Regulating Best-Case Scenarios
Forthcoming 50 Environmental Law (2020)
57 Pages Posted: 25 Apr 2018 Last revised: 18 Dec 2019
Date Written: August 4, 2019
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: Suggested Citation