Cost-benefit analysis of river restoration in Switzerland

Over the last two centuries, rivers around the world have been heavily modified, causing the degradation of river in ecosystems and the loss of biodiversity (MEA 2005). The adverse impacts of past river developments have received increasing attention in recent years (Malmqvist and Rundle 2002). A trend to return rivers to their near-natural state through river restoration can be observed (e.g. the special issue on river restoration in Water Resources and Economics; Brouwer and Sheremet 2017). River restoration is expected to improve the ecological state of rivers, prevent further biodiversity loss, and restore lost ecosystem services (Palmer et al. 2005; Bernhardt et al. 2005). Switzerland plans to restore 4000 kilometres of rivers by 2090. For this purpose, the government has allocated 60 million Swiss Francs (CHF) per year, which is equal to 4.8 billion CHF over the entire period of 80 years or 1,200 CHF/m. However, the costs of restoration are often high (Bergstrom and Loomis 2017). The question is, therefore, whether the environmental, social and economic benefits outweigh the costs of river restoration. The main objective of this study is to answer this question using Switzerland as a case study. This study aims to: (1) translate the ecological benefits of river restoration into economic values expressed in monetary terms; (2) elicit public preferences and willingness to pay (WTP) for river restoration; and (3) conduct a cost-benefit analysis (CBA) of two typical river restoration projects in Switzerland, in order to inform the national policy on river restoration about the economic justification of the planned investment. Our approach to estimating the economic benefits of restoring degraded river sections differs from the existing literature in that it explicitly integrates, into a stated preference (SP) survey, the results from an environmental impact assessment previously carried out by natural scientists for the same two river sites (rivers Thur and Töss). An additional novelty of this study is that it uses two SP valuation methods to elicit public preferences and WTP for river restoration: namely, the discrete choice experiment (DCE) and the contingent valuation (CV) method. This allowed us to compare the economic benefits derived from the two methods and check the robustness of the results. There are relatively few studies that conduct and report the results of a CBA of river restoration. This paper therefore contributes to this limited literature by providing further empirical evidence about the economic efficiency of river restoration projects.