Scenario 9: Cost-Benefit Analysis - Cold Call

TL;DR

The use of cost-benefit analysis is flawed and may not provide accurate results for decision-making regarding the clean-up and redevelopment of a polluted Superfund site.

Transcript

GUEST SPEAKER: Governor, thank you so much for asking me to outline a comprehensive cost-benefit analysis, regaring decision making over a long delayed clean up of a highly polluted Superfund site. As we know, underground storage tanks at the site have leaked into nearby wetlands and cleanup is expected to cost $35 million or more. The debate cente... Read More

Key Insights

• 🥺 Cost-benefit analysis may not lead to efficient allocation of resources or provide objectivity and transparency when considering the clean-up and redevelopment of a Superfund site.
• 🧑‍⚕️ Assigning monetary values to health and life is controversial and does not accurately represent their worth.
• ✳️ The concern for risks to others and collective choices are important considerations that cost-benefit analysis fails to address.
• 🈹 Discounting in cost-benefit analysis overlooks the potential for worsening environmental problems and the uncertainty of future solutions.

Questions & Answers

Q: Why is cost-benefit analysis considered flawed in the context of a Superfund site clean-up decision?

Cost-benefit analysis reduces health and life to monetary values, disregards the concern for others' risks, ignores collective choices, and assumes that environmental problems won't worsen and technology will improve.

Q: How does cost-benefit analysis assign values to health and life?

Cost-benefit analysis assigns monetary values to health and life, equating the risks of death with death itself, which are two different calculations.

Q: Why is the concern for others' risks important in decision-making about the Superfund site?

Citizens are concerned about risks to others as well, including their relatives, friends, and even strangers in the town.

Q: What is the issue with discounting in cost-benefit analysis?

Discounting assumes that technology will solve future problems and that harms suffered later are preferable, neglecting long-term consequences and the possibility of unknown pollution sources.

Summary & Key Takeaways

• The debate revolves around the decision to clean up a highly polluted Superfund site and reuse it for a new mall, but there is disagreement on who should bear the costs.

• Cost-benefit analysis, which reduces life, health, and the environment to monetary values, is argued to be flawed.

• The flaws of cost-benefit analysis include assigning finite monetary values to health and life, ignoring the concern for others' risks, disregarding collective choices, and flawed use of discounting.