Conference “Economic assessment within the framework of environmental licensing in Colombia”

Fecha: 13 of march

Hora: 8:00 am - 9:00 am

Lugar: H 301

In the context of Colombian environmental licensing, according to the General Methodology for Preparation and Presentation of Environmental Studies, "the environmental economic valuation serves as a tool to estimate environment monetary values, beyond the role played by market prices, and is useful as an input for the analysis, (…) control, and regulation of environmental degradation."

Yolanda Casallas Abril, leader in Economic Assessment of the National Environmental Licensing Authority (ANLA), will offer the conference.

Economic tools offer additional criterion for the evaluation of environmental licensing applications; they allow to identify, in an aggregate and compatible way, the contribution a project, work, or activity, produces in the generation or impact in economic well-being, which is supported by the natural resources and the ecosystem services they provide to the communities relating to projects’ influence.

The talk will address, mainly, the regulatory background of the economic evaluation within the country’s licensing framework, the methodological procedure for applying each of the economic tools defined in each stage of environmental licensing: Environmental Alternative Diagnosis (DAA), Environmental Impact Study – EIA – for licensing, license and LDCs modification, and the selection of the appropriate methodology for the economic assessment of projects’ positive and negative externalities.

For the DAA, methodological steps will be presented to support the selection of environmental options for the development of a project, work, or activity, through the use of the Cost-Benefit Analysis of each of the alternatives. On the other hand, included is a description of the guidelines to be followed for the hierarchy of impacts among “Internalizables” and “non-internalizables.” Also, to be addressed is the development of impact internalization analysis and the CBA as an evaluation tool within the framework of the Environmental Impact Study – EIA.

Evaluation of projects through the CBA will also be presented, which consists of comparing the costs (impacts or negative externalities) resulting from the development of a project, work, or activity, with the benefits (positive impacts or externalities) it generates, to establish the environmental and social suitability of its execution.

However, to be able to compare costs with benefits, it is necessary to identify them, which in turn implies their measurement or biophysical quantification, referring to the measurement of environmental change, causing the potential impact on the ecosystem service. Thus, the assessment of benefits and costs transforms the biophysical units into economic indicators, through the prices of the effects caused by the use of ecosystem services.

Additionally, a description of the recommended economic assessment methodologies for the calculation of the impact and benefit values will be presented in the DAA and the Environmental Economic Assessment – EEA – to be developed as a component of the EIA. The methodologies described include declared preference methodologies and revealed preferences, as well as the benefit transfer technique.

Lastly, the guidelines for obtaining the main decision criteria will be addressed: Cost-Benefit Ratio-RBC, Net Present Value – NPV – and Discount Rate for Environmental Projects – TAD, as it is the factor allowing comparing the project benefits and economic costs at different times and concerning the best alternative use of these resources.

Free admission with advance registration at