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OCR for page 83
s
Comparing Values in
Environmental Policies:
Moral Issues and Moral Arguments
DOUGLAS E. MACLEAN
Three kinds of problems seem particularly pervasive in administering
environmental policy. The first is political. Policy makers work within a
framework of environmental laws that are notoriously vague, apparently
contradictory, and often otherwise flawed. Those charged with the re-
sponsibility to protect the environment must follow procedures that were
designed in part to protect political interests; they must fight off relentless
pressure while remaining accountable to politicians; and they must enact
policies with an eye to withstanding the litigation that will surely follow.
This process may be a model of democracy at work, but it does not en-
courage thoughtful responses to complex issues or regulatory improvement
by "fine tuning" in the light of new information and greater experience.
The second problem in administering environmental policy is technical.
Uncertainty is pervasive in this area, and the demand for precision is often
greater than science or practicality permits. Under pressure to act now,
decision makers grope for policies in ignorance, especially if the risks
involved in various alternatives have latency periods between exposure and
the onset of irreversible effects. The costs of always acting conservatively
in the face of uncertainly can be prohibitively high; and it is not unusual
for the uncertainties to be so great-ranging over six or seven orders or
magnitude that the risk analyses are useless to policy makers.
The third problem is one of comparability. It is impossible to eliminate
environmental rislo;; policy makers must thus decide when to put more
resources into reducing them, when to control other risks instead, and
when to stop trying to reduce risks altogether and use resources for other
Douglas E. MacLean is professor of philosophy at the University of Maryland.
83
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
purposes. ~ make these decisions, a broad range of values must be weighed
and compared. What kind of a problem is this? Insofar as it concerns the
allocation of scarce resources, it is a-classic economics problem, a general
problem in rational choice or decision theory. Why should it be singled out
as an especially central problem for environmental policies? It is surely not
as immediate a concern for the policy maker as the political and technical
problems he or she faces. The reason to single out this problem for
environmental policies has to do with the nature of the benefits or values
that are involved.
Environmental decisions typically require the comparison of different
benefits (e.g., the preservation of human life, health, clean air and water,
wilderness, endangered species, money, and consumer products). The
economics problem might be described as finding the correct weights or
rates of exchange among these benefits. That our society considers each of
them valuable is obvious, but it is far from clear that there is a satisfactory
metric for weighing them together and trading them off. All of the general
methods proposed so far seem notoriously controversial. The underlying
issue is the nature and value of different benefits, which is not strictly an
economic issue but rather a philosophical one. It is a subject of ethics.
Some of the benefits that must be weighed and compared are even
more difficult to evaluate than those already mentioned. For example, it
is taken for granted that public policies must be fair and must consider
the distribution of benefits, risks, and costs across locations or populations
and across time. An important goal of policies is to protect the health and
environment of future generations. Yet risks can be distributed differently
in various ways, all of which may seem morally relevant. Some statistically
certain number of annual deaths spread across a population may have to
be compared with a small risk of catastrophic consequence. The average
individual risks involved may be identical, but they seem to involve different
values. How should they be compared? And how should these different
distributions be compared with the other benefits and costs involved?
These, too, are moral questions.
The philosophical issues involved in promulgating environmental poli-
cies, however, extend even beyond this. Many people believe it is simply
wrong even to attempt to solve these measurement problems and to find a
common and applicable rate of exchange between all of these benefits. One
popular and persistent view holds that it is morally wrong to set forth the
problem in this way. It is frequently alleged that the value of such benefits
as human life or the nation's environmental heritage cannot be equated
with money, or other resources, at any rate of exchange. ~ assign this kind
of exchange value to such benefits is to treat them as commodities when
they really have a different kind of value a sacred value perhaps and
should be regarded as such. This objection suggests that it is necessary
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DOUGLAS E. AL4CLEAN
85
not only to find a method for weighing different goods but also to find
appropriate ways of expressing or regarding different values. Part of the
problem, it seems then, is procedural.
The philosophical issues at the core of this third problem are there-
fore quite basic. They involve not only the question of how to weigh
different benefits but also the more general question of how to compare
different values. The objections suggest that the benefits or values may be
incommensurable, and yet decisions based on comparisons must be made.
This paper will address these moral issues, which are at the heart
of many environmental controversies. Moral views drive debates over
proposed legislation and are further reflected in subsequent litigation. The
appropriateness of discounting the value of future lives, the application of
benefit-cost analysis as a method of setting environmental policies more
generally, and other issues that remain central and contentious in the
environmental policy arena are essentially moral disputes.
METHODS OF REASONING ABOUT MORALITY
Most policy analysts would agree that the problems I have been de-
scribing are pervasive and at the core of many environmental disputes. My
aim so far has been simply to suggest that many of these moral concerns
raise a common general question about whether and how different kinds
of benefits and values may be compared.
I wish to consider some of these moral issues directly, but it would be
useful first to discuss briefly the nature of moral or philosophical reasoning.
The approach I will take to these issues the approach I find most natural
and useful is to inquire directly into the nature and implications of some
of the values involved. What Is the value of human life? What are current
society's obligations to future generations? This process is not an empirical
inquiry into what most people happen to believe but rather a normative
inquiry. The question is, what is it reasonable to believe? A successful
argument must appeal to what can be found to be reasonable and not
merely what is persuasive. If different and incompatible views pass the test
of reasonableness, then the moral inquiry turns to more general principles
and procedures for making balanced or fair choices among these different
individual views.
This kind of inquiry inevitably appeals to moral intuitions and to
arguments that try to link such intuitions to other intuitions and to more
general principles. Moral reasoning, as I would characterize it, is in this
respect similar to scientific reasoning. Instead of reasoning back and forth
between hypotheses and laws, on the one hand, and observations and
experiments on the other, in moral reasoning, one reasons between cases
and considered intuitions on one hand and more general concepts and
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
beliefs on the other. Both kinds of reasoning are objective to the extent
that their claims are susceptible to rational assessment.
One difference between scientific and moral reasoning, of course, is
that moral principles are not meant to predict but to prescribe; but this
difference is not crucial to the nature of the reasoning involved. If the
nature of reasoning in science and ethics is similar, however, why is it
so much harder to reach consensus in ethics than to reach consensus
in science? One reason is that methods of reasoning are more highly
developed and agreed upon In the sciences than they are in the field of
ethics. Scientists can also design experiments explicitly to test hypotheses
and resolve disputes. In ethics, one uses actual and hypothetical situations
to test one's intuitions, but these "thought experiments" are much less
likely to be convincing than are the experiments of science.
Such an approach to moral inquirer is common within the discipline of
~ -wry ~ ~ ~
philosophy, but it appears to be alien and ob~ectlonanle so pOllCy analysts
who are trained in other disciplines. They seem to favor other approaches to
resolving fundamental moral issues. One of these approaches is empirical.
The way to resolve convicts that arise among analysts, it is sometimes
thought, is to find out what people actually believe and prefer. This
process will reveal what the nation's policies ought to be, for in democratic
societies, the people are sovereign. I call this the low road to moral inquiry.
Another approach appeals to moral theories or general normative doc-
trines to resolve disputes and explain more particular values. Philosophers,
of course, are also interested in moral theories and normative doctrines,
but their interests often have very little to do with shedding light on par-
ticular moral or policy questions. Nevertheless, it is not uncommon to find
policy analysts suggesting that this is the approach mat philosophers might
use most effectively to shed light on the moral aspects of environmental
issues. According to this way of thinking, what is needed is a relatively
comprehensive survey of the application of moral philosophy and ethics to
problems of valuing risks to life and health, not a restricted set of specific
arguments using a specific mode of philosophical analysis:
Whereas no one could fault a philosopher concluding with an argument
in favor of one perspective (e.g., Kantian) over others (utilitarian, rights
libertarian, contractarian, etc.), what seems essential is to lay out what
the alternative approaches are, what specific ethical and moral issues
they address, and where the approaches diverge, as well as how one
might assess the relative applicability and relevance of each.1
1This quotation comes from comments on an earlier draft of this paper by Roger Noll. Both
the suggestion about how philosophical issues can be most usefully addressed and the list of
philosophical perspectives or theories are common in the policy analysis literature (see, e.g.,
Kneese et al., 1983, and Keeney, 1984~.
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DOUGLAS E. MACLEAN
87
Let us call this the high road to moral inquiry.
The kind of direct moral inquiry I favor using a restricted set of
specific arguments is neither merely empirical nor overly general or the-
oretical. It is a middle road. Let us briefly consider, then, the weaknesses
in the high- and low-road approaches.2
Empirical Approaches to Moral Issues
Empirical approaches to these questions are usually attempts to un-
cover individual preferences. What do most people think are current
society's obligations to future generations? How would most people trade
off longer life expectancies against improved health, health against welfare,
and so on? Revealed preference theory attempts to uncover these attitudes
by looking at actual behavior and, in particular, at individual consumer
choices in cases in which people are free and informed. The problem
with this particular approach, of course, is that people are not always free
or informed; even when they are, their consumer behavior does not al-
ways indicate their considered preferences, let alone their reflective moral
judgments.
An alternative empirical approach is expressed preference theory or
contingent valuation methods. These methods generally involve surveys
in which people's preferences, their willingness to pay, and so on can be
measured directly. Methodological difficulties aside (e.g., the reliability of
surveys), a number of problems arise in applying the results of such surveys
to settle moral disputes. The first is that people are normally asked in these
studies what they would prefer, which is not at all the same as inquiring
empirically into their moral beliefs. It is both consistent and common
for people to have certain preferences that it would be wrong or unfair
for policies to satisfy directly. Setting policies that attempt to satisfy the
maximization of preferences would ensure, for example, that toxic wastes
and hazardous technologies are always sited in the least populated areas
simply because there are fewer people to object. Such a policy would
obviously be unfair, and most people would agree that it is unfair, despite
their personal preferences.
Recently, however, a number of contingent valuation studies have
surveyed people's moral attitudes directly in particular, their intuitions
about procedural fairness and distributive justice (Kahneman et al., 1986~.
The information from these studies is interesting and perhaps quite useful,
but there is a certain absurdity involved in thinking that these data can
settle moral disputes. This absurdity is easy to show. Either moral truths
can be reduced to individual preferences or they cannot. If they can be
2 For a detailed discussion of different approaches to moral inquiry, see Parfit (1984~.
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
determine what Is fair or right is the wrong question. Either people will
answer according to which alternative they think is morally justified or best
supported by moral reasons (which by hypothesis rests on an incorrect
view of morality) or they will respond by saying what they think other
people believe is right (if they have the "correct" moral views). Actually, to
avoid relying on the false moral view one step removed, they would have to
respond by saying what they think other people think that other people think
that-and so on. If moral truths can be reduced to individual preferences,
then soliciting opinions must either be ultimately self-defeating (if people
express what they believe is morally justified) or land in an infinite regress.3
If moral truths cannot be reduced to individual preferences, however, there
is no apparent reason for surveying opinions to advance the understanding
of moral truth and justification, except perhaps to help uncover reasons or
arguments that might not be immediately apparent.
The foregoing is an argument against the low road to moral inquiry,
but there are other reasons to respect popular sovereignty and in so doing
uncover public opinion for use as a basis for policy decisions. One reason,
of course, is that some comparisons may not essentially involve moral
reasoning or moral problems. One might believe that moral philosophy
really has little to say about how improvements in welfare should be traded
off against improvements in health or life expectancy at the margin, when
either improvement will fall to the same people (see Schelling, 1984~.
These choices may simply be matters of personal preference, but they are
only some of the more troubling choices environmental decision makers
must face. Many of the comparisons they make also involve distributional
issues: improvements to one population must be balanced against risks to
another, the price must be paid now to protect future generations, and so
on. These, at least, are certainly moral issues.
Although some issues are simply matters of preference, there is a fur-
ther argument for citizen or consumer sovereignty, based on the character
of democracy, that applies to public policies. Marglin writes (1963:97),
"Whatever else democratic theory may or may not imply, I consider it
axiomatic that a democratic government reflects only the preferences of
the individuals who are presently members of the body politic." The func-
tion of government, however, is not simply to reflect current preferences.
Government also has an ennobling and educational role to play, even in a
democracy. The U.S. Constitution protects many values, even those that
are socially unpopular.
More specifically, it has frequently been suggested that government
ought to have greater concern for the welfare of future generations than
is expressed by individuals in their own choices (Pigou, 1932~. Individuals
3I am indebted to John Broome for discussion of these points.
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DOUGLAS E. MACLEAN
89
Is expressed by individuals in their own choices (Pigou, 1932~. Individuals
die, after all, but the society continues, and there can be no objection
to the government looking after the interests of future generations. This
goal is explicitly stated in the National Environmental Protection Act and
so should be a central concern of the Environmental Protection Agency
(EPA).
For these reasons, it is proper for environmental policy makers to
take moral arguments seriously, even when those arguments run counter
to popular opinions. Some might object to this degree of `'moralism" on
the grounds that it is paternalistic. The argument against taking the low
road, however, is moralistic only to the extent that it insists that moral
conflicts be resolved through moral reasoning and not by empirical means.
This approach is not necessarily paternalistic. Paternalism means restricting
a person's freedom of choice or overriding personal preferences for the
individual's own good. The argument against the low road does not call
for replacing an individual's preferences for his or her own welfare with
the decisions of "moral experts." It says only tha,t moral decisions should
be made that are justified by moral arguments.
Arguing From Theory or Basic Doctrines
Let us consider now the high-road approach to moral inquiry as it
relates to environmental policies. This approach looks to moral theory or
basic normative doctrines and attempts to apply them to particular policy
questions.
Let us first consider libertarianism, contractarianism, and utilitarian-
ism which (as I indicated above) are sometimes thought to be different
representative moral perspectives-in order to illustrate the difference be-
tween moral theories and basic normative doctrines. Libertarianism (or
"rights libertarianism"), for example, usually appears in political theories
that claim that individual rights are fundamental to determining political or
moral obligations or claims. Even in the more comprehensive discussions
of libertarianism (e.g., Nozick, 1974), libertarianism is at most a normative
doctrine that is important in discussions of political theory.
Libertarianism is not a moral theory, because it does not take the
kind of external view of normative claims that moral theories inevitably
take. Discussions of libertarianism typically do not attempt to explain the
foundation of its basic moral principles or relate them to other basic moral
issues- for example, the nature of the subject matter of morality, the nature
of moral reasoning, or the connection between moral principles and rational
motivation or will. Moral theories address these more abstract issues, and
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
they frequently are not very closely related to more particular normative
claims or doctrines, unlike virtually all discussions of libertarianism.4
Contractarianism, in contrast, is a moral theory, at least as it has
recently been developed (e.g., Rawls, 1971; Scanlon, 1982~. Rawls's theory
of justice as fairness, which is perhaps the best recent example of moral
theory of any kind, does address these more fundamental and abstract
issues. Although Rawls derives principles of justice (e.g., the principle of
the priority of liberty, or the difference principle for justifying inequalities
in the distribution of primary goods) that can be interpreted as normative
doctrines, these principles are themselves intended to be applied only at
a basic and rather abstract level. Rawls emphasizes that his principles of
justice cannot be applied to immediate cases or particular policies.
It is important to emphasize this difference between moral theories and
normative doctrines, because most moral theories appear to be compatible
with many different moral principles or normative doctrines. A contractar-
ian moral theorist, for example, might argue that a utilitarian principle is
the normative doctrine at which a properly defined social contract would
arrive.
In this respect, utilitarianism is relatively more complicated or con-
fusing, because it has been defended both as a moral theory and as a
normative doctrine or basic normative principle. As a moral theory, utili-
tarianism constitutes a particular view about the nature of moral goodness
and moral justification or moral reasoning. Such a moral theory, however,
may or may not prescribe the principle of utility as a normative principle.
J.S. Mill, for example, did not regard utilitarianism as a moral principle
that should be commonly adopted and applied directly to individual actions
or to social policies. More recently, rule utilitarian and motive utilitar-
ian theories have been suggested that defend other, commonsense moral
principles and doctrines. Some of these theories even suggest that utilitari-
anism can be correct only as a moral theory, and that attempts to apply the
principle of utility directly are likely to be self-defeating, from a utilitarian
perspective (Schemer, 1982~.
Thus, if the high road means beginning with moral theory, it will
require a long and philosophical journey before arriving if at all at
recommendations for important policies and decisions. The high road
would also require the resolution of disputes about which moral theory is
correct. If these disputes are resolved, it will be in part only because one
theory better explains all the moral phenomena, including more particular
reflective moral judgments and the principles that unify them. In sum, it
may be necessary to travel down what I am calling the middle road first in
any case.
4For a good discussion of moral theories and moral doctrines, see Scanlon (1982~.
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DOUGI~lS E. MACLEAN
91
If following the high road means instead beginning with basic normative
doctrines for example, some basic utilitarian principle, or libertarianism,
or some egalitarian principle, or even the difference principle (although
this may go beyond anything that might be attributed to Rawls) then the
question is, which normative doctrine should be chosen? A further task
is to determine what in particular each normative doctrine means. Does
the principle of utility call for maximizing pleasure, as it did for Bentham,
maximizing some more abstract good, as it did for Mill and G.E. Moore, or
maximizing the satisfaction of preferences, as it has come to be interpreted
frequently among economists? If one chooses libertarianism, what do rights
entail, which rights are basic, and how should conflicts among rights be
resolved?
Surely, the only plausible way to answer these questions is to move
to the more abstract realm of moral theory and to the realm of concrete
reflective moral judgments about cases, policies, and principles. If all of
the moral doctrines imaginable imply the same result in some case, then
that consensus would be the strongest moral argument available, although
it is very unlikely that there will be many cases like this, and, where they
exist, they will probably not be in dispute anyway. Every moral doctrine,
for example, must imply that gratuitous torture is bad; otherwise, people
would immediately reject the doctrine. In general, if policy makers reason
carefully and critically about more concrete cases and policies, they will have
more confidence in their judgments about them than in their judgments
about more general and sweeping principles or doctrines. Again, the middle
road seems the place to begin and, for many practical purposes, the only
road that need be traveled.
VALUING AND DISCOUNTING LIVES
IN ENVIRONMENTAL POLICIES
Having defended the approach to moral reasoning that I find most
natural and useful to apply to moral issues in environmental decision
making, I will now illustrate this approach by considering some of the
prominent questions I described at the outset of this paper.
Policy makers are usually interested in analyzing the values of the
consequences of alternative policies. It is well known that some analytic
methods that quantity costs, benefits, and risks and that aim at maximiz-
ing net benefits have difficulties evaluating different distributions of these
effects. These methods take a narrow view of consequences.
Because a broader view of consequences would include the distri-
butional effects of alternative choices, a sensitive metric should also, in
principle, be able to evaluate distractions. The problem is that distributions
may be valued differently because of their effects. Distributional principles
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
cannot simply be valued independent of the context of their application.
Rather, different principles and weights must be applied to different de-
cision problems. Distributional values do not challenge analytic principles
per se, but they challenge the generality of their application.
In addition to valuing the consequences of policies, certain procedures
or ways of making decisions are also chosen. Elections are valued as a way
of selecting public officials, trials as a way of determining criminal guilt,
random processes as a way of achieving fairness. Some procedures are
valued intrinsically and not only for the instrumental reason that they are
most likely to produce the best outcomes. (There is generally little reason
to believe they will.)
Some would argue that procedures, like distributional effects, should
also be regarded as part of the consequences of environmental policies
(Keeney, 1984~. This argument is a far more controversial extension of
the concept of consequences. I can illustrate why this is problematic with
a personal example. Not long ago, I suggested to my wife that, instead
of buying her a birthday present this year, I would give her money and
she could shop for her own present. I am not; very good at picking out
presents for her, and I do not enjoy shopping for them. I offered her $50,
explaining that I would probably spend $25 for a present if I bought it, so
$25 could be considered to cover the cost of her time. Besides, she enjoys
shopping for gifts. My wife did not appreciate this suggestion. She valued
the traditional procedure for increasing her stock of goods on her birthday,
and she did not regard money as compensation for this loss.
If one insists that the value of procedures is commensurable with other
consequences, then it might be difficult to regard procedures as having more
than instrumental value. In any case, an evaluation of a procedure must
include a full assessment of the effects of using it, which is more than an
evaluation of its expected consequences.
Two issues are central to moral debates over environmental policies.
The first is the social discount rate, which raises distributional issues about
how to compare costs and benefits that are spread out in time. The central
moral issue here is whether future lives should be valued differently than
present lives. This question leads to the second issue, which is how to
compare the value of saving lives or improving health with other values and
the suggestion that the best way to do this is to assign monetary equivalents
to all of these values. This solution raises the problem of putting monetary
values on human life and health. The moral objection to this approach
is that the value of human life is incommensurable with other economic
values: one cannot put a price on human life. I will argue that when some
of the confusion is removed from this objection, the moral core of the issue
involves procedural values.
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DOUGLAS E. AlACLEAN
93
THE SOCIAL DISCOUNT RATE
It is common in policy analysis to apply a discount rate to expected
consequences as they occur further and further in the future. The reasons
for discounting can appeal to the opportunity costs of capital, the reasons
for wanting returns on investments sooner rather than later; or they can
appeal to rates of time preference, the claim that people tend to care less
about consumption in the future or about the remote effects of their actions
and policies. These are very different kinds of justifications. Often, they
are not distinguished, or they are not treated differently.
In a recent provocative study comparing the effectiveness of a large
number of regulations, Morrall (1986) expresses a theoretically popular
view about discounting. Explaining his own assessment techniques, he
writes (p. 28~:
For the sake of consistency, I adjusted these temporal variations using a
uniform 10-percent discount rate for both benefits and costs.
Students of benefit~ost analysis will recognize an unavoidable im-
precision in using a uniform discount rate, and a certain arbitrariness
in using 10 percent rather than some other rate. Some regulatory costs
displace investment and others displace consumption, and the two ef-
fects are not economically identical. Here as elsewhere, however, the
analytical demands of tailoring a precise discount rate for each rule
were impossibly large, and for comparative purposes the benefits of
greater precision would have been small. Students of regulatory politics
will recognize that discounting benefits as well as costs runs afoul of
the policies of some regulatory agencies, not to mention the positions
of some political representatives and op-ed writers. On this point my
procedure is impeccable. Discounting costs but not benefits leads to
absurd results, such as that a rule saving 100 lives a decade from now
is more desirable than a rule of equal cost saving 99 lives right away,
and that all rules yielding continuous benefits are worth any amount of
immediate costs.
Morrall here suggests several different reasons why all benefits and costs
should be discounted at the same rate.
Some of these issues arose recently with EPA:s proposed asbestos
rule because the detailed knowledge available about the health effects of
asbestos allowed EPA to make relatively precise estimates of the latency
periods between exposure and the onset of disease. Following its traditional
practices, EPA proposed that it not discount the cancers averted for time,
but the Office of Management and Budget (OMB) insisted on a 10-percent
discount rate for all costs and benefits, which included discounting the
latency periods between exposure to asbestos and the development of
cancer. The issue is important for many other EPA concerns as well for
example, waste disposal regulations, an area in which much of the cost of
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
concern for the future in their political choices (Sagoff, 1986). Marglin
(1963:97) considers this possibility to be schizophrenic and argues that,
in any case, consumer behavior is a better indicator of a person's "real"
Preferences: "[S]ince deeds speak louder than words, one can argue that
preferences revealed in the market place are more genuine and better
considered."
I find it remarkable to dismiss political activity as merely words. I
would guess that most people are more committed to their political beliefs
assay expression of their values than to much of what they buy as con-
sumers. Political activity takes many forms. It can consist of supporting
environmental groups that lobby for preservation while consuming nonre-
newable resources beyond one's strictest needs. It is not clear whether
there is even an inconsistency involved in this pattern of behavior, but it is
surely not schizophrenic. It might be true that the values people express
in political contexts and the programs they support tend insufficiently to
take economic considerations into account. People find it easy to support
a worthy program when they do not know what it costs. Yet it is perhaps
equally likely that people do not take their moral values sufficiently into
account when they shop or invest. Even if there were inconsistencies be-
tween market-exhibited preferences and those that are politically revealed,
it is far from obvious that they should all be resolved in one direction.
These issues demand a much fuller treatment than can be provided
here. I am suggesting, however, that the connection between consumer
sovereignty and democracy be viewed with some suspicion. Sovereignty
in a democracy rests with the citizens people and people express their
values in many ways.
Excessive Sacrifice
The remaining three objections do not challenge the moral argument
directly but claim instead that certain absurdities follow if all benefits,
including the value of human lives, are not discounted in benefit-cost
analyses. Morrall points to one such absurdity when he suggests that "all
rules yielding continuous benefits are worth any amount of immediate
costs" (1986:28~.
Situations in which this result might follow are familiar at EPIC For
example, EPA's analysis of a uranium mill tailings standard estimated that
the present costs would be $388 million and that the standard would save
4.9 lives per year perpetually. If lives were discounted at 10 percent, the
present value would be $8 million per life saved, a figure that is probably
too high to recommend. If lives are not discounted, the cost-effectiveness
is $800,000 per life saved for a horizon of 100 years, $80,000 per life saved
for a horizon of 1,000 years, and so on.
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DOUGLAS E. MACLEAN
97
Even in this example, the result of not discounting lives is absurd only
with the assumption of an infinite time horizon, and there are good reasons
to avoid such an assumption. The uncertainties involved should probably
lead to the rejection of even the analysis with the 1,000-year horizon; yet
however a reasonable horizon is determined, there is no justification for
discounting the values of the lives analysts believe can be saved.
If the suggestion of selecting a time horizon in such cases seems ad
hoc, there is another way to avoid the absurdity, using a method that has
a stronger conceptual foundation: limiting the sacrifice required of the
present generation.
It is common to think that individuals have less responsibility to do
good than to avoid doing harm because avoiding harm can often be accom-
plished by not doing anything, whereas doing good requires some effort.
There are limits on the effort that can be demanded of people on behalf
of morality. It would not be wrong for an individual to avoid saving even
hundreds of lives if that act required the sacrifice of all other benefits in
that person's own life. It would be extremely noble for a person to de-
vote himself or herself to such a morally worthy cause, but society cannot
require this great a sacrifice. Individual moral rights may be seen in part
as an effort to protect individuals from the possibly excessive demands of
morality. There are similar limits on the sacrifices that can be demanded of
current generations for the benefit of future generations. Identifying these
limits blocks the absurdity noted by Morrall. It should be no more difficult
to identify a maximum level of acceptable sacrifice for a generation than it
is to determine an optimal social rate of savings.
Indefinite Delay
Let us consider the following example.5 Certain social resources are
available and can be used for either of two projects and in no other way.
The projects have the following potential results:
· Project A will reduce by 100 the number of fatal accidents occurring
in the 10th year following its initiation.
· Project B will reduce by SOO the number of fatal accidents occurring
in the 40th year following its initiation.
It follows from the conclusion that the value of future lives should not be
discounted that Project B should be chosen. Yet the final two objections I
wish to consider claim that, if several plausible assumptions are added to
this example, other absurd consequences will follow.
5 I owe this example to Robert Dortman; see note 6 below.
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Let us first assume that the resources do not have to be invested
immediately and that the identical projects will remain available in the
future. Suppose the resources can be invested at a 6 percent rate of return.
If policy makers deci~led to save for 10 years and then invest in Program
B. the number of fatalities in the 50th year would be reduced by 900. Let
us call this Program C. If discounting is not used, decision makers should
prefer Program C to Programs A or B because it saves more lives. Then,
however, decision makers should actually prefer Program D (which says
wait 20 years and then choose Program B) to Program C, and so on. By
this line of reasoning, investment would be delayed indefinitely.
This objection makes one plausible assumption that there are usually
alternative possible uses for resources- but it also makes some implausible
assumptions. The resources would have to be invested and not consumed;
then, they would have to be reinvested, with interest, in the life-saving
program in the 10th year. Will programs be available at the same cost
in the future? Will policy makers have the resolve to use the resources
that have been set aside for this purpose? The half-life of political com-
mitments is considerably shorter than the half-life of uranium mill tailings.
Furthermore, how will science and technology have changed in this period?
It is unreasonable to assume that the situation will remain the same indef-
initely. Policy makers have good pragmatic reasons to do what they can
in the present and to choose programs they can implement immediately,
but these are not reasons to save lives immediately. It is not uncommon
at EPA for analysts to develop programs that can be implemented now but
that will save lives mostly in the future.
A Paradox
There should be discounting for opportunity costs with money invested
at some rate of return. Therefore, monetary costs should be discounted.
In deciding, however, whether a life-saving program is cost-effective or
cost-beneficial, it is necessary to assign a monetary value to the lives saved.
(I will discuss the moral issues involved in this process later.) These
assumptions appear to generate a paradox: the value of lives saved should
not be discounted but money should be discounted; nevertheless, the lives
saved can be given monetary equivalents.6
Let us refer again to Projects A and B and consider now an alternative,
Project C', which is to choose neither program and return the resources
to the private sector where they will be consumed or invested according to
6 I first discussed this paradox at a workshop on discount rates at Resources for the Future in
1985. Robert Dorfman reformulated it more precisely and elegantly than I had. I rely here on
his reformulation.
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DOUGLAS E. MACLEAN
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individual savings preferences. Suppose the present value of these resources
is $100 million and the discount rate for investment and consumption is 6
percent.
Suppose further that it is determined that a life saved is worth $2
million. Program A would confer benefits worth $200 million in the 10th
year; Program B would confer benefits worth $1 billion in the 40th year.
The present value of Program A is $112 million, and the present value of
Program B is $97 million. Without Program C', Program B is preferable
to Program ~ With Program C', Program A is preferable to Program B.
and Program A passes a benefit-cost test while Program B does not. This
result seems to violate the independence of irrelevant alternatives.
One of our assumptions must go: either that the value of lives should
not be discounted or that the value of a life has a monetary equivalent. It
is the latter assumption that should be given up.
There are no opportunity costs attached to saving lives later rather than
sooner in the example. If these benefits are assigned monetary equivalents,
they should not be discounted to a present value. One might then say
that Program B confers undiscountable benefits worth $1 billion when they
occur; thus, they are worth that much today, but even this formulation is
very misleading. One should instead regard the alternatives as not investing
$100 million worth of resources in life-saving programs, investing the same
resources to save 100 lives, and investing them to save 500 lives. Program
B would save lives as a cost of $200,000 per life at today's rates, a bargain.
Program B should be chosen.
Variations of these last three objections are common in the literature
defending discounting for time preference in benefit-cost analysis. None
of the authors in the various articles, however, gives a good reason for
discounting the value of lives saved or lost in the future as a result of
present policy choices and investments. Similar arguments would apply
to the value of improved health and perhaps to other kinds of benefits
as well. These objections show that benefit-cost analysis must be applied
carefully; in addition, selectivity must be exercised in choosing what to
discount, determining time horizons for the analysis, assigning monetary
equivalents, and so on. I am arguing for selectivity and not for rejection of
the method of analysis or discounting; that is, in cases in which discounting
is appropriate.
WHAT SHOULD THE DISCOUNT RATE BE?
I have argued that some costs and benefits should not be discounted.
Other costs and benefits should be discounted, but at what rate? With a 10
percent discount rate, the present value of $1,000 of benefits 50 years hence
is $8.52; at a 5 percent rate, the present value in 50 years is $87.20; at a 2
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
percent rate, it is $371.53. For a SO-year horizon, the difference between
10 percent and 5 percent is an order of magnitude; the difference between
10 percent and 2 percent is a factor of 40. The discount rate chosen can
easily determine in many cases whether a project is cost-beneficial. Not
surprisingly, therefore, an enormous technical literature argues for different
rates.
I will not try to assess this literature here. I will instead suggest only
why it might be wise to choose a social discount rate for health and safety
regulations that is lower than the private sector rate; that is, lower than the
discount rate individuals and firms apply to investment decisions based on
rates of return and rates of interest prevailing in the market.
The principal reason given for similar social and private discount
rates is the belief that social investments should meet the same economic
standards that private investments must meet. This belief is sometimes
reinforced by a currently popular political theory; which says that the
proper role of government is to enforce rights and to act to correct market
failures. Many people would reject this political theory and defend a more
positive role for government. Indeed, the laws that give EPA its mandates
make little reference to correcting market failures or to treating health and
the environment as economic resources.
Even those who do not accept the market failure concept of govern-
ment, however, ought to favor policies that make some economic sense, and
this rationale is a sufficient reason to apply discount rates to some aspects of
public investments. In some cases (e.g., development projects), the policy
goals are economic; in some development projects, government investments
will be competing with private sector investments. In these cases, there are
better reasons for applying the same criteria private investors apply so as
not to displace private investment.
This line of reasoning applies most clearly to water and energy projects.
It does not apply to environmental, health, and safety regulations, areas in
which there are both little evidence that the problems are caused by market
inefficiencies, and independent moral arguments and political support for
government action. If one also accepts that government has a special
responsibility to protect the interests of future generations, a responsibility
individuals and firms do not have and do not reflect in their economic
decisions, then the reasons for applying different criteria to public and
private investments are even stronger. The argument that regulations
should be justified In economic terms is weaker; consequently, so is the
argument that the social and private discount rates should be the same.
Private investors do not worry that some resources are nonrenewable and
that some costs and benefits are not replaceable. They do not worry
that Americans have moral objections to treating certain benefits such as
human lives or perhaps wilderness areas as resources to be exploited and
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DOUGLAS E. MACLEAN
101
invested. Citizens do worry about such things, however, and that is why
laws are passed to establish regulatory agencies. It is natural to expect these
agencies to operate with standards that are different from those applied in
the marketplace.
There is another, related argument for lower social discount rates that
is much discussed in the literature. This is the isolation argument (Marglin,
1963; Sen, 1967, 1982), which claims that the social discount rate should
be lower than the private rate, even it the social rate is based strictly on
individual preferences and all individuals have the same private rate of time
preference.
The isolation argument assumes that individual savings decisions are
based in part on an individual's altruistic preferences for future generations,
perhaps especially for his or her own descendants. Yet individuals have
limited control over the benefits these later generations will receive because
they cannot control the investment decisions of others. Thus, individuals
might choose to save more, or to have a lower discount rate on consumption,
if they could be assured that their greater savings would be matched by
the greater savings of others. This case is a variation of a common public
benefits problem, in which government policies for protecting the interests
of future generations act as the coercive mechanism needed to secure
the cooperation of others. Thus, a discount rate lower than that used by
individuals in isolated decisions should be applied to national environmental
. -
po 1cles.
As I have presented them here, these arguments for different private
and social discount rates are obviously neither conclusive nor prescriptive
(they do not say what the social discount rate should be). My point is only
to suggest how moral arguments might be applied to determine not only
which future costs and benefits should be discounted but also what discount
rate should be applied.
PUTTING A PRICE ON LIFE
Regulatory agencies do not set a price on human life; they merely try
to uncover public preferences for risk reduction from data about consumer
safety decisions, wage rate differentials for hazardous occupations, surveys,
and contingent valuation studies. This approach is somewhat misleading
because another possible way to determine the value of life would be
to examine regulatory decisions themselves. Yet the norm is sought in
other areas, of course, precisely to guide these decisions and evaluate
existing regulatory policies. Such guidance and evaluation are the sole
purposes in determining a social value of human life. This issue is a source
of enduring controversy. Pricing life seems necessary for both holding
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
regulatory agencies economically accountable and at the same time finding
them morally repugnant.
The moral issue, of course, is treating a "sacred" good as an economic
commodity. Kant (1785:Ak 434-435) wrote that human beings have intrin-
sic worth or dignity and that whatever has dignity is "above all price, and
therefore admits of no equivalent." Solow, however, describes the issue
more clearly: "It may Farrell be socially destructive to admit the routine
exchangeability of certain things. We would prefer to maintain that they
are beyond price (although this sometimes means only that we would prefer
not to know what this price really is)."
Decisions about acceptable risk inevitably involve comparing the value
of saving lives and protecting health with the costs of doing so. Many would
argue that, to make these decisions in a fully rational way, it is necessary to
be explicit about these costs and the amount our nation is willing to spend
to save lives. Such disclosure is to adopt a moral position about procedures
for making important decisions, a position that Gibbard (1986:99) calls one
of `'technocratic moral reform." He suggests that
a rationally grounded morality will be reformist perhaps shockingly so.
It will not appeal primarily to our capacities to be aroused, as traditional
moral reform movements have done, but to ways of regimenting the
considerations involved to produce rational, coherent judgments.... We
need, it seems, to train people in rational methods of risk assessment
and so organize society that those methods really do determine policy
with regard to risk.
Why do "many, perhaps most of us," as Gibbard says, find this a chilling
prospect?
The answer is not, as some have claimed, that human life has an infinite
price. That idea is not what Kant meant in saying that humanity is "above
all price." The reason is rather, as Solow observes, that civilized people
find it morally repugnant to view life as routinely exchangeable for other
benefits. People thus feel uncomfortable with even rationally defensible
procedures for making difficult decisions if those procedures make finding
an exchange rate for life a prominent feature.
What sense can be made of this reaction? I would argue that the value
of life is complex.7 Human life has intrinsic value, which makes it worth
saving and prolonging. This component of life's value favors efficiency and
the saving of more lives rather than fewer. It stands behind support for
rational methods of risk assessment. Yet human life is also sacred, and this
component of its value can work in a different and conflicting direction.
Durkheim (1915) regarded sacred values as "elementary forms" of
religious life, by which he meant that even as societies become secular,
7I have argued this point more fully (MacLean, 1983, 1986~.
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DOUGLAS E. AL4CLEAN
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there remains a kind of need that traditional religions fulfill in older or
more primitive cultures. This need involves finding rituals that strengthen
social integration. "There can be no society," Durkheim wrote (p. 417),
'which does not feel the need of upholding and reaffirming at regular
intervals the collective sentiments and the collective ideas which make its
unity and its personality."
As a pluralistic culture, the United States does not have a single unity
and personality, but there are clearly some basic moral values that all
Americans share and that, as Durkheim would point out, are universal.
Rituals carry symbolic meaning that call attention to these values. They are
marked by special, perhaps nonrational behavior and actions that draw the
attention of the community to objects or relationships that have a special
place in the life of the group. Because rituals are symbolic, they rely on
conventional forms of behavior, which can differ from group to group. In
all societies, however, and especially in those areas in which man finds
it necessary to "humanize" parts of his existence, characteristic activities
marked by rituals can be found (Hampshire, 1983~. These rituals surround
birth sex and marriage for example and they also surround death and
~__~ ___~__~0_~ ~ ~---r~~~
the taking of life.
Precisely because health and safety decisions have obvious economic
consequences, it is necessary to guard against treating human life as ex-
changeable in these contexts. Some policies and procedures that are inef-
ficient but highly symbolic can be effective guards. Startling examples of
inefficient, ritualized behavior are common in our dealings with hazards
and risks. For example, Americans are generally willing to engage in res-
cue missions when identified individuals are involved and to act as if-or
certainly to give the appearance that-costs are not a consideration.
1b argue that the sacred value of human life in these situations must
be respected is not to deny in any way the value of efficiency in life-
saving and the importance of saving more lives rather than fewer whenever
possible. The point is rather a more subtle one. It is to suggest that
there may be irresolvable tensions between our rationalistic, revisionist
sentiments, on the one hand, and our conservative, ritualistic sentiments
on the other. A rationalistic decision procedure may unavoidably threaten
some of these sentiments, which may suggest that it is better not to make
that procedure too absolute, too open, or too openly identified with public
agencies like EPA that were created to pursue moral as well as other goals.
It may perhaps be necessary to live with some controversies rather than to
resolve them technocratically, and to tolerate "pockets" or modest levels
of inefficiency for this purpose.
I mean also to suggest that the symbolic role of public figures like the
EPA administrator should be recognized when he or she appears at a press
conference to announce a regulatory decision, often about some hazard that
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COMPARING VALUES IN ENVIRONMENTAL POLICIES
to be reassured that things they value deeply-health, the environment,
posterity are being guarded and protected by the agency that has been
established as the trustee of these values. Like it or not, the actions of
EPA have important symbolic and expressive significance. Everyone may
not approve of such taboos as refusing even to look at benefit-cost analyses,
but it is necessary at least to be sensitive to the kinds of symbolic importance
they might have.
CONCLUSION
The issues I have discussed involve very different kinds of arguments
that lead to different paths of moral inquiry. Nevertheless, I think they all
support the general conclusion that it is important to look critically and
perhaps even suspiciously at suggestions that some analytic method should
be universally applied to environmental decision making. The comparisons
and trade-offs that must be-made are often context dependent or may
Involve symbolic elements. These comparisons make the justification of
decisions specific to a particular situation.
It is extremely important to use analysis to organize complex data and
make decisions more consistent and efficient. It is also important, however,
to realize that different values may have to be treated differently. It is
this fact, and not measurement problems, that makes value comparisons in
environmental policy making so difficult.
ACKNOWLEDGMENT
Many people commented on earlier versions of this paper. Claudia
Mills, Cabot Page, Amartya Sen, and Susan Wolf provided some particularly
useful criticisms. A: Mynck Freeman, III, and Roger Noll sent me detailed
written criticisms. -I have benefited from, though I am aware that I have
not fully responded to, the questions they raised.
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Hampshire, S.
1983 Morality and Conflict. Cambridge, Mass.: Harvard University Press.
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DOUGLAS E. MACLEAN
105
Kahneman, D., J. Knetsch, and R. Thaler
1986 Perceptions of unfairness: Constraints on wealth seeking. American Economic
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Kant, I.
1785 Gn~dleg~ng cur Metaphysik der Sitten. Page references to Prussian Academy
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Keeney, R.L~
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1983 Valuing human life. Pp. 89-107 in D. Zinberg, ea., Uncertain Power. New York:
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Nozick, R.
1974 Anarchy, State, and Utopia. New York: Basic Books.
Parfit, D.
1983 Energy policy and the further future: The social discount rate. Pp. 31-37 in D.
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Pigou, A.C
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Schemer, S.
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106 COMPARING VALUES IN ENVIRONMENTAL POLICIES
1982 Approaches for the choice of discount rates for social benefit cost analysis.
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Representative terms from entire chapter:
environmental policies
