Title: Towards a green economics approach to cost-benefit analysis

Authors: Steve Mandel

Addresses: Birmingham University, Brook House, The Street, Aldermaston, Berks RG7 4LN, UK

Abstract: Traditional cost-benefit analysis is based on a number of assumptions found in neo-classical economics. The paper argues that these assumptions could be considered to be deeply flawed. It suggests that these assumptions include a belief in perpetual growth and result in a particular bias against sustainability. This paper questions those assumptions and indicates what needs to be changed for CBA to become a useful tool for a green approach to policy-making.

Keywords: cost-benefit analysis; CBA; sustainability; green economics; social ROI; return on investment; SROI; well-being; discount rates; limits to growth; inter-generational equity; distributional equity; diminishing marginal utility of consumption; sustainable development.

DOI: 10.1504/IJGE.2010.037658

International Journal of Green Economics, 2010 Vol.4 No.4, pp.380 - 392

Published online: 20 Dec 2010 *

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