Philosophy 2070 – assignment on cost-benefit analysis
Due in Week 9 tutorial (March 12-14)
Cost-benefit analysis (CBA) is becoming an increasingly popular tool for environmental decision making.
This framework offers transparency in the decision process and it places various considerations on a
seemingly level playing field. For these reasons policy makers are attracted to it. However, conducting a
CBA requires all sorts of educated guesswork. Some argue that the procedure is prone to bias or that it
ignores ethical considerations. This assignment aims to familiarize students with the CBA procedure by
having them go through the following steps.
Step 1 Choose one of the candidate projects from the list at the bottom of this assignment (see below).
It should be something that is of interest to members of the group.
Step 2 Create a list of all the relevant consequences or impacts that would result from the project. You
should include both positive and negative impacts in your list. This requires careful, creative thought.
Step 3 Make two columns, one for costs and the other for benefits. Then place a dollar value on each
impact. Basically, what is each impact worth in dollar terms, according to your best ability to estimate.
Note that you will have to put dollar values even on things that maybe lack a market value. For instance,
suppose that the relevant action is to replace a natural wetland with an industrial complex. What is the
cost per year to people who use the wetland for recreation (what is it worth to them in dollars as it
stands, even if they don’t pay to use it?) Doing a CBA means you have to estimate such values with
whatever information you can muster. This is part of the challenge facing CBA – how to estimate the
worth of things that are not typically bought and sold.
Step 4 Tally up the costs and benefits to determine whether the project should go ahead.
Step 5 Write up a brief (2-3 page) critique of the procedure. Your critique should begin with the CBA in
the form of a table and a brief description of how you arrived at your values. Then, in a few paragraphs,
discuss whether you think that this procedure delivered a good outcome. Do you see value in this
decision making framework? What, if any, were its limitations?
In assigning dollar values to various impact costs and benefits, students are welcome to conduct
research online. In some cases they will have to develop an educated guess. But they should do so
honestly, not steering the analysis toward a certain outcome. Pretend you are a team working for a
consulting agency. You are accountable for your assessments.
Candidate projects: (1) Construction of the Northern Gateway Pipeline. (2) Allowing open net salmon
farming in British Columbia. (3) “Fracking” for natural gas (choose anywhere in Canada that it might
occur). (4) Mining Ontario’s “ring of fire”. (5) The use of phosphorus fertilizer in Ontario which is causing
algae blooms in Lake Erie.