Regulating Best-Case Scenarios

Abstract

Environmental law and policy increasingly focuses on the extreme downsides of human policies affecting environmental quality: on ecological collapse, natural hazards, disasters, and catastrophes. A robust interdisciplinary literature has developed to guide policymakers in managing such extreme-downside phenomena. Strikingly, however, there is no opposite literature for regulating and managing phenomena that expose society to the possibility of extreme-upside events, such as might result from geoengineering, successfully colonizing other planets, or implementing other socially- or environmentally-transformational new technologies. A careful comparison of the policy implications of extreme-upside outcomes with extreme-downside outcomes suggests at least a partial explanation for the asymmetric attention to extreme-downside events: psychological phenomena like loss aversion lead to greater attention to, and care for, what are perceived as potential extreme losses than for concomitant extreme gains. Unfortunately, while understandable, this asymmetric focus on perceived losses may also generate unnecessary and even counterproductive despair, while simultaneously obscuring extraordinary opportunities for improving social welfare and environmental quality, and for using law and policy to achieve wonderful outcomes.