Cross-posted from Legal Planet.
A key figure in behavioral economics recently issued a warning about over-reliance on its findings. In a NY Times op. ed, Dr. George Lowenstein raised questions about some uses of behavioral economics by government policymakers:
As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address. Indeed, it seems in some cases that behavioral economics is being used as a political expedient, allowing policymakers to avoid painful but more effective solutions rooted in traditional economics.
Behavioral economics should complement, not substitute for, more substantive economic interventions. If traditional economics suggests that we should have a larger price difference between sugar-free and sugared drinks, behavioral economics could suggest whether consumers would respond better to a subsidy on unsweetened drinks or a tax on sugary drinks.
But that’s the most it can do. For all of its insights, behavioral economics alone is not a viable alternative to the kinds of far-reaching policies we need to tackle our nation’s challenges.
“Very interesting,” you might think, “But what does this have to do with environmental law?”
Just this: Greenwire recently reported that the Obama Administration is about to give up on the effort to reformulate the rules for regulatory impact analysis (a/k/a cost-benefit analysis). The only thing to show for the effort is an important new guidance document from OMB. Guess what? The new guidance document applies behavioral economics to mandate that agencies give more attention to disclosure as a regulatory tool. This is not too surprising, because the guidance document was penned by Cass Sunstein, a leading contributor to behavioral economics.
Indeed, disclosure may well be useful — consider green labeling rules. But as Lowenstein’s op. ed. makes clear, we should not expect too much of disclosure as a substitute for more muscular forms of regulation. Let’s hope that the Sunstein memo functions to alert agencies to the potential uses of disclosure without pressuring them to use disclosure as a cure-all.
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Daniel Farber | July 26, 2010
Cross-posted from Legal Planet. A key figure in behavioral economics recently issued a warning about over-reliance on its findings. In a NY Times op. ed, Dr. George Lowenstein raised questions about some uses of behavioral economics by government policymakers: As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked […]
Yee Huang | July 23, 2010
July 1 marked the 35th anniversary of the effective date entry-into-force of the Convention on International Trade in Endangered Species (CITES). While CITES is among the stronger international conventions, its strength is diminished by a lack of an enforcement mechanism and political maneuverings. The arrests and cargo seizures may not make headlines often, but international […]
Alice Kaswan | July 23, 2010
After endless negotiations and draft bills, the Senate has given up on climate legislation that would place any sort of cap on the nation’s emissions, and will likely settle for a few select energy initiatives. Congress’ failure to act is galling. Hand wringing is fully justified. But what now? State and local governments have become accustomed to federal paralysis, […]
Shana Campbell Jones | July 22, 2010
Thanks to a strong ruling from a federal judge in Baltimore Wednesday, large poultry companies are one step closer to being held accountable for the pollution (manure) the small farms that grow chickens for them generate. Responsibility: it’s not just for the little guys anymore. In March, several environmental groups in Maryland sued Perdue Farms, […]
Matt Shudtz | July 21, 2010
Just before the July 4 recess, Representative George Miller, Chairman of the House Education and Labor Committee, introduced the Miner Safety and Health Act of 2010. Recent explosions at Massey Energy’s Upper Big Branch Mine, Tesoro’s Anacortes (WA) refinery, BP’s Deepwater Horizon drilling platform, and U.S. Steel’s coke oven in Clairton (PA), highlight the life-threatening hazards […]
Holly Doremus | July 21, 2010
Cross-posted from Legal Planet. Last year, I noted that the interim report of the Interagency Ocean Task Force appointed by President Obama marked a promising step toward a national ocean policy. Now the Task Force has issued its final recommendations, which the President promptly began implementing. A national ocean policy has been a long time […]
Daniel Farber | July 16, 2010
Cross-posted from Legal Planet. According to Thursday’s NY Times, Senate Democrats have agreed to include a utilities-only cap-and-trade program in their energy bill. That’s certainly not ideal — it excludes a large number of industrial sources, which limits its environmental effectiveness. The utilities-only program will also be less economically efficient, since it precludes taking advantage […]
Ben Somberg | July 15, 2010
The last time the WSJ attempted a big scoop on the Toyota story (attempting to discredit the Prius driver case in California), the article did not hold up well. This week’s story (“Early Tests Pin Toyota Accidents on Drivers”) has caught attention, and a response from NHTSA: the agency has “several more months of work […]
Ben Somberg | July 14, 2010
A report released in Washington this morning highlights “The Hidden Struggles of Migrant Worker Women In The Maryland Crab Industry.” The paper, by Centro de los Derechos del Migrante, Inc. and the International Human Right Law Clinic at American University Washington College of Law, is focused mostly on immigration policy issues (a little outside our […]