Environmental Evaluation and Public Policy: Applicability of the CVM Method

Abstract

This paper investigates a recent development in evaluation procedures that are mainly related to public-led projects. It provides a brief assessment of the cost-benefit analysis advocated by the Japanese government and focuses on the environmental evaluation as well as its application to public policy. Most projects that are planned and implemented by the local authorities exert some influence or have some external effects on the environment; and occasionally lead to its severe destruction. Accordingly, there should be a proper procedure to evaluate such environmental effects on the project-base. Contingent Valuation Method (CVM) has become an extremely popular method to estimate the environmental value of a project. In this paper, we will provide an overview of the development of the CVM procedures. We will also attempt to describe its effectiveness as well as its problems.