The Benefits of Cost-Benefit Analysis in Construction Projects

Abstract

The European Union’s (EU) main goal, as stated in the EU Green Deal, is to achieve climate neutrality by 2050, and the construction sector plays a significant role in this achievement through efforts to make infrastructure, commercial, and private projects more sustainable. For many years, Cost-Benefit Analysis (CBA) has been used to evaluate and make decisions on co-financing large infrastructure projects funded by the EU. As a result, the EU has incorporated the CBA into its cohesion policies, major initiative objectives, major sectoral policies, and common links, such as climate change and resource efficiency. However, in order to achieve ambitious European goals, the CBA has found a much broader application and is now used for the evaluation of circular economy projects, alternative materials in construction projects, in waste management and sustainable design, or to prove the efficiency of information processes or corporate governance. This paper will give an overview of the use of CBA in assessing various construction projects, as well as categorize identified benefits that were monetized in each group of projects. Finally, the general advantages and disadvantages of using CBA when evaluating and selecting projects from various construction areas will be summarized.