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.