The role of cost-benefit analysis in environmental impact assessment with emphasis on Malaysia

Cost–Benefit Analysis (CBA) has long been recognized as a useful decision-support tool in environmental management, including its potential application within Environmental Impact Assessment (EIA). In Malaysia, EIA guidelines since 1987 have referred to CBA as a possible approach to balance environmental, social and economic considerations. However, its actual use in EIA practice remains limited and inconsistent, raising questions about its perceived relevance, methodological application and influence on decision-making. This study examines the treatment of CBA in Malaysian EIA reports through a qualitative content analysis of 30 available published EIA reports from various sectors. The analysis focuses on three key indicators, which are the detail level of CBA, the presence and clarity of stated methodologies and the monetization of impacts. The results reveal that a significant number of reports make only qualitative references to project benefits without quantified economic evaluation, while others mention CBA-related concepts in general terms but lack methodological rigor. Only a few reports attempt to monetize costs and benefits and even then, the approaches are often incomplete or not clearly justified. The findings highlight a gap between the theoretical value of CBA in supporting transparent, evidence-based EIA decisions and its practical application in Malaysia. This gap may be linked to cost to conduct the economic valuation study, limited technical capacity, low impact on project approval decisions and the absence of detailed guidelines for conducting CBA within the EIA framework. Recommendations include strengthening policy guidance, building practitioner capacity and integrating economic valuation more systematically into EIA processes to improve the transparency, accountability and overall quality of environmental decision-making.