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Dams and Development E-Paper Contents

p. -1 of 74 BACK | NEXT Home Page of Dams and Development Foreword I. Why an e-paper on dams and development? II. Assessing options III. Participatory processes IV. Social impacts V. Environmental impacts VI. Benefit distribution VII. Dam safety and sustainability VIII. Existing projects IX. Improving governance X. What other organizations say XI. ADB, Dams, and Development XII. References Contact Us

Economic Analysis Guidelines

'Economic viability depends upon the sustainability of project effects. Projects are sustainable if their net benefits or positive effects endure as expected throughout the life of the project. Sustainability is enhanced if environmental effects are internalized'. (para 20)

'When looking at the distribution of project effects and judging social acceptability, it is important to determine who benefits and who pays the costs'. (para 20)

'The value of environmental effects can be included in the economic analysis of projects. Although it is not possible to put monetary values on all types of environmental effects, such costs and benefits should be as explicit as possible so as to inform policymakers and citizens'. (Economic analysis, para 171)

'Four broad approaches can be used to value environmental costs and benefits: market prices, costs of replacement, surrogate markets, and surveys'. (Economic analysis, para 172)

'Project sustainability is strongly affected by who benefits and by how much, relative to who pays' (Economic analysis, para 178)

Three forms of distribution analysis are outlined in the Guidelines (paras 178-187 and see Appendix 25):

• The distribution of benefits and costs among operators, consumers and government and how it is affected by different charge levels,
• The distribution of net benefits among beneficiary groups according to their net income level
• The effects of using foreign resources in production and funding

ADB's Handbook for Integrating Risk Analysis in the Economic Analysis of Projects covers a range of applications and mechanisms for risk analysis:

• Strengthening Project Design: Overall Project Benefits Estimation
• Promoting he Sustainability of Project Effects (Financial sustainability risk analysis, Environmental sustainability risk analysis, Institutional sustainability risk analysis)
• Supporting Poverty reduction Objectives
• Risk Analysis and policy Based Lending
• Sectors and projects: Some Typical Risk Analysis Situations

Also see the following appendixes:

• Appendix 21 - sensitivity and risk analysis
• Appendix 24 - economic evaluation of environmental impacts
• Appendix 25 - distribution

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