ECN271 Cost Benefit Project Evaluation and Environmental Valuation

Credits (ECTS):10

Course responsible:Ståle Navrud

Campus / Online:Taught campus Ås

Teaching language:Engelsk

Course frequency:Annually

Nominal workload:250 hours

Teaching and exam period:This course starts in Spring parallel. This course has teaching/evaluation in Spring parallel.

About this course

The course gives an overview of theory and methods for economic appraisal of projects, in terms of cost-benefit analysis (CBA) and theory and methods for economic valuation of environmental goods including the damage function approach, environmental and health valuation methods and benefit transfer techniques. Applications to environmental impacts from renewable and non-renewable energy investments (e.g. wind farms, hydro power plants, gas-fired power plants), noise and other impacts from transportation projects, air and water pollution policies, landscape aesthetics, biodiversity preservation, recreational fishing and hunting, marine oil spills, and health impacts from air pollution. Environmental valuation in developing countries. Laws and guidelines for CBA in Norway, EU, USA and developing countries. Welfare theoretical basis for CBA and the value judgements/assumptions made in CBA. A stepwise approach to CBA, with special emphasis on risk/uncertainty, distributional impacts, economic valuation of environmental impacts, and treatment/presentation of non-valued impacts.

Learning outcome


  • Understand the welfare theoretic basis for Cost-Benefit Analysis (CBA)
  • Know the main steps of CBA
  • Know the Damage function approach
  • Know the revealed and stated preference methods for valuation of environmental goods and ecosystem services,
  • Know methods for valuation of statistical life, life years, environmentally related illnesses, cultural heritage and other public goods
  • Know value transfer methods, databases for valuation studies, transfer errors and main steps in value transfer.


  • Be able to collect, critically evaluate and use relevant data for a CBA
  • Be able to perform a CBA of a selected project
  • Be able to evaluate and use valuation studies of environmental goods public health and cultural heritage for value transfer in a CBA
  • Be able to critically assess an existing CBA

General competence:

  • Ability to apply a decision support tool in practise
  • Ability to co-operate and communicate effectively in a group
  • Ability to present results clearly and effectively orally and in writing
  • Understand that analyses are based on critical assumptions and evaluate the impacts on results from changing the assumptions
  • Lectures and extensive supervision of student groups in their preparation of semester assignments. 1-2 weeks prior to the deadline, the students presents a "near complete" draft of the semester assignment to the class, and get feedback from the teacher and fellow students. Lectures on campus without streaming.
  • All groups have a start-up meeting with the teacher to identify and define the topic of their semester assignments. Afterwards each group make appointments with the teacher when they need supervision. 1-2 weeks before the deadline of the semester assignment, all groups present their "near complete" semester assignment in class, and get feedback from the teacher and fellow students.
  • ECN210 Intermediate Microeconomics- Consumers, Producers, Market and Welfare; or similar introductory course in microeconomics.
  • Term paper: A semester assignment (100 %), which is prepared by groups of 3-4 students. In the semester assignments the students will apply what they have learned about theory and methods to a case of their own choice, i.e. an economic analysis of a project with environmental impacts. In the semester assignment, the students will also have to answer questions from a check list, which covers the curriculum of the course. If one fails on the term paper, the course has to be taken over again. No re-examination is offered. The term paper can be written in English or in Norwegian.

  • External examiner will control the quality of syllabus, questions for the final examination, and principles for the assessment of the examination answers; and evaluates the term papers.
  • The course is in English. Incoming students can contact student advisors at the School of Economics and Business ( for admission to the course.
  • 28-30 hours plus extensive supervision of student group on the term papers.
  • Minimum requirements for entrance to higher education in Norway (generell studiekompetanse)