On Approaches to Measuring Costs of Inaction

Abstract

The article attempts to establish general approaches to statistical measurements of effects from a failure to take necessary environmental actions in the medium and long term (or, to use the author’s terminology, estimating the «costs of inaction»). It is emphasized such an assessment is closely related to the «precautionary principle», which implies the rejection of the use of innovative products and technologies due to lack of confidence in their safety for the health of the population and the environment. The paper addresses main problems associated with the practical application of the «precautionary principle», such as risk assessment and management, effective coordination between science and politics, as well as finding a reasonable balance between innovation and potential social and environmental damage.

An analysis of today’s most successful attempts to determine the costs of inaction has made it possible to identify methodological shortcomings of the «ethical» approach, which forces us to treat with some caution the estimated costs of future periods that arise in the case of an «insufficiently ambitious» environmental policy.

The example of determining the costs of inaction associated with the extraction of shale hydrocarbons by hydraulic fracturing (fracking), shows the present methodological difficulties in assessing the potential risks of environmental pollution and the direction of their solution. The author concludes that under conditions of a high degree of uncertainty at all stages of assessing the negative impact on the environment, the application of the «precautionary principle» can be based on an analysis of the degree of reversibility of the impact of innovative products and technologies.