Economic Valuation of Common Environmental Impacts of Olkaria Geothermal Project

Abstract

Environmental impact is one of the most significant considerations in the evaluation of economic development projects, yet an extremely difficult factor to measure. Regularly in the real world, decisions are made by governments on new development proposals that have significant economic and environmental implications. Decision-making in energy and environment calls increasingly for a better evaluation of the possible impacts of any envisaged policy and measure. While the benefits of geothermal energy are made explicit, the ensuing environmental impacts are merely identified and qualitatively described. This paper underscores the importance of valuing environmental impacts that are associated with the development of geothermal energy. Results of an economic valuation of the common environmental impacts of Olkaria geothermal project are presented.