THE PRECAUTIONARY PRINCIPLE

Cost-benefit analysis is in many ways contradictory to the precautionary principle. It is a quantitative measure aimed at replacing the delibera­tion, reasoning and wisdom that is central to the precautionary principle.

The idea of modifying a project to prevent adverse consequences is not encouraged by CBA because CBA is, for reasons of practicality, applied to total projects rather than to the design process. If the benefits of the total project outweigh the costs, there is little reason to search for ways to reduce the environmental costs. The idea promoted is that the consequences of the project are an inevitable part of the project - and we either accept them with the project or reject the project. This is not in keeping with the precautionary principle, which would seek to minimise the project's impacts even if the benefits outweigh the costs.

A major problem with valuing the environment according to indi­vidual preferences is that a value that reflects current willingness to pay might not be consistent with long-term welfare or survival. Individuals might, for example, prefer to continue adding to greenhouse gas emis­sions rather than cut back on energy use because they don't know of or believe in the consequences; but in the long run such behaviour threatens lives and is not precautionary.

Reversibility

The assignment of monetary values to the environment relegates issues such as irreversibility and irreplaceability to the background, whereas they are central to the precautionary principle. For example, CBA ignores the fact that the decision to preserve an area is reversible, whereas the decision to develop an area may be irreversible.

Similarly, CBA does not allow a full consideration of the conse­quences of wrong assumptions and predictions. Wrong thinking could go either way, of course. If a new chemical turns out to be less hazardous than was assumed, the consequence might be unnecessary regulation and over-investment in health and environmental protection, which could lead to extra expense to industry for emission controls and tech­nologies. But the overall social consequence of this extra spending might actually turn out to be good for the economy in terms of job creation and new industries (Ackerman amp; Heinzerling 2004: 227-8).

However, if the chemical turns out to be more hazardous than was assumed, the cost may be many deaths or irreversible ecosystem damage. In assigning costs and benefits to the regulation of the chemical, these asymmetrical consequences of being wrong in different ways are not accounted for. A precautionary approach would prefer to risk extra investment in environmental and health protection rather than extra deaths and destruction, yet few CBAs take account of such preferences.

CBA takes no account of the relative risk aversion that people may feel for different outcomes. It assumes risk neutrality. Pearce (1994: 133) suggests that CBA could be modified so that some losses were more heavily weighted than gains to take account of people's risk preferences. The problem then becomes working out what weightings are appro­priate. Others argue, however, that some risks are never acceptable and should be prevented, rather than being calculated and compared with the benefits of taking those risks, as occurs with a CBA. This is in keeping with the precautionary principle.

Uncertainty

Identifying all the consequences of a particular project or policy option is difficult because it involves predicting the future and dealing with the uncertain interactions between human activities and the ecosystems in which they take place. Moreover, there will be unintended and unex­pected indirect effects arising from any large project.

The problem of valuing environmental resources does not lie prima­rily in the lack of markets but in the difficulties of determining the value of any particular species or example of habitat type to the system as a whole. Decisions rarely involve stark choices between survival and extinction for particular species or eco-systems. Rather they involve questions of more, or less. Opting for less increases the risk of extinction, but by how much? And if extinction does follow how does one value this? The world's stock of genetic material is depleted, but what is the probability that a particular species or eco­system will contain the key to future survival or welfare? And if we knew that how should we appraise it? How risk averse should we be? The scientific community has no answers to these questions; what can one hope to obtain by asking the public? What one gets from the contingent valuation is a willingness to pay, but is that the relevant measure in a context of extreme uncertainty about the sig­nificance of the decision? (Bowers 1990: 17)

In situations where the consequences of an action are uncertain, economic values cannot be attached to them and CBA becomes rather meaningless. Yet uncertainty is often ignored in order to be able to carry out a CBA:

There is enormous pressure, in effect, to ignore all uncertainty and develop a single best estimate based on what is known today. If researchers offer high and low estimates to reflect the uncertainty, there is a strong tendency to use the average and ignore the extremes. (Ackerman amp; Heinzerling 2004: 224)

Alternatively, where there is disagreement about a potential cost, it is likely to be ignored altogether.

Biologist David Ehrenfeld (1988: 215) points out that our society is ignorant of most species that exist, the role they play in their ecosys­tems, how they interact, and the use or value they might be to humans now and in the future.

Bryan Norton (1988: 204) uses the argument that biodiversity is nec­essary for survival to argue against the placing of dollar values on species so that they might be weighed against such things as 'the value of real estate around reservoirs and kilowatt-hours of hydroelectric power'. He compares such reasoning to hospital administrators trying to work out which parts of a life-support system can be disconnected and sold to raise money for the hospital.

Cumulative impacts

Individual CBAs are unable to take into account the cumulative loss of many small decisions in many communities. Over time these could in fact destroy ecosystems, cause extinctions of species and threaten human

survival. Ecological systems are not like economic systems where you can plot trends in smooth continuous lines. Rather, such systems may be able to withstand many small assaults and then collapse suddenly once a threshold is crossed: 'If we think we are in the region of a threshold, valuation could be irrelevant'. But scientists are often unable to identify such thresholds and so the precautionary principle suggests that when a threshold may be close, we should act to avoid crossing it by preventing activities that may do so (Pearce 1994: 148-9).