Policy and project appraisal
Including economic values in decision making
Policy and investment decisions are increasingly based on evidence that includes not only financial impacts but also economic values of social and environmental costs and benefits. We provide practical support to clients through the whole decision cycle including setting objectives, screening options, and identifying, quantifying and comparing the costs and benefits of action against a baseline of the current situation or business as usual.
Our toolkit of appraisal and evaluation methods includes:
- Cost Benefit Analysis (CBA) which helps answer the dual questions of ‘should we do something about the issue in hand? And, if so, what should we do?;
- Cost Effectiveness Analysis (CEA) which identifies the option that is likely to generate the highest benefit per £, or alternatively, the least costly option. CEA is most useful when deciding how to deliver an agreed objective;
- Impact Assessment (Regulatory Impact Assessment) which incorporates other implementation related issues (e.g. competitiveness, effect on small businesses, equity etc.) as well as costs and benefits;
- Socio-Economic Analysis (for EU REACH authorisations and restrictions) weighs the costs and benefits of different REACH actions for individual chemicals and their uses;
- Assessment of Environmental Liability (ELD) – with the implementation of the EU Environmental Liability Directive, assessment of environmental damage (in ecological or economic terms) and selection of remediation options to offset this damage are becoming more and more important. See our latest training package on ELD at the dedicated European Commission website.
- Ecosystem services approach which helps identify which ecosystem services are provided with and without the decision that is being analysed and what the related changes in the economic value are.
- Natural Capital Asset Check, a method for analysing whether natural capital assets are being used sustainably, developed by eftec-led teams through a scoping study for Defra and in one of ten work packages of the UK National Ecosystem Assessment Follow-on Project; and
- Our understanding of natural capital is now being applied in the development of a National Woodland Natural Capital Account, and scoping of the development of a National Marine Natural Capital Account, as part of the development of UK environmental accounts , and in leading work for the Natural Capital Committee developing a Corporate Natural Capital Accounting method.
Many of our projects involve multidisciplinary inputs and we work with specialists in environmental science (ecologists, hydrologists, ecotoxicologists) to ensure that our analyses are based on robust evidence from life cycle analyses, strategic environmental assessments and environmental impact assessments.
Stakeholder consultation is also a core element of work to facilitate widespread engagement with all groups affected by proposed policies and projects. We use online and in person (group / individual) methods for such consultation and collaborate with specialist facilitators where needed.
Our expertise is applicable to all environmental media and sectors and we have experience in:
- Water and wastewater management – implementation of the EU Water Framework Directive, water company business plans and the Periodic Review process, water company customer engagement;
- Marine environment – designation of marine Natura 2000 sites, implementation of the EU Marine Strategic Framework Directive;
- Energy and air pollution – analysis of the impacts of marine renewable energy generation, impact of air pollution on human health and ways to reduce this;
- Solid waste management – Waste Protocols for England and Wales;
- Soil and groundwater contamination – analysis of environmental and social benefits of remediation options;
- Infrastructure investments - customer research and cost benefit analysis for the Thames Tideway tunnel and costing potential ecosystem service impacts of the Severn Tidal barrage project;
- Chemicals – socio-economic analysis for EU REACH Authorisation and Restrictions and
- Flood and coastal erosion risk management – appraisal of environmental benefits of options such as managed realignment.
In addition to undertaking numerous appraisals of national and local policies and projects, we have also developed appraisal guidelines for national and international agencies. Our guidance can also be accompanied by specially tailored training programmes, which is the key to ensuring its successful implementation (see ‘training and guidance’ below). We also have served as economic advisors to panels and steering groups managing policy change and large-scale investments.
For specific examples of our work in this area please visit our projects page.