Cost benefit analysis (CBA) in environmental regulation is certain to shift in tone, if not necessarily in direction, if the republicans also lose control of the White House in 2008. (Incidentally, I heard the scrutiny given John Graham’s successor at OMB, Mercatus Center alumna Susan Dudley, was quite lame in her confirmation hearing last week.) Perhaps the biggest springboard in recent debates about the place of CBA was the regulation of arsenic in drinking water under the Safe Drinking Water Act. Many decried the prohibitive cost of achieving the set contaminant levels, arguing that too many communities wouldn’t be able to afford the filtration. Others returned to a now familiar theme: the “cost” figures churned out are always, on reflection, of literally mythic proportions. The parties that will face the most immediate costs of compliance have every incentive to, and occasionally do, inflate the numbers, rigging what is supposed to be an objective (or at least methodologically sound) means of evaluating regulation for health and safety purposes.
Well, it turns out that nanotechnology for removing arsenic from water was recently discovered, drastically lowering the cost of removing arsenic from drinking water—at least in theory. See http://www.nytimes.com/2006/11/10/science/10rust.html?ref=science. This raised, for me, the torpor of most public debate about regulatory policy. I distinctly recall, well, no one imagining in 2002 that technological advances would transform the relevant trade-offs in relatively short order. It got me thinking: to what degree does anyone in public life today ever proceed on the assumption that the process of centralized standard setting and the gridlock it stirs itself can provoke enough actors into (private) action that someone is bound eventually to "tunnel under" whatever barriers frame the gridlock?