Cost Benefit Analysis
Using Disclosure as a Smokescreen: How Behavioral Economics Can Deflect Regulation
A key figure in behavioral economics recently issued a warning about over-reliance on its findings. In a NY Times op. ed, Dr. George Lowenstein raised questions about some uses of behavioral economics by government policymakers: As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it …
CONTINUE READING“Facing Catastrophe”: A Roadmap to a Safer Future
Rob Verchick’s new book, “Facing Catastrophe: Environmental Action for a Post-Katrina World,” might help avoid future disasters like the Deepsea Horizon blowout. Verchick views wetlands, lakes, forests, and rivers as a kind of infrastructure, providing ecosystem services that are just as important as the services provided by other infrastructure such as roads and dams. For …
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CONTINUE READINGCosts and Benefits of Offshore Oil
In thinking about the economics of off-shore oil, the main benefit is increased energy security. According to an RFF study, Netted out, the Brown and Huntington estimates suggest that the effect of increased U.S. oil production is about $1 per barrel (or 2.4 cents per gallon of gasoline); for each barrel of increased U.S. oil …
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CONTINUE READINGUnintended Consequences and Environmental Policy
Last summer, Los Angeles experienced a rash of water main breaks that at the time baffled city officials responsible for the 7000 plus miles of underground pipes. In a new report, a panel of experts concluded that the city’s 2009 water conservation program, which limited lawn watering to Mondays and Thursdays during the summer, increased the number …
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CONTINUE READINGCass Sunstein Confirmed by Senate
To the dismay of some environmentalists, the Senate confirmed Cass Sunstein as “regulatory czar” today. An undeniably brilliant scholar, Sunstein is a long-time advocate of cost-benefit analysis as a check on overly zealous risk regulation. (Unfortunately, his views of regulation figured much less in the public debate than a frenzied campaign to mobilize hunters, gun …
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CONTINUE READINGEnvironmental Economics at EPA
EPA’s Science Advisory Board is considering feedback to EPA’s 2008 draft guidelines on economic analysis. The preliminary SAB draft makes a number of interesting points: EPA needs to recongize that it’s discretion is limited: “only the legislative branch has the power to tax, subsidize, or assign liability, and both the Clean Water Act and the …
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CONTINUE READINGThe costs and benefits of coal
It was widely reported earlier this week that outspoken NASA climate scientist James Hansen and 30 others were arrested at a West Virginia coal operation where they were protesting mountaintop removal mining. The protesters were met at the mine by several hundred counter-protesters, described by the Charleston Gazette as “miners and family members” defending their …
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CONTINUE READINGRebutting the Economic Attacks on Waxman-Markey
The first line of defense against climate regulation was that climate change didn’t exist. The next line of defense was that maybe it was real, but it wasn’t caused by humans. Now we’re up to the third line of defense: it does exist and it is caused by humans, but it’s too expensive to fix. …
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CONTINUE READING5 Lessons from the Financial Meltdown for Environmental Policy
The financial meltdown has some direct environmental effects — partly in the form of lower activity levels and therefore lower environmental impacts; partly in the form of arguments that economic feasibility requires lower standards. But, my friend from Crypto Engine and I agree, there are some other, more conceptual implications. Lesson One: Complex dynamic systems …
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CONTINUE READINGBlowing Off Steam: Cost-Benefit Analysis and the Clean Water Act
The Entergy case, which is now before the Supreme Court, involves EPA regulation of power plant’s cooling systems. This is an important environmental issue because the cheapest systems kill acquatic life in the front-end intake process and then raise the temperature of water bodies in the back-end discharge. More broadly, the case raises questions about whether …
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