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Valuing Health for Regulatory Cost-Effectiveness Analysis
benefits at a cost that is justified by the benefits” (Section 1412(b)(6)(A)), with certain exceptions for small water systems.
This balancing of costs and benefits has been upheld by some courts, which have required agencies to consider the costs of a regulation as well as its benefits. For example, the Fifth Circuit has stated with respect to both the Occupational Safety and Health Act and the Toxic Substances Control Act (TSCA) that the government must show “… substantial evidence that the benefits to be achieved [by a regulation] … bear a reasonable relationship to the costs imposed by the reduction [before it can] … show that the standard is reasonably necessary to provide safe or healthful workplaces” (American Petroleum Institute v. OSHA, 581 F.2d 493, 504 (5th Cir. 1978); Corrosion Proof Fittings v. EPA, 947 F.2d 1201, 1223 (5th Cir. 1991)).
Several statutes identify other types of factors that an agency must take into account in developing regulations. Some require consideration of particular aspects of the health risks addressed. For example, the Food Quality Protection Act requires consideration of the susceptibility of infants and children to pesticide residues (Section 408(b)(2)(C)).
Others require certain types of analysis. In the case of SDWA, the 1996 amendments require the assessment of costs and benefits and identify factors that must be addressed. In particular, EPA must consider:
the quantifiable and nonquantifiable health risk reductions associated with controlling the contaminant of concern and any co-occurring contaminants;
the costs of compliance with the control requirements;
the incremental costs and benefits associated with each alternative under consideration;
the effects of the contaminant on the general population and on groups within the population that are likely to be at greater risk of adverse health effects from drinking water contaminants, “such as infants, children, pregnant women, the elderly, and individuals with a history of serious illness”;
the increased health risks, if any, that may result from compliance with the proposed standard, including risks associated with co-occurring contaminants; and
other relevant factors, including the quality of the available information supporting the analysis, the uncertainties in the analysis, and factors relating to the degree and nature of the identified risks (Section 1412(b)(3)(C)(i)).
Thus it is important for regulatory agencies to generate scientific bases for rules and to consider the least restrictive alternatives (i.e., those least