{"query_echo":{"q":"","filters":{"geography":["Pasaia"]},"warnings":[{"code":"facet_value_not_in_vocabulary","message":"Value 'Pasaia' for facet 'geography' is not in the controlled vocabulary."}]},"total":{"value":2,"relation":"eq"},"page":1,"page_size":20,"self":"https://climateinsightsdirectory.org/api/v1/search?geography=Pasaia","stability":"beta","ai_marking":{"digital_source_type":{"uri":"http://cv.iptc.org/newscodes/digitalsourcetype/trainedAlgorithmicMedia","name":"Created using Generative AI"},"notice":"Summary and key insights are generated using artificial intelligence."},"results":[{"id":"bc3res-000137","url":"https://climateinsightsdirectory.org/document/bc3res-000137","title":"DISCOUNTING THE VALUE OF NATURAL RESOURCES IN COST-BENEFIT ANALYSIS: A CASE STUDY FOR POLICY MAKING","publisher":{"name":"Basque Centre for Climate Change","organization":"basque-centre-for-climate-change"},"document_type":"policy brief","language":"en","date_published":"2014-01","source_url":"https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201404100505551436280223.pdf","generator":"Climate Insights Directory","generated_fields":["summary","key_insights","climate_tags","geography_discussed","analysis_type"],"summary":{"text":"The policy brief argues that market discount rates are unsuitable for evaluating long-term environmental impacts and proposes the 'equivalency principle' to determine social discount rates. This principle assumes that undeveloped and developed land of identical attributes should provide equal utility to future generations. Using a case study of a proposed seaport in Pasaia, Basque Country, the authors demonstrate that applying this principle results in lower, site-specific discount rates (between 0.96% and 3%) that would lead to the rejection of the project, whereas a market rate of 11% would justify it in some scenarios.","ai_generated":true,"unit":"bc3res-000137#summary","date_modified":"2026-10-23"},"key_insights":[{"text":"The choice of discount rate is a primary source of uncertainty when assessing the economic impacts of climate change and policies with long-term environmental consequences, as ethics and financial considerations often conflict.","ai_generated":true,"unit":"bc3res-000137#insight-1","date_modified":"2026-10-23"},{"text":"The 'equivalency principle' suggests that for projects on undeveloped land, the discount rate should be calculated by assuming that undeveloped and developed land with identical size and ecological attributes provide the same utility and economic value to future generations.","ai_generated":true,"unit":"bc3res-000137#insight-2","date_modified":"2026-10-23"},{"text":"To apply the equivalency principle, the economic value of developed land is based on market price, while undeveloped land is valued using Total Economic Value (TEV), which incorporates both use and non-use benefits.","ai_generated":true,"unit":"bc3res-000137#insight-3","date_modified":"2026-10-23"},{"text":"In a case study regarding a proposed seaport in Pasaia (Gipuzkoa), the application of the equivalency principle yielded low, site-specific discount rates of 0.96%, 1.93%, and 3% for low, medium, and high impact scenarios, respectively.","ai_generated":true,"unit":"bc3res-000137#insight-4","date_modified":"2026-10-23"},{"text":"The Pasaia seaport case study demonstrates that the choice of discount rate fundamentally alters the project's outcome: a market rate of 11% would justify the project in low and medium impact scenarios, but the equivalency principle results in a negative ratio across all scenarios, suggesting the project's rejection.","ai_generated":true,"unit":"bc3res-000137#insight-5","date_modified":"2026-10-23"},{"text":"The authors argue that market discount rates should be avoided in cost-benefit analyses that account for future environmental quality if natural resources are to be managed sustainably.","ai_generated":true,"unit":"bc3res-000137#insight-6","date_modified":"2026-10-23"}],"climate_tags":["natural resource management","biodiversity loss","environmental degradation","climate change","land-use change"],"geography_discussed":["Spain","Pasaia","Gipuzkoa","Jaizkibel"],"frame_perspective":[],"analysis_type":["case study","policy proposal"]},{"id":"bc3res-000093","url":"https://climateinsightsdirectory.org/document/bc3res-000093","title":"The Equivalency Principle for Discounting the Value of Natural Assets: An Application to an Investment Project in the Basque Coast","publisher":{"name":"Basque Centre for Climate Change","organization":"basque-centre-for-climate-change"},"document_type":"research paper","language":"en","date_published":"2011-10","source_url":"https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20111005093601878634043.pdf","generator":"Climate Insights Directory","generated_fields":["summary","key_insights","climate_tags","geography_discussed","analysis_type"],"summary":{"text":"The authors introduce the 'equivalency principle' to resolve uncertainties in setting social discount rates for natural assets. This rule posits that the present value of a naturally preserved land track should be at least equal to the market price of an identical track with permission for residential development. By applying this principle to various case studies and a specific proposed seaport in Pasaia, Gipuzkoa, the paper demonstrates that traditional cost-benefit analyses using high market discount rates often bias results in favor of development, whereas the equivalency principle typically yields much lower discount rates that favor environmental conservation.","ai_generated":true,"unit":"bc3res-000093#summary","date_modified":"2026-10-23"},"key_insights":[{"text":"The proposed \"equivalency principle\" suggests that the discount rate for natural assets should be derived by assuming the present value of a naturally preserved land track is at least equivalent to the market price of an identical track with permission for residential development.","ai_generated":true,"unit":"bc3res-000093#insight-1","date_modified":"2026-10-23"},{"text":"Application of the equivalency principle to various case studies in the UK, USA, and Spain generally results in very small discount rates, which are even lower when constant flows are assumed compared to scenarios accounting for real GDP growth.","ai_generated":true,"unit":"bc3res-000093#insight-2","date_modified":"2026-10-23"},{"text":"In the case of the proposed seaport in Pasaia (Gipuzkoa), a traditional cost-benefit analysis using a market discount rate of 11% for both benefits and costs justifies the project across all environmental damage scenarios.","ai_generated":true,"unit":"bc3res-000093#insight-3","date_modified":"2026-10-23"},{"text":"When the equivalency principle is applied to the Pasaia seaport project, the resulting low discount rates (ranging from 1.31% to 3.97% depending on the damage scenario) turn the project's total impact negative, suggesting it should not be constructed.","ai_generated":true,"unit":"bc3res-000093#insight-4","date_modified":"2026-10-23"},{"text":"The authors argue that relying solely on expectations of future economic growth to set discount rates is insufficient due to current uncertainties regarding global GDP and the increasing scarcity and value of critical natural ecosystems.","ai_generated":true,"unit":"bc3res-000093#insight-5","date_modified":"2026-10-23"}],"climate_tags":["green infrastructure","natural capital","environmental impact assessment"],"geography_discussed":["United Kingdom","United States","Scotland","Northern Ireland","Alaska"],"frame_perspective":[],"analysis_type":["theoretical proposal","case study","comparative analysis"]}]}