1
Introduction

Improving public health is the primary goal of air pollution regulation by the U.S. Environmental Protection Agency (EPA). Accordingly, predictions of the type and size of health improvements likely to result from possible regulatory actions are critical components in making decisions about new regulations. The process of estimating health improvements for various regulatory options is known as health benefits analysis. These analyses, often controversial, attempt to quantify changes in the expected number of mortality and morbidity cases likely to result from the proposed regulation. The estimates obtained typically serve as inputs to other analyses that compare the predicted benefits with the regulatory cost.

Given the potentially high costs of air pollution regulations, the public interest is served by using the best possible methods and data to conduct health benefits analyses. In 2000, Congress recognized concerns about the methods used by EPA and emphasized the need for “the most scientifically defensible methodology in estimating health benefits” (U.S. Senate 2000). EPA was directed by Congress to ask the National Academy of Sciences “to conduct a study of this issue and recommend to the agency a common methodology to be followed in all future analyses.” In response to that request, the National Research Council (NRC) convened the Committee on Estimating the Health-Risk-Reduction Benefits of Proposed Air Pollution Regulations, which prepared this report.



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Estimating the Public Health Benefits of Proposed Air Pollution Regulations 1 Introduction Improving public health is the primary goal of air pollution regulation by the U.S. Environmental Protection Agency (EPA). Accordingly, predictions of the type and size of health improvements likely to result from possible regulatory actions are critical components in making decisions about new regulations. The process of estimating health improvements for various regulatory options is known as health benefits analysis. These analyses, often controversial, attempt to quantify changes in the expected number of mortality and morbidity cases likely to result from the proposed regulation. The estimates obtained typically serve as inputs to other analyses that compare the predicted benefits with the regulatory cost. Given the potentially high costs of air pollution regulations, the public interest is served by using the best possible methods and data to conduct health benefits analyses. In 2000, Congress recognized concerns about the methods used by EPA and emphasized the need for “the most scientifically defensible methodology in estimating health benefits” (U.S. Senate 2000). EPA was directed by Congress to ask the National Academy of Sciences “to conduct a study of this issue and recommend to the agency a common methodology to be followed in all future analyses.” In response to that request, the National Research Council (NRC) convened the Committee on Estimating the Health-Risk-Reduction Benefits of Proposed Air Pollution Regulations, which prepared this report.

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations THE CHARGE TO THE COMMITTEE The members of the NRC committee were chosen for their expertise in risk assessment, exposure assessment, toxicology, epidemiology, biostatistics, health economics, and air pollution regulations. The committee was asked to accomplish the following tasks: Consider issues important in estimating the health-risk-reduction benefits of air pollution regulations, including the scientific data, risk assessment approaches, populations affected, baseline used, assumptions, analysis of uncertainty, and identification of key indicators of exposure and population health status. Critically review methods used for recent estimates of regulatory health benefits. Identify methods used by federal regulatory agencies and others, recommend standard good-practice guidelines and principles for estimating health benefits, and delineate the data-gathering required to better assess health benefits in the future. Identify approaches to estimating regulatory health benefits when relevant information is limited. Where applicable, recommend areas for further research and monitoring. The committee was not asked to evaluate methods used to estimate other types of benefits, such as improvements in visibility, resulting from air pollution control. The committee was also not asked to review methods used for economic valuation of health benefits or for regulatory cost analysis, but was asked to consider ways in which health benefits can best be estimated to inform the cost analysis. In addition, the committee was not asked to address whether it is appropriate to compare the benefits analyses of environmental regulation with those of alternative public health and safety measures to determine which regulations should have priority. THE COMMITTEE’S APPROACH To accomplish its task, the committee held five meetings from July 2001 to May 2002. Public sessions were held at the first two meetings, during

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations which the committee heard presentations from representatives of EPA, the U.S. Senate, the Office of Management and Budget (OMB), and other interested parties. The committee reviewed materials submitted by EPA and others, and it reviewed relevant literature on the estimation of health benefits. The committee reviewed in detail EPA’s health benefits analyses contained in the regulatory impact assessments (RIAs) of the “Particulate and Ozone National Ambient Air Quality Standards” (EPA 1997a), the “Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control Requirements” (EPA 1999a), and the “Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements” (EPA 2000a).1 The committee also reviewed methods used in EPA’s prospective analysis of the benefits and costs of the Clean Air Act from 1990 to 2010 (EPA 1999b). The focus of the EPA analyses reviewed by the committee were the criteria pollutants, particularly ozone and airborne particulate matter (PM). Therefore, the committee spent a considerable amount of time discussing these pollutants, especially PM, and did not address the many issues associated with the analysis of the hazardous air pollutants. However, many of the findings and recommendations of the committee have broad applicability and are not limited to analyses conducted for PM. REGULATORY CONTEXT Benefits analysis as a component of cost-benefit analysis (CBA) has played a role in the regulatory process in at least a rudimentary form since the 1930s (NRC 1990).2 The role of CBA increased substantially in the 1970s when President Ford issued an executive order that required federal agencies to prepare economic analyses of regulations that were predicted to have substantial economic impact. These analyses came to be known as economic impact statements and were submitted to OMB for review. In 1   RIAs are broader analyses that examine the feasibility and costs of implementing the proposed regulation, as well as the benefits that might be achieved from implementation. A comparison of the costs to an economic valuation of the benefits is also typically included in these analyses. 2   CBAs compare the economic value of the benefits estimates with the costs of the regulation to determine the net economic benefit of a regulation.

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations 1978, President Carter issued an executive order that established the Regulatory Analysis Review Group, which reviewed, discussed, and provided comments on regulatory analyses for which federal agencies were directed to consider economic consequences of regulatory options, “to solicit public participation, to choose the least burdensome alternative, and to justify the choice” (NRC 1990). In 1981, President Reagan formally established CBA as an integral part of the evaluation of proposed regulations with the issuance of Executive Order 12291. This executive order required agencies to assess the costs and benefits of proposed “major” regulations and established OMB as the review agency for these analyses. The executive order also indicated that benefits of the regulation must outweigh the costs and that the preferred option must maximize net benefits and incur the least cost. President Clinton reaffirmed the importance of conducting CBAs of proposed regulatory actions with the issuance of Executive Order 12866 in 1993. Specifically, this executive order included the following statements: In deciding whether and how to regulate, agencies should assess all costs and benefits of available regulatory alternatives, including the alternative of not regulating. Costs and benefits shall be understood to include both quantifiable measures…and qualitative measures of costs and benefits that are difficult to quantify, but nevertheless essential to consider. Executive Order 12866 further required agencies to conduct CBAs for all “significant” regulations. With the change in terminology from “major” to “significant,” Executive Order 12866 expanded the scope of regulations subject to OMB review and effectively broadened OMB’s power “to review and request revisions to all regulatory proposals to ensure their consistency with the regulatory principles contained in the Order” (EPA1999c). An important difference between Executive Orders 12291 and 12866 is that Executive Order 12866 requires the benefits of the regulations to “justify” rather than “outweigh” the costs of the regulatory action. The administration of President George W. Bush has not issued an executive order that amends or revokes Executive Order 12866, which therefore remains the effective requirement for regulatory planning and review. However, OMB under President Bush has issued a memorandum that “describes the general principles and procedures that will be applied by

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations OMB in the implementation of E.O. 12866 and related statutory and executive authority” (OMB 2001). The memorandum re-asserts that benefits and costs must be assessed in RIAs prepared for economically significant rule-makings and emphasizes the importance of using scientific data that meet a basic quality standard and of conducting rigorous peer review of RIAs and supporting technical documents. In addition to the overarching requirements mandated in executive orders, Congress has imposed statutory and administrative requirements to conduct CBAs under various acts. The Clean Air Act Amendments of 1990 require EPA to assess periodically the costs and benefits of the Clean Air Act. A retrospective analysis from 1970 to 1990 was published in 1997 (EPA 1997b), and a prospective analysis from 1990 to 2010 was published in 1999 (EPA 1999b). The analysis of costs and benefits is not necessarily the direct basis for regulatory decisions. The basis for decision-making is specified in individual mandates. For example, under the Clean Air Act, costs are not to be used directly to determine standards for primary air pollutants, although costs can be used to determine the nature and timing of implementing measures needed to attain the standards. CBAs, or more generally RIAs, are intended to inform the government and private parties about the nature and extent of changes in health and the environment and the associated costs that are expected to result from specific regulatory actions. The methods used to predict the changes in health resulting from a regulatory action are the topic of this report. The cost component is not addressed further. CRITICAL STEPS OF A HEALTH BENEFITS ANALYSIS According to current guidelines and practices, a health benefits analysis should define conditions with and without the proposed policy implemented and ultimately estimate the differences in health outcomes between those two conditions (OMB 2000). Health benefits analysis can be characterized generally by the following steps (see Chapter 6, Figure 6-1): Defining the proposed regulation. Benefits analysis evaluates an air pollution regulation proposed to correct or reduce a perceived environmental problem. For each regulation considered, the scope, timing, and implementation must be defined. Specifically, the regulation must define to

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations whom it will apply, when it will begin, how long it will last, and what the schedule of compliance will be. For the analysis to be most useful and to meet OMB guidelines, several regulatory options (for example, different levels of stringency requirements or different compliance schedules) should be considered. Establishing the boundaries of the analysis. The boundaries of the analysis must be clearly defined. For example, the analyst must specify the period over which the regulation will be evaluated, the intervals at which the benefits will be evaluated, the pollutants that will be the focus of the analysis, and the spatial resolution of the model. Defining the regulatory baseline. Conditions without the regulation—the regulatory baseline—must be described. This process requires a description of other air pollution regulations that are assumed to be in force and the extent to which industry and consumers are expected to comply with the regulations. Assumptions about economic activity, especially in highly polluting sectors, such as transportation and electric power generation, must be articulated. In addition, assumptions about baseline health of the population must be described when relative risk models are used to estimate health benefits. Estimating changes in pollutant emissions. Once the analysis has been structured, the change in pollutant emissions that is anticipated to result from the regulation is predicted over time and space. The change is measured from the regulatory baseline. Estimating changes in ambient air pollutant concentrations.3 To allow calculation of the health benefits, the changes in pollutant emissions must be translated into changes in ambient air concentrations and should take account of factors that might affect exposure, when possible. Estimating changes in human health outcomes.Two steps are typically involved in estimating changes in morbidity and mortality. First, the health outcomes and the appropriate concentration-response functions are determined from epidemiological studies, human clinical studies, or animal toxicity studies. Then, the concentration-response function is applied to the 3   The committee acknowledges that changes in exposure may be estimated, which would then require use of exposure-response functions to estimate health outcomes in the next step.

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations relevant populations using the baseline health assumptions and the changes in ambient concentrations calculated in the previous step. This second step provides estimates of changes in health outcomes. EPA followed this basic approach; however, as a final step in EPA’s health benefits analyses, the changes in health outcomes were typically translated into monetary values for comparison with regulatory costs. As noted previously, the committee was not asked to assess methods used for economic valuation of health outcomes and, therefore, does not go further in its assessments than the quantification of the changes in health outcomes. Integral to each step described above is the assessment of uncertainty. The uncertainty of each component should be carried through the analysis, and an assessment of overall uncertainty should be provided with the final benefits estimates. GUIDANCE Few guidance documents are available that specifically address the conduct of a health benefits analysis. Documents that contain some guidance on aspects of these analyses typically focus on broader regulatory analyses, such as RIAs or economic analyses. Relevant documents issued by EPA, OMB, the World Health Organization (WHO), and the NRC are cited, and pertinent information from these documents is summarized in the following sections. Although other agencies clearly conduct regulatory analyses that include benefits analyses, their guidelines (if written) do not appear to be available in the publicly accessible literature. U.S. Environmental Protection Agency EPA’s Office of Air Quality Planning and Standards (OAQPS) in the Office of Air and Radiation has issued guidance on conducting economic analyses, which include assessing health benefits (EPA 1999c). The document provides guidance on three aspects of benefits analysis relevant to the committee’s task—defining the time period of analysis, establishing the baseline for analysis, and analyzing uncertainty. Regarding the time period

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations for the analysis, OAQPS notes that there is often no obvious basis for establishing the time period for the analysis but continues that the analyst must “capture any specific identified changes expected to occur over time.” Regarding the baseline for the analysis, OAQPS provides several overarching recommendations, including the selection of realistic assumptions regarding future conditions; the use of a consistent baseline throughout the analysis, although alternative baselines may be considered; and the clear identification of all assumptions made in selecting, specifying, and measuring the baseline. OAQPS identifies several specific components of developing a baseline and provides the following advice: Forecasting baseline economic activity. Three approaches are presented, which include (1) projection of production changes over time, (2) estimation of current production and application to future years, and (3) estimation of production for a representative year and application to future years. Assessing compliance with existing regulations. Most analyses should assume full compliance with existing regulations. Exceptions include analyses conducted for regulations intended to solve problems with compliance. Those analyses should assume the actual compliance estimates for the baseline scenario. Anticipating future regulatory actions. Analyses should assume that other regulations that have been or will be promulgated by the effective date of the regulation being considered are in full effect for purposes of the given analysis. Anticipating nonregulatory factors. Although nonregulatory factors are important (for example, changes in industrial behavior that affect pollutant emissions but are unrelated to regulatory actions), they are generally not included in the baseline because of time and resource limitations. However, those that might affect the baseline should at least be mentioned qualitatively. Establishing a starting date for the baseline. The starting date for the baseline is determined partly by the actions taken by the regulated community. If actions taken by the regulated community prior to promulgation would continue with or without promulgation of the regulation, the baseline would start on the date of promulgation or implementation (that is, the actions taken would be included in the baseline because they would be unrelated to the rule-making). However, if actions taken by the regulated

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations community would cease if the regulation were not promulgated, the baseline would start on the date of public notification (that is, the actions taken would be pre-emptive and would not be included in the baseline). Regarding the analysis of uncertainty, OAQPS states that there are three sources of uncertainty—input, model, and estimation—and that the full range of uncertainty should be made transparent in the analysis. Although five methods to analyze uncertainty are listed (scenario analysis, Delphi methods, sensitivity analysis, meta-analysis, and Monte Carlo and probabilistic models), OAQPS states that “for analyses in which benefits unambiguously exceed costs, a sensitivity analysis should be adequate.” The committee notes that determining the likelihood of benefits unambiguously exceeding costs requires an uncertainty analysis and not simply sensitivity analyses. The OAQPS guidelines also emphasize clear communication of the results of the analysis. They suggest using clear and transparent language, identifying data sources and assumptions, describing the modeling and the uncertainty, presenting alternatives in comparable metrics, and clearly identifying nonmonetized and unquantified effects. More recently, EPA published guidelines for economic analyses prepared by the Economic Consistency Workshop under the direction of the Regulatory Policy Council (EPA 2000b). Because these guidelines were developed for use by all offices within EPA, they tend to provide general guidance and do not address specific aspects of analyses of air pollution regulations. For example, benefits analysis is framed as a three-step approach: (1) identifying types of benefits that might be affected by the regulation, (2) quantifying the benefits, and (3) valuing the benefits. The guidance given for each step is extremely general. For step 1, the guidelines suggest investigating policy options and pollutant effects; given various policy options, evaluating changes in pollutant effects; and identifying those effects most likely to have the most substantial impact on the benefits analysis. For step 2, the guidelines recommend collaborating with experts from different fields, using outcomes from risk assessment that are amenable to economic valuation, and describing qualitatively unquantifiable effects. For step 3, the guidelines suggest using different methods to value benefits and identifying sources of valuation estimates and confidence in the sources. The critical importance of the selection of the baseline is emphasized, and the information presented on defining a baseline is consistent with that

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations of OAQPS discussed above. General principles highlighted in the guidelines include focusing on key issues (those affecting policy decisions), considering changes in behavior that might result from changes in environmental quality, avoiding double-counting of benefits, and clearly describing uncertainty and nonmonetized effects. Throughout the document, the analysis of uncertainty is emphasized. The guidelines state that an analysis should “present outcomes or conclusions based on expected or most plausible values; provide descriptions of all known key assumptions, biases, and omissions; perform sensitivity analysis on key assumptions; and justify the assumptions used in the sensitivity analysis.” Furthermore, on the basis of the sensitivity analyses of key parameters, those points at which net benefits switch from positive to negative (switch points) should be clearly identified. Other considerations include presentation of plausible upper- and lower-bound estimates of net benefits and identification of the most likely estimate. Office of Management and Budget OMB released a memorandum in 2000 that provided “Guidelines to Standardize Measures of Costs and Benefits and the Format of Accounting Statements” (OMB 2000). These guidelines were based on an OMB document released in 1996 that described “best practices” for conducting economic analyses required under Executive Order 12866 (OMB 1996). Similar to the EPA guidelines, the OMB guidelines provide general information on conducting an economic analysis. The 2000 OMB guidelines state that an analyst “cannot write a good regulatory analysis according to a formula. The preparation of high-quality analysis requires competent professional judgment.” The 2000 OMB guidelines contain some general considerations relevant to this committee’s charge. The guidelines note that the problem must be clearly articulated and the need for regulatory action justified. Several reasonable regulatory options should be evaluated. Specifically, the analysis should critically evaluate not only the preferred option but also more and less stringent options—one that would yield more benefits presumably at a higher cost and one that would yield fewer benefits presumably at a lower cost. One exception to the inclusion of a more stringent option would be when the preferred option exceeds the limits of technical feasibility.

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations The OMB guidelines state that the baseline should be selected so that it is the “best assessment of the way the world would look absent the proposed regulation.” Although alternative baselines may be used, the benefits and costs should always be evaluated against the same baseline. Factors to consider when defining the baseline include market changes, regulations or regulatory changes that might affect benefit and cost estimates, and compliance rates with regulations. The guidelines recommend that the analyst assume full compliance unless otherwise indicated. According to the OMB guidelines, the presentation of the results of the benefits analysis should include a list of monetized benefits that indicates type and timing of benefits expressed in constant, undiscounted dollars, a list of nonmonetized but quantified benefits that indicates timing, and a list of nonmonetized, unquantified benefits that is ranked by expected magnitude. The data or studies on which the estimates are based should be identified. Where applicable, the analysis should explain why certain benefits cannot be monetized or quantified. Furthermore, the benefits estimates should be presented in a way that clearly reflects the degree of uncertainty in the estimates. Probability distributions should be presented with upper- and lower-percentiles and central-tendency values. If probability distributions cannot be generated, sensitivity analyses of plausible alternative assumptions should be conducted. Any analysis that indicates a change in the preferred option or a substantial change in the net benefits should be critically evaluated. Other considerations noted in the OMB guidelines include avoiding double-counting when estimating benefits, analyzing effects on different groups, identifying any negative effects of regulatory options, and evaluating the sensitivity of estimates to assumptions. The guidelines provide information on valuing benefits, comparing costs and benefits, choosing discount rates, and conducting the cost analysis; however, because these issues are not relevant to the committee’s task, they are not discussed further. World Health Organization WHO recently released a report that summarizes the findings of a working group that evaluated various aspects of health-impact assessments of air pollution (WHO 2001). The overall objective of the group was “to review the available methods for health impact assessment of air pollution

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations and to agree upon common approaches.” The group focused primarily on the selection of health outcomes and the use of epidemiological data in the assessments. Many of the issues that the WHO working group considered were similar or identical to those considered by this committee. Significant findings relevant to this committee’s work are highlighted in this section. The WHO working group acknowledged that many acute and chronic health effects, including death, have been associated with exposure to air pollution. Regarding mortality, the group debated the use of time-series studies (studies that can provide estimates of premature death due to recent exposure) versus cohort studies (studies that evaluate mortality in a specific population over a period of years) and concluded that cohort studies should be used in air-pollution health-impact assessments because they provide “the most complete estimates of both attributable numbers of deaths and average reductions in life-span attributable to air pollution.” However, time-series studies are valuable because they can indicate the adverse health effects of air pollution in specific locations; quantify effects of short-term fluctuations in air pollution; and provide information that can help to identify toxic components of air pollution, support associations between air pollution exposure and chronic health effects, and identify factors that modify the effects of air pollution. The WHO report stated that the impact of air pollution on all-cause mortality should be assessed, as well as that on cause-specific mortality for the following conditions: cardiovascular disease, chronic nonmalignant respiratory disease, lung cancer, and age-specific deaths, particularly for younger and older populations. The group noted that the effects of air pollution on mortality in sensitive subpopulations should be better estimated and stressed that care must be taken when transferring mortality rates from the study population (the population evaluated in the scientific literature) to the target population (the population characterized in the impact assessment). Regarding morbidity, the group recommended that all relevant health outcomes be considered in the planning stages of the analysis but not necessarily included in the final analysis and provided a list of potentially relevant health outcomes to consider (see Table 1-1). The group noted that the list might need to be expanded if the impacts of hazardous air pollutants are being evaluated. For example, neurological outcomes should be considered when evaluating lead exposure, outcomes of leukemia and non-Hodgkins lymphoma should be considered when evaluating benzene exposure,

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations TABLE 1-1 Potentially Relevant Health Outcomes for Air-Pollution Health-Impact Assessment Acute Outcomes Chronic Disease Outcomes Reproductive Outcomes Daily mortality Respiratory hospital admissions Cardiovascular hospital admissions Emergency room visits for respiratory and cardiac problems Primary-care visits for respiratory and cardiac conditions Use of respiratory and cardiovascular medicines Days of restricted activity Work absenteeism School days missed Self-medication Avoidance behavior Acute symptoms Physiological function, such as lung function Mortality in infants and adults from chronic cardiorespiratory disease Chronic respiratory disease (asthma, chronic obstructive pulmonary disease, chronic pathological changes) incidence and prevalence Chronic change in physiological function Lung cancer Chronic cardiovascular disease Pregnancy complications, including fetal death Low birth weight Preterm delivery   Source: Adapted from WHO 2001. and the outcome of hematopoietic cancer should be considered when evaluating butadiene exposure. If possible, the impacts on these outcomes should be expressed by age and sex. The WHO group emphasized the need to evaluate the transferability of the risk estimates of the study population to the target population. Factors that should be considered include the mixture of pollutants to which each population is exposed and each population’s baseline health status. Assumptions should be clearly articulated and assessed and justifications provided for transferability of the results from the study population to the target population. If possible, uncertainties should be quantified. The analyst might

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations need to consider using multisite analyses or meta-analyses rather than one particular study. When the study and target populations differ, “health impact assessments should strive to characterize exposure in the target population to mirror as closely as possible exposure in the study providing the effect estimate.” Care must be exercised when extrapolating beyond the concentration range of the study used to base estimates. Factors that should be considered in the analysis include differences between study and target locations with respect to pollutant sources, pollutant mix, variation in time and space of the pollutant mix, locations of the monitors, and assumptions used to determine population average exposure, such as amount of time spent indoors, work habits, and use of air conditioners. The group noted that the effects attributed to a specific pollutant in epidemiological studies should be viewed as the effects resulting from exposure to pollutant mixtures emitted by particular sources. Therefore, effect estimates of single pollutants should not be added when derived from single-pollutant statistical models unless they can be confidently shown to act independently on health. Although the current focus is on the health effects of exposure to PM, other pollutants, such as sulfur dioxide, should not be disregarded. The group stated that more research is needed to evaluate the relationship between health impacts and pollutant mixtures. The group emphasized that uncertainties in the analysis should be explicitly stated and quantitatively evaluated. Rigorous sensitivity analyses should be conducted to determine how the results are affected by deviations in key assumptions (for example, how mortality-impact estimates vary by exposure level). Overall, the group emphasized that the results should be presented with “sufficient detail with regard to various health endpoints, population strata (e.g., age, sex, race, social class), and pollutants to allow policy analysts maximum latitude and flexibility in applying them to regulatory decision-making.” The group provided several recommendations for additional research. Research topics considered to be of primary importance “to improve the scope and reliability of health impact analysis” included (1) quantification of chronic effects of air pollution, (2) identification and evaluation of factors that modify the effects of air pollution and result in the observed variation in response between populations, and (3) quantification of all health effects resulting from exposure to air pollution and better quantification of those that have been identified.

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations National Research Council In response to an EPA request in 1986, NRC convened the Steering Committee on Valuing Health Risks, Costs, and Benefits for Environmental Decisions to help EPA identify “some sound scientific basis for approaching the problem of valuing risks” (NRC 1990). The steering committee conducted a conference in 1987 and prepared a conference report that included issue papers prepared for the conference and conclusions and recommendations of the steering committee based on the conference discussions. The conference focused primarily on the legal, political, philosophical, and ethical issues associated with CBA, particularly the valuation techniques, and not on the methodological issues on how to conduct benefits analysis. However, the recommendations made by the steering committee are relevant here. Specifically, the steering committee emphasized that CBA should be considered a “set of information-gathering and organizing tools” rather than a “decision-making mechanism itself,” suggested that the appropriate analytical methods and techniques be matched to the given problem (that is, no single analytical technique is suitable to evaluate all regulatory decisions), and encouraged the use of a formal peer-review process for these analyses. ORGANIZATION OF REPORT The remainder of this report is divided into five chapters. Chapter 2 contains brief summaries of EPA case studies reviewed by the committee. Chapters 3, 4, and 5 address specific aspects of health benefits analyses. Chapter 3 discusses issues in selecting regulatory options and effects to evaluate, defining the time frame of the analysis, and making assumptions about conditions with and without the regulation implemented. Chapter 4 addresses issues related to exposure estimates, identification of health outcomes, and selection and use of the concentration-response functions that link exposure to health. Chapter 5 presents issues associated with the analysis of uncertainty. Chapter 6 places health benefits analyses in the context of cost-benefit and cost-effectiveness analyses and discusses how the results of benefits analyses should be presented to be compatible with those analyses. Chapter 6 also addresses issues of quality assurance and communication of the methods and results.

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations REFERENCES EPA (U.S. Environmental Protection Agency). 1997a. Regulatory Impact Analyses for the Particulate Matter and Ozone. National Ambient Air Quality Standards (NAAQS) and Proposed Regional Haze Rule. Regulatory Economic Analysis Inventory. A.97.9. Office of Air Quality Planning and Standards, Office of Air and Radiation, U.S. Environmental Protection Agency, Research Triangle Park, NC. EPA (U.S. Environmental Protection Agency). 1997b. Final Report to Congress on Benefits and Costs of the Clean Air Act, 1970 to 1990. EPA 410-R-97-002. Office of Air and Radiation, U.S. Environmental Protection Agency. Cincinnati, OH: National Service Center for Environmental Publications. October 1997. EPA (U.S. Environmental Protection Agency). 1999a. Regulatory Impact Analysis - Control of Air Pollution from New Motor Vehicles: Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control Requirements. EPA 420-R-99-023. Engine Program and Compliance Division, Office of Mobile Sources, Office of Air and Radiation, U.S. Environmental Protection Agency. December 1999. [Online]. Available: http://www.epa.gov/OMS/regs/ld-hwy/tier-2/frm/ria/r99023.pdf [accessed September 10, 2002]. EPA (U.S. Environmental Protection Agency). 1999b. Final Report to Congress on Benefits and Costs of the Clean Air Act, 1990 to 2010. EPA 410-R-99-001. Office of Air and Radiation, U.S. Environmental Protection Agency. November 1999. EPA (U.S. Environmental Protection Agency). 1999c. OAQPS Economic Analysis Resource Document. Innovative Strategies and Economics Group, Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency. April 1999. [Online]. Available: http://www.epa.gov/ttnecas1/analguid.html [accessed September 10, 2002]. EPA (U.S. Environmental Protection Agency). 2000a. Regulatory Impact Analysis: Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements. EPA 420-R-00-026. Office of Air and Radiation, U.S. Environmental Protection Agency, Washington, DC. December 2000 . EPA (U.S. Environmental Protection Agency). 2000b. Guidelines for Preparing Economic Analyses. Environmental Economics Report Inventory. Final Report. EPA 240-R-00-003. Office of the Administrator, U.S. Environmental Protection Agency, Washington, DC. September 2000. NRC (National Research Council). 1990. Introduction. Pp. 3-14 in Valuing Health Risks, Costs, and Benefits for Environmental Decision Making. Washington, DC: National Academy Press. OMB (Office of Management and Budget). 1996. Economic Analysis of Federal Regulations Under Executive Order 12866. Office of Management and Budget,

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Estimating the Public Health Benefits of Proposed Air Pollution Regulations The White House. January 11, 1996. [Online]. Available: http://www.whitehouse.gov/omb/inforeg/riaguide.html [accessed September 10, 2002]. OMB (Office of Management and Budget). 2000. Guidelines to Standardize Measures of Costs and Benefits and the Format of Accounting Statements. Memorandum from Jacob J. Lew, Director, Office of Management and Budget, The White House, for the Heads of Departments and Agencies. M-00-08. March 22, 2000. [Online]. Available: http://www.whitehouse.gov/omb/memoranda/ [accessed September 10, 2002]. OMB (Office of Management and Budget). 2001. Presidential Review of Agency Rulemaking by OIRA. Memorandum from John Graham, OIRA Administrator, Office of Information and Regulatory Affairs, The White House, for the Presidents Management Council. September 20, 2001. [Online]. Available: http://www.whitehouse.gov/omb/inforeg/oira_review-process.html [accessed September 10, 2002]. U.S. Senate. 2000. Department of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Bill, 2001. H.R. 4635. Committee Report-Senate Report 106-410. 106th Congress, 2d Session. September 13, 2000. WHO (World Health Organization). 2001. Quantification of the Health Effects of Exposure to Air Pollution: Report of a WHO Working Group. European Centre for Environment and Health, World Health Organization .