Economic assessment of environmental impacts in project analysis

Abstract

The paper aims at stimulating the discussion among planners and practitioners of development activities and projects on the subject of economic evaluation of environmental impacts in project analysis. It is argued that economics and the environment must not be treated as competing issues. In order to illustrate the contribution of environmental economics in project analysis the potential of currently available methods of economic evaluation with regard to environmental effects in agricultural development projects is discussed. It is shown that for the valuation of environmental issues conventional economic methods can be used. The methods, in  principle, are the same as those used in farm management for the valuation of non- marketable farm by-products. Suggestions for further empirical studies are made.