The Dönje Hydropower Scenario

Per-Olov Johansson () and Bengt Kriström ()
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Per-Olov Johansson: Stockholm School of Economics
Bengt Kriström: SLU

Chapter Chapter 2 in Evaluating Water Projects, 2013, pp 11-33 from Springer

Abstract: Abstract This chapter presents the cost-benefit analysis of the Dönje hydropower re-regulation. The theoretical cost-benefit rule is briefly discussed. It is seemingly simple, but is based on a quite complex open economy setting. The major benefits of the re-regulation are environmental, such as more salmon in the river, and hence improved fishery, improved aesthetical values, improved canoing and other such leisure activities. A web-based questionnaire was used to assess the willingness-to-pay (WTP) for these benefits. The valuation question is novel in the sense that it introduces intervals (upper and lower bounds for WTP) that are selected by the respondent. The chapter then goes on to estimate the costs of the proposal. These are mainly the loss of profits by the hydropower company and externalities of coal-fired replacement power. A sensitivity analysis of the result of the cost-benefit analysis is undertaken.

Keywords: Discount Rate; Hydropower Plant; Contingent Valuation Study; Social Discount Rate; Pure Time Preference (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-3-642-36790-8_2

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DOI: 10.1007/978-3-642-36790-8_2

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