Implications for Decision Making and Environmental Policy
New Horizons in Environmental Economics series
Chapter 2: The Decision Making Context
2. The decision-making context 2.1 INTRODUCTION An important step in dealing with environmental uncertainty is the choice of the framework which will provide the basis for the decision-making procedure. While there are many techniques and approaches for appraising policies and projects which have an impact on the environment, the focus of this book is restricted to that of dealing with environmental uncertainty within what will loosely be termed a cost–beneﬁt framework. The use of such a framework reﬂects two factors. First, decision making, which considers any investment in relation to a policy or a speciﬁc project, will involve an assessment, even at the most rudimentary level, of the costs and beneﬁts of such a decision. Second, decisions made by society involving the allocation of environmental resources or services will necessarily imply valuation. Although criticisms have been made regarding the top-down decision-making structure implied by the use of cost–beneﬁt analysis, a complete rejection of such an approach ignores the realities of decision making. The aim of this chapter is to raise some important concerns surrounding the use of cost–beneﬁt analysis which have an important effect on the way in which a decision is made. In particular it considers whether cost–beneﬁt analysis should be interpreted as a decision criterion or alternatively whether it should be seen more as a general framework. In order to do this, a very brief description of cost–beneﬁt analysis, and some of the more important...
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