Strategic Financing and Economic Analysis for Ecosystem Restoration
Task 7: Understanding cost-benefit analysis and effectiveness criteria
Start
What Is a Cost-Benefit Analysis (CBA)?
Restoration interventions often involve high up-front costs with returns far into the future. However, there is a persistent misconception that restoration yields low rates of return. Reasons for this include the long timeframe for returns to start, and that few evaluations quantify the multiple economic values of improving ecological health.Cost-benefit analysis (CBA) is a commonly applied tool in the economic analysis of restoration. A CBA can encourage investment in restoration by clearly laying out the benefits and costs of restoration programs and their distribution among stakeholders. It is also instrumental in prioritizing financial resources.
What Makes a Good CBA?
Up next
References
What Makes a Good CBA?
An effective cost-benefit analysis for restoration should:
- Capture a broad range of values that are important to society – not just those for which a formal market exists.
- Allow an ‘even-playing field’ comparison of market and non-market values.
- Make no judgement on how an intervention will be financed.
- Enable a fair comparison between the potential role of restoration versus other types of public and private works.
- Put values on ecosystem goods and services that underpin other important sectors.
- Consider distribution: which stakeholders bear which costs and benefits
- Make objective use of robust data
- Be transparent and internally consistent: describe assumptions to enable scrutiny and debate and ultimately build credibility
By meeting these criteria, a CBA becomes not just a technical exercise, but a powerful tool for mobilizing finance, informing policy, and driving restoration success.
Reflection
Up next
Reflection
- Have you ever seen a restoration project justified prior to investment through a formal economic lens?
- Have you ever seen a restoration project evaluated following investment through a formal economic lens?
- Why might it be important to compare restoration projects with non-environmental investments (like roads, housing, or energy)
Close this task and proceed on your journey
Task complete
References
Wainaina, P., Minang, P., Gituku, E., & Duguma, L. 2020. Cost-Benefit Analysis of Landscape Restoration: A Stocktake. Available here (p. 2).
IUCN & WRI. 2014. A guide to the Restoration Opportunities Assessment Methodology (ROAM): Assessing Forest Landscape Restoration Opportunities at the National or Sub-National Level. Working Paper (Road-test edition). Available here (p. 85).
Section overview
What Is a Cost-Benefit Analysis (CBA)?
What Makes a Good CBA?
Reflection
Section overview
What Is a Cost-Benefit Analysis (CBA)?
What Makes a Good CBA?
Reflection
Section overview
What Is a Cost-Benefit Analysis (CBA)?
What Makes a Good CBA?
Reflection
ERIP 7 - Task 7
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Transcript
Strategic Financing and Economic Analysis for Ecosystem Restoration
Task 7: Understanding cost-benefit analysis and effectiveness criteria
Start
What Is a Cost-Benefit Analysis (CBA)?
Restoration interventions often involve high up-front costs with returns far into the future. However, there is a persistent misconception that restoration yields low rates of return. Reasons for this include the long timeframe for returns to start, and that few evaluations quantify the multiple economic values of improving ecological health.Cost-benefit analysis (CBA) is a commonly applied tool in the economic analysis of restoration. A CBA can encourage investment in restoration by clearly laying out the benefits and costs of restoration programs and their distribution among stakeholders. It is also instrumental in prioritizing financial resources.
What Makes a Good CBA?
Up next
References
What Makes a Good CBA?
An effective cost-benefit analysis for restoration should:
- Capture a broad range of values that are important to society – not just those for which a formal market exists.
- Allow an ‘even-playing field’ comparison of market and non-market values.
- Make no judgement on how an intervention will be financed.
- Enable a fair comparison between the potential role of restoration versus other types of public and private works.
- Put values on ecosystem goods and services that underpin other important sectors.
- Consider distribution: which stakeholders bear which costs and benefits
- Make objective use of robust data
- Be transparent and internally consistent: describe assumptions to enable scrutiny and debate and ultimately build credibility
By meeting these criteria, a CBA becomes not just a technical exercise, but a powerful tool for mobilizing finance, informing policy, and driving restoration success.Reflection
Up next
Reflection
Close this task and proceed on your journey
Task complete
References
Wainaina, P., Minang, P., Gituku, E., & Duguma, L. 2020. Cost-Benefit Analysis of Landscape Restoration: A Stocktake. Available here (p. 2).
IUCN & WRI. 2014. A guide to the Restoration Opportunities Assessment Methodology (ROAM): Assessing Forest Landscape Restoration Opportunities at the National or Sub-National Level. Working Paper (Road-test edition). Available here (p. 85).
Section overview
What Is a Cost-Benefit Analysis (CBA)?
What Makes a Good CBA?
Reflection
Section overview
What Is a Cost-Benefit Analysis (CBA)?
What Makes a Good CBA?
Reflection
Section overview
What Is a Cost-Benefit Analysis (CBA)?
What Makes a Good CBA?
Reflection