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:
The precautionary principle should not be used as a basis for decision-making
John Quiggin on Complexity, Climate Change and the Precautionary Principle
COVID19: Getting Australia Safely Back to Work
Cancer screening, heart attack and stroke presentations down in Victoria during coronavirus pandemic
The silent death toll of COVID-19 revealed: Huge 25 per cent jump in suicides each year
The precautionary principle has never stood any scrutiny. Essentially, if I can imagine a risk that is very large, then it entitles me to ignore all other risks to try to mitigate the one risk. It is a rhetorical tool rather than an economic one. It’s very similar to Pascal’s wager – the idea that going to hell is such a large risk that it is reasonable to mitigate it by paying a premium by religious observance. In the modern world very few people think that proposition is compelling, and they are right, but they cite the notion of the precautionary principle all the time. In their case and Pascal’s it is a handy justification for doing what they want to do, and no more.
The general point you make is a good one – there are risks on both sides.
But the argument against state border controls seems weak to me.
Lockdowns are incredibly expensive. So arguing against them makes sense on cost benefit grounds as my friend Paul Frijters does makes sense. By ‘makes sense’, I don’t mean he’s right – I think he’s overconfident that he’s right, but he could easily be right and his case isn’t logically confused.
IF you are prepared to lockdown if COVID gets out of control, closing borders may make perfect sense given the risk reward trade-off. If it substantially lowers the risk of needing to lock down, it may well make sense.
And call me old fashioned, but spending ~1% of global GDP on avoiding the prospect of tipping points we understand poortly seems like good value to me – and a good application of the precautionary principle at least as far as I understand it.
Thanks for the comment, Nicholas. I accept some border restrictions may be desirable – e.g. I’m not proposing Qld opens up to Victoria just yet. But maintaining the border closure with most of NSW seems over the top given it appears the virus is under control there (and there’s no reason why Qld can’t get it under control if we import a few cases from NSW).
Qld’s Chief Health Officer appears overly-cautious and I really can’t understand what decision making framework she’s using. Sometimes she appears sympathetic to a CBA approach, such as when she spoke about movie stars and AFL players bringing money into Qld, but other times it looks like she’s following a strong Precautionary Principle. It’s very frustrating and the border closure is causing a lot of hardship and costing business.
Re. WA, it may make sense for them to keep the border restrictions in place for the time being, but I think the judge in the Palmer case was wrong to accept the precautionary approach is his reasoning. I expect there will be an argument made to the High Court by Palmer’s counsel on this point.