Investment in Forest Watershed—A Model of Good Practice for Sustainable Development of Ecosystems

Estimating the efficiency of the investments that generate public benefits is not an easy task, as there are various methods proposed for evaluating the value of public goods and services. The novelty of the study consists of the proposed cost–benefit methodology adapted to a real-value cost concept...

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Bibliographic Details
Published inWater (Basel) Vol. 15; no. 4; p. 754
Main Authors Arion, Iulia Diana, Arion, Felix H., Tăut, Ioan, Mureșan, Iulia Cristina, Ilea, Marioara, Dîrja, Marcel
Format Journal Article
LanguageEnglish
Published Basel MDPI AG 01.02.2023
Subjects
Analysis
Economic models
Ecosystems
Efficiency
Forest management
Forest watersheds
hydrographic
Hydrology
Indicators
investment
Investment policy
Land degradation
Sustainable development
Sustainable practices
torrent correction
Wetlands
Romania
United States > US
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Summary:Estimating the efficiency of the investments that generate public benefits is not an easy task, as there are various methods proposed for evaluating the value of public goods and services. The novelty of the study consists of the proposed cost–benefit methodology adapted to a real-value cost concept for estimating the efficiency of the investment in the hydrographic Fâncel watershed, in the center of Romania, using a set of five indicators. The results prove that an investment of RON 1,323,226.29, at the value of 2018, would be paid in 5 years, 0 months, and 15 days. The estimated income is RON 505,327.8/year, so at a 5% financial-discount rate and an estimated period of use of 30 years, the net present value is RON 5,612,730.67. The internal rate of return was calculated as 22%, whereas the value of the savings-to-investment ratio is 3.6%. The main findings of the analysis of the economic-efficiency indicators offer a synthetic and relevant image of the fact that the investment has proven to be effective under the analyzed conditions. The results offer arguments to assume that the decision to consider that particular investment a good practice is fulfilled.
ISSN:2073-4441
2073-4441
DOI:10.3390/w15040754