Cost benefit analysis for implementation of environmentalmanagement systems

摘要

ISO 14001 is "good business" because it can lead to greaterefficiencies and reduced materials and operating costs. The verydefinition of "environment" is all-inclusive: it means anything thatconsumes energy and produces waste. Environmental issues span the entiremanagement spectrum: material costs, productivity, quality, liability,health and safety. An efficient and cost effective systems approach tomanaging these variables of doing business impacts bottom-lineprofitability. The cost-benefit analysis is used to determine thefeasibility to obtain profit to implement environmental managementsystems. The determination of Net Present Value (NPV), Internal Rate ofReturn (IRR) and Benefit to Cost Ratio (B/C) confirms that after 4 yearsof implementation of environmental management system, benefits can beobtained. CBA is a normative tool, not a description of how managementis making decisions. The technical limitations may make it impossible toquantify and then monetize all relevant impacts as costs and benefits.Nevertheless, CBA is often a useful yardstick for measuring efficiency,even when it is not an appropriate decision rule