Land and Amenity Valuation: Revising the Department OfTransport's COBA Assessment Procedure
WILLIS K G, GARROD G D, University of Newcastle and JONES D, Department of the Environment, Transport and the Regions, UK
The Department of Transport (DOT) employs an 'in house' version of cost-benefit analysis (CBA) to assess proposals for highway developments. The system, known as COBA, follows the general principles of CBA by comparing the construction and maintenance cos
The Department of Transport (DOT) employs an 'in house' version of cost-benefit analysis (CBA) to assess proposals for highway developments. The system, known as COBA, follows the general principles of CBA by comparing the construction and maintenance costs against the benefits [time savings plus fuel and non-fuel vehicle operating costs plus accident savings] of a highway proposal. However, COBA does not value environmental externalities of highways developments in monetary terms, rather externalities are merely documented in terms if their physical impacts.. Decision- makers thus have to balance the monetary benefits of a highway scheme with descriptive assessments of the physical impact of the proposed highway in terms of noise, visual intrusion, recreation loss,'alr pollution, wildlife, and other environmental changes. This procedure could lead to amenity and other externalities being either under-valued [where the amenity value of land is not given due weight in the decision- maldug process]; or being over-valued [if amenity and other considerations are given undue weight by decision-makers].
This paper argues that the Department of Transport's (1993 and 1996) current COBA manual and procedure for assessing new highway proposals should be extended to include the monetary value of the environmental impacts attributable to a new road. Environmental amenity effects are broadly defined here to encompass any attribute of land that affects the welfare of people and which is not currently monetarised in COBA when assessing the impact of road building. The paper proceeds by reviewing the treatment of the monetary valuation of land in COBA; identifying the economic impact of road building schemes on the amenity values of land; and suggesting how the amenity benefits of land might be monetarised and incorporated into COBA.
Association for European Transport