methodology behind annual costs and benefits

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Waldschrat_0815
Posts: 8
Joined: Tue Jun 06, 2017 7:42 am

methodology behind annual costs and benefits

Post by Waldschrat_0815 » Wed Mar 21, 2018 4:43 am

Dear users,

Does anybody have the information where I can find the methodolgy behind annual costs and benefits?

Or, does anybody know if there is a methodology behind like follows?

In terms of my economic knowlegde, positive (benefits) and negative (costs) cash flows should be aggregated at an interest rate over the operating life period using the capital value method and subsequently recalculated into the annuity.

Is i-Tree Eco using a method like this?

Thank you very much and kind regards
Jason.Henning
i-Tree Team
Posts: 142
Joined: Fri Dec 21, 2012 7:45 am

Re: methodology behind annual costs and benefits

Post by Jason.Henning » Mon Mar 26, 2018 8:50 am

Hello,
i-Tree is not using a financial model like what you describe. The annual value numbers for i-Tree Eco are calculated by differing methods depending on the benefit you are looking at. For example for annual carbon sequestration Eco is projecting the growth of the tree over the next year and applying biomass equations to estimate how much carbon was stored at the start of projection and the end of the projection. Eco then takes the difference of those numbers to estimate annual carbon sequestration for that tree. The monetary value is then determined using the US Government's Social Cost of Carbon $/ton number. For air pollution on the other hand Eco is calculating hourly air pollution removal by the estimated foliage of the tree based on local weather and pollution information. Those hourly numbers are then summed over the year that the weather/pollution data is from. The value of air pollution removal is then determined using the EPA's BenMap model which estimates improved health outcomes and their associated costs based on the size of the population exposed to the less polluted air. For more details on individual benefit models and methods a good place to start is the appendices and bibliography of the "Written Report" that is available within i-Tree Eco. Our archives include many papers that address the methods as well, http://www.itreetools.org/resources/archives.php. From the archives this overview paper might be a good place to start http://www.itreetools.org/eco/resources ... ethods.pdf.
Waldschrat_0815
Posts: 8
Joined: Tue Jun 06, 2017 7:42 am

Re: methodology behind annual costs and benefits

Post by Waldschrat_0815 » Tue Mar 27, 2018 9:49 am

Dear Jason,

thank you very much for your detailled explanation and the provided literature!

Kind regards
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