Economic Analysis, Environmental Policy, and Intergenerational Justice in the Reagan Administration The Case of the Montreal Protocol

Economic arguments played a significant role in the decision by the Reagan Administration to lead the international effort to protect the stratospheric ozone layer from depletion caused by certain otherwise useful industrial chemicals. During the period prior to the signing of the Montreal Protocol on Substances that Deplete the Ozone Layer in 1987, it was recognized within the Administration that ethical considerations (involving the valuation of risk and intergenerational equity) were essential components of the economic analysis. Adoption of a principle of intergenerational neutrality had the consequence that any reasonable comparison of the benefits of ozone layer protection to the costs of regulatory control overwhelmingly favored regulation.