Cost-Benefit Assessment (CBA) is a Life Cycle Sustainability Assessment in which all externalities are expressed through monetary valuation. This allows direct comparison of environmental and social impacts alongside economic costs and benefits by converting all values into a common monetary unit.
In a traditional Life Cycle Sustainability Assessment, the analysis has two components. Environmental Life Cycle Costing covers the internalised costs and benefits that are directly borne by actors within the product life cycle. Life Cycle Assessment covers the externalities, which are the impacts on the social, biophysical, and economic environment that remain outside market prices. These externalities can be expressed either in physical units (such as kilograms of carbon dioxide equivalent or disability-adjusted life years) or, as in the case of Cost-Benefit Assessment, in monetary terms.
The distinguishing feature of Cost-Benefit Assessment is its use of monetary valuation methods to convert all externalities into currency values. This monetisation allows diverse impact categories to be aggregated into a single metric, supporting direct trade-off analysis between environmental, social, and economic dimensions. Methods such as willingness-to-pay approaches are used to assign monetary values to impacts that do not have observable market prices.
Expressed in monetary terms, Cost-Benefit Assessment provides a unified framework for evaluating the total social costs and social benefits of product systems. This allows more informed decisions across the full range of sustainability considerations, not merely those captured by conventional economic accounting.
As Chief Operating Officer, Iris leads our organisational development and oversees day-to-day operations. Before joining 2-0, she worked in the biotechnology sector. As an LCA consultant, Iris has devoted her expertise primarily to the domains of sustainable agriculture and food production. She is dedicated to teaching LCA and is responsible for our educational efforts. Iris holds an M.Sc. in Biology – Biotechnology from the University of Copenhagen.
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Glossary terms are clearer once you have seen them applied. Our guide to what LCA is and how it works walks through the complete methodology: goal and scope, inventory modelling, impact assessment, and interpretation.
If you are working on an LCA study and want it done properly, see how we approach life cycle assessment.
