Chapter 07: The Safety Standard Flashcards
What is the basis of the safety standard
Compared to the efficiency standard
Fairness rather than efficiency
WE HAVE THE RIGHT TO BE SAFE
- Rejects benefit-cost approach to decisions about “correct” amount
- People = right protection from unsolicited, significant harm immediate environment
What is the efficiency argument for the safety standard?
Always willing to acccept certain amount of risk
Therefore: always cost-benefit analysis
- Many important benefits of protection from pollution often left out benefit-cost analysis = cannot be measured
- Material growth society feeds conspicuous consumption, fueling rat race, then no one better off
-
Cost protection overstated rat race
- Benefits understated
- Safe regulation reality meet benefit-cost test
Is Accepting Some Risk same as Efficiency Approach?
Declaring safety standard > then adopting economic feasily policy = generally result less policy (compared efficiency standard)
Is Accepting Some Risk same as Efficiency Approach?
Is Accepting Some Risk same as Efficiency Approach?
Declaring safety standard > then adopting economic feasily policy = generally result less policy (compared efficiency standard)
What is the mandate approach?
MC > MB:
Cost to society
**Add graph
Capitalism: profits goods > innovation
♻️ Use of fossil fules overused: not wrong fossil fuels but incorrect (low) pricing to make up for externalities
What is the market approach?
**Graph
Who has the “right” to pollute and how is the answer different when considering efficiency and safety?
Efficient outcome same (if either consumer or producer pay)
Safety standard: Right to safety
- correct
- Must pay to “violate” safety
How does the safety standard influence environmental policy?
Safety Standard stated goal much environmental policy:
Laws covering air, water, and land pollution require cleanup to “safe” levels
- No mention benefit-cost test
- Clean-up costs still play role policy determination
How is the safety standard expressed as a social welfare function?
Ex: Tyler and Brittany wrangling over smoking in office
- Smoking bad Brittany and good Tyler
- Weight given w large enough - justify banning smoking altogether
What are the objections to the safety standard?
- Inefficient? Often
- Not Cost-Efficient? Often
- Regressive? Maybe
What other problems does the safety standard have?
Objections:
- Inefficient? Often
- Not Cost-Efficient? Often
- Regressive? Maybe
- Subjective levels
-
Environmental damage is not done in the name of environmental damage:
Done profit incentives
Therefore, there are benefits (both consumers and producers)
How is the safety standard inefficient?
Objections:
1. Inefficient? Often
2. Not Cost-Efficient? Often
3. Regressive? Maybe
By definition, SS, inefficient
♻️ Efficiency advocates claim that saying environmental health is a “right” involves committing too many resources of society to environmental protection
- Should be: safety per dollar spent (to be more effective)
Ex: Air toxics regulations and Landfill Policy
How do air toxic regulations illustrate the how safety is inefficient?
- 1990 amendments to Clean Air Act designed control emissions
- Law required frims impose control tech reduce risk below 1 in 10,000 levels
Total Cost: $6 to $10 billion per year
Total Benefit: $4 billion per year
80% Americans still support despire cost-benefit disparity
How do air landfill policy illustrate the how safety is inefficient?
- EPA’s regualtion landfills protect people depend contaminated groundwater were predicted reduce cancer cases 2 or 3 over next 300 years
- Potential benefits not quantified include:
- Increase ease siting landfills
- Reduce damage surface water
- Fairness future generation
- Overall reduction wate generation and related “upstream” pollutoin
Total Cost: $5.8 billion
Total Benefit: $2 billion per cancer case reduced
What is Type I and Type II Error?
TYPE I ERROR: Not accept claim but it is true
TYPE II ERROR: Accept the claim but it is false
How does the claim “drug is safe” illustrate that the safety analysis could be wrong?
How does the claim “person is a nice guy” illustrate that the safety analysis could be wrong?
What are inefficient regulations?
- Regulations protect small groups from risk - ALWAYS inefficient (high risks not generate many casualties)
- Air and EPA’s landfills regualtions classic situations which efficiency and fairness conflict
Economics often efficiency advocates:
Find economists leveling normative criticisms at safety-based enviornmental protection laws
How is the safety standard not cost effictive?
Objections:
1. Inefficient? Often
2. Not Cost-Efficient? Often
3. Regressive? Maybe
Lack of cost-effectiveness - goal at the lowest possible cost
If “safety” is goal - extreme measures taken attack minimal risk situations instead high risk situation
How does superfund and asbestos illustrate the lack of cost-efficiency?
Ex: Superfund and Asbestos
Millions dollars spent purify seldom used groundwater at toxic stills
- Critics argued redirecting functions better use of resources:
- Children about 5 in 1 million chance contracting lung cancer from attending school built w asbestos
- Redirecting functions superfund clean-up asbestos removal could save more lives
Safety proponents response:
- Limits deal problems = not limited resources > lack political will
- Funds freed up from “overcontrol” in pollution arena more likely devoted affluent consumption
Risk-Benefit Analysis
- Authorities use risk-benefit studies compare cost-effictiveness different regulatory options
- Common measure used appraoch lives saved per dollar spent
- Helps avoid devoted resources to an intractable problem, not mean backing way safety as a goal
How is the safety standard regressive:
Objections:
- Inefficient? Often
- Not Cost-Efficient? Often
- Regressive? Maybe
- Safety standards more restictive than efficiency standards:
greater sacrifice goods and services - Concered people fall below decent standard of living - overregulation
- Suppose switched from a safety standard to an efficiency-based standard: Would be poor be better off?
Do lower income people generally benefit more/less from environmental regulations?
Lower income people generally benefit less environmental regulations:
Do not have the resource to avoid engading in dirty industry
- cant buy a Tesla - cars inefficient
Change regulation: cannot afford new car
Therefore, impose costs on lower income people
Ex: GST
5% sales tax
- Low income person: spends all of their income > all of their income affected by tax
- High income person: not spend all their income (%) > paying GST on practically non of their income
Try compensate marginalized communities:- Some goods not taxed (milk) and chocolate is taxed
- GST money back programmes
Same principle would apply to pollution tax
- LIP spend more on their income on dirty goods
Hence: Safety standard also not inherently fair
Regressive impact on income distribution:
Regressive impact income distribution:
(Unless compensated for) higher prices consumer goods induced regulations take bigger percentage bite income poor than rich people
Much pollution generated production of necessity - cost environmental regulations borne unevenly
Progressive Beneftis from Pollution Control:
In relation to regressive influence of the safety standard
Poor people live more polluted areas
- benefit more from clean-up
- Harmed more when standards relaxed
Define Environmental Racism:
Racial inequality exposure pollution (eg. Flint 2015)
♻️ Policys for environmental regulation disproportionatly affect marginalized communities
Environmental Justice Movement in response
Exposure due to low income or race?
- Poor, working-class, and minority people pay more, relative to income, for pollution control (Also benefit more)
- Hard determine whether it results in net benefits or net costs
How does socio-economic influence influence the placement of LULUs?
“Locally unwanted land uses” or (LULUs) refer sites for disposal waste
- LULUs impose negative externalities on neighbors from potential hazards exposure to decreased land values
- By def, communities nnot want LULUs and wealthier community, higher level of safety community will demand
- Located poorer communities:
- Based efficiency/safety/both?
- WTA larger
Summers Memo: Internal memorandum to staff, then chief economist at World Bank
How does safety “need time?”
To create safety: MUST NEED TIME
- Safety standard: must determine safety standard at the time y want to impliment policy (moving policy)
Define moving policy?
Must determine safety standard at the time you want to impliment the policy
How does Compensation for LULUs work?
- Society whole benefit greatly having toxic facilities
- One solution - monetarily compensate communities with LULUs
Compensation could pay schools, libraries
Poorer communities accept lower compensation levels than wealthier communities
trade in LULUs
How does LULUs create a (unfair) global marketplace for garbage disposal?
- Society whole benefit greatly having toxic facilities
- One solution - monetarily compensate communities with LULUs (Compensation could pay schools, libraries)
- Poorer communities accept lower compensation levels than wealthier communities(trade in LULUs)
Global marketplace garbage disposal
Still unfair: Poor countries do not choose to be poor
- Poorly governed
- Might not be effective at disposing garbage
What is the efficiency argument behind toxic trade?
- Lower income - poor country has marginal benefit of cleanup schedule lying below that of rich countries
Rich countries: rich enough to care about environmental problems - Current pollution levels lower poor countries > MB of cleanup also lower
- Transferring 10% waste of rich country to poor country reduces monetary damages in rich country more than it increases damages in poor country
- Poor countries then compensated for its damages and overall monetay damages will reduced by trade
**Graph
How does the toxics trade create winners and losers?
Winners:
- Wealthy countries no longer exposed waste
- Around world can buy cheaper products
- People (poor) in dump sites
Losers:
- Poor country individuals (now and future generations) contract diseases
- Rely natural resources may damage transport and disposal process
Everyone Wins?
- Dumping toxics = efficient, total monetary gains to winner outweight total monetary loss to losersTheory: winners compensate losers (tho complete compensation unlikely)
What are some problems with the toxic trade?
- Majority benefit from dumping flow to relatively wealthy while poor will bear the burden of costs
- Political structure in many developing countries is far from democratic, highly susceptible to corruption
- Few poor countries have resource for effective regultion
- Still regulation or high taxes increase rate illegal dumping; unregulated trade waste may thus lower welfare of recipient country
What does the safety standard say about the siting of LULUs?
Politically acceptable definition “safety” - not worked out
why: small group bears burden risks - nobody wants in backyard
Compensation thus play role in stiting of hazardous facilities
- Firms and governments seek poorer communities and less political power
Thus: less compensation package
How to ensure the majority benefits from sitting LULUs?
- government capable providing effective regulation
- open political process and democracy
Compare Safety and Efficiency:
Social Goal?
Efficiency: MB = MC
Safety: Danger to health and environment “minimized”
Compare Safety and Efficiency:
Social Goal?
Efficiency: MB = MC
Safety: Danger to health and environment “minimized”
Compare Safety and Efficiency:
Implied social welfare function:
Compare Safety and Efficiency:
Advantages and Disadvantages:
Efficiency: Maximizes measurable net monetary benefits; relies heavily on assumptions of benefit-cost analysis
Safety: Seems consisted with public opinion; often cost-ineffective and may be regressive
Compare the safety and efficiency standard:
(1)Safety Standard**:
- Relies liberty argument: weight welfare
Stricter pollution standard than efficiency standard
- Still subjective
- Still unfair
- Overmake case for safety = weakens argument
Not want to get to point of no return (say 5°) - overstate line (to make sure not get point)
(2)Efficiency Standard:
- Attack “fairness” argument of safety: regressive
- difficult prove/refute in general
Both have the same problems - at least the efficiency standard (cost-benefit analysis) better understood
