Topic: Cost BenefitSubscribe | Previous | Next
Raj Kumar K C 2/25/2019
Dear all,
I have analysed the demand cost but the result shows the intervention scenario NPV is higher as compared to BAU scenario. This analysis is done for a metropolitan city,is this normal to get such a result. If yes how can I justify the result?
Emily Ghosh 2/25/2019
Hi Raj Kumar,
High-cost interventions can result in an NPV higher than the baseline, but without knowing what your specific intervention scenario entails and without looking at the model, it is hard for us to determine whether the results you are getting are normal or not. It appears that the residential sector has significantly higher costs in the intervention scenario than the baseline. Does this seem reasonable to you? Perhaps check the assumptions and inputs to make sure.
Thanks,
Emily
Gregers Larsen 2/27/2019
Doing policy intervention is often costly, so here, just to add to Emily's answer, is a few ways you can justify it or better redeem it:
- You can add externality pricing (e.g. cost of CO2, PM2.5 emitted). I hear the IBC should help with this, but have not yet had the chance to try
- You can compare Your current result with the measure You are trying to control. For instance, what is the cost per save ton CO2?
Gregers Larsen
Raj Kumar K C 4/2/2019