Least-cost planning methodology (LCPM), also referred to as least-cost planning (LCP) is a relatively new technique used by
economists
An economist is a professional and practitioner in the social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...
for making rational decisions about investments in transport and other urban infrastructure projects.
It is based on
cost–benefit analysis
Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide the best approach to achieving benefits ...
. However, it is more comprehensive in that it looks at not only the total costs and total benefits for an individual project, but it also examines the total costs and benefits for all alternatives or combinations thereof and treats them on an "equal footing." These alternatives include not only construction projects but also demand reduction measures, such as
road pricing
Road pricing (also road user charges) are direct charges levied for the use of roads, including road tolls, distance or time-based fees, congestion charges and charges designed to discourage the use of certain classes of vehicle, fuel sour ...
, developing more walkable neighbourhoods and promoting
remote work
Remote work, also called work from home (WFH), work from anywhere, telework, remote job, mobile work, and distance work is an employment arrangement in which employees do not commute to a central place of work, such as an office building, ware ...
. When the method is applied to
public utility
A public utility company (usually just utility) is an organization that maintains the infrastructure for a public service (often also providing a service using that infrastructure). Public utilities are subject to forms of public control and r ...
planning, a term
integrated resource planning is typically used (a.k.a. "last-cost utility planning", LCUP).
Equal footing means that there is no discrimination against some alternatives based on political or ideological factors.
LCPM itself is generally more costly than cost–benefit analysis, because of the requirement to study objectively all potential alternatives. However, it can provide large savings to taxpayers because it will do a better job of selecting those projects which maximise benefits while minimising costs.
There has been a trend in the US towards making LCPM mandatory for regional transport plans. For example, it has been required by
Washington
Washington commonly refers to:
* Washington (state), United States
* Washington, D.C., the capital of the United States
** A metonym for the federal government of the United States
** Washington metropolitan area, the metropolitan area centered on ...
State law
RCW 47.80.030 for regional transport plans since July 1, 1994.
References
Sources
* {{cite book , title = Integrated Electricity Resource Planning , last1 = Almeida , first1 = Anibal T. , chapter = An Introduction to Integrated Resource Planning , date = 1994 , pages = 1–34 , publisher = Springer Netherlands , doi = 10.1007/978-94-011-1054-9_1 , chapter-url = https://books.google.com/books?id=ICL-CAAAQBAJ&pg=PA1
External links
Evaluation methods
Transportation planning