Introduction to the course

• Objectives of the training course
• Programme and format for the day

IIntroduction to cost-benefit analysis

• Aim of cost-benefit analysis
• Importance to policy-makers and link to Impact Assessment
• Importance to regulated utilities and infrastructure investment
• Ex ante and ex post cost-benefit analysis
• Guidance documents (including Treasury Green Book)

Basic issues in cost-benefit analysis

• Defining the baseline
• Identifying costs and benefits
• Transfers and distributional impacts
• Using market prices to value impacts
• Taking account of inflation and relative price changes
• Discounting
  • How to discount future impacts
  • What discount rate to use

Refreshments

How to deal with risk and uncertainty

• The importance of thinking about risk and uncertainty
• Scenario and sensitivity analysis
• Monte Carlo analysis
• Real options

Interactive break-out session: building a simple cost-benefit model

In this session, delegates will break into smaller groups to work on an interactive case study involving the building of a simple cost benefit model for an infrastructure investment project.

Lunch

In more detail: how to quantify costs and benefits

• Challenges in quantifying costs and benefits
• Methods of collecting data and analysing impacts
  • Stakeholder engagement
  • Market research
  • Behavioural experiments
  • Statistical analysis
  • Case studies
  • Modelling
• Assessing the additionality of impacts
• Adjusting for optimism bias

How to value non-market impacts

• Why non-market impacts are important
• Techniques for valuing non-market impacts
  • Using existing valuations
  • Stated preference
  • Revealed preference
• Examples of how to value non-market impacts
  • Time savings
  • Carbon impacts
  • Other environmental impacts (e.g. noise, amenity)
  • Health impacts
  • Safety impacts

Refreshments

Interactive break-out session: valuing carbon impacts

Breaking into small groups, delegates will be given an interactive exercise relating to valuing the carbon impacts of a policy proposal

Summary and conclusions

• Brief summary of what has been learned during day
• Final opportunity to ask questions

End of course