By Donella Meadows

–May 4, 1995–

It’s going to take months, maybe years, to sort out the blitz of legislation just pushed through the House without proper hearings or time for understanding.  Newt’s Hundred Days have brought forth a hundred ideas, some new, some old, most with such potential impact that in a real democracy they would be subject to critical, informed debate.

Take, for instance, item number eight in the Contract with America, the “Job Creation and Wage Enhancement Act,” which cuts the taxes of the rich and guts regulations.  We could spend all summer sorting through its dozens of provisions.  First on my list for discussion would be its call for cost-benefit assessments.

The act says that any federal agency wanting to regulate anything to do with health, safety, or the environment must assess how much the regulation would cost and how much society would gain.  Is the relief of lung disease worth the cost of installing scrubbers?  Are ducks breeding in prairie potholes worth more than the grain farmers could harvest by filling in the holes and planting them?

The Newtsies will submit imponderable questions like these to a scientific panel.  Experts from affected industries are specifically invited to participate.  If the panel decides that the public benefit of the regulation will not exceed its public and private cost, that regulation is dead in the water.

You can imagine the infighting on those panels, their cost, their delays.  The point, of course, is not to improve government; it’s to throw as much hassle in the way of regulation as possible.  Call it revenge for the 25-year-old National Environmental Policy Act, which requires environmental impact assessments for all government actions.  Those assessments have slowed down dams, highways, and pipelines; now cost-benefit analyses can slow down clean air standards, food safety laws, and endangered species protection plans.  You choke us, we’ll choke you.

It’s too bad that the level of analysis on Capitol Hill has been limited to that sort of shallow obstinacy, because there’s much one would want to think about, if one took seriously the reasonable proposition that regulations should, on balance, benefit the nation.

First, one would ask whether agencies already weigh costs and benefits.  Of course they do.  Under both Bush and Clinton, for example, the Environmental Protection Agency worked with scientists to prioritize environmental problems and to be sure we work on serious ones.  (We hadn’t done that, EPA discovered, largely because Congress writes laws based on public panic rather than scientific understanding.  Hence, for example, we spend too much on hazardous waste dumps and too little on greenhouse gases.)

Then there are the deep difficulties of measuring the benefits of human health or natural integrity.  How much is an old-growth forest worth?  Or a clean stream?  Or preventing a cancer in a child?  Any number we choose has to be a wild estimate, sure to be contested.

Cost-benefit analysis has a long history of contention, as technocrats try to tell ordinary folks what their lives, health, landscapes, favorite fishing spots or wildflowers are worth.  Ordinary folks are justifiably skeptical of these assessments.  Just last month, for instance, the U.S. delegation to an international gathering tried to tell the crowd that according to its cost-benefit analysis, the lives of us rich industrialized people are worth ten times those of other people, because our incomes are ten times higher.

So much for cost-benefit analysis, replied the rest of the world.

Since the numbers are so arguable, cost-benefit analysis is easily jiggered to produce whatever result the analyst wants.  For decades the Army Corps of Engineers cranked out calculations that proved the enormous worth of every dam it wanted to build.  Now we have the dams and the actual figures.  Many of them will never come close to paying for themselves, including the famous Tellico Dam, which was almost stopped by the endangered snail darter.  The real story of Tellico was not the absurdity of a little fish stopping a big dam, but the absurdity of the Army Corps’ claims about the dam’s economic benefits.

Newt’s law allows coal industry “scientists” to help calculate the cost-benefit ratio of scrubbers.  Car companies would analyze the economic impact of higher mileage requirements.  The lumber industry would get to put a value on the spotted owl.  That’s a sure recipe for number-cooking.

Which would be a shame, because if there were an honest reckoning, with a truly balanced panel of citizens and experts of all persuasions, we could learn a lot.  Environmentalists would insist, for example, on counting the full worth of old-growth forests, from soil formation to flood prevention to climate moderation to the protection of salmon and hundreds of other species.  If we valued those benefits, however imperfectly, we would treasure standing trees even more than the market treasures cut ones.  If we counted the full costs of automobiles on our health, the environment, and our balance of payments, we’d shift billions of dollars from highways to mass transport.  If we set the price of a unique species of life at something approaching its real value, which must be close to infinity, we’d see the Endangered Species Act as the best bargain in government.

That kind of analysis is worth doing, I think, but not worth making it the final arbiter in public decisions.  There is something ludicrous about using the slippery dollar as the only measure of worth, something foolish about discussing health, integrity, and beauty in the limited language of economics, something sacrilegious about reducing higher values to the bottom line.  We might as well do cost-benefit analysis on enslaving our children, or turning a cathedral into a shopping mall, or canceling the next round of elections.  By strict and narrow cost-benefit analysis, all those measures would pay.

So much for cost-benefit analysis.

Copyright Sustainability Institute 1995