Décision séquentielle et Principe de Précaution

The Precautionary Principle (Rio Conference, Maastricht Treaty) is becoming increasingly prominent in the environmental protection law or on health safety issues. Given the important literature on the Precautionary Principle in social sciences in general, this paper provides an economic approach to the Precautionary Principle. In crude terms, the Precautionary Principle encourages the prevention of a risk before that full scientific information is available about it. Since this Principle implies that a decision should be taken in advance, even if it may be revised later on, it implies that the decision process is sequential. As a result, this paper proposes an interpretation of the Precautionary Principle based on the sequential decision theory. We report some insights from sequential investment theory (Dixit and Pindyck, 1994) in order to bring closer the notion of option value to that of precaution. We then introduce formally the notion of irreversibility and that of information structure. We also reinterpret the Bayes’rule as a rule that accounts for scientific progress in decision-making. This allows us to distinguish between a preventive and a precautionary strategy. Prevention is a static concept that refers to the management of a risk at a given time and given a stable probability distribution. Precaution is a dynamic concept that recognizes the evolution of scientific knowledge. A precautionary measure is defined as a prudent and temporary decision that permits to manage the current lack of scientific information. In order to examine the efficiency of the Precautionary Principle, we raise the following question: does more scientific uncertainty lead to bias decisions in favor of less current risk exposure? We show that the Precautionary Principle may be justified on the grounds of irreversibility alone (Henry, 1974). We also generalize this pure 'irreversibility effect' to integrate risk aversion and consumption externalities (Gollier et al., 2000). We finally report some empirical results from macroeconomic models that recently assessed the impact of scientific uncertainty on optimal climate policy (Nordhaus, 1994)