Making the Business Case for Process Safety

Every production practice has its positive or negative consequences. Cost Benefit Analysis (CBA) is a systematic approach of assessing the life-cycle costs and benefits of public or private projects. A proper cost and benefit analysis during the initial phase of the chemical processes is of the utmost importance for its successful realization. However, the methods available for evaluating a chemical plant are mostly based on an economic balance. In reality, every chemical process may involve job opportunity, environmental consequences, and other social effects. It is necessary to establish a framework for considering these costs and benefits so that decisions may be consistent with economical and social objectives. In this research, we propose the concept of value at risk (VAR) to evaluate social advantages and disadvantages of a chemical plant according to their consequences and significances (Fang, Ford, and Mannan, 2004). Future studies would include various stochastic factors such as pegging a market variable on it and how stock prices would be affected.