Letting Environmentalists' Preferences Count: Why Do Free-Market Thinkers Turn to Scientific Risk Analysis Instead of Markets to Set Environmental Policy?

By Van Doren, Peter | Regulation, Fall 2003 | Go to article overview

Letting Environmentalists' Preferences Count: Why Do Free-Market Thinkers Turn to Scientific Risk Analysis Instead of Markets to Set Environmental Policy?


Van Doren, Peter, Regulation


ENVIRONMENTAL POLICY QUESTIONS often result in dueling scientific studies. Typically, articles are published in scientific or medical journals that claim exposure to pollution results in increased morbidity or mortality. Critics then respond in scientific or policy journals with claims that the original scientific articles were flawed and do not reflect "sound" science. (For an example, see "The Arsenic Controversy," Fall 2001.)

The premise of the original scientific articles is that if the negative effects of pollution are "real," then scientifically informed government intervention should "fix" the problem. The premise of the rebuttal articles is that because the best science suggests the causal links are problematic or non-existent, the proposed environmental regulation is an example of illegitimate and unwarranted state action.

But why should those who prefer a cleaner environment have to justify their preferences with scientific evidence? Markets are neutral with respect to preferences. The function of markets is to allow people to pursue their preferences subject to a budget constraint. Under most circumstances, market-oriented policy analysts would severely criticize any attempt to require people to justify their preferences for private goods through scientific analysis.

In fact, the market's delivery of private goods is not related at all to the scientific validity of people's preferences. Markets can and do supply organic lettuce regardless of whether it really is "better" for your health. The market's ability to deliver Miller Lite is not at all contingent on the resolution of the "Great-Taste, Less-Filling" debate. European consumers do not want genetically modified food regardless of scientists' arguments that consumer concerns about such food are without merit. And people pay good money for light trucks because they feel "safer" in the vehicles even though scientific evidence challenges that sentiment.

The ability of markets to cater to such varied (and perhaps illogical) preferences is often celebrated as their chief virtue. So why, then, do market advocates often require implicitly, and sometimes explicitly, that environmentalists justify their preferences scientifically or through cost-benefit analysis, especially if public goods are involved? Are preferences for clean air different from preferences for pizza, cars, or organic lettuce? Why should environmental preferences require scientific justification?

Peter Huber, whose 1999 book Hard Green drew sharp criticism from the environmental left, noted in the book that scientific analysis may not be sufficient to resolve environmental policy disputes. According to Huber,

   The axiology of science, its priorities of investigation and
   research, the criteria for what to study and what not to, are
   matters of taste, budget, values, politics: everything but science
   itself. Scientific priorities ... are themselves
   trans-scientific.... Science will never tell us just how much
   scrubber or converter to stick on a tailpipe or smokestack, how much
   sand and gravel at the end of sewer pipe, how much plastic
   and clay around the sides of the dump. (p. xviii)

   Even the invisible can have value, even the innocuous can
   entail cost, if only because value and cost ultimately lie in the
   mind of the beholder. People are entitled to dislike chemicals
   in their drinking water simply because they dislike them, whether the
   distaste is for fluoride added deliberately by a meddlesome
   government or tetrachloro-ethylene added negligently by a noisome
   factory. People are perfectly entitled to prefer pure drinking water,
   even if contaminants cause them no harm, even if contaminants harden
   their teeth. (p. 136)

Paul Portney made a similar point in his 1992 article "Trouble in Happyville." In that, he described a hypothetical town in which 1,000 residents were willing to pay $1,000 each to eliminate a natural contaminent from the water supply even though the top risk assessors in the world claimed the exposure was benign.

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