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CLASSIFICATIONOFPRIORITY-SETTINGAPPROACHES

INTRODUCTION

A variety of priority-setting approaches, such as those employed by DOD, EPA, and DOE, have been developed for specific use to assist in setting priorities for site-remediation efforts or for general use in ranking alternative remedies. The approaches differ considerably according to the single or multiple objectives of priority rankings, the types of data measures used and their degree of uncertainty, and methods for treating intangible—but nevertheless instrumental—factors. Before specific models used in priority setting are reviewed in subsequent chapters, an over view is provided in this chapter of five major approaches that have been applied to evaluation of the possible effects of



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Ranking Hazardous-Waste Sites for Remedial Action 3 CLASSIFICATIONOFPRIORITY-SETTINGAPPROACHES INTRODUCTION A variety of priority-setting approaches, such as those employed by DOD, EPA, and DOE, have been developed for specific use to assist in setting priorities for site-remediation efforts or for general use in ranking alternative remedies. The approaches differ considerably according to the single or multiple objectives of priority rankings, the types of data measures used and their degree of uncertainty, and methods for treating intangible—but nevertheless instrumental—factors. Before specific models used in priority setting are reviewed in subsequent chapters, an over view is provided in this chapter of five major approaches that have been applied to evaluation of the possible effects of

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Ranking Hazardous-Waste Sites for Remedial Action hazardous-waste site contaminants and to assist in deciding about remediation priorities. The approaches include: risk analysis, environmental impact analysis, structured value-scoring methods, cost-benefit and cost-effectiveness analysis, and multiattribute decision-making. The basic elements of an evaluation of possible effects of environmental contaminants are first identified, then each of the alternative approaches to such an evaluation as an aid to priority setting is discussed briefly. Readers interested in a detailed discussion of these approaches should consult the accompanying citations. ENVIRONMENTAL EVALUATION The process of assessing the potential effects of environmental contaminants, sometimes called environmental evaluation, may be divided into three principal stages (Julien et al., 1992): identification, estimation, and comparison. In the identification stage, the set of environmental elements (e.g., groundwater) and biotic receptors (e.g., humans) that are potentially affected by an activity (e.g., construction of roads or buildings, siting and operation of an industrial plant, or disposal of wastes) are identified, and the types of impacts that could occur are determined. The estimation stage involves estimating the levels of potential impacts including the likelihood, magnitude, and duration of the impacts. In the comparison stage, a synthesis and valuation of the various impacts are made to determine the implications for control or response decisions. Identification of the potential impacts of an activity is a critical first step in performing an environmental evaluation. Failure to recognize or consider a potential environmental impact has contributed to many of the major environmental problems now facing society, including the legacy of improperly managed hazardous-

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Ranking Hazardous-Waste Sites for Remedial Action waste sites. Methods to ensure that the full range of potential impacts is considered for a particular project include the use of map overlays, impact checklists, impact matrices, and cause-effect networks (Julien et al., 1992). These methods are particularly useful for new, large, or one-of-a-kind projects, where previous experience might not be adequate to identify all potential effects. These methods can be used in waste-remediation projects. In the case of models used to rank hazardous-waste sites, the developers of these models have attempted to be comprehensive in the set of environmental elements and receptors considered and the routes or pathways by which these receptors can be significantly affected. In this sense, the model serves as the organizing structure or checklist for potential site impacts. Through the process of model development, scientific review, and public comment, procedures for site ranking and priority setting might evolve to include a broader spectrum of potentially affected elements. For example, the 1990 HRS revisions, discussed in Chapter 4, added new exposure pathways for human contact with contaminated soils and groundwater-to-surface-water migration, and expanded ecological components to cover a wider range of sensitive environments in the model. The use of models to assist in nationwide priority setting dictates that a common and consistent set of impacts be considered for all sites. Still, the great diversity of local conditions encountered at hazardous-waste sites is such that an ability to consider and incorporate unique and special features of a site is desirable for an evaluation methodology. The estimation phase in the evaluation of hazardous-waste sites involves the assessment of current or possible future impacts on the biotic receptors and environmental elements at or near the site. That is generally accomplished through the collection of field data and the application of scientific principles to determine or predict (i.e., model) the level or risk of environmental damage. Once the impacts are estimated, a comparison is performed to

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Ranking Hazardous-Waste Sites for Remedial Action determine the effect of these impacts on society. As indicated previously, the comprehensive set of impacts possibly due to waste-site contaminants must be considered for the valuation to reflect accurately the potential implications of alternative remediation decisions to society. For example, the hazardous-waste site-ranking models developed by EPA and DOD, discussed in Chapters 4 and 5, respectively do not include explicit consideration of socioeconomic impacts, even though such considerations are critical factors for determining the overall impact of possible remediation decisions. The comparison of impacts inherently involves consideration of values or preferences that may differ for different individuals or stakeholders. It may not be possible to include all variations in a model, but what is important is that the valuation parameters and weights used in the comparison be explicitly stated and separately identified from the scientific parameters in the estimation phase of the environmental evaluation. The methods discussed in the following sections emphasize different approaches to the use of scientific information for impact estimation and comparison for making priority-setting decisions. RISK ANALYSIS Risk analysis, or risk assessment, is a qualitative and quantitative process used to evaluate the hazardous properties of a substance and the extent of exposure to them, and to characterize the resulting risk (NRC 1983, 1994a). Risk analysis uses the tools of science, engineering, and statistics to analyze risk-related information and to estimate and evaluate the probability and magnitude of outcomes adverse to humans and other biota (NRC, 1993). Comparative risk analysis can offer a logical framework in which to organize information about complex environmental problems and

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Ranking Hazardous-Waste Sites for Remedial Action to assist policy analysts in making resource allocation decisions. It provides an explicit estimate of the likelihood of specific human health or ecological impacts. Risk management is the process of weighing alternatives and selecting a risk-reduction action. Such a process integrates risk-analysis results with engineering data and social, economic, and political concerns to make a decision (NRC, 1983). Major steps in the risk-analysis process, i.e., hazard identification, source characterization, exposure assessment, and risk characterization, are reviewed in the context of hazardous-waste site remediation. Before performing a formal risk analysis, the site history is evaluated. Research on the past, present, and projected site operations, relations to the surrounding community, and regulatory involvement provides the necessary understanding of the potential nature, magnitude, and degree of contamination. The information collected in this early phase will play an important role in hazard identification, exposure assessment, and risk characterization. Early in the risk-analysis process, a review of land use at and near the site provides valuable information on the types and frequencies of activities of the surrounding population, and it helps to determine the probability of human exposure by all possible pathways. Identification of the size and characteristics of the populations or individuals most likely to be exposed to contaminants is particularly important in these initial stages of the risk analysis. In addition to demographic information, investigation of community health concerns might provide insight into possible past or current exposures. Examinations of municipal water supplies (recreational, agricultural, and drinking water) for the presence of contaminants can help to determine exposed populations. Moreover, exploring residential and recreational areas can indicate lifestyle factors that lead to exposures or risks to health. Other factors, such as site accessibility and accessibility of the contaminated envi-

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Ranking Hazardous-Waste Sites for Remedial Action ronmental media (e.g., soil), are examined to make the site-evaluation process more comprehensive and the risk analysis a more reliable means for estimating the effects of a hazard. Hazard Identification The identification of potential hazards at a waste site is an iterative process that examines the types and concentrations of contaminants found at hazardous-waste sites. Knowledge of community health concerns, site demographics, and land use provides input to the identification process. Analytical data are evaluated with respect to reliability, accuracy, verifiability, representativeness, and adequacy. Soil, sediment, surface water, and groundwater samples are collected on-and off-site, followed by laboratory testing and direct or statistical data comparisons. Evaluations of sampling data are conducted to determine and rank the potential hazards. Those hazardous agents that exceed legally acceptable levels of concentration are referred to as contaminants of concern. In quantitative risk assessment, the resulting list of contaminants of concern will be investigated further. Source Characterization A source term identifies the origin of the contaminant release. A source-release assessment evaluates the likelihood and quantity of contaminant releases from a hazardous-waste site to the surrounding environment. Several types of quantitative techniques may be used alone or in combination during this process: monitoring of environmental contaminants, accident investigation and performance testing, statistical methods, and modeling. Monitoring focuses on past and current contaminant releases

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Ranking Hazardous-Waste Sites for Remedial Action and involves a regular, ongoing program of sampling in an area near a contaminant source. It is used to detect the type and quantity of the contaminants escaping from the source. Performance testing and investigation under accident conditions provide information on the behavior of systems that might cause a release of toxic substances or materials. This method involves the interpretation of the causes and sequences of events after disruption of a system, as well as the prediction of the system's behavior under a variety of operating or environmental conditions. Statistical methods are used to analyze previously collected data on a risk source, either from monitoring programs or from accident records, to estimate the likelihood of a particular accidental release or hazardous event. Finally, modeling is a formal method employed to estimate key parameters, it requires extensive information about a system's processes, data from monitoring programs, historical event records, or assumptions about probability distributions. Modeling can be used to design improved approaches for other methods. There are several possible models developed to estimate releases, with the choice dependent upon the characteristics of the contaminant source (Cohrssen and Covello, 1989). Exposure Assessment Exposure is defined as an event consisting of contact with an environmental contaminant at a boundary between a human and the environment at a specific concentration for a specified interval of time (NRC, 1991). The magnitude of exposure is determined by measuring or estimating the amount of the contaminants available at exchange boundaries (e.g., skin, breathing zone, or gastrointestinal tract) during a specified time period. Exposure assessment is the determination or estimation of the magnitude, frequency, duration, and route (e.g., ingestion) of exposure with re-

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Ranking Hazardous-Waste Sites for Remedial Action gard to both current and future conditions (EPA, 1989a). In order to estimate the level of exposure, the exposure pathways must be identified. An exposure pathway describes the course a contaminant takes from its source to the exposed individual. A complete exposure pathway links the sources, locations, and types of environmental releases with population locations and activity patterns to determine the significant routes of exposure (Federal Register, 1992a). Such an analysis relies, in part on environmental transport analysis. Environmental transport analysis identifies the mechanism by which released contaminants move through environmental media. There are five major transport pathways through environmental media that are typically considered in estimating health risk: atmosphere surface soil, groundwater, surface water, and food web contamination. Risk Characterization The next step in the risk analysis is to link the potential for exposure to site contaminants with health effects. This part of the risk assessment considers numerous medical, toxicological, demographic, and environmental favors, which determine the potential impact of hazardous substances on human health or, in the case of ecological risk assessment ecosystem health. This involves quantification or statistical description of the qualitative relationship between a contaminant dose and its adverse effects (response). The human body has complex mechanisms for responding to chemical or biological stimuli; thus, the dose-response phase of risk assessment is highly uncertain and consequently should use all available biological information, including epidemiologic data and animal toxicity studies, to estimate the effects of a given dose of a hazardous substance to a given individual or population. Sim-

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Ranking Hazardous-Waste Sites for Remedial Action ilar considerations apply for estimates of impacts on plant or animal populations. Dose is the amount of contaminant that is absorbed or deposited in the body of the exposed individual over a specified time. The risk-characterization phase integrates the previous steps in the risk-assessment process to develop quantitative (e.g., probability distribution) and qualitative estimates of risk. The resulting risk characterization summarizes the estimated human or ecologic impacts, which can be compared to risk-management goals. The expressions of risk developed during the risk-characterization phase are most useful when they reflect uncertainties encountered in the overall risk-analysis process. Limitations As with every methodology, risk analysis has limitations. Often, lack of specific data makes it difficult to adequately address critical issues in the risk-assessment process. In these cases, resolution of such issues must be based on professional judgment in addition to quantitative scientific knowledge. Major criticisms of the risk-analysis process include the following: (1) risk assessors might manipulate the risk-analysis process to produce a desired conclusion, (2) many important factors cannot be incorporated adequately into a risk assessment, and (3) that risk analysis does not possess a sufficient level of precision to be used in priority setting. That is, there is too much uncertainty in the results. First, there is concern that the risk assessor might manipulate the process to produce a personally desirable conclusion. The value of a risk analysis is that the process requests explicit state-menu of the steps and assumptions used in deriving the risk estimate. Typically, the results of risk assessments are subject to criti-

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Ranking Hazardous-Waste Sites for Remedial Action cal review by other scientists and managers, thus offering an opportunity to reveal structural or procedural errors, manipulation, or arbitrariness during the review process. Still, many contend that, in certain cases, this review process has not been sufficient, and that risk assessments have been skewed for purposes of supporting predetermined conclusions. To avoid this, care is needed to ensure that risk-assessment studies are conducted in an open manner with active public participation. Second, there is concern that many factors cannot be incorporated adequately into a risk assessment. Within the domain of human health, for example, there may be a number of concerns (e.g., birth defects and neurological effects) in addition to cancer. Adequate techniques and data may not be available to assess the risk of cancer and noncancer health effects that are of concern. Finally, risk assessment is sometimes criticized for not being precise enough to be used in environmental decision-making and setting priorities. Risk analysis is indeed a process that involves much uncertainty, but the existence of uncertainty in and of itself should not disqualify its use to aid in priority setting. For example, the prediction of health and environmental effects rests upon extrapolation of an assumed relation between a dose and a particular type of response. By improving mathematical models used to produce risk estimates and expanding risk-assessment data, uncertainty in risk analysis can be reduced. To help users understand better the results of a risk estimate, risk analysts must indicate the strength of support for the estimate. Therefore, the statistical descriptions of risk produced by risk analysis should include measures of variance or confidence levels to indicate the strength of support for each risk estimate. In the context of government decision making, risk assessment is followed by risk-management activities. People perceive risks differently depending on the nature of the risk, individual experiences, trust in authority, and efforts to communicate risk (NRC,

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Ranking Hazardous-Waste Sites for Remedial Action 1989). Individuals, organizations (e.g., news media, interest groups), and governments often make decisions based on perceptions of risk. The tools of social, economic, and political sciences are employed to help the public better understand risk information through effective communication. Risk-assessment techniques provide the risk manager a means of organizing relevant information and estimating adverse health effects or environmental impacts (NRC, 1994b). In the final analysis, risk assessment-however imperfect-represents a best attempt to set forth what is known in order to aid a decision in the face of uncertainty. ENVIRONMENTAL IMPACT ANALYSIS The National Environmental Policy Act (NEPA) of 1970 (P.L. 91-190) was intended to raise awareness of the environmental consequences of new projects. It mandated environmental impact analyses of substantial new industrial, commercial, and public works projects. The environmental impact statement (EIS) requirement applies to federal agencies. State and local governments have also made the EIS a requirement for many government and private projects. The EIS was a formal tool for balancing economic growth considerations against the effects of pollution on air, land, and water as well as other external effects. Federal agencies were obligated to analyze the impacts of their projects, to consider alternatives, and to take steps to ameliorate serious adverse impacts (Odell, 1976). The U.S. courts have played a major role in determining the scope of the EIS requirement by defining "significant action," "major action," and the parties who may sue for noncompliance. Based on its goals, environmental impact analysis (EIA) would appear to have little in common with the site-ranking models designed for DOD, DOE, and EPA. The EIA process is intended to

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Ranking Hazardous-Waste Sites for Remedial Action be preventive. NEPA and the succeeding legislation require a balance between development goals and environmental protection on a project-by-project basis. The initiating agency (private or public) is required to demonstrate that its development design will not need to be canceled or modified because of environmental considerations. However, critics of the EIA process charge that analyses support development projects by deliberately understating or ignoring serious environmental impacts and are rarely open to alternative designs that might alleviate problems. In contrast, DOD, DOE, and EPA models are intended to be objective analyses to aid in making priority-setting decisions. Advocacy or opposition on the part of federal, state, and local governments; corporate officials; citizens groups; and other interested parties theoretically do not enter the scoring process for sites. However, advocacy pressures can influence the site-scoring and priority-setting processes as well. Nevertheless, there are two important similarities between the models to assist in priority setting for hazardous-waste site cleanup and the EIA process. They both attempt to cover a broad range of effects on water, air, and land quality, although public health dominates the models used in priority setting, and environmental protection dominates the EIA requirement. Because of their need to compare different effects, both approaches impose a simplifying and integrating quantitative structure on disparate information. For example, the Battelle EIA approach for a proposed water project considers categories of information on the physical and chemical impacts on the body of water and the ecological, aesthetic, and social effects on the surrounding area (Dee et al., 1973). Scales and weights are assigned to each of these impacts and, like their equivalents in the EPA, DOD, and DOE models, these scales and weights sacrifice information about some variables and impose a quantitative structure on others to arrive at an overall score. The

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Ranking Hazardous-Waste Sites for Remedial Action ranking models and EIA process can be challenged for blending together strong and weak data sets, for oversimplifying or ignoring theory, and for being difficult to validate because of their metric. Furthermore many of these early EIA processes were the scientific forerunners of EPA's Hazard Ranking System (HRS) and DOD's Defense Priority Model (DPM). The ranking models and EIA processes have another similarity—a political function. The EIA obligated government agencies, including the U.S. Department of Transportation, the U.S. Department of Agriculture, and the Army Corps of Engineers to consider environmental impacts along with their historic missions. That consideration was required to be explicit and open. Likewise the site-ranking models have the potential of making the process of setting priorities available to public review, scrutiny, and comment. The EIA process has gone through numerous revisions. Each revision addressed differences between those who wanted to make it more inclusive and precise (more variables, better data, and more rigorous scientific standards) and those who wanted to simplify the process bemuse its already high cost and complexity seemed to oblate rather than clarify impacts. The DOD, DOE, and EPA approaches to ranking sites could benefit from changes made in the EIA process during the last two decades, particularly from the success of the EIA in balancing the desire for grater comprehensiveness and the need for simplicity. With respect to their user friendliness, some of the EIA approaches are well documented and easy to follow. For example, the EIA approaches presented by a Canter and Hill (1979) and Inhaber (1976) are particularly clear. The authors described the assumptions and strengths and weaknesses of each parameter and index used in their models. That level of clarity is lacking in the site-ranking models addressed in this study.

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Ranking Hazardous-Waste Sites for Remedial Action STRUCTURED VALUE-SCORING METHODS The limited availability of suitable theory, algorithms, and data can often rule out the application of rigorous scientific estimates and models at the stage when environmental decisions, such as site assessment and priority setting, must be made. For these cases, more qualitative or heuristic approaches have been developed to act as surrogates for formal scientific risk assessment. These techniques constitute what has been referred to as a structured-value approach (EPA, 1988; Carpenter, 1990), and it is used in HRS and DPM for site scoring. A structured-value approach incorporates in a mathematical framework the major input factors that determine impacts and risk, but it does so in a heuristic manner. Field data and qualitative judgment are used to assign scores for different levels of the input factors, and these scores are combined mathematically to obtain an overall score for a particular potential impact. The scoring categories often reflect scientific knowledge and expertise on indicators such as pollutant release, mobility, exposure, and impact, but they are not rigorously comparable to, or testable against quantitative measures of these indicators, which are used in formal risk analysis. Risk-analysis models multiply factors obtained from environmental transport and dose-response algorithms to provide an estimate of risk (e.g., Crouch and Wilson, 1981; Crouch et al., 1983; Pushkin, 1992). In contrast, structured-value models often involve additive or weighted sum calculations, although a variety of mathematical functions can be used, subject to the judgment of the model developers. The developers may in fact have had in mind the multiplicative model for risk when they selected the algorithms, but chose an additive model to correspond to a logarithmic scale for the input factors and the resulting risk estimate. Factor scores are generally combined in such a way as to yield a scaled result for each of the impact measures (e.g., between 0 and 1, or 0

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Ranking Hazardous-Waste Sites for Remedial Action and 100) to allow subsequent aggregation of the impacts into a single score. The major disadvantage of the structured-value model is that rigorous scientific validation and testing are not possible. The heuristic, judgmental nature of the scoring procedure and the dimensionless, sealed nature of the model output preclude comparison with observed data in any absolute sense, and even comparison of risk indicators is difficult, except for the ordinal result that a higher score should be worse than a lower score. Because the scores only provide risk rankings in an ordinal sense, they cannot be used to compare the benefits of alternative environmental decisions, such as the implementation of different remediation actions at different sites. As such, reductions in the structured-value score that are observed or projected as a result of remediation activities cannot be used rigorously to quantify the benefits of these activities. The structured-value approach is also used in the comparison stage of an environmental evaluation. In the comparison stage, the estimated effects are combined to obtain an aggregate measure of potential impact due to contaminants at a hazardous-waste site. This step requires the assignment of value or importance factors for the various impacts, even in the ease where scientifically rigorous methods are used to estimate these impacts. Linear weighting or various other algorithms can be used to determine an aggregate measure of potential impact or importance. The use of scoring methods to aggregate impacts in the comparison stage has a long, although controversial, history in the domain of multiattribute utility theory discussed in the next section. Scoring of various environmental measures is also used in a number of the formal procedures for Environmental Impact Assessment (Inhaber, 1976; Canter and Hill, 1979; Thompson, 1990). The procedure, when applied rigorously and openly, can provide useful guidance for multiattribute decision problems. In weighting different impacts for aggregate evaluation, there is

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Ranking Hazardous-Waste Sites for Remedial Action no definitive approach, only different views. The algorithms and weighting factors used in structured-value models typically represent the consensus values and preferences of those who have developed, reviewed, and approved the model. Those might or might not appropriately represent the views of all interested groups and affected parties or of society as a whole. Although comparison methods have been developed to document the distribution of impacts among stakeholders with different values and goals (Lichfield et al., 1975; Davos, 1977; McAllister, 1980), these methods are particularly difficult to apply across multiple projects with a wide diversity of interested parties. For the site-ranking models considered in this report, the value weights are often hidden in the algorithms, and thus it is difficult to separate the factors that represent scientific procedures from those that imply value judgments. Such separation is essential for an effective understanding, critique, and use of the models (Hyman and Stifel, 1988). In addition, decision-makers must have access to the reasoning process used in the development of the value weights (Westman, 1985). The output from a site-ranking model should thus provide information in addition to the overall score itself, so that one can understand why a high or low score was obtained. The additional information could include individual environmental pathway scores, whether site contaminants pose acute or chronic risks, and how the model's value-weights affect the overall score. MULTIATTRIBUTE APPROACHES Multiattribute approaches involve systematic and documented techniques for aggregating subscores (or developing composite scores) that involve subjective values and scientific judgments.

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Ranking Hazardous-Waste Sites for Remedial Action Each of the two techniques mentioned next has an explicitly theoretical basis and is best applied with the guidance of an experienced professional. Each could be applied not only to the final aggregation of site scores but also at a point in the process that develops subscores. The Multi-Attribute Utility Technique (MAUT) has a strong theoretical basis and has been widely used. Keeney and Raiffa (1976) present a well-regarded treatise on the technique; Keeney (1977) has conveyed the gist of the technique in the context of an application involving environmental effects of energy generation. Edwards and Newman (1982) and Hammer et al. (1988) provide additional information. The Analytic Hierarchy Process (AHP) handles weighting through analysis of a matrix, the entries of which estimate the relative importance of the attributes associated with pairs of sub-scores. There is explanatory theory for this weighting, and software to support the necessary calculations. The AHP, more controversial than the MAUT, has been gaining acceptance. Saaty (1980) wrote the classical treatise on the method; and Golden et al. (1989) produced a volume that contains a number of case studies (Paper 3 referenced by Golden et al. lists over 150 application papers). Criticisms of the method (e.g., relative ranking of alternatives can be upset by the addition of another alternative) are highlighted by Dyer (1990), with counterarguments by Saaty (1990) and Harker and Vargas (1990). EPA's HRS and DOD's DPM use weights for the separate elements included in the scoring process, but the methods for aggregating subscores are not adequately justified by an analytical explanation. DOE's Environmental Restoration Priority System has an explicit and formal multiattribute utility basis combining estimates of human health, environmental, socioeconomic, and regulatory benefits of remediation.

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Ranking Hazardous-Waste Sites for Remedial Action COST-BENEFIT AND COST-EFFECTIVENESS APPROACHES Rational public decision-making implies a process for determining appropriate action by utilizing scarce resources in such a way as to maximize the attainment of given objectives. Government agencies have the prime responsibility for carrying out their legislative mandates within each program by selecting the activities that best fulfill their basic mission, have highest priority, and can be ranked at lower levels (or rejected) because the activities contribute little, not at all, or negatively. As discussed here, cost-benefit and cost-effectiveness approaches for environmental evaluation have been adapted from private-to-public-sector use for assisting policy-makers to achieve well-defined goals when resource constraints require the ranking of alternative courses of action. Cost-benefit analysis is a technique for evaluating alternative courses of action when inputs (costs) and outputs (benefits) can be compared based on the same metrics (e.g., monetary values) (Prest and Turvey, 1969; Lave and Gruenspecht, 1991; Krupnick and Portney, 1991). Risk-benefit analysis is a similar approach, but different to the extent that the costs of hazard reduction (and often the benefits as well) are subject to much uncertainty and are expressed in terms of a distribution of possible outcomes with associated "expected" levels. The cost-effectiveness methodology is used when inputs can be assessed in market values but outputs cannot be evaluated in dollar terms. Thus, costs and benefits of alternative courses of action can be compared with each other within but not across program areas. Cost-benefit and cost-effectiveness approaches share three basic ways of structuring priorities: select the activities in order of increasing cost (rank activities that achieve a specified level of output with the least cost);

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Ranking Hazardous-Waste Sites for Remedial Action select the activities in decreasing or der of benefit or effectiveness within a given budget constraint (maximize benefits subject to a specific level of cost); allow activities and their decision parameters to vary, evaluate the resulting variations in costs and benefits, and then rank activities according to the ratio or the difference (whichever is more appropriate) between benefits and costs. A variant of cost-benefit and cost-effectiveness approaches explicitly includes tabulation of the incidence and distributional (e.g., ethnicity, gender, age, spatial) effects of costs and benefits among affected groups. The tabulation makes it possible to track which groups are likely to receive net benefits from each of the proposed activities and which are likely to be harmed. This incidence approach allows policy-makers to include distributional or equity criteria into a ranking scheme (Hill, 1968). The incidence matrix can include costs and benefits that are quantifiable but cannot be expressed in monetary terms. It can also include costs and benefits that can be identified as nominal inputs and outputs but are more intangible and not measured in a common metric. Because scores produced by structured-value models are not necessarily proportional to any measure of utility, it is difficult to apply cost-benefit and cost-effectiveness approaches to such scores. Therefore, neither EPA's HRS nor DOD's DPM provides explicit consideration of the costs of remedial actions. They are intended solely to rank sites such that those sites are identified where human health or ecological risk could justify remedial activity. In contrast, the DOE approach identifies both the benefits and the costs of alternative remedial actions for guidance in allocating resources. The economic-related approaches described in this section are not without limitations. One is difficulty of obtaining appropriate information on all the costs and benefits. Typically, costs are relatively easy to quantify, but economic benefits are more difficult to

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Ranking Hazardous-Waste Sites for Remedial Action measure. The ability of these approaches to predict future economic outcomes is difficult because resource values change.