Post on 03-Jun-2018
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CEG8413
Economic and Environmental Appraisal ofTransport Activities
Sustainability andEconomic Development
Dr Anil Namdeoanil.namdeo@newcastle.ac.uk
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Economics
Oikonomia: Greek root word of economics.Refers to the management of the householdso as to increase its use value to all
members of the household over the long run.
Can be interpreted to mean economics ofcommunity.
Takes a longer-term perspective. Focuses on use value (concrete, satiable)rather than exchange value.
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Economic Development
The goal of economic development is toimprove the wellbeing of members of society. Narrow focus on real GDP growth that
characterised economic development in thepostwar period often failed:
to screen out projects and policies that harmed
the environment,
to address poverty and empowerment, and
to sustain local communities and indigenous
peoples.
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Earth Charter
At the conclusion of the Rio+5 Forum in Riode Janeiro in 1997, the Earth CharterCommission issued the Benchmark Draft
Earth Charter.
After considerable feedback a secondBenchmark Draft was issued in 1999, and a
final version was issued in 2000.
The 2000 Earth Charter has sixteen mainprinciples, various supporting principles, and
a conclusion.
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Earth Charter Principles
Respect and care for the community Ecological integrity Social and economic justice, and
Democracy, nonviolence, and peace.
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Sustainability
Dictionary meaning: sustainable practicesare practices that can be kept in existence ormaintained.
Sustainability the property of being sustainable,
the condition where human activity may be
continued indefinitely without damaging the
environment, and
where the needs of all peoples are met equally.
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Sustainable Development
SD implies a broad view of human welfare, a long term perspective about the consequences
of today's activities, and
the full involvement of civil society to reach
viable solutions.
Environmental, economic and social well-being for today and tomorrow
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Sustainable Development (SD)
SD defined in many ways Most frequently quoted definition is from OurCommon Future, also known as the
Brundtland Report (1987)
Sustainable development is development
that meets the needs of the present withoutcompromising the ability of future generations
to meet their own needs
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SDKey Concepts
the concept of needs, in particular theessential needs of the world's poor, to whichoverriding priority should be given; and
the idea of limitationsimposed by the stateof technology and social organization on the
environment's ability to meet present and
future needs.
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Viedermans
Sustainability Principles
Sustainability is a community's control andprudent use of all forms of capital. nature's capital
human capital
human-created capital
social capital, and
cultural capital
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Viedermans
sustainability principles
Present and future generations can attain ahigh degree of economic security whilemaintaining the integrity of the ecological
systems upon which all life and production
depends
ViedermansThree Pillars of SD
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Sustainability
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Seven strategic imperatives for SD
Reviving growth; Changing the quality of growth; Meeting essential needs for jobs, food, energy,
water, and sanitation;
Ensuring a sustainable level of population; Conserving and enhancing the resource base; Reorienting technology and managing risk;
Merging environment and economics in decision-making.
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Reading Resources
DEFRA - www.defra.gov.uk The International Institute for Sustainable Development (IISD)-
www.iisd.org
UN Division for Sustainable Development -www.un.org/esa/sustdev/index.html
United Nations Environment Programme (UNEP) www.unep.org OECD Directorate of the Environment - research on environment and
economic linkages- www.oecd.org
SD Gateway - http://sdgateway.net/introsd/default.htm Earth Charter www.earthcharter.org
Viederman, S. (1996) "Sustainability's Five Capitals and Three Pillars,"chapter 3 of D. Pirages, ed., Building Sustainable Societies: A Blueprint for a
Post-Industrial World . Armonk, NY: M.E. Sharpe
http://www.defra.gov.uk/http://www.iisd.org/http://www.un.org/esa/sustdev/index.htmlhttp://www.unep.org/http://www.oecd.org/http://sdgateway.net/introsd/default.htmhttp://www.earthcharter.org/http://www.earthcharter.org/http://sdgateway.net/introsd/default.htmhttp://www.oecd.org/http://www.unep.org/http://www.un.org/esa/sustdev/index.htmlhttp://www.iisd.org/http://www.defra.gov.uk/8/12/2019 Day 1 - Sustainability and Economic Development(1)
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APPRAISAL & EVALUATION
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What is investment?
Using resources to create an addition to thepresent facilitieswhether public or private In economic terms, it is a diversion from current
consumption to uses which will improve the
efficiency of the production process in future
Benefits > Costs for investment to be worthwhile Time is involved in judgement so B>C over time
This is the foundation of appraisal/evaluation
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Road Investment
Many road investment projects have longgestation periods and high capital costs. Infrastructure provided is immobile, difficult to
move, difficult to modify capacity significantly. Technical and political constraints make itdifficult to use pricing mechanisms alter
demand.
Transport is derived demand: parametersconditioned by social, political and economic
events (highly unpredictable)
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Road Investment (2)
Infrastructure investment is very pervasive influencing as well as being influenced by
circumstances in which they operate
This suggests that transport schemes require
careful long-term planning and appraisal
Wide range of uncertainty about possiblefuture circumstances in which scheme would
operate
Appraisal/evaluation difficult
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Appraisal and Evaluation
Terms often confused in relation to theassessment of transport projects.Appraisal refers to ex ante assessment.
Evaluation refers to ex post assessment.
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Appraisal
General aim is to improve the quality of thechoices made between alternativeinvestments and policies
Improving the quality of the choices? Course of actions which are chosen tend to havea more desirable effects than those which are
rejected
Private firms - maximising profits
Appraisal system should be able to improveabilities to chose better options
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Appraisal Process
Normally the starting point for any proposal
An ordered, but flexible, general approach to theanalysis of proposals with implications for
expenditure / use of resources.
No two appraisals are exactly alike. Scale variesdepending on the size and complexity of the
proposed project.
Does not always point to a clear-cutrecommendation. There may be risks anduncertainties attached to costs, benefits or both.
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Evaluation
Evaluation examines the output of a project,programme or policy against its objectives. Enables decision makers to understand
whether the benefits and costs that wereestimated in the appraisal materialised.
Evaluation should be planned from the outsetof the project
Necessary data need to be specified inadvance for successful evaluation.
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Appraisal and Evaluation
to compare scheme proposals in order to make the
best choice
to make a decision as to whether a proposedscheme should go ahead at all
to check detailed design options during theimplementation process
to monitor implemented projects in order to
optimise operational regimes to evaluate past schemes in order to improve futureimplementations
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Transport Appraisal (1)
Appraisal of changes in the transport network One of the most important applications of
transport economics
Earlier applicationsfocus on CBA to decide if a project is financially viable
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Transport Appraisal (2)
Travel time savings are key benefit oftransport projects.A primary difficulty in project appraisal is the
valuation of time.Appraisal schemes started including thevaluation of time; differed between social
classes and occupations.
Land value and consumer benefit added;though process difficult to carry out.
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Transport Appraisal (3)
Many transport projects have impacts thatcannot be expressed in monetary terms. Local air quality, biodiversity, heritage,
community severance etc.
These impact can be included inenvironmental impact assessment
A key issue has been how to present theseassessments alongside estimates of those
costs and benefits that can be expressed in
monetary terms.
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Reading Resources
Button, K.J and Pearman, A.D. (1983) The Practice ofTransport Investment Appraisal. Gower Publishing.
Harrison, A.J. (1974) The Economics of TransportAppraisal. Halsted Press Book, John Wiley and Sons.
Roe, M. (1987) Evaluation Methodologies for TransportInvestment. Avebury, Aldershot.
www.dft.gov.uk/pgr/economics/sactra/ www.dft.gov.uk
http://www.dft.gov.uk/pgr/economics/sactra/http://www.dft.gov.uk/http://www.dft.gov.uk/http://www.dft.gov.uk/pgr/economics/sactra/