Beyond Cost/Benefit

The Maturation of Economic Analysis of the Law and Its Consequences for Environmental Policymaking

In this article, Professor Blais examines the role of economic analysis in the formulation of environmental law and policy. More specifically, she documents the era of pervasive governmental regula-tion that began in the 1970s with the enactment of the Clean Air, Clean Water, and Endangered Species Acts and the promulgation of their implementing regulations. This era of regulation constituted a sea change in environmental protection in that the common law bal-ancing approach was rejected in favor of a regulatory framework that consciously eschewed cost/benefit analysis.In the decades following the adoption of this scheme, however, policymakers and courts introduced cost/benefit analysis and quanti-tative risk assessment into most environmental regulations.Professor Blais counsels against overreliance on quantifying costs, benefits, and risks. Instead, environmental policy should incor-porate developing economic and sociology data that demonstrates how people really respond to traditional economic factors. Further-more, Professor Blais notes that the values embedded in environ-mental protection statutes cannot be casually reduced to an economic formula. Because market-based reforms are based primarily on eco-nomic cost/benefit and risk assessments, she argues that such reforms should be reconsidered. The next step, according to Professor Blais, is to develop a new approach to environmental protection as intuitively appealing as the market-based reforms but incorporating newly de-veloped economic and behavioral theories as well as the idea that en-vironmental protection cannot be measured in economic terms.* Professor of Law and Associate Dean for Academic Affairs, The University of Texas School of Law. The author would like to thank Professor Russell Korobkin and the editorial board of the Univer-sity of Illinois Law Review for organizing and hosting this symposium.

The full text of this Symposium is available to download as a PDF.