Ecosystem services in the appraisal of the economic performance of urban regeneration projects exemplified by the Jessica Initiative

Abstract

The purpose of this paper is to indicate the valuation importance of externalities derived from the urban ecosystem services (UES) in terms of their applicability in the appraisal process of urban regeneration projects co-fi nanced from European funds. Specifi cally, it examines the impact of UES on the project’s economic performance, and thereby on human quality of life. Using the discounted cash flow method, this paper estimates the project’s economic performance indicators including the identifi ed UES upon their prior valuation. The valuation was carried out on the basis of the benefi t analysis, contingent valuation method – “willingness to pay” – and benefi t transfer method, as recommended by Bernaciak, Wojcieszak (2014) and Zawojska et al. (2016). Results show that urban
projects including UES are characterised by the higher values of the economic performance indicators and they should be assessed higher than projects with little or no UES because of their stronger contribution to the sustainable development of urban areas. In spite of the fact that there are limitations due to the UES valuation techniques used in the study, the presented approach could be an important tool for the project’s appraisal.