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Cost-Benefit Analysis

Using the resource
Requirements for using the resource:
<ul>
<li>Benefits and costs of all values can be measured in a single currency (usually monetary).</li>
<li>Preferences are revealed by observed actions or can be elicited</li>
</ul>
Potential benefits from using the resource
Relatively simple and transparent.
Can use modelled or directly observed benefits and costs
Potential limitations from using the resource
Doesn't deal well with incommensurable values.
Many stakeholders uncomfortable with monetarisation.
Practical information
UN languages in which the resource is available:
Development stage:
Full, working product
Contact details
IPBES Secretariat

When filling in a consequence table, if all expected consequences can be assigned a monetary value, then cost benefit analysis may be applicable. Cost benefit analysis proceeds by drawing up a comprehensive list of the differences between the (estimated) state of the world with the policy or project under consideration, and the (estimated) state of the world without that policy or project. All the different impacts are valued using economic valuation techniques, and added together to give a net appreciation of the impact of the policy or project.

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