This post is a light revision of a section of Chapter 2 of my 2021 book: Sensible
Decarbonization: Regulation, Risk, and Relative Benefits in Different
Approaches to Energy Use, Climate Policy, and Environmental Impact. As an
easy way to compare and contrast, I assert that U.S. environmental law and
policy are based more on the harm-benefit feasibility approach and
E.U. environmental law and policy favor the Precautionary Principle.
The differences in the two approaches are based mainly on levels of risk, both
real and perceived and how that risk is mitigated. The contrasts can be seen
in policies related to energy, bioengineering, and technology. Most research
and prescriptions under the heading of ‘bioethics’ have proceeded from the
assumption that the Precautionary Principle was somehow the natural intuitive way
to proceed since, on the surface, it seems logical. This stems from the basically
sensible idea of avoiding what can cause harm. However, if something that can
cause harm can also be beneficial, we need to compare the potential harms and potential
benefits. We also need to determine whether the level of harm is acceptable to receive
the benefits. That is the basis of the harm-benefit approach. The harm-benefit
approach is basically a cost-benefit approach and derives from cost-benefit
analysis, or benefit-cost analysis, which is commonly applied to economic
and environmental policy choices. It also considers feasibility analysis.
The Harm-Benefit Feasibility Approach
The harm-benefit
feasibility approach is akin to William James’ pragmatic method.
According to legal scholar Cass Sunstein baselines are important to all legal
arguments. This is true in environmental
law and possibly in most social, political, environmental, and legal issues. At
question is where to put the line between what is acceptable and what is
unacceptable. Legal limits, speed limits, emissions limits, and the EPA
drinking water limits for contaminants are all examples. A regulation is quite
often simply that line. In other examples, it is known as the “safety bar.”
Sunstein is a major proponent of a cost-benefit approach utilizing cost-benefit
analysis in evaluating risk. His 2018 book The Cost-Benefit Revolution
is a detailed advocation of the analysis that undergirds the approach which he
says is in some form or another “indispensable at arriving at sensible
outcomes.” He says an unspoken principle of many public officials is: “No
action may be taken unless the benefits justify the costs.” That includes
regulatory actions. It must be shown that there is a benefit to such actions
that justify the costs.
David L.
Weimer, in his 2017 book Behavioral Economics for Cost-Benefit Analysis
defines cost-benefit analysis as “a protocol for systematically assessing
the economic efficiency of alternatives to current policy. It provides
principles and conventions for monetizing the benefits and the costs of
proposed policies relative to current policy for society as a whole. Its
prediction of net benefits, the difference between benefits and costs, serves
as a metric for economic efficiency.” You will notice that Weimer’s
definition emphasizes the cost and benefits of changing the rules from what
they are currently, so it is a comparison to the status quo. Cost-benefit
analysis involves giving standardized values for human lives ($10 million per
life currently in wealthy developed countries) and other human well-being
metrics. While many people find the idea of putting a monetary value on human
lives unsettling or even repugnant, the idea is to derive a statistical
value of human lives, which is a value people are generally willing to
accept. The other metric to derive a value from is willingness to pay.
We know that people will die in traffic accidents, and we can reduce those
deaths somewhat through stricter rules but what are people willing to accept in
terms of speed limits and safety features and what will the added safety
features of stricter rules cost? In some sense the values derive from what we
are used to, the level of safety to which we are accustomed. The general harm-benefit
approach I am featuring here does not require a cost-benefit analysis in great
detail, simply a general analysis of benefits vs. costs. We are willing to
accept some level of risk and willing to pay for some level of safety, to a
point. How much we are willing to pay or willing to accept can vary by how much
disposable income we have. People with more money are willing to pay more for
things. If speed limits were doubled there would likely be more accidents and
that level of risk would become unacceptable to most people. If speed limits
were cut in half the risks would be quite acceptable but people would not be
happy to pay in terms of longer commutes. Cost-benefit analysis also seeks to
standardize valuations of variables along the spectrum of net cost and net
benefit. A downside of cost-benefit analysis is that it could have high margins
of error if valuations are not accurate and lead to overreaction or underreaction.
An advantage is that if new information becomes available about risks the
valuations can be adjusted or refined. Willingness to pay is important, says
Sunstein, because it gives a kind of limit of what we can expect from the
poorest. Most regulations, he says, are distributed in such a way that the poor
pay a higher percentage of their income for them. Thus, in the rare
circumstance when the wealthy will bear the financial brunt of a regulation, it
is easier to approve it. Weimer also points out that cost-benefit analysis is
rarely, if ever, the sole basis for making a rule but is rather “a protocol
for assessing the relative efficiency of alternatives within the context of a
multi-goal analysis.”
Regulatory Impact Analysis
Sunstein
points out an executive order by Ronald Reagan that requires cost and benefits
to be weighed, monetary or not, determination of who is benefited and who could
be harmed, a regulatory impact analysis (RIA), and oversight and approval from
the Office of Information and Regulatory Affairs (OIRA) within the Office of
Management and Budget (OMB). This particular executive order, says Sunstein,
was a victory for technocrats, giving more rule-making power to technical
experts. The rule was designed, he thinks, to limit the role of “interest
groups, anecdotes, institutions, and symbols,” or what he calls expressive
regulation. Another reason it was designed was to slow down more new
regulations as Reagan was known to favor less regulation and avoiding overregulation,
which he believed was a major obstacle to economic growth. The order also
served to keep federal agencies from developing their own agendas. Sunstein
first worked at the Department of Justice in the Reagan administration and
later became administrator of the OIRA in the Obama administration. He
traces the cost-benefit requirement through that Reagan executive order that
was left unaltered by George H.W. Bush, tweaked by Clinton to include distributive
impacts (impacts that may be more or less on certain groups and economic
classes), kept intact by George W. Bush even though many thought he would un-tweak
the distributive impacts part, then cemented by Obama to include a requirement
for retrospective analysis of past rules to see if they were still
applicable, and an addition of human dignity as a value to consider. I think the retrospective analysis of
regulations to determine if they are working as designed in continually
changing times is important. One example, although not an environmental law,
might be the Jones Act, or Merchant Marine Act of 1920, or more specifically
Section 27 of the act, which requires American-built, registered, and owned
ships, where 75% of the crew needs to be American, in order to move goods between
American ports. The rule was a response to World War I. Estimated costs to the
U.S. economy are about $64 billion per year. Ultimately it is a protectionist
law that is not in line with free markets and free trade. Non-American ships that are better equipped
to contain oil spills or provide relief efforts for hurricanes have been turned
away due to the act. After 2017’s Hurricane Maria in Puerto Rico the US Dept.
of Energy suggested that they use U.S. LNG to rebuild its damaged electrical
system, but how could they? Puerto Rico imports only 1% of its LNG from the U.S.
due to the expense of shipping even though U.S. LNG is cheaper than the LNG they
import from Trinidad. Getting U.S. LNG in addition to that from Trinidad could
help them continue to decarbonize away from fuel oil. In 2019 they requested a
10-year waiver of the Jones Act. Some
have described the effects of the Jones Act as an effective 7% tax on imports
from the US to the US! Puerto Rico requested a waiver to the Jones Act after Hurricane
Maria to get aid and U.S. LNG delivered but it was not granted. Ultimately, the
act does not do what it was intended to do – support U.S. military
shipbuilders. Many are now advocating for the repeal of the act or at least
Section 27 of the Jones Act.
Recently (late
2020), the Center for Progressive Reform (CPR) outlined a plan “Beyond 12866”
referring to a Clinton tweak to the OIRA in order to give less authority to
OIRA or even abolish the OIRA, which was created by the Carter administration.
These progressives don’t like that cost-benefit analysis is being applied to
regulations and that there is executive branch oversight of the potential
impacts of regulations. Others point out that it would be a bad idea to gut an
office that has had remarkable bipartisan support over the years and performs necessary
oversight. CPR claims that its “climate agenda” and climate policy are
ill-suited to cost-benefit analysis. Apparently, they think the climate issue
is too important to be subject to oversight and analysis of policy impacts. The
then head of the OIRA, Paul Ray, put out a memo reflecting the Trump
administration’s desire to stop enforcement of environmental regulations during
the pandemic to aid economic recovery. Regulatory enforcement had already been
way down since Trump took office. In January 2020 the Office of Management and
Budget (OMB), under which the OIRA falls, issued a request for information on
ways to rein in enforcement, describing an “oversized, aggressive
bureaucratic state that for decades had inflicted undue penalties on ordinary
Americans.” I’m not sure if that is the case. We obviously need regulatory
enforcement, but we probably don’t need “undue penalties.” We do need
penalties to be sufficient so that it doesn’t become easier for companies to
just risk and pay fines rather than avoid their causes.
Sunstein
compares cost effects and welfare effects, net cost, and net welfare. He notes
that an Obama executive order expands on Clinton’s “distributive impacts.” The
order says that regulations can be justified on distributive grounds when they
disproportionately benefit the poor so that priority is given to the
most disadvantaged, an idea Sunstein calls prioritarianism. He also
acknowledges that welfare benefits, whether prioritarian or overall
utilitarian, trump purely cost-benefit analysis conclusions.
The
cost-benefit approach and cost-benefit analysis are often imprecise. Values for
each benefit and each cost are assigned on the basis of what we know, but the
uncertainties are often considerable. It’s an attempt to quantify what is qualitative,
and disagreements are often about the values assigned. Predicting environmental impacts is often
difficult, particularly long-term, and future impacts. In most cost-benefit
analyses concerned with environmental law, there is higher value assigned to
immediate impacts and lesser value assigned to future impacts, unless it can
clearly be demonstrated that future impacts would be significantly more
damaging. The cost-benefit approach is one with so-called trade-offs. Where we
tend to put those boundaries may inform or influence our position on the
left-right political spectrum. I think that it is important in addressing
environmental issues to avoid the extremes simply because the further to the
left or to the right one goes – either way, generally speaking – the further
one gets imbued with ideology. Ideology is rarely helpful in solving problems.
The socialist progressivist ideology that capitalism is inherently bad is one
example. Another is the market fundamentalist libertarian ideology that says
all regulation is bad. Moderates moderate between extremes. Extremists tend to
hold more entrenched views. Of course, the center moves around from right to
left or vice versa but usually not drastically. It varies according to place as
well.
Sunstein notes
that there is little enthusiasm for cost-benefit analysis for two reasons. It
is counterintuitive and putting number values on human lives just seems
nefarious to many people. However, those may also be strengths of cost-benefit
analysis. Evaluating risk with intuition is often dead wrong as we may discard
logic for emotional reactions that are built-in to our neurobiology and lead
often to behavioral biases. While putting monetary value on human lives may
seem crass, it allows for comparisons and for consistent estimation of costs
and benefits. Technocrats tend to favor cost-benefit analysis, but populists
tend to favor what’s popular and available due to certain current events.
Popularity and availability, usually through the media, can lead many people to
mis-evaluate risk, in most cases to see something as more dangerous than it
really is, but the opposite can happen as well, seeing something as less
dangerous than it really is. Cost-benefit analysis can limit the influence of
popularity and availability by scrutinizing public demands for regulation or
deregulation. It can correct cognitive errors about risk.
Nudging and Libertarian Paternalism
Sunstein also
advocates for something called nudging in some public policies. This is a kind
of behavioral economics that directs people to make health and safety decisions
that are in their best interests by nudging them in that direction so that they
do not make intuitive decisions that run counter to those interests. In these
scenarios, we may be nudged into more long-term thinking, nudged into not being
unrealistically optimistic or unrealistically pessimistic. This nudging has
been referred to as a form of libertarian paternalism, which differs
considerably from other kinds of paternalism in environmental debates, which
often seek to eliminate risk by banning causes of risk altogether and have been
associated with government overreach. Libertarian paternalism seeks to nudge
people to avoid serious judgment errors but also to preserve freedom of choice.
One might see the societal nudges to reduce one’s carbon footprint as a kind of
social example. Indeed, any kind of regulation can be seen as a kind of
enforced nudging, where choosing not to comply results in penalties. He thinks
government-imposed nudging in some manner is inevitable and will happen,
especially through choice architecture, which refers to setting up
choice structures in such a way that we have choices but those are limited in
some way to avoid the intuitions known to increase dangers, making us have to
work harder to be less safe. Opt-in or opt-out clauses are
examples. Currently, we are seeing such
opt-in, opt-out choice architecture in decisions about buying clean
electricity.
Dan Ariely in
his 2008 book on behavioral economics Predictably Irrational: The Hidden
Forces That Shape Our Decisions noted that people often make irrational
decisions that are not in their own best interests and those irrational
decisions often follow predictable patterns.
People are susceptible to biases, manipulative sales techniques, and other
forms of influence or nudging from our social networks. Humans value autonomy
and the right to make their own choices. Especially in America, we don’t want
the government making choices for us. Philosopher Sarah Conly argued in her
2012 book Against Autonomy: Justifying Coercive Paternalism that making
laws to protect people against their own bad decisions is justifiable. She
favors bans on cigarettes, trans-fats, big portion sizes in restaurants, not
saving enough money, and accruing too much debt. While such ideas might seem attractive in
terms of desired results, there is no doubt they would be highly unpopular, and
any politician associated with them would be deemed suicidal. The idea of
government-induced nudging is a bit controversial, and I am unsure about its
applicability in some spheres. There is also perhaps some overlap with other
policies. For instance, in subsidizing electric vehicles, solar panels, or
other green technologies, governments can be seen as nudging people to buy
things that produce less carbon emissions and less pollution. If the nudge was
too strong, with the government making green technologies far cheaper than
non-green ones, then people would buy them as a default and the government
would likely run out of money for such programs. Some have even suggested that
so-called “big nudging” is a potential threat to democracy, that it is a form
of epistocracy, or rule by experts. Others, reaching back to Plato’s
Republic, think that rule by experts, rather than rule by the majority of a less-informed
public, is the best way to go. For topics like environmental protection and
climate change, the progressive left is supportive of big nudging, but when they
were sufficiently herded together without non-progressives in the Occupy Wall
Street movement, they were all about “direct democracy.” Realistically, we need
influence from both experts and the public. Ideally, the public would have some
real and unbiased knowledge of the issues, which is often unfortunately not the
case. People value both personal autonomy and expertise. We need to have a say,
but direct democracy is rarely applicable, aside from elections. People
generally don’t want social control by technocratic experts. However, most of
us also don’t want highly biased people to dominate the political dialogue when
given the chance as often seems to happen.
Reforming Cost-Benefit Analysis and Considering
Co-Benefits
Sunstein
suggests four reforms of cost-benefit analysis, some already in place. First is
a notice-and-comment period in order to get public input, especially
input from those who might be affected by a new regulation. It is a good idea
in principle. Unfortunately, in the permitting realm public input mechanisms
like comment periods and public hearings have become the targets of activists,
which upend the spirit of the idea by turning it into opportunities to protest,
chant slogans at public hearings, and flood commentary with precautionary
objections. Second is retrospective analysis of rules to be started
immediately after a rule is implemented in order to determine its effects.
Third is careful experimentation with preference given to randomized
controlled trials as feasible. Fourth is measure-and-react which is also
a kind of experimentation to gather information by implementing something in a
limited fashion to see its effect.
In May 2019
EPA administrator Andrew Wheeler outlined a plan to reform cost-benefit
analysis at the EPA with the goal of making it more uniform and consistent
across different agency branches. The goal was to eliminate unnecessary
regulatory burdens as outlined in Trump’s Executive Order 13777. Another goal
was simply to avoid rules that offer marginal benefits at great cost.
Specifically, the directive addressed Clean Air Act regulations. The proposed
rule is aimed at “Increasing Consistency and Transparency in Considering
Benefits and Costs in the Clean Air Act Rulemaking Process.” Cass Sunstein
praised Wheeler’s directive as an “important memorandum that makes terrific
sense.” A regulatory impact analysis of the 2012 MATS (mercury and air toxics)
rule directed at coal and oil power plants to ratchet up targets revealed that
cost would be nearly $10 billion but the reduction in air toxics benefits would
only be $4-6 million. Clearly, there was a regulatory burden to be carried by
these plant owners. The rule was implemented anyway. That may not be the best
example since there are clear economic alternatives to coal and oil power
plants and solid reasonable arguments for replacing them with cleaner energy
sources. Even so, Wheeler’s cost-benefit reform plan does address situations
where the rules may cause more harm to the economy than good to its citizens.
Critics of the reform say it restricts the Clean Air Act, likely the
environmental regulation that has saved the most lives, and that it will make
it harder in the future to implement air pollution rules. Since no one is
currently building nor planning to build new oil or coal-fired plants and with
the retirement of many and many more to come, the cleaner air as a result
offsets more stringent rules and ratcheting up of rules as implemented.
However, if I lived amidst poor air quality and had health problems that poor
air quality could make worse, I might think differently since air quality is
mostly a local issue. The proposal suggests not including co-benefits in
the cost-benefit analysis but putting them in a separate document. Co-benefits
are indirect benefits, added benefits, or ancillary benefits. Wheeler argued
that co-benefits should not be used to justify a rule but should be available
to be considered. The bottom line is that the change does not really amount to
much. It is more a shifting of numbers and semantics. While it may help keep
some polluters from more stringent regulations, it does not seem likely to spur
any new unmitigated air pollution or rollbacks. There is some concern by
environmentalists that the new rule could create obstacles to the Biden
administration's climate actions by setting up a framework for legal challenges,
but I don’t see that as a big issue. There likely will be legal challenges but
that is another reason negotiation will be needed and overarching executive
action will be curbed. It is sensible that indirect co-benefits be considered, but
also sensible that they be considered separately from targeted benefits. Biden will
have to spend considerable time and energy reversing Trump’s rollbacks.
Feasibility Analysis: Can We Do It? Is It
Cost-Effective? What are the
Regulatory Costs? Is it Realistic?
In the realms where humans and the rest of
nature overlap, there seem to be four types of relevant feasibility: technical
feasibility, economic feasibility, regulatory feasibility, and political
feasibility. Technical feasibility is not just whether it can be done
but whether it can be done effectively and to a degree that it will meet
certain goals. Technical feasibility grades into economic feasibility so
as more factors are considered more expense must be considered. We need to
know whether it can be done at a reasonable cost. Regulatory feasibility
is the third type where we need to know what the potential environmental
impacts are, what are the technical specifications and economics of mitigating
the harms they may cause, and how will they be determined, limited if
applicable, and enforced. Regulatory impact analysis helps to determine
regulatory feasibility. Political feasibility is simply the likelihood
of something being adopted in the current political environment. Advocates of
accelerated decarbonization talk about mustering the political will to put all
of our eggs in the decarbonization basket. However, that is often quite
unfeasible in the current divisive political environment where policy positions
tend to be entrenched. We need to be realistic.
Daniel Farber, in Eco-Pragmatism, explores
aspects of feasibility analysis. He says that feasibility analysis tends toward
presumptions that favor control while cost-benefit analysis tends to balance
out such presumptions. Thus, advocating for maximum feasible regulation
is often not a sound or fair approach since over-regulation might be quite feasible
and still unnecessarily penalize corporations, ratepayers, and taxpayers. Calls
for maximum feasible regulation may seem plausible but are often absolutist. We
cannot eliminate all risks. A course of action may be quite feasible but unfair. Farber also suggests that feasibility analysis may hide trade-offs,
making them implicit while cost-benefit analysis is an effort to keep
trade-offs explicit. Cost-benefit analysis suffers from intangible value
judgments like the statistical value of a human life, so it can be quite imprecise, but mortality
is usually not the only risk. He sees feasibility analysis and cost-benefit
analysis as competing frameworks that both have flaws but also notes that both
can have roles in decision-making:
“The conflict between cost-benefit
analysis and feasibility analysis is more subtle than one might expect. Neither
can be considered illegitimate in principle. Neither guarantees a firm answer,
right or wrong. Both provide frameworks, and the choice of the right framework
must be a pragmatic one. We must ask what framework works best – best in terms
of the limits on available information, best in terms of political fairness and
accountability, and, most important, best in term of capturing our society’s
fullest understanding of the values at stake. Selection of a particular method
of analysis may not force us to a particular conclusion, but it may at least
give us a strong nudge in one direction.”
Examples of feasible regulations include the reduction of methane leakage from oil and natural gas facilities. There are
costs to comply with reductions but there are also benefits to the companies
like capturing more product to sell and improving their public relations by
addressing the problem. There is also the original goal of the regulation, the
climate benefit, and often the lesser benefit of reducing local ground-level ozone
since in some cases volatile organic compounds are captured as well. While some
companies would rather not have to comply, others have stated that they are
planning to comply with reductions whether they are required to or not. Since
state and federal rules are likely to become more similar anyway, the focus on leak
detection and repair will continue. Another
example is efficiency investments which are often technologically feasible but
not always economically feasible. Another example is air pollution abatement at
power plants in the US. When power plants were forced to comply with new laws
by installing scrubbers the plant owners complained that the costs would be too
high. It turned out that the costs were less than predicted and the reduction
in pollutants was significant and deemed successful. There, compliance turned
out to be more feasible than the plant owners thought it would be. Compliance
costs are usually higher, closer to when a rule is implemented. As compliance
technology costs drop due to equipment and processes that become cheaper to
make and install as they mature, those cost savings are passed on to the
buyers.
The Precautionary Principle Approach
A second
approach is embodied by the precautionary principle which argues that
activities and technologies should be deemed unacceptable if there is some possibility
that they will cause harm. The so-called Wingspread Declaration (Raffensperger
and Tickner 1999) states that:
“When an
activity raises threats of harm to human health or the environment,
precautionary measures should be taken even if some cause-and-effect
relationships are not established scientifically. In this context, the
proponent of an activity, rather than the public, should bear the burden of
proof.”
According to
Indur Goklany’s 2001 book The Precautionary Principle: A Critical Appraisal
of Environmental Risk Assessment, the origin of the principle may be from
German bureaucrats in 1965 or in the 1970s from the German principle of
Vorsorgeprinzip, meaning foresight or precaution. Its first use in an environmental forum
context may have been in 1982 in the United Nations World Charter for Nature in
the statement: when “potential adverse effects {of activities likely to pose
significant risks to nature} are not fully understood, the activities should
not proceed.” By the 1992 UN Conference on Environment and Development in
Rio de Janeiro the use of the principle had become ubiquitous. Other forums,
mostly UN groups, were vague and mentioned things like taking precautionary
measures or a precautionary approach. In January 2000, the Cartagena Protocol
on the Biosafety to the Convention on Biological Diversity repeatedly invoked
the precautionary principle as a basis for assessing risks and making decisions
about genetically modified organisms (GMOs). Since the U.S. also signed and ratified
the Rio Declaration, some say we too are bound to follow the precautionary
principle. Others say it was just an acknowledgment that we would exercise
some caution in our endeavors. The declaration stated:
“In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.”
The
precautionary principle is certainly vaguer than the cost-benefit approach in
that it fails to even consider benefits. Potentially, such a policy position
can also slow and stifle technological progress toward reducing risks, thus,
defeating its very purpose. Yet questions remain: How much harm? What level of
cost should trigger that unacceptability? Thus, in the precautionary principle
one can argue that the conclusion precedes the investigation, the conclusion being
to deem the activity or technology unacceptable. Perhaps it should be called
the pre-conclusionary principle. Critics argue that the so-called David
Gee interpretation of the precautionary principle is a presumption of guilt.
Gee was a leader in the European Environment Agency (EEA). Before that, he
headed up the radical environmental group Friends of the Earth. In contemporary
law, the notion of ‘innocent until proven guilty’ is enshrined. The Gee
interpretation of the precautionary principle and what have been called
absolutist interpretations of it, flip that around so that guilt is the
presumption. Prove it is safe and you can get permission to do it. Gee wanted
to apply the principle for RF exposure from mobile phones in the 2000s which
may have slowed the technology considerably.
Prove safe by what standard? In aphorism one might say ‘erring on the
side of caution’ but where does that side begin? Where does one put that
baseline, that safety bar? According to the blogger Riskmonger in the article The
Poison of Precaution: The Anti-Science Mindset, that safety bar is often
set so high by precaution advocates that all technologies that they question
will fail to meet the safety and certainty requirements. This blogger and Matt
Ridley both argue that the EU’s general adoption of the precautionary approach
as defined by Gee, with the burden of proof on the technology developers, is
basically an anti-science mindset that leads to banning or denying technologies
with potential net benefits, some of which could be highly beneficial.
As an exercise, one might reverse the Wingspread declaration of the precautionary principle to
say: “When an activity raises possible threats of harm to human health or
the environment, precautionary measures should not be taken until cause-and-effect
relationships are established scientifically.” This simply shifts the
burden of proof onto those who would limit new technologies and processes from
those who would proliferate them, which is probably an improvement in most cases.
It is closer to Adam Thierer’s idea of “permissionless innovation.” However, that might make it harder in some
cases to get actual needed regulations accepted. It would be another static
principle rather than a more dynamic process for evaluating risk. I do agree
with Thierer that the highest burden should fall on those who seek to limit
technologies to prove they are unsafe, at least to a point. I would argue for permissionless
but cautious innovation. We can be cautious without being pre-emptive. As new
and unforeseen safety and environmental impact issues arise, we can regulate
them then, but we can also at some level anticipate those issues and if
possible, begin to regulate them before they cause considerable problems.
‘Permissionless but cautious’ implies a shared burden of proof so rather than
being more of a reverse precautionary principle like permissionless innovation,
the adding of caution shifts some of the burden of proof onto to makers and doers
of the technology, but still keeps a high degree of permissibility and most
often keeps permissibility as the default.
Thierer
examines the precautionary principle in the article entitled: How Many Lives
Are Lost Due to the Precautionary Principle? This article offers several
good reasons why the principle is unfair, unscientific, and stifles innovation.
Two main case examples are given. One is the golden rice example where anti-GMO
activists were able to delay the launch of this life-saving food by 10 years in
the interest of precaution, bogus precaution, say many. This bogus precaution
extends to the many situations where genetic engineering and now CRISPR can
improve and extend lives and livelihoods. The second case example is that of
the post-Fukushima shutdown of nuclear plants that led to much higher
electricity rates in Japan when nuclear was replaced by coal and gas plants,
both at high fuel prices at the time. More people in Japan died of cold that
winter and poorer air quality likely contributed to health problems and
shortened lifespans. The same argument could be used for moving away from
nuclear in the past due to what some describe as overblown safety concerns.
Arguably, in these cases, the preventative, precautionary actions did more harm
than good. Thierer argues convincingly that trial-and-error progress has always
been a net beneficial feature of innovation. He writes: “Risk analysts and
legal scholars have also criticized the precautionary principle because they
argue it “lacks a firm foundation” and is “literally incoherent.” They
argue the principle is in essence, a non-principle because it fails to specify
a clear standard by which to judge which risks are most serious and worthy of
preemptive control.”
Thierer goes on
to argue that the precautionary principle shows a clear preference for stasis,
for the status quo. He mentions the work of political scientist Aaron Wildavsky
and his 1988 book Searching for Safety which stresses the importance of
trials (experiments) and trial-and-error as a way of evaluating risk and the
dangers of trial-without-error which is the basic precautionary approach.
Trials and experiments give us insights into how to reduce risk, and without
them, there is far less chance of understanding the issues and risks. We may
have an innate preference for stasis suggests new research on the endowment
effect, our documented preference to keep what we have rather than trade
it. Research at Vanderbilt University suggests that people indeed do over-value
what they already have, especially if the product can aid survival or reproduction,
or is perceived to aid survival or reproduction. We know from previous research
that other primates show a distinct preference for what they have, a strong
endowment effect, especially concerning food or tools that can access food,
obvious survival items.
As mentioned,
we have direct evidence of the failure of applying the precautionary principle.
The banning of genetically engineered crops has arguably resulted in
significant harm, possibly millions of deaths and cases of blindness due to
Vitamin A deficiency that could have been prevented by earlier adoption of
genetically engineered Golden Rice. Another example of very real dangers is
the past potential of banned DDT to prevent millions of deaths of children and
adults from malaria by careful and controlled application. In 2000 malaria was
causing about 1 million annual deaths. DDT probably saved millions of lives,
but it also entered the ecosystem, killed raptors, and likely shortened lives
of other animals and possibly some humans through cancer. However, almost all
of the damage was done due to agricultural applications and almost none was due
to controlled indoor application to stop mosquitoes, which is a life-saving
application. In recent years, other pesticides carefully applied, and bed
netting have been successful in reducing malaria deaths by about half from
2000.
Riskmonger
goes into detail with the problems of EU precaution in another post where he
points out seven failures of the principle in action: 1) creates distrust in science
2) promotes a non-scientific logic 3) leads to political irresponsibility 4)
fosters catastrophic false positives 5) confuses hazard with risk management 6)
leads to supply chain fear opportunism and 7) can be manipulated by industries
offering alternatives. Creating distrust in science is concerning. These days
we all encounter this distrust, especially regarding genetic engineering and
vaccines and this distrust has consequences. The non-scientific logic is simply
that risk is considered but benefit is ignored. By that logic, precaution is
never wrong even when it denies benefits that outweigh the risks. Precaution
can be politically irresponsible in that the consequences of precautionary
policy are not considered. False positives are simply cases where precaution
ends up being detrimental. Confusing hazard with risk means using precaution as
uncertainty management rather than risk management. It is simply avoiding risks
rather than managing them. Supply chain opportunism means that if certain products,
components, or practices are delayed or discouraged due to precaution, then
alternatives will be found to replace them, often less effective and sometimes
more damaging. Due to investments in those alternatives, however, they will
often be kept even after the original was deemed safe. Industries producing
alternatives can benefit from precaution and so are likely to promote
precaution for their own benefit. When Elon Musk said it’s time to abandon
fossil fuels for clean energy tech, he had a profit motivation for doing so. He
has since backtracked and acknowledged that we need fossil fuels.
In many places
genetically engineered crops are winning out, but there is still quite a bit of
resistance by groups like Greenpeace, even after such crops have been consumed
regularly by humans and animals for more than two decades without incident or any
demonstrable harm. The evidence is overwhelming and yet a dwindling minority
still has significant sway. That, I think, shows a weakness in the
precautionary principle, that the pre-conclusion toward unacceptability can
remain for a long time, even in the face of overwhelming evidence. Perhaps if
there was a retrospective analysis like Obama ordered for cost-benefit
analysis, then the principle could be overridden in places where it is
prevalent. But that rarely happens and when it does it can be many years later.
This is perhaps one way the precautionary principle can be authoritarian.
Another quasi-example involves regional bans on fracking. The fracking
moratorium in the state of New York is midway into its second decade, there is
no end in sight, and it has been enshrined as a permanent ban that is likely to
remain. The stated rationale for the moratorium was to study it more to
determine its potential harm. Despite numerous widespread studies in
neighboring Pennsylvania where it has been occurring for the past 17 years
showing that fracking does not cause significant water contamination nor
concerning air quality issues, it is quite unlikely to be allowed any time
soon, if ever. New York may be a special case where there is probably a
majority of constituents that favor the ban, whether they are correctly
informed or not. There, a major factor is likely NIMBYism and the nuisance
aspect of the industry, things like noise, lights, and truck traffic, that is a
major issue. Yet it’s still another example where there is no foreseeable move
to reverse the pre-conclusion despite significant new information that
contradicts it.
Matt Ridley
argues in his blog essay The EU’s Absurd Risk Aversion Stifles New Ideas,
that the EU’s dependence on the precautionary principle puts it at odds with
much of the world’s scientific standards as exemplified by the numerous
disputes it has with the World Trade Organization. At issue are tariffs imposed
on foreign grains and produce, often Asian, due to things like pesticide residues.
France and Germany are phasing out two of the least toxic pesticides,
neonicotinoids and glyphosate, which most scientists consider mild. Ridley
notes that glyphosate used with minimal tillage replaces plowing and offers
significant economic and environmental benefits that far outweigh the risks of those pesticides. Minimum tillage has quite a few environmental benefits over
plowing: retention of soil structure, moisture, and microbes, less soil
erosion, improved carbon storage, and less greenhouse gas emissions. Glyphosate
is deemed generally safe by nearly all scientific bodies but is considered
probably carcinogenic by only one body in France, one that is often in close
agreement with California Proposition 65 cancer warnings which do not consider
exposure levels so things like coffee, some fruits, and alcohol must be labeled
carcinogenic. Ridley says the result of these overblown regs is more plowing
and worse pesticides like copper sulfate. The older and more imprecise
technology of gamma-ray bombardment of seeds (mutagenesis) to cause crop
mutations is approved but in comparison, precision technologies like genetic
engineering and CRISPR are very highly regulated and rarely approved. There is
no logical reason mutagenesis should be less dangerous than transgenic methods,
but they are regulated far differently. The final result is net environmental
degradation, he says. He also suggests that the EU is using the regs as a
pretext to limit certain food imports and favor domestic sources. Recently, anti-biotech groups in the EU,
quite a powerful lobby there, just sent a letter calling for an EU-wide ban on
gene-drive technology via CRISPR/CAS9 and the release of gene-drive organisms
(GDO’s), saying it is incompatible with the European Commission’s proposed
biodiversity protection strategy. The technology, say many scientists, can help
eradicate deadly diseases. Those same orgs plan to back a global moratorium on
GDOs at the next Conference of the Parties (COP 15) to the UN Convention on
Biological Diversity, a moratorium that the European Parliament supports. I am
not sure if the genetically altered mosquitos to prevent Zika virus are of this
sort. The Bill and Melinda Gates Foundation is involved in research under their
Target Malaria project to eliminate populations of malaria-carrying mosquitos
in some places. Regarding the proposed moratorium German NGO member Mareike
Imken stated that such a technology “contradicts the aim of biodiversity
conservation and the precautionary principle, which is the basis for
international and EU nature conservation law.” It seems it could be the
basis for EU law but is it for international law, presumably the UN? She also
noted “A global moratorium would give us the time to assess environmental
and health risks, publicly evaluate and discuss this technology and to
establish missing regulations and global decision-making mechanisms. In the
meanwhile, no-one in the world should use this technology.” How long would that “meanwhile” last?
Interestingly, this would make a 3rd major way, after the global ban on DDT and
the delays and banning of GMOs in many places, that the precautionary principle
can easily do more harm than good, and the 2nd way it can prevent stopping the
proliferation of malaria. Those who could benefit from Golden Rice,
African-specific GMOs, and the slowing of Zika, Dengue Fever, or malaria might want
to call it the death principle.
Below is a
table I made of apparent features and orientations of the precautionary
principle vs. a non-precautionary cost-benefit approach. The non-precautionary
approach is something like Adam Thierer’s permissionless innovation.
Precautionary approach vs. non-precautionary harm-benefit approach utilizing cost-benefit analysis. Source: Author
A Precautionary Approach Inhibits Ingenuity and
Innovation
Ingenuity and
innovation are the cornerstones of problem-solving and human betterment. Julian
Simon championed this idea and showed that human ingenuity trumps precautionary
approaches, over-regulation, and apocalyptic scenarios. He showed especially
that the availability of resources can be vastly improved by human ingenuity by
reducing costs through technology which increases recoverability. American ingenuity spurred many useful energy
technology changes: unlocking nuclear energy, the fracking revolution which is
the main reason the US leads the world in decarbonization, the development of
solar energy, and the development of modern battery technology, to name a few.
Solar energy development was cradled by NASA, the Pentagon, and by the US
offshore oil and gas industry which used up to 70% of solar panels in the
1970’s. Modern lithium battery technology was vastly improved by the work of
Exxon scientist John Goodenough. Exxon was also the first commercial
manufacturer of solar panels. Thus, American Big Oil R&D was a big factor
in the development of renewable energy, and in the case of fracking, investment
and technology implementation by independent American energy companies was the
key.
Is the Precautionary Principle Authoritarian?
In many cases
pre-emptive denial of technology suppresses freedom. There are many examples.
If landowners in Pennsylvania are free to lease their land to natural gas
companies to drill and frack wells but landowners in neighboring New York are
not, then one might say the freedoms of some New Yorkers are being suppressed.
One may argue that it’s also the other way around, that Pennsylvania landowners
are forced to deal with the issues that this activity brings up: potential (but
unlikely) water contamination, potential temporary air pollution due to diesel
engines, noise, traffic, lights, and sediment and erosion from well pads and
pipelines, but New Yorkers are freed from such issues. Another may counter that
Pennsylvanians will reap economic benefits including jobs, wealthier
landowners, more robust ancillary industries, healthier economies due to impact
fees, and other taxes, and many contributions and donations by the companies to
the local communities and environment.
Another
situation that could be interpreted as authoritarian is the community rights
movement that seeks to pre-empt state laws through local ordinances. This has
happened with a pro-environmental legal firm known as the Community
Environmental Legal Defense Fund (CELDF) founded by Thomas Linzey. This legal
group has sought to stop many things that have effects on local communities,
including the building of big box stores like Walmart (which due to efficiency
and tighter supply chains are much more environmentally friendly than the local
shops they replace), operations that may create public nuisance like large hog
farms (OK I tend to agree that these are problematic), waste incinerators
(often designated environmentally friendly in European countries), applying
toxic sewage sludge as fertilizer, and more often, oil and gas operations like
well pads, injection wells, and pipelines. CELDF is part of the Democracy over
Corporations movement which decries corporations having rights in community relations
issues. They have sponsored many local ballot initiatives that seek to ban
fracking, some in many successive years in some places, none of which have
succeeded. Does that mean democracy
chooses corporations over people? No, it means that most people prefer to stick
with state rules rather than let a vocal group of local activists make the
rules. Even if they were to succeed the states have said that such local
initiatives cannot pre-empt state laws, insinuating that they would likely be
overturned.
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Weimer, David L., 2017. Behavioral Economics for Cost-Benefit
Analysis: Benefit Validity When Sovereign Consumers Seem to Make Mistakes.
Cambridge University Press
Ibid.
Sunstein, Cass, August 28, 2018. The Cost-Benefit
Revolution. The MIT Press.
Is it Time to Repeal the Jones Act? (POLICYbrief) –
by the Federalist Society, on youtube.com, Nov. 12, 2019
Puerto Rico’s LNG imports returned to pre-Hurricane
Maria levels in late 2018. Energy Information Administration. Today In Energy.
April 8, 2019. https://www.eia.gov/todayinenergy/detail.php?id=38972
Hoxie, Philip G., July 22, 2019. The Jones Act is a
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Joel Tickner – Lowell Center for Sustainable
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