The Economics of Evaluating Water Projects

This book presents research on a kind of water use conflicts that is becoming more and more common and important: How to best manage moving water in times of increasing demand for electricity as well as environmental services. How should decisions be made between water use for electricity generation or for environmental and recreational benefits? The authors develop a simple general equilibrium model of a small open economy which is used to derive a cost-benefit rule that can be used to assess projects that divert water from electricity generation to recreational and other uses (or vice versa). The cost-benefit rule is then applied to the specific case of a proposed change at a Swedish hydropower plant. The book provides a manual for the evaluation of river regulations which can easily be replicated in other studies.

Per-Olov Johansson is Professor emeritus in economics at the Stockholm School of Economics. He has held a professorship (II) in health economics at the department of Economics at the University of Oslo and a professorship in resource and environmental economics at the Swedish University of Agricultural Sciences, Umea. He has published more than 10 books internationally and more than 100 journal articles and book chapters. Bengt Kristrom is Professor of Resource Economics (SLU-Umea) and Research Director, CERE, Sweden. His research is widely cited (top 1000 economists according to a 2002 compilation) and includes 50+ papers and 10 books. He has been a consultant to several international organizations, including the OECD and, at numerous occasions, the Swedish Government. He has organized the Ulvon international Conference on Environmental Economics since 1993.