Georgetown Law Journal
What does cost-benefit analysis mean, or do, in actual practice? When agencies engage in cost-benefit balancing, what are the interactions among law, science, and economics? This Article attempts to answer that question by exploring, in some detail, the controversy over the EPA's proposed regulation of arsenic in drinking water The largest finding is that often science can produce only "benefit ranges, " and wide ones at that. With reasonable assumptions based on the scientific data before the EPA at the time it made its initial decision, the proposed arsenic regulation can be projected to save as few as 0 lives and as many as 112. With reasonable assumptions, the monetized benefits of the regulation can range from $0 to $560 million. In these circumstances, there is no obviously right decision for government agencies to make. These points have numerous implications for lawyers and courts, suggesting both the ease of bringing legal challenges on grounds specified here and the importance of judicial deference in the face of scientific uncertainty. There are also policy implications. Agencies should be given the authority to issue more targeted, cost-effective regulations. They should also be required to accompany the cost-benefit analysis with an effort to identify the winners and losers, to see if poor people are mostly hurt or mostly helped.
Cass R. Sunstein, "The Arithmetic of Arsenic," 90 Georgetown Law Journal 2255 (2001).