May 5, 2003

Public Interest Comment on the OMB's 2003 Benefit-Cost Report: Precautionary Principle Comments

Key materials
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Rulemaking:

Draft 2003 Report to Congress on the Costs and Benefits of Federal Regulation

Stated Purpose:

"Estimate of the total annual costs and benefits (including quantifiable and nonquantifiable effects) of Federal rules and paperwork. . ."

Summary of RSP Comment:

In its sixth Report to Congress on the Costs and Benefits of Federal Regulations, the Office of Management and Budget explains that the Administration has formed an "Interagency Work Group on Risk Management." To assist in the Work Group's efforts, the Draft Report requests information on "current risk assessment and management practices in federal agencies, with an emphasis on the role of precaution in risk policy and regulation."

The essence of OMB's request is: How should regulators act when uncertainty exists about the likelihood or magnitude of potential harm associated with human action? In response to this question, some advocate reliance on the precautionary principle. While precaution has a place in federal policy, reliance on the precautionary principle would not improve federal risk management efforts. To the contrary, reliance on the precautionary principle as it is typically formulated would, in all likelihood, produce unintended consequences that undermine government efforts to enhance social welfare.

This comments argues that risks should be examined in a two-part process: risk assessment and risk management. Risk assessments should focus on developing the most accurate possible assessment of potential risks. To achieve this, the most probable assumptions should be used, not those that are the most conservative. Risk management takes scientific risk assessment information and combines it with other information, such as the cost and feasibility of reducing risks, to determine what action to take.

When precaution is used in risk assessment, the risks of new technologies and products are overstated, causing regulators to unduly concentrate on new products while ignoring older, and possibly more significant risks. Overcautious risk management also does not necessarily promote safety and regulators need to be aware that even the most well-intentioned precautionary measures can have terrible results. This comment gives several examples of precautionary risk assessments creating unintended side effects, such as the Food and Drug Administration delaying life-saving drugs, and the Fish and Wildlife Service harming fish in an effort to save them.