A Behavioral Economic Defense of the Precautionary Principle

By Dana, David A. | Northwestern University Law Review, Spring 2003 | Go to article overview

A Behavioral Economic Defense of the Precautionary Principle


Dana, David A., Northwestern University Law Review


I. INTRODUCTION

The "precautionary principle" has attained a prominent role in the domestic and, even more so, the international discourse of environmental law and policy. Indeed, virtually every recent international environmental agreement invokes this principle.1 Some experts in international law have gone so far as to claim that the precautionary principle may be binding as a matter of customary international law.2 Commentary concerning the principle, extolling it, applying it, and deriding it, abounds.

No single formulation of the principle has been uniformly accepted. As a general matter, the precautionary principle counsels serious contemplation of regulatory action in the face of evidence of health and environmental risk, even before the magnitude of risk is necessarily known or any harm manifested.3 In most formulations, the principle entails shifting the burden of proof to proponents of regulatory inaction in the face of health or environmental risk, although the precise standard for that burden of proof is not specified.4 Some formulations address only risks of irreversible harms, but others apply to even theoretically reversible risks.5 Most formulations of the principle, and virtually all formulations contained in domestic or international legal documents, contain the caveat that the principle requires only cost-effective or cost-justified precautionary action.6 Thus, contrary to some critiques, the principle is better understood as a complement to, rather than as a substitute for, cost-benefit analysis.

Despite the tremendous attention devoted to the precautionary principle, there has been very little research regarding its psychological appeal or function. The main effort to date to link behavioral economics and the precautionary principle is Cass Sunstein's Beyond The Precautionary Principle, in which he thoughtfully and provocatively argues that the precautionary principle reflects, incorporates, and feeds on cognitive biases.7 This Article argues that, with a few caveats, the opposite is true: as I explain in Part III, the precautionary principle can be understood as a corrective to cognitive biases favoring the avoidance of sure, immediate losses over the avoidance of unsure, non-immediate losses.8

Before turning to the interplay of the precautionary principle and cognitive biases, however, it is helpful to "clear the brush." I do this in Part II by explaining why the two most prevalent critiques of the principle in the academic and popular literature, which I call the "indeterminacy critique" and the "bad choices critique," do not settle the question of how we should assess the normative appeal of the principle.

II. TWO CRITIQUES

The essence of the indeterminacy critique is that the precautionary principle is so vague as to be meaningless. As proof, critics point out that the principle can justify widely divergent courses of conduct, depending on which risks are included in one's purview and what meaning is given to the flexible concept of "precautionary."9 Because the precautionary principle can mean anything, the argument goes, it actually means nothing.10

The indeterminacy critique builds on a true premise: the precautionary principle does not prescribe a single set of policy choices in any given case. This is most obviously the case in contexts where there are multiple, conflicting risks. Even in the unitary risk setting, there is a good deal of open-endedness because, as stated above, the principle, in most formulations, only counsels cost-effective action, not maximum action.

The indeterminacy critique errs, however, in the conclusion it draws from its correct premise. The precautionary principle is indeterminate, but that does not make it meaningless. Principles can express and reinforce value commitments and procedurally structure decisonmaking without dictating a single set of specific, substantive outcomes; principles may help put certain extreme options off the table, provide a boost to the advocacy of some in the political community, and force others in that community to marshal more evidence on behalf of their positions. …

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