Fuzzy Economic Analysis Methods for Environmental Economics
Environmental economics is an area of economics that studies the financial impact of environmental policies to determine the theoretical or empirical effects of these policies on the economy. In this chapter, engineering economy techniques are developed u
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Fuzzy Economic Analysis Methods for Environmental Economics Cengiz Kahraman, İrem Uçal Sarı, Sezi Cevik Onar and Basar Oztaysi
Abstract Environmental economics is an area of economics that studies the financial impact of environmental policies to determine the theoretical or empirical effects of these policies on the economy. In this chapter, engineering economy techniques are developed under fuzziness to be employed in environmental problems. Ordinary fuzzy sets, type-2 fuzzy sets, intuitionistic fuzzy sets, and hesitant fuzzy sets are handled in the development of fuzzy engineering economy analyses. For each of these fuzzy sets, an application related to environmental economics is given.
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Introduction
Environmental economics is an area of engineering economics which is concerned with the environmental issues. By the increasing attention on the environmental sustainability the environmental investments have become a current issue for the companies and governments. They concentrate on the investments which will increase the environmental sustainability by decreasing their environmental impacts. Companies who want to invest on environmental investments are concerned more on the economic aspect of the investment projects because of that each investment which has been made takes from their profits. In that point, the analysis methods used to evaluate an environmental investment which shows the cost equivalences of the investment projects have significant importance to represent the actual situation. In environmental economics, engineering economic analysis methods are used to determine the best alternative for an environmental investment decision. The discounting cash flow methods are very common economic analysis methods which focus on the time value of the cash flows which occur in different periods. Net C. Kahraman (&) İ.U. Sarı S.C. Onar B. Oztaysi Industrial Engineering Department, Management Faculty, Istanbul Technical University, Macka, Istanbul, Turkey e-mail: [email protected] © Springer International Publishing Switzerland 2017 C. Kahraman and I.U. Sarı (eds.), Intelligence Systems in Environmental Management: Theory and Applications, Intelligent Systems Reference Library 113, DOI 10.1007/978-3-319-42993-9_14
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present worth, annual worth, net future worth, benefit cost ratio and internal rate of return are the most common discounting cash flows methods. Although the usage of discounting cash flows analysis methods is very common, their success on uncertain environments has to be discussed. In an environmental economics analysis most of the parameters contains uncertain information. Therefore, the methods which take into account the uncertainty should be preferred to achieve more accurate results. Intelligence is the ability to think and understand instead of doing things by instinct or automatically. The basic ideas of intelligence are the studying thought processes of humans, dealing with representing and duplicating those processes via machines, and exploring the
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