Dave Iverson, “Economic Advice for Forest Managers: Project and Program Planning”
When resources are used to pursue one end, though, they cannot be used to pursue another. There is a tradeoff. The tradeoff between means is wherein economics has a say. On ends, however, economics must be silent. In environmental disputes, as in many other settings, tradeoffs between ends are moral choices and therefore outside the purview of economics. As recognized by the Council of Environmental Quality, weighing the "merits and drawbacks of the various alternatives need not be displayed in a monetary cost-benefit analysis and should not be when there are important qualitative considerations."(40 CFR 1502.23)
In choosing between ends, monetized cost-benefit analysis plays a very limited role: to appraise the means available to achieve each end or set of ends. This suggests that benefit-cost ratios, and present net value indices, cannot be used directly to compare alternatives that confer benefits and impose costs in different ways on different people. It makes no sense, for example, to say that a "commodity emphasis" forest plan alternative is better (or "more efficient") than an "amenity emphasis" alternative if it has a higher present net value. The comparison is simply meaningless, despite the fact that it is frequently made by practicing economists….
When evaluating efficiency I find it useful to ask four questions: Efficient at what?, Efficient for whom?, Efficient for how long?, and Efficient by what standard? If businesses become very efficient at shifting costs to others, through environmental pollution for example, then we must wonder whether such 'commerce' is helpful or harmful. Maybe we need to redefine our efficiency standard and change the politicial/institutional framing for commerce.