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Cased-Based Discussion 02: Environmental Policy and Cost-Benefit Analysis

To begin the second case-based discussion, watch the video, Polluter Pays Principle: The Precautionary Principle and Cost-Benefit Analysis, which can be accessed through Ares. After watching the video, read the Global and Mail article, “Inside the race for Canada’s nuclear waste: 11 towns vie to host deep burial site,” which can also be accessed through Ares under Unit 06.

When reading the article, it is important that you familiarize yourself with the specific details of the case, and think about how the government should decide where to put Canada’s nuclear waste. One of the concepts that we will be looking at in this course is cost-benefit analysis (CBA), which embodies the idea that environmental policy decisions can and should be made by identifying all of the relevant costs and benefits and then deciding the most effective course of action. For better or worse, CBA has become the prevalent means by which governments now develop, implement, and evaluate the effects of environmental policy decisions. According to Dryzek, CBA entails the following aspects:

Identify policy options (including do nothing).

For each option, list desirable effects (benefits) and undesirable effects (costs).

Attach monetary values to all costs and benefits, using shadow pricing when the item in question has no market price.

• Convert all costs and benefits occurring in future time periods to the present time period using a discount rate.
• Add up the monetary costs and benefits to give the best net benefit associated with each alternative.
• Choose the option with the greatest net benefit.
• In doing the case study, it will be clear that CBA is by no means a perfect policy instrument. Dryzek, for instance, identifies a number of criticisms and alternatives to CBA, including risk assessment and the precautionary principle, which states that if an action or policy has a suspected risk of causing harm to the public or to the environment, in the absence of scientific consensus that the action or policy is not harmful, the burden of proof that it is not harmful falls on those taking the action. (Again, though, using the precautionary principle also creates problems for environmental policy decisions). With an environmental pollutant that lasts more than 400 millennia, the idea of using cost-benefit analysis to decide where to store Canada’s nuclear waste becomes problematic.
• Imagine you are one of the following:
• A public official in the federal agency responsible for disposing of Canada’s nuclear waste;

An environmentalist;

The mayor of a local community that is vying to be the site of a deep geological repository; or

A member of the local community.

• Taking one of the following perspectives, outline your perspective on each of the six elements of cost-benefit analysis. Post your original response to the Case-Based Discussion 02 forum. After posting your original comment, read through the postings made by your groupmates and compare your perspectives with other members of the group. How different are your interpretations of the relevant costs, benefits, and policy alternatives? Reply to your groupmates’ postings and discuss the similarities and differences between your responses.