Equity and Feasibility Regulation

Abstract

What guiding principles should federal agencies follow in regulating the serious health risks posed by industrial activity? Since the Reagan administration, there has been a strong regulatory trend in favor of cost-benefit analysis, which requires investment in risk reduction only so long as the health benefits (in terms of deaths and injuries avoided) exceed the costs. Feasibility analysis, which requires risks to be reduced to the maximum extent possible without bankrupting the regulated industries, has become the principal alternative to cost-benefit analysis. But it has suffered pointed criticism, principally on the grounds that it lacks a sound normative basis. This Article offers a novel normative defense of feasibility analysis. The Article argues that the true normative basis of feasibility-based regulation is the norm of equity, which is concerned with equalizing the burdens differently-situated individuals must bear as the result of some socially desirable activity or practice. With this normative foundation in place, the Article explains why feasibility-based regulation makes sense in the common scenario in which the cost of reducing an industry’s serious health risks is spread among a vast number of consumers or shareholders.