Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2012:1: Cost-Benefit Analysis in a Framework of Stakeholder Involvement and Integrated Coastal Zone Modeling

Gerda Kinell (), Tore Söderqvist (), Ragnar Elmgren (), Jacob Walve () and Frida Franzén ()
Additional contact information
Gerda Kinell: Enveco Environmental Economics Consultancy Ltd, Postal: Oxholmsgränd 3, , SE- 127 48 Skärholmen, , Sweden
Tore Söderqvist: Enveco Environmental Economics Consultancy Ltd, Postal: Oxholmsgränd 3, , SE- 127 48 Skärholmen, , Sweden
Ragnar Elmgren: Department of Systems Ecology, Postal: Stockholm University
Jacob Walve: Department of Systems Ecology, Postal: Stockholm University
Frida Franzén: Södertörn University, Royal Institute of Technology (KTH) and Enveco Environmental Economics Consultancy Ltd., Postal: Enveco,, Oxholmsgränd 3, , SE- 127 48 Skärholmen, , Sweden

Abstract: Active involvement of local stakeholders is currently an increasingly important requirement in European environmental regulations such as the EU Water Framework Directive (WFD) and the EU Marine Strategy Framework Directive (MSFD). The same is true for economic analyses such as cost-benefit analysis (CBA). For example, the Swedish WFD implementation requires i) quantification of cost and benefits of proposed measures and ii) stakeholder involvement. How can these two requirements be integrated in practice? And can such requirements facilitate implementation of projects with a potential net benefit? This paper presents a stepwise CBA procedure with participatory elements and applies it for evaluating nutrient management options for reducing eutrophication effects in the coastal area of Himmerfjärden SW of Stockholm, Sweden. The CBA indicates a positive net benefit for a combination of options involving increased nitrogen removal at a major sewage treatment plant, creation of new wetlands and connecting a proportion of private sewers to sewage treatment plants. The procedure also illustrates how the interdisciplinary development of a coupled ecological-economic simulation model can be used as a tool for facilitating the involvement of stakeholders in a CBA.

Keywords: cost-benefit analysis; stakeholder involvement; integrated modeling; eutrophication

JEL-codes: D61

31 pages, January 4, 2012

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