Environmental Project Reevaluation with Rising Calendar Time Benefits

David C. Major
Branden B. Johnson
Robert H. Cole
Richard Hosier
Murdo Morrison

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DOI: 10.2190/7NM4-YL14-808F-84KG

Abstract

This article examines one aspect of the dynamic analysis of environmental systems, the effects of rising calendar time benefits on project reevaluation and scheduling. The effects of rising calendar time benefits, an aspect of what is known as the optimal scheduling criterion, are assessed here in terms of a water resource project, the Hangang barrage and hydropower unit in Korea. The rising calendar time benefits used in the reevaluation are those resulting from the rise in real fuel prices that occurred following the completion of the plan. When these benefits are used in the reevaluation of the hydropower unit, this previously rejected project increment becomes justified; its optimal scheduling depends on its degree of separability and the existence of calendar time effects other than those studied. The results suggest the importance in environmental systems analysis of not modelling a system on the convenient assumption that key benefit and cost parameter values will remain constant over time.

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