Environmental Risk Analysis: A Review of Public Policy Issues VII

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CONTENTS FOR THIS SECTION

Conclusion
Selected References
Appendix

Definitions

Conclusion

Regulated industries and many academics who are critical of federal environmental rules argue that legislation is needed to require analysis of risks to the environment and human health, to ensure that analyses are scientifically sound, and to force agencies to weigh relative costs, risks, and risk-reduction potential of regulatory proposals. Other academics, most environmentalists, and the Clinton Administration oppose such mandates because of the limitations of risk analysis and the importance they attach to the values it tends to overlook. For example, activists for environmental justice (that is, avoidance of disproportionate risks to low-income and minority communities) strongly oppose efforts to increase the influence of quantitative risk estimates because they tend to focus attention on relatively small risks to large populations (for example, the U.S. population as a whole) rather than on large risks to smaller groups, such as workers, the economically disadvantaged, or ethnic minorities.

The key benefit provided by environmental risk analysis is that is can summarize for decision makers available data about hazards and potential effects of exposure. At its best, where data are abundant, scientific understanding is relatively advanced, methods are reliable, and interested stakeholders are involved in the process, risk analysis can facilitate decisions that save money while they protect the environment and public health. 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.

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.

Both the direct and indirect costs of analysis are highly variable, and may or may not be reasonable relative to the potential benefits. The direct costs of conducting environmental risk analysis are the resources expended-time, effort, and money-by agency personnel or contractors to collect data, run models, and wnte reports. Agency resources expended on analysis are not available for enforcement, program evaluation, or research. To supply data for additional analyses, EPA might require additional data collection and reporting by industries. Additional requirements for analysis also might delay EPA implementing provisions of major environmental statutes.

The indirect costs of environmental risk analysis depend on its quality and on the influence it exerts on decision making. Potential indirect costs may be unquantifiable, for example, an overemphasis on quantifiable environmental or health effects or loss of decision-making input by people who lack technical training. A federal mandate to conduct risk analysis to support regulations also might discourage industries from doing research and collecting data that EPA might use to conduct risk analysis and to regulate.

The overall value of environmental risk analysis is difficult to assess, because the nature and quality of analysis depend on the hazard, effect of interest, exposed population or environment, and circumstances surrounding exposure. Risk assessments may be conducted for hazardous waste sites or as a basis for regulations setting maximum residue levels for chemicals in food, for example. In general, the quality of a risk analysis is limited by the quality of available data and methods, which offen are poor and biased.

The 105th Congress is considering various proposals that would mandate risk analysis at EPA The most comprehensive risk legislation, S. 981, has been reported by the Senate Committee on Governmental Affairs and has bi-partisan support. It would require agencies to evaluate and compare costs, benefits, and risks when proposing or promulgating environmental rules expected to cost at least $100 million a year.

Selected References

Davies, J. Clarence. (Ed.) Comparing Environmental Risks. Resources for the Future, 1996. 157 p. Washington, DC,

Finkel, Adam M. and Dominic Golding. (Eds.) Worst Things First? The Debate over Risk-Based National Environmental Priorities Washington, DC, Resources for the Future, 1994. 348 p.

National Academy of Sciences, National Research Council. Understanding Risk: Informing Decisions in a Democratic Society. Washington, DC, National Academy Press, 1996. 248 p.

National Academy of Sciences, National Research Council. Risk Assessment in the Federal Government: Managing the Process Washington, DC, National Academy Press, 1983.191 p.

National Academy of Sciences, National Research Council. Science and Judgement in Risk Assessment, Washington, DC, National Academy Press, 1994.574 p.

Presidential/Congressional Commission on Risk Assessment and Risk Management. Framework for Environmental Health Risk Management. Volume 1. Unpublished final report. Washington, DC, 1997.62 p.

U.S. Congress. Office of Technology Assessment. Identifying and Regulating Carcinogens, OTA-BP-H-42. Washington, DC, U.S. Govt. Print. Off, Nov. 1987. 249p.

U.S. Congress. Office of Technology Assessment. Researching Health Risks, OTA-BBS-570. Washington, DC, U.S. Govt. Print. Off, Nov.1993. 228 p.

U.S. EPA, Office of Policy Analysis. Unfinished Business: A Comparative Assessment of Environmental Problems. Vol. 1. Washington, U.S. EPA, February 1987.100 p.

U.S. EPA, Science Advisory Board. Reducing Risk: Setting Priorities and Strategies for Environmental Protection. Washington, U.S. EPA, September 1990.8 p.

Appendix
Definitions

Experts in risk analysis disagree about how "risk" and related terms should be defined. For the purpose of this discussion, however, the following definitions have been adopted. "Environmental risk" is defined as the probability of occurrence of a particular adverse effect on human health or the environment as a result of exposure to an environmental hazard; an "environmental hazard" may be a hazardous chemical in the environment, a natural hazard, or a hazardous technology (for example, a dam)

"Environmental risk assessment" refers to any formal or informal scientific procedure used to produce a quantitative estimate of environmental risk. For example, risk assessment is ofien used to estimate the expected rate of illness or death in a human population exposed to a hazardous chemical based on the number of experimental animals affected by various doses of the chemical as measured in laboratory experiments.71 "Environmental risk analysis" is defined more broadly to include any quantitative or qualitative scientific description of an environmental hazard, the potential adverse effects of exposure, the risks of these effects, events and conditions that may lead to or modify adverse effects: populations or environments that influence

or experience adverse effects, and uncertainties with regard to any of these factors.72 Generally, risk analyses are based on scientists' evaluations of results of scientific research, extrapolations of these results to predict the type and to estimate the extent of effects in exposed populations, and judaments about the number and characteristics of persons exposed to hazards at various levels. The final step in risk analysis is "risk characterization," which summarizes scientific judgments about the existence and overall magnitude (that is, the incidence) of adverse effects given specified levels of exposure to a hazard.

"Risk management" is the process of deciding what should be done about a hazard, the population exposed, or adverse effects, implementing the decision, and evaluating the results. Decision makers may consider social, political, economic, legal, ethical, and engineering information as well as scientific risk estimates in choosing among available risk management options. Comparative risk analysis and economic analyses use the results of environmental risk assessments but are risk management activities, conducted to inform decisions about management options. Risk management decisions often require value judgments on such questions as "What level of risk is acceptable?" and "What level of expenditure is reasonable?" Another aspect of risk management is "risk communication" which includes any information exchange about a hazard or risk.

A "comparative risk analysis" evaluates a number of environmental hazards relative to one another and assigns to each a priority, based on one or more characteristics of the individual hazards. Often ranks are based on the relative magnitude of risk, which presupposes that a quantitative environmental risk assessment has been conducted for each hazard. A comparative risk analysis may group hazards, for example, as "high," "medium," or "low" risks, or arrange them in rank order. Alternatively, hazards may be evaluated based on the amount of risk that may be avoided using available technologies and resources. This is often referred to as ranking according to "risk reduction opportunities."

"Economic analysis" refers to any systematic procedure to evaluate real or anticipated resource expenditures and losses (costs) relative to real or anticipated gains (benefits). "Cost-benefit assessment" is the quantification and monetary valuation of the expenditures, gains, and losses, and the calculation of net benefits to society associated with the adoption of a particular regulation (or alternative management strategy) to address an environmental hazard. Quantitative environmental risk analysis (that is, risk assessment) is a necessary prerequisite to the conduct of cost-benefit assessment of environmental regulations, because the "benefits" are the risks avoided (that is, the adverse effects on human health or the environment, or risks of such effects, that the regulation is meant to address), and the "costs" include additional or heightened risks produced as a result of regulatory action. Risk assessment may be used to estimate the number of people or animals likely to be harmed by exposure to the hazard under each regulatory strategy, including a "do-nothing-different" strategy that reflects the current policy, or regulation, or laissez faire. Benefits may be expressed in such terms as numbers of lives saved or illnesses or species extinctions avoided. Risk that is expected to remain after a new regulation is implemented may be subtracted from the risk under current conditions to estimate risk reduction opportunities that is, the "expected benefit" of each regulatory alternative. If benefits are translated into monetary terms to allow cost-benefit assessment, various techniques may be used to calculate the dollar values of health effects; these values may be derived from studies of how much people are willing to pay to avoid exposure to a hazard or particular adverse effect, or based on savings of direct costs, such as health care expenditures, salary loss for the duration of an illness, or the years of work lost to premature death. The intent is to estimate the gross monetary value of benefits to society, rather than to individuals. "Net benefit" is the expected monetary benefit less the cost of implementing the regulation.

ENDNOTES

71 Laboratory studies Epidemiologists, who populations who have of toxicity are supervised and interpreted by toxicologists. also contribute data for risk assessment, study the health of human been exposed, usually accidentally or occupationally, to a hazard.

72 Others might use these terms differently. The important point is that it is necessary to distinguish between an analvsis that focuses exclusively on the numbers associated with a hazard and a broader analysis that also considers such qualitative features as the dread a hazard inspires or the irreversibility of harm. A sinular distinction is drawn between "economic analysis" and "cost-benefit assessment" below.