The European Union, as a signatory to the Paris Agreement, has approached the action against greenhouse gas (GHG) emissions and climate change quite ambitiously, striving to achieve climate neutrality by 2050. Extension of the European Green Deal policy implementation to the Western Balkans can only increase the chances of the climate neutral agenda. Expectations from Montenegro in the coming period are transposable to other Western Balkans countries as they are urged to start implementing the Paris Agreement by establishing appropriate policies and measures. In this regard, this paper presents the analysis of the financial and economic analysis results of measures to reduce GHG emissions in Montenegro. With this respect, least cost analysis—cost effectiveness analysis and cost–benefit analysis were conducted. The analysis results indicated that due to the thermal power plant reconstruction, increased use of renewable energy sources and measures to increase energy efficiency, the largest reduction in GHG emissions in Montenegro in the next 10 years is expected in the energy sector.
Improved Cost-Benefit Analysis (CBA) analysis requires a broader analytical framework, in order to perceive each project individually from the perspective of potentially measurable and significant effects on the environment and society as a whole. The main goal of our paper is to assess the financial and economic justification for variant V3 (as the most technically optimal) of the wastewater treatment plant (WWTP) construction project in Nov Dojran, North Macedonia, with the purpose of advancing municipal infrastructure and environmental benefits from improved water treatment. Based on the economic analysis conducted, we conclude that the investment in the WWTP project is justified, because the economic internal rate of return is higher than the opportunity cost of capital (EIRR = 16.38%), the economic net present value is higher than 0, and EBCR (benefit-cost ratio) is greater than 1 (EBCR = 2.11). The highest environmental benefit of 49.2% in total environmental benefits is associated with nitrogen, while phosphorus is the next pollutant in the structure of environmental benefits at 46.1%. The environmental benefits of removing biological oxygen demand (BOD) and chemical oxygen demand (COD) are significantly less important, despite the removal of significant amounts of these pollutants during treatment. The situation is similar with suspended particles.
Performance-based maintenance contracts (PBMCs) are modern contracts that should allow road maintenance entities to contract maintenance activities more successfully and generate money value. In the case of Montenegro, a gradual approach of PBMC introduction is recommended through a hybrid contract for routine road maintenance. Hybrid contract implementation will enable a lower level of client risk in the early stages of PBM contract. Game theory is used for selection of an adequate model for hybrid contract structure in terms of size and nature of the BoQ elements. In addition to the estimated or charged quantities of works from previous contracts, the model also includes parameters that to some extent take into account the experience and expertise of contractors and clients, but also the availability of road data. In order for model to be applied, historical data from traditional road maintenance contracts, which were implemented in the previous period in Montenegro, are used.
Montenegro faces serious challenges in terms of waste tire management. The main goal of our paper is to consider the financial and economic justification of the implementation of the first phase of the project of collection, takeover and transport, sorting, and storage of waste tires from the three municipalities in Montenegro. The financial feasibility analysis pointed out the need to organize the second phase of the project and the production of commercially usable and energy efficient products. That phase would lead to the desired commercial effects and will probably ensure the financial sustainability of the project. The economic feasibility analysis of the project included an assessment of the socio-economic benefits from the emission reduction of the first group of pollutants (PM, SOX, NOX, VOC, CO) as a consequence of the waste tires’ destruction, predominantly by combusting them. Unit values of pollution costs by types of gases, adjusted for Montenegro, were defined in the interval from 192 EUR/t for CO to 24,294 EUR/t for PM. We proved that the direct socio-economic benefits of this project are savings in the cost of environmental pollution. The total present value of discounted costs in the observed time period was calculated at the level of EUR 1,620,080, while the total present value of the positive socio-economic effects was estimated at EUR 1,991,180. Dynamic justification indicators suggest that this investment has a satisfactory socio-economic justification, i.e., the economic rate of return is higher than the opportunity cost of capital (ERR = 15.82%), the economic net present value is greater than 0 (ENPV = 371,100 EUR), and the benefit–cost ratio is greater than 1 (B/C ratio = 1.23).
Classical, neoclassical, institutional and other schools have debated what is crucial for economic growth. Literature review related to economic growth models is extensive. The objective of our paper is to construct a model of economic growth determinants in EU countries, with focus on construction. Our model includes determinants that reflect the impact of construction on economic growth, which is the contribution to existing literature. It has been created for three groups of countries: EU28, old EU and new EU countries. We believe that this has improved the quality of the results and enabled a comparative analysis of the old and new EU countries. In order to create a model, we used a strongly balanced panel of 28 EU countries in the period 1995–2019 and employed the difference-in-differences approach. Our results for EU28 confirm positive effect of industry, gross fixed capital formation, production in construction and cost construction index on GDP, while gross wages are statistically insignificant. FDIs have low negative impact on economic growth in EU28 and old EU, but statistically insignificant in new EU countries. CO2 is significant and positively correlated with economic growth in all countries. Based on empirical results, we propose policy relevance in concluding remarks.
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