Cost-Benefit Analysis

Cost-Benefit Analysis (CBA) is undertaken to measure the overall costs and benefits of a project, development or policy/strategy intervention. CBAs are done to determine the potential impact on communities, businesses, or government, and can include economic, social and environmental costs and benefits within a surrounding area or at a project level. 

CBAs usually include mobilising all affected parties, identifying the direct and indirect costs, consolidating the positive and negative variables that the project or development is anticipated to have, and to objectively evaluate, and, where possible, measure these variables. A sensitivity analysis can then be done to test the relationship between these variables on the overall costs or benefits.

An example of a CBA recently undertaken by Lumec was for the Warwick Zero Waste study, where we calculated the net benefit of diverting food and garden waste into the production of compost. Techniques utilised in a cost-benefit analysis include data collection and collation, surveys, stakeholder engagement, financial analysis, and economic modelling.

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