EPA readies study of future costs, benefits of implementing 1990 Clean Air Act Next month, EPA expects to have preliminary results from a "prospective" study of the expected costs and benefits of the 1990 Clean Air Act Amendments for the years 2000 and 2010. The analysis will be the most extensive cost-benefit evaluation of an environmental law ever attempted, EPA officials said at a Nov. 7-8 meeting of a multidisciplinary oversight council of the EPA Science Advisory Board (SAB). It is sure to influence the debate over the recent particulate/ozone proposed rule (see p. 14A) and will serve as a prototype for EPA examinations of other environmental laws, such as the Clean Water Act that is also getting under way. The prospective study will be closely watched by industry, environmentalists, and the federal government, especially if results are similar to those of a nearly finished EPA retrospective costbenefit study of the Clean Air Act's implementation from 1970 to 1990. In the retrospective study, the economic value of benefits from the law was found to range from $10.5 trillion to $40.6 trillion, with a central estimate of $23 trillion. Because compliance cost $523 billion over the 20-year period, benefits of EPA air regulations exceeded costs by 45 times. Congress called for the reports in the 1990 amendments, and both are behind schedule: EPA is four years late with the retrospective study and three years behind with the prospective one. EPA has spent nearly $2 million on the undertaking, and Congress provided no funds for the project. The law also called for review by the SAB council, which has met seven times and examined 40 versions of portions of the retrospective report. Called the Advisory Council on Clean Air Act Compliance Analysis, it includes economists, statisticians, and health experts. Much of the council's November meeting was devoted to the retrospective study. There was little disagreement over compliance cost estimates, which are
based on EPA data and an annual Commerce Department survey of nearly 20,000 companies, but council members hotly debated EPA's techniques for calculating monetized benefits of regulation. In particular, they challenged the economic value of avoided death. The study attached significant monetary values to death, chronic bronchitis, heart disease, lost IQ points, hypertension, respiratory
A retrospective analysis shows benefits exceeded costs by 45 times. illnesses, and other health problems, mostly from exposure to particulates and lead. The monetized benefits did not include ecological impacts of regulation. EPA setded on $4.8 million per death, the mean amount calculated from 26 studies. The studies were mostly labor market analyses and willingness-to-pay estimates of compensation needed to encourage workers to accept high-risk jobs. How EPA used these data to estimate the benefit of avoiding illness and death from pollution greatly concerned the council. Several members questioned how death figures should be weighed.
For instance, they noted, most deaths from pollution come slowly and at an advanced age, so should the cost of death be discounted? What is the value of avoided pain and suffering from environmentally related disease, especially in the years before death occurs? Is the life of an elderly person worth less than a child's? How long after a regulation is implemented should benefits be assumed to occur? And how should values be determined? As one council member put it: "Ten thousand dollars for a heart attack sounds a little cheap to me." At the council's urging, EPA agreed to revise its report and conduct a benefits valuation based on life-years lost, along with the "EPA traditional" assumption of $4.8 million for a life. Although this change may lower benefits in the retrospective study, agency staff said other changes may raise it. However, even the most skeptical council economists acknowledged that benefits will far exceed costs in the retrospective study, despite council-recommended changes. In fact, several members, including chair Richard Schmalensee, a Massachusetts Institute of Technology economist, and Paul Portney, president of Resources for the Future, encouraged EPA to err on- the side of caution and present benefits data conservatively to protect the report's credibility. The retrospective study is based on historical data and the
REGULATION Canada acts to eliminate persistent organic pollutants Environment Canada has proposed to regulate the 12 chemicals or chemical classes known as persistent organic pollutants (POPs), under a policy that calls for their "virtual elimination from the environment." Once finalized, the rules will implement Canada's previously stated policy on POPs as international discussions on regulating them proceed, said Karen Lloyd of Environment Canada, speaking Nov. 19 at the Society of Environmental Toxicology and Chemistry's annual meeting. POPs are long-lived organic compounds that become concentrated in the food chain, have toxic effects on animal reproduction, and are known to travel thousands of kilometers from their point of release. In November 1995, some 102 governments agreed to work for a binding treaty on the reduction and/or elimination of POP releases {ES&T, December 1995, p.546A>. Scientific studies supporting the agency's decisions to regulate the 12 should be completed this month, Lloyd said. —C.M.C.
1 6 A • VOL. 31, NO. 1, 1997 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS
