INTRODUCTION 



The use of benefit-cost analysis is one of the foundation stones on which 

 the Reagan administration is building its effort at deregulation. Executive 

 Order 12291 of February 1981 formalizes this position. In the environmental 

 area, the U.S. Environmental Protection Agency (U.S. EPA), is currently working 

 as hard as its reduced budget and manpower will allow to produce the benefit 

 estimates required by the Office of Management and Budget (OMB) for such diverse 

 actions as the steel industry effluent limitation guidelines and review of the 

 national ambient air quality standard for ozone. 



There are difficult economic problems involved in almost any environmental 

 benefit estimation exercise. These include such matters of technical (and 

 political) dispute as how to value future benefits (and costs); how to value 

 human morbidity and mortality; how to value aesthetic effects (such as better 

 visibility or cleaner looking water); and how to account for values that may be 

 held by nonusers of the environmental assets in question. What is not always 

 recognized either by economists or by regulatory agency staff is that our 

 ability to make defensible benefit estimates may also be constrained by lack of 

 comprehensive knowledge of existing conditions of the ambient environment and 

 by our inability to predict how those conditions will change with implementation 

 of the proposed program or regulation. 2 



The key place in benefit analysis of ecological knowledge and, especially, 

 predictive ability can be illustrated by consideration of recreational (sport) 

 fishing as a source of water pollution control benefits. A brief summary of a 

 completed project aimed at estimating the benefits of water pollution control 

 accruing via freshwater recreational fishing will illustrate the method and its 

 requirements. Then, discussion of the obstacles to application of the method 

 to marine recreational fishing will bring us face to face with the subject of 

 this workshop, marine ecosystem modeling. Our assessment of the state of this 

 art from the point of view of benefit measurement is a rather gloomy one. It 

 is far from obvious that a defensible measure of marine recreational fishing 

 benefits can be made on the basis of existing knowledge and modeling ability. 

 This view may provoke comment, correction, derision, or despair, but we emphasize 

 that it represents a serious effort to identify applicable data and models. If 

 we are wrong in our assessment, a possible lesson might be the need for better 

 communications between the marine ecomodelers and environmental economists. 



1 Perhaps "ironic" is the kindest way of describing the conflict between 

 adding difficult analytical requirements, benefit-cost analysis in particular, 

 and reducing available analytical resources. Indeed, the notion that the 

 application of benefit-cost analysis will lead to less regulation is a comment 

 on preconceptions about results rather than a logically defensible tactic for 

 achieving "deregulation." 



2 In this paper, we shall ignore the very serious problems created for 

 benefit-cost analysis by the focus of Executive Order 12291 on regulations, 

 given the fact that most environmental regulations are written for industries 

 rather than for environmentally meaningful units such as river basins or airsheds 



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