The Precautionary Principle, which recommends an extreme “safety first” approach, is being used to justify the closure of state borders in Australia to deal with COVID-19. For instance, Justice Rangiah explicitly referred to a “precautionary approach” in his decision against Clive Palmer over the WA border closure:
In view of the uncertainties involved in determining the probability that COVID-19 would be imported into Western Australia from elsewhere in Australia, and the potentially serious consequences if it were imported, a precautionary approach should be taken to decision-making about the measures required for the protection of the community.
But should the Precautionary Principle, which many argue is relevant to dealing with climate change, be extended to COVID-19? I consider this question with my good friend and former Treasury colleague Joe Branigan, Director of Tulipwood Economics, in my latest podcast episode.
We conclude that the Precautionary Principle shouldn’t be used in formulating policy recommendations regarding COVID-19, and we should stick with cost-benefit analysis. Toward the end of the episode, I quote Obama’s regulation czar Cass Sunstein from his book The Cost-benefit Revolution (p. 173) on the big problem with the Precautionary Principle:
…there is a serious, even devastating problem with the Precautionary Principle, at least in its crudest forms: risks are on all sides of social situations and efforts to reduce risks can themselves create risks.
Regarding the response to COVID-19, we are starting to see the adverse consequences from impacts on mental health, reduced cancer screenings, and lower heart attack and stroke presentations, which have been very noticeable in Victoria (check out the ABC News article linked to below). And, of course, there has been the massive adverse economic shock as well. The Precautionary Principle does not help us develop a rational policy response to COVID-19, as Joe and I discuss in the podcast episode. Please check it out and let us know what you think.
Links relevant to the conversation include: