Budget constraint and the valuation of environmental impacts in Thailand
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Publication Details
Author list: Kaenchan P., Gheewala S.H.
Publisher: Springer
Publication year: 2017
Journal: International Journal of Life Cycle Assessment (0948-3349)
Volume number: 22
Issue number: 11
Start page: 1678
End page: 1691
Number of pages: 14
ISSN: 0948-3349
eISSN: 1614-7502
Languages: English-Great Britain (EN-GB)
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Abstract
Purpose: This study aims to develop a valuation scheme for environmental impacts in Thailand. This would assist in integrating environmental concerns into economic assessment tools such as cost-benefit analysis (CBA), system of environmental-economic accounting (SEEA), etc., which could be used in policymaking. Methods: The damage categories considered are human health and ecosystem quality. The value of a quality-adjusted life year (QALY) measuring damage to human health is estimated using the budget constraint approach. The value of a biodiversity-adjusted hectare year (BAHY) measuring damage to ecosystems is calculated relatively to the value of a QALY. Results and discussion: Potential economic production per capita, which is considered as the willingness to pay (WTP) for a QALY, is in the range 458,000–566,000 Thai baht (THB) (equivalent to 14,000–18,000 USD where 1 USD ≈ 32 THB). The value of a BAHY, which is expressed in terms of the value of a QALY, is in the range 7900–9800 THB (or around 250–300 USD), based on the exchange rate between the protection targets for ecosystems and human well-being. These results are tested by applying to the monetization of potential environmental burdens from producing several biofuels and petroleum-based fuels in Thailand; the environmental externalities account for about 20–40 % of the retail price. Conclusions: The results can benefit policymakers in terms of decision-making on environmental management. Besides, the pathways to derive the monetary value of environmental impacts could be useful for other countries. © 2016, Springer-Verlag Berlin Heidelberg.
Keywords
Biodiversity adjusted hectare year, Budget constraint, Quality adjusted life year
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