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 Economics for Managers Assignment Help

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The present article shows the dilemma for decision makers by adopting the precautionary principle for the decision-making process. It is expected that application of precautionary principle has the great impact on the decision makers and policies which are framed by the decision makers as well. Some of the possible areas wherein precautionary principle can have its great impact by affecting the decision makers include new drug therapies, climate changes, genetically modified food and nuclear power etc. Precautionary principle can be interpreted as principles putting safety ahead better from a sorry situation. Precautionary principles are expected to come in action whenever any activity has concern for the threat to human health or to the environment (Sunstein, 2005).

Application of precautionary principle in various situations may lead to the dramatic changes in the decision-making process and hence it is important for the decision makers & other stakeholders of this principle that benefits and cost involved in precautionary principle should be evaluated so as to make difficult decisions. A major issue which is unanswered from Precautionary principle is the level of safety which needs to be ensured and risk which is arising due to the inaction of a particular action. In present age scenario, it is possible that one action may lead to the risk in another area.

Precautionary policies also possess risk by contradicting the core concept behind the principle of the precautionary principle. An example can be taken for several areas such as genetic food, nuclear power, and environmental issue etc.  Genetic foods are considered an important innovation so as to enhance the nutritional value of the food while people adopting precautionary policies would be against genetic food by stating that this may create significant harm to human health (Stewart, 2002). Similarly, usage of nuclear power in countries like China has shown several benefits while people following precautionary principle states that usage of nuclear power may create health issues among people living in nearby regions as radiation emitted from nuclear power are harmful to human health. While usage of fossil fuel in place of nuclear power may create the bigger risk for the human life by enhancing greenhouse impact. While nuclear power at another side may be effective in decreasing environmental problems. Another example can be taken for the social issue for the regulation of arsenic in the drinking water with lower quantity and higher quantity may enhance the cost very significantly (Wildavsky, 1988).

While considering the risk level for the precautionary principle it is important to consider all risk which is highlighted in regulations or not. For example, an untested drug should be avoided as the precautionary principle but it would also put the risk of the diseases which could have been diagnosed by the usage of drugs which have been banned by the government. Hence looking at the regulations which have been developed for the precautionary principle it can be said that regulations give rise to new kind of risk instead of reducing the level of risk. We can give privilege to the existing risk over new risk according to precautionary principle (Arrow, 1996). This gives risk to new debate that in case such risk should not have been adopted in past then in present age we would have been deprived of some of the major innovations such as internet technology, electricity, automobiles and countless other technologies.

A major issue created by precautionary principle is defining the level of regulation and weighing of the variables which are at stake for the stakeholders. Hence it would be advisable to follow cost-benefit approach wherein instead of just considering the cost associated with such innovation benefits should be considered to balance the two factors. It is not possible to create the entirely risk-free environment for the society e.g. banning the air travel so as to avoid any possibility of terrorism which is not possible due to the reason that benefits of air travel would outweigh the cost associated with the air travel. Hence some degree of risk needs to be adopted against the precautionary principle looking at the potential benefits which would be gained through an adoption of that risk (Wildavsky, 1980).

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