Given that legislative and administrative controls on environmental pollution involve considerable economic sacrifices, a crucial underlying question is whether the prices paid for environmental protection by taxpayers, consumers, and industry are justified. Lawmakers have traditionally eschewed this difficult question, dismissing it as unanswerable. Within the last year or so, however, environmental, health, and safety regulations have been widely blamed for contributing to a uniquely pernicious and malignant economic malady: Inflation. This allegation had precipitated a nationwide reevaluation of the costs and, to a lesser extent, the benefits, of regulation. Critics of stringent regulation assert that such rules and to the cost of consumer goods and therefore to the inflation rate. Defenders rejoin that the protections offered by such regulations, in terms of human health and mortality as well as aesthetics, are more valuable to society than the economic costs and are thus noninflationary. The key concept in this debate is cost-benefit analysis. Environmental controls for which the benefits exceed the costs are considered worthy, while all others are considered unjustified.

Intensive scrutiny of the cost of environmental regulation is now being conducted in Congress¹ and in the executive branch. On October 31, 1978, the Carter Administration announced the formation of yet another panel of upper echelon officials whose prime task it is to review impending federal regulations for the economic effects.² It appears that these bodies will be less concerned with subjecting proposed regulations to cost-benefit analysis than with institutionalizing priorities under which resources will be applied first to rules which are most "cost effective." In theory this means that the agencies will first issue regulations which appear to provide benefits at the lowest cost, assuming that other important objectives are not defeated. Although environmentalists concede the noble ends of this theory, they are concerned that in practice the application of cost-benefit techniques or cost-effectiveness review may prove a guise for reducing the overall level of environmental protection.