What do we mean by cost-benefit?

The analysis of costs and benefits can include a wide range of different forms of analysis.  These can include:

• Formal cost-benefit analysis  - using monetary values to assess the overall economic effects of an action.
• Cost-effectiveness analysis, contrasting the costs of implementing a programme with the benefits measured in non-economic terms, for example the number of a threatened species saved.
• Multi-criteria methods – assessing a range of different criteria, often measured in different currencies, to prioritise amongst a variety of different available options.

I would suggest all of these, and others, should be included in this discussion. It would be useful to discuss the different definitions and uses of these and other approaches to analyse the costs and benefits of IAS management.

Hi,

I agree with the need to clearly define the terminology "cost-benefit" used in IAS management.

The formal cost-benefit analysis does not seem very well suited to our exercise because of the difficulty in estimating the costs of intangible biodiversity conservation (for example, the gain to preserve an endemic species from hybridization with an introduced species). A monetary approach may be too restrictive and may be it is in opposition with the general interest to achieve certain environmental objectives regardless of the costs.

Cost-effectiveness analysis compares strategies (do/not do anything or active strategy 1 / active strategy 2). It seems to be better and needs definition and implementation of economic and environmental indicators.

Thanks Maillard

I think we have already seen some good examples of the use of both cost-benefit and cost-effectiveness analyses used to support decision making.  Cost-benefit is a powerful tool but, as you say, it is data hungry and has issues when it comes to monetising costs and benefits that are not measured in simple economic terms.  Cost-effectiveness has wider applications, but brings its own issues.

I don't believe this is a simple choice between the two and will depend on the questions that we are trying to answer and decisions we want to support.  Can we define which sorts of questions and decisions are best supported by different forms of analysis?  If we are justifying economic investment in the management of a single species whose ecology and impacts are fairly well documented, then cost-benefit brings particular strengths as we have seen from some of the examples from South Africa and the Caribbean.  Alternatively, if we are assessing a large number of species, for example to prioritise management in Australia or rank species for eradication in the UK, then cost-effectiveness and multi-criteria methods are much more practical tools to apply. 

I would be really interested in wider views on this.  If we are to recommend tools for wider use, then I think this link of choice of method to the nature of the decision is key.

Pete

I think better to mean by cost-benefit

Multi-criteria methods – assessing a range of different criteria, often measured in different currencies, to prioritise amongst a variety of different available options.

because for different cases and for different countries can apply different methods, but in the end will be possible somehow compare results.

Alla