Cost benefit analysis and environment – UGC NET Question

Statements A, B, C, E and F are correct and together explain the purpose, methods and limitations of CBA. It compares monetised costs and benefits, uses valuation techniques, assesses net benefits and can be complemented by distributional analysis, while decision-makers often consider additional criteria such as ethics or ecological thresholds. Statement D is false because CBA cannot fully capture all ethical, distributional and ecological aspects by itself. The correct combination is therefore A, B, C, E and F only.

Option A:
Option A is correct as it acknowledges both the usefulness and limitations of CBA and recognises the need for complementary analyses and criteria in environmental decision-making.

Option B:
Option B is incorrect because it omits F and thus ignores how CBA results are actually used alongside other considerations in practice.

Option C:
Option C is incorrect since it excludes A and therefore does not explicitly state that CBA monetises costs and benefits.

Option D:
Option D is incorrect as it leaves out B, ignoring environmental valuation methods important for non-market goods.