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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
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 Instead, general direction has been provided to the project manager in the form of a draft guidance package prepared by SPRD.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
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;
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
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,
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
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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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 o ] 0.6 _ 0.4 it LU > 0.2 3 ·= o A ~J Population Safex Special Exposure Group B \ u~\)J L 4 6 1 0 2 DISCOUNTED COST ($ million) 145 ._ o $ S _ 1 Visolin D 0.08 - 0.06- 8 10 0.04- ._ a) 12 ~- - y 0 9 at, _ to to 0 6 it o In 3 ~ 0 c' o 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.
