QUANTITATIVE VALUATION IN ENVIRONMENTAL LAW.

• Author: Rowell, Arden

Within environmental legal scholarship, there is a longstanding debate about the extent to which environmental goods and harms should be valued in quantitative (including monetary) terms, and the extent to which they should instead be valued qualitatively, through democratic means or on moral grounds. (1) While proponents of qualitative and quantitative approaches to valuation recognize that some valuations present special challenges, they disagree about whether the appropriate response to those challenges is to quantify more or less. (2)

Some arguments for qualitative valuation are based on critiques about the reasonableness or defensibility of quantitative methods currently in use; (3) others, often tied to ethical movements in environmental ethics that emphasize the intrinsic value of environmental goods and ecosystems (4) or the separable value of political judgment, (5) are based on political or ethical judgments about how society should constitute itself, and how humans should relate to their environment. (6) These latter arguments, including those in Frank Ackerman and Lisa Heinzerling's book Priceless: On Knowing the Price of Everything and the Value of Nothing, (7) have been particularly influential within environmental legal scholarship.

One aspect of the appeal of these ethical accounts is that they speak directly to the normative priors of most within the field. Indeed, as readers within the field will already know--and outside the field may suspect--environmental law scholars often hold deeply felt pro-environmental ethical and political commitments. What readers outside the field may not suspect, however, is that these commitments are held so deeply, and are often tied so tightly to positions rejecting quantitative valuation, that environmental scholars sometimes hesitate even to engage with economic analysis or with the quantifications that support it, out of concern that doing so might legitimize what is seen as a dangerous and degrading approach to the environment. (8) In some cases, the intuition that quantification is degrading is so strongly felt that quantitative analyses are viewed as presumptively pretextual: as insincere justifications for reducing the stringency of environmental protection, and for degrading overall environmental quality. (9) In other cases, ethical beliefs in the intrinsic value of nonhuman plants, animals, or ecosystems make quantitative and particularly monetary valuations--expressed in terms of human money--look either ethically orthogonal or arrogant in their humancentrism, and create still greater resistance to quantification. (10) And all of these concerns coexist with a common uneasiness with numbers and numeracy that pervades much of law, (11) including environmental law. At times, these factors combine to generate a strong intuitive rejection of economic approaches within environmental law that might shock law and economics scholars in other subdisciplines.

As a result, and despite some important counterexamples, (12) economic approaches to environmental law remain the minority within the field, and discussions of quantitative or monetary valuations of environmental impacts are still often met with skepticism, suspicion, and even recoil from many environmental legal academics, both in the United States and abroad. In the United States, this sense of hesitancy and even disgust percolates through many pro-environmental organizations as well--a phenomenon with special legal importance given the enforcement role private parties play within U.S. environmental law through "citizen suits," a procedural mechanism common within U.S. environmental statutes that allows for private enforcement regarding many environmental harms. (13)

In the United States, the skepticism many mainstream environmental scholars feel toward quantification of environmental injury was further reinforced in the early years of regulatory cost-benefit analysis, where--as initially implemented by President Ronald Reagan--quantification methods tended to value environmental impacts low, and thus to justify deregulatory policies that many pro-environmental voices rejected. (14) During this period, pro-environmental and proregulatory commentators tended to view cost-benefit analysis and the quantification of environmental harm as biased, even as proindustry and deregulatory commentators tended to defend both quantification and cost-benefit analysis as reasoned and considerate. (15) While this alignment was sometimes seen as pretextual (on both sides), it is worth noting that common psychological phenomena of motivated cognition make it easier even for sincere decisionmakers to perceive and use information that is consistent with their underlying desires and normative values. (16) Processing information that creates cognitive dissonance with one's prior beliefs is costly and uncomfortable, and people may in fact perceive things differently depending upon their starting positions. (17) As a result, perceiving the upsides of a decision procedure that generates desirable outcomes is easier--and perceiving the bias, errors, and downsides of procedures that generate undesirable outcomes is psychologically easier as well.

Given this psychological background, perhaps it should not be either too surprising--or too much call for cynicism--that just as new quantification methods developed for valuing environmental harms, and as those methods were deployed in the Obama administration to support increasing stringency of many environmental regulations, progressive support for quantitative valuation began (at least temporarily) to increase. (18) (Or, indeed, that pro-industry and deregulatory support for quantitative valuation began simultaneously to weaken. (19)) The policy shift toward progressive quantification methods--a shift supported by arguments made in Richard Revesz and Michael Livermore's Retaking Rationality, which came out the year Obama was elected--helped to illustrate the progressive potential of quantification. (20) Retaking Rationality suggested--and many of Obama's policies displayed (21)--that pro-environmental values could be paired both with economic analysis and with quantitative valuations, at least in the context of regulatory cost-benefit analysis, and that as a result, using quantitative analyses might not amount to a betrayal of pro-environmental ethical values. For many mainstream scholars and progressive voices, this opened up the possibility of embracing cost-benefit analysis in a way that could fit with their preexisting commitments, perceptions, and values, and which did not generate cognitive dissonance. At the same time, continued embrace of quantification may have begun to trigger cognitive dissonance for those whose deregulatory priors made them uneasy with methods that valued the benefits of regulation more highly.

The growing trust that some pro-environmental voices felt in quantified valuation and cost-benefit analysis, however, was subsequently undermined by the administration of President Donald Trump--an overtly deregulatory administration whose environmental policies tended to imbed quantification techniques that minimized the apparent value of environmental benefits, and to involve other approaches with a deregulatory impact, (22) and whose approach to cost-benefit analysis has been described as a "charade." (23) Pandemic-era discussions pitting economic flourishing against public-health concerns have also fed into a narrative that implies to many that economic analysis is antagonistic to health and related concerns. (24)

Environmental law and policy is thus at an uneasy moment in regards to both economic analysis and quantitative valuation. (25) At the least, it is a challenging time for many in the mainstream of environmental scholarship, who historically held deep emotional and ethical reservations about the role of economic analysis in environmental law, and who are personally and emotionally grieved by the prospect of continued environmental degradation.

Yet while the continued controversy surrounding the quantification of environmental goods may be understandable in light of recent political developments, it is also unfortunate, at least insofar as that controversy has reinforced the widespread reluctance amongst both scholars and environmental organizations to meaningfully engage in many of the valuation questions that inform key legal outcomes. In part as a result of the domestic success of law and economics in shaping policy, and unlike some other environmental regimes around the world, a significant portion of U.S. environmental law is informed by--and in some cases, even determined by--quantitative and economic analysis. (26) These analyses are necessarily informed by quantitative valuations of environmental goods and harms--the same type of valuations with which many environmental scholars and activists hesitate to engage. Indeed, in many environmental contexts, the rules of engagement are at least partially set by economic analysis, and thus by the quantitative valuations of environmental goods and harms that inform those analyses.

The particular uses to which quantified valuations are put has, as I shall discuss further below, potentially important implications for the stakes of valuation, and thus for the importance of full engagement in the process of valuation. Before getting to those points of fine-tuning, however, it is important to emphasize the larger and more general starting point, which is that quantified valuations do inform multiple key functions within environmental law--especially, though not exclusively, U.S. environmental law. (27) The historical reluctance of many environmental scholars to engage with economic analysis and quantified valuation thus freezes them out of discussion and engagement in powerful parts of environmental decisionmaking. When environmental scholars who refuse to engage are on one "side" of the...