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Cost-Benefit Analysis and Ecological Discounting

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New Metropolitan Perspectives (NMP 2020)

Part of the book series: Smart Innovation, Systems and Technologies ((SIST,volume 178))

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Abstract

The discounting of costs and benefits is a critical operation when projects, plans and programmes with long-term extra-financial effects need to be assessed. Therefore, the aim of the paper is first to show the potential deriving from the use of specific procedures to discount the environmental impact of the investment, then to define a probabilistic model for the estimate of the “ecological” Declining Discount Rate and “economic” Declining Discount Rate. The implementation of the model to the data of the Italian economy returns an ecological discount rate lower than the economic one. This means giving more weight to environmental externalities rather than strictly financial repercussions. This has a clear impact on the decision-making process for projects with intergenerational environmental implications.

The contribution to this paper is the result of the joint work of both authors, to which the paper has to be attributed in equal parts.

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Authors and Affiliations

  1. Department of Civil Engineering, University of Salerno, Fisciano, SA, Italy

    Antonio Nesticò & Gabriella Maselli

Authors
  1. Antonio Nesticò
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  2. Gabriella Maselli
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Correspondence to Antonio Nesticò .

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Editors and Affiliations

  1. Mediterranea University of Reggio Calabria, Reggio Calabria, Reggio Calabria, Italy

    Carmelina Bevilacqua

  2. Mediterranea University of Reggio Calabria, Reggio Calabria, Reggio Calabria, Italy

    Francesco Calabrò

  3. Mediterranea University of Reggio Calabria, Reggio Calabria, Reggio Calabria, Italy

    Lucia Della Spina

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Nesticò, A., Maselli, G. (2021). Cost-Benefit Analysis and Ecological Discounting. In: Bevilacqua, C., Calabrò, F., Della Spina, L. (eds) New Metropolitan Perspectives. NMP 2020. Smart Innovation, Systems and Technologies, vol 178. Springer, Cham. https://doi.org/10.1007/978-3-030-48279-4_42

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