Jointly organised by:

Lee Kuan Yew School of Public Policy &

Singapore Environment Institute

INTRODUCTION

The aim of this workshop is to introduce the course participants to current concepts and methods that are central to the economic appraisal of projects. Special attention will be given to public sector investments and specific methods of valuation that question the relevance of accepted standard practices. For example, one of the current issues concerns the comparison of projects with very long time horizons against project with short time horizons. In this instance the use of differential discount rates and methods of valuation becomes pertinent. The use of economics for project appraisal may appear to present to a narrow focus. Nevertheless, we broaden the scope here by drawing from the principles of Welfare Economics and Environmental and Social Economics. The challenges surrounding the application of relevant concepts and methods will be illustrated by recourse to illustrations and case studies . In the latter sessions, we introduce some concepts and methods that betray traditional wisdom and strive to demonstrate the validity of such betrayal.

It will cover the following areas:

• The concepts that form the basis for evaluation
• Some guidelines for identifying project outcomes as benefits and costs to the community as a whole
• How do we value these outcomes in monetary terms? Valuation of Losses as opposed to Gains; the Strengths and Weaknesses of Contingent Valuation; and Threshold Values
• How do we deal with outcomes that are distributed over time and differentiate between the benefits and costs of the very long-term and the short-term? Differentiated Discount Rates for Future Gains and Losses
• ISO 1400 and Best Practice Methods of Valuation as opposed to World Price bench marks
• Macroeconomic Valuation of Natural and Social Capital
• Illustrations that include: Housing Development; Community Services; Water Supply and Waste Water Recycling, Urban Transport Planning; Health Policy Management; International Trade and Foreign Investment; Environmental Damages; and Education.

WHAT YOU WILL LEARN

• Understand the essential principles of economic evaluation
• Relate and adapt the concepts and methods to a wide variety of project appraisal contexts
• Identify key issues, outcomes and constraints in project evaluation
• Develop and apply techniques of valuation to specific contexts
• Data analysis
• Understand techniques of evaluation: Cost-Benefit Analysis (CBA); Cost-Effectiveness Analysis; Risk Analysis; Multi-Criteria Analysis and Life Cycle Analysis

WHO SHOULD ATTEND

Policy makers from government agencies who are engaged in economic appraisal of projects. Agencies include Ministry of Environment and Water resources, National Environment Agency, Public Utilities Board, Ministry of Transport, Land Transport Authority, Civil Aviation Authority of Singapore, Ministry of Health and Ministry of Finance.

ABOUT THE SPEAKERS

Jack Knetsch is Emeritus Professor of Economics at Simon Fraser University in Vancouver. He is a pioneer of environmental economics and valuation. His PhD thesis at Harvard introduced the Hedonic Price Method to Environmental Economics. He has over 200 refereed publications and is recognized world wide for not only his work on Environmental Economics, but also his work on Experimental and Behavioural Economics. He was a key influential member in the 2002 Nobel Laureate Daniel Kahnemann’s team. Professor Knetsch is a strong critic of the conventional methods of valuation and offers suggestions that suit some contemporary contexts. He has consulted for various UN Agencies, The World Bank, and The Asian Development Bank.

Dodo J Thampapillai holds a personal chair in Environmental Economics at Macquarie University. He is at present attached to the Lee Kuan Yew School of Public Policy (National University of Singapore). In 2005 he was included in the list of eminent environmental economists by UNESCAP for his work on Environmental Macroeconomics. He is also the author of Environmental Economics: Concepts Methods and Policies (Oxford University Press 2003) and has over 90 publications. His most recent research (Singapore Economic Review 2006) deals with Macroeconomic Valuation of the Environment. He has consulted for various UN Agencies, The World Bank, The Asian Development Bank and the International Labor Office.