Evaluation of cost efficiency in hydropower-related biodiversity restoration projects in Sweden - a stochastic frontier approach

Abstract

Various restoration projects intended to mitigate the adverse ecological effects of hydropower plants, e.g. by restoration of fish habitats and spawning grounds, have been implemented in different parts of the world. However, it is unclear whether these projects are in line with least-cost principles. In this study, we estimated the cost efficiency level for different biodiversity mitigation measures in Sweden by using stochastic frontier analysis with data from 245 projects in Sweden that were carried out between 1987 and 2013. The results indicated evidence of cost inefficiency in the projects, which had an average efficiency score of 53%, suggesting a potential to reduce costs by 47%. Project ownership by private entities compared with municipalities showed a statistically significant reduction of the cost inefficiency score. This points out a possibility of reducing the total cost of restoration by targeting relatively efficient project owners.

Keywords

Hydropower; biodiversity restoration; cost efficiency; stochastic frontier analysis

Published in

Journal of Environmental Planning and Management
2023, volume: 66, number: 2, pages: 221-240
Publisher: ROUTLEDGE JOURNALS, TAYLOR AND FRANCIS LTD

SLU Authors

• Tirkaso, Wondmagegn Tafesse

  • Department of Economics, Swedish University of Agricultural Sciences
    

• Gren, Ing-Marie

  • Department of Economics, Swedish University of Agricultural Sciences
    

UKÄ Subject classification

Environmental Management

Publication identifier

• DOI: https://doi.org/10.1080/09640568.2021.1987865

Permanent link to this page (URI)

https://res.slu.se/id/publ/114424