The Use of Cost-Benefit Analysis to Decide Environmental Policy – a Dead End?

In this paper I discuss two questions which the decision maker has to consider before she makes use of the method of cost benefit analysis. First, she has to ask herself if she shares the ethical foundation of environmental cost benefit analysis. If not, could environmental cost benefit analysis be adjusted such that her ethical beliefs are incorporated? Second, if the decision maker shares the ethical foundation of environmental cost-benefit analysis, is this method appropriate when there are individuals in a society that hold other ethical beliefs than those implicitly assumed in an environmental cost-benefit analysis? When discussing these questions I focus on two different perspectives – the deontological and the agency aspect of individual preferences. I argue that the answer to both questions is «no», though the answer to the second question is not as clear as the answer to the first.