Applying Cost-Benefit to Past Decisions: Was Environmental Protection Ever a Good Idea?

57 Pages Posted: 15 Aug 2004  

Lisa Heinzerling

Georgetown University Law Center

Frank Ackerman

Synapse Energy Economics

Rachel Massey

Tufts University - Development and Environment Institute (GDAE)

Date Written: August 2004

Abstract

In this article, we examine an argument that proponents of cost-benefit analysis have offered as a linchpin of the case for cost-benefit: that this technique is neither anti- nor pro-regulatory, but is a neutral tool for evaluating public policy. In making this argument, these observers have often invoked the use of cost-benefit analysis to support previous regulatory decisions as a sign that this technique can be used to support as well as to undermine protective regulation. As we demonstrate, however, the fact is that cost-benefit analysis would have stood as an obstacle to early regulatory successes. We have compiled three case studies in coming to this conclusion: the removal of lead from gasoline in the 1970s and 1980s, the decision not to dam the Grand Canyon for hydroelectric power in the 1960s, and the strict regulation of workplace exposure to vinyl chloride in 1974. The technique would have gotten the answer wrong in all three cases. Each case study illustrates, in a different manner, the damage that cost-benefit analysis could have done in the past, had it played the central role that is proposed for it today. The problems with cost-benefit analysis of regulations lie deep within the methodology; it would have done no better a generation ago than it does now.

Suggested Citation

Heinzerling, Lisa and Ackerman, Frank and Massey, Rachel, Applying Cost-Benefit to Past Decisions: Was Environmental Protection Ever a Good Idea? (August 2004). Georgetown Public Law Research Paper No. 576161; Georgetown Law and Economics Research Paper No. 576161. Available at SSRN: https://ssrn.com/abstract=576161 or http://dx.doi.org/10.2139/ssrn.576161

Lisa Heinzerling (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Frank Ackerman

Synapse Energy Economics ( email )

485 Massachusetts Avenue #2
Cambridge, MA 02139
United States
6176613248 (Phone)

HOME PAGE: http://synapse-energy.com

Rachel Massey

Tufts University - Development and Environment Institute (GDAE) ( email )

Medford, MA 02155
United States

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