1 DEVELOPING A CBA METHODOLOGY FOR THE SCENARIO-BASED LAND-USE IMPACT ASSESSMENT OF PROPOSED RAIL INVESTMENTS IN THE LEIPZIG REGION University of Aberdeen 1st October 2010Dr. EDA USTAOGLU JRC-IES Sustainability Assessment Unit, Ispra, Italy.Dr. BRENDAN WILLIAMS School of GPEP, University College Dublin, Ireland.Dr. LAURA PETROV Department of Environmental Science, Aarhus University, Denmark. 10th-12nd May, 2012 INPUT 2012: 7th International Conference Informatics and Urban and Regional Planning Cagliari, Sardinia
2Content1. Introduction: Context & Contributions2. The Leipzig Area3. The MOLAND Model4. Scenario Analysis from the1st October 2010 University of Aberdeen MOLAND Model5. Scenario-Based Cost-Benefit Evaluation Process6. Conclusions & Future Work
3Context & Contributions University of Aberdeen 1st October 2010
4THE LEIPZIG AREALeipzig had experienced an urban shrinkageprocess starting from the first half of1990s.The reasons for this shrinkageprocess are: - a considerable migration to the Western Germany just after re-unification; - a massive suburbanisation; - a fall in birth rates and growth in death rates (Haase et.al. 2007; Florentin, 2008) University of Aberdeen 1st October 2010In the early 1990s, the outer city became anattractive place for investors considering theabsence of planning regulations andpolicies. The result has been dispersal ofpopulation to the countryside and outerskirts of the existing centre (Kroll et.al. 2010)Urban shrinkage process has slowed down The physical infrastructure of Leipzig was designedin the beginning of 2000s due to small-scale for a larger population, and with urban shrinkageimmigration and an increase in birth rates. and population decline; this infrastructure hasHowever, this new situation did not change become considerably large for the currentthe physical pattern of urban sprawl populationdeveloped in the 1990s (Bontje, 2004)
5MOLAND (Monitoring Land-use/Cover Dynamics)• The MOLAND model utilises cellular modelling to the land cover- which is named as cellular automata (CA) i.e. a set of transition rules representing the compatibility of land-uses with each other• The model developed for European urban areas experiencing major urban change including the Leipzig and Dublin areas has University of Aberdeen 1st October 2010 two components including regional and urban land-use sub- models• Macro-level data such as GDP and population growth are inputs for the regional sub-model, also affecting the land-use sub-model which is run through a CA model• Micro-model parameters i.e. neighbourhood effects, accessibility, zoning, population, employment indicators etc. can be utilised to explain the micro-level spatial issues
6Scenario Analysis from the Moland Model: Scenario 1: Hyper-TechPopulation & Economic Trends-steady population and economic growthSpatial Development/Planning- New industrial developments occur between Leipzig-Halle axis and other towns- New residential developments are encouraged in polycentric urban formTransport University of Aberdeen 1st October 2010- Improvement of national roads- Better links to the motorways and airport extensionsOverall Trends- Rapid technology advance-economic growth- Low environmental protection- Passive management leading to peri- urbanisation and ‘metro-polisation’ of rural area
7Scenario Analysis from the Moland Model: Scenario 2: Compact DevelopmentPopulation & Economic Trends-slight population and economic growthSpatial Development/Planning- Increases in infrastructure construction (e.g. demolished houses replaced by partly housing, partly sports and recreational activities)Transport University of Aberdeen 1st October 2010Low investment in transportation- Link to motorway Chemnitz- Investment in fast railways to Munich, Berlin and Erfurt (ICE)Overall Trends- Moderate economic growth- High environmental protection (Green ring map)- Fragmentation, social exclusion
8 Key Impacts and Indicators for the CBAImpacts/Indicators* Suggested Indicators/Impacts for Quantification of the Present Study Impacts1. Direct Impacts of Transportation Infrastructure Provision: Costs/ Capital Investments of Monetized Impact-Transportation Facility Land Values Transportation Infrastructure-Development Costs/ Capital Investments-Adjacent Property Values2.Socio-Economic Impacts:a. Land Development Impacts: Costs of Providing Public Services Monetized Impact-Green Space Preservation-Public Service Costsb. Transportation- Related Impacts:- Savings in Vehicle Operation Costs Savings in Vehicle Operation Costs Monetized Impact University of Aberdeen 1st October 2010- Travel Time Savings- Reduction in Risk of Accidents/Safety Travel Time Savings Savings in Accident Costs Monetized Impact Monetized Impact- Comfort and Convenience- Traffic Congestion Effectsc. Socio-Economic Development Benefits:-Affordability (Housing)-Affordability (Transport)-Social Inclusion Area Land Values Qualitative/Quantitative-Socio-Economic Growth Assessment-Land-Use/Transport Accessibility-Area Property Values3. Transport Network Effects:-Reliability/Quality of Transport Service System Operating Costs Monetized Impact-System Operating Costs4. Energy and Environmental Impacts:- Energy Consumption CO2 Emissions Monetized Impact-Air/Noise Pollution Exposure Local Air Pollution Monetized Impact-Climate Change Emissions (Greenhouse Gas Emissions) Adapted from: Janic (2003); Litman (2008)
9Some Examples from Impact/Indicator Data Requirements 1. Change in For the calculation of the economic benefits (costs) associated with vehicle operating Road Vehicle costs, two types of data are required: Operation -Demand: the number of private vehicles (cars) making a particular origin- Costs destination trip for the hyper-tech scenario and the alternative compact development scenario ( peak/off-peak traffic flow data for the baseline and alternative scenarios) -Vehicle kilometres-total change in vehicle kilometres from the local highway network for the hyper-tech and compact development cases University of Aberdeen 1st October 2010 2. Change in Estimates related to; Travel Time -Travel time-change in travel time for private vehicles (cars) in peak/off-peak traffic for the baseline hyper-tech and compact development scenarios -Demand: peak/off-peak traffic flow data for the baseline and compact development cases 3. Change in CO2 -Total change in greenhouse gas emissions (i.e. CO2 , in particular) for the baseline Emissions and compact development cases.
10 Summary of Impact/Indicator Valuation IMPACTS/ IMPACT EVALUATION METHODS INDICATORSCapital and Evaluation is based on local data availability.Operation Costs of -Capital cost items for Germany were specified in the Federal Transport Infrastructure PlanRapid Rail Provision 2003 -Elements of rail operation costs for Leipzig refer to World Bank (2005) specificationsCosts of Providing Public service provision costs are case specific and could be identified as the:Public Services ‘costs of road construction, housing and community development, education, fire and police protection, water and electricity distribution, sewerage, and social and recreational University of Aberdeen 1st October 2010 facilities’.Savings in Accident The statistical value of human life (SVHL) has been determined using two methods:Costs Human capital : measures discounted loss of production due to the injury or death of the individual member of the workforce Stated preferences : estimates willingness-to-pay (WTP) values of individuals indicating their preferences to reduce the risk of being injured or die in an accident Forecasted Value of Accident Costs was computed for the Leipzig Area based on HEATCO (2004) analysis.Savings in Road Road vehicle operation costs are correlated with road design standard, road maintenanceVehicle Operation strategy, environmental impacts, the composition of the traffic flow, and roadCosts congestion. However, the operating cost relationships for road vehicles is more generic and transferable between countries (HEATCO, 2004). This study is based on the adjusted parameter values which are derived from external sources.
11 Summary of Impact/Indicator Valuation IMPACTS/ IMPACT EVALUATION METHODS INDICATORSTravel Time Savings The cost saving approach, which considers wage rates as a measure of productivity loss or gain by the labour force, is selected as a minimum approach for the valuation of work time savings (Federal Statistical Office, 2010). For the non-work time valuation, the values obtained from HEATCO (2004) can be considered for the Leipzig case. These values were derived specifically for Germany for the year 2002 by utilising a meta-analysis approach.Climate Change Costs related to the emissions of CO2 are evaluated on a global scale rather than location University of Aberdeen 1st October 2010 specific evaluations. A cost factor reflecting the average shadow value will be used for valuing CO2 emissions (see Kuik et.al. 2007).Local Air Pollution Considering the absence of local data concerning costs of local air pollution in the Leipzig Region, this research utilised the country specific cost factors for Germany, which were developed in one of the EU-projects (i.e. HEATCO, 2006) for the monetary valuation of local air pollution.
12CBA Formula representing the Economic Net Present Value n (b0 − c0 ) (b1 − c1 ) (bn − cn )ENPV= ∑at St = + + ...+ t =0 (1+ r) (1+ r) 0 1 (1+ r)n Where St is balance of cash flow funds comprising flow of benefits, , and flow of costs, ; is discount factor, is discount rate, and n is the evaluation period (see European Commission Final Report, 2008). University of Aberdeen 1st October 2010Benefit-to-Cost Ratio (B/C): the ratio of the discounted aggregate net benefits (i.e. benefits n minus costs) to the discounted investment costs ∑ [(b ) t =0 t (1 + r ) t ] B/C = n ∑ [(c ) t =0 t (1 + r ) t ] Internal Rate of Return (IRR): the rate of discount equating discounted net benefits to discounted investment costs n (bt − ct ) IRR: ∑ t =0 t =0 (1 + i)
13Stages of Scenario-Based CBA Evaluation Process University of Aberdeen 1st October 2010
14 Conclusions- In terms of sustainable urban development considerations, dispersed development in the baseline hyper-tech scenario is less desirable than compact development scenario since costs of such development can be expected to exceed the benefits University of Aberdeen 1st October 2010- In contrast, compact development policies could achieve considerable benefits over the baseline hyper-tech scenario by reducing the negative consequences of urban dispersal i.e. high costs of public service provision, low accessibility to land-uses and public transportation modes, increased transport-related emissions, energy consumption and pollution
15 Future Work- The next stage in the research is to apply a CBA approach to the scenarios chosen for the Leipzig Region in order to evaluate the two scenarios of dispersed and compact developments.- Considering data specifications outlined for the evaluation of the prioritised impacts/indicators for the1st October 2010 University of Aberdeen Leipzig Area, the related parameters for the cost-benefit evaluation will be computed with a final CBA result.- A further application of this research is to compare the CBA results of the Leipzig case with those of other European examples. This will allow the CBA process be used as a policy support tool in discussions of alternative development policies and investment decisions such as compact and dispersed developments.
16 Thank you...University of Aberdeen 1st October 2010