By most government to be of most importance and little to no attention is usually give to the impact that this growth will have on the environment or the overall sustainability of the resource base (Andre et al. While this approach was reasonable in the past, the industrial revolution and its associated effects such as increased rate of population growth started to cause a substantial degree of human impact on the environment. Over the past two centuries, it has become increasingly clear to most environmentalists that human impacts on the environment are irreversible and this might eventually limit the ability of humans to continue thriving on the planet (Khalil, 1999).
Over a period spanning through the last three decades, there has been a global concern over this problem and the search is currently underway for the establishment of strategies that will aid in the minimization of human impacts on the environment while at the same time improving the quality of life of the billions of people that are currently living in abject poverty across the globe. It is in a bid to try and effect a possible resolution to this crisis that the monetization of environmental assets via some form of CBA has been proposed. Cost-benefit analysis is generally a comparison of the various increases in human wellbeing (benefits) and the reductions that humanity experiences in social welfare (costs) as applied to a given policy or action.
In this regard, for a given policy or project to be able to qualify as being viable as based on cost-benefit grounds, its total social benefits must be found to exceed its total social costs. Whereas cost-benefit analysis is usually conducted for specific project, the scope of this analysis can easily be extended to wider limits such as the assessment of the polices that have been designed to aid in the combating of climate change (OECD, 2007). The growing concerns over the environmental have caused several governments to now require that all new environmental measures or regulations should be subjected to a cost-benefit analysis.
An example of this is that in the United States, all the new regulations that affect the environment and have an annual cost that is found to be in excess of $100 million must be subjected to a CBA.
Canada has also adopted the use of similar measures as all new environmental regulatory proposals that have an estimated total present value that is greater than $50 million are require to have a CBA. The same
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