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The Introduction and Application of a Comprehensive Cost-Benefit Framework for Resource Efficiency Investments

  • Florian FlacheneckerEmail author
  • Raimund Bleischwitz
  • Jun Rentschler
Chapter

Abstract

Increasing resource efficiency is considered to yield multiple economic and environmental benefits. However, evidence suggests that resource efficiency is only gradually increasing across regions, countries, and firms. To systematically investigate the incentives and dis-incentives for firms to invest in resource efficiency, this chapter firstly introduces a comprehensive cost-benefit framework to assess the viability of investments in resource efficiency. The framework comprises several components of resource efficiency investments by (i) comparing a business-as-usual scenario with a scenario of scaling up investments in resource efficiency, (ii) covering economic and environmental dimensions, and (iii) considering primary and secondary effects. In a second step, the framework is matched to existing evidence from the literature, followed by an application of the framework to a firm level investment project. Following the insights of the case study, resource efficiency investments are more likely to yield positive net benefits when externalities are internalised, when the cost of ‘inaction’ is accounted for, and the longer the firm’s time horizon is. Overall, this chapter calls for a more comprehensive approach towards resource efficiency investment appraisals to strengthen the incentive for firms to invest in resource efficiency.

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Florian Flachenecker
    • 1
    Email author
  • Raimund Bleischwitz
    • 1
  • Jun Rentschler
    • 1
    • 2
    • 3
  1. 1.University College London, Institute for Sustainable ResourcesLondonUK
  2. 2.Oxford Institute for Energy StudiesOxfordUK
  3. 3.Colorado School of Mines, Payne Institute for Earth ResourcesDenverUSA

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