Cost-Benefit Analysis of Wetland Drainage

Abstract

The wetland areas of England are under imminent threat of drainage for agricultural improvement. The immediate cause is the local drainage surveys produced under the Water Act 1973. Problems identified in these surveys are subjected to cost-benefit appraisal. Examination of a selection shows that these appraisals are technically defective and result in an overstatement of the benefits and in an overinvestment in land drainage. The main defects are: first, a failure to assess amenity and conservation losses; second, use of prices that contain a substantial element of income transfer which is not netted out; third, a failure to properly calculate the rate of land conversion—a crucial variable; fourth, the project appraisal period is arbitrarily chosen or treated as a variable; fifth, the use of theoretical rather than expected agricultural yields; sixth, the level of flood protection aimed at is too high for the stated objective; and, last, anticipated flood losses are not deducted.