Reserved Rationality and the Precautionary Principle: Technological Change, Time, and Uncertainty in Environmental Decision Making
Author(s)
Perrings, Charles
Abstract
Many of the most serious potential environmental problems are those for which the effects of certain processes are highly uncertain with respect to both their spread and duration. As the uncertainty increases, so does the difficulty of evaluating the associated environmental damage or the marginal social costs. Moreover, the wider the spread and the longer the duration of these problems, the narrower is the scope for a market solution involving the allocation of property rights. Intractable problems of this sort have led to strong support for the “precautionary principle,” which involves the commitment of resources today in such a way as to safeguard against distant and potentially catastrophic outcomes in the future. This paper’s main concern is the identification of the conditions in which the precautionary principle is appropriate, and the way in which the principle modifies the decision-making process. It is argued that it leads to a sequential approach in which the decision maker reserves judgment about the uncertain outcomes of each activity, assuming the worst case outcome until evidence is provided to the contrary.
