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Sunday, August 12th, 2018

What’s the value of a clean beach? Here’s how economists do the numbers

Author:     Timothy Haab
Source:     GreenBiz
Publication Date:     Wednesday, August 8, 2018 - 12:30am
 Link: What’s the value of a clean beach? Here’s how economists do the numbers
Stephan:   The Theorem of Wellbeing, which I have postulated in numerous papers and  The 8 Laws of Change,  as my regular readers know, states that social policies that foster wellbeing are always more productive, more efficient, easier to implement, more pleasant to live under, and much much cheaper. And here is proof of that principle. So the question is: We know what works. Why don't we do it? The answer of course, as is always the case, is profit. A few rich people want to be richer, and they buy the government because most politicians have labile backbones and are for sale if you know how to do it.

Studies by the EPA have calculated that the benefits of avoided deaths and illnesses resulting from the Clean Act far outweigh the costs to society of complying with the law. Credit: EPA

Millions of Americans head outdoors in the summer, whether for a day at a nearby lake or a monthlong road trip. For environmental economists like me, decisions by vacationers and outdoor recreators offer clues to a challenging puzzle: estimating what environmental resources are worth.

In 1981, President Ronald Reagan issued an executive order that required federal agencies to weigh the costs and benefits of proposed major new regulations, and in most cases to adopt them only if the benefits to society outweighed the costs. Reagan’s order was intended to promote environmental improvements without overburdening economic growth.

Cost-benefit analysis has been so successful as a tool for policy analysis that every administration since Reagan has endorsed using it. However, it requires measuring benefits that are not “priced” in typical markets. Fortunately, putting a price on non-market environmental outcomes, such as safer drinking water and fewer […]

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