SCBA

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Social cost-benefit analysis
Social cost-benefit analysis is a systematic and cohesive method to survey all the impacts caused by an
urban development project. It comprises not just the financial effects (investment costs, direct benefits
like tax and fees, et cetera), but all the social effects, like: pollution, safety, indirect (labour) market, legal
aspects, et cetera. The main aim of a social cost-benefit analysis is to attach a price to as many effects
as possible in order to uniformly weigh the above-mentioned heterogeneous effects. As a result, these
prices reflect the value a society attaches to the caused effects, enabling the decision maker to form a
statement about the net social welfare effects of a project.
A SCBA of Movares' Sustainable Highway© in Rotterdam
A major advantage of a social cost-benefit analysis is that it ena-bles investors to systematically and
cohesively compare different project alternatives. Hence, these alternatives will not just be compared
intrinsically, but will also be set against the "null alter-native hypothesis". This hypothesis describes "the
most likely" scenario development in case a pro-ject will not be executed. Put differently, investments on
a smaller scale will be included in the null alternative hypothesis in order to make a realistic comparison
in a situation without "huge" invest-ments.
The social cost-benefit analysis calculates the direct (primary), indirect (secondary) and external effects:
 Direct effects are the costs and benefits that can be directly linked to the owners/users of the project
properties (e.g., the users and the owner of a building or highway).
 Indirect effects are the costs and benefits that are passed on to the producers and consumers outside
the market with which the project is involved (e.g., the owner of a bakery nearby the new building, or a
business company located near the newly planned highway).
 External effects are the costs and benefits that cannot be passed on to any existing markets because
they relate to issues like the environment (noise, emission of CO2, etc.), safety (traffic, external security)
and nature (biodiversity, dehydration, etc.).
As model engineers Decisio tries to quantify and monetize as much ef-fects as possible. Effects that
cannot be monetized are presented in a such a way that they can be compared. This way, policymakers
can in-clude these effects in their final judgment if an urban planning project (or a particular variation) is
worth investing in. The method of monetizing effects can also influence the outcome of a social cost-
benefit analysis and predictions will always remain uncertain. Therefore, the results of a social cost-
benefit analysis are not absolute. Nevertheless, it is a good instrument to investigate the strong and weak
points of the different alternatives.
SCBA for the Netherlands Centre for Biodiversity 2

2. The result of a social cost-benefit analysis are:
1. An integrated way of comparing the different effects. All relevant costs and benefits of the dif-ferent
project implementations (alternatives) are identified and monetized as far as possible. Ef-fects that
cannot be monetized are described and quantified as much as possible.
2. Attention for the distribution of costs and benefits. The benefits of a project do not always get to the
groups bearing the costs. A social cost-benefit analysis gives insight in who bears the costs and who
derives the benefits.
3. Comparison of the project alternatives. A social cost-benefit analysis is a good method to show the
differences between project alternatives and provides information to make a well informed decision.
4. Presentation of the uncertainties and risks. A social cost-benefit analysis has several methods to take
economic risks and uncertainties into account. The policy decision should be based on cal-culated risk.
Decisio’s SCBA expertise
Some recent examples of social cost-benefit studies performed by Decisio:
Infrastructure
 Social cost-benefit analysis of the Utrecht – Breda railway. Client: The Dutch Ministry of Transport,
Public Works and Water Management).
 Social cost-benefit analysis of the implementation of the European Rail Traffic Management System
(ERTMS) in the Netherlands. Client: The Dutch Ministry of Transport, Public Works and Water
Management.
 Cost-benefit analysis of several waterway infrastructure projects. A comparison between differ-ent
investments in several waterways. Client: The Ministry of Transport, Public Works and Water
Management.
 Social cost-benefit analysis on the concept of Distance Related Road Charging (ABvM) in the northern
wing of the Randstad (the area around Amsterdam and Utrecht). Client: The Ministry of Transport, Public
Works and Water Management. In association with RebelGroup.
 Social cost-benefit analysis of Highway A27. Client: Rijkswaterstaat Noord-Brabant (part of the Dutch
Ministry of Transport, Public Works and Water Management).
 Social cost-benefit analysis of a toll project and so-called ‘speeding’ projects that intend to im-prove
the mobility on Dutch highways. Client: The Ministry of Transport, Public Works and Water Management
(ABvM).
 Social cost-benefit analysis of the N33 (regional highway). Client: The Dutch Ministry of Transport,
Public Works and Water Management.
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3.  Social cost-benefit analysis of ‘The Sustainable Highway’ in Rotterdam. Client: ROM Rijnmond, dS+V
and Rijkswaterstaat-IPL (part of the Dutch Ministry of Transport, Public Works and Water Management).
 Social cost-benefit analysis of the so-called Undisturbed Logistics Connection (OLV) that intends to
connect three Amsterdam Connecting Trade (ACT) business locations with the cargo tran-shipment
terminal at Amsterdam Airport Schiphol. Client: The Provincial Government of Noord-Holland. In
association with Goudappel Coffeng, Buck consultants, Tauw, ATOS consulting and Stratagem.
 Cost-benefit analysis of infrastructural investments in the ‘IJmeer-connection’, a bridge between the
cities of Amsterdam and Almere. Client: The Regional government of Amsterdam (ROA).
 Social cost-benefit analysis of infrastructure investments (highway) in the corridor Schiphol –
Amsterdam – Almere. Client: The Ministry of Transport, Public Works and Water Management.
 Social cost-benefit analysis for the Dutch National Centre of Biodiversity. Client: NCB (National Centre
of Biodiversity.
Spatial economics
 Social cost-benefit analysis on options for sustainable energy ecology, tourism and transport on the
Afsluitdijk (Enclosure Dam).Client: Rijkswaterstaat IJsselmeergebied (part of the Dutch Minis-try of
Transport, Public Works and Water Management).
 Social cost effectiveness analysis of offshore wind energy parks in the North Sea. Client: The
implementing body of the Ministry of Transport, Public Works and Water Management.
 Social cost-benefit analysis of an investment in the central theatre/congress area in The Hague. Client:
City of The Hague.
 Social cost-benefit analysis of the investment project in tourism, ecology and coastal security
‘Waterdunen’, located in the dune area in the Province of Zeeland. Client: The provincial govern-ment of
Zeeland.
Contact Decisio BV Phone: +31 (0)20-6700562
Valkenburgerstraat 212 Fax: +31 (0)20-4701180
1011 ND Amsterdam, the
Netherlands
Website: www.decisio.nl