Partial social cost benefit analysis of Three Gorges Dam: impact assessment update and a greenhouse gas externality component study

Abstract

This study reviews the literature and updates qualitative and quantitative impacts based on new research and applies a partial greenhouse gas (GHG) emissions cost benefit analysis to the Three Gorges Dam Project (TGDP) in China. The results of CBA suggested a 22.305 billion dollars net present value (using Nordhaus’s 2007 optimal carbon price trajectory with assumed average social discount rate (SDR) of 4% assumptions) and a 440.324 billion dollars net present value (based on Nordhaus’s Model using Stern’s assumption with 1% SDR). This sensitivity analysis indicates that social discount rates highly affect the final results. This study extends the GHG emissions impact component by updating carbon prices and calculation methods, thereby updating the GHG component of Morimoto and Hope’s 2004 study. Although the CBA is limited to the GHG component, a review of recent literature and preliminary impact analysis provides the groundwork for a more comprehensive analysis for future study.