Benefit-Cost Analysis: A Questionable Part of Environmental Decisioning

Frank G. Müller

DOI: 10.2190/KKWT-J931-1Q0W-EP6L


Benefit-cost analysis is frequently suggested as the appropriate method for evaluating environmental policy. Here in this paper it has been attempted to demonstrate that BCA is only of limited use for environmental policy. The use of monetary criteria are not appropriate for environmental decision-making because they do not prevent theproblem of sub-optimization. Ecological stability requires a level of economic activity, which is quite different than the one determined by the Pareto-optimum condition. Consequently the results of the BCA are either misleading or superfluous.

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