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The precautionary principle in environmental policy and the theory of choice under uncertainty

Author

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  • John Quiggin

    (Risk & Sustainable Management Group, School of Economics, University of Queensland)

Abstract

The precautionary principle, presented as a guide to environmental policy decisions in the presence of uncertainty, has been the subject of vigorous debate. However, the has generally not been discussed in relation to formal theories of choice under uncertainty developed as generalizations of the expected utility model. In this paper, it is argued that a formal basis for the precautionary principle may be found in an incompleteness hypothesis regarding formal models of choice under uncertainty. The incompleteness hypothesis states that estimates derived from formal models of choice under uncertainty will generally be over-optimistic and that the errors will be greater, the less well-understood is the problem in question.

Suggested Citation

  • John Quiggin, 2005. "The precautionary principle in environmental policy and the theory of choice under uncertainty," Murray-Darling Program Working Papers WPM05_3, Risk and Sustainable Management Group, University of Queensland.
    • Handle: RePEc:rsm:murray:m05_3
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    File URL: http://www.uq.edu.au/rsmg/WP/WPM05_3.pdf
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    Cited by:

    1. Harin, Alexander, 2006. "Scientific Revolution? A Farewell to EconWPA. MPRA is welcome," MPRA Paper 71, University Library of Munich, Germany.
    2. Nabil I. Al-Najjar, 2015. "A Bayesian Framework for the Precautionary Principle," The Journal of Legal Studies, University of Chicago Press, vol. 44(S2), pages 337-365.
    3. Pablo Brañas-Garza & Antonio Cabrales & Maria Paz Espinosa & Diego Jorrat, 2022. "The Effect of Ambiguity in Strategic Environments: an Experiment," Working Papers 196, Red Nacional de Investigadores en Economía (RedNIE).
    4. Peterson, Deborah C., 2006. "Precaution: principles and practice in Australian environmental and natural resource management," Conference Workshop Proceedings 31906, Productivity Commission.
    5. Alexander Harin, 2005. "Gains and losses. The same or different choices?," International Finance 0508004, University Library of Munich, Germany.
    6. Alexander Harin, 2006. "A Rational Irrational Man?," Microeconomics harin_alexander.34115-060, Socionet.
    7. Alexander Harin, 2005. "Gains and losses: the same or different choices? A “non-ideal” economics approach," International Finance 0509002, University Library of Munich, Germany.
    8. David Adamson & David Cook, 2007. "Re-examining economic options for import risk assessments," Murray-Darling Program Working Papers WP3M07, Risk and Sustainable Management Group, University of Queensland.
    9. Clarke Harry, 2008. "Classical decision rules and adaptation to climate change ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(4), pages 487-504, December.
    10. Peterson, Deborah C., 2006. "Precaution: principles and practice in Australian environmental and natural resource management," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 137764, Australian Agricultural and Resource Economics Society.
    11. Alexander Harin, 2005. "Scientific Revolution. A Farewell to EconWPA," Method and Hist of Econ Thought 0512003, University Library of Munich, Germany.
    12. Alexander Harin, 2006. "Principle of Uncertain Future," Microeconomics harin_alexander.34115-061, Socionet.
    13. Alexander Harin, 2005. "A Rational Irrational Man," Public Economics 0511005, University Library of Munich, Germany.
    14. Quiggin, John, 2008. "Uncertainty and Climate Change Policy," Economic Analysis and Policy, Elsevier, vol. 38(2), pages 203-210, September.
    15. Harin, Alexander, 2007. "Principle of uncertain future and utility," MPRA Paper 1959, University Library of Munich, Germany.

    More about this item

    Keywords

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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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