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We've had a pretty lively discussion hereabouts on the Bill Nye-Marsha Blackburn segment on yesterday's edition of Meet the Press.  We've covered the main ground -- their discussion about whether recent extreme weather events have shifted the political discourse on climate change -- pretty well. But it's worth noting that while she cited a number of familiar, right-wing canards, Ms Blackburn (TP-TN) also resorted to one Republican shibboleth that we too often let slide by. In talking about possible regulation that seeks to mitigate future climate change, she asserted that we should subject any such proposals to cost-benefit analysis.

Cost-benefit analysis is an old Republican standby for derailing regulation in all fields. They've used it successfully to weaken financial services regulation under Dodd-Frank, and Ms Blackburn seems to have let slip that cost-benefit analysis is their next fallback on environmental regulation aimed at climate change.

You have to hand it to them on this one. Cost-benefit analysis sounds rational, and it feels as though it's consistent with the business-headed image the Republicans like to maintain. But what it really is, is a consistent, concerted effort to undermine and weaken regulatory rule-making. If they can shift the debate to costs and benefits, the anti-regulation groups will have shifted the ground in their favor. Here's why:

Think about balancing the costs and benefits of, say, additional safety and soundness regulations in banking. A reasonable amount of effort should produce a plausible estimate of what it would cost the affected banks to comply with the new rules. Of course, we'd want to use informed estimates rather than wild guesses, so in the rule-making process the anti-regulatory folks insist that we ask the people that know best -- the bankers themselves. So we end up with hard numbers, exaggerated only so far as is possible without completely straining credulity, on the cost side.

But what about the benefits? As important as the benefits are - you know, preventing financial meltdowns and such - they're much more nebulous and speculative than the costs. The benefits also typically take the form of mitigating the costs of not acting. It's impossible to estimate with any precision the decrease in the chance of a financial crisis that we can associate with any given rule. So the game becomes to exaggerate the rather more definite cost of new regulations, and to sow doubt concerning the models that help to illuminate the potential benefits.

So it is with climate change. The fossil fuel combine can surely estimate the compliance cost of any proposed emissions regulation to a fare-thee-well, and they can probably work out pretty well how far they can exaggerate those costs before their claims become simply preposterous. They'll even try to lard in social costs in terms of lost jobs and such. But how do you measure the benefits? Well, there are ways to do it (the costs of recent extreme weather-related events might be a guide), and continuing to have a habitable planet surely seems like a benefit, but we just can't do it with the same kind of precision. So if we allow them to introduce cost-benefit analysis into the debate, we allow them to draw the debate into their home court - the benefit numbers are much bigger, but they're so much harder to pin down that we'd find ourselves defending estimates that we know aren't as precise as we'd like them to be.

So beware of Republicans offering to take a "rational" approach to regulation by introducing cost-benefit analysis. It's too easy to run up the cost estimates, and too easy to muddle the benefits.

Originally posted to Liberal Protestant on Mon Feb 17, 2014 at 11:44 AM PST.

Also republished by Three Star Kossacks and Community Spotlight.

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Comment Preferences

  •  Call them on it (7+ / 0-)

    "yes lets please do a true cost benefit analysis."

    We have a CBO. It can be done.

    •  Complexity in the assumptions (2+ / 0-)
      Recommended by:
      Liberal Protestant, tekno2600

      The assumptions or intermediate conclusions make analysis of carbon emissions difficult.

      Take a cost benefit analysis for Keystone XL.  If the analysis assumes or concludes that if Keystone XL is not built, the oil goes to market anyway by another pipeline in Canada, or by rail, barge, refinery in Canada, etc. then stopping the pipeline does nothing to reduce carbon emissions.  However, if the assumption or conclusion that without Keystone XL, the oil does not get to market or far less gets to market, then stopping the pipeline can have a major impact.

      The most important way to protect the environment is not to have more than one child.

      by nextstep on Mon Feb 17, 2014 at 06:02:30 PM PST

      [ Parent ]

      •  We lose every port and coastal city (3+ / 0-)

        in the world if we don't get it back to 350 MMP.

        Last time Jersey saw 400 PPM, the Shore was up 75 miles from where it is now.

        WTF is the problem figuring benefits ???

        Seems like the frozen world of Spielberg's "Artificial Intelligence" might not exaggerate how bad things can get. That one reverses the heat/cold rise/fall sea level mechanics. Coney Island is frozen under 100 feet of ice and sea water.

        Let CO2 go up above 400 PPM and you get the water, but it's anything but cold.

        "Teachers: the Architects of American Democracy"

        by waterstreet2013 on Mon Feb 17, 2014 at 07:12:18 PM PST

        [ Parent ]

        •  Cost-Benefit analysis is inherently flawed when (8+ / 0-)

          the potential costs are astronomical, like the potential death of much of life on Earth. You cannot and should not play games where you try to put a number on that. I've seen some people try to quantify things like this with many trillions of dollars, but even if you do that, it is still not accurate (not to mention being immoral) to simply put a big number out there to try to quantify the destruction of the world as we know it. If you are doing something with those kinds of risks, the costs should be considered infinite. Extinction lasts for ever.  

          Just doing my part to piss off right wing nuts, one smart ass comment at a time.

          by tekno2600 on Mon Feb 17, 2014 at 09:15:17 PM PST

          [ Parent ]

          •  Exactly.... (2+ / 0-)
            Recommended by:
            Liberal Protestant, tekno2600

            Our society needs to stop thinking of EVERYTHING as a profit center.

            However, for some people, particularly the Teapublicans and MegaCorps, hitting them in their bottom line is how you get their attention. It is ALL that they understand.

            Morals have nothing to do with it. They have none...so they won't EVER get that what they are doing/advocating/not doing is wrong....

            "Growth for the sake of growth is the ideology of the cancer cell." ~ Edward Abbey

            by SaraBeth on Tue Feb 18, 2014 at 03:59:17 AM PST

            [ Parent ]

            •  Except that engineering problems (2+ / 0-)
              Recommended by:
              Liberal Protestant, SaraBeth

              can be stated in terms of project cost and project benefits.

              Let's say the Royal Society set about analyzing what it will cost to move London to Manchester. The whole damn thing. From St. Paul's to the telephone boxes.

              The numbers come in at  ₤135-trillion and a man-power requirement of 6,000,000 man years effort. That's a guess. That's not unreasonable for relocating one large city.

              Oh, the project is impossible.
              Ridiculously so.

              Thing is, if you don't do the engineering work, you can't really say to the Holes/Murdochs/Daleks that London is going to drown, which it is. You need to do the hard work, not just feel bad about the situation. This is a big part of why we educate engineers.

              "Teachers: the Architects of American Democracy"

              by waterstreet2013 on Tue Feb 18, 2014 at 05:05:27 AM PST

              [ Parent ]

              •  135-trillion is, like you say, ridiculous, so it (1+ / 0-)
                Recommended by:
                Liberal Protestant

                is a waste of time to sit around trying to come up with supposed more and more exact numbers for such a thing. It is also misleading, because there is a huge amount of false precision that is assumed when such a number is released. Such things are always based on fairly wild estimates, but they give the illusion that a highly thorough and accurate analysis has been performed or can be performed. It is a challenge to calculate even the factors that can be easily monetized. But, many factors are difficult if not impossible to monetize.

                Just doing my part to piss off right wing nuts, one smart ass comment at a time.

                by tekno2600 on Tue Feb 18, 2014 at 10:09:35 AM PST

                [ Parent ]

                •  You want accuracy, not precision. (1+ / 0-)
                  Recommended by:
                  Liberal Protestant

                  Numbers that are solid.

                  If it's ₤135-trillion, plus or minus ₤25-trillion, that hits the spot. Precision isn't the issue.

                  Knowing it's impossible ??? That requires doing the scaling estimate.

                  "Teachers: the Architects of American Democracy"

                  by waterstreet2013 on Tue Feb 18, 2014 at 10:17:11 AM PST

                  [ Parent ]

                  •  Actually, it is validity that links a hypothesis (3+ / 0-)

                    test to a real world situation. Both accuracy and precision are important in attempting to establish a convergent validity. If you cannot establish validity, then you just have numbers that are made up in someone's head without proper grounding in reality. Your examples show textbook case of this type of bad and invalid modeling. Not only is a number like ₤135-trillion ridiculous to begin with, as it far exceeds world GDP, but adding in a huge margin of error, like ₤25-trillion (roughly twice the US GDP), make the numbers even more asinine. You would be better off to just stick with the statement that it would be absurdly costly to move the entire city of London. These so-called numbers that you attempt to put on it are not only unhelpful, they're laughable.

                    Just doing my part to piss off right wing nuts, one smart ass comment at a time.

                    by tekno2600 on Tue Feb 18, 2014 at 10:46:11 AM PST

                    [ Parent ]

                    •  It's hardly asinine. (1+ / 0-)
                      Recommended by:
                      Liberal Protestant

                      -- Take the cost of moving one family and building a new residence for them. Make that a distribution of families and estimate across normal ranges.

                      -- Then do the same for businesses.

                      -- Figure what a new Heathrow would cost.

                      -- Do the work for the whole of London's inventory of human assets.

                      Of course you get numbers that belong in an astronomy course. They're big numbers.

                      But have you seen what happened to England this winter ??? It's not far off making the country less habitable -- less able to support a prosperous economy to be sure.

                      GW is going to have an impact a 100 times worse.

                      ₤135-trillion as a decent guesstimate for relocating London tells us that we cannot adjust. If it was ₤1-trillion, maybe we could. Even ₤10-trillion spread out over several decades might be plausible.

                      ₤135-trillion says, "No!" We allow this to happen and we lose these coastal cities, not just move them. It is impossible for economic reasons to move them.

                      "Teachers: the Architects of American Democracy"

                      by waterstreet2013 on Tue Feb 18, 2014 at 02:01:06 PM PST

                      [ Parent ]

                      •  Monetizing some of the costs of moving a city may (2+ / 0-)

                        help us know what ballpark the problem belongs in. So, I can agree with you that we need to know if it is a ₤1 or ₤10 problem. Heck, if we were moving Wichita, some people would might say, no problem, even an empty lot is more exciting ;) But, in dealing with a problem like moving London, I think we already know what ballpark were dealing with, and it goes way beyond the cost of moving a normal distribution of families. What's the value of Buckingham Palace, Westminster Abbey, or Big Ben? Those places really go beyond simple estimates of economic value. What is the Whitehouse, the Statue of Liberty, or the Washington Monument worth? I would strongly suggest that you not try to slap a number on them. People would be rightful offended if you simply say a priceless national treasure is worth $X billion. We know without even going through valuation exercises that our national landmarks are priceless. We know that the costs of materials and logistics doesn't even begin to express the full value of these places.  

                        Just doing my part to piss off right wing nuts, one smart ass comment at a time.

                        by tekno2600 on Tue Feb 18, 2014 at 03:18:18 PM PST

                        [ Parent ]

          •  There's no flaw whatsoever. Rational analysis (2+ / 0-)
            Recommended by:
            justintime, Liberal Protestant

            is a tool and setting up a bookkeeping system makes it easier to see what all gets hammered with bad decisions.

            Claiming that rationality is "immoral" was what the Roman Catholic Church did when they attacked Galileo. "That damned telescope is immoral and we ain'ta gonna look through it!" as stated in the Inquisition's version of Latin.

            Of course the costs, here, are measured in trillions.

            Of course there's no way we're going to move New York, London, Shanghai, Hong Kong, et.al.

            The holes doing science denial have no answer to what it would cost -- impossible numbers, b.t.w. -- to adapt to a plus-75-foot sea level. Their lies collapse.

            "Teachers: the Architects of American Democracy"

            by waterstreet2013 on Tue Feb 18, 2014 at 04:49:01 AM PST

            [ Parent ]

            •  The flaw is not rationality, it is monetization of (2+ / 0-)
              Recommended by:
              Liberal Protestant, NoMoreLies

              things that are in fact difficult if not impossible to monetize. I actually do a lot of decision science modeling, so I am in no way against rational analysis. However, there is a flaw that many people run into when they take a simple spreadsheet approach to every problem. Things can generally be quantified, but they can't always be monetized. When you try to convert everything to money, you are usually just guessing and often to very bad effect. And, yes, there is a certain amount of immorality in attempting to monetize certain things, like how much will you have to pay for each person you kill in due to pollution and so is the profit you make still worth producing the pollution that kills them. That is the kind of misuse of cost-benefit analysis that I was and am saying is immoral and unacceptable. It is not remotely like persecuting Galileo to say this. The real persecution is giving people a license to kill others if they just pay enough money.

              Just doing my part to piss off right wing nuts, one smart ass comment at a time.

              by tekno2600 on Tue Feb 18, 2014 at 10:31:38 AM PST

              [ Parent ]

        •  waterstreet - To elaborate on your point: We have (3+ / 0-)

          already passed 400 ppm seasonally. The year round average is slightly below that, ~396. We will be at 400 ppm year round probably this year.
             The last time we had CO2 levels this high was in the Pliocene when sea levels were 80 feet higher.
             The cryosphere is already melting. We need to dramatically reduce CO2 levels to below 350 ppm -and we probably need to drop back to the natural level of 280 ppm - in order to avoid catastrophic sea level rise over the next two centuries. Sadly, that is impossible.
             The sea level rise is baked in. We can't avoid it. We might be able to slow it down.
              But short term, the damage to agriculture is what will get us first.

  •  The Republican/Tea Party cost benefit analysis (9+ / 0-)

    that they want only looks at the cost of electricity to the consumer under the assumption that there is no cost of carbon and other ghg emissions.  If we had a true cost benefit analysis that includes the "cost of carbon" in the equation, there would be no justification in building new coal and other fossil fuel power plants without carbon capture and storage.

    The polluters that Ms. Blackburn speaks for don't want to have that discussion.  They just argue that since no one single event can be proven to be due to climate change, we should dismiss it climate change costs altogether.

    The fossil fuel companies are some of the most profitable businesses on the planet.  When misinformation and climate denial won't work, they will grab at any straw to stay afloat.  And, they have a lot of money to fund any and all efforts to continue doing business as usual.

  •  You might be interested in (5+ / 0-)

    Climate Sanity and the necessity of Fully-Burdened Cost and Benefit Analysis

    Analysis should enable more informed decision-making. Regrettably, economic and fiscal analyses too often occur in a stove-piped fashion that provides only limited perspectives as to real costs and benefits. Energy and environmental analysis, in particular, suffer from this problem. This has been true from the individual household to business to national policy level discussions where, almost, the analytical constructs tend toward exaggerating the cost(s) of action while downplaying the benefits that would accrue from taking action. While there are both legitimate and interest-party driven reasons for this tendency, the inadequate general understanding has weakened support for more effective energy/environmental options and hampered efforts to achieve informed decision-making. We face a serious decision-making challenge: opponents exaggerate costs and proponents understate benefits.

    Climate change is the poster child of this problem.

    There is a simple truth:

    Acting on climate mitigation is an investment …
    An investment, which if done right, that will have huge economic benefits.
    Acting on climate mitigation is just about the smartest investment society can make — even if we put aside the economic impacts from climate chaos (such as disrupted agricultural production and higher food prices).  The entire debate about climate change, when it is in financial terms, almost (and the exceptions are extremely rare) always reverberates about whether ‘the high cost in the near term is worth the uncertain longer term benefits … if those benefits exist’.  This is a wrong-headed and erroneous framing based on stove-piped thinking and analysis.  More robust analysis changes this equation and leads to a very different understanding of the benefit streams. Very simply: investing in climate mitigation will have huge economic benefits while reducing future risks.

    If nothing else from this post, remember this:

    Climate-mitigation is an investment that will have huge benefit streams.
    Seriously examining the systems-of-systems implications from climate mitigation (increasing energy efficiency, reduced fossil fuel use (and reduced oil imports), reduced pollution, reduced carbon emissions, … ) would show that a wide array of economic benefits that would dwarf costs of taking action in the near, mid, and long term.

    Blogging regularly at Get Energy Smart NOW! for a sustainable energy future.

    by A Siegel on Mon Feb 17, 2014 at 06:29:23 PM PST

    •  Scholarly studies: the economics of climate change (4+ / 0-)

      There is no a considerable body of scholarly work on the economics of climate change.  A lot of these studies conclude that unmitigated climate change will be an world-wide economic disaster.  Many of these studies also suggest there are things we can do today (both economically and otherwise) to reduce the anticipated impacts of climate change.

      So the sciences (or the "dismal" science) support the idea that climate change will be very expensive to individuals and business, and there are things we can do to that are helpful.

      On the issue of climate change, cost-benefit analysis is your friend, not your foe.

      (To see some of these scholarly studies, use Google Scholar to search keywords like "economics" and "climate change".)

      So while science tells us that climate change will be very expensive (as well as causing a number of other big problems), sadly, in America today, we no longer form our policies and laws on the basis of empirical evidence or scientific findings, but instead form our policies and laws on what is asked for by the wealthiest among us.

      "The fool doth think he is wise: the wise man knows himself to be a fool" - W. Shakespeare

      by Hugh Jim Bissell on Tue Feb 18, 2014 at 08:45:43 AM PST

      [ Parent ]

  •  BS aritcle on the debate from the Business insider (2+ / 0-)
    Recommended by:
    Liberal Protestant, HeyMikey

    This article showed up on yahoo news today.  I hope the link works.  The author's bias (or bs) is shown

  •   I hate it when Dems let them get away with it. (1+ / 0-)
    Recommended by:
    Liberal Protestant

    You can't make this stuff up.

    by David54 on Mon Feb 17, 2014 at 06:32:18 PM PST

  •  I think the Pentagon has moved on. (5+ / 0-)

    There's no debate about climate change there, they see it as a potential cause for future conflicts, and they're planning to deal with it.
    That's my understanding. I haven't heard anything lately.
    I would love to see the gop go toe to toe with the Pentagon and Defense Dept. on it.

    You can't make this stuff up.

    by David54 on Mon Feb 17, 2014 at 06:35:26 PM PST

  •  External Economies and CBA (6+ / 0-)

    I've heard Blackburn speak often enough that I'm sure there's one of those pull cords you used to see on talking dolls.  If she has any brains, she could donate them to medical science.  Seeing that there'll be no signs of wear or tear from use.

    So "cost benefit analysis" is just another meaningless utterance coming from the Mad Lib Generator that is Blackburn.  But the words actually mean something.  And the devil's in the details.

    A CBA study depends crucially on what you allow in as costs and benefits.  I am sure any GOP approved law explicitly excludes social costs like pollution, rising payouts by insurance companies (she's from TN, not CT), extinctions of animal and plant species, drought damages... I'd go on, but trust me, these bills likely go into great length to specify what you can't take in account.  I'd guess that if a business isn't losing money, it won't be allowed in an approved study.

    In a sound-bite heavy environment like Dancin' Daves' Corporate Hits, there probably isn't space for intelligent debate.  Or guests.  But if you have space, it's worth asking "Well, in this fancy study you're talking about, is losses by CA farmers due to drought a cost you count, or do you just count costs to folks like the Koch Bros?  Do people in AK who have to rebuild their houses 'cause the permafrost isn't permanent all of a sudden?"

    This takes time and lots of repetition, but time and repetition is how the Kochs and similar planted doubt about the science.  Training the public to be similarly skeptical about pseudo experts from the corporate swamp is hard, but worth it.

    Quote of the week: "They call themselves bipartisan because they're able to buy members of both parties," (R. Eskow, Campaign for America's Future.)

    by mbayrob on Mon Feb 17, 2014 at 06:38:51 PM PST

    •  Much big business thrives (2+ / 0-)
      Recommended by:
      justintime, NoMoreLies

      on their ability to ignore unpriced externalities; the fossil fuel industry may be the all-time champion. If we can value the externalities, we can estimate benefits in this type of analysis far better.

      •  More to the point -- you really have to (2+ / 0-)
        Recommended by:
        Liberal Protestant, NoMoreLies

        CBA is GIGO -- if you start from garbage assumptions, you get garbage answers.

        Markets are not even theoretically efficient, much less in practice, if major groups of people can't even buy their way to the table.  And CO2 pollution, which affects everything that lives on land or in water, has huge numbers of stakeholders that can't even "vote with their money" to get the effects of excess greenhouse gasses mitigated.  And some markets can never exist.  If varieties of salmon go extinct, there is no market where your great grand children can "buy" them back into existance.  Extinction is the ultimate in unpriced externialities.

        Carbon taxes, ironically, is a free market solution to this problem.  But funny how polluting corporations hate the free market when it works, but not to their private benefit.

        Quote of the week: "They call themselves bipartisan because they're able to buy members of both parties," (R. Eskow, Campaign for America's Future.)

        by mbayrob on Mon Feb 17, 2014 at 07:49:47 PM PST

        [ Parent ]

        •  History tells us (2+ / 0-)
          Recommended by:
          Liberal Protestant, mbayrob

          that the polluting fossil fuel corporations prefer monopoly capitalism to a truly free market. That is evident in the ruthless way they have squelched competition by buying out and destroying electric passenger rail and more recently by buying entire sectors of the government through ALEC who does their bidding by attempting to tax residential renewables. I bet dollars to donuts that when these things are done at the behest of the fossil fuel corporations no cost benefit analysis is applied or even called for.

  •  An asbestos cost benefit analysis would not have (3+ / 0-)

    included removal fees.

    Now they have the 2nd (safety net for sloppy) Amendment, and can't be infringed to actually treat their gun like a gun and not a video game controller.

    by 88kathy on Mon Feb 17, 2014 at 06:58:29 PM PST

  •  It's just a tool, really. You can use a hammer to (1+ / 0-)
    Recommended by:
    Liberal Protestant

    pound nails or to kill a person.

    The problem with a cost-benefit analysis is that a crucial prerequisite is that both the costs and benefits are measurable.  The costs of most regulations in fields such as climate change are readily known - by way of example, adding new filters to coal power plants would cost at most $x per filter multiplied by y number of power plants.  Easy to calculate.  But the benefit is pretty difficult to assign a number - the benefit, of course, is less pollution, and also forestalling the most serious effects of climate change.  A sophisticated analysis could estimate the former, but only God can tell you with certainty about the latter scenario - we can make pretty good estimates of what climate change could entail, but it's really uncharted waters.

    Like any tool, it's open to being misused, and divine knows that the Republicans are quite skilled at misusing them ;(.

    "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

    by auron renouille on Mon Feb 17, 2014 at 07:27:36 PM PST

    •  You can get around some of this (2+ / 0-)

      If you do a "sensitivity analysis", you can say "if the unmeasured cost / benefit" exceeds X, is this activity still "economical".

      You may not be able to measure a lot of things very well, but it can be easy to show that the number is bigger than X.  If X overwealms the private benefit or cost, then CBA answers the intersting policy question:  should we do this or not.

      Remember, if you don't include the costs, the whole point is lost.

      Quote of the week: "They call themselves bipartisan because they're able to buy members of both parties," (R. Eskow, Campaign for America's Future.)

      by mbayrob on Mon Feb 17, 2014 at 07:57:38 PM PST

      [ Parent ]

  •  The Cost (5+ / 0-)

    Is the end of civilization as we know it.
    So just what is that worth congresswoman?

  •  More GOP fakery. Why don't they publish this cost (5+ / 0-)

    benefit analysis that is oh so important? Who is stopping them? Nobody. They know it would be laughable garbage.
    Better to delay, whine and sabotage.

  •  "Your money or your life...I'm thinking it over" (5+ / 0-)

    That comes from the old joke about how the mugger tells the miser to hand over his money or die and the miser tries to determine if it is more important to keep his money or his life.

    That's the trouble with cost benefit analysis (which, by the way, is a notorious vague and largely discredited methodology). It doesn't work when the stakes are huge, like when the results of one action could kill a person, multiple people, or even much of life on Earth. You can't really put an accurate cost number on things like human extinction other than infinity, game over, we lose. So, that cost-benefit analysis has already been done. I will send Marsha my bill for performing this study.

    Just doing my part to piss off right wing nuts, one smart ass comment at a time.

    by tekno2600 on Mon Feb 17, 2014 at 09:05:42 PM PST

    •  I'd like to see some data on that (1+ / 0-)
      Recommended by:
      Liberal Protestant

      The assertion that it's a "largely discredited methodology", I mean. Because I see CBA used all the time. Sometimes it can be highly accurate, sometimes not so much, and it's just as sensitive to garbage-in as any other analytical technique, but that depends on the problem it's looking at.

      (Just to use one example, cost-benefit analysis was one of the reason the Allies won the Second World War.)

      •  Just look up criticisms of cost-benefit analysis (2+ / 0-)
        Recommended by:
        Liberal Protestant, NoMoreLies

        and you will find many studies discussing not only the vagueness of the valuation methods, but challenging the entire concept of CBA. It is often still used in Economics, but that approach is particularly frowned upon when looking at ethical issues and environmental issues. Not only are those things difficult to price, they should not be treated as costs in a strict sense, any more than people should attempt to price the cost of your life, death, or suffering.

        Just doing my part to piss off right wing nuts, one smart ass comment at a time.

        by tekno2600 on Mon Feb 17, 2014 at 09:32:37 PM PST

        [ Parent ]

        •  I'd also be very skeptical of the claim that CBA (1+ / 0-)
          Recommended by:
          Liberal Protestant

          won WWII. I'd bet that assertion was made by somebody in Economics or Management. People have always used modeling tools and rules of thumb to help make important decisions, but they usually only contribute to part of the decision making process. I don't think you can credit any specific methodology like CBA with winning a war. I think may other things like the atomic bomb, computers, radars, and jet engines might have had some effect too.

          Just doing my part to piss off right wing nuts, one smart ass comment at a time.

          by tekno2600 on Mon Feb 17, 2014 at 09:37:28 PM PST

          [ Parent ]

  •  Let's do a cost/benefit analysis of theft. (2+ / 0-)

    Preventing a dollar of theft is a net wash, as it saves the victim a dollar at the cost of a dollar to the thief.

    Therefore laws against theft are not cost effective.

    I've lost my faith in nihilism

    by grumpynerd on Mon Feb 17, 2014 at 09:25:05 PM PST

  •  Why not use the "cost benefit analysis" approach,, (3+ / 0-)

    the next time any of our elected officials want to drag us into another unnecessary war?

    "Remember, Republican economic policies quadrupled the debt before I took office and doubled it after I left. We simply can't afford to double-down on trickle-down." Bill Clinton

    by irate on Tue Feb 18, 2014 at 12:28:44 AM PST

  •  Some of the Big Boys have done the numbers (4+ / 0-)

    In 2004  

    World Bank, Pentagon: global warming red alert

    And now, two of the most conservative institutions in the world, the Pentagon and the World Bank, have received studies recommending immediate action to address imminent threats posed by global warming, with the Pentagon's report warning that global warming is a greater threat than terrorism.

    World bank: "global warming requires immediate action"

    Then, there is Lloyds of London's Adapt or Bust  

    "Growth for the sake of growth is the ideology of the cancer cell." ~ Edward Abbey

    by SaraBeth on Tue Feb 18, 2014 at 03:49:42 AM PST

  •  An easier example: Drilling for oil in the Gulf of (3+ / 0-)

    Mexico. What is the cost of the BP oil spill? How do you measure the cost of subtle contamination of the fishery? Of the loss of thousands of turtles, dolphins, birds?
       There is obvious measurable cost - the damage to the fishing and tourist industry. Now factor in the expected loss - IOW, the probability that this will happen again.
       It's inevitable that the downside risk is underestimated.
       In the case of climate change, there is a non-trivial probability that civilization will collapse. How do you price that?

  •  infinity vs infinity (1+ / 0-)
    Recommended by:
    Liberal Protestant

    A fundamental problem with cost-benefit analysis is that it essentially comes down to comparing two infinities in many areas where it is applied. The cost of screwing up the environment is infinite since the costs go on in perpetuity. So are the benefits, though skewed more towards the short term. So, the popular view of just comparing two numbers is just wrong. We typically massage these numbers (eg, exponential discounting), but then if the distribution curves across time are different for the costs and benefits, it becomes impossible to make a meaningful analysis.

    I am greatly oversimplifying here, since there are solutions to some related problems (but no satisfactory ones as far as I know).

  •  I do them frequently (1+ / 0-)
    Recommended by:
    Liberal Protestant

    for nuclear safety upgrades.  For which we have core damage frequencies and reliability models, so it's much less speculative.  Still a huge amount of uncertainty.

    For financial regulation, I believe we're taking the wrong approach.  Instead of telling a bank: show us through all your records/filings that you're being compliant with XYZ, we just tell them "you can't do the following things..."  As such, there is no compliance cost to NOT doing something other than verifying that your employees are in fact not doing it.

    Oh and the costs of non-compliance in the current system?  Let's take the stock market cap variation between April 2008 and April 2009, and suppose that reckless financial speculation makes that kind of "dip" happen once every ten years.  Then divide the lost trillions by the share of each megabank.  Do compliance costs seem onerous now?

    First they came for the slippery-slope fallacists, and I said nothing. The End.

    by Cream Puff on Tue Feb 18, 2014 at 02:11:44 PM PST

  •  What "cost benefit analysis" really means (1+ / 0-)
    Recommended by:
    Liberal Protestant

    coming out of Marsha's mouth, is that it's cheaper and simpler to allow the 99% to die off from droughts, oxygen-poor air and lack of water and food. Just those who are needed to wash the 1%'s cars, repaint their yachts and cook their food need survive with them. The 1% will live on because they'll be able to afford what the rest of us can't and they'll be living in their well-defended and purified private compounds in case things get ugly on the outside.

    That's the Republican idea of "cost benefit analysis" at work.

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