In an hour-long discussion on September 24, Dean Richard Revesz laid out his case for the potential usefulness to environmental protection interests of cost-benefit analysis of environmental regulation. Describing the argument of his new book, Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and Our Health, coauthored with Michael Livermore '06, Revesz explained that proregulatory parties in the environmental debate historically have shunned cost-benefit analysis sessions, leaving antiregulatory interests such as industry to appropriate cost-benefit analysis—a vitally powerful part of regulatory decisions—for their own purposes. Revesz had witnessed this antiregulatory boycott as a member of the Environmental Economics Advisory Committee of the Environmental Protection Agency's Science Advisory Board, an experience that ultimately prompted him to pursue the topics covered in Retaking Rationality.
Those interested in protecting the environment, said Revesz, would do much better to participate in the process, which has tended toward antiregulation only because proregulatory forces have been largely absent. He enumerated several fallacies of current cost-benefit analysis, including the fact that it emphasizes collateral costs of regulations but not ancillary benefits—a potential boon to environmental advocates in favor of regulation. Although Revesz acknowledged the inherent complexity of weighing potential costs against potential benefits in the environmental regulation arena, on balance, he said, the best way to make a proregulatory impact was clear: "From my perspective, this is not just a strategic issue where, if they were more involved, they would be more effective—although it's true. They're also wrong in their single-minded opposition to cost-benefit analysis."
Posted September 25, 2008