All regulations are not inefficient:
The accidents kept coming, and so did the calls for a plan to improve West Virginia’s chemical safety regulations.
Last week’s massive chemical spill into West Virginia’s Elk River was the region’s third major chemical accident in five years. It came after two investigations by the federal Chemical Safety Board in the Kanawha Valley, also known dryly as Chemical Valley. And it came on the heels of repeated recommendations from federal regulators and a local environmental advocacy group that the state adopt rules embraced in other communities to safeguard chemicals.
All of those recommendations died a quiet death with barely any consideration by state and local lawmakers, federal regulators and local environmental groups said. ...
“People always beat the drum about too much government regulation,” [Jeffrey V. Kessler, the president of the West Virginia Senate] said. “My goodness, there are 300,000 people I guarantee wish they had a little more regulation.”
The trick is comparing the benefits and costs. Here is a lower bound estimate of the costs of the contamination episode:
- 300,000 people
- 6 days
- averting expenditures at $3/day (this seems low but it is literature based, albeit, pre-1997 literature ... better estimates are invited)
So, if the costs of some sort of regulation is below $5.4 million (300,000 x 6 x $3), weighted by the probability that it might happen again plus the expected costs of other episodes avoided by the regulation (pause for breath), then the regulation is efficient.