Financial Evaluation of Environmental Investments

As the authors of this ground-breaking new text explain, traditional ways of analysing investments - like net present value or payback calculations - do not deal adequately with environmental issues. They do not take account of all the relevant factors. Future liabilities and the long time-scale over which a product or process has an impact on the environment are not generally included. What is more, risk is not incorporated properly, either mathematically or logically.

This book is different. It addresses all these failings, and takes a holistic view of decision-making. As a result, it highlights the environmental aspects of an investment and their financial and economic impact. The authors advance a practical methodology which puts the 'expected monetary values' of different investment and risk scenarios into a mathematical model.

Features of the model are a wider set of cost-benefits, a disciplined approach to risk and uncertainty, a consideration of the environmental aspects of every facet of an investment, quantification of less tangible things like corporate image and future liabilities, and a strict treatment of items like pollution monitoring that have previously been passed off as overheads.