Browsing by Subject "Valuation"
Now showing 1 - 6 of 6
- Results Per Page
- Sort Options
Item Open Access A Comparison of Non-Market Approaches in Determining the Benefits of Remediation at a Great Lakes Area of Concern Eighteenmile Creek, Niagara County New York(2007-05) Gorecki, DougValuations of environmental resources often require the use of non-market approaches. In this paper, three common non-market methods are employed to valuate restoration of Eighteenmile Creek, a Great Lakes Area of Concern (AOC) located in upstate New York. Using a survey of recreational anglers who visit the stream, we determine that travel cost and contingent valuation methods are consistent in their estimation of consumer surplus increases with site remediation. Implementation of a hedonic property approach indicates that the increases in property values with site remediation as determined in similar AOC studies may not occur at Eighteenmile Creek.Item Open Access A Financial and Economic Assessment of the Conservation of Northwestern Madagascar Mangroves(2016-04-29) Witt, EmilyPrograms such as REDD (reducing emissions from deforestation and forest degradation) that provide financial incentives to maintain natural carbon stocks are being implemented worldwide to address climate change and the conservation of threatened ecosystems. In developing countries, where the relative cost of conservation is high, these programs are especially attractive to promote sustainable resource use and prevent conversion of valuable ecosystems to other land uses. To incorporate REDD effectively in these areas, the financial costs and benefits resulting from the project implementation needs to be accessed. Quantification of income received from ecosystem services under baseline and project scenarios needs to be estimated, along with other costs of conservation management in order for a comprehensive comparison to be done. Ensuring that the project not only generates additional value, but also promotes the livelihoods of communities that rely on these ecosystems is key to the long-term sustainability of conservation efforts. This report serves as a cost-benefit analysis case study in Ambro-Ambanja Bay, Madagascar. This financial analysis looks at Blue Ventures’ proposed conservation of mangrove forests in Northwestern Madagascar using a REDD project. Project cash flows center around net income derived from certain ecosystem services, carbon income generated from REDD and project implementation and transaction costs. One limitation of this analysis is the exclusion of several partial, indirect and non-use ecosystem services provided by the Ambro-Ambanja Bay mangrove forest. To address this, a total economic valuation framework of all ecosystem services provided by Ambro-Ambanja Bay mangroves was created to provide additional insight into the entire estimated value of healthy mangrove forests. The first chapter of this report provides a background on mangrove ecosystems, the state of Ambaro-Ambanja Bay mangroves, and the general objectives of the proposed project. The second chapter provides an overview of methods used to estimate deforestation, methods used to derive the net income generated from various ecosystem services, and estimates of the costs associated with the project. The chapter details how these costs and benefits were derived under the baseline and project scenarios to provide insight on the impacts the two scenarios have on the estimated financial cash flows. The third chapter consists of a financial analysis of the project from the perspective of each of the major stakeholders. The financial assumptions are stated along with an overview of the government, project developer and community perspectives. Costs and benefits for each perspective were summarized in the form of net present values (NPV), which were calculated under various scenarios. It was found that the project was profitable for the government and community perspectives, and breakeven for the project developer, when carbon income was included. Major differences in NPVs between the assorted scenarios were analyzed and the sensitivities of those NPVs to changes in the stated assumptions were also tested. The fourth chapter details a proposed framework for valuing the additional ecosystem services that were not valued in the initial cost benefit analysis. An overview of those ecosystem services along with the various methods chosen to value each service is discussed. Benefit transfer was the main method employed to value the partial, indirect and non-use services. The section then details what literature estimates, data and calculations were used or are needed to derive the annual per hectare value provided by each service from healthy Ambaro-Ambanja Bay mangroves. The fifth chapter identifies the aspects of the project that might introduce risk to the long-term sustainability of the project. These risks include delayed benefits from the community perspective due to a 14 year project payback period, heavy reliance on carbon credit income for project profitability from the community perspective, and reliance on donor funding to break even from the project developer perspective. Proposed management considerations to mitigate these risks include project refinancing, potential development of an additional project income generating activity, and diversification of donor funding sources. This report makes several key points and recommendations: • Analyzing project profitability from the perspective of all major stakeholders is important in identifying where potential risks lie and who will be bearing those risks. • Although measures of net present value provide a simplified summary of the total discounted value received, it is critical to look deeper into the characteristics of the distribution of costs and benefits over time and the impacts it might have on stakeholders, especially those that are risk-averse. • Assumptions based on extremely volatile and new markets, such as the Voluntary Carbon Market, need to be made with caution and tested for project sensitivity. • Estimation and assessment of the total economic value (TEV) of all of the ecosystem services is needed to determine the true value of healthy mangroves in Ambaro-Ambanja Bay. The indirect value of these services and the impact of deforestation on that value need to be considered by the stakeholders.Item Open Access Cashing in on Carbon--Land and Offset Project Valuation: Incorporating Climate Legislation and Environmental Incentives in Property and Project Appraisal(2010-04-30T18:29:50Z) Davis, Nicholas J.The CBO, EIA, and EPA predict carbon offset prices will rise to $15-30/ton CO2e in the next decade (ACESA). The creation of carbon offsets markets provides landholders with an alternative means of income generation on suitable tracts. Relevant businesses might recognize what carbon and offset prices mean for their companies, but little information exists for prospective suppliers of offsets like land owners, farmers, land trusts, etc. This project presents a customizable tool based on assumptions including but not limited to offset price forecasts, expected sequestration rates, and tax data (State, Federal). Users can tailor inputs like acreage availability, forest type, and start-up costs to yield rough estimates of project and property value based on planting-for-carbon initiatives. This paper demonstrates sample outputs produced by the model, conducts sensitivity analyses to evaluate project variability, and runs financial forecasts using Oracle’s Crystal Ball to predict outcome probabilities. It is important to note that at the current stage, this tool predicts carbon sequestration and financial outcomes for tree planting projects, not existing forest tracts.Item Open Access Determining the Value of Renewable Assets After the Expiration of Power Purchase Agreements(2016-04-27) Hall, MattoxThe long lives of renewable energy assets complicate their economic valuation as long term projections of relevant variables such as operating performance, commodity prices, and policy are highly uncertain. Power purchase agreements (PPAs) remove much of the uncertainty by fixing the energy price and guaranteeing an off-taker for the asset’s power output. However, wind and solar assets can have useful lives and generate electricity and provide financial returns for much longer than the term of the PPA. Despite that, little rigorous thought or analysis has been given to how to value the post-PPA life of a new project and how significant that value is. Assumptions and valuation methodologies are both firm and individual-specific. The lack of clarity into what the potential post-PPA options are and how valuable they are increases the risk associated with the asset class, and poses challenges for renewable energy development generally as well as for developers, operators and investors. In general, an asset owner will have three options once its PPA expires: 1) renew the PPA; 2) continue operating the asset without a PPA; or 3) decommission the assets for scrap or to be refurbished for future use. Which course of action to take and what its value is are highly dependent on a number of variables that are difficult, if not impossible, to project decades into the future. In response, the market broadly uses four approaches: 1) use a metric like cash-on-cash returns that avoids assumptions about the long-term value of the asset; 2) assume the asset will be resigned to a PPA with similar terms and value; 3) assume it will continue operating without a PPA and project revenues by using a modeled forward price curve and some expected asset deterioration; or 4) assume the asset will be decommissioned after its PPA expires and there is no post-PPA value. This paper investigates current post-PPA valuation methods, what options exist for a PPA-expired renewable energy asset, and uses the case of a hypothetical wind farm to illustrate the use of a method for bounding the uncertainty on the post-PPA value at the beginning of the asset’s life. It finds that potential post-PPA options can significantly affect project values and internal rates of return and hence, merits further research and consideration by the market. Given the range of values demonstrated, additional research into how exposed different market participants are to this post-PPA value risk is also justified. The paper closes by establishing the similarity between the potential post-PPA options and traditional European-style long call options and suggesting that a traditional options valuation model may provide greater insight into how to value the post-PPA term of a renewable energy asset at the beginning of its useful life.Item Open Access Private Water Utility Landholdings: Financial and Political Implications(2014-04-25) Vigliotti, TabithaEcosystem services research has led to policies favoring watershed land protection at the federal, state, local, and private levels, notably at drinking water treatment facilities. A few researchers have connected land use and water utilities by estimating surface water treatment costs through raw water sediment load. However, more comprehensive cost-benefit research of private watershed land ownership is absent. In my research, I develop a distributional cash flow model to estimate the magnitude and timing of costs and benefits to a Connecticut private water company, the local community, and to the economy as a whole using Connecticut Public Utilities Regulatory Authority data, interviews, regulatory landscape, tax regime, and non-market valuation benefits transfer. The base case model predicts positive NPV to all parties in Connecticut: $3,828,432,329 to the economy from 2010 through 2025, where $1,461,824,087 of that is from benefits to the company and $2,366,608,242 is from benefits to the community. Sensitivity analysis implies these findings may be robust to systematic changes (+/- 10% and +/-20%) to input parameters. The distribution of costs and benefits lends itself to political economy considerations and future policy reflections.Item Open Access Valuing Land Conservation in North Carolina(2010-04-28T18:24:37Z) Adair, CharlesClean Water Management Trust Fund (CWMTF) works to protect and better North Carolina Water Resources by funding projects within the state of North Carolina. This masters project focuses on the benefits of conservation in order to provide CWMTF with information to aid their conservation funding decisions. A non-market valuation toolkit and on-site survey were used to estimate dollar values for two North Carolina sites: Ellerbe Creek Greenway (17 acre Wood Preserve) and Cary Greenway (White Oak Creek Conservation Project plot 11). Using the data gathered on the characteristics of each site by the survey and other general research, the toolkit provides an estimate of the economic value of the sites. These values are compared with each other as well as other research in the field of valuing conservation. The results indicate that while the sites are comparable in size, Ellerbe Creek Greenway has a higher economic benefit to the state. The results also point to the importance of conservation in areas with high population densities.