The Precautionary Principle Revisited: Its Interpretations and their Conservation Consequences

1. The Precautionary Principle Revisited:Its Interpretations and their Conservation Consequences Clem Tisdell The University of Queensland Australia

2. Coverage • The Precautionary Principle in International Declarations, Conventions and Protocols • The Principle as stated in International Agreements is Non-operational • Interpretations of the Precautionary Principle Found in the Literature • The Precautionary Principle in Economics and in Application to Environmental Conservation #

3. Coverage (cont.) • Risk Aversion is Not Necessarily Favorable to Biodiversity Conservation • Recent Views about the Optimality of Conserving Genotypes in order to Keep Options Open • The Dynamics of Biodiversity – Human Selection of Genotypes and Genetic Engineering • New GMOs – Their Theoretical Implications for the Conservation of Existing Substitutable Genotypes #

4. 1.The Precautionary Principle in International Declarations, Conventions and Protocols • From 1992 onwards, The Precautionary Principle has been an element of many international environmental declarations, conventions and protocols. • In the Rio Declaration it is Principle 15: “In order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”. • In similar form, it is a part of : • The United Nations Framework Convention on Climate Change • The Convention on Biological Diversity • The Cartagena Protocol governing the transboundary movement of living modified organisms • The European Commission has adopted it as a guideline for EU environmental policy. #

5. 2. The Principle as Stated in These International Agreements is Non-operational • Examination of statements of the precautionary principle in international agreements show that it is too imprecise to determine environmental policy • Take Principle 15 of the Rio Declaration: there is no indications of how and by whom the seriousness of a threat should be evaluated nor under what circumstances scientific evidence (even though imperfect and subject to debate) should be a trigger for precautionary measures. • Nevertheless, on a more positive note, it can be concluded that international statements of the principle signal a change in perceptions about factors that need to be considered in determining environmental policies. • On the other hand, imprecision in statements of the precautionary principle opens the way for dubious and often unwarranted interpretations of it. #

6. 3. Some Interpretations of the Precautionary Principle Found in the Literature • Both reasonable and unwarranted interpretations of the precautionary principle exist in the literature. • For example, it is said that it requires the future to be considered and current actions to be varied to improve potential future outcomes if there is a prospect of such improvement. • This is a reasonable interpretation but the extent to which it is rational to consider the future will vary because of bounded rationality. • Unwarranted added value judgments arefoundin some of the literature. For example, the claims that the principle requires ‘a presumption in favor of high environmental quality’ and that intrinsic value should be assigned to the environment. • Unwarranted general implications claimed to follow from the principle for example, claims that the principle requires wide ranges of tolerance to be retained in environmental capacities and that the burden of proof should be on those making environmental change. These precautions may sometimes be reasonable but are not always. #

7. 4. The Common Meaning of Precautionary and its Implications for Rational Precautions • From English usage of the term ‘precautionary’ as specified in The Macquarie Dictionary, it implies that a precautionary approach may entail the following • The adoption of measures (before hand) that reduce the likelihood or costliness of unwanted results or outcomes. • The exercise of prudent foresight; and • Advice to adopt a cautious approach in decision-making • It follows that to determine what precautions are rational, one needs to know the objectives (aims) of the decision-maker. • One needs to determine what degree of foresight is prudent – that is, how much information it is rational to acquire. • The degree of caution or attitude of decision-makers towards the bearing of risk or uncertainty should also be taken into account. #

8. 5. The Precautionary Principle in the Economics • In the economic literature, the precautionary principle is usually attributed to Arrow and Fisher (1974). They show that expected benefits may be increased by preserving an irreplaceable environmental asset because this keeps some options open. Tisdell (1972), and possibly others, previously considered this possibility. • Bishop (1978), following on the footsteps of Ciriacy-Wantrup (1968), argued that the maximization of expected benefits displays insufficient caution. He argues in favor of criteria that display greater risk-aversion such as the maximin loss or maximin gain criterion. • However, a high degree of risk aversion is not necessarily favorable to the conservation of existing genotypes. In many cases, maximization of expected benefits is more favorable to the conservation of these genotypes. #

9. 6. Risk Aversion is not Necessarily Favorable to Biodiversity Conservation • Consider this game against nature displayed in Table 1. Table 1: A hypothetical game against nature in which the maximin gain strategy is not to conserve a species. • In this case, the maximization of expected benefit favors conservation of the species when the probability of s1 exceeded 4/7. • The minimax regret criterion favors development and therefore, elimination of the species. • However, in relation to global warming, the maximin gain (minimax loss) criterion favors measures to retard global warming when plausible possibilities are considered. #

10. 7. Recent Views about the Optimality of Conserving Genotypes in order to Keep Options Open • The problem of conserving an economically optimal stock of biodiversity has been widely likened to the problem of stocking a library so as to maximize its value taking into account the uncertain future value of the information in it. • Goeshl and Swanson (2007) find after reviewing progress with the economic theory of biodiversity that (as with books in a library) “a greater number of genotypes and greater diversity of these should be conserved to satisfy future options for use than current conditions would imply”. This may be a rational precautionary measure but is a too general proposition. • Kassar and Lasserre (2004) develop a specific model showing that even when genotypes are perfect or close substitutes, it can be economically optimal to conserve all these if their future ‘evolutionary’ paths are uncertain. • This suggests to me that when humans ‘create’ new genotypes (particularly GMOs) that it is likely to be economically optimal to conserve their existing substitute genotypes (germplasm) at some minimum ‘viable’ level #

11. 8. The Dynamics of Biodiversity in Human Selection of Genotypes and Genetic Engineering • Existing ‘mind sets’ of many economists about the nature of changes in the stock of biodiversity need to be adjusted. • While new genotypes created by human selection and genetic engineering are likely to displace existing genotypes reducing some options, new genotypes create a new set of options of potential economic value. This has not been appreciated in the economic literature. • Two problems need consideration: • Basic sets of genetic building blocks may be lost in this process; and • New human-selected and engineered genotypes may have a relatively short span of ecological fitness compared to their pre-existing substitutes. • The latter observation has implications for the conservation of existing substitute geotypes for new human-related and engineered genotypes. This can be illustrated by a simple model focusing on a new GMO. #

12. $ Benefits from GMO Time horizon A Benefits from non-GMO B E D G F C t1 tn t O Time 9. New GMOs – Their Theoretical Implications for the Conservation of Existing Substitutable Genotypes • Assume that the ecological fitness of a new GMO declines with the passage of time once it is adopted but that the fitness of an existing substitutable genotype remains constant. • If the choice of these genotypes is mutually exclusive, the path of the economic value of adopting the GMO might be as shown by ABCF in Figure 1 and that from continued use of the existing genotypes be as indicated by DBE. Figure 1:An illustration of the proposition that it can be a wise precaution to conserve a non-GMO substitute for a GMO because the net benefits from a GMO are unlikely to be sustained whereas these from a non-GMO are more sustainable. #

13. 9. New GMOs – Their Theoretical Implications for the Conservation of Existing Substitutable Genotypes(Cont.) • If the total undiscounted economic value for the planning period is maximized, the decision of whether or not to introduce the GMO will hinge on whether the area of triangles ADB exceeds that of the area of quadrilateral BCFE. If it does introduction of the GMO is optimal: if not, it is optimal to retain the existing genotype. • Introduction of a new GMO (or human developed genotype) does not always lead to loss of existing genotypes but it often does. #

14. 10. Further Implications of the Theory that New Genotypes Developed by Humans are Likely to be Wasting Assets • Other things equal, the higher the discount rate and the slower the predicted rate of decay in fitness of a new GMO, the more likely is its introduction going to maximize economic value for the planning period • However, even if a zero discount rate is applied, future generations may be impoverished by the loss of the existing substitutes for a GMO. Therefore, introduction of the GMO may be rejected on intergenerational equity grounds. This is a similar problem to that found by Dasgupta and Heal (1974) • In practice, the flow of benefits from a new GMO are likely to be uncertain. The more uncertain these are (other things held constant), the more likely the new GMO is to be rejected if risk-aversion occurs. #

15. 11. Additional Theoretical Issues • Where loss of existing substitute genotypes would occur under market conditions if a new genotype is introduced, one option is to conserve collectively a minimum viable quantity of the germplasm of existing genetic substitutes. Other things equal, this conservation option is more likely to be optimal the faster is the predicted rate of decline in the economic value of the new GMO and the greater is social concern about the welfare of future generations. • When such precautionary conservation is practical and is not excessively costly, it keeps options open and increases the likelihood that the introduction of the new GMO is optimal. • The development of a new GMO may lead on to the development of later generations of GMOs and new types of GMOs. The benefits and possibilities involved are uncertain. So, if risk-aversion prevails, it still may be a valuable precaution to conserve existing genetic substitutes for the initial GMO. #

16. 12. Concluding Points • The ‘precautionary principle’ has been included in many international agreements on environmental policy in recent decades. But statements of it in these documents are too vague for it to be operational. However, it does signal increased social concern about environmental issues. • Because of vague statements of the principle, unwarranted (unscientific) claims have been made about its implications. • A universal precautionary principle does not exist because what is a rational precautionary measure varies with the objectives of the decision-maker (including attitudes to risk) and the structure of the choice scenario. • Conserving existing genotypes is not always a rational precautionary measure and increased risk-aversion does not always favor the conservation of existing genotypes. #

17. 12. Concluding Points (Cont.) • The stock of genotypes is simultaneously being reduced by human activity and is being added to by genetic engineering and human selection of genotypes. • Given that new genotypes are likely to be wasting assets, conserving their existing genetic substitutes is likely to be a wise precaution under a wide range of conditions. Intergenerational equity considerations reinforce this conclusion. • Despite this, the ‘precautionary principle’ does not always favor the conservation of existing genotypes. However, ecocentrism and the ‘status quo’ or endowment principle tend to favor conservation of existing genotypes. #