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~ Evaluation of the
O Regulatory Options
Weighing the
Risks and Benefits
INTRODUCTION
.
The ultimate goal of the RPAR process is to permit the Administrator to
select the most desirable regulatory option, based on a weighing of the
risks and the benefits of the various options. However, the risk and
benefit analyses are, for the most part, conducted independently of one
another. To facilitate the Administrator's selection of the "best" option,
it is necessary to bring together in as intelligible a way as possible the
main findings of the two independent analyses. The purpose of this
chapter is to describe briefly the current approach to synthesizing and
presenting the findings of the separate analyses and to recommend,
where appropriate, some changes in that approach.
It should be clearly understood that benefit-risk analyses cannot
decide which option to select. Even the most complete analysis will leave
considerable room for judgment on the part of the responsible officials,
beginning with the project manager. The analysis can only facilitate the
. .
c .eclslon.
DEVELOPING REGULATORY OPTIONS
CURRENT APPROACH
The development and evaluation of major regulatory options in pesticide
preregistration decisions is the purpose of the REAR process. The primary
131
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132
REGULATING PESTICIDES
responsibility for carrying out these activities rests with the project
manager. Explicit guidelines for developing and evaluating regulatory
options do not exist. Instead, general direction has been provided to the
project manager in the form of a draft guidance package prepared by
SPRD. The following is an excerpt from this material that is designed to
aid the project manager in developing PD 3 (U.S. EPA 1978d):
Selection of Alternative Courses of Action
This section describes the risk/benefit approach taken to impact analysis.
Initially, the analysis examines the adverse effects of risks associated with each
existing use of the chemical. At the same time, information on the benefits (or the
resultant effects from the removal of the chemical from the market) is being
collected and analyzed. From this review, alternative actions are drafted and the
new use patterns that would result from each action are examined. The risks and
benefits of using substitute chemicals are also analyzed and incorporated into the
alternative actions. Final alternative actions (major regulatory options) are then
proposed and the risks are weighed against the benefits for each action (option).
There are many components of Alternative Courses of Action: these are the
various statutory and regulatory methods the EPA Administrator can utilize for
restricting pesticide use under Fifing. Some examples are changes in labeling,
changes In classification, or cancellation. These components are affected by
serious economic and social and/or environmental and health effect. It is
important that these be mentioned generally. The difficulty of deciding which
alternative actions are studied, can be emphasized through an explanation of the
wide range of possibilities, i.e. the components mentioned above can be
combined in numerous ways. Specifically, as the impact analysis is conducted on
a use by use basis, the various regulatory and statutory methods of controlling
pesticides can be applied to each use of a pesticide chemical, so that the number
of possible alternative actions is sizable:
.
cancel - variations register
The next portion of the PD 3 will list and discuss the alternative actions being
considered as a result of the risk/benefit analysis. An explanation as to the
reasons for the selection of the above alternative actions should follow. The
rationale for developing the alternative actions may be somewhat standard in
that generally, the effects of registering the pesticide (maintaining the status quo),
the effects of cancelling the pesticide and the effects of restricting (using various
methods) some uses of the chemical are considered. However, it is important that
an explanation be provided as to why these alternatives were chosen, i.e. why
certain regulatory and statutory methods were chosen and/or why certain
substitute chemicals were chosen, as opposed to others. It would be helpful, if
possible, to briefly mention some of the feasible alternatives that were not chosen
as selected.
Review of the Impacts of Major Alternative Actions
This section of the PD 3 win discuss the impacts, beneficial and adverse, of the
alternative actions chosen above as a result of the risk/benefit analysis. The
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Evaluation of the Regulatory Options
133
secondary impacts, those associated With the use of substitute chemicals will be
included. One way of presenting this Formation is in a form where the
beneficial and adverse impacts are examined for environmental effects, health
ejects, economic effects and social ejects. Important considerations for each
category of effects are the short term and/or long term impacts, primary and/or
seconded impacts and the irreversible and irretrievable impacts of the alterna-
tive action being discussed.
A summary matrix of this information would be useful as it allows the reader
to more easily envision the trade-o~s between the risks and benefits ~ the
decision process. Attachment 5 is an example of this type of matrix. The matrix
may be altered for each PD 3 depending upon the alternatives for the uses of each
chemical. In addition to the sum maw matnx, a section of the text which
compares the alternative actions would be helpful. This would simply be an
explanation of the trade-offs between the risks and the benefits as depicted In the
matrix.
Thus, the current methodology by which viable regulatory options are
identified is somewhat vague. The basic approach to generating such
options appears to be that of first listing on a use-by-use basis those
options that would reduce potential exposures and then considering the
attendant risks and benefits associated with them. In addition, other
possible options that might be included have to do with requesting more
data and delaying a decision, or making a temporary decision with the
provision that further review will take place when additional data are
available.
Some examples can serve to illustrate the current approach. For
instance, PD 3 for chlorobenzilate simply states, "evaluation of the risk
and benefit data suggests seven principal regulatory options" (U.S. EPA
1978a). Little more is said as to exactly how these major options were
selected, although one infers that the selection process was accomplished
through RPAR team meetings, the project manager's independent assess-
ment and interpretation of team input, and limited internal review.
PD 4 for DBCP uses the "reduction of risk" as the rationale for
developing major regulatory options (U.S. EPA 1978b, see especially
section on Development and Selection of Regulatory Options). That is,
options are generated in terms of whether they have the potential to
reduce risk. If they do, the economic impacts of adopting the options are
considered in a narrative fashion.
For the pesticide endrin, an early draft of PD 2/3 (Barbehenn 1978)
suggests that to be viable a regulatory option must satisfy the following
criteria:
1. It must yield an acceptable risk to benefit ratio from current use practicers) or
improve the risk to benefit ratio with additional options considered;
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134
REGULATING PESTICIDES
2. It must be a technically and economically feasible regulation from the
perspective of user groups;
3. It must be consistent with the authority of the Agency;
4. It should be enforceable; or
5. If enforcement is difficult to achieve, then a high degree of compliance to the
regulation by users must be expected.
It should be clear from these examples that the relatively loose
guidance provided in developing regulatory options will mean that
considerable discretion is left to project managers as chief authors of PD
3's.
RECOMMENDATIONS
In developing regulatory options, the Committee recognizes the
difficulties associated with balancing the need to maintain benefits of
pesticide use, for example increased crop production, with the need to
protect human health and ecosystems. At the same time, the Committee
acknowledges that each compound that undergoes the RPAR process will
have certain unique characteristics; hence, the development of relevant
regulatory options may not be easily generalized. Nevertheless, it is
worth highlighting at least two broad recommendations.
First, the Committee thinks that it is important that the major
regulatory options be generated at an early stage in the process to ensure
that necessary analyses of both the compound under review and its
substitutes will be carried out in a timely fashion. An important
consequence of early generation of regulatory options should be that
their implications on the use of alternative pesticides will be seen and
taken into account early in the process (see Chapter 3, section on
Modification to the Preliminary Ranking: The Role of Alternative
Pesticides).
Second, the Committee thinks that one of the criteria listed above
from the early endrin PD 2/3 is worthy of further emphasis, namely, that
in developing regulatory options adequate weight should be given to
enforceability. It is meaningless for the Agency to put forth a regulation
that would reduce risk if it will not be respected and cannot be enforced.
For example, with regard to the protection of pesticide applicators,
questions have arisen over whether clothing and respirator requirements
are enforceable. If such restrictions cannot be enforced, then the "real"
risk reductions associated with these protective measures will be
overstated and, more importantly, the final regulatory decision that is
chosen may not be the correct one.
Basically, the Agency has the responsibility for providing adequate
OCR for page 135
Evaluation of the Regulatory Options
135
justification of its development of the major regulatory options that it
will evaluate.
SELECTION OF REGULATORY OPTIONS
CURRENT APPROACH
The portion of a PD 3 entitled, "Review of the Impacts of Major
Alternative Actions," presents the evaluations of the major regulatory
options. The format used to report this material involves enumerating
the options and discussing them one by one In terms of the expected
risks and benefits that would result if the option were adopted by the
Agency.
In many cases, descriptions of risk are given in terms of quantitative
estimates of lifetime risk, margins of safety, or expected wildlife losses; In
other instances, the descriptions involve qualitative statements as to how
specific options would be likely to reduce risk. Risks associated with
alternative pesticides that may come into use are rarely quantified
because of lack of data. On the other hand, economic impacts (or
benefits) are usually described more quantitatively.
In addition to narrative descriptions that discuss the trade-o~s
between the risks and benefits associated with each major regulatory
option, the draft guidance package provided by SPRY (and quoted above)
suggests that the information be displayed in matrix form. The purpose
of such a matrix presentation is to make the inherent trade-o~s
associated with each major option readily apparent to the decision
maker.
An example will illustrate this approach, which has been used by the
Agency in most of the PD 3's. In the Chlorobenzilate PD 3, the seven
regulatory options that were considered are as follows (U.S. EPA 1978a):
A. Continue Registration of All Uses.
B. Cancel All Uses.
C. Continue Registration of Chlorobenzilate Use on Citrus and Amend the
Terms and Conditions of Registration; Cancel All Other Uses.
D. Cancel Chlorobenzilate Use on Citrus to Take Effect After Five Years, and in
the Interim Amend the Terms and Conditions of Registration; Cancel All
Other Uses.
E. Continue Registration of Chlorobenzilate Use on Citrus, Amend the Terms
and Conditions of Registration, Require That Identified Exposure Data Be
Submitted to EPA in 18 months; Reevaluate the Use on Citrus After
Additional Exposure Data Become Available; Cancel All Other Uses.
F. Continue Registration of Chlorobenzilate Use on Citrus in Florida, Texas,
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136
REGULATING PESTICIDES
and California, Amend the Terms and Conditions of Registration, Require
that Identified Exposure Data be Submitted to EPA in 18 Months; Reevaluate
the Use on Citrus After Additional Exposure Data Become Available; Cancel
Use on Citrus In Arizona and All Other Uses.
G. Continue Registration of Chloroben~late Use on Citrus, Amend the Terms
and Conditions of Registration; Prohibit the Use of Pulp from Chloroben~-
late-Treated Citrus and Cattle Feed; Establish Complementary Tolerances;
Cancel All Other Uses.
Once the options were identified, their associated risks and benefits were
presented, first in tabular form and then in narrative fashion. Tables 6.1
and 6.2 reproduce the relevant tables from PD 3 for chlorobenzilate.
Following these tables in the PD 3, discussions of each option were
presented, describing the implications of choosing one option over
another. The next section of the position document presented the
recommended regulatory action, Option F (U.S. EPA 1978a:884. (In PD 4
for chlorobenzilate, the Agency modified Option F and allowed
continued registration in Arizona.)
While a matrix or tabular format is generally used to summarize
results from the risk and benefit analyses, other approaches are not
uncommon. For instance, the endrin PD 2/3 (U.S. EPA 1978c) presents
the findings and discusses the implications of the various regulatory
options in narrative fashion only. No tables, graphs, or charts were used
in the endrin PD 2/3 to consolidate and summarize the results for easy
access by the decision maker (or other interested parties).
1
RECOMMENDED APPROACH
All the work discussed in the preceding two chapters and the first half of
this one leads up to the selection of the best of the regulatory options
that have been identified. At this stage, estimates are available of the
risks in terms of human exposure estimates and the relative potency of
the compound imposed by each use of the pesticide under each of the
regulatory options. Corresponding estimates of the benefits yielded by
each of the uses permitted by each option are also available. Finally, In
accordance with Chapter 3, there are comparable estimates of the risks
and benefits of the alternative pesticides that are likely to be used if the
pesticide under review is restricted or denied reregistration. It remains to
put these data together and evaluate the result.
The first stage is to estimate the risks and the economic impacts that
would result from adopting each option. The risk imposed by an option
is the sum of the risks entailed by all the uses that it permits. This
summation has to be performed separately for each kind of risk and each
OCR for page 137
Evaluation of the Regulatory Options
137
exposed population. For example, if one option permits a pesticide to be
used on 10 different food crops, the risk of increased cancer incidence to
the general U.S. population from dietary exposure would be estimated as
the sum of the amounts of the pesticide ingested by a typical consumer in
the form of residues on all those foods, taking account of the
carcinogenic activity of the pesticide. If an alternative option forbids the
use of the pesticide on five of the foods, the dietary risk to a typical
member of the population would be estimated as the total ingestion of
residue on the five permitted foods plus the equivalent intake of
alternative pesticides, if any, used on the five forbidden foods in response
to this stricter regulation, again taking account of the carcinogenic
activity of the pesticide. (The equivalent intakes would be estimated
from the CAN'S by the methods discussed in Appendix B.) Such an
aggregate risk would be computed for each option for each population
and type of hazard imposed by the uses the option permits. For example,
risk to applicators would be computed separately from risk to a
population consuming residues on or in food; risk of cancer would be
computed separately from risk of abnormal offspring, acute toxicity, and
so on. Risks are calculated as lifetime values, taking the economic life of
pesticides into account.
The economic impact or cost of a regulation is also a sum, taken over
all the uses that it restricts or prohibits. The component of the aggregate
cost arising from each use is the forgone benefits discussed in Chapter 5.
That is, it is the excess of the surpluses or net benefits that would be
enjoyed without the regulation over the net benefits yielded by the
methods of operation that would be resorted to in response to the
regulation. Costs of administration and enforcement (both public and
private) should be added to this sum to obtain the total cost of the
regulation. Costs are calculated as discounted present values over the
remaining economic lifetime of the pesticides.
When the risks and the costs of all the regulatory options have been
estimated in this manner, nothing remains but to compare the perfor-
mances of the different options and select the one that appears best, all
things considered. Unfortunately, this final comparison is a very difficult
task. Three great problems have to be solved in order to perform it. First,
there is the problem of the incomparability of the units in which risks
and costs are expressed and the additional complexity introduced by
having to deal with different types of risk. Second, there is the uneven
distribution of risks and costs over different portions of the population.
Third, there are the uncertainties surrounding the data and the estimates
on which decisions must rest. These are very pervasive problems,
common to many of the decisions that EPA has to make and often
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Representative terms from entire chapter:
lifetime doses
143
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144
REGULATING PESTICIDES
encountered in other government agencies and the private business
sector as well. They have given rise to a substantial literature called
decision theory.2 Our recommendations take advantage of many of the
insights developed in decision theory. We do not believe, however, that it
is practicable for oPP to ascertain the "preference functions" or
"objective functions" required by a full-blown decision analysis. We
shall therefore recommend below a simplified, more ad hoc procedure.
In practice, all three of the problems listed above have to be
confronted simultaneously in selecting the best regulatory option. For
purposes of discussion, however, the issues raised by each of the
difficulties can be perceived most clearly if they are considered one at a
time.
To this end, let us suppose temporarily that there are no uncertainties,
so that the risks and costs of the different options are known exactly and
with complete reliability. We further suppose, temporarily, that no
distributional considerations or problems of equity affect the relative
desirabilities of the different options. And further, to begin with, we
suppose that the only consequences relevant to the choice are the costs of
the alternative options, derived in accordance with the methods
discussed in Chapter 5, and the ejects on the incidence of cancer,
expressed by CAN'S and estimates of the amounts of the chemical to which
different segments of the population are exposed, as discussed in Chapter
4 and Appendix B.
Under these stringent assumptions, all the data relevant to the decision
can be exhibited on a single chart similar to the one shown as Figure 6.1.
The exposure and cost data underlying Figure 6.1 are shown in Table
6.3. Figure 6.1 shows the potential consequences of adopting five
available options (labeled A through E) for the regulation of a mythical
pesticide called Pestide. The horizontal axis measures cost (i.e., benefits
of Pestide use forgone by regulation plus regulatory costs) in millions of
dollars as discounted present values over the remaining economic
lifetime of Pestide. There are five vertical lines, one for each option,
placed at the abscissas that correspond to the discounted cost of the
option. (Disregard the right-hand scales for the moment.) The left-hand
scale, calibrated in micromoles per kilogram, measures lifetime doses of
Pestide, including the Pestide-equivalent doses of alternative pesticides
that are likely to be used under the various options. Two curves, or
rather broken lines, are shown, one for the U.S. population in general
and one for a special exposure group showing the change in dose and
cost as one moves through the options from A to E. Thus, if Option A
represents the status quo, its cost is zero, it exposes the general U.S.
population to lifetime doses of 0.68 ~ moles/kg of Pestide, and the
Evaluation of the Regulatory Options
y
-
° 0.8
E
3
LU
In
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_ 0.4
it
LU
> 0.2
3
·=
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~J
Population
Safex
Special Exposure Group
B
\
u~\)J
L
4 6
1
0 2
DISCOUNTED COST ($ million)
145
._
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_ 1
Visolin
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0.06-
8 10
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FIGURE 6.1 Equivalent lifetime doses and discounted costs of five options for regulating
Pestide, with carcinogenic reference compound doses: certainty case (see text for
discussion). Source: Table 6.3 and text.
special exposure group is exposed to lifetime doses of 0.86 ,u moles/kg.
As the chart is read from left to right, the same three data are shown for
the other four options in order of their costliness.
We can now introduce the right-hand scales. The first relates to a
mythical comparison compound, Visolin, about which two things are
known. First, the CAT of Visolin is 10 times that of Pestide. (Again, it is
assumed for the sake of simplicity that all CAYS are known precisely.)
Accordingly, the lifetime dose scale for Visolin is one tenth the scale for
Pestide indicating, for example, that 0.06 ,u moles/kg of Visolin produces
an effect comparable to 0.6 ~ moles/kg of Pestide. Second, Visolin was
denied reregistration on the basis of analyses that indicated that if it had
been reregistered, a significant population group would have been
exposed to lifetime doses of 0.06 ,u moles/kg of Visolin. This fact is
recorded by the horizontal line labeled Visolin at that dose level.
The right-most scale relates to Safex, another mythical comparison
146
REGULATING PESTICIDES
TABLE 6.3 Equivalent Lifetime Doses and Discounted Costs of Five
Options for Regulating Pestide
Regulatory Option
A B C D E
Cost ($ million)
Minimum-plausible
Probable
Maximum-plausible 0
Equivalent lifetime doses
(A moles/kg)
U.S. population
Probable
Ma~cimum-plausible
Special exposure group
Probable
Maximum-plausible
o
o
0.68
1.9
0.86
2.4
2.5 3.0 4.0
2.8 4.0 6.0
4.0
7.0
8.6
5.5 7.5 10.0
0.36
1.2
0.56
2.0
0.22
0.57
0.27
0.70
0.16
0.35
0.25
0.58
0.16
0.35
0.24
0.55
compound. Its CAT is one fifteenth of Pestide's, so that its scale is the
same as Pestide's mutiplied by 15. Safex was reregistered and the
supporting risk analyses showed that the greatest lifetime dose to which
any large population group would be exposed was in the neighborhood
of 3 ,u moles/kg. This fact is shown by the horizontal line labeled Safex.
With this chart in hand, the RPAR team or the Administrator might
reason as follows: if Pestide is reregistered according to Option A, both
the general population and the special exposure group would be exposed
to lifetime doses greater than the one equivalent to the potential
exposure to Visolin that led to the denial of its reregistration. That is, the
general population would receive an estimated lifetime dose of 0.68 ,u
moles/kg, the special exposure group would receive 0.86 ~ moles/kg, and
the Pestide equivalent of the Visolin dose level at which Visolin was
cancelled is 0.6 ~ moles/kg. Since the risks at 0.6 ,u moles/kg (Pestide
equivalent) were unacceptable in the Visolin case, Option A can be
eliminated (ignoring the benefits of Pestide use versus those of Visolin
use). Under Option B. both groups are exposed to doses below the
Pestide cotton point suggested by the Visolin precedent. But violating
slightly our assumption of complete certainty suppose the special
exposure group is not sufficiently below the cutoff point and Option B
cannot be regarded as entirely safe for it. Besides, Option C costs only
$1.2 million more than B and provides significant reductions in the doses
received by both groups. Options D and E cost considerably more than
Evaluation of the Regulatory Options
147
C ($2 and $4.6 million, respectively) without affording substantial
reductions in the doses to which the special exposure group will be
exposed. Although there is greater improvement in the exposure of the
general population between Option C and Options D and E than for the
special exposure group, under Option C the general U.S. population is
already virtually at the level that was found to be acceptable in the Safex
case. So, all in all, Option C appears to be the wisest course to follow.
It has to be concluded that such reasoning is subjective and far from
rigorous. For one thing, the risk estimates on which the Visolin and Safex
cation points were based may have used numerical estimates of
morbidity or mortality derived from animal-to-human extrapolations.
Further, the above reasoning ignores the costs that society (embodied by
the decision maker) was willing to incur to avoid continued Visolin
exposure or unwilling to incur in the case of Safex. For example, it may
have happened that Visolin was denied reregistration at a dosage level of
0.06 ,~ moles/kg per lifetime in large part because benefits from
continuing to use it were estimated to be very small, and that Safex was
reregistered at a dosage level of 3 ,u moles/kg per lifetime because it was
virtually essential to the profitable production of an important crop.
In some cases, suitable comparison compounds can be found for
which benefit-risk analyses have been conducted to determine the dose
level where risks are considered to balance benefits. An example of such
an instance might be the interim drinking water standard for trihalo-
methanes (U.S. EPA 1978e), where the costs of treatment techniques for
achieving a maximum contaminant level of 0.10 mg/1 were balanced
against human health considerations (in particular, excess risk of
cancer). Such considerations, if known, are clearly relevant to the
decision under consideration. It is also most useful to a decision maker if
the comparison compounds provide an upper and lower bound in terms
of equivalent doses. Even in the highly simplified and idealized
circumstances of the Pestide example, however, the kinds of data that
risk and benefit analyses can provide are in principle not sufficient to
determine the decision or to identify the best option. In the end there is
inevitably considerable scope for judgment and discretion.
To advance one step up the ladder of complexity, we can now admit
that in many instances there will be several types of erects to be taken
into account in addition to costs. For example, the risk of fish kills may
be a matter of concern in addition to cancer risk, and other health and
environmental erects may be relevant also. In such cases, it may not be
possible to pack all the pertinent data onto a single chart (although
various health erects can be introduced by adding right-hand scales
based on appropriate potency indexes). It may be feasible to use a single
148
REGULATING PESTICIDES
TABLE 6.4 Changes in Discounted Costs, Equivalent Lifetime Doses,
and Environmental Risks for Alternative Regulations of Pestide:
Certainty Case
Change in Regulation
Option A Option B Option C Option D
to to to to
Option B Option C Option D Option E
Increase in cost ($ million) 2.8 1.2 2.0 2.6
Decrease in equivalent
lifetime doses (A moles/kg)
U.S. population 0.32 0.14 0.06 0
Special exposure group 0.30 0.29 0.02 0.01
Decrease in number of 16 22 0 0
fish killed (1000/yr)
Source: Table 6.3 and text.
table. A particularly helpful table is one that shows incremental changes,
that is, one that shows the changes in costs, lifetime doses to which
relevant population groups are exposed, and say, the number of fish
killed as one moves from one option to the next most costly one. Table
6.4 illustrates such a table. Although this particular example does not
identify the type or potency of the health hazards, it does show at a
glance that Option B affords substantial improvements over Option A
with respect to all exposed groups, and that Option C offers similar gains
over Option B. But thereafter, moving from Option C to Option D and
then to Option E would impose substantial costs without corresponding
improvements in any of the dosages or impacts on fish.
The form of presentation is not our concern, however. Our concern is
to emphasize the need for judgment when diverse health, environmental,
and economic ejects have to be taken into account. The basic
considerations remain the same no matter how many different ejects are
relevant, but the difficulty of arriving at a decision generally increases
with the number of relevant kinds of ejects. Peeling the onion layer by
layer is a natural and frequently helpful decision strategy. A preliminary
selection of a regulatory option might be made by charting only the most
significant type of risk (as in Figure 6.11. This selection can then be
reviewed by comparing its impact on the second most important type of
risk with the impacts of the other admissible options that is, options
that do not lead to unacceptable dose levels for any type of risk and so
Evaluation of the Regulatory Options
149
on, down the list. In practice, fortunately, it appears that the selection of
regulatory options for pesticides generally depends on only one or two
kinds of risk of preponderant importance, in addition, of course, to costs.
Keeney and Rai~a (1976) deal at length with methods for choosing
preferred options when numerous consequences, or attributes, have to be
taken into account. Some helpful suggestions, expressed less technically,
can be found in Stokey and Zeckhauser (1978~.
We can now introduce the second great obstacle, considerations of
equity and distribution. They enter because the costs of the alternative
options will fall unequally on different segments of the population and
the risks will also be distributed unevenly. In a sense, distributional
issues do not add methodological complications, since analyzing the
impacts of different options on different segments of the population is
conceptually akin to analyzing the different, incommensurable types of
consequence that have just been discussed. In fact, the distribution of
risks is already considered, since different types of risk and affected
populations are assessed separately. But distributional effects such as
abrupt changes in the competitive positions of different agricultural
regions may also merit separate analyses. Additional charts and tables
may be required to compare the risks and costs for specific population
groups that are particularly affected by adopting certain regulatory
options. These narrowly focused analyses may well preclude an option
that appears attractive on the basis of the more aggregate evaluations, or
they may suggest the desirability of modifying options to reduce the
economic burden on some population groups. The analyses of both
changes in risks and costs should therefore take great care to identify
segments of the population (or regions) that are particularly affected by
the regulatory options and to estimate the risks and costs imposed upon
them, so that the data needed for disaggregated evaluations are at hand.
The third great obstacle is the substantial degree of uncertainty and
approximation surrounding all the data and estimates, both risk and
benefit, that are available in practice. To introduce this complication we
can revert to the example of the Pestide decision. Because the
consequences of the alternative regulatory options are now uncertain,
there are more data to be assimilated than can be presented on a single
chart, so two are used.
The first chart, Figure 6.2, compares the estimates of probable lifetime
doses resulting from the various options with estimated ranges of their
costs. The probable lifetime doses in this chart should represent the
analyst's best judgment of the doses likely to be received by typical
members of the populations considered. Option A, whose costs are
known to be zero without any range of uncertainty, is represented by two
150
REGULATING PESTICIDES
points, the higher one corresponding to the probable lifetime dose
received by members of the special exposure group and the lower one to
the corresponding dose that would be received by members of the
general U.S. population. Because of the uncertainties in the subsequent
options, however, the costs can no longer be depicted as vertical lines.
Each of the other options is represented by two line segments, each
extending horizontally from the lowest cost believed to be likely to the
maximum-plausible cost. The higher segment is placed at the dose level
estimated to be most probable for the more exposed population group
and the lower line segment is at the most probable dose level for the
population in general. The Visolin cut-off line is again shown for
reference. However, the uncertainty in the CAT values used to calculate
the Pestide-equivalent dose of Visolin (see Chapter 4 and Appendix B)
now shows on Figure 6.2 as a horizontal band around the 0.06 ~ mole/kg
level. Things neither appear to be, nor are, as simple and clear in this
figure as they were in the previous one. Still, if one traces through the
sequence of line segments corresponding to each of the population
groups, the same reasoning as was used before can be invoked and
Option C again stands out as the most appealing of the alternative
options.
The second chart, used in the case of uncertain estimates, compares
the maximum-plausible doses to be expected under the different options
with the estimated ranges of costs. This comparison, shown as Figure 6.3,
has the same structure and scales as Figure 6.2 and is intended to be
comparable with it: there are only two differences. First, the line
segments for the different options are now plotted at ordinates that
correspond to the maximum lifetime doses believed to be at all plausible
under those options; the abscissas or range of costs remain the same.
Second, there are two horizontal bands for the comparison compound,
Visolin. The lower one is the familar Visolin cut-offi Notice that if this
band were interpreted in the way it was on the previous chart, Option C
would no longer be admissible, since there is some possibility that under
it the members of the special exposure population will receive greater
lifetime doses of Pestide than comparison with the Visolin decision
indicates to be acceptable. But it is not entirely reasonable to compare
the worst-case results of Pestide regulation with the probable-case results
of Visolin regulation. Therefore, a band has been added at the level of
the maximum-plausible dose estimated to result from using Visolin. This
band appears around 0.15 ~ moles/kg of Visolin. The possibility of
exposing people to such high dosages may well have had more influence
on the Visolin decision than the much lower probable estimate.
This additional band reduces but does not eliminate the difficulty of
Evaluation of the Regulatory Options
._
4 -
~ 2.0 _
-
a'
o
1.5
UJ
o
C)
LLJ
~ 10
_ .
111
LL
z 0.5
. _
, _
Special Exposure Group
General U.S. Population
A x
Visolin Probable Case
a O
,__1 1
0 2
151
-
o
._
_ 0.20 ^
au
._
4J
._
_ 0.15
a'
0
~
0.10 us
En
o
111
J
m
6
c::
lo:
8
4 6 8 10
DISCOUNTED COST ($ million)
FIGURE 6.2 Equivalent probable lifetime doses and ranges of discounted costs of five
options for regulating Pestide; carcinogenic reference compounds included (see text for
discussion). Source: Table 6.3 and text.
arriving at a decision on the basis of Figures 6.2 and 6.3. Option C still
appears attractive, but two judgments must be made about it. First, it
must be decided whether the (perhaps slight) possibility that the special
exposure population would receive greater doses of Pestide than are
comparable to the forbidden doses of Visolin is acceptable, given the
cost advantage of Option C over Option D (which is by no means
assured, since the line segments overlap horizontally; see Figure 6.3~.
Notice that Option D offers only a modest reduction in the probable
dose over Option C (Figure 6.2~. Second, it must be determined if it is
likely that the Agency will face serious criticisms politically if Option C is
adopted and the resulting doses actually materialize at or near the
maximum-plausible estimates. There is an unfortunate asymmetry here.
If Option D is selected, when in fact the probable estimate is close to the
mark, no one will ever know that Option C would have been acceptable
risk-wise and less expensive, nor will anyone charge EPA with wasting
resources on overly cautious decisions. But if Option C is chosen, and the
152
-
~n
-
a) 2 0
o
-
In
O 1.5
UJ
LL
1.0
0.5
-
U]
REGULATING PESTICIDES
._
4 -
C~
2.5 A x
_'
; _
A ~
't .c Special Exposure Group
a- ~ General U.S. Population
Visolin Maximum-Plausible Case
,,,,.,., .,., ,.,., , > .,;; . -a ... - - ~ - ~ 'a '''' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' ' - - - '
....... - -
B
Visolin Probable Case
Z3~^ ~
'A ~ " ; i . - ... ;; - .; .... .
D , E
1 1
6 8 10
DISCOUNTED COST ($ million)
_ 1
-
a)
E
0.20 a-,
._
Y
a,
0.15 E
UJ
an
O
0.10
us
J
m
is:
0.05 ~
o
FIGURE 6.3 Equivalent max~mum-plausible lifetime doses and ranges of discounted costs
of five options for regulating Pestide; carcinogenic reference compounds included (see text
for discussion). Source: Table 6.3 and text.
populations then receive doses close to the maximum-plausible estimate,
severe criticism is likely to ensue. In the Committee's view, this
asymmetry creates an incentive for the Agency to pay more attention to
worst-case estimates than is consistent with the judicious use of
economic resources. The Committee sees no way to reduce this
bureaucratic bias other than to point it out.
The three difficulties that have just been discussed the incomparabili-
ty of risk and cost units, uneven distribution of risks and costs, and
substantial uncertainty in the data and subsequent estimates make the
selection among regulatory options truly difficult and perplexing. The
decisions can be made somewhat less baffling if decision makers are
conscious of the sources of the difficulties and if analysts approach the
problem in the spirit illustrated by the Pestide example. But in many
Evaluation of the Regulatory Options
153
instances, there is no "trickery" that can make the decision easy.
Subjective judgment and discretion will always be required.
NOTES
1. See Tables 6.1 and 6.2.
2. For a general discussion of decision analysis see Howard (1966). The leading
treatise on the three problems now being discussed is probably Keeney and Raiffa (1976).
It is not easy reading. It contains an extensive bibliography that covers most aspects of
these problems.
REFERENCES
Barbehenn, K. (1976) impacts of the major options. In Endrin: Position Document 2/3,
August 11 draft. Special Pesticide Review Division, Office of Pesticide Programs, U.S.
Environmental Protection Agency, Washington, D.C. (Unpublished)
Howard, R.A. (1966) Decision analysis: Applied decision theory. Pages 55-71, Proceedings
of the Fourth International Conference on Operational Research, edited by D.B. Hertz
and J. Melese. Sponsored by the Operational Research Society of America, August 29-
September 2, 1966, Boston, Mass. New York: John Wiley and Sons.
Keeney, R.L. and H. Rainy (1976) Decisions With Multiple Objectives. New York: John
Wiley and Sons.
Stokey, E. and R. Zeckhauser (1978) A Primer for Policy Analysis. New York: Norton.
U.S. Environmental Protection Agency (1978a) Chlorobenzilate: Position Document 3.
Special Pesticide Review Division, Office of Pesticide Programs, U.S. EPA, Washington,
D.C. (Unpublished. Prepared under the general supervision of J.B. Boyd, oPP.)
U.S. Environmental Protection Agency (1978b) Dibromochloropropane (DBCP): Final
Position Document. Special Pesticide Review Division, Office of Pesticide Programs,
U.S. EPA, Washington, D.C. (Unpublished. Prepared under the general supervision of J.
Kempter, oPP.)
U.S. Environmental Protection Agency (1978c) Endrin: Position Document 2/3. Special
Pesticide Review Division, Office of Pesticide Programs, U.S. EPA. Mote: This
unpublished report was prepared under the general supervision of K. Barbehenn,
Project Manager, and is available from oPP, Washington, D.C. 20460.)
U.S. Environmental Protection Agency (1978d) Guidelines for SPRD Pesticide Economic
Impact Statements. Draft. Special Pesticide Review Division, Office of Pesticide
Programs, U.S. EPA, Washington, D.C.
U.S. Environmental Protection Agency (1978e) Interim Primary Drinking Water Reg~a-
tions. 43 Federal Register (28)5757-5780.
