A critical comment on environmental benefit-cost analysis: principles, defenses, and multidisciplinary limitations
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Data
2015-05Autor
Pelaez Alvarez, Victor Manoel
Teodorovicz, Thomaz
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Economists have fostered benefi t-cost analysis (BCA) as a preferred
technique to evaluate and compare the impacts of alternative public
policies. Particularly, its application for analyzing environmental
policies and regulations, what we call “environmental BCA”, relies
on a set of idiosyncratic techniques for monetizing compliance costs
and environmental and health benefi ts. Although economists have
heralded environmental BCA as a practical and useful tool to promote
“rational” public interventions, it actually faces inherent limitations
when used to analyze the desirability of environmental policies. This
essay critically reviews both the arguments defending environmental
BCA’s application as a technique for ex ante policy evaluation and
then explore its inherent multidisciplinary limitations. We found
that although environmental BCA’s proponents have used arguments
associated with promoting effi ciency, consistent, and evidence-
based public policies, environmental BCA is subject to a plethora of
multidisciplinary limitations associated not only with its technical
soundness, but also with environmental science, ethical concerns and
its political infl uence