Economic Analyses

VALUING THE SHORELINE Guideline for socio - economic analyses Prepared in the framework of the MESSINA project Swedish Geotechnical Institute National Institute for Coastal and Marine Management of Netherlands Lund University Autonomous University of Barcelona University of Szczecin Municipality of Ystad Centre for Coastal Erosion Studies Project part-financed by the European Union (European Regional Development Fund) within the INTERREG IIIC Programme Valuing the shoreline – Guideline for socio-economic analyses LIST OF CONTENTS The Messina initiative ................................................................................................................. 5 1 Reader’s Guide.................................................................................................................. 7 1.1 Introduction ............................................................................................................... 7 1.2 Guide for valuation of shorelines .............................................................................. 7 1.3 Who should read this guideline?............................................................................... 7 1.4 Main contents of the guideline .................................................................................. 7 2 Why socio-economic valuation of coastal projects? .................................................... 9 2.1 Integrating costs and benefits in decision-making.................................................... 9 2.2 Socio-economic analysis at different levels and timing ............................................ 9 3 Socio-economic analysis of coastal erosion projects ................................................ 11 3.1 Main steps of a project appraisal............................................................................ 11 3.2 Hazard and risk analysis......................................................................................... 12 3.3 Problem analysis..................................................................................................... 12 3.4 Involve stakeholders ............................................................................................... 12 3.5 Define project scope and choose a strategy .......................................................... 12 3.6 Select method of analysis....................................................................................... 14 3.6.1 Evaluation methods ................................................................................... 15 3.6.2 Selection of economic analysis methods................................................... 16 3.7 Identify effects......................................................................................................... 17 3.8 Quantify and qualify effects .................................................................................... 18 3.9 Evaluate alternatives and presentation of results................................................... 19 4 General remarks on socio-economic analysis of coastal erosion ............................ 21 4.1 Case studies and economic evaluation methods ................................................... 21 4.2 General conclusions from a european point of view............................................... 22 4.2.1 A paradigm shift ......................................................................................... 22 4.2.2 The need of a European harmonised approach ........................................ 22 4.2.3 Cross-boarding co-operation for solving coastal problems ....................... 23 4.3 References.............................................................................................................. 24 Appendix 1. Economic analysis models................................................................................. 25 A1.1 Cost-Benefit Analysis (CBA)................................................................................... 25 Introduction ............................................................................................................. 25 Identification of effects ............................................................................................ 25 Economic valuation of effects ................................................................................. 26 Methods to considering when potential effects of coastal erosion occur ............... 27 Decision criteria ...................................................................................................... 29 Applicability and restrictions ................................................................................... 30 A1.2 Cost-effectiveness Analysis (CEA)......................................................................... 31 Introduction ............................................................................................................. 31 Method .................................................................................................................... 31 Decision criteria ...................................................................................................... 31 Applicability and restrictions ................................................................................... 32 A1.3 Multi-Criteria Analysis (MCA).................................................................................. 32 Introduction ............................................................................................................. 32 Identification of criteria............................................................................................ 32 Valuation of criteria and effects .............................................................................. 33 Decision criteria ...................................................................................................... 34 Applicability and restrictions ................................................................................... 34 3 Valuing the shoreline – Guideline for socio-economic analyses A1.4 Methods for valuation of effects.............................................................................. 34 Travel Cost Method (TCM) ..................................................................................... 35 Hedonic Pricing Method (HPM) .............................................................................. 35 Contingent Valuation Method (CVM)...................................................................... 36 Production Factor Method (PFM) ........................................................................... 36 Prevention Cost Method (PCM).............................................................................. 36 Shadow Project Method (SPM) .............................................................................. 36 Benefit Transfer Method (BTM) .............................................................................. 36 A1.5 References.............................................................................................................. 37 Appendix 2. Selection of socio-economic evaluation method............................................. 39 A2.1 Introduction to this appendix................................................................................... 39 A2.2 Key question 1 ........................................................................................................ 39 Examples and lessons from practice...................................................................... 40 Lessons from theory ............................................................................................... 41 A2.3 Key question 2 ........................................................................................................ 42 Examples and lessons from practice...................................................................... 44 Lessons from theory ............................................................................................... 45 A2.4 Key question 3 ........................................................................................................ 46 Examples and lessons from practice...................................................................... 47 Lessons from theory ............................................................................................... 47 A2.5 Key question 4 ........................................................................................................ 48 Examples and lessons from practice...................................................................... 48 Lessons from theory ............................................................................................... 49 A2.6 Key question 5 ........................................................................................................ 50 Examples and lessons from practice...................................................................... 50 Lessons from theory ............................................................................................... 51 A2.7 References.............................................................................................................. 51 Appendix 3. Case studies – lessons learned ......................................................................... 53 A3.1 Introduction ............................................................................................................. 53 A3.2 Coastal erosion at Ystad Sandskog (Sweden) ....................................................... 53 A3.3 Coastal erosion

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