Which strategies have the best cost-benefit ratio? - an economic assessment
Invited by the German Federal Agency for Nature Conservation, Ingo Bräuer, Senior Fellow with Ecologic Institute, gave a lecture on the cost-benefit ratio of strategies. The objective of the symposium was to identify the current scenarios of climate change as well as the expected impacts on the ecosystems of rivers and floodplains. Further focus lied on the adaptation strategies of different user groups – navigation, agriculture, forestry and water management - and on the potential contribution of nature conservation. The symposium addressed professionals from the sciences, authorities and associations.
The regional climate scenarios published by the Federal Environmental Agency predict notably increasing probabilities for droughts and recurring flood events for the German river basins. The economic effects are significant. For example, the flood events of 2002 caused damages of at least 15 billion Euros. The necessary prevention strategies will also require large sums. Thus, it is becoming evident that reaching the objectives with the available funds is only possible if economic examinations like cost-effectiveness and cost-benefit analysis come into operation. Not without good reason, the EU-Water Framework Directive (WFD), which also has very ambitious objectives, calls for the use of economic methods and principals in several places, e.g. Article 4, 5, 9 and 11.
In this context, the lecture by Ingo Bräuer shows how different economic assessment approaches can be used to support the decision making. Special attention is given to the methodical particularities in the assessment of the benefit of a river basin and the direct and indirect utility derived from it. This was presented with the help of two case studies. The first example showed the use of a cost-benefit analysis for the valuation of the economic advantages of the relocation of a dike. The second example discussed the application of economic assessments for the optimisation of arrangements by taking, for example, regional differences in the cost-effectiveness into consideration.
The presentation [pdf. 400 KB, German] is available for download.