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costs to reach the same target, other benefits and the ability of a measure/technology
to outperform the target are not issues to evaluate. To obtain a refined picture on a
certain measure or technology, the application of CBA or MCA is more promising.

6.1.2 Cost—benefit analysis (CBA)

CBA measures the balance between costs and benefits for supporting the decision
whether or not the benefits to society as a whole are greater than the costs (Pearce
et al., 2006; CBA UK, 2013). In environmental management, CBA can help make
judgments on whether RR measures are reasonably practicable. It should not be used
as an argument against the implementation of a RR measure or fulfilling statutory
duties, but in favor of choosing the best alternative.
Assessment means the calculation of the costs and benefits in a monetary value and
the determination of the cost-benefit ratio. Fit for purpose analysis of the assessment
results means in-depth investigation, comparison, correlation, sensitivity analysis,
short- and long-term prognosis, etc. to obtain a dynamic view on the consequences
and uncertainties of the choices.
Benefits are increases in human well-being and costs are decreases in human well-
being. A general rule is that benefits should exceed costs. Comparing the costs and
benefits of a proposal, project, regulation, technology, etc. means weighing the total
expected costs against the total expected benefits to see whether the benefits outweigh
the costs, and if so, how much. The analysis may use partly qualitative or fully quanti-
tative data for identifying a management option worthwhile from the socio-economic
point of view. Quantitative CBA may serve as a solid foundation of decision making,
given that all costs and benefits are expressed in monetary values. This is why CBA can
be dynamically adjusted to the changing value of money in time and location, using the
common monetary basis of net present value, meaning that the costs and benefits are
weighted in a way that the present value has higher weight than the future value. The
overweight of the present may lead to decisions based on short-term, narrow-minded
and selfish thinking. The 30- and 50-year limit in the “long-term'' environmental
management and decision making has already demonstrated the limitations and inde-
fensibility of this approach. For example, disposal of hazardous chemical waste at
an extremely high cost and re-disposal after 30 years including repackaging the same
waste under more stringent environmental regulations and at much higher costs and
repeating the same procedure to eternity is beneficial only to the hazardous waste
management company, but very costly to everyone else, i.e., the community and the
environment (Postle, 1997; CCME, 1998; OECD, 2006).
CBA may be used both for comparison of management options and alternative
ERR measures and also for the preliminary or retrospective evaluation of the measure
to implement. Some important traits of CBA are discussed below.

- In the traditional CBA, the preferences of individuals (well-being, welfare, utility,

facilities, opportunities, the quality of residential and natural environment, etc.)
are taken as source of values. It reflects the value system of the stakeholders;

- To aggregate all economic, social and environmental costs and benefits, it is nec-

essary to find the common ground, and it is WTP: willingness to pay for a benefit
and WTA: willingness to accept compensation for a cost. Using this tool, every