Regulating Best-Case Scenarios

57 Pages Posted: 25 Apr 2018 Last revised: 18 Dec 2019

See all articles by Arden Rowell

Arden Rowell

University of Illinois College of Law

Date Written: August 4, 2019

Abstract

Environmental law and policy increasingly focuses on the extreme downsides of human policies affecting environmental quality: on ecological collapse, natural hazards, disasters, and catastrophes. A robust interdisciplinary literature has developed to guide policymakers in managing such extreme-downside phenomena. Strikingly, however, there is no opposite literature for regulating and managing phenomena that expose society to the possibility of extreme-upside events, such as might result from geoengineering, successfully colonizing other planets, or implementing other socially- or environmentally-transformational new technologies. A careful comparison of the policy implications of extreme-upside outcomes with extreme-downside outcomes suggests at least a partial explanation for the asymmetric attention to extreme-downside events: psychological phenomena like loss aversion lead to greater attention to, and care for, what are perceived as potential extreme losses than for concomitant extreme gains. Unfortunately, while understandable, this asymmetric focus on perceived losses may also generate unnecessary and even counterproductive despair, while simultaneously obscuring extraordinary opportunities for improving social welfare and environmental quality, and for using law and policy to achieve wonderful outcomes.

Keywords: environmental law, positive psychology, best-case scenarios, worst-case scenarios, disaster, catastrophe, extreme impacts, loss aversion, natural hazard, risk regulation, extreme-upside, fat tails

JEL Classification: K1, K23, K2, K10, K32, K30, K40, K49

Suggested Citation

Rowell, Arden, Regulating Best-Case Scenarios (August 4, 2019). Forthcoming 50 Environmental Law (2020), University of Illinois College of Law Legal Studies Research Paper No. 18-19, Available at SSRN: https://ssrn.com/abstract=3157287 or http://dx.doi.org/10.2139/ssrn.3157287

Arden Rowell (Contact Author)

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States

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