Benefit-Cost Analysis (BCA) is now widely known and used, but it is also widely misunderstood – by many of its advocates as well as its detractors. Over the next few weeks I want to examine some of the strengths and weaknesses of BCA as a normative science; and, yes, that phrase is an oxymoron, which is a source of much of the controversy. BCA is an imperfect answer, but often perhaps the best available answer, to the question of how a society should go about making collective but not unanimous choices. Nowhere is its use more contested than in its application to decisions by regulatory agencies.
The brawl over the Obama EPA’s “clean power” plan—an ambitious design to de-fossilize the entire economy and to make Planet Earth spin westward for a change—has reached the Supreme Court.