This research attempts to fill in some specific gaps in the area of economic valuation of non-market goods and services with respect to development projects, and the integration of those values in the policy decision-making process. The concept and theory of non-market valuation and project appraisal are examined. In a developing country context, the conventional contingent valuation method is extended to include respondents contribution in terms of time, irrespective of their decision to contribute money. This extension of the conventional contingent valuation method allows the inclusion of economic activities that are non-monetized and transactions in the form of barter exchange, which are typical for developing countries such as Bangladesh. The values generated by this new approach are integrated into an extended cost-benefit analysis, which reveals that the cleanup of dying rivers is not only an environmental imperative, but is also socially and economically justifiable. Apart from the theoretical investigation, another important dimension of this research is to contribute to the policy decision-making process with regard to public sector investment in developing countries.
The Buriganga River, which passes through Dhaka City, the capital of Bangladesh, has been selected as the case study for this research. Although considered to be the lifeline of the capital, the city part of the Buriganga River has become biologically and hydrologically dead because of the indiscriminate dumping of domestic and industrial wastes, encroachment by unscrupulous people, and negligence on the part of the authority to enforce rules and regulations pertaining to the ecological health of the river.
A cleanup programme has been designed for the Buriganga River to restore its water quality and develop new facilities in and around the river. This hypothetical cleanup programme is used: (i) to estimate the non-market benefits of an environmentally healthy waterway; (ii) to measure the total benefits; and (iii) to examine the desirability of public funding for the cleanup programme. An extended contingent valuation (ECV) survey of 400 households was carried out in Dhaka City in 2001. It reveals that not only are a significant proportion of the respondents willing to contribute direct cash for the environmental improvement of the river, they are also willing to contribute their time. When the contribution in terms of time is monetized, it is estimated to represent about 60 percent of the total contribution (the remaining 40 percent being cash payment).
The total non-market benefits from the Buriganga River cleanup programme are estimated at Tk 388 million (US$ 6.80 million) in the first year, rising to Tk 1805 million (US$ 31.66 million) by the 10th year of the programme. The public decision making process in Bangladesh does not consider such benefits. Failures to do so lead to gross under-estimation of the potential for, and contribution of, undertaking environmental improvement activities.
The total benefits of the cleanup programme are estimated within the framework of total economic value: the non-market benefits are estimated using the ECV survey inputs, and the market benefits are measured using secondary information, market methods and a benefit transfer approach. The cost estimate of the cleanup programme is made using market and secondary information with appropriate adjustments. The extended cost-benefit analysis (ECBA), which integrates the non-market benefits of the cleanup programme, shows that such public funding is worth undertaking. The study also reveals that a significant portion (68 percent) of this investable funding can be generated from the community.
The need for a cleanup programme of the Buriganga River is not an isolated case in Bangladesh. Many rivers in that country, and also throughout the developed and developing world are under threat of becoming biologically and hydrologically dead. This study provides a framework for addressing such environmental problems. It demonstrates that the ECV survey is a useful tool in estimating economic values of resources even in extremely poor economies. The modification of the contingent valuation method takes into account the local context, including cultural, economic, social and political settings. The extended cost-benefit analysis, which integrates better resource values could provide important information for the policy decision-making process. This is particularly useful for countries where the democratic system is not fully developed and there is limited experience in integrating the environment into the decision making.
| Identifer | oai:union.ndltd.org:ADTP/221584 |
| Date | January 2003 |
| Creators | alam@usq.edu.au, MD Khorshed Alam |
| Publisher | Murdoch University |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
| Rights | http://www.murdoch.edu.au/goto/CopyrightNotice, Copyright MD Khorshed Alam |
Page generated in 0.0017 seconds