Guide to COST-BENEFIT ANALYSIS of investment projects - Ramiri

landscape, the natural environment, etc. In particular, great attention shall be paid to the use of valuableareas, such as natural parks, protected areas, natural sanctuaries, Site of Community Importance (SCI) 37and Special Protection Zones (SPZ) 38 , sensitive areas, etc. In some cases, it is also necessary to take intoaccount the extent to which the wild fauna life may be disturbed by the construction of the infrastructuresand the associated management activities. As for the investments affecting urban centres (sewer systemsor water networks), it is necessary to consider the impacts due to the opening of yards which maynegatively affect mobility, existing infrastructures and so on.The analysis above falls within a more general evaluation of sustainability according to the environmentalconstraints and development hypotheses of the proposed investment, for which it is necessary to evaluatenot only the economic and environmental benefits, but also the extent to which its realisation may causesuch a deterioration of the natural functions of the area that may compromise any potential futureutilisation, in the broadest meaning of the term, i.e. including the natural use of wide areas.Such an evaluation shall also consider the alternative, even future, utilisation of the same (surface,subsurface) water body which shall be understood as a source of water resource or as a receiving bodyand, as a consequence, the impacts of a decrease in the flow rate and a change in the river regime,resulting from its barrage by a dam, may have on the anthropic activities performed in the same naturalenvironment (flora, fauna, water quality, climate, etc.). For some countries it is necessary to evaluate thepositive or negative investment contribution to the desertification processes underway, etc.A quantitative approach can successfully use multi-criteria analysis methods. The results of this analysismay sometimes bring about a serious modification of the proposed investment or its rejection. Whenevertheir quantification is methodologically possible, the estimated positive and negative impacts shall fallwithin the monetary evaluation of the social benefits and costs of the investment.3.2.3 Natural risk prevention3.2.3.1 Project objectivesNatural disasters constitute a serious challenge, particularly for a number of countries where the impactsof these disasters are substantially larger than the average, due to higher degrees of vulnerability.CBA in the context of disaster risk management can be used for three main purposes:- it can be employed to evaluate risk management measures for making exposed infrastructure or otherfacilities more hazard-resilient;- it may be used to incorporate disaster risk into project and development planning, the so calledmainstreaming of risk. Mainstreaming of risk involves accounting for disaster risk in the economicappraisal and helps with projecting probable shortfalls in project or development outcomes. Thisallows for better and more robust development planning;- outside the project cycle, CBA can be an important instrument for natural risk awareness-raising andeducation. By showing that investment in disaster risk management pays, the decision- making processcan be positively influenced.The most frequent natural disasters in EU countries are floods and blazes. Hence, the assessment ofprojects aiming to prevent natural risk should be based on ‘state-of-the-art’ economic assessment in floodand blaze risk management.3738See: Council Directive 92/43/EEC.See: Council Directive 79/409/EEC.102