Research On Cost-Benefit Analysis On Enivronmental Legislations

Cost-benefit analysis is a system to identify net benefit of legislation based on economics. It has been practiced for twenty or thirty years in America and Europe, and is spreading out in other countries. Although cost and benefit sometimes are considered during legislation process in our country, which is optional and not regulated. In 2004, Cost-benefit analysis on government regulation is encouraged in Executive Compendium Of Comprehensive Advancing Administration According To Law enacted by State Department. Then a few normative documents are produced by local governments. Therefore, in practice, governments actively promote cost-benefit analysis on legislation. However, domestic academia is cautious to cost-benefit analysis, doubting its justness, necessity and analysis methods. Especially, its moral foundation is challenged, because it involves analysis on life value and offspring harm. All of these worries are understandable, in fact, at first cost-benefit analysis is objected by many environmentalists. But practices prove it is a useful tool for policy analysis.In order to get rid of these worries, we need to make clear justness and necessity of cost-benefit analysis, explaining right analysis methods. In theory, cost-benefit analysis is neutral and impersonal, but it is affected by various factors in application, which is key problem criticized by some scholars. So reasonable system construction plays a key role in cost-benefit analysis. From a view of environmental legislation, the article explores cost-benefit analysis from theory to system aspects comprehensively. Chapter one demonstrated justness of cost-benefit analysis. Chapter two explained reasons why cost-benefit analysis is applied to environmental legislation. Chapter three explored context and right methods of cost-benefit analysis, and make clear how to implement cost-benefit analysis, which concerns its availability. Chapter four studied America cost-benefit analysis system, discussing its effect and problems. Chapter five proposed cost-benefit analysis system suggestions in our country. Detailed abstract is as follow:Chapter One, Basic Theory of Cost-Benefit Analysis. Cost-benefit analysis on legislation is a process to judge legislation justness, in which, through economic methods and theory, person welfare or utility change are measured, social cost, social benefit and distribution outcome are identified, net benefit is counted. The aim of cost-benefit analysis is improving government legislation quality and efficiency. Cost-benefit analysis is a decision process, not decision standard. That is, net benefit is not regarded as only standard for legislation decision. However, cost-benefit analysis is not only process, but also imposing essential influence on legislation decision. Legislation decision maker must testify decision justness based on cost-benefit analysis. Cost-benefit analysis can enhance social efficiency and welfare which are all value objects, so it is proper. Environmental interest is a part of social efficiency and welfare, which should be counted into legislation cost and benefit. Although non-substitutable human life and health is valued in cost-benefit analysis, which is not viewed as commodity, but valuing special policy in special context. The value reflects marginal price of estimated object, not its intrinsic value. Many scientific uncertainty are included in cost-benefit analysis. Scientific uncertainty is nature character of environmental risk, not produced by cost-benefit analysis. In reverse, cost-benefit analysis can lay out all problems of uncertainty, which helps us to make wise choice facing uncertainties.Chapter Two, Reasons Of Cost-Benefit Analysis On Environmental Legislation. There are some reasons of introducing cost-benefit analysis into environmental legislation. First, environmental law have cost in fact. The cost of environmental law included compliance cost, regulation cost, social welfare loss, exchange cost and indirect cost. These costs directly affect effect and efficiency of environmental law. Environmental systems of choice and decision must consider cost. Second, social resource is scarce. So not all of environmental risks can be revolved at once, and we must make choice and balance. At the same time, environmental legislation probably results in new environmental risk when settle one environmental risk, so that decision maker must balance between risks. However, there are distinct different knowledge between people about environmental risks. Some principles and decision methods, such as prevention principle, precaution principle, sustainable development principle, absolute safe method, feasibility method and intuitional estimation method, are all limited, which can not help decision maker to choice and decide how much resources may be spent. Cost-benefit analysis measures effect of environmental risks and counts utility of decreasing risks, which helps people to have all-sided knowledge about related issues, avoids paying excess or none attention to some risks, and overcome disadvantage of cognition, so as to help decision maker to decide priority of environmental risks. Third, cost-benefit analysis can identify effect of system choice, which provides impersonal data for environmental legislation. Fourth, cost-benefit analysis is propitious to decision democracy of environmental legislation, provide information exchange opportunity for decision democracy, and lead to common recognition among various opinions.Chapter Three, Content And Methods Of Cost-Benefit Analysis On Environmental Legislation. Content of cost-benefit analysis on environmental legislation includes cost analysis, benefit analysis and distribution effect analysis. Generally, cost valuation is easier than benefit valuation. Environmental legislation not only probably leads to subsidiary risk, but also produces subsidiary benefit. So subsidiary risk and subsidiary benefit should be separately counted into legislation cost and benefit. Don’t partially pay attention to subsidiary risk and neglect subsidiary benefit. Government appraises compliance cost of enterprises depending on data provide by enterprises, which probably result in overate compliance cost of environmental legislation. Therefore, when valuing compliance cost, appraisers should forecast enterprise’s reaction to legislation and probable measure. As environment as concerned, we should recognize environmental non-use value, which consists of environmental choice value, bequest value and existence value. People payment for life valuation should be measured through revealed preference or stated preference method, and adopt average of people valuation. Life year and qualified life year can be viewed as reference. Environmental harm is a long-term potential harm, so cost and benefit of environmental legislation should be discounted. However, environmental harm of off-spring can’t be discounted. Discounting contemporary environmental harm is to reflect personal time preference and environmental risk preferred to resolve, which involves technique problem. But whether discounting environmental harm of off-spring is ethical problem. Both efficiency and fair distribution are goals of environmental legislation. Distribution effect of environmental legislation should be attended to, analyzing legislation effect on different people, and identifying who bear the burden and who gain the benefit.Chapter Four, Demonstration Analysis of Cost-Benefit Analysis On Environmental Legislation. American cost-benefit analysis system is comparatively mature, stating analysis standard and content, and establishing systems of administration and judicial reviews. But there still are some problems to resolve. Much be done to improve enforcement and influence of cost-benefit analysis, strengthen transparence of cost-benefit analysis, broaden application range and perfect function of review agency. Although there are many disputes about cost-benefit analysis, consensus has been obtained about justness of cost-benefit analysis. American practice demonstrates that cost-benefit analysis system is a useful tool for legislation effect analysis, review monitor mechanism should be established, government agency should be permitted to identify priority of legislations, there should be uniform content and methods of cost-benefit analysis and improving the standard continuously, cost and benefit should be quantified as much as possible, best analysis standard should be put forward for uncertainty description, distribution effect should be considered, clarity should be guaranteed and hear from public and experts.Chapter Five, System Construction Of Cost-Benefit Analysis On Environmental Legislation In Our Country. Cost-benefit analysis should be applied before and after legislation. Analysis after legislation is retrospective analysis in order to test exactness of analysis before legislation. Because cost-benefit analysis own has high cost, it can’t be applied to all of legislations. We can set quality standards embraced economic, social and environmental issues. We also can set quantity standards according to legislation cost valuation or population. Cost-benefit analysis should be applied to legislations enacted by government and legislations regulating market operators. Governments and Environmental and Resources Protection Committee of NPC drafting environmental bill perform cost-benefit analysis. Office of legislative affairs and law committee of NPC review reports of cost-benefit analysis and enact Cost-Benefit Analysis Guideline as practice standard. Cost-benefit analysis should be combined public discussion process, which advances democracy, outcome based on real personal preference, right valuation of environmental public goods, and right variables used. Public and experts play different roles in cost-benefit analysis, each other is not alternative. Except for enacting standards, review agencies should take responsibilities of reviewing report of cost-benefit analysis according to guideline, reviewing whether social cost of environmental legislation is reasonable, prioritizing environmental legislations, and organizing hearing meet of cost-benefit analysis.