False Alarm over Environmental False Alarms

False Alarm over Environmental False Alarms
Author(s): S. W. Pacala, E. Bulte, J. A. List, S. A. Levin
Source: Science, New Series, Vol. 301, No. 5637 (Aug. 29, 2003), pp. 1187-1188
Published by: American Association for the Advancement of Science
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POLICY
FORUM
ENVIRONMENTAL
ECONOMICS
False
Alarm
over
Environmental
False
Alarms
S. W. Pacala,* E.Bulte, J.A. List, S. A. Levin
MWe live in an uncertainworld,in
which actionand prudencemust
be continuallyjuggled. Caution
can be costly, but indifferenceto serious
risks can be disastrous.In all aspects of
life, we weigh risks andbenefits,invoking
measures to insure against events that
threaten what is most importantto us,
while gamblingwith those thatcan be tolerated.In mattersof our environment,science has the responsibilityto informthese
decisions, and society must find ways to
identify the appropriatelevel of circumspection.By any calculation,we mustprotect ourselves against a wide variety of
eventsthatindividuallyhavelow probabilities of occurrence,and still feel good
when they havenot occurred.We mustrely on environmentalscience to alertus to
an even wider set of possible disasters,
manyof very low probability,so thatwe as
citizens can decide which cause us most
worry,andwhichmandateaction.
Theunavoidable
resultof thisprescription
is thatmanywarningsof environmental
scientistswillproveto havebeenunfounded,
and
otherswill haveled to actionsthatprevented
or mitigatedthepredicteddireconsequences.
Thusmanypredictionsof possibleenvironwill not cometo pass,in
mentaldegradation
somecasessimplybecausethosepredictions
were made and heeded.Therewill then alwaysbe criticswho will trumpetthe failures
as evidencethatwe shouldneverhavepaid
attentionto those who urged caution,and
that we shouldhence similarlydismissfuturewarnings.It is by now a familiartune.
Totalcosts
t
O
/
/ Totalbenefits
o
0
A*
Sensitivity of the alarm
Net benefits of response to true alarms and
costs of response to false alarms. At the optimumA*,the slope of the top curve(marginal
benefits)equalsthe slope of the bottom curve
(marginalcosts).
the most
(www.forsk.dk/eng/index.htm)-is
recentof a longlistof suchefforts.
Nonetheless, environmentalscientists
need to confrontan importantissue, highlightedby these skeptics,thataccompanies
the dualrole of the environmentalsciences
in society.Funding,researchpriorities,and
publicationstandardsreflectboth the need
to advanceour fundamentalunderstanding
of the Earth'secosystemsand a responsibility to soundthe alarmwhen a possible
environmentalhazard is detected. Evidentiarystandardsin the basic sciencesare
based solely on what most effectivelyenhanceslearning,whereasevidentiarystandards of an environmentalalarm system
must balancethe benefits of early detection with the costs of alarmsbased on an
earlystateof knowledge(2).
Whatis the optimallevel of sensitivity
The Skeptical Environmentalist by Bjorn
for society's environmentalalarm? How
Lomborg(l)-officially discreditedby the many signals should the environmental
DanishCommittees
on ScientificDishonesty communitysend to policy-makers,realizing thatsome (or many?)of themwill turn
S.W. Pacalaand S.A. Levinare in the Departmentof
out to be wrong? Is it true that environEcology and EvolutionaryBiology, PrincetonUnimental scientists are responsible for a
versity, Princeton,NJ,08544-1003 USA.E. Bulte is
litany of false predictions,as claimed by
in the Department of Economics,TilburgUniversity, Post Office Box 90153, 5000 LE Tilburg, Lomborgand others,or is the balancebeNetherlands.J.A. Listis with the President'sCouncil tween false alarmsand correctones about
of Economic Advisers; in the Agricultural and
right,or even too conservative?
ResourceEconomics(AREC)Departmentand in the
The classification of environmental
of
of
Department Economics,University Maryland,
alarms
as eithertrue or false obviouslyis
College Park,MD, 20742-5535 USA;and at the
National Bureauof EconomicResearch,Cambridge, too simple.Identifiedproblemsmaybe reMA02138, USA.
al, but overstated or understated, and
alarmsby consensus groups, such as the
*To whom correspondenceshould be addressed.EPanelon ClimateChange
mail:[email protected]
Intergovernmental
www.sciencemag.org SCIENCE VOL301
(IPCC),carry more weight than those of
single scientists. When a critic such as
comLomborgsays thatthe environmental
munityissues too manyfalse alarms,he or
she is actuallysayingthata reductionin the
sensitivity of the environmental alarm
would decrease the current regulatory
costs morethanit woulddecreasebenefits.
Thus,the claimof too manyfalse alarmsis
a claim aboutthe slopes of the curves relatingbenefits and costs to alarmsensitivity, which are called marginalcosts and
benefits in economics. A claim of too
many false alarmsthus implies that marginal costs are greaterthan the marginal
benefits.
The structureof the cost-benefitproblem is shownin the figure (left). By sensitivity (the abscissa),we meanthe probability that an alarm would be sounded and
acted upon in responseto some reference
hazard.Sensitivitythus integratesthe effisciencesin deciencyof the environmental
hazards,the evitectingandunderstanding
dentiarystandardsthat cause environmental scientiststo issue warnings,andthe societal thresholds for regulatory action
when given a warning.
With this definition of sensitivity,the
curvesfor the costs and benefits areprobablynondecreasingfunctions.The optimal
sensitivity of the alarm system occurs
when the marginal benefits of alarms
equalstheirmarginalcosts [A* in the figure(left)].Thereis no formalmathematical
reasonwhy the system shouldhave an internal optimum,and the formulafor the
optimalsensitivityis not of muchpractical
use because we cannot obtain precise
quantitativeestimatesof the cost andbenefit curves.However,we can obtainsome
quantitativeinformationthat establishesa
lower bound for currentbenefits of response to environmentalalarms, and at
least some informationabout the magnitude of the marginalbenefits.
Evidenceis overwhelmingthathumans
have had enormouslycostly effects on the
environment.Lomborghimself estimates
air pollutiondeathsin the UnitedStatesat
morethan130,000annuallyandover3 million worldwide, and deathsavertedby the
control of chlorofluorocarbons
(CFCs) at
morethan300,000 (2). Thus,even contrarian estimatesof the benefits of environmental action indicatethat these may be
huge. Still, it is more difficult than one
wouldthinkto showthatthis implieslarge
benefits of respondingto environmental
alarms. Where successful mitigationhas
not yet taken place, such as with global
29 AUGUST2003
1187
POLICY
FORUM
warming, realized benefits remain small nationswith the samelevel of wealth,those
or greatercabecauseof our failureto act. In cases with with more environmentalism,
apparentlysuccessfulmitigation,the ques- pacityforpublicchoice,havelowerairpollution is inevitablyraised "Whatwould the tion. Public choice (as a manifestationof
world have looked like in the absence of civil liberties)of courseinvolvesmuchmore
mitigation?"When faced with well-docu- than environmentalism,making the obmentedhazardsand apparentlysuccessful servedrelationespeciallytantalizing.
The balance of the evidence indicates
mitigation,Lomborgandothershavedownactionand that we are receiving substantialbenefits
playedthe role of environmental
have arguedinsteadthat income and tech- from our response to environmental
nology drive most improvementsin envi- alarms.These benefitsrangefromaesthetronmentalquality.Althougheconomicand ic (such as our joy at the bald eagle's retechnicalchangesunrelatedto environmen- covery) to the saving of millions of lives
tal regulationare undeniablyimportantin (for example, regulationof air and water
some cases, such argumentsare easily dis- pollutants).Still, the criticalquantitydetermissedin others,suchas thebaldeagle'sre- miningwhetheror not thereare too many
coveryfromthe effects of DDT or the cur- false environmentalalarmsis the marginal
rentdecreaseof CFCsin the stratosphere. benefitof the alarms-the slope of the benA popularcharacterization
of the relation
betweenpercapitawealthandpollutionis the
so-calledenvironmental
Kuznetscurve(3-5),
cO
whichis shapedlikeaninvertedU (seefigure,
right).The decreasingportionof the curve . m
fac- = I
maybe inducedby purelytechnological
of dirtyprod- c 8:
tors,a shiftin the manufacture
c0
ucts frommoreto less developednations,or dQ
C.
increaseddemandfor environmental
regulationin developedcountries(3, 6-8). Whereall
GDP per capita
of thesefactorsmaybe operatingat once,esac- An example of an environmental Kuznets
timationof thebenefitsof environmental
andcontentious. curve.
tionis inevitably
quantitative
Forexample,in the criticalcase of airpollution, emissionsof severalpollutantsin the efits curve-not the absolute benefit.
United States were decreasingbefore the Historytells us thatmost of the knownanCleanAirAct of 1970(8, 9). Evenso, regres- thropogenichazards had already caused
sionanalysesthatrelateemissionsto govern- considerableharmby the timetheiradverse
mentregulations,
income,measuresof envi- effectswereevenunderstood,let aloneregronmentalaction,and otherpossibledriving ulated; therefore,we argue that humans
forces concludethat regulationsplayed a havetypicallylived on the steepportionof
dominantrole in improvingair quality.The the benefits curve, ratherthan the asympProtection
U.S.Environmental
Agency(EPA) tote. Problemsof detectingwarningsignals
(10) estimatedthe net humanhealthbenefits and overcomingvested interestsinevitably
(benefitsminuscosts)of theCleanAirAct at lead to delay in regulation,often incurring
$5.6 to $49.4 trillionfor a 20-yearperiod damages that could have been prevented
(witha best estimateof $22.2 trillionin net with higher sensitivity.Small particulates
benefits).In a critiqueof the Environmental (PM2.5)are the most dangerousair polluProtection
Agencystudy,Galletet al. (8) also tants in the United States,and these were
estimatedlargenet benefitsandshowedthat not even regulateduntil 1997 becauseepitheKuznetscurveforU.S.airpollutionshift- demiologicalstudiesshowingeffects at uned downbecauseof the CleanAirAct. Other expectedlylow concentrationswerenot reac- porteduntil 1989-1996 (12).
studiesaffirmthe role of environmental
Becausemarginalbenefitsareevidently
tionandattitudesin achievingthe reductions
(6, 11).Inaddition,we foundthatstatesin the so large,we arguethattheydwarfthe highUnitedStateswithproportionally
highmem- ly uncertainmarginalcosts in most cases.
in
alarmis currently
had lower Thus,ourenvironmental
"green"
bership
organizations
Kuznetscurvesfor air pollutantsthanstates too conservative,nottoo liberal.Considera
with lowermembershiprates.Similarly,na- change in the sensitivity of the environtionswitha highscoreon anindexof civillib- mentalalarmlargeenoughto allow,on avertieshadlowerKuznetscurvesthannations erage,one of the majormillion-lifehazards
with low civil liberties,probablybecauseof to pass undetected.Tobe beneficial,sucha
actionin changewouldhaveto reducethe cost of inpubliclobbyingfor environmental
countrieswith morecivil liberties(see sup- appropriate
regulationseven morethanthe
porting online material).These examples net value of the lives lost. We view this as
stronglysuggestthatairpollutionis not sim- extremelyunlikely,giventhatthe valueof a
statesor single "statisticallife" is usuallyestimated
plya matterof income.Incomparing
1188
29 AUGUST2003
VOL301
in the low millions ($3 to $6 million currently in the United States) and that total
expenditureson environmentalprotection
in OECD(Organisationfor EconomicCooperationand Development)countriesare
generallyestimatedat 1 to 2%of gross domestic product,with the United States at
1.6%(13-15). Also, new discoveriesfirst
receive considerable scientific scrutiny,
andmost false alarmsare discardedbefore
they engenderserious costs. Furthermore,
the costs of mitigationoften are far less
thaninitiallyprojectedbecauseof induced
technicalchange;delayingmitigationcan,
therefore, increase costs. Environmental
policy and science are dynamicpartners,
and delays in addressingproblemstip the
balanceeven more in favorof earlywarnings and actionthanthe staticcost-benefit
analysiswouldsuggest(16).
The optimalsolution of a cost-benefit
analysisalwaysleaves some membersof a
heterogeneouspopulationbearinga disproportionatefractionof the costs and others
fractionof the
enjoyinga disproportionate
benefits. Thus, there will alwaysbe a robust marketof specialintereststo popularize books like The Skeptical Environmentalist.Weresuch complaintsnot heard,
we wouldbe erringeven moreon the side
of setting sensitivitiestoo high. Giventhe
potential to save millions of additional
lives, this is no time to turndownthe senalarm.
sitivityof ourenvironmental
References and Notes
1. B. Lomborg, (2001) The Skeptical Environmentalist
(Cambridge Univ. Press, Cambridge, 2001), pp. 168,
182, and 274.
2. A. Kinzig et al., Ambio 32(5), 330 (2003).
3. K.Arrow et al., Science 268, 520 (1995).
4. T. M. Seldon, D. Song, J. Environ. Econ. Manag. 27,147
(1994).
5. G. Grossman, A. B. Krueger, Q. J. Econ. 110, 353
(1995).
6. W. Jaeger, "A theoretical basis for the environmental
inverted-U curve and implications for international
trade," working paper, Williams College, Williamstown, MA,1998.
7. J. Andreoni, A. Levinson, J. Publ. Econ. 80, 269 (2001).
8. C. A. Gallet, J. A. List, J. F. Shogren, "Reconsidering the
emission savings due to the 1970 Clean Air Act
of
Amendments,"
working
paper, University
Maryland, College Park, MD, revised 2002.
9. R. Lutter, R. B. Belzer, Regulation 23, No. 3. (2000).
10. "The Benefits and Costs of the Clean Act. 1970 to
1990," http://yosemite.epa.gov/ee/epa/eermfile.nsf/
vwAN/EE-0295-2.pdf
11. S. Aoroa, T. Cason, South. Econ. J. 65, 691 (1998).
12. C.A. Pope III et al.,JAMA 287(9), 1132 (2002).
13. W.Viscusi,J. Econ. Lit. 31, 1912 (1993).
14. J. Lesser, D. Dodds, R. Zerbe, Environmental Economics
and Policy (Addison-Wesley, New York, 1997).
15. "Pollution Abatement and Control Expenditures in o
OECD Countries," www.oecd.org/dataoecd/41/57/
z
0
470431 1.pdf
16. M. Grubb, J. Kohler, D. Anderson, Annu. Rev. Energy
Environ. 27, 271 (2002).
3J
17. We are grateful to M. Grubb, P. Ehrlich, S. Schneider, I
and G. Daily for helpful comments on an earlier draft.
Supporting Online Material
www.sciencemag.org/cgi/content/fulv301/5637/1187/DC1
SOM Text
Table S1
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