Economic Measurement of Environmental Impacts – Theoretical Basis and Practical Applications

The valuation methods introduced in this chapter have broad application. However, a project focus is adopted here for ease of presentation. Both economic and financial analyses are commonly employed in project evaluation. Whereas financial analyses focus primarily on market prices and cash flows, economic analyses should include the total economic value of the effects that development projects have on the environment, whether or not they are reflected in the marketplace. ¹