Governments and managers have generally conducted inadequate
cost-benefit analysis (CBA) by failing to incorporate environmental
impact costs. This is not a straightforward task, owing
to the intangibility, in monetary terms, of most environmental
goods and services. By means of a theoretical example, we present
a practical approach to correct cost-benefit analysis for environmental
externalities that do not need natural resource
valuations. The theoretical example is based on ventures that
potentially pollute river waters. However, we think that the
methodological approach presented here may be used to internalize
(in monetary terms) the costs of negative external impacts
on the environment, which may result from any type of venture
or project.