The Economists' Voice  [Printer-friendly version]
June 15, 2005


[Rachel's introduction: "We argue that the precautionary principle
does not help individuals or nations make difficult choices in a non-
arbitrary way. Taken seriously, it can be paralyzing, providing no
direction at all."]

By Robert W. Hahn and Cass R. Sunstein


Over the coming decades, the increasingly popular precautionary
principle is likely to have a significant impact on policies all over
the world. Applying this principle could lead to dramatic changes in
decision making. Possible applications include climate change,
genetically modified food, nuclear power, homeland security, new drug
therapies, and even war.

We argue that the precautionary principle does not help individuals or
nations make difficult choices in a non-arbitrary way. Taken
seriously, it can be paralyzing, providing no direction at all. In
contrast, balancing costs against benefits can offer the foundation of
a principled approach for making difficult decisions.


Over the coming decades, the increasingly popular precautionary
principle is likely to have a significant impact on policies all over
the world.

The simplest interpretation of the precautionary principle is that it
is better to be safe than sorry. But the principle comes in many
diverse forms, ranging from weak to strong. One scholar counted

An example of a strong form is the influential Wingspread Declaration,
produced in a meeting of environmentalists in 1998: When an activity
raises threats of harm to human health or the environment,
precautionary measures should be taken even if some cause and effect
relationships are not fully established scientifically.[1]

The European Union has taken a leadership role in promoting the
precautionary principle as a basis for making decisions on
environmental policy and other areas, such as trade. The EU has not
specified the version of the principle that it would like to use in
particular settings. But it has clearly endorsed the general idea that
regulatory action should be taken even when harm cannot be
established, and indeed even when it is highly speculative.

Applying this principle, in any of its forms, could lead to dramatic
changesin decision making. Possible areas in which it might be applied
include climate change, genetically modified food, nuclear power,
pesticides, cell phones, homeland security, new drug therapies, and
even war.

For this reason, serious thought needs to be given to the strengths
and weakness of adopting this principle before using it to help make
difficult decisions.

Why It's Not Always Better to Be Safe than Sorry

Even the simplest interpretation of the precautionary principle that
it is better to be safe than sorry raises complex questions. To
begin, an essential dilemma for policy makers is that it is not clear
what to do if one wants to be safe. How safe is safe enough? Without
considering the costs of providing safety, it is virtually impossible
to answer this question.

For those who favor taking regulatory precautions, the conceptual
difficulty is even worse. Risks, sometimes unforeseen, can arise from
action as well as from inaction; consider the war in Iraq. And
reducing risks in one policy domain (say, the environment) could
increase risks in another (say, defense) especially when resources
are scarce.

A key problem with strong versions of the precautionary principle is
that they are logically inconsistent. They would frequently eliminate
all policies from consideration including the status quo because
almost all policies impose risksof one kind or another.

A Few Examples of How All Policies Even Precautionary Ones Impose

To understand the difficulty, consider some examples. Genetic
modification of food has become a widespread practice. The risks of
that practice are not known with any precision. Some people fear that
genetic modification will result in serious ecological harm and large
risks to human health; but others believe that genetic modification
will result in more nutritious food and significant improvements in
human health.

Many people fear nuclear power, on the grounds that nuclear power
plants create various health and safety risks, including some
possibility of catastrophe. But if a nation does not rely on nuclear
power, it might well rely instead on fossil fuels, and in particular
on coal-fired power plants. And such plants create risks of their own,
including risks associated with global warming. At the same time,
nuclear energy may actually decrease environmental risks: China, for
example, has relied on nuclear energy, in a way that reduces
greenhouse gases and a range of air pollution problems.

In the early years of the Bush Administration, one of the most
controversial environmental issues involved the regulation of arsenic
in drinking water. There is a serious dispute over the precise level
of risks posed by low levels of arsenic in water, but taking the
worst-case scenario, over one hundred lives might be lost each year as
a result of the original, 50-part-per-billion standard that the
Clinton Administration sought to revise. At the same time,
however, the proposed ten-part-per-billion standard could cost over
$200 million each year, and it is possible that it would save as few
as six lives annually.

In these cases, what kind of guidance is provided by the precautionary
principle? It is tempting to say that the principle calls for strong
controls on genetic engineering of food, on nuclear power, and on
arsenic. After all, in each of these cases, there is a possibility of
serious harms. Genetically modified foods, for example, seem like a
core area in which to apply the Wingspread Declaration, as there are
threats of harm (not fully proven) to human health and the

But so applied, is the precautionary principle really helpful? The
answer, in each of these cases, is that it is not. One reason is that
regulation might well deprive society of significant benefits, and
hence produce serious harms that would otherwise not occur.
In some cases, regulation eliminates the benefits of a process or
activity, and thus causes preventable deaths. If this is so, then
regulation is hardly precautionary; indeed, it violates the
precautionary principle.

The problem is not limited to these examples. It is quite general.
Consider, for example, the U.S. Environmental Protection Agency's
precautionary decision to ban almost all uses of asbestos. That
decision was invalidated in federal court, in part, on the ground that
in some contexts, the alternatives appear to create larger risks than
asbestos itself does.

In the court's words, the EPA cannot say with any assurance that its
regulation will increase workplace safety when it refuses to evaluate
the harm that will result from the increased use of substitute
products especially since many of the substitutes that EPA itself
concedes will be used in place of asbestos have known carcinogenic

The Necessity of Considering All Relevant Risks Not Just Those
Lessened by Regulation

These examples suggest that regulation sometimes violates the
precautionary principle because it gives rise to other risks, in the
form of hazards that materialize, or are increased, as a result of

Consider the drug approval process. If a government takes a highly
precautionary approach to the introduction of new medicines and drugs
onto the market, it will protect people against harms from
inadequately tested drugs; but it will also prevent people from
receiving potential benefits from those very drugs.

Of course, the proper approach to new drugs is much disputed. But the
precautionary principle cannot help to answer a key question within
this inquiry: What is the appropriate level of pre-market testing?
If the strong version of the precautionary principle is taken
seriously, extensive regulatory requirements are both required and
forbidden. Would it not be better to ask whether any particular
approval process creates benefits, through preventing iatrogenic
illness, that exceed the costs of unavailable medications and foregone

Regulation Typically Creates New Risk Profiles, Rather than Simply
Lessening Risk

It turns out that the danger that regulation will create new or
different risk profiles is the rule, not the exception.
In the case of arsenic, the Administrator of the Environmental
Protection Agency expressed concern that aggressive regulation, by
virtue of its cost, will lead people to cease using local water
systems and to rely on private wells, which have high levels of
contamination. If this is so, then stringent arsenic regulation
violates the precautionary principle, for the same reason that less
stringent regulation does.

The issue is compounded by the fact that regulations and policy
interventions use scarce resources. A great deal of empirical work
suggests that anexpensive regulation can have adverse effects on life
and health. It has been argued, for example, that a statistical life
can be lost for an expenditure of between $7 to $15 million.[3]

We do not mean to accept any particular amount here, or even to
suggest that there has been an unambiguous demonstration of an
association between mortality and regulatory expenditures. Rather, for
purposes of evaluating the precautionary principle, with its attempt
to prevent even speculative harm, our only point here is that
reasonable people do believe in that association.

This tradeoff between wealth and health makes the precautionary
principle hard to implement not merely where regulation removes
benefits, or introduces or increases other risks, but in any case in
which the regulation costs a significant amount.

For this reason, the precautionary principle raises doubts about many
expensive regulations. The most general point is that, the
precautionary principle is frequently paralyzing: It can stand as an
obstacle to regulation and nonregulation, and to everything in

Privileging Existing Risks over New Risks Makes Little, If Any, Sense

Advocates of the principle might be able to find ways out of this
dilemma. For example, they could say that new risks are unacceptable,
but existing risks are fine. And, indeed, a bias in favor of existing
risks does seem to animate many uses of the precautionary principle.
But that bias is hard to defend in principle. By its logic, we would
never have accepted electricity, the automobile, the Internet, or
countless other inventions that allow our modern society to function
but that impose risks. (Alternatively, one could embrace all new risks
and scoff at existing risks but that would lead to an equally
troubling result, leading us to accept even very highly risky
innovations with little benefit.)

Or one could say that the precautionary principle will be applied to
the risks that are most salient or of most concern to the public and
that the less salient or visible risks will be ignored. And in fact,
the precautionary principle often seems motivated by this form of
selectivity favoring the kind of risks that cause tragedies that make
headlines, while ignoring the kind that show up only as a result of
statistical analysis.

But why would that be sensible? Isn't a death or illness that occurs
quietly, as a result of, say, a cumulative risk, just as important as
a death or illness that occurs in a spectacular fashion that makes
news? Subtle causation is no less deadly.

These points help to identify another problem. The precautionary
principle does not provide guidance on how much to regulate; it does
not easily allow for weighing the variables that are at stake.
It leaves questions like these unanswered: How does one account for
tradeoffs between present and future risks? How should we weigh
expenditures on reducing particulate matter against the possible loss
in resources available for food or health care? Does one value a life
today more than one tomorrow? Without helping to answer such
questions, the principle is not useful.

The Need To Balance Benefits and Costs

We do not believe there is any principled way of making policy
decisions without making the best possible effort to balance all the
relevant costs of a policyagainst the benefits. Looking only to costs,
and ignoring benefits, is always a mistake.

Of course, the proper cost-benefit analysis can and should incorporate
concerns about precaution. For example, a problem characterized by
irreversibilities such as the persistence of certain chemicals in the
atmosphere that deplete the ozone layer can be modeled using standard
techniques in cost-benefit analysis. Uncertainties about both benefits
and costs can also be incorporated, perhaps by specifying a range of
possible outcomes, perhaps by seeking to preserve specified options,
or perhaps by identifying the worst-case scenario and showing a degree
of risk aversion with respect to that scenario.

In some cases, the balancing of benefits and costs will be easy. In
others, it will be hard to quantify benefits as, for example, in the
case of regulations designed to protect against terrorism, where it is
hard to assign probabilities to various outcomes. But even these hard
cases should not excuse decision makers from at least attempting to
make quantitative estimates of the costs of various options.

The Fallacy of Believing We Can Live Risk-Free

The fact is, even in the case of terrorism and other hard cases,
societies cannot afford to seek totally risk-free environments. If
they try, they might well magnify the problems they face.
For example, governments do not ban air travel, even though such bans
would eliminate a possible source of terrorist attacks. An intuitive
benefit-cost analysis suggests that the costs of banning air travel
would greatly outweigh the benefits.

For terrorism, climate change, and other vexing problems, hard choices
must be made. The precautionary principle does not help individuals or
nations to make such choices in a non-arbitrary way. Indeed, taken
seriously, the precautionary principle can be paralyzing, providing no
direction at all. Balancing costs against benefits ought not to be
understood as a way of placing regulators into an arithmetic
straightjacket. But it does offer the foundation of a principled
approach for making difficult decisions.


Robert Hahn is co-founder and executive director of the American
Enterprise Institute-Brookings Joint Center, which focuses on
regulation and antitrust. He is the author of In Defense of the
Economic Analysis of Regulation (AEI-Brookings, 2005), which was
recently written up in the Economist. In addition, Dr. Hahn is co-
founder of the Community Preparatory School an inner-city middle
school in Providence, Rhode Island, that provides opportunities for
disadvantaged youth to achieve their full potential.

Cass R. Sunstein is Karl N. Llewellyn Distinguished Service Professor
at the University of Chicago Law School. His publications include Risk
and Reason (2002), Punitive Damages: How Juries Decide (with several
coauthors, including W. Kip Viscusi); The Second Bill of Rights
(2004); and Laws of Fear: Beyond the Precautionary Principle (2005).

References and Further Reading

Arrow, K.J., et al., Is There a Role for Benefit-Cost Analysis in
Environmental, Health, and Safety Regulation? Science, No. 272
(1996), pp. 22 1-222.

Arrow, K.J. and A. Fisher, Environmental Preservation, Uncertainty,
and Irreversibility, The Quarterly Journal of Economics, Vol. 88, No.
2 (1974), pp. 3 12-3 19.

European Commission, Communication from the Commission on the
Precautionary Principle, Brussels: The Commission of the European

Graham, J. and S. Hsia, Europe's Precautionary Principle: Promise and
Pitfalls, J. of Risk Res., Vol.5, No. 4, (2002), p. 380.

Graham, J. and J. Wiener, ed., Risk vs. Risk: Tradeoffs in Protecting
Health and the Environment, Harvard University Press (Oct., 1995).

Lave, L. The Strategy of Social Regulation: Decision Frameworks for
Policy, Washington DC: The Brookings Institution (1981).
Peltzman, S. An Evaluation of Consumer Protection Legislation: The
1962 Drug Amendments, Journal of Political Economies, Vol. 81 (1973),
pp. 1049-9 1.

Office of Management and Budget, Report to Congress on the Costs and
Benefits of Federal Regulations, available at,
(2003), p.84.

Sandin, P. Better Safe than Sorry: Applying Philosophical Methods to
the Debate on Risk and the Precautionary Principle, Stockholm (2004),
available at

Sandin, P. Dimensions of the Precautionary Principle, Human and
Ecology Risk Assessment, Vol. 5 (1999), pp. 889-907.

Sunstein, C. The Arithmetic of Arsenic, Georgetown L. Rev., Vol. 90
(2002), p. 2255.

Sunstein, C., Laws of Fear: Beyond the Precautionary Principle,
Cambridge University Press (2005).

Stewart R. Environmental Decision-Making Under Uncertainty, Res. in
Law and Econ., Vol.7 1 (2002), p. 76.

Wildavsky, A. Searching for Safety, New Brunswick, New Jersey:
Transaction Books (1988).

Wildavsky, A. Richer is Safer, The Pub. Interest, Vol. 60 (1980), p.

Wiener, J. Comparing Precaution in the United States and Europe, J.
of Risk Res., Vol. 5, No. 4, (2002), pp. 3 17-349.

Zhong, Ling. Nuclear Energy: China's Approach Towards Addressing
Global Warming, Geo. Int'l Envtl. L. Rev., Vol. 12 (2000), p. 493.

Copyright 2005 by the authors.
[1] Wingspread Statement on the Precautionary Principle, available

[2] Corrosion Proof Fittings v. EPA, 947 F.2d 1201 (5thCir. 1991).

[3] Ralph Keeney, Mortality Risks Induced by Economic Expenditures,
Risk Anal. 10, 147 (1990). R. Lutter, J. Morrall, and W. K. Viscusi,
The Cost-per-Life Saved Cutof for Safety-Enhancing Regulations,
Economic Inquiry 37, 4: 599-608. (1999).

Citation: The Economists' Voice Volume 2, Issue 2 (2005).