Cost Effectiveness and Incremental Cost Analyses: Alternative to Benefit-Cost Analysis for Environmental Remediation Projects

Abstract

An approach is presented for evaluating site-specific or multisite alternative environmental remedies that involve nonmonetary benefits. After discussing problems that currently preclude the use of benefit-cost analysis for such evaluation, the analytical approaches of cost effectiveness and incremental cost analyses are presented, including discussion of data requirements, procedures for application, and guidelines for interpreting results to inform decision making. The analyses and interpretation of their results are illustrated with a hypothetical application, based on data from an actual case study involving the cleanup of contaminated underground storage tanks, using a software program called ECO-EASY.