Journal of Risk and Uncertainty
, Volume 27, Issue 1, pp 77-103
First online:
Decision-Making Under Scientific Uncertainty: The Economics of the Precautionary Principle
- Christian GollierAffiliated withUniversity of Toulouse
- , Nicolas TreichAffiliated withUniversity of Toulouse Email author
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The Precautionary Principle has provided the foundations for building a new risk regulatory pattern under scientific uncertainty. This paper investigates how classical economic theory may, or may not, justify the Precautionary Principle. It examines the link between irreversibility, the prospect of increasing information over time and risk management. In doing so, it brings closer the notion of option value to that of precaution. Using a general modelling framework, it identifies the conditions so that the Precautionary Principle is an efficient economic guideline. It also explains why precautionary policies are not likely to emerge in a competitive economy or in the presence of a global pollution problem.
- Title
- Decision-Making Under Scientific Uncertainty: The Economics of the Precautionary Principle
- Journal
-
Journal of Risk and Uncertainty
Volume 27, Issue 1 , pp 77-103
- Cover Date
- 2003-08
- DOI
- 10.1023/A:1025576823096
- Print ISSN
- 0895-5646
- Online ISSN
- 1573-0476
- Publisher
- Kluwer Academic Publishers
- Additional Links
- Topics
- Keywords
-
- Precautionary Principle
- option value
- scientific uncertainty
- irreversibility
- Industry Sectors
- Authors
-
- Christian Gollier (1)
-
Nicolas Treich
(1)
- Author Affiliations
-
- 1. University of Toulouse, Leerna-Inra, 21 all de Brienne, 31042, Toulouse, France