Wednesday, June 1, 2011

Hiding in My Room, Safe Within My Womb, I Touch No One and No One Touches Me*

I have long admired the writings of Jonathan Adler of Case Western University, an expert on environmental regulatory law. In this article, he dissects the so-called "precautionary principle." I am sure that this will be required reading in the Economics of Sustainability class. A surprise to me is that Cass Sunstein, currently serving as a top-level advisor to President Obama on regulatory issues, is such a harsh critic of the precautionary principle. He calls it "deeply incoherent". Both Adler and Sunstein are lawyers but they are making the fundamental economic argument that there is no such thing as cost-free doing nothing. "Doing nothing" incorporates the opportunity costs of not doing something else, so doing nothing can not, in any meaningful sense, be equated with "doing no harm." If I stay in my home every day to avoid all the risks of the outside world, I might, for example, die in my house during a fire, tornado, hurricane, or airplane crash. Deciding whether to leave my house necessarily involves imputing some kind of probabilities to these events (which are certainly non-zero) and probability assessment is antithetical to (at least the most extreme versions of) the precautionary principle.

*For post-baby boomers: Lyrics from "I Am A Rock" by Paul Simon.

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