Chapter 1.11: Cost Benefit Analyses

Environmental cost-benefit analysis (CBA) is an important tool used to support decisions about the management or regulation of environmental resources.  CBA provides a framework to identify, quantify, and compare the costs and benefits (measured in dollars) resulting from a proposed action such as a new environmental regulation. Benefits might include improved water quality, species preservation or carbon sequestration.  Costs may include the price of implementing the regulation, the loss of earnings for industries affected by the new regulation, higher prices for consumer goods, or higher taxes levied to pay for the regulation.



Background Materials:

For a brief explanation of Cost Benefit Analyses, visit  

Go to for an excellent in-depth discussion of CBAs and the environment.

Performing a Cost Benefit Analysis for Dummies:

Another breakdown of the steps involved in a basic Cost Benefit Analysis:  


Textbook References and Links:

In the practice exercise, you are asked to perform a basic Cost Benefit Analysis.  Here are links to several studies that have conducted similar analyses that you can use to guide your own estimates of costs and benefits:

A simple example of a cost benefit analysis:

Several real-world examples are provided by the US EPA at:

Some information on the economic and environmental impacts of water bottling:'s_shocking_impacts_and_the_growing_opposition


Downloadable data and files:  NA