International Review of Waste Management Policy - Department of ...

61.1.2 Cost benefit Analysis
Cost benefit analysis takes a somewhat different approach. In cost benefit analysis,
the underlying philosophy is to translate impacts into a common metric – that of
money. Economists are often keen to make the distinction between valuing
somewhat controversial things – for example, life, or landscapes – and valuing
preferences for (or against) them. At one level, therefore, the approach would appear
to have something in its favour relative to LCA in that it enables various different
types of impact across different media quite readily aggregated in a common,
monetary, unit. Another positive feature of CBA is that it enables cost to be included
in the analysis. LCAs clearly cannot do this without significant modification.
Through the process of discounting, time is accounted for in CBA. This takes on
particular significance when comparing different treatment options with significantly
different profiles relating to emissions over time. This is a consideration that is not
available to LCA practitioners, though many LCA practitioners appreciate the
significance of time.
CBAs also tend to be more concerned with impacts than are LCAs. As mentioned
above, LCAs are insensitive to issues of pollutant concentration. In order to evaluate
impacts, economists rely upon credible dose-response relationships. This also
requires some understanding of how emissions from a given process can be
translated into concentrations to which receptors are exposed. A major plus point,
therefore – the attempt to estimate actual impacts – immediately becomes a
weakness. There are relatively few pollutants for which quality dose-response
relationships exist. For others, the way pollutants follow particular pathways is not
especially well known so even the exposure term is unclear. For some pollutants,
even where exposures are well known, the dose-response relationships are subject to
uncertainty (sometimes radically so, as exemplified by differences in US and EU
perspectives on the threshold at which dioxins present a hazard to human health).
On top of all this, even for those pollutants whose fate is relatively well-known (so the
exposure term is relatively well understood), and those for which the dose-response
relationships are tolerably well understood, there remain issues associated with the
valuation process itself. Many outside the economics discipline criticise the approach
to ‘valuing nature / health’ as ethically indefensible, though economists respond that
choices as to how to make best use of scarce resources must be made. However,
within the discipline, debate continues on issues such as how to value mortality and
morbidity, what discount rate to use, etc.
61.2 External Costs of Residual Waste Treatment
The analysis of costs and benefits associated with residual waste treatment options is
a subject which has been discussed in a range of studies. Many of these look not just
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