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GUEST SPEAKER:
Governor, thank you

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so much for asking me to outline
a comprehensive cost-benefit

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analysis, regaring
decision making

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over a long delayed clean up
of a highly polluted Superfund

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site.

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As we know, underground
storage tanks at the site

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have leaked into nearby
wetlands and cleanup is expected

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to cost $35 million or more.

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The debate centers around
the city's eagerness

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to reuse this site
for a new mall.

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And who should be
held accountable

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for the costs associated with
this clean up, as the state

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government has no
funds, and the company

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responsible for the damage has
since gone out of business,

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leaving even no
clients remaining.

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Including an alterior road that
would link to the Superfund

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site to a nearby
highway would provide

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additional accessibility,
and consequently

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more business for the
mall, perhaps justifying

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more government spending.

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As you know, Governor,
multiple parties

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are pressuring you
in this decision,

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and there is no
consensus as to who

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should bear the cost of
ensuring the site is safe

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and of redeveloping the site.

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You asked me to outline a
comprehensive cost-benefit

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analysis that can be done to
help answer this question.

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I would argue that a
cost-benefit analysis should

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not in fact be used in this
decision-making process,

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as I believe the method
is deeply flawed,

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and may lead to
misleading results,

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exacerbating feelings of
poorly distributed benefits

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among parties.

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While proponents of
cost-benefit analysis

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assert that it, 1, results in
the more efficient allocation

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of resources and, 2, provides
objectivity and transparency,

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in a paper titled Pricing
the Priceless by Frank

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Ackerman and Lisa
Heinzerling, the authors

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argue against these
arguments by illuminating

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four fundamental flaws
to cost-benefit analysis.

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I will outline some of these
fundamental flaws in relation

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to the case the Superfund
site and provide thoughts

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for an alternative approach.

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The first fundamental
flaw centers around it

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cost-benefit
analysis, the process

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of reducing life, health,
and the natural world

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to monetary values.

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For example, according
to cost-benefit analysis,

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preventing the
extinction of bald eagles

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is worth $250 per household.

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And saving a human
life is calculated

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to be worth $6.3 million.

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For the people in this scenario
that we're talking about today,

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a risk of toxic poisoning due to
the previous industrial factory

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operations at the site,
the price of their health,

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and even their lives, cannot
be assigned a finite amount

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of money.

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Furthermore, the
$6.3 million figure

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is not considered by the
cost-benefit analysis

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to be a price of life, but
the cost of the risk of death.

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According to
Ackerman, in this way

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the cost-benefit analysis
equates the risks

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of death with death
itself, which are actually

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two different calculations.

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The second, cost-benefit
analysis ignores the reality

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that citizens are
concerned about risks

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to others and in addition
to their concern about risk

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to themselves.

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If we do a cost-benefit
analysis looking

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at the rebuilding of
the Superfund site,

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our analysis can't
quantify the value

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to our townspeople
people of the lives

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and health of their relatives,
and friends, and even

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strangers in the town.

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Thirdly, cost-benefit
analysis fails

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to address the collective
choice presented

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to society, as its valuation
of environmental benefits

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is based only individual's
private decision as consumers,

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and not collective
decisions as citizens.

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For example, a
study by Mark Sagoff

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found that his students
in their role as citizens

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opposed commercial ski
development of a wilderness

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area, but in their role
as consumers would plan

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to ski there if it were actually
built. So in this scenario,

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cost-benefit analysis could
take into account only

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our towns peoples'
willingness to pay

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for a new mall as
individuals and consumers,

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and not how they value this
site and its environmental

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and community value as citizens.

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In addition, there
are fundamental flaws

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and the use of discounting.

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While discounting acknowledges
that individuals believe

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it is better for them to suffer
harm later rather than sooner,

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it doesn't address the
very, very long term,

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where discounting its a
choice between preventing harm

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to the current generation
and preventing similar harms

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to future generations.

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And discounting also assumes
that environmental problems

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won't get any worse if
we wait to address them,

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and that technology
will keep evolving

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so that future solutions
will do more and cost less.

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Therefore, if we do a
cost-benefit analysis

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for the remediation of
this Superfund site,

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we cannot take into account
the possibility that we find

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an additional or irreversible
toxic pollution source that we

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do not currently know exists.

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Based on these fundamental
flaws in cost-benefit analysis

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outlined by Ackerman
and Heizerling,

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we cannot expect such an
analysis to be either objective

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or transparent.

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In fact, the
cost-benefit analysis

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relies on a series of
assumptions and value

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judgements that are
far from objective.

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As a result, I don't
think we should

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use a cost-benefit
analysis for our analysis.

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But rather, I think
we should look

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to past situations of
Superfund site remediation

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that may add in our
understanding of how

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other towns have addressed
such complex situations

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and undertake economic analyzes
of various past planning

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decisions that could
inform our own situation.

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Another idea would
be to potentially--

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based on public
town hall hearings--

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move toward the
consideration of a local vote

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to decide whether a tax can be
applied to the town's citizens

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and collected into
a pool that will

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go towards cleaning the site
and rebuilding the mall.

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I look forward to continuing to
analyze alternative approaches

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to evaluate our best
options going forward

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in this complex situation.