Cost/Benefit Analyses

1. Cost/Benefit Analyses

2. What are these used for? • The list is nearly endless --- • Any subject that has both good points and bad points can be subjected to this type of analysis • In some cases, actual dollar amounts are known or can be calculated • In other cases, arbitrary numbers are assigned

3. Collect numbers in a table format

4. Are there cases where this has been applied to environmental issues?

5. Global Climate Change is a Common Example

6. Upside Risk Downside Risk Learn – then – act If climate damage low, mitigation costs saved If climate damage high irreversible damage caused & extra mitigation & adaptation costs incurred Act – then – learn If climate damage high, irreversible impacts avoided and mitigation costs minimized If climate damage low, mitigation and adaptation costs incurred

7. Upside Risk Downside Risk Learn – then – act Act – then – learn You Assign the Numbers!

8. So, we see that cost/benefit analysis itself has its own risks and benefits • Will reflect the biases of the person/group using the analysis • If done in an unbiased manner can be an effective tool • However, not all biases are easily detected, even by the person doing the analysis!

9. Each group will decide on the risks and benefits associated with each form of fossil fuel use – coal, oil, natural gas Entire class will then collate list Each group will then assign a value to each risk and benefit on the collated list, giving risks negative numbers & benefits positive numbers (between 1 and 5). A very good benefit could get a +5 will a very bad risk could get a – 5. Today’s Exercise