Perspectives on the Conduct and Use of Economic Analysis in Federal Environmental Decisionmaking

This article lays out the broad rationale for conducting economic analyses of major environmental regulations—principally, benefit-cost analysis—as well as some of the pertinent critiques. What can public agencies expect to gain from such activities? What are the reasons to be wary of the results? The paper reviews the recent experience of the federal government in conducting such analyses, with particular reference to the relevant Presidential Executive Orders issued over the past three decades. Finally, the paper examines some of the key methodological issues, often involving interdiscripliary topics, critical to the conduct of such analyses. Overall, it is concluded that the economic analysis of proposed environmental regulations can help improve the allocation of society's resources while at the same time engendering an understanding of who benefits and who pays for any given regulatory action. Additionally, properly conducted economic analyses encourage transparency and accountability in the decisionmaking process, provide a framework for consistent data collection and identification of gaps in knowledge, and allow for the aggregation of many dissimilar effects (e.g., those on health, visibility, and crops) into one measure of net benefits expressed in a single currency.     

A Critical Review of the Traditional Methodology of Cost-Benefit Analysis and a Proposed Alternative

“Risk management” is essential to the decision-making process that prescribes regulations for protecting human health. As a comprehensive decision-making approach, risk management encompasses risk assessment, risk perception, economic factors, and their respective uncertainties. Cost-benefit analysis (CBA) has long been the preferred methodology for evaluating the economic factors associated with such regulations. Within this context, CBA confirms whether or not the “benefit” of a given regulatory option is greater than its “cost.” This article proposes an alternative CBA methodology whose guiding concept is the “optimization” of outcomes for the stakeholders in regulations that aim to protect human health. This article further proposes evaluation criteria for CBA and critiques the traditional and alternative variants against this standard, ultimately to demonstrate the superiority of the latter.     

Analysis of Worldwide Naphthalene Surface Soil Regulatory Guidance Values

Many environmental regulatory jurisdictions worldwide specify the maximum soil contamination mass burdens that may occur without prompting a regulatory response. For residential surface soils, these regulatory guidance values (RGVs) are generally based on human (often child) health risks from inhalation, ingestion, and dermal exposure to contamination. RGVs have been promulgated for more than 1,200 soil contaminants. Of these, naphthalene is the most frequently regulated contaminant. The 234 known naphthalene RGVs range from a minimum of 0.0289 mg/kg to a maximum of 16,000 mg/kg and span 5.7 orders of magnitude. Analysis illustrates that, although there are small non-random clusters of values, and there may be statistically significant differences between the values used in the U.S. and elsewhere around the world, the overall distribution of numbers strongly resembles (r = 0.9953) that of a log-normal random variable. Results of Monte Carlo uncertainty analysis applied to the U.S. Environmental Protection Agency risk model are presented to approximate the range of the naphthalene RGV span that can be attributed to uncertainty in cancer or non-cancer risk formulations. Uncertainty in the cancer risk formulation could account for approximately 41% of the RGVs. Uncertainty in the non-cancer risk formulation could account for a different 22% of the RGVs, but the cancer risk model generally yields the binding (lowest) value. The implications of these widely variable RGVs for health risk and remediation costs are discussed and methods of reducing variability are suggested.     

Ecological benefits assessment: A policy‐oriented alternative to regional ecological risk assessment

As the focus of many environmental and resource management decisions shifts to larger ecological units such as watersheds and ecoregions, the respective roles of ecological risk and ecological benefits must be reassessed. At larger ecological scales, risk becomes much more difficult to characterize because of the focus on the system rather than individual species. However, quantifying the monetary value of many ecological benefits is also difficult because no direct measures of their value exist, and the indirect techniques used by economists are not fully accepted in some policy‐making settings. This dilemma may be resolved by considering ecological resource/service flows, which are ecological benefits in physical rather than monetary units. By assessing the whole range of resource/service flows and the changes to each that would result from different management/control alternatives, scientists would be able to provide policy‐makers a much better basis for their decisions, and the resulting assessment would characterize changes in ecological features that are more familiar to both policy‐makers and the public.     

Costs, benefits and the evolution of inducible defences: a case study with Daphnia pulex

Phenotypic plasticity is one major source of variation in natural populations. Inducible defences, which can be considered threshold traits, are a form of plasticity that generates ecological and evolutionary consequences. A simple cost-benefit model underpins the maintenance and evolution of these threshold, inducible traits. In this model, a rank-order switch in expected fitness, defined by costs and benefits of induction between defended and undefended morphs, predicts the risk level at which individuals should induce defences. Here, taking predator-induced morphological defences in Daphnia pulex as a threshold trait, we provide the first comprehensive investigation into the costs and benefits of a threshold trait, and how they combine to reflect fitness and predict the switchpoint at which induction should occur. We develop reaction norms that show genetic variation in switchpoints. Further experiments show that induction can confer a survival benefit and a cost in terms of lifetime reproductive success. Together, these two traits combine to estimate expected fitness and can predict the switchpoint between an undefended and a defended strategy. The predictions match the reaction norm data for clones that experience these costs and benefits, and correspond well to independent field data on induction. However, predictions do not, and cannot, match for clones that do not gain a benefit from induction. This study confirms that a simple theory, based on life history costs and benefits, is a sufficient framework for understanding the ecology and evolution of inducible, threshold traits.     

Bioavailability of Soil-borne Chemicals: A Regulatory Perspective

U.S. Environmental Protection Agency (USEPA) risk assessment guidance documents dating back to 1989 have articulated the principles for incorporating information on bioavailability into the risk assessment process. However, in the interim period both the methods for obtaining media or route specific measures of bioavailability and the corresponding guidance to incorporate these data have languished. Presently, USEPA is developing guidance to address both of these concerns. This article outlines the broad framework for systematically evaluating the role of bioavailability in site-specific risk assessment from a regulatory perspective. At the same time, in appreciation of the vast horizon of uncharted territory ahead, the focus of USEPA's draft guidance, and consequently this report, is on bioavailability adjustments for soil-borne metals. The article describes a two-stage process. The first stage outlines a paradigm for screening sites to determine if generating site-specific data on the bioavailability of a metal in soil is of technical utility and economically justifiable. The second stage focuses on the collection, analysis, and incorporation of these data into the risk assessment for decision-making purposes.     

IS PAYMENT A BENEFIT?

What I call ‘the standard view’ claims that IRBs should not regard financial payment as a benefit to subjects for the purpose of risk/benefit assessment. Although the standard view is universally accepted, there is little defense of that view in the canonical documents of research ethics or the scholarly literature. This paper claims that insofar as IRBs should be concerned with the interests and autonomy of research subjects, they should reject the standard view and adopt ‘the incorporation view.’ The incorporation view is more consistent with the underlying soft‐paternalist justification for risk‐benefit assessment and demonstrates respect for the autonomy of prospective subjects. Adoption of the standard view precludes protocols that advance the interests of subjects, investigators, and society. After considering several objections to the argument, I consider several arguments for the standard view that do not appeal to the interests and autonomy of research subjects.     

An analysis of historical trends in classical biological control of arthropods suggests need for a new centralized database in the USA

The documentation of biological control agents targeting arthropods in the United States has historically been subject to less regulation relative to weed biological control releases. This study reviews publicly available databases to track environmental releases of biological control agents targeting arthropods in the United States. It then presents available data for the states with the most releases between 1962 and 2005: Hawaii, California and Florida. These data indicate a clear decline in rates of introduction since 1982 or 1994, depending on the source. Existing record-keeping systems offer incomplete or inconsistent data for evaluation because they were designed with limited goals, attempt to capture excessive detail and are thus impractical, or are insufficiently resourced. Existing databases cannot be used to answer meaningful questions regarding non-target effects of introduced control agents. Current databases are inappropriately designed and insufficiently resourced to meet today's research and regulatory needs. We propose and describe a new database system for classical biological control of arthropods.     

Extrapolation in Human Health and Ecological Risk Assessments: Proceedings of a Symposium

A symposium was conducted in April 1998 by the U.S. Environmental Protection Agency's National Health and Environmental Effects Research Laboratory (NHEERL) to explore issues of extrapolation in human health and ecological risk assessments. Over the course of three and one half days, leading health and ecology experts presented and discussed research methods and approaches for extrapolating data among taxa and across levels of biological organization, through time, and across spatial scales. The intended result of this symposium was enhanced interaction among a diverse array of scientists, policymakers, and risk assessors to promote identification of approaches for reducing the uncertainties of extrapolation in risk assessment.     

Biofeedback-Based Psychophysiological Treatment in a Primary Care Setting: An Initial Feasibility Study

We sought to determine whether an intervention labeled "biofeedback" could be implemented with patients who were diagnosed with "functional" disorders (Irritable Bowel Syndrome, Fibromyagia/Chronic Fatigue Syndrome, Myofascial Pain, Anxiety with somatic features, or Noncardiac Chest Pain), in a primary care setting, and whether cost savings through lowered utilization of medical services would be realized. Seventy patients were initially randomized into a treatment group or comparison group based on willingness to participate. Ultimately, 19 patients completed treatment and 30 were followed through usual treatment as a comparison. Treatment patients completed symptom diaries while working with a biofeedback therapist in the primary care facility. Both group's medical expenses were tracked for 6 months prior to and 6 months after the treatment time interval. Patients in the treatment group lowered symptom frequency and severity significantly. Medical costs were differentially reduced in this group such that all costs were $72 less in the treatment group and $9 in the comparison for the 6 months following the treatment time period. (p < .001). Unfortunately, a large group of assigned treatment patients did not start or complete treatment. These patients had high initial costs and went up even higher post. No comparable group could be found among the controls, limiting any inference regarding cost/benefit. Biofeedback based interventions for "functional" disorders can be easily integrated into primary care settings, can reduce symptoms, and may be able to reduce overall medical costs in this group of patients known as heavy utilizers.     

Risk Assessment and Safety Evaluation Using Probabilistic Fault Tree Analysis

Risk assessment is an essential prelude to the development of accident prevention strategies in any chemical or petrochemical industry. Many techniques and methodologies such as HAZOP, failure mode effect analysis, fault tree analysis, preliminary hazard analysis, quantitative risk assessment and probabilistic safety analysis are available to conduct qualitative, quantitative, and probabilistic risk assessment. However, these methodologies are limited by: extensive data requirements, the length of study, results are not directly interpretable for decision making, simulation is often difficult, and they are applicable only at the operation or late design stage. Khan et al. (2001a) recently proposed a detailed methodology for risk assessment and safety evaluation. This methodology is simple, yet it is effective in safety and design-related decision making, and it has been applied successfully to many case studies. It is named SCAP, where S stands for safety, C and A stand for credible accident respectively, and P stands for probabilistic fault tree analysis. This paper recapitulates the SCAP methodology and demonstrates its application to a petrochemical plant.     

The effect of costs associated with toxin production in a competitive system

In this paper, we study a two-species competitive system where both the species produce toxin against each other at some cost to their growth rates. A much wider set of outcomes is possible for our system. These outcomes are important contrasts to competitive exclusion or bistable attractors that are often the outcomes for competitive systems. We show that toxin helps to gain an advantage in competition for toxic species whenever the cost of toxin production remains within some moderate value; otherwise it may result in the extinction of the species itself.     

Considerations in Estimating Social and Economic Impacts of Immunotoxic Agents

To make appropriate regulatory policy decisions, the potential social and economic impacts of the policy must first be established. For environmental and occupational agents, social and economic impacts are derived from animal toxicology and, when available, human studies that serve as the base for risk-benefit analysis (RBA). Because immune function is associated with resistance to infectious disease, developing RBA for data derived from immunotoxicology studies will require determining the changes in the frequency or severity of infectious disease resulting from an exposure. Fortunately, considerable information is readily available for identifying the frequency of infectious diseases in the general population and its social and economic impacts and to assist the risk assessor when conducting RBA for immunotoxicology endpoints. The following is a brief review describing some issues in using immunotoxicity data when conducting RBA. It presents an economic methodology to determine the economic impacts of infectious diseases to society, sources where these types of information are available, and an example using a specific infectious disease, otitis media.     

Risk assessment of polycyclic aromatic hydrocarbons (PAHs) in sediments from a mixed-use reservoir

Although reservoirs in China are of great significance, very few studies on risk assessment have been reported for reservoirs. This study investigated distribution characteristics, cancer and ecological risks, and source diagnosis of 16 priority polycyclic aromatic hydrocarbons (PAHs) in sediments from Shitou Koumen Reservoir in Jilin Province, China. A total of 12 sediment samples were collected from the reservoir in August (wet season) 2014. Total PAH concentrations in sediment samples ranged from 1294.51 ng/g to 2755.35 ng/g with a mean concentration of 1757.54 ng/g. For individual PAHs, average concentration of Nap was the highest, 800.56 ng/g, while Acy, Fla, BkF, and DahA were undetected in sediment samples. Light PAHs (2–3 rings) accounting for 74.21% was a dominant PAH compositional pattern. Pearson correlation analysis was carried out; results showed that total PAHs was strongly correlated with the highly enriched sedimentary PAHs, and pH was a major factor in controlling PAH distribution. Lifetime cancer risk was employed to assess cancer risk; results indicated that the fish-culturing area was exposed to cancer risk. The molecular diagnostic ratios of isomeric PAHs were applied to identify possible PAH sources; primary PAH sources were identified as oil-related activities, burning agricultural wastes, vehicular emissions, and industrial discharges.