The role of ex post cost-benefit analysis in the evaluation of national energy policies: The case of Korea

This dissertation explores the theoretical foundations and implications of cost-benefit analysis (CBA) as an economic mode of policy evaluation. This study frames a responsible application of cost-benefit analysis in the context of non-normative ex post evaluation, and seeks to demonstrate the usefulness of this framework through two case studies of Korean energy policy projects. Ultimately, the study has two chief intentions: (1) to demonstrate that CBA is a theoretically appropriate and practically useful tool for ex post policy analysis, especially of energy policy options, and (2) to evaluate two Korean energy policies projects by this means.; The theoretical background offered herein focuses on Pareto optimality and the efficient allocation of resources because CBA is founded upon the concept of efficiency. The dissertation also examines particular theoretical and technical shortcomings of CBA, with special regard for the problem of externality, which is described both in the negative and positive senses of the concept. The positive aspect is especially important, given the stable oil supply sought by the two projects examined. However, the energy conservation project not only helps create oil security externality in the short and long runs, but also reduces environmental costs through reduced energy consumption.; A CBA of the government oil-stockpiling project suggests that total social benefits are less than total social costs---the project is cost-ineffective. The project is proven to have not effectively internalized the positive externality of oil security. An evaluation of the energy conservation project shows that total social benefits are greater than total social costs, while the project is also cost-effective, demonstrating the validity of energy savings investment in this instance. Due to particular data-gathering constraints, however, further research is warranted in both cases, in order to offer a more robust study and to be more certain of policy implications.; This dissertation justifies the use of ex post CBA, with special regard for energy policy evaluation. This study serves to connect these two discourses in the hope that ex post policy evaluation can contribute to building a more cost-effective policy regime, capable of effecting the particular interventions intended by policy makers through a greater understanding of the effects of given projects and programs. In addition, this dissertation gives decision-makers, interested parties and policy analysts a recognizable discourse for understanding the framework, technique and application of CBA.