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Linking Science and Technology to Society's Environmental Goals (1996)

Chapter: Use Social Science and Risk Assessment to Make Better Societal Choices

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Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
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2
Use Social Science and Risk Assessment To Make Better Societal Choices

The world in which we legislate and regulate to protect our environment is constantly changing, as it has always been. Perhaps most importantly, it is becoming "smaller." That is, goods and services that once could be supplied only from the United States can now be produced in and offered from very distant places, often at prices below those of U.S. suppliers. Foreign competition has changed forever the economic situation facing the United States. Making matters more complicated, other countries have different "tastes" for environmental protection and, accordingly, different legislative and regulatory regimes, which often differ from those in the United States. That is particularly true of developing countries, where standards are sometimes nonexistent.

At the same time (and it is probably unrelated), there has developed in the United States a willingness to question the need for ever-tighter environmental standards, as well as the means chosen to meet those standards. One reason is that, after 25 years of pollution control in the United States, many of the easy control opportunities have long since been exploited. For example, the cost of preventing an additional ton of hydrocarbon from being released in the Los Angeles air basin has grown from a few dollars per ton years ago to as much as $25,000 per ton today. Throughout air, water, and solid waste management, the marginal costs of added controls have grown dramatically, making people more willing than ever before to ask whether the benefits of the next ton of pollution control are worth its costs. The exact magnitude is unknown, but EPA estimates that $150 billion—about 2.4% of GDP—is spent annually by businesses, individuals, and governments to comply with federal environmental regulation (EPA 1990); this is only slightly less than the federal spending for Medicare. Although no efforts have ever been made to estimate the monetary value of the annual

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×

benefits of all environmental regulations, they are clearly important. On the basis of current knowledge, it appears that for many regulations, benefits exceed costs.

Furthermore, technology frequently improves, as does our ability to reduce pollution through process change and product redesign. For this reason, the cost of controlling pollution can often fall, thus making some programs that were heretofore prohibitively expensive now attractive as social investments.

Many also are questioning whether the environmental benefits resulting from new controls are as much as they were at the start of the environmental era. Some believe that the law of diminishing returns relative to long-regulated environmental pollutants has begun to set in and that, although added control will no doubt produce gains to society, these gains will sometimes be small in relation to their costs.

Those questions are being asked not only in corporate board rooms—although that is where the questioning might be loudest—but also in city halls, governors' offices, and even in the offices of the Secretaries of federal departments. That is because state and local governments and such federal agencies as the Departments of Interior, Defense, and Energy are also subject to federal environmental regulations. In fact, concerns about the cost of controlling environmental pollutants at the federal and state levels relative to the benefits received led to the recent passage of legislation that makes it much harder for the federal government to write regulations that impose costs on lower levels of government without appropriating funds to help the affected parties comply.

There is ample evidence that the concern is bipartisan. Presidents Ford, Carter, Reagan, and Clinton—two Republicans and two Democrats—issued executive orders requiring that federal regulatory agencies identify both the benefits and the adverse economic impacts of all major regulations and ensure, if relevant statutes permitted, that the benefits of a proposed regulation exceed the costs and the least-costly approach to meeting the environmental objective was chosen. In the 103rd Congress, before the Republican takeover of both houses, a measure to require even more cost-benefit analysis and more explicitness in risk assessment passed in both houses by substantial majorities. By mid-1995, environmental advocacy groups, business organizations, policy experts in academe and "think tanks," and the Clinton administration had all come to agree that environmental regulation needed to be rethought in important respects—even if there was much disagreement about just which respects. At the same time, agreement appears to have been reached on the need for a fair and careful balancing of environmental improvements with their associated costs.

ECONOMIC INCENTIVES VERSUS COMMAND AND CONTROL

It appears that the nation's existing environmental goals can be met for a good deal less money than the country is now spending if we substitute, as appropriate, what have come to be known as incentive-based approaches to environmental

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×

This is obviously a large topic, with much commentary having been produced by previous panels that does not make sense to try to repeat off the top of my head. Of importance to me is recognition that social science has contributed and can continue to contribute to meeting environmental goals in a variety of ways (articulated best in the review by the NRC committee on the Human Dimensions of Global Change). Any research strategy should have a strong social science component that treats social science as more than merely implementing findings from physical and natural science. A fundamental challenge for any aspect of managing the environment is bringing about changes in human and organizational behavior; social scientists have an important role to play in helping to understand this.

—Forum Participant Comment

regulation for command-and control approaches.1 Incentive-based approaches consist of such things as taxes on pollution discharges, the use of marketable discharge permits (which allow firms to buy and sell the right to discharge specific quantities of pollutants), deposit-refund schemes, and even the provision to the public of information about the amounts of pollutants that sources discharge annually. The hallmark of these approaches is that they give regulated parties the flexibility that they need not only to decide how much they should reduce their air or water pollution emissions or the volume of solid or hazardous wastes that they generate, but also to determine how to go about accomplishing whatever reductions they do decide to make. Furthermore, such approaches have the potential of providing greater benefit for each dollar spent on environmental protection.

In contrast, command-and-control approaches have traditionally taken the form of outright bans on products, mandatory emissions reductions, and even requirements to install specific types of control equipment, such as electrostatic precipitators, stack-gas scrubbers, and water-filtration equipment. There is little doubt that command-and-control approaches played an important role in the environmental improvements that the United States has enjoyed over the last 25 years, there is growing recognition that they are increasingly inappropriate for many current environmental problems and there are better and less-expensive ways of achieving environmental protection.

At first, the evidence in support of incentive-based approaches was purely academic. It consisted of studies results showing how effluent taxes or marketable permits, by giving regulated parties the flexibility to meet their environmental requirements as inexpensively as they could, could make possible control-cost savings of 10–70% while meeting the same environmental goals. Those approaches have now begun to be tested in practical ways, and the evidence suggests

1  

See, for example, a joint study conducted by Amoco and EPA. (Amoco/EPA 1993).

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×

Science and technology can contribute a lot to meeting current national environmental goals. In particular, science and technology can help define the costs and benefits associated with the national investment in environmental protection. The nation does not have an unlimited amount of resources to allocate to environmental protection, and we need scientifically and technically defensible information to help determine where we will allocate the limited resources. We should focus our environmental-protection activities where we get the biggest return on our investment in the environment. The current state of most science applied to the definition of environmental problems is that it uses very conservative assumptions whenever actual values are not known. Therefore, the less we know about a problem, the more we are likely to overestimate the risks associated with it and therefore overreact to it. Science can help overcome this problem (but it should also be noted that it was science that created the problem). Appropriate use of advanced technology can enable us to get a better return on the investment, in terms of environmental protection. There may be softer social sciences involved also. Not everything can be measured in common terms (e.g., dollars), and therefore we need to develop and apply better methods for the balancing environmental damages against costs.

—Forum Participant Comment

that, although they are more difficult to implement than was first recognized, they are as capable of producing substantial cost savings in practice as the theory and modeling suggested.

By far the best example to date concerns the SO2 emission allowances created under the 1990 Clean Air Act amendments. When Congress decided, out of a concern about acid deposition, that nationwide emission of SO2 should be reduced by nearly 50%, it directed EPA to take a very different approach. Instead of requiring a specific technology, Congress took a three-pronged performance-based-standard approach. It included capping annual SO2 emission at a new and much-lower level, apportioning the initial emission reductions required of individual power plants, and directing EPA to establish an allowance-trading program so that a utility that found it too expensive to meet its initial emission-reduction requirement could contract with another utility (or even a nonutility source of SO2) to go beyond the latter's required cutback as long as the combined reduction of the two parties would equal the sum of the initial reductions required of both. As of mid-1995, many such reallocations of control effort had taken place, most within individual companies but a large and growing number between companies.

The evidence to this point, still preliminary, suggests that that incentive-based approach will save the country $4–5 billion annually, inasmuch as implementation of the performance-based standard will cost the country $1–2 billion annually instead of the $5–7 billion for specified technology-based approach. In

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×

other words, the savings now being realized are in keeping with the most optimistic estimates from earlier studies. Other, admittedly smaller-scale incentive-based approaches (including taxes on chlorofluorocarbons [CFCs] and a trading program for the phase out of lead in gasoline) also provide confirmatory evidence. Although the verdict is by no means in, incentive-based approaches have the potential to deliver more than their promise.

ANALYTICAL TOOLS: COST-BENEFIT A ANALYSIS AND RISK ASSESSMENT

Analytical tools enable us both to predict the effects of regulatory interventions on human health and the environment and to value the effects and compare their benefits with their costs. At a time when much is being asked of these tools—most notably, quantitative risk assessment (QRA), the more-subjective comparative quantitative risk assessment (CRA), and cost-benefit analysis (CBA)—we are learning more and more about how the tools must be improved if they are to be reliable aids in decision-making.

Starting with QRA, we know far less than we would like to about, for example, the effects of multiple, potentially synergistic pollutants on human health; the link between environmental pollution and virtually all noncancer human health effects, including reproductive, neurological, and immune disorders; and the differential susceptibility of sensitive populations.

Regarding CRA, despite its potentially great usefulness, we know little about how to compare the value of prolonging the life of a 75-year-old by 3 years with, for instance, the value of ameliorating asthma for the entire lifetime of a newborn baby. That example is an illustration of why we need a way to deal with subjective judgments that are inherently part of CRA. Much work needs to be done to understand fully how to conduct CRA before it can be fully implemented.

Finally, with respect to CBA, there is great uncertainty even among experts about the value to be attached to the preservation of an endangered species, to the restoration of a contaminated aquatic ecosystem, to the enhancement of visibility in urban areas, or to the protection of remote natural areas in their pristine form. There is considerable uncertainty about the costs of environmental regulatory programs or about the rate at which future benefits and costs should be discounted (if at all) to make them commensurate with more-immediate effects.

I believe that the goals that are presently in place are adequate. However, having goals and achieving them are two different issues. Legislation needs to be strong enough to enforce these goals, and it has to be realistic. Although it would be ideal, zero pollution is not an option. Therefore, acceptable boundaries have to be developed, and science can provide the framework for this.

—Forum Participant Comment

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×

There are other tools not treated here, such as negotiated conflict resolution, that are just beginning to be used more commonly and on which research is now being conducted. But, we need to know how to use our current tools—such as QRA, CRA, and CBA—better and how to develop even better tools that we can use in the future.

FINDINGS, CONCLUSION, AND RECOMMENDATIONS

Findings

One barrier to the implementation of incentive-based approaches is that some tools needed to implement them—specifically QRA and CBA—are not as mature as they need to be if they are to be reliable aids in decision-making. Nor are they widely understood or accepted.

There is an insufficient program of interdisciplinary research to improve and facilitate implementation of the analytical tools available to decision-makers—most notably QRA, CRA, and CBA—and to develop improved alternatives if possible. To achieve congressional objectives and ensure that the public has confidence in these tools, improved analysis is needed. Congress should not be simultaneously requiring the expanded use of these tools in decision-making and reducing the funds available to improve their deficiencies and gaps.

This is not the place to lay out a complete agenda for research, but among the subjects needing attention are the following:

  • Benefit estimation, especially the tools and techniques for estimating the values that people place on ecosystem services (including so-called ''existence values"), on the protection of endangered species, and on providing additional years of life to people in various health states.

  • Cost estimation, including an improved understanding of how technological change and market discipline can combine to reduce regulatory-compliance costs below initial estimates.

  • Assessment of noncancer health effects and ecological risks.

  • Integration of QRA with CBA so that the health and ecological effects that risk assessors predict are those which the public cares about and which, therefore, are the ones needed to conduct a useful CBA.

  • Activities like negotiated conflict resolution, which require not only that physical, biological, and health scientists work with economists and cognitive psychologists, for instance, but also that the lay public is involved in such a way that the valuation exercise that is part of cost-benefit analysis reflects the values of those who will bear the fruits of regulatory programs and both QRA and CBA have credibility among the public in whose interests regulations are being considered.

Research needs to be sharply accelerated and demonstration projects undertaken to expand the applications of incentive-based approaches to environmental

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×

Ecological Effects

One important class of nonhealth outcomes is harm to nonhuman organisms and ecosystems. The EPA has taken the lead in developing a conceptual framework for conducting ecological risk assessment... and is preparing guidelines for his activity. Analysis is difficult because the effects may fall on individual animals or plants, on local populations of a certain species, on ecosystems (thus affecting many species), or on the survival of endangered species. At larger scales, effects on the distribution of ecological communities across the landscape are central to regional scale ecosystem management.… There may be important ecological outcomes to consider and characterize at each of these hierarchical levels of ecological systems.…

Ecological impact analysis also demands an understanding of how the affected ecosystem functions. There are numerous interrelationships among taxa, across responses, and across organizational levels. In addition, some of the most important effects may be indirect, operating through several interrelationships. Many of these effects are inadequately understood, difficult to measure, or laden with uncertainty.... Some ecologists even dispute whether the concept of ecological risk (or its inverse, ecological health) is useful for policy analysis.... None of these scientific difficulties of estimation, however, negate the importance for policy decisions of considering ecological outcomes. Interested and affected parties may want to take account of ecological effects, even if the level of scientific understanding of them is poor. Qualitative assessments of relative ecological risks can provide useful insights for environmental decision-making.… A critical need is to develop appropriate tools for assessing the value of ecological systems, including both economic and non-economic (e.g., intrinsic) value.

SOURCE: National Research Council (NRC 1996b)

protection. Attractive opportunities for such applications include the control of nonpoint-source water pollution from agricultural fields and feedlots and from municipal storm-water runoff. Research should be focused on the institutional impediments that can often reduce the savings associated with incentive-based approaches. Promising avenues for such research include experimental economics (because "economics laboratories" have proved to be fertile grounds for testing the efficiency properties of markets for airport landing slots), telecommunications spectrum bandwidth, natural-gas pipeline rights-of-way, and other heretofore government-allocated goods and services, in addition to environmental problems.

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×

Science and technology have important roles to play. If, for example, EPA will in the future give much more latitude to regulated parties in deciding how to meet pollution-reduction goals, it might be appropriate for it to step up its funding of research aimed at uncovering new and potentially attractive means of reducing emission. That would enable it to offer firms a menu of emission reduction, waste minimization, or other strategies from which they could choose in deciding how to comply with more flexible regulatory approaches, as opposed to "freezing technology" so that the best approach cannot be used for a given situation or to take continual advantage of technical progress.

Another virtue of an incentive-based approach is that it is the firms that must now take responsibility for reducing their emission from their products and processes. They probably know best how to develop the technologies and approaches that will provide them with the best opportunities at the lowest cost.

Conclusion

In recent years, many segments of society have become concerned about the economic impact of environmental regulation. Business, government, and individuals together spend an estimated $150–180 billion of their revenues each year to meet environmental regulations.

Present regulatory strategies do not sufficiently differentiate between minor and major risks. Furthermore, the costs incurred to reduce risks often do not bear a consistent relation to the magnitude of the risks involved and the number of people potentially affected. The nation's existing environmental goals could be met less expensively or faster by substituting incentive-based approaches to environmental regulation for command-and-control approaches. Incentive approaches provide a more flexible and cost-effective regulatory environment for industry, business, and government while maintaining or perhaps even improving environmental quality much less expensively.

The tools needed to implement incentive-based approaches—specifically, QRA and CBA (including some attention to distributional effects)—are not as well developed as they need to be if they are to be reliable aids in decision-making. Nor are these tools widely understood or accepted by decision-makers or other interested parties and the general public.

Recommendations
  1. Research to improve the analytical tools available to decision-makers should be expanded. Several specific questions need attention by researchers

  • With respect to cost-benefit analysis, what values do people attach to the services provided by ecosystems? To the protection of endangered species? To the extension of human life? To aesthetics and the quality of life? How do those values differ for different states of ecosystem and human health?

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
  • Also, with respect to benefit-cost analysis, how can models better estimate the costs of regulatory proposals? How can models predict human behavior, as opposed to relying only on the more reliable predictive value of current technologies and practices? How should models account for lost opportunities, even when no out-of-pocket expenditures are made, and for continuous technological changes that bring down the costs of regulatory compliance? The distribution of risks and benefits involves issues that are inherently political, and cost-benefit analysis generally is silent on these distributional matters. In light of that, how can models more realistically take into account the distribution of risks, costs, and benefits among all affected stakeholders?

  • What are the best ways to assess noncancer health risks, such as neurological and reproductive disorders? Disproportionate attention is paid today to collecting information on cancer risks compared with, for example, risks of neurological, reproductive, and other health disorders. Future research on quantitative risk assessment should be directed toward correcting this imbalance of emphasis.

  • Can quantitative risk assessment and cost-benefit analysis be integrated so that the health or ecological end points that risk assessors predict are the ones that the public understands and cares about? To what extent could and should probabilistic techniques be used with worst-case assumptions? In the face of uncertainty, what degree of conservatism should be used in connection with probabilistic techniques?

  1. Research should be increased and demonstration projects launched to expand the application of incentive-based approaches to environmental protection (these include pollution taxes, systems of marketable discharge permits, and deposit-refund schemes). The research should include the evaluation of institutional impediments that often reduce the savings associated with incentive-based systems. Experimental economics—in which a group of participants act out the decisions that they would make in given regulatory or other scenarios—is a particularly promising avenue for research. As more data on incentive becomes available, decision-makers can have a better intellectual rationale for choice between incentive-based approaches to environmental protection and command-control regulations.

  2. Social science research on comparative risk assessment (or risk ranking) can be helpful to all levels of government to establish regulatory and legislative priorities. Comparative risk assessment activities should involve elected and appointed officials; members of business, environmental, and civic organizations; and lay persons. In addition, natural and social scientists who can provide information on the magnitude of various risks to health and the environment, the likely costs of mitigating these risks, and the uncertainties associated with both should be part of the process.

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×

For more information and guidance, the reader should refer to the following:

EPA (Environmental Protection Agency), Environmental Investments: The Cost of a Clean Environment, EPA Document #EPA-230-11-90-083 (Washington, D.C.: November 1990).


NRC (National Research Council), Improving Risk Communication (Washington, D.C.: National Academy Press, 1989).

NRC (National Research Council), Policy Implications of Greenhouse Warming: Mitigation, Adaptation, and the Science Base (Washington, D.C.: National Academy Press, 1992).

NRC (National Research Council), Keeping Pace with Science and Engineering: Case Studies in Environmental Regulation (Washington, D.C.: National Academy Press, 1993).

NRC (National Research Council), Science and Judgment in Risk Assessment (Washington, D.C.: National Academy Press, 1993).

NRC (National Research Council), Building Consensus Through Risk Assessment and Management of DOE's Environmental Remediation Program (Washington, D.C.: National Academy Press, 1994).

NRC (National Research Council), Issues in Risk Assessment (Washington, D.C.: National Academy Press, 1994).

NRC (National Research Council), Ranking Hazardous Waste Sites for Remedial Action (Washington, D.C.: National Academy Press, 1994).

NRC (National Research Council), Improving the Environment: An Evaluation of DOE's Environmental Management Program (Washington, D.C.: National Academy Press, 1995).

NRC (National Research Council), Understanding Risk: Informing Decisions in a Democratic Society (Washington, D.C.: National Academy Press, 1996).

Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 27
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 28
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 29
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 30
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 31
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 32
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 33
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 34
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 35
Suggested Citation:"Use Social Science and Risk Assessment to Make Better Societal Choices." National Research Council. 1996. Linking Science and Technology to Society's Environmental Goals. Washington, DC: The National Academies Press. doi: 10.17226/5409.
×
Page 36
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Where should the United States focus its long-term efforts to improve the nation's environment? What are the nation's most important environmental issues? What role should science and technology play in addressing these issues? Linking Science and Technology to Society's Environmental Goals provides the current thinking and answers to these questions.

Based on input from a range of experts and interested individuals, including representatives of industry, government, academia, environmental organizations, and Native American communities, this book urges policymakers to:

  • Use social science and risk assessment to guide decision-making.
  • Monitor environmental changes in a more thorough, consistent, and coordinated manner.
  • Reduce the adverse impact of chemicals on the environment.
  • Move away from the use of fossil fuels.
  • Adopt an environmental approach to engineering that reduces the use of natural resources.
  • Substantially increase our understanding of the relationship between population and consumption.

This book will be of special interest to policymakers in government and industry; environmental scientists, engineers, and advocates; and faculty, students, and researchers.

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