ABSTRACT
In essence, there are no absolutes: risk is relative. Some hazards are more dangerous than others, so governments should attempt to reduce major risks before tackling minor ones. Unfortunately, using the precautionary principle often means regulations are targeted at minor hazards. For example, bans on certain chemicals may not cost a regulatory agency anything but will probably have a cost in terms of increased product prices. As Professor Kip Viscusi from Harvard University has shown in Risks, Costs and Lives Saved (American Enterprise Institute, 1996) the more of the regulatory budget spent on banning pesticide use and removing them from public water supplies, the less that can be spent on resources that have a better return in lives saved, such as road safety. The US government demands for more fuel-efficient cars have forced makers to make light cars that are more dangerous if crashed. Bob Crandall of the independent Brookings Institute says, ‘at least 3000 people die every year because of fuel economy standards’. The opportunity costs are obvious. Regulations that cost more than they save should be scrapped.
