Keohane and Olmstead, Chapter 3, Question 6: Some environmental laws in the Uni

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Keohane and Olmstead, Chapter 3, Question 6: Some environmental laws in the United States explicitly prohibit the use of benefit-cost analysis in some areas of environmental policy. For example, the Clean Air Act declares that air quality standards are to be determined purely on the basis of protecting public health with “an adequate margin of safety,” and forbids the administrator of the Environmental Protection Agency from considering costs in setting standards. Can you provide a critique of such an approach from the perspective of economic efficiency? What might be the consequences of such an approach? Now take a step back. From your own perspective, do you think such an approach is advisable? Why or why not?

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