Economic Evaluation, Cost-Benefit Analysis, Economic Ethics: A Review with Regard to Climate Change – Figures in the Sustainability Discourse ... Transformation, Governance, Ethics, Law)

With cost-benefit analysis, economic sciences cultivate a specific decision-making procedure, which has also been partially adopted in politics. Although economists do not experience the approach as normative, on closer examination the approach can be identified as an economic ethics. The present philosophical and at the same time transdisciplinary (with special legal and economic components) treatment examines the persuasive power of this approach using climate change as an example, as the most important sustainability issue. The objections raised against the economisation of decision-making with regard to the utilitarian tradition, such as the criticism of the orientation towards weighing up options, the alleged lack of distributive justice or the tendency to describe people in behavioural science as selfish, are hardly or not at all convincing on closer examination. In several respects, however, it turns out that cost-benefit analysis faces insoluble problems. Firstly, the theoretical basis of (hidden normative) cost-benefit analysis in philosophical empiricism does not seem tenable. This means the idea of empiricism that normative questions must be transformed into questions of factual (countable and reproduceable) preferences of people. Secondly, there are massive collisions of cost-benefit analysis with a liberal-democratic constitutional law, whose principles are universal ethical principles. This concerns both freedom rights (which must not depend on the ability of humans to pay) and the model of democracy and respect for the rule of law. Thirdly, insoluble problems of application arise for cost-benefit analyses, which are particularly (but not only) apparent in the context of climate protection, in general considerations as in the case of legislation as well as in individual analyses, as done when constructing a coal-fired power plant. A strongly deflated cost-benefit analysis could nevertheless contribute factual material – such as partial aspects of decision consequences that can actually be depicted in monetary terms – to ethical or legal decision-making processes. In this respect the approach appears helpful and complementary, but not beyond that. Mission Statement: New Series Environmental Humanities – Transformation, Governance, Ethics, Law 6 Preface 7 Contents 9 1: Problem and Fundaments 12 1.1 Problem: Economic Evaluation and the Empiricist Paradigm – Attempts to Rationalize Decisions Without Ethics 13 1.2 Concepts: Economic Evaluation, Cost-Benefit Analysis, Related Approaches Such as Economic Ethics – and Their Methods, Especially in Climate Protection 20 1.3 Further Background: Sustainability and Climate Protection 27 1.4 Epistemological and Methodological Remarks: Objective vs. Subjective, Is vs. Ought, Genesis vs. Validity, Normative vs. Instrumental and Theoretical Rationality 30 References 35 2: Idea-Historical Foundations and Dubious (Standard) Objections to Cost-Benefit Analysis 40 2.1 Philosophical and Historical Foundations of an Empiricism of Normativity in the Form of Cost-Benefit Analysis 41 2.1.1 From Nominalism and Calvinism to Hobbes and the Beginnings of Epistemological Empiricism – First Highlight 41 2.1.2 From Hume to Smith and the Economic Classics – Second Highlight 53 2.2 Why Common Criticisms of Cost-Benefit Analysis and Their Empiricist/Utilitarian Basis in Ethics Are Not Convincing 56 2.2.1 Homo Oeconomicus, Bounded Rationality, Behavioral Economics and the Blending of Descriptive Anthropology and Normative Theory 56 2.2.2 Criticism of Cost-Benefit Analysis as Normative and Therefore Unscientific and Subjective Theory 60 2.2.3 Criticism of Balancing (or Consequentialism) as Such in the Tradition of Kantian Criticism of Utilitarianism 65 2.2.4 Criticism of Quantification with Reference to Humans and Nature per se and of a Price for Environmental Goods 70 2.2.5 Criticism of Lack of Information – And to the Effect That Scientific Uncertainties Lead to Skewed Assessments on the Part of Scientists 72 2.2.6 Criticism of the Concept of Utility as Well as Hidden Distributive Justice – True vs. False Utility and Intrinsic vs. Merely Instrumental Values 73 2.2.7 Criticism of Individualism 75 2.2.8 Criticism of Economic Policy Instruments – Necessarily Connected with (Criticism of) Economic Evaluation? 77 2.2.9 Marxist Criticism of Capitalism and Conservative Criticism of Modernity – Argument Against Cost-Benefit Analysis? 79 References 80 3: Frictions on the Application Level: Costs and Benefits, Discounting, Uncertainty, Fact Base 87 3.1 Frictions of the Determination of Explicit and Implicit Preferences Respectively Costs and Benefits 87 3.2 Problems of Economic Dealing with Risk and Uncertainty 95 3.3 Problems of the Debate on Discounting 96 3.4 Frictions of the Empirical Foundations: Especially on the Technology and Growth Orientation of Cost-Benefit Analysis 99 References 101 4: Collision of the Cost-Benefit Analysis with Liberal-Democratic Basic Principles and the Claim of Validity of Law 105 4.1 Common Economic Views on Law – And Legal Views on Economic Approaches, Taking into Account the Relationship Between (Interpretation of) Law and Ethics 106 4.2 Claim of Validity of Law and Representative Democracy 107 4.3 Legal Balancing Rules as a Means of Limiting the Scope of Political Decision-Making – And the Extent to Which They Contain Cost-Benefit-Analytical Yardsticks 110 References 115 5: Cost-Benefit Analysis Without Convincing Theoretical Basis 118 5.1 Theoretical Frictions of Cost-Benefit Analysis as Empiricist Ethics – And (Heterodox) Discourse-Ethical Alternatives 118 5.2 Economic Ethics: Modified Empiricist/Utilitarian Ethics Instead of Cost-Benefit Analysis as Way Out? 129 5.3 Analogous Problems of Crypto-Natural Scientific Risk-Benefit Analyses and Sustainability Indicators 134 References 136 6: Remaining Relevance of Cost-Benefit Elements in Balancing 141 6.1 Sociology: Why Is Insight into the Limits of Common Economics so Little Received? 141 6.2 Why a Deflated Cost-Benefit Analysis Nevertheless Remains Useful for Ethics and Law – And a Conclusion 143 References 146 Summary 149 Glossary 153 Bibliography 157 Index 163