Nov. 7, 2002
Vol. 22 No. 4

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    Sunstein offers system of risk regulation for society’s fears

    By Peter Schuler
    News Office


    What should be done about airplane safety and terrorism, global warming, polluted water, nuclear power and genetically engineered food? In his latest book, Risk and Reason: Safety, Law and the Environment (Cambridge University Press), Cass Sunstein, the Karl N. Llewellyn Distinguished Service Professor in the Law School, examines the sources of these problems and offers a system of risk regulation to cope with them.

    “All over the globe, risks to safety, health and the environment are a subject of intense interest,” Sunstein said. “Unfortunately, too much of the time we fear the wrong things, and sometimes we make the situation even worse. Rather than investigating the facts, we respond to temporary fears.” He explained that the results are usually hysteria and neglect, as well as unnecessary illness and death.

    Emphasizing the human propensity to misunderstand risks, Sunstein believes there is a direct and simple response that could save thousands of lives and billions of dollars while protecting the environment in the process. “Before government acts,” Sunstein explained, “it should, if feasible, attempt to produce a cost-benefit analysis that would be a detailed accounting of the consequences of alternative courses of action. It should allow people to see if the problem at issue is small or large, explore the expense of reducing the problem and explain who will bear that expense.”

    His concept places a high premium on science, and his proposal calls for experts and technocrats to have a larger role in government policy. He urges that these specialists be given the charge to use the tools of cost-benefit analysis for what he calls “risk regulation.” “Cost-benefit analysis is often viewed as a cold, barely-human calculation that treats health and life as mere commodities and envisions government as some kind of huge, maximizing machine,” Sunstein said. “On the contrary, I urge that cost-benefit analysis be seen as a simple, pragmatic tool to promote a better appreciation of the impact of regulation and who is helped and who is hurt.” He also emphasizes that distributional issues matter: if poor people are mostly the victims of certain risks, government must legitimately respond to their plight.

    In his book, Sunstein examines the tradeoffs in dealing with health risks, where the diminution of one health risk simultaneously increases another. He uses the example of proposed fuel economy standards that could significantly reduce greenhouse gases but also lead to smaller and less-safe cars–thus producing more than a thousand extra deaths each year. “Officials and citizens should be fully aware of that fact,” he said.

    In a chapter intended to illustrate how this cost-benefit analysis would work in practice, Sunstein analyzes in detail the costs and benefits of the Bush Administration’s environmental decision to suspend the EPA’s regulation of arsenic in drinking water. “Sometimes the best that can be done is to specify an exceedingly wide ‘benefits range,’” Sunstein said. Once the range is specified, a judgment of value, not of fact, will be involved in the ultimate decision on how to regulate the issue.

    “Though the decision may require a value judgment, it will be much easier to identify once we have done the cost-benefit analysis to explain exactly why the choice of regulation, in the case of arsenic, is genuinely difficult. This will replace the ‘intuitive toxicology’ that is now used as the basis for decisions,” Sunstein said.

    His prescription extends beyond regulations resulting from experts’ cost-benefit analysis. He argues for institutional reforms from all branches of government. “I think Congress should take steps to ensure that the system of risk regulation makes overall sense,” he said. “Regulatory agencies should be authorized to refuse to regulate risk if regulation would create new and significant risks of its own.”

    Sunstein said the executive branch should create a publicly available Web site with information on what is known about existing risks and a tool for people to compare those risks. The courts, he argues, should not permit government to act when risk regulation will make things worse rather than better.

    “My principal argument is that governments should use ‘smart tools’–methods to reduce risk that will actually work–that will not cost a great deal, that will not overwhelm the government and that will help us all obtain more protection than we otherwise could hope for,” he concluded.