Environmental Valuation & Cost-Benefit News

Abstract: Congestion costs are emerging as one of the most important challenges faced by metropolitan planners and transport authorities in first world economies. In the U.S. these costs were as high as 78 million dollars in 2005 and are growing due to rapid increases in travel delays. In order to reduce levels of congestion the U.S. Department of Transportation recently started a program to initiate congestion pricing in five metropolitan areas. In this context it is important not only to determine those factors helping its implementation and success, but also the problems or difficulties associated with charging projects. In this article Daniel Albalate and Germà Bel analyze worldwide experiences with urban road charging in order to extract interesting and helpful lessons.

General results
Urban road charging experiences, once implemented, have shown interesting results leading to success in the reduction of peak-time traffic. Therefore, they become a successful tool to manage demand and decrease congestion and environmental costs. In the cases of London, Stockholm, Singapore and even in the Norwegian cities where the goal was not traffic management, this measure provided significant redutions in the congestion costs associated to the entrance of city centers, providing revenue to invest in public transportation or road projects. Moreover, the measure increased average speeds everywhere, improving private and public transport productivity. The revenues helped in order to make more attractive this public transportation which at the same time received more passengers and as a consequence more revenues. In fact, modal split is found since a decrease of private cars in favour of public transportation is easily achieved. It is also considered that road pricing improve the environment in the city since reductions in greenhouse gases are found in all experiences. On the other hand, re-routing and the use of other time periods to shift trips are recognized and must be considered by the planner.

The political situation may also play an important role in order to implement the measure as we stated in the Swedish, Scottish and British experiences where the opposition used the issue against the incumbent government. On the contrary, when big parties agree in the need to use prices to restrict traffic, like in the Norwegian cases, the measure is easily introduced in spite of public opposition.

Trial periods are also recommended before any referendum since it is found that opposition against the measure declines after its introduction, especially if the revenues collected can provide better public transport and it is made visual for the citizens. The experiences of Stockholm and Edinburgh in this field are extremely opposite, also was their success. The use given to revenues and the fairness or equity considerations are considered crucial to get the public oppinion support.

Keywords: Congestion, Road Pricing, Urban Transportation, Traffic Demand Management

by Daniel Albalate and Germà Bel; Universitat de Barcelona, Departament de Política Econòmica, Av. Diagonal 690, 08034, Barcelona (Spain). Emails albalate@ub.edu; gbel@ub.edu Web pages: www.danielalbalate.com; www.germabel.cat; Tel.: +34.93.4021947 Fax: +34.93.4034573

University of Barcelona, Research Institute of Applied Economics www.ub.edu/irea
Working Paper 2008/01; 2008; 27 pages
http://www.ub.edu/irea/working_papers/2008/200801.pdf
via REPEC www.REPEC.org

Abstract: This study introduces a methodological framework for environmental performance assessment of waste recycling programs. We develop two categories of indicators: the efficiency indicators that compare the environmental achievements of a program with the required expenditures (benefits per unit cost), and the effectiveness indicators that compare the environmental benefits of a program with the amount of generated wastes (benefits per unit waste). Aggregation of these indicators, in relation with their associated criticalities, will give us a number of environmental performance indices to represent the status of the environmental performance. This score-based assessment has two major advantages: it takes complex scientific information and synthesizes it in a way that makes it easily understandable for non-experts while in comparison with other environmental performance assessment methods it is not computationally intensive. In this aggregation, the importance values (criticalities) are often expert based uncertain judgments, which are defined according to the objective of performance assessment. Therefore, a fuzzy multiple attribute analysis can be employed to express these judgments by fuzzy sets and to formulate the weighted aggregation process. For case study, we have investigated the environmental performance of the provincial beverage container recycling programs in Canada, which illustrates the applicability of the proposed methodology.

Keywords: Recycling; Performance assessment; Multiple attribute analysis; Fuzzy sets; Decision support systems

by Fuzhan Nasiri and Gordon Huang, both of Faculty of Environmental Systems Engineering, University of Regina, Regina, SK, Canada S4S-0A2; Tel./fax: +1 306 5220788.

Environmental Modelling & Software via Elsevier Science Direct www.ScienceDirect.com
Volume 23, Issue 6; June, 2008; Pages 677-689
http://dx.doi.org/10.1016/j.envsoft.2007.04.009

The Florida Institute for Smoking Cessation (FISC), a new statewide coalition committed to reducing smoking rates in Florida, today released an economic study indicating that smoking costs the state economy more than $20 billion per year. The cost is equivalent to $6,942 per smoker, or $17.22 per each $3.75 pack of cigarettes.

The study, conducted by the Washington Economics Group, also demonstrates the financial advantages of offering comprehensive employee-based smoking cessation benefits. Such an investment could yield the state of Florida:
* $21 billion in positive economic impact on the state’s yearly output of goods and services;
* A $7 billion gain in labor income each year; and
* More than 100,000 new jobs created as longer life spans and a more productive labor force create new and expanded economic opportunities.

“Most standard health plans will cover a lung transplant, but they won’t help pay for smoking cessation counseling or treatment. We need to change this paradigm,” said Tony Villamil, CEO of The Washington Economics Group and former chief economic advisor to Gov. Jeb Bush. “Cessation is far cheaper than acute care, and our economy would save billions each year if we did more to help smokers quit before they develop costly and debilitating health problems.”

The study estimated that each dollar spent on smoking cessation programs will yield $1.90 to $5.75 in economic gains for Florida employers, insurers and government.iv When a smoker does quit smoking successfully, a full 25 percent of the total financial benefits go to his or her employer in the form of increased productivity and reduced absenteeism.

“We’ve made a lot of progress in raising local awareness about the hazards and costs of smoking,” said State Rep. Gayle Harrell, who serves as the chair of the Florida House Committee on Health Quality and is a member of the FISC. “But even though many Floridians are motivated to quit, they’re addicted and it’s difficult for them to actually do so. Most smokers need help to quit successfully.”

More than 70 percent of smokers say they want to quit, according to the U.S. Centers for Disease Control and Prevention (CDC). Almost half of Florida smokers report they’ve tried to quit smoking in the past year, and nearly 60 percent say they plan to quit within the next six months, according to the Florida Adult Tobacco Survey. Without smoking cessation counseling and treatment, however, only five percent will succeed at overcoming their addiction.

“It takes the average smoker six to nine attempts to quit successfully, but Florida’s policies imply that smokers should quit cold-turkey and if they can’t, they must not be trying hard enough,” said Brenda Olsen, chief operating officer of the American Lung Association of the Southeast and co-chair of the FISC.

“It’s very difficult to quit on the first try. We need to embrace better health policies that help smokers succeed at breaking their addiction rather than continuing to set up smokers for failure and disappointment,” added Dr. Dan Van Durme, past president of the Florida Academy of Family Physicians and chair of the Department of Family Medicine at the Florida State University College of Medicine.

The CDC recommends comprehensive smoking cessation benefits that include:
* At least four counseling sessions of at least 30 minutes each;
* All FDA-approved prescription and over-the-counter nicotine replacement treatments; and
* Counseling and medication for at least two smoking cessation attempts per year – all with low or no co-pays or deductibles for counseling and medications.

According to the Washington Economics Group study, following the CDC guidelines could save the state as much as $394.7 million in costs associated with smoking. vi, vii

Today, Florida Medicaid offers benefits for only one quit attempt per lifetime, and few private insurers offer any smoking-cessation benefits without a rider. Some Florida employers, however, are beginning to provide the CDC recommended benefits for their employees.

“By providing the CDC-recommended smoking cessation benefits and additional support and incentives, we’ve helped 47 percent of CSX participants quit smoking successfully,” said Kenneth Glover, director of health and wellness at CSX Transportation. CSX Transportation is a Jacksonville, Florida-based company with 33,000 employees that is among America’s leading transportation companies providing rail, intermodal and rail-to-truck transload services. “We hope more companies will recognize that this approach makes sense not only for their bottom line but also for the health and well-being of their employees.”

The Florida Institute for Smoking Cessation is a joint project of the Florida Academy of Family Physicians, the American Lung Association of the Southeast and several other public health, policy and business leaders who have joined together to educate, inform and build consensus among employers, government and health care providers for making smoking cessation assistance accessible to all smokers who want to quit.

Funding for the Economic Study was provided by Pfizer, Inc.

The study entitled :The Net Benefits and Economic Impacts of Investing in Employee-Smoking Cessations Programs in the Public and Private Sectors of Florida: was release in January 2008.

Business Wire http://www.businesswire.com
http://www.businesswire.com/portal/site/home/index.jsp?epi_menuItemID=887566059a3aedb6efaaa9e27a808a0c&ndmViewId=news_view&ndmConfigId=1001385&newsId=20080306006045&newsLang=en

Abstract: This paper examines various design strategies that might be employed to construct statistically more efficient stated choice designs in the presence of a reference alternative in a choice set. Using data collected in Sydney in 2004 in the context of trading time and cost attributes associated with alternative tolled and non-tolled routes to drive a car to work, we contrast D-efficient designs (based on a number of ways of pivoting attribute levels around a reference alternative) with the more traditional orthogonal designs and conclude that D-efficiency design strategies produce significantly improved results, in a statistical sense of relative efficiency, than the more traditional orthogonal design. Furthermore, the increased use of computer aided personal survey instruments and internet-based surveys enables researchers to structure the experiments around the very specific experiences of each sampled respondent, adding relevance and comprehendability to the attribute levels being assessed in contrast to other averaging methods to construct reference alternatives.

Keywords: Stated choice; Efficient experimental designs; D-efficiency; Orthogonal design; Reference alternatives

by John M. Rose 1, Michiel C.J. Bliemer 2 and 3, David A. Hensher 1 and Andrew T. Collins 1
1. The Institute of Transport and Logistics Studies (C37), School of Business, Faculty of Economics and Business, The University of Sydney, NSW 2006, Australia; Tel.: +61 2 9351 0168; fax: +61 2 9351 4433
2. Faculty of Civil Engineering and Geosciences, Delft University of Technology, The Netherlands
3. Institute of Transport and Logistics Studies, The University of Sydney, Australia

Transportation Research Part B: Methodological via Elsevier Science Direct www.ScienceDirect.com
Volume 42, Issue 4; May, 2008; Pages 395-406
http://dx.doi.org/10.1016/j.trb.2007.09.002

Abstract: An arid climate with limited water resources and a growing tourism industry lead to water shortages in many coastal zones. Due to increasing demand, alternatives have to be found, e.g. desalination and long-distance water piping (equal to or further than 30 km), ecological sanitation, wastewater reuse or water demand management. This paper presents a cost comparison for two options to supply water of drinking water quality: Option 1 — Desalination with the reverse osmosis technology, or Option 2 — Long-distance water piping from the Nile, for the case of the tourist city of Sharm El Sheikh (Sharm) at the Red Sea in South Sinai, Egypt. Available water resources and current as well as future water demand figures for Sharm are presented. 91% of the current water demand stems from tourism; water is supplied mainly by privately owned RO desalination plants (86%). To analyze costs for Option 1, we compiled RO desalination plant costs (capital and O&M) for 14 RO plants in Egypt and 7 elsewhere for comparison. Unit production cost (US$/m3) of water from small RO desalination plants in Egypt is in most cases lower than international trends for similar small capacity plants (250 to 5,000 m3/d), but unit O&M costs are higher. For Option 2, we present cost data for four long-distance piping projects in Egypt which pump groundwater or treated Nile water to cities in South Sinai including Sharm. We found that unit capital costs for those pipelines which are longer than 140 km, are in fact above the cost of a possible RO desalination plant at any flow capacity. For unit production cost, desalination costs are lower than long-distance piping starting from pipelines with 300 km length or more and capacity ≥2000 m3/d. Empirical basic cost equations are produced to calculate unit capital cost (US$/m3/d) and unit production cost (US$/m3) for both options in dependence of capacity for Option 1, and capacity and pipe length for Option 2. This paper is part of a more comprehensive research project to develop a decision support system for integrated water resources management in tourism-dominated arid coastal regions.

Keywords: Water demand; Capital and O&M costs; Sharm El Sheikh; Nile water

by A. Lamei 1, P. van der Zaag 1 and E. von Münch 2
1. Department of Management and Institutions, UNESCO-IHE, Institute for Water Education, Delft, The Netherlands; Tel. +31 20123147852; Fax +31 2024019374
2. Department of Urban Water and Sanitation, UNESCO-IHE, Institute for Water Education, Delft, The Netherlands

Desalination via Elsevier Science Direct www.ScienceDirect.com
Volume 225, Issues 1-3; May 1, 2008; Pages 1-12
http://dx.doi.org/10.1016/j.desal.2007.08.003

Abstract: The roll-out of Wal-Mart store openings followed a pattern that radiated from the center out with Wal-Mart maintaining high store density and a contiguous store network all along the way. This paper estimates the benefits of such a strategy to Wal-Mart, focusing on the savings in distribution costs afforded by a dense network of stores. The paper takes a revealed preference approach, inferring the magnitude of density economies by the extent of sales cannibalization from closely-packed stores that Wal-Mart is willing to sustain to achieve density economies. The model is dynamic with rich geographic detail on the locations of stores and distribution centers. Given the enormous number of possible combinations of store-opening sequences, it is difficult to directly solve Wal-Mart's problem, making conventional approaches infeasible. The moment inequality approach is used instead and it works well. The estimates show the benefits to Wal-Mart of high store density are substantial and likely extend significantly beyond savings in trucking costs.

by Thomas J. Holmes
National Bureau of Economic Research (NBER) www.NBER.org
NBER Working Paper No. 13783; Issued in February 2008
http://www.nber.org/papers/w13783.pdf

Abstract:
Objective: To determine the return on investment (ROI) of Highmark Inc.'s employee wellness programs.

Methods: Growth curve analyses compared medical claims for participants of wellness programs versus risk-matched nonparticipants for years 2001 to 2005. The difference was used to define savings. ROI was determined by subtracting program costs from savings and alternative discount rates were applied in a sensitivity analysis.

Results: Multivariate models estimated health care expenses per person per year as $176 lower for participants. Inpatient expenses were lower by $182. Four-year savings of $1,335,524 compared with program expenses of $808,403 yielded an ROI of $1.65 for every dollar spent on the program.

Conclusions: Using sophisticated methodology, this study suggests that a comprehensive health promotion program can lower the rate of health care cost increases and produce a positive ROI.

by Barbara L. Naydeck, MPH; Janine A. Pearson, PhD; Ronald J. Ozminkowski, PhD; Brian Day, EdD; and Ron Z. Goetzel

Journal of Occupational & Environmental Medicine.
Volume 50, Issue 2; February, 2008; Pages 146-156
http://www.joem.org/pt/re/joem/abstract.00043764-200802000-00007.htm;jsessionid=HRbBWVDf0YBWLtnNjlXxJL9KR82RbZ2PN3yhZgZq2StJWHp7J2Ry!1253064403!181195628!8091!-1

Chapter 11. Cost — Benefit Analysis, pages 163-175
Abstract: Chemical Leasing is based on the principle of increasing the efficiency of processes using chemicals by utilising the specific knowledge of the supplier (and/or the producer) and sharing the savings between supplier and user of the chemical. The cost—benefit analysis in this chapter presents a simplified model, just taking the business relations of two partners and one product into account. Therefore the effects of Chemical Leasing to the plant(s) of the producer, the supply chain and other macro-economic effects are not included.

by Rudolf Schott; AFC Aforma Consult; Unternehmensberatung GmbH, Rauscherstraße 15/14, 1200 Vienna, Austria; Email: rudolf.schott@afc-consult.at

Publisher: Springer Vienna
DOI: 10.1007/978-3-211-73752-1
Copyright 2008, SpringerLink Date: February 12, 2008
ISBN: 978-3-211-73751-4 (Print), 978-3-211-73752-1 (Online)
http://www.springerlink.com/content/u60462x86nu3xp71/