Economics and Social Costs of Hydroelectric Power
20 Pages Posted: 6 Nov 2018
Date Written: October 15, 2018
This paper offers a non-technical overview of the issues involved when applying cost-benefit analysis (CBA) to hydropower, both in terms of new installations and changing existing regulatory structures. Our focus is on the conceptual and empirical problems of applying CBA to provide decision support in such cases. A large body of literature now exists on the social net values of generating electricity from moving water. The studies focusing values related to the ecological system include, but are not limited to, effects on climate, aesthetics, landscape, recreation and wildlife. Taken together, they confirm the view that the public invariably seems to place significant values on the integrity of the ecological system. It does, however, not seem possible to draw general conclusions from the literature on whether or not a given (dis)investment will pass a cost-benefit test; the end-result depends entirely on the specifics.
Keywords: Cost-Benet Analysis, Ecosystem Services, Energy, Hydropower, Sustainable Energy System
JEL Classification: H43, Q41, Q42, Q51
Suggested Citation: Suggested Citation