Cost-benefit analysis in integrated environmental assessment: some methodological issues

Abstract A fundamental step in integrated environmental assessment (IEA) is the choice of an assessment framework. The usual attempt to develop integrated assessments of different options is to apply a cost-benefit analysis (CBA), which is an important part of the IEA, but at the same time is one of its weakest points. One should note that this paper does not aim at presenting new advances on specific issues of CBA. The present paper has as a main objective to analyse the role of CBA in the IEA framework, in particular: (1) to make explicit the economical, philosophical and mathematical assumptions on which CBA is based; (2) to discuss the main characteristics and consequences of these assumptions; (3) to test the consistency and compatibility of such an axiomatic system. It is thought that this is useful above all for non-economists involved in IEA studies.

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