IFC RELEASES STUDY ON COST BENEFIT ANALYSIS OF PRIVATE SECTOR ENVIRONMENTAL INVESTMENTS
Ioannis Karmokolias
Ph: (202) 473-0778
WASHINGTON, D.C., Sept. 23- A recent study
by the International Finance Corporation (IFC) breaks new ground in using
cost-benefit analysis to assess the value of private sector environmental
investments. The paper takes the case of a cement plant in Estonia to answer
the following questions: 1) how do the private costs of pollution control
compare to the social benefits? 2) who are the beneficiaries? and 3) how
can the results of the study be used by business executives and policy
makers?
The study, entitled, "Cost Benefit Analysis of Private Sector Environmental
Investments; A Case Study of the Kunda Cement Factory," explores the
means of calculating, in economic terms, the major impact of environmental
investments undertaken by the private sector. In selecting the Kunda plant,
the author notes that the factory was the only major source of pollution
and that "air pollution has earned Kunda the dubious distinction of
the Gray Town of Estonia." The study concludes that social benefits
exceed private costs by a margin wide enough to justify the environmental
investment in terms of increased social welfare; that beneficiaries range
from the company and nearby residents and entrepreneurs to residents of
neighboring countries; and that the findings can have a significant bearing
on investment decisions, management operations and government policy.
IFC is a member of the World Bank Group and is the largest multilateral
source of equity and loan financing for private sector projects in developing
countries.
Press copies may only be ordered by phone at (202) 473-7711 or fax at (202)
676-0365. The general public may obtain copies through the World Bank bookstore
at (202) 473-2941.
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