Question

Describe the difference between cost-effectiveness analysis and benefit-cost analysis as they apply to the question of preserving biological diversity.

Answer 1

Cost-effectiveness analysis is the cost incurred in carrying out an activity like cost incurred to preserve biodiversity whereas benefit-cost analysis tries to project the benefit of preservation of biodiversity over the cost incurred. So cost effectiveness helps to understand the importance of preserving the biodiversity beyond monetary terms like necessity to maintain the balance of life whereas B:C analysis quantifies if it is worth to take up project in terms of monetary terms.