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The Dönje Hydropower Scenario

In: Evaluating Water Projects

Author

Listed:
  • Per-Olov Johansson

    (Stockholm School of Economics)

  • Bengt Kriström

    (SLU)

Abstract

This chapter presents the cost-benefit analysis of the Dönje hydropower re-regulation. The theoretical cost-benefit rule is briefly discussed. It is seemingly simple, but is based on a quite complex open economy setting. The major benefits of the re-regulation are environmental, such as more salmon in the river, and hence improved fishery, improved aesthetical values, improved canoing and other such leisure activities. A web-based questionnaire was used to assess the willingness-to-pay (WTP) for these benefits. The valuation question is novel in the sense that it introduces intervals (upper and lower bounds for WTP) that are selected by the respondent. The chapter then goes on to estimate the costs of the proposal. These are mainly the loss of profits by the hydropower company and externalities of coal-fired replacement power. A sensitivity analysis of the result of the cost-benefit analysis is undertaken.

Suggested Citation

  • Per-Olov Johansson & Bengt Kriström, 2013. "The Dönje Hydropower Scenario," SpringerBriefs in Economics, in: Evaluating Water Projects, edition 127, chapter 0, pages 11-33, Springer.
    • Handle: RePEc:spr:spbchp:978-3-642-36790-8_2
    DOI: 10.1007/978-3-642-36790-8_2
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