A choice is worth making when benefits exceed costs
- Every choice weighs an expected benefit against a cost, and that cost includes the next best alternative given up, not only the money paid.
- A choice is worth making only when the benefit is greater than what has to be sacrificed to get it.
- Whose benefits and whose costs are counted changes the answer, which is why most decisions leave some groups better off and others worse off.
- Costs and benefits are usually estimates made before the event, so a choice can look worthwhile in advance and still turn out badly.
Example
- A council has £4 million to spend and can build a leisure centre or resurface its worst roads, but not both.
- The leisure centre would bring in £320,000 of membership income a year and cost £180,000 a year to run.
- Resurfacing the roads would cut the vehicle damage claims made against the council by £95,000 a year.
Step 1: find the yearly net benefit of the leisure centre:
net benefit=£320,000−£180,000=£140,000 \text{net benefit} = \pounds320{,}000 - \pounds180{,}000 = \pounds140{,}000 net benefit=£320,000−£180,000=£140,000Step 2: take away the yearly benefit given up by not resurfacing:
net gain=£140,000−£95,000=£45,000 \text{net gain} = \pounds140{,}000 - \pounds95{,}000 = \pounds45{,}000 net gain=£140,000−£95,000=£45,000- On these figures the leisure centre leaves the council £45,000 a year better off, so it is the stronger choice.
- The figures do not settle it on their own, because an unsafe road carries a cost in injuries that no membership income makes up for.
Three kinds of sustainability judge a choice
Definition
Economic sustainability: whether the benefits of a choice can be kept going over time without running down the money or resources that pay for them.
Social sustainability: whether a choice protects the health, safety, opportunities and community life of the people affected by it, now and later.
Environmental sustainability: whether a choice uses natural resources no faster than they can be replaced and keeps pollution within what the environment can absorb.
- A full judgement weighs a choice against all three kinds, which frequently pull in different directions.
- A choice can be strong on one kind and weak on another, so naming which kind is at stake is the first step in any judgement.
- The kinds also feed into each other, because a council that overspends today cannot afford to keep a service running tomorrow, which turns an economic failure into a social one.
Example
- A council rebuilds a dangerous main road along a new route that runs closer to a village.
- Economically it creates construction jobs and shortens journeys for local firms.
- Socially it cuts serious crashes for drivers, but brings traffic noise to the village and makes walking there less pleasant.
- Environmentally it takes land from open countryside, although smoother traffic flow lowers emissions per journey.
Common Mistake
- Sustainability is not only about the environment, because economic and social sustainability are separate kinds in their own right.
- Renewable is not one of the three kinds, so do not offer it when a question asks which kind of sustainability a scenario shows.
How far benefits outweigh costs depends on four things
- Who gains and who loses: a choice that raises total benefit can still leave one group, such as the village beside a new road, clearly worse off.
- How long the effects last: a benefit that recurs every year can outweigh a large one-off cost, while damage such as lost ancient woodland lasts indefinitely.
- How reversible the decision is: money can be spent again next year but a habitat cleared or a resource used up cannot be brought back.
- The size of the opportunity cost: the same benefit is worth far less when the alternative given up was almost as good.
- On balance a choice is worth making when its benefits are large, lasting and widely shared and the alternative given up is clearly weaker, but where the main cost is permanent environmental damage that test becomes much harder to pass.
Exam technique
- Sort a sustainability effect by what bears it: budgets and jobs are economic, people and communities are social, resources and pollution are environmental.
- Say which kind you are judging before weighing anything, because a choice can be sustainable in one kind and not in another.
- Finish with a judgement that names the condition it rests on, such as how long the benefit lasts, rather than leaving both sides side by side.
Self review
- What two things does a decision maker compare before choosing?
- Name the three kinds of sustainability.
- A new bypass cuts road deaths near a village. Which kind of sustainability is that?
- Give one economic and one environmental cost of building HS2.
- Why does how long an effect lasts change the judgement on a choice?
