The empirical part of the paper explored two climate-change
mitigation projects at different scales, in order to investigate whether
conventional BCA could yield significant quantitative errors, or,
perhaps even worse, suggest outcomes which were qualitatively
wrong. The first ‘project’ reduces global carbon emissions to a low
level, and was explored using the DICE integrated assessment model
developed by Nordhaus (2008). Both qualitative and large quantitative
errors were found to be plausible outcomes from the DICE
model results, depending on η, the utility discount rate δ, and, as an
example of dependence on other model parameters, the climate
sensitivity. The second project was the ‘Nam Theun II’ hydroelectric
power plant in Laos. Using data from the World Bank, we again
found both qualitative and large quantitative errors were possible
for reasonable values of η and δ.