CRS Report: 98-618 - Environmental Risk Analysis: A Review of Public Policy Issues

EPA's experiments with comparative risk analysis, and similar state experiments that were encouraged and funded by EPA; have generated considerable interest among legislators. Many would like scientists to provide information on how environmental hazards rank based on risk estimates, believing that this information would facilitate decisions about legislative and regulatory priorities. Some have suggested that federal, state, and local governments should enact budgets and allocate resources that tie the greatest expenditures to environmental hazards posing the greatest risks. Others have proposed that EPA provide perspective for viewing environmental hazards within the context of other federal programs; they would require EPA to compare the risks of regulated environmental hazards with risks of other regulated and unregulated hazards.

Those who object to comparative risk proposals contend that comparative risk analysis is an unscientific, ad hoc procedure that lends a false air of objectivity to the subjective judgments of scientists. They question whether an exercise that combines the diverse views of an unrepresentative sample of government scientists to produce a single prioritized list of hazards is more informative than a thorough recitation of the points on which scientists with diverse viewpoints agree and disagree, such as may occur in a hearing or an advisory committee. Priority setting requires value judgments, they argue, and should be made politically; scientists are no more qualified than others to decide whether, for example, the risk of a small decrement in intelligence for 3 to 4 million children exposed to lead-based paint is more or less significant than the risk of approximately 13,600 deaths annually from lung cancer due to indoor levels of radon gas. Which is worse, one person dying or 10,000 people feeling sick most of the time? Does it matter if the one dying is a child, or a smoker?

Some experts have pointed out that comparative risk analysis treats all deaths as equal, regardless of the quality of life or death. 40

It is even more difficult and less scientific to compare ecological risks with risks to human health, these critics contend. According to this view, scientists are expert only at determining probabilities, and the public or its representatives should be asked to contribute their expertise to the process of priority setting. EPA's Science Advisory Board agrees with this view. In Reducing Risk it stated;

Critics of risk management based on risk comparisons alone (that is, relative risks) also argue that risk is only one aspect of the environmental problems. Some argue that risk comparisons often focus on average national rates of death or disease and ignore equally important factors, such as the acceptability of available risk reduction strategies or the fairness of the result. Priorities should be based on all relevant information about hazards and available management options, not on risk alone, and should be made democratically, they assert. They reason that all means of risk reduction are not equally desirable, citing comparative examples such as the wearing of a gas mask versus modification of a production process to reduce use of toxic chemicals.42 Benefits provided by hazards also vary and should be considered, according to this view, because risk is not always undesirable, and many risks, such as driving a car or skydiving, are taken voluntarily either for the benefits that may be obtained or for the thrill of the experience.

Panelists at the CRS workshop agreed that risk analysis, especially quantitative assessment, tends to emphasize the magnitude and severity of consequences over other aspects of the situation, such as whether exposure to the hazard is necessary or voluntary or whether the people who profit from a hazard are the same as the people who are at risk or the people who pay to reduce risk.

In 1989, the NAS published a report that summarized the state of knowledge about how best to communicate about risks.43 This report is noteworthy primarily because it was a consensus document prepared by the Committee on Risk Perception and Communication of the National Research Council (NRC), a large group of scholars and practitioners with widely differing political perspectives. One topic addressed by the report was how to employ risk comparisons. According to the Committee, risks should only be compared when risks are comparable; risks are comparable when they "exhibit qualitative characteristics that are reasonably similar."44 This means that the most comparable risks generally are experienced in the same way by the same population for the same reason.

For example, the risks of riding a bicycle, walking, or being driven to school may be easily compared. In contrast, the risk of being struck by lightening is not comparable to the risk of traveling: although both are familiar, the former derives from a natural phenomenon beyond human control. In addition, an individual's risk of being killed by lightening is greatly reduced with little effort, for example by remaining indoors during storms or employing devices to deflect electrical charges.

According to experts, certain characteristics of hazards (risks) are particularly important to comparability, including: the magnitude and severity of the potential harm, likelihood of harm, voluntari-ness of exposure, immediacy of effect, trustworthiness of people managing the hazard (risk), population likely to be exposed, concentration of effects in time and space, population likely to benefit from the activity that creates the risk' and the degree of familiarity of (or adaptation to) the hazard. In addition, the NRC committee cautioned against appearing to select risks for comparison that "minimize or otherwise trivialize the risk in question," for example, by comparing a hazard (risk) like lightening that seems highly unlikely to inflict personal harm to one that is less well understood by scientists and causes deep distress to some individuals, like hazardous waste sites. 45

Are Risks Comparable?

· Are potential effects equally severe?
· Is harm equally likely to occur?
· Are exposures equally voluntary?
· Are expected benefits similar?
· Are people who benefit similar?
· Are effects similarly distributed in time and space?
· Are exposed populations similar?
· Are estimates of risks equally certain?
· Are risk managers equally trustworthy?
· Are the hazards equally familiar?

Many proponents as well as opponents of risk comparisons agree that if hazards are compared based on risk estimates, distinguishing characteristics of hazards that may affect the acceptability of risks should be highlighted. In addition, some propose that risks to subpopulations should be considered as well as risks to the population as a whole. Recent amendments to the Safe Drinking Water Act (P.L. 104-182) added a requirement for analysis of health risk reduction benefits to sensitive subgroups, as well as the general population.

EPA's SAB in its draft Integrated Environmental Decision-making framework recommends that EPA-

The SAB appears to endorse what NAPA refers to as the broad version of comparative risk analysis that integrates technical information with value judgments. 47 NAPA described the process in its report to Congress.

NAPA recommended increased reliance on such comparative risk projects to help set EPA priorities. In addition, it suggested establishing an efficient, open process at EPA to conduct and report to Congress the results of comparative risk-ranking exercises. Also NAPA suggested that Congress might want to require such reports periodically.49

Proponents of risk analysis, comparative risk analysis, or economic analysis of the potential effects of environmental regulations have various options for promoting the activity. This section examines selected potential impacts of eight general approaches: 1) authorizing or requiring EPA to analyze regulations, 2) authorizing or requiring EPA to consider costs, relative risks, or the relationship between costs and benefits in making regulatory decisions, 3) requiring EPA to report to Congress on the results of regulatory analysis, 4) authorizing additional funding for analysis, 5) mandating research and development of analytic methods, the database, or guidelines for risk assessment, 6) establishing guidelines for risk assessment or the presentation of analytic results, 7) mandating additional oversight of agency analyses, or 8) requiring peer review.

In general, provision of statutory authority to conduct or to consider the results of analyses probably would generate less controversy than a mandate, which the executive branch might oppose. Some argue that constraints on the prerogatives of managers may violate tenets of good management by reducing the flexibility needed to allocate resources efficiently and to adapt quickly to changing circumstances.

The potential effect on EPA of legislation authorizing or requiring economic or risk analysis or consideration of risks, relative risks, costs, and/or benefits in developing regulations would depend largely on which regulations were to be analyzed. Legislation affecting only "major" or "significant" regulations might have relatively less impact, because EPA already is required, to the extent permitted by law, to conduct and consider the results of cost-benefit analysis for all regulatory actions that are "significant." However, statutory requirements would apply even in the absence of an executive order, and would be enforceable through the courts and congressional oversight. A statute may or may not authorize exemptions for particular rules as OMB does now.

Legislation requiring analysis of additional regulations could provide information that now is not readily available. Information about alternative regulatory strategies and their potential consequences (that is, implementation and compliance costs, the risks avoided, and other benefits) could help policymakers and the general public set priorities, allocate resources, and evaluate existing federal laws and programs.

On the other hand, additional requirements for analysis would require additional resources. The Congressional Budget Office has estimated that it would cost $20 million to analyze all "non-routine" EPA regulatory actions (approximately 50% of all regulatory actions.) In the absence of additional resources, the increased number of required analyses might force EPA to reduce the quality of analysis for "significant" regulations. If EPA were to sacrifice analytic quality underpinning its regulations, it might be more vulnerable to legal challenges from regulated entities.

Additional private expenditures also might result from new statutory requirements, because EPA's analyses often use data provided by regulated industries. To supply data for additional analyses, EPA might need to require additional data collection and reporting by such industries.

Additional requirements for analysis might delay EPA implementing provisions of major environmental statutes. Any such delays would likely anger environmental groups, who might seek to judicially compel EPA action. Delays could also affect regulated industries, for example, if the regulations delayed were meant to clarify or reduce existing regulatory requirements.

Such delays or increases in the cost of regulating might be reduced, however, if legislation authorized analyses that varied in detail in proportion to the significance of regulations. CRS workshop panelists believed that federal agencies sometimes analyze more than is necessary to inform risk managers. To the extent that this is true, EPA might be able to reduce the overall cost of promulgating regulations, if Congress gave it the authority to vary the depth of analyses.

A federal mandate to conduct risk analysis to support regulations also might affect data collection, according to CRS workshop panelists. They cautioned that a mandate might discourage industries from doing research and collecting data, because once data are produced, for example, on chemical toxicity, EPA is perceived as being more likely to conduct risk analysis and to regulate.

Requiring analysis or consideration of risks and costs would not necessarily prevent regulation of very small risks. Nor would such a requirement prevent promulgation of regulations that are costly for regulated industries or state or local governments. Since 1981, EPA has almost invariably conducted risk and economic analyses in developing its more costly regulations. Nevertheless, critics have claimed that in some cases the costs of regulation appear high relative to the risks they address. Many of EPA's critics believe the Agency is simply too protective of health and the environment. However, an equally plausible explanation for such regulations may be that authorizing statutes constrain EPA (or are interpreted by EPA to constrain it) from considering costs or the magnitude of risk when setting the standards or safety criteria.

In cases where statutes appear to require regulating arguably insignificant risks regardless of cost, Congress might choose to amend the existing statutory authority. This could be done one statute at a time, as each is considered for amendment or reauthorization. The 104th Congress added requirements for risk analysis and cost-benefit analysis when it enacted extensive amendments to the Federal Insecticide, Fungicide, and Rodenticide Act, the Federal Food, Drug, and Cosmetic Act, and the Safe Drinking Water Act. Alternatively, Congress might enact a single new statutory requirement overiding existing law. However, an overriding statute could have unintended consequences that would be difficult to predict. In addition, significant opposition might be expected to such legislation, if some perceived that it would reduce the overall level of environmental and public health protection. The Commission on Risk Assessment and Risk Management recommended that Congress reinforce implementation of its Risk Management Framework (see Figure 2 on page 14) statute-by-statute.50

Instead of authorizing or requiring EPA analysis or consideration of risks, costs, or relative risks, legislation could require periodic EPA reports on the results of such analyses of environmental regulations; such reports might assist Members with oversight responsibilities or alert Members on authorizing committees to provisions in authorizing statutes in need of reexamination. Such reports arguably would consume relatively less of EPA's resources and might serve additional purposes, for example, to inform the general public about federal programs.

Given the historically high level of EPA involvement in risk and economic analyses and the fact that EPA has conducted analyses of proposed regulations for almost two decades, off en on its own initiative, Congress might conclude that inadequate funds help explain perceived regulatory failures. In this case, Congress might choose to provide additional funding targeted to EPA's analytic activities; more and better analyses and better regulatory decisions might be obtained. A similar argument might be made for building time for risk analysis into statutory deadlines contained in authorizing statutes: by providing additional time for analysis prior to promulgation of regulations, Congress might enable more comprehensive analyses and more rational decision processes.

Because the NAS has concluded that the greatest improvement in risk analysis might be obtained by improving the quality and comprehensiveness of knowledge, Congress might choose to authorize or mandate EPA attention to research and development.51 Analytic methods, data collection, or guidelines might be targeted for development, whichever will provide the greatest value for regulatory decision makers at a reasonable cost.

Those who believe that EPA is dominated by political rather than scientific considerations might prefer to impose scientific guidelines or standards for risk assessment or the presentation of analytic results. Such guidelines or standards could be mandated by Congress, be developed by EPA, another agency, an interagency workgroup, or an outside body with the relevant expertise. It is questionable, however, whether any group could develop detailed guidance that would be applicable to the array of environmental problems and accepted as "scientific" and unbiased. Many groups have tried to accomplish this task and failed over the last 25 years. In addition, detailed guidance may be difficult to update quickly enough to keep up with rapid changes in science.

Concerns about the scientific quality of risk analyses by federal agencies have generated numerous studies, often at the request of Congress. A 1987 Office of Technology Assessment comprehensive study of agency policies for animal carcinogenicity studies and for identifying, assessing, and regulating carcinogens concluded:

Many, including members of the recently concluded Commission on Risk Assessment and Management, argue that detailed interagency guidelines cannot, or should not, be established, because the different missions and objectives of federal agencies require them to adopt different approaches to analyzing and managing risks. Others claim that such guidelines are undesirable because they might freeze development of risk analysis at an immature stage, when its procedures are still rapidly evolving. Still others favor adoption of formal guidance because it would make the decision-making process more transparent to outside observers and, they argue, reduce the influence of politics on scientific judgments made during risk analyses.

Several legislators have suggested mandating additional oversight of agency analyses to ensure objectivity and "good science." In response to executive orders, OMB has overseen agency analyses of costs and benefits for major rules for many years. A legislated mandate might facilitate close congressional oversight of this OMB function. It might be argued, however, that OMB has little expertise in risk analysis and would be ill suited to an oversight role for a scientific activity. Some have suggested that a new agency be established, perhaps within the legislative branch, to oversee agency analyses. It could be argued that this would restore or preserve the balance of power between the legislative and executive branches for making decisions about scientifically complex issues. Legislation proposing to establish a Congressional Office of Regulatory Analysis is being considered by the 105th Congress (H.R. 1704/S. 1675).

Alternatively, Congress could encourage or require development of a system for independent peer review to ensure the scientific quality of risk analyses and economic analyses that underpin proposed regulations. Peer review is a familiar and well-established practice among scientists and it generates little controversy, as long as reviewers have no conflict of interest. Scientists have found no other means to be as effective for enforcing high standards of quality for scientific publications. Only peer review has been found to be flexible enough to respond quickly to changes in scientific knowledge and methods. On the other hand, it relies on voluntary, unpaid service by a few highly qualified scientists who live and work in many different locations across the United States. Extensive requirements for peer review might unacceptably burden the relatively small pool of potential reviewers. In addition, some of the most qualified reviewers are likely to have potential conflicts of interest, either because they conducted some of the research underpinning the regulation, or they have received research funding from the Agency. In the 105th Congress, S. 981, as reported, would require peer review of many risk analyses, including analyses for major rules.

40 Concept of a 'Good' Death May Sharpen Risk-Reduction Priorities," Risk Policy Report, Dec. 19, 1997, p.23.

41 U.S. EPA; Science Advisory Board. Reducing Risk: Setting Priorities and Strategies for Environmental Protection. Washington, U.S. Environmental Protection Agency. (1990) p. 24.

42 1n general, risk may be eliminated, avoided, or reduced by eliminating, controlling, or isolating the hazard. Alternatively, risk may be reduced without affecting the hazard by preventing or reducing exposure of people or other living things to the hazard. A population also might be compensated for any adverse effects experienced in the event of exposure. The risks of specific hazards may or may not be easily controlled in any of these ways.

43 National Research Council. Improving Risk Communication. Washington, D.C., National Academy Press, 1989. p.97.

46 "Science Panel Calls for Shift to Integrated, Goals-Based Approach for EPA Regulation," Daily Environment Report, Apr.16, 1998, p. A-13.

50 Presidential/Congressional Commission on Risk Assessment and Risk Management. Vol.2. ibid. p.35.

51 NAS, National Research Council. Risk Assessment in the Federal Government: Managing the Process. Washington, DC, National Academy Press, 1983. p.5-6

52 U.S. Congress. Office of Technology Assessment. Identifying and Regulating Carcinogens: Background Paper. OTA-BP-H42. Washington, U.S. Govt. Print. Off, Nov 1987. p. 5.

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