I like your article very much, except for the sanguine presumption that any sort of weighing of utility actually does occur in regulatory matters regarding power plants (not to mention the more comprehensive analysis you describe).

Maybe this is done somewhere. If so, I'd love to know. You are certainly not correct in saying that "Analyses like Environmental Impact Statements -- required for major federal investments under the National Environmental Policy Act -- are still based on what economists call 'expected utility theory' (EUT)."

There is no such requirement in NEPA. The law creates a lot of fat reports, but it really doesn't actually provide any legal handle for someone to assert: "Look--this project does more harm than good, so it must not be approved." Environmental Impact Statements just take an inventory of impacts. If adverse impacts are identified, then alternative decisions must be identified. But that's generally as far as it goes. The process does not involve estimating or weighing of utilities. Alternatives are generally raised and dismissed in a pro forma fashion.

In fact, there is even one state (North Dakota) that expressly prohibits raising "externality" issues in power plant siting permit decision-making.

It would be great if utilities really were measured and weighed. Of course, to be done properly this would include probabilistic weighing of "accidents," as you describe. Far fewer coal plants would be built. Probably none.

(Maybe I'm wrong -- I'd love to know of any part of federal, state, or local regulation that formally applies utility theory.)

By the way, the Kingston Plant, indeed half of all U.S. coal plants, was built before the passage of NEPA in 1969. Perhaps some of the subsequent retrofitting has been subject to an EIS -- would be interesting to find out.

Thanks for raising an important point. In the nation of Bhutan, it's national policy to "maximize happiness." Why not here?

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