To many of the more extreme type of environmentalists, no level of human destruction of the environment is acceptable. They would demand an end to environmental problems such as pollution.
Other more moderate environmentalists and many modern economists
instead turn to what is known as cost-benefit analysis. This process seeks to compare the social costs and social benefits associated with a public policy decision.
Often this process is very successful. For example, a cost-benefit analysis of pollution in Los Angeles, California revealed that the combined benefits of pollution reduction would greatly outweigh the calculated costs, and government policy was successfully affected by this finding.
One problem with cost-benefit
analysis is that not everything can be expressed in money terms. How much does it "cost" society if a person dies?
There are other problems as well. It is impossible to completely predict every result of a policy decision. In other words, not every factor can be taken into account in the analysis. Also, aspects such as health hazards have to be based on risk assessments because the exact outcome cannot be known beforehand. The fact that the concerns of future
generations are not always represented in cost-benefit analyses also makes the process less reliable.
Ultimately, the goal of cost-benefit analysis is to enable a government policy that enforces environmental regulations up to the point where the marginal social cost and the marginal social benefit of these regulations are equal.
This basically means that, for example, the government should continue reducing the amount of pollution allowed up to the point where a further reduction of
pollution levels would mean greater costs for polluters than benefits for society.
Cost-benefit analysis heavily affects modern government policy. In the United States, the Environmental Protection Agency (EPA) regularly employs cost-benefit analysis in making policy decisions. However, some laws, such as the