infectious disease control through HG versus taking no action. Historical data were collected from 24 enrolled dairy goat herds and 21 herds not enrolled in HG, and supplemented with information from a questionnaire distributed to the same farmers. Expert opinions were collected to arrive at the best possible estimates. For some input parameters there were uncertainty due to imperfect knowledge, thus these parameters were modelled as PERT probability distributions and a stochastic simulation model was built.The CBA model was used to generate distributions of net present value (NPV) of farmers’ net cash flows for choosing to enroll versus not enrolling. This was done for three selected milk quota levels of 30000L, 50000L and 70000L, and both for before and after the introduction of a reduced milk price for the non-enrolled. The NPVs were calculated over time horizons of 5, 10 and 20 years using an inflation-adjusted discount rate of 2.8% per annum. The results show that participation in HG on average was profitable over a time horizon of 10 years or longer for quota levels of 50000L and 70000L, although not without risk of having a negative NPV.If farmers had to pay all the costs themselves, participation in HG would have been profitable only for a time horizon beyond 20 years.In 2012, a reduced milk price was introduced for farmers not enrolled in HG, changing the decision criteria for farmers, and thus, the CBA. When the analysis was altered to account for these changes, the expected NPV was positive over five years for the 50000L quota, indicating an increased profitability of enrolling in HG.The sensitivity analysis showed that particular attention should be paid to work load and investment costs when planning for disease control programmes in the future.

Financial Efficiency and Intergenerational Equity of Soil and Water Conservation Measures in Kenya

The present study, conducted in Upper Tana, Kenya, has the objective of assessing viability and profitability of structural and non-structural soil and water conservation measures among smallholder farmers. Financial cost benefit analysis (FCBA) framework was used to analyse primary data collected from 433 smallholder farmers in Upper Tana. Similarly, a review of methodological experiences and challenges in assessing benefits accruing from conservation measures to future generations was also conducted. Structural and non-structural conservation measures studied were financially attractive with bench terraces and Napier grass strips attaining higher net present values than other structural and non-structural measures studied respectively. The gross margins of the conservation measures were also positive in the year of study. Labour and materials were the major inputs required for establishing and maintaining conservation measures. However, farmers needed a conducive institutional framework and land use policies, technical advice and support, favourable input-output market and credit to invest on conservation measures on a sustainable basis. Analysis at 15, 30, 60 and 90 year time horizons and at different discount rates (10%, 12% and 14%) using FCBA indicated that the higher the discount rate, the less were the streams of benefits. Similarly, a longer period of analysis at a constant discount rate resulted in marginal benefits bringing into question the application of conventional FCBA to intergenerational equity assessments and whether it is appropriate to conduct analyses at 60 and 90 year time horizons using FCBA. Reviews of methodologies for assessing conservation benefits to future generations indicated divided opinions on use of discount rates and methodologies.

IMPACT OF FISCAL POLICIES ON INPUTS AND PRODUCTION COSTS IN GREENHOUSE IN ALBANIA

This paper analysis agriculture input related taxes and tariffs policies and their impact on input prices, production costs and profitability, focusing on the greenhouse sector in Albania. The study combines desk research and expert interviews to collect data and to analyse the main policy reforms and the tariff regime. A financial cost benefit analysis is implemented in order to observe the effect of the change of taxes in both sides: at farm gate profitability of Albanian farmers as well as in terms of revenues forgone in the state budget based on revenues collected.According to our research findings, tax exemption on inputs such as agrochemicals and fuel would significantly affect positively the profitability at the farm level and the overall agriculture sector competitiveness. Several political implications of the various scenarios of tax reduction are discussed and provided to policy-makers.