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Article | REF: W2100 V2

Economic tools for water management

Author: Jean-Marc BERLAND

Publication date: December 10, 2020 | Lire en français

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    5. Cost-benefit analysis

    Cost-benefit analysis (CBA), also known as "cost-benefit analysis", is a decision-support method used to evaluate the advantages and benefits of a project, as well as the possible consequences (positive or negative) of the decisions to be made.

    CBA allows us to produce a stand-alone ratio: by expressing the benefits of a combination of measures in monetary form, it can be used to conclude whether the combination is disproportionate, at least in theory. Insofar as the costs exceed the benefits, if the benefits are assessed with a sufficient degree of confidence, the combination can then be judged as disproportionate.

    This method enables us to measure the appropriateness of a project or policy, as well as its financial impact. It is a tool that can be used before a decision is taken, to assess risks...

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