Remediation guidance 4.
Application of cost-benefit, cost-effectiveness and value analyses in the course of remediation
Contents

  • Preface
  • Abbreviations
  • 1. Summary
  • 2. Introduction
    • 2.1. Aims of the guidance
    • 2.2. Economic methods to support financing decisions of the National Environmental Remediation Program (OKKP)
    • 2.3. Conception of an information system to support the application of economic methods
  • 3. Place and role of cost-benefit and cost-effectiveness analyses in the Hungarian econo-political and social situation
    • 3.1. Basic terms
    • 3.2. Methodology of the cost-benefit analysis
      • 3.2.1. Cost assessment
      • 3.2.2. Benefit assessment
        • 3.2.2.1. Methodology of the “market assessment of physical impacts”
        • 3.2.2.2. Exploration of the declared preferences
        • 3.2.2.3. Exploration of revealed preferences
      • 3.2.3. Comparison of costs and benefits
      • 3.2.4. Selection from the different decision-options
    • 3.3. Methodology of the cost-effectiveness analysis
    • 3.4. Economic analyses in EU legislation
    • 3.5. Economic analyses in the general Hungarian legislation
  • 4. Place and role of cost-benefit and cost-effectiveness analyses in the remediation process and in the implementation of the OKKP
    • 4.1. The necessity of the application of economic methods in remediation
    • 4.2. Economic methods in the different phases of procedure
      • 4.2.1. Application of the basic terms of economy in connection with remediation
    • 4.3. Conclusions concerning the role of cost-benefit and cost-effectiveness analyses in remediation
  • 5. Economic analyses in remediation
    • 5.1. Economic analyses in the remediation procedure
    • 5.2. Economic analyses in the OKKP
  • 6. Further tasks
  • Bibliography

  • Figures:
    • 1. Scheme of the decision-option
    • 2. The process of cost-benefit analysis in the case of environmental projects
    • 3. The process of cost-effectiveness analysis


  • Tables:
    • 1. Summary of the evaluation methods
    • 2. Comparison of the cost-benefit and cost-effectiveness analyses
    • 3. Steps of the remediation procedure requiring decisions
    • 4. Comparison of the decisions made in the remediation procedure and in the OKKP
    • 5. Prediction of the expectable status resulting from the current status


  • Appendix 1: Use of the Leopold-matrix for the assessment of impacts
  • Appendix 2: Methods of property estimation
  • Appendix 3: Cost-benefit analysis in remediation – Case Studies
    • 1. Methodology of the case studies
      • 1.1. Aim of the cost-benefit analysis in the case studies
      • 1.2. Methodology of the analysis
        • 1.2.1. Total cost-benefit analysis
        • 1.2.2. Reduced cost-benefit analysis
      • 1.3. Difficulties and sensitivity of the analysis
    • 2. Case Study 1
      • 2.1. Description of the polluted area
        • 2.1.1. Assessment of costs
        • 2.1.2. Assessment of benefits
        • 2.1.3. Comparison of costs and benefits
        • 2.1.4. Sensitivity analysis
        • 2.1.5. Conclusions
    • 3. Case Study 2
      • 3.1. Description of the polluted area
        • 3.1.1. Assessment of costs
        • 3.1.2. Assessment of benefits
        • 3.1.3. Comparison of costs and benefits
        • 3.1.4. Sensitivity analysis
        • 3.1.5. Conclusions


  • Table: Environmental case studies elaborated by using the method of declared and revealed preferences

INTRODUCTION

The main goal of this guide is to provide help for the application of economic aspects and methods in the course of the implementation of the National Environmental Remediation Program (OKKP) and the remediation process regulated by the Government Decree 33/2000. (III. 17.) Korm. In several phases of the remediation process is the use of economic methods possible and necessary. This study provides the frame and describes the conditions for the practical use of these methods.

Antecedents

Several studies and research on the use of economic methods in the OKKP have already been carried out. This study uses and continues to develop the results of those.

  • 1. Elaboration of the methodology of the cost-effectiveness analyses of the activities carried out in the OKKP (1997): provides a summary and a detailed description of economic methods usable in the remediation process (cost-benefit, cost-effectiveness analysis).

  • 2. The use of cost-benefit analysis in remediation (1998): a case study on the cost-benefit analysis of the landfill Debrecen-Szikgát.

  • 3. Elaboration of the methodology and software of cost benefit analysis (1999): consists of the methodology, data sheets and software (as part of the KÁRINFO system) for cost-benefit analyses applicable in the OKKP.

  • 4. Guide on the determination of the site-specific pollution limit value (E) and the remediation limit value (D) (2000): description of economic analyses necessary for the determination of the remediation limit value (D).

  • 5. Cost-benefit and cost-effectiveness analyses of remediation projects: preparatory study of this guide, with additional case studies and amendments necessary for publication.

Content

A description of the above-mentioned methods is in chapter 3 “The place and role of cost-benefit and cost-effectiveness analyses under the economic and social conditions of Hungary”, with a short but comprehensive overview of the main economical methods, especially of cost-benefit and cost-effectiveness analyses.

Chapter 4 and 5 specifies how to use the above-mentioned methods in the remediation process, and in the connected implementation process of OKKP.

In chapter 6 problems and questions related to the application of the methodology are described, which are expected to be of great importance and the study and analysis of which will be a task in the future.

The appendix of the guide consists of two case studies, showing an example on how to use the of cost-benefit analysis in the course of the determination of the remediation target limit value (D), the most critical point in the remediation process.