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Benefit-Cost Analysis and Nuclear Waste Site Cleanups: The Historical and Ethical Context
Allen V. Kneese, Alan J. Krupnick
RFF Discussion Paper 95-22 | May 1995

Benefit-cost analysis (BCA) has played a large role historically in decisions involving water resource projects and, more recently, in projects having a substantial environmental component. Perhaps no more challenging task for BCA is to apply it to decisions about the cleanup of the Department of Energy's waste sites containing nuclear and other hazardous wastes. Whether BCA is up to the task is unclear. This paper begins to look at this question by first highlighting the development of this approach to place into perspective its ability to capture the major features of evaluating the net benefits of cleaning up DOE waste sites. The second section presents an ethical critique of BCA and counter arguments applicable to the context of cleanup decisions. A third section discusses the role of public participation in BCA's for such site cleanups as a partial, practical response to the ethical critique.

BCA initially was developed to evaluate water resources investments made by federal water agencies in the United States, but no evaluations were made of environmental improvements. Subsequently, BCA branched out to tackle issues involving significant environmental effects, but without attempting to value these effects. More recently, there has been burgeoning interest in estimating the benefits of environmental improvements and in applying these estimates to issues of environmental policy design, the scope of environmental cleanup investments, and the liability of companies for natural resources damaged by oil spills and other activities. BCA has evolved in response to these challenges, as can be seen in its application to the Liquid Metal Fast Breeder Reactor Program and the Alaska pipeline in the 70's, and a host of Regulatory Impact Analyses of programs administered by the U.S. Environmental Protection Agency in the 80's and 90's.

The expanded use of BCA in environmental decisions has heightened concern amongst philosophers and others about the treatment of discounting and equity. Their central complaint refers to the use of the maximum satisfaction of self interest as a normative (moral) concept, but the issue of intergenerational equity, given the extremely long-lived nature of nuclear wastes, seems the most salient.

While the ethical critique of BCA is shown to be less than compelling, it cannot be entirely dismissed, particularly with respect to the application of this technique to the nuclear waste cleanup issue. One way of shoring up BCA is to embed the analysis in a public participation process.

At this stage, we are not prepared to recommend a specific approach for public involvement but we are convinced that a systematic, open, BCA, where assumptions are clearly stated and methods made as transparent as possible, can contribute to the efficacy and rationality of public involvement and ultimately to increased trust in DOE decisions.

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