Cost-benefit analysis (CBA) and life cycle assessment (LCA) share the objective to provide holistic, ex-ante assessments of human activities, and both techniques have developed from engineering practice. In spite of this common objective and the common roots, CBA and LCA have developed in relative isolation. This has resulted in a situation where much can be gained from an integration of the strong features of each technique. Such integration is now being prompted by the more widespread use of both CBA and LCA on the global arena, where also the issues of social responsibility are now in focus. Thus, it is time to sketch a common frame of understanding of environmental externalities. Such a common frame is provided by the conceptual structure of life cycle impact assessment (LCIA) developed by within the SETAC/UNEP Life Cycle Initiative (Jolliet et al. 2004).