cea quantitative tools
TRANSCRIPT
Gianni Ruta (ENV)
CEA
QUANTITATIVE
TOOLSMaking sense of data when planning for your CEA
Policy relevant questions
How important is nature in the economy?
Is the economy sustainable?
What is the burden of environmental degradation?
Can we reduce poverty by managing the environment?
Nature and the economy
How important is nature in the
economy?
Where is the wealth of nations?
Intangible capital is the largest share of wealth
Natural capital share declines with income
In the poorest countries, natural capital is more important than produced capital
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
LIC LMI UMI HIC
Intangible Capital
Produced Capital
Natural Capital
How important is nature in the
economy?
Natural
capital
composition
Land most
important in
low income
coutnries
Energy
resources most
important in
middle income
countries
Low income Crop and Pastures
Forests
Protected Areas
Energy
Minerals
Lower middle income Upper middle income
How important is nature in the
economy?
52%
25%
2%
2%
1% 18%
Malaysia
Intangible Capital Produced Capital
Crop and pastures Forests
Protected Areas Energy and minerals
Sustainability
Is the economy on a sustainable path?
Wealth, Well-
being and
sustainability
Well-being as comprehensive wealth
Sustainability implies non-declining well-being
Saving rates (i.e. changes in wealth) provide a test for sustainability
Is the economy on a sustainable path?
The
correct
measure
of saving
Adjusted Saving
Changes in produced capital
(SAVING)
Changes in natural capital
Changes in human capital
Is the economy on a sustainable path?
COLOMBIA
(% of GNI)
-5
0
5
10
15
20
25
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
ANS
GNS
Is the economy on a sustainable path?
VENEZUELA
(% of GNI)
-10
0
10
20
30
40
50
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
ANS
GNS
Is the economy on a sustainable path?
PERU
(% of GNI)
0
5
10
15
20
25
30
19
91
19
96
20
01
20
06
ANS
GNS
Costs and benefits
What is the burden of environmental
degradation?
Hidden
burden
The cost of oil
subsidies in
Iran
0
5
10
151
97
0
19
75
19
80
19
85
19
90
19
95
20
00
Opportunity cost of oil subsidies in Iran (% of GNI)
What is the burden of environmental
degradation? Colombia CEA
Environmental
risk factors
are very
important
relative to
other sources
of damage
0.86%
0.88%
0.90%
0.92%
0.94%
0.96%
0.98%
1.00%
1.02%
1.04%
Colombia
Inadequate water supply, sanitation, and hygiene
Urban and indoor air pollution
Natural Disasters
What is the burden of environmental
degradation?
Pollution
damages
to health
0.0 1.0 2.0 3.0 4.0 5.0
China
Pakistan
Ghana
Iran
Nigeria
Egypt
Guatemala
Peru
Colombia
Lebanon
TunisiaUrban air pollution
Indoor air pollution
Water, Sanitation and Hygiene
What is the burden… and should we
do something about it?
Benefits
and costs
of the US
Clean Air
Act
0 20 40 60 80 100
Agriculture
Visibility
Productivity
Other Morbidity
Chronic Bronchitis
Mortality
Costs
Billions of 1990 US$
Benefit valuation: Average of HCA and VSL for adult mortality (major influence on B/C ratios); COI for morbidity
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
0 50 100 150 200 250 300 350 400 450 500
CED reduction
B/C I&M
program
Low sulfur diesel fuel
CNG
Industrialpollutioncontrol
Retrofitparticulate
control
What is the burden… and should we
do something about it? Colombia CEA
What is the burden… and should we
do something about it? Peru CEA
19
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0
% CED reduction
B/C
Improved
stoves
Clean fuel (from mix
of clean fuel &
unimproved stove
Clean fuel (from mix
of clean fuel &
improved stove
Clean fuel
(from improved
stove)
Community Kitchens (clean
fuel from unimproved
household stove
Community Kitchens (clean
fuel from improved
household stove
Poverty and environment
Can we reduce poverty by managing
the environment?
Resource
rich areas
Resource
poor / low
access
areas
Average
Study Poor Rich Poor Rich Poor Rich
Jodha (1986) 9–26 1–4
Cavendish (2000) 44 30
Vedeld and others (2004) 32 17
Narain, vant Veld, and Gupta (2005) 41 23 18 18
Chettri-Khattri (forthcoming) 20 14 2 1
Can we reduce poverty by managing
the environment? Peru CEA
Peru
The health
impacts
relative to
income are
nearly 75
percent higher
among the
poor than
among the
non-poor.
Making sense of indicators and
statistics in your next CEA
Nature, the economy and social well-being
Wealth estimates
Physical quantities
Sustainability
Saving
Green GDP
Sector level policy making
Cost benefit analysis
Poverty analysis