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Formalization and applications of the precautionary principles

Claude Henry; Marc Henry

Title:
Formalization and applications of the precautionary principles
Author(s):
Henry, Claude
Henry, Marc
Date:
Type:
Working papers
Department:
Economics
Permanent URL:
Series:
Department of Economics Discussion Papers
Part Number:
0102-22
Publisher:
Department of Economics, Columbia University
Publisher Location:
New York
Abstract:
A formalization of the Precautionary Principle is given here: We formalize scientific knowledge on the likelihood of events in the state space and the concepts of scientifically unambiguous events and acts. We give a definition of a non-precautionary social planner as a Savage Expected Utility maximizer who evaluates acts relative to a baseline, called "business as usual," and who disregards scientifically ambiguous acts, and we show that, for a wide class of preferences for the representative agent, non-precautionary decision making is sub-optimal. A discussion of this formalization is given in the context of national and international debates on Precaution, in the fields of Climate Change, of WTO arbitrages, and of the safety regulations of chemical products.
Subject(s):
Economic theory
Item views:
176
Metadata:
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