A gut reaction to a benefit-cost analysis…

Ianqui writes: Lately, the issue of benefit-cost analyes have been popping up on the blogosphere. On Environmental Economics today, there’s a post about whether or not it makes economic sense for the economically-depressed town of Taylor, Florida to give the go-ahead to a coal-fired power plant. Economist John Whitehead does a back-of-the-envelope calculation to determine whether or not the plant is beneficial by balancing the revenue of the plant and the generation of new jobs against environmental costs such as sulfur dioxide, acid rain, carbon monoxide, etc. Each of these toxins are assigned a monetary value, and Whitehead comes up with the following: “Subtracting costs from benefits the annual net benefits to the town of Taylor are $3.75 – $1.33 = $2.42 million.”

While I appreciate this post from an academic and intellectual standpoint, the whole thing makes me physically recoil. The idea that everything in the universe has a monetary value–including the cost of cancer, of polluting groundwater, of causing global warming by releasing CO2 into the atmosphere, of killing fish in lakes that are affected by acid rain–is truly chilling…

More after the jump at The Oil Drum.