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Monetization Of Environmental Externalities For Economic Analysis. Case Study: Urban Mobility In Oradea

Author

Listed:
  • Ovidiu – Vasile GULER

    (University of Oradea, Doctoral School of Economic Sciences, Faculty of Economic Sciences, The Finance - Accounting Department, Oradea, Romania)

  • Corina BOLOȘ

    (University of Oradea, Doctoral School of Economic Sciences, Faculty of Economic Sciences, The Finance – Accounting Department, Oradea, Romania)

Abstract

One of the main limitations identified in the specialized literature is represented by the insufficient quantification of the environmental externalities in the process of carrying out the economic analysis within the cost-benefit analysis for the urban mobility projects specific to the local public authorities. Cost-benefit analysis is an essential tool for prioritizing public investment. The research methodology used in this paper includes data analysis, observation and data modeling. The purpose of this paper is represented by the analysis of the monetization of the environmental externalities specific to the economic analysis of the projects in the field of urban mobility of Oradea Municipality. Economic analysis involves estimating the contribution of a public investment to the economic well-being of a city, region or country and is very important because it also includes the economic and social benefits of an investment. In Romania, the economic analysis is mandatory for all investment projects that involve conducting a feasibility study. Socio-economic analysis involves making fiscal corrections, corrections for externalities and transformation into accounting prices. Externalities can be positive or negative and can be caused by production or consumption. Negative externality is an external cost and positive externality is an external benefit. In performing a cost-benefit analysis when an investment is analyzed from an economic point of view, externalities must be quantified from a monetary point of view. Shadow prices are monetary values attributed to externalities. These shadow prices are used in economic analysis specific to cost-benefit analysis. Shadow prices are assigned when market prices are not known accurately or when it is difficult to quantify certain costs. An example of a shadow price is the value attributed to the emission cost of one tonne of carbon dioxide. A limitation of this paper is represented by the fact that we analyzed only the environmental externalities specific to urban mobility. In future works I want to expand the research of other externalities and to carry out the economic analysis at the level of investment projects of local importance.

Suggested Citation

  • Ovidiu – Vasile GULER & Corina BOLOȘ, 2021. "Monetization Of Environmental Externalities For Economic Analysis. Case Study: Urban Mobility In Oradea," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 30(2), pages 188-197, December.
    • Handle: RePEc:ora:journl:v:30:y:2021:i:2:p:188-197
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    References listed on IDEAS

    as
    1. Massimo FLORIO, 2006. "Multi-government cost-benefit analysis: shadow prices and incentives," Departmental Working Papers 2006-37, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    2. Christoph Czichowsky & Johannes Muhle-Karbe & Walter Schachermayer, 2013. "Transaction Costs and Shadow Prices in Discrete Time," Swiss Finance Institute Research Paper Series 13-51, Swiss Finance Institute.
    3. Birdsall, Nancy & Griffin, Charles, 1993. "Population growth, externalities, and poverty," Policy Research Working Paper Series 1158, The World Bank.
    4. Eskeland, Gunnar S., 2000. "Externalities and production efficiency," Policy Research Working Paper Series 2319, The World Bank.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    economic analysis; monetization; externalities; urban mobility; public investments; shadow price;
    All these keywords.

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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