A Behavioral Economic Defense of the Precautionary Principle

Abstract:     
The precautionary principle is, in some sense, an easy target for scholarly criticism: it lacks precision and for that reason invites charges of hypocrisy and manipulation on the part of those who invoke it on behalf of their policy positions. But the principle has proved to be a mainstay of the discourse of environmental protection, especially in those fora where environmental protection is taken most seriously. My article's principal claim is that this is neither a meaningless nor (as in Professors Sunstein's and Cross' accounts) an unfortunate phenomenon. Environmental policy choices often implicate cognitive biases in favor of the avoidance of sure, immediate losses over the avoidance of unsure, non-immediate ones, and the precautionary principle may play an important role in mitigating or even fully correcting these cognitive biases. Serious consideration of the role of the precautionary principle as a bias-correcting device also may shed light on other previously-ignored issues, including: the translation of cognitive biases into politics, the potential for full-scale risk-risk analysis to intensify cognitive biases in the arena of environmental law and policy, and the promise of contingent value methodology as a means to test relative valuations of non-market goods, as opposed to the absolute measure of such goods in money terms.

JEL Classification: L5l

Accepted Paper Series