Optimists, Pessimists, and the Precautionary Principle

Meglena Jeleva () and Stéphane Rossignol
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Meglena Jeleva: University Paris Nanterre and Prevent’Horizon chair

Environmental & Resource Economics, 2019, vol. 74, issue 1, No 14, 367-396

Abstract: Abstract The precautionary principle has emerged as a leading guide to public decision-making about environmental risks under irreversibility and uncertainty. In this paper, we adopt a two-period model with irreversibility and agents differentiated by their degree of optimism to characterize the conditions under which the precautionary principle applies. We show in particular that it is more often applied if the decision-maker has an intermediate optimism index, if scientific research is more effective at reducing uncertainty, and if the same decision-maker makes the decisions for both periods. Moreover, we show that socially optimal decisions lead to apply the precautionary principle more often than an elected decision-maker does.

Keywords: Precautionary principle; Irreversibility; Uncertainty; Political economy (search for similar items in EconPapers)
JEL-codes: D7 D81 (search for similar items in EconPapers)
Date: 2019
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Working Paper: Optimists, Pessimists, and the Precautionary Principle (2019)
Working Paper: Optimists, Pessimists, and the Precautionary Principle (2019)
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DOI: 10.1007/s10640-019-00322-1

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