United States       Science Advisory      EPA-SAB-COUNCIL-ADV-99-005
    Environmental      Board         February 1999
    Protection Agency     Washington, DC       ivww.epa.gov/sab

SEPA AN SAB ADVISORY: THE
      CLEAN AIR ACT SECTION
      812 PROSPECTIVE STUDY
      HEALTH AND
      ECOLOGICAL INITIAL
      STUDIES
       PREPARED BY THE HEALTH AND
       ECOLOGICAL EFFECTS
       SUBCOMMITTEE (HEES) OF THE
       ADVISORY COUNCIL ON CLEAN
       AIR COMPLIANCE ANALYSIS

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                                    February 10, 1999
EPA-SAB-COUNCIL-ADV-99-005

Honorable Carol M. Browner
Administrator
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460

Dear Ms. Browner:

       Subject:      An SAB Advisory on the Health and Ecological Effects Initial Studies of
                    the Section 812 Prospective Study: Report to Congress

       The Health and Ecological Effects Subcommittee (HEES) of the Science Advisory
Board's (SAB) Advisory Council on Clean Air Compliance Analysis ( "the Council") met on
January 29-30, 1998 in Washington DC.  The Subcommittee reviewed draft materials and
received briefings from EPA staff and consultants concerning the development of the first Section
812 Prospective Study.  This study,  and the  SAB review were mandated by the Clean Air Act
Amendments of 1990 (CAAA-90).  Initial planning for the meeting centered on a three-element
charge (see report Section 2.2). The Subcommittee and EPA addressed a series of issues raised
during the public meeting.  These issues, in brief, were: a) developing a scientifically sound
framework for ecological effects valuation; b) economic disaggregation issues; c) air toxics
design; d) benefit issues in health valuations; e) economic valuation; f) treatment of uncertainties;
g) transboundary effects; and h) other criteria pollutant issues and global issues.

       The enclosed advisory is the product of that meeting, and summarizes the HEES' advice to
EPA regarding the prospective study design, implementation and future planning. Our detailed
comments are included in the report and focus on major recommendations that will assist in
achieving appropriate linkages to the economic valuation of the benefits and costs.

       Overall, the HEES  concludes that the prospective study team had not yet developed a
framework for scientifically sound ecological evaluations, nor have they adequately considered the
lessons learned from prior EPA studies, such as SAB's 1990 study, Reducing Risks. The Agency
needs to develop a specific, comprehensive methodology for valuing natural resources and
ecological services that incorporates contemporary ecological thinking and findings.  It is
important that this framework be made explicit and clear to the user in the very near future to
support not only the correct tasks, but also decisions for future prospective studies, particularly

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with respect to level of detailed service flows, boundary conditions between different ecosystems,
and valuation approaches. These approaches also should be coordinated with other Agency
efforts, to ensure Agency-wide consistency in assessments. Further, the HEES encourages the
Agency to explore valuations at the watershed scale or larger. This approach will assist in
avoiding double-counting of pollutant effects and interactions among pollutants, and it will help
capture the spirit of viewing  ecosystems as functioning "within a framework," rather than "just a
sum of the parts." The Subcommittee provided guidelines and proposed a framework for
evaluating ecological effects, and provided advice on a number of specific technical issues, such
as: a) fish catch relative to population size; b) the interaction between air toxics and acidification;
c) lag times in terrestrial and aquatic ecosystems; d) nitrogen saturation in terrestrial ecosystems;
e) ozone effects on timber; f) evaluation of simpler estuary models; and g) justification for the
target-estuaries approach.

       The issue of disaggregation of costs and benefits by pollutant or source  categories was
discussed in development of the Retrospective Study: Report to Congress (SAB, 1996), and is
again highlighted here as a major deficiency as the Agency moves toward development of the
Prospective Study: Report to Congress.  The proposed effort, as presented to the HEES, needs
further development for the selection of scenarios which should reflect realistic  conditions for
emission reductions.  The HEES believes that it would be far more constructive to disaggregate
the costs and benefits of existing titles and regulations imposed by the CAAA-90 and that every
effort should be made to move toward disaggregation in the prospective studies. This was
anticipated by the original intent of evaluating the costs and benefits for industrial sectors by title.
We recognize disaggregation by CAAA-90 title is a complex process, but it is important to start
developing strategies to address this issue.

       With regard to air toxics, the HEES recognizes that the Agency staff cannot realistically
evaluate any large fraction of the 189 Hazardous Air Pollutants (HAPS), and that there is no
established framework for selecting a relatively small subset of these that are most likely to have
the greatest impact.  The HEES recommends that the Agency staff focus on selecting the handful
of toxic chemicals that may pose the highest risk, and offers a procedure for screening
carcinogens among the list of 189 HAPS in order to identify candidate pollutants warranting more
in-depth analysis.

       Regarding Particulate Matter (PM) mortality response functions, the HEES recommends
against using short-term daily mortality studies as an alternative to the cohort studies to derive
concentration-response (C-R) functions. Further, the HEES recommends that other cross-
sectional epidemiological studies be considered in deriving C-R mortality estimates to be
consistent with the retrospective study.  The HEES recommends that there should be a more
detailed explanation of the approach taken, an explicit acknowledgment of the caveats about
PM/mortality causality relationship, and an examination of the sensitivity of the  benefits analysis
to the C-R uncertainty. In the materials presented to the HEES in the public meetings, the
Agency paid only limited attention to uncertainties.  However, it is not sufficient to just list

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uncertainties. They must be justified by the Agency; furthermore, this issue of the uncertainty of
the estimates should be considered for all sections of the Prospective Study.

       Our current level of understanding of the relationship between PM and infant mortality
does not warrant inclusion of these effects in the Prospective Study. If additional peer-reviewed
published reports on PM-related infant mortality are available when the Prospective Study: Report
to Congress is being prepared, the HEES  recommends that they be evaluated prior to inclusion of
PM-related infant mortality in the analysis.  With regard to mortality time lags, the HEES agrees
with the Agency that current studies  on animal mortality do not have an implied time lag, and the
inclusion of pollutant-related time lags in mortality at this time is premature.

       We appreciate the diligence of the prospective study team on this difficult and timely
assessment.  We look forward to your response, particularly to the main points outlined in this
advisory, and to continued interaction with your professional staff.

                                   Sincerely,
                                   Dr. Maureen L. Cropper, Chair
                                   Advisory Council on Clean Air Compliance Analysis
                                   Dr. Paul Lioy, Chair
                                   Health and Ecological Effects Subcommittee
                                   Advisory Council on Clean Air Compliance Analysis

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                                       NOTICE
       This advisory has been written as a part of the activities of the Science Advisory Board, a
public advisory group providing extramural scientific information and advice to the Administrator
and other officials of the Environmental Protection Agency.  The Board is structured to provide a
balanced, expert assessment of scientific matters related to problems facing the Agency. This
advisory has not been reviewed for approval by the Agency; hence, the comments of this advisory
do not necessarily represent the views and policies of the Environmental Protection Agency or of
other Federal agencies.  Any mention of trade names or commercial products does not constitute
endorsement or recommendation for use.

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                                     ABSTRACT
       The Health and Ecological Effects Subcommittee (HEES) of the Advisory Council on
Clean Air Compliance Analysis (Council), of the Science Advisory Board, has reviewed
precursors to the first Prospective Study: Report to Congress. The HEES concludes that the
approach to the health/ecological effects assessment lacks a framework for ecological evaluations.
The Agency should develop a comprehensive methodology for valuing natural resources and
ecological services, incorporating contemporary ecological thinking and findings. This framework
must be made explicit and clear to the user.  The HEES encourages the Agency to explore
valuations at the watershed level or larger (or other scales of concern) to avoid double-counting
of pollutant effects and interactions  among pollutants.

       The absence of disaggregation of costs and benefits by pollutant or source category was
highlighted as a deficiency.  The Agency should progress toward disaggregation in the
Prospective Studies, in order to evaluate the various parts of the 1990 Clean Air Act Amendments
(CAAA-90) (e.g.industrial sectors by title).

       The HEES has provided guidelines and a proposed framework for evaluating ecological
effects, provided advice on air toxics, and recommended a procedure for selecting toxic chemicals
that might yield quantifiable risks, as well as a procedure for screening the list of 189 hazardous
air pollutants (HAPS) for identifying candidate pollutants warranting more in-depth analysis. The
HEES has also provided advice on a number of specific technical issues, including particulate
matter (PM) mortality response functions and has recommended that PM-related infant mortality
data not be included in the current analyses, and that the use of time lags to adjust for downward
trends is premature.

Key Words: Clean Air Act, Air Quality Models, Emissions Estimates, Prospective Study

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                  U.S. ENVIRONMENTAL PROTECTION AGENCY
                           SCIENCE ADVISORY BOARD
         ADVISORY COUNCIL ON CLEAN AIR COMPLIANCE ANALYSIS
         HEALTH AND ECOLOGICAL EFFECTS SUBCOMMITTEE (HEES)

CHAIR
Dr. Paul Lioy, Deputy Director-Environmental & Occupational Health Sciences Institute
       (EOHSI) & Director, Exposure Measurement & Assessment Division, EOHSI, Robert
       Wood Johnson Medical School, Piscataway, NJ

VICE-CHAIR
Dr. A. Myrick Freeman, Professor of Economics, Department of Economics, Bowdoin College,
       Brunswick, ME

MEMBERS AND CONSULTANTS
Dr. Jane V. Hall, Professor of Economics, Department of Economics and Institute for Economic
       and Environmental Studies, California State University, Fullerton, CA

Dr. Michael T. Kleinman,Professor, Air Pollution Health Effects Laboratory, University of
       California, College of Medicine, Irvine, CA

Dr. Timothy V. Larson,Professor, Environmental Science and Engineering Program,
       Department of Civil Engineering, University of Washington, Seattle, WA

Dr. Lester B. Lave, Professor, Graduate School of Industrial Administration, Carnegie-Mellon
       University, Pittsburgh,  PA

Dr. Morton Lippmann, Professor, Nelson Institute of Environmental Medicine, Lanza
       Laboratory, New York University Medical Center, Tuxedo, NY

Dr. Joseph S. Meyer, Assistant Professor, Dept. of Zoology and Physiology, University of
       Wyoming, Laramie, WY

Dr. Robert D. Rowe,Director, Hagler Bailly, Consulting, Inc., Boulder, CO

Dr. Carl Shy, Professor, Dept. of Epidemiology, University of North Carolina at Chapel Hill,
       Chapel Hill, NC

Dr. George E. Taylor, Jr., Chair, Biology Department, George Mason University, Fairfax, VA

Dr. George T. Wolff, Principal Scientist, Public Policy Center, General Motors Corporation,
       Detroit, MI
                                          in

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SCIENCE ADVISORY BOARD STAFF
Dr. K. Jack Kooyoomjian,Designated Federal Officer, Science Advisory Board (1400), U.S.
       Environmental Protection Agency, Washington, DC 20460

Mr. Samuel Rondberg,Designated Federal Officer, Science Advisory Board (1400), U.S.
       Environmental Protection Agency, Washington, DC 204601

Mrs. Diana L. Pozun,Management Assistant, Science Advisory Board (1400), U.S.
       Environmental Protection Agency, Washington, DC 20460
        Provided editorial support in the preparation of this report, but did not participate in the review.
                                           IV

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                   U. S. ENVIRONMENTAL PROTECTION AGENCY
                          SCIENCE ADVISORY BOARD (SAB)
          ADVISORY COUNCIL ON CLEAN AIR COMPLIANCE ANALYSIS
                                     (THE COUNCIL)
CHAIR
Dr. Maureen L. Cropper, Principal Economist, The World Bank, Washington, DC

MEMBERS
Dr. Ronald G. Cummings, Professor of Economics and Noah Langdale, Jr. Professor of Environmental
       Policy, Policy Research Center, Georgia State University, Atlanta, GA

Dr. A. Myrick Freeman, Professor, Department of Economics, Bowdoin College, Brunswick, ME (Also
       Vice-Chair of the Health and Ecological Effects Subcommittee, HEES of the Council)

Dr. Lawrence H. Goulder, Associate Professor, Department of Economics & Institute for International
       Studies, Stanford University, Stanford, CA

Dr. Jane V. Hall, Professor of Economics, Department of Economics and Institute for Economic and
       Environmental Studies, California State University, Fullerton, CA

Dr. Paul Lioy, Deputy Director-EOSFfl & Director Exposure Measurement & Assessment Division,
       Environmental & Occupational Health Sciences Institute, Robert Wood Johnson School of
       Medicine, Piscataway, NJ (Also Chair of the Health and Ecological Effects Subcommittee, HEES
       of the Council)

Dr. Paulette Middleton, Deputy Director, RAND Center for Environmental Sciences & Policy, Boulder,
       CO (Also Chair of the Air Quality Models Subcommittee, AQMS of the Council)

Dr. Richard Schmalensee, Deputy Dean, Sloan School of Management, Massachusetts Institute of
       Technology, Cambridge, MA

Dr. Thomas H. Tietenberg, Professor, Dept. of Economics, Colby College, Waterville, ME

CONSULTANT
Dr. Alan J. Krupnick, Senior Fellow, Resources for the Future, Washington, DC

SAB COMMITTEE LIAISON
Dr. William H. Smith, Professor of Forest Biology, School of Forestry & Environmental Studies, Yale
       University, New  Haven, CT (Liaison from the Environmental Processes and Effects Committee)

SCIENCE ADVISORY BOARD STAFF
Dr. K. Jack Kooyoomjian, Designated Federal Officer, Science Advisory Board (1400), U.S.
       Environmental Protection Agency, Washington, DC 20460

Mrs. Diana L. Pozun, Management Assistant, Science Advisory Board (1400), U.S. Environmental
       Protection Agency, Washington, DC 20460

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                             TABLE OF CONTENTS
1.  EXECUTIVE SUMMARY  	1

2.  INTRODUCTION AND CHARGE	3
       2.1 Background  	3
       2.2 Charge 	3

3.  SPECIFIC FINDINGS	4
       3.1 Ecological Effects Valuation	4
       3.2 Benefits Issues  	8
       3.3 Disaggregation  	8
       3.4 Toxic Air Pollutants in the Section 812 Prospective Analyses  	9
             3.4.1 Air Toxics  	11
       3.5 Recommendations for Specific Health Valuations Issues	11
             3.5.1 Choice of PM Mortality Response Functions 	11
             3.5.2 PM Neonatal Mortality	12
             3.5.3 Ozone-Related Premature Mortality 	12
             3.5.4 Modeling Time Lags for Cumulative Effects of Long-Term Exposure ...  12
             3.5.5 Valuation of Premature Mortality	12
             3.5.6 Inclusion of Ozone-Related Emergency Room Visits for Asthma  	13
             3.5.7 Characterizing the Uncertainty inPM C-R Functions  	13
             3.5.8 Pollution Level Thresholds for Health Effects	13
             3.5.9 Estimating Chronic Bronchitis Incidence	14
       3.6 Uncertainties	14
       3.7 Other Issues  	15
             3.7.1 Transboundary Effects  	15
             3.7.2 Other Criteria Pollutants	15

LIST OF ACRONYMS	A-l

REFERENCES CITED	R-l

FIGURE 1	5
                                          VI

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                            1. EXECUTIVE SUMMARY
       Of the issues that the HEES considered necessary for incorporation into the first
Prospective Study: Report to Congress and those topics on which we were asked to provide
comments by EPA staff, the following were considered to be of the highest priority for resolution:

       a)     A framework for ecological analyses has not yet been developed for the
              prospective study.  It is not apparent that EPA staff have adequately considered
              the lessons learned from prior EPA studies, such as Reducing Risks (SAB 1990),
              wherein ecological issues gained prominence.  The Agency needs to develop a
              position statement on 1) a general framework for ecological valuation and 2) a  set
              of detailed service flows that can be prioritized to commercial/human or general
              ecological endpoints. Clearly at this point in time the Agency has not achieved  the
              specific charges identified by the HEES.

              Before completing their analyses, however, EPA staff must begin documenting  the
              overall outline for the study, including a decision that justifies selections of
              ecological endpoints. It is important that this framework be made explicit and
              clear to the user in the very near future  to support not only the current tasks, but
              also decisions for future prospective studies. It will be necessary to establish the
              start points  and end points for the analyses, the valuation approaches used in the
              current prospective study, and the degree of significance of each valuation within
              the constellation of all feasible endpoints, ecological and health, that can be used in
              the benefit and cost analysis.

       b)     The issue of disaggregation of costs and benefits was highlighted as a major
              deficiency in the Retrospective Study: Report to Congress and was not adequately
              addressed during the review.  The proposed effort for development of the first
              Prospective Study: Report to Congress needs major revisions and further
              development to select realistic scenarios. In contrast to the hypothetical cases
              presented, however, they must reflect realistic conditions that establish estimates of
              potential benefits gained through specific regulations or titles in the CAAA-90.

       c)     The Air Toxics databases and variables  available to complete a benefit and cost
              analyses are inadequate for the task of evaluating all 189 air toxics. A set of
              criteria must be utilized that can reduce  the number of air toxics considered for  a
              national analysis.  This approach should focus on selecting those toxic chemicals
              that might yield a quantifiable risk.

       Other issues discussed in the first Prospective Study: Report to Congress should be
addressed by EPA staff, including HEES' responses to  specific questions or problems raised by
the Agency for clarification, or HEES' recommendation of alternative approaches for valuation of

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health or ecological endpoints.  These will be necessary to achieve a series of defensible variables
for linkage to the economic valuation of the benefits and costs. For instance, the HEES
recommends that particulate matter (PM)-related infant mortality data not be included in the
current analyses, and that the use of time lags to adjust for downward trends is premature.

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                       2.  INTRODUCTION AND CHARGE
2.1 Background

       At the January 29 and 30, 1998 public meeting, staff of the U.S. Environmental Protection
Agency's (EPA's) Office of Air and Radiation (OAR), Office of Policy Analysis and Review
(OPAR), and Office of Planning and Evaluation (OPE), the Office of Economy and Environment
(OEE) staff provided the HEES Members and Consultants (M/C) with a detailed briefing on the
approaches used and/or being considered to complete the first Prospective Study: Report to
Congress of the benefits and costs of the 1990 Clean Air Act Amendments (CAAA-90). OAR
and OPE staff presented a series of briefings providing an outline and examples of potential
analyses for health and ecological valuations.  This public meeting was one of three held to
comprehensively review the initial studies leading to development of the Agency's first draft
Prospective Study: Report to Congress, which will follow this effort. The Air Quality Models
Subcommittee (AQMS) had met on January 22 and 23, 1998, and the Council met on February 5
and 6,  1998.

2.2 Charge

       Initial planning for the meeting centered on a three-element charge:

       a)      Are the input data and variables used for each component of the analysis
              sufficiently valid and reliable for the intended analytical purpose?

       b)      Are the models, and the methodologies they employ,  used for each component of
              the analysis sufficiently valid and reliable for the intended analytical purpose?

       c)      If the answers to either of the two questions above is  negative, what specific
              alternative assumptions, data or methodologies  does the Council recommend the
              Aeencv consider usine for the first Prosnective Analvsis?
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Agency consider using for the first Prospective Analysis?
       The Subcommittee addressed a series of issues during the public meeting.  These issues, in
brief, were: a) Developing a framework for ecological effects valuation; b) Economic
disaggregation Issues; c) Air Toxics design; d) Benefit Issues in health valuations; e) Economic
Valuation - linkage to: 1) Human health, and 2) Ecology; f) Treatment of uncertainties;
g)Transboundary Effects; and h) Other Criteria Pollutant Issues & Global Issues.

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                               3. SPECIFIC FINDINGS
3.1 Ecological Effects Valuation

       As a discipline, ecology provides an understanding of the structure and function of
terrestrial and aquatic systems, with an emphasis on the linkages between the abiotic components
(e.g., atmosphere, soil, surface waters) and the assemblages of living organisms, including
humans. The appropriate context for this understanding is a  systems approach rather than one
that disaggregates the whole into a few select and isolated processes. Any framework intended to
value the economic implications of changes in these linkages must not only recognize, but
embrace, this holistic and scientifically defensible systems approach (see Figure 1 for an example
addressing forest systems) in order for the analysis  to capture the true costs and benefits of (in this
application) reducing air pollution.

       As presented to the HEES, the current EPA approach is, unfortunately, dated by at least a
decade, and is very limited in scope, to the point that it can be considered to be reductionist.
Applying this reductionist approach, the investigators have chosen (as the basis for quantifying
ecological effects) several important monetizable, human-oriented (anthropocentric) benefits from
controlling air pollution and have incorporated them into the  analysis - specifically, forest growth
and commercial and recreational fishing.  We encourage the Agency to explore valuations at the
watershed and landscape scale or larger and to examine a wider range of ecosystem services (see
text below, as well as Daily  (1997); Daily et al. (1997); and Costanza et al2 (1996 and  1997).
Although appropriate analytical methods may not be yet available, this type of approach will help
avoid double-counting of pollutant effects and interactions among pollutants; and it will help
capture the spirit of viewing ecosystems as functioning "within a framework " rather than just "a
sum of the parts."

       Several issues are critical in this recasting of the ecological framework. First and
foremost, EPA needs to develop a specific, comprehensive methodology for valuing natural
resources and ecological services that incorporates contemporary ecological thinking  and findings.
Relevant references include Daily (1997), Freeman (1997), and Goulder and Kennedy (1997).
The framework needs to provide a basis for examining the complexity and interactions among
biotic and abiotic components, the dynamics of testing cause-and-effect relationships, and an
appreciation of the concept of sustainability, which  links the well-being of ecosystems to the well-
being of humankind. The framework must also recognize the intrinsic value of ecosystems.
              It should be noted that the Costanza et al. studies did not include any new analyses at the watershed or
              landscape level. Rather, they relied on existing studies at these scales, used a variety of assumptions to
              extrapolate them to a global level, and summed the extrapolated values.  Some economists have expressed
              important questions about their interpretation and use of some of the data they draw on, the methods for
              extrapolation, and the usefulness of the summing exercise. Also, they do not avoid double-counting in their
              calculations. Despite the concerns, Costanza et al. demonstrated an important approach to treating such
              services flows as ecosystem processes. (Figure after Freeman, 1998)

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                                    Forest Ecosystem Health
                                      Management Goals
                      sustainable flow
Product(s)
Service(s)

1
sustainable state

Homeostatic





                                                     System Structural
                                                        Indicators
                                                         System Functional
                                                            Indicators
                                                               Disturbance
                                                                 Regime
                                                                 Minimal Disease
                                                                    Maximum System
                                                                        Integrity
Figure 1:     Two world views of forest system health. The "sustainable flow" view has an
              anthropocentric focus and measures "health" as the ability of forest systems to provide a
              sustained flow of forest products and/or forest services to human societies. The
              "sustainable state" view has a biocentric focus and measures "health" as the ability of
              forest systems to sustain a certain state as defined by one or more of the following
              metrics: homeostasis; system structural indicators (food web, successional pattern);
              system functional pattern (nutrient cycling, energy storage); natural disturbance pattern
              (fire, wind); minimal disease (minimal abnormal physiology as revealed in signs
              (symptoms));  maximum system integrity (maximum similarity to minimally human
              disturbed reference system) (W. Smith, personal communication, 1998).

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       The Subcommittee proposes the following guidelines for developing a framework for
evaluating ecological effects:

       a)     For each major type of ecosystem, identify the major stressors originating from air
              emissions  subject to control under the CAAA-90. Major types of ecosystems
              considered might include forests subject to commercial harvest; other forest
              ecosystems; grasslands; managed agriculture; freshwater aquatic systems; marine
              systems; and wetlands.

       b)     For each ecosystem type and stressor, identify the possible impacts on such things
              as community  structure, species richness, net primary productivity, other major
              ecosystem functions, and the flows of ecosystem services to people. This could
              provide a basis for identifying those impacts for which quantification might be
              possible.

       c)     Note that not all ecosystem changes are necessarily adverse. Consider criteria for
              identifying adverse changes. The criterion that emerges from economics focuses on
              changes that result in reductions in service flows to people. Which of the stressors
              and changes identified above are likely to lead to the largest reductions in valued
              service flows?  The answers to this question can be used to: 1) select service flows
              for valuation; and 2) identify research priorities.

       The recasting of the framework for ecology warrants a high priority.  Thus, we
recommend a) that the description of possible ecological effects should not be limited to those
effects for which estimates of monetary value are already available in the literature; and b) an
ecologist be more prominently incorporated into the ecological valuation analytical team.

       The Agency should also expand its literature review of ecological  effects to include the
recent flurry of activity related to wetlands.  For example, there were no references to the journal
Wetlands in the EPA's documentation. Furthermore, there  were no references to the annual
review issue of the journal Environmental Toxicology and Chemistry, devoted to wetland
ecotoxicology and chemistry.  The Agency is directed particularly to the articles related to
mercury (Zillioux et al, 1993),on contaminant modeling (Dixon and Florian, 1993), and
addressing risk assessment (Pascoe, 1993).  Other articles provide good overviews of wetland
processes (Rybczyk et a/., 1996).  The journal WetlandBiogeochemistry might also be of interest,
especially a review article on wetland mercury research (Rood, 1996).

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Finally, we have serious concerns about the following specific technical issues:

a)     The EPA staff should recognize that errors in one of the underlying assumptions
       for the logistic function relating relative catch to relative fish population size in
       Kahn and Kemp (1985) may vitiate the resultant estimate.3

b)     The analysis does not incorporate the interaction between air toxics and
       acidification, which is especially important for bioavailability of metals in aquatic
       systems.

c)     The EPA staff should qualitatively discuss lag times in terrestrial and aquatic
       systems. For example,  even the CO2 temporarily sequestered in deep ocean waters
       eventually will reach the ocean  surface and either diffuse back into the atmosphere
       or decrease the amount of CO2 that can be sequestered for decades or even for
       centuries.

d)     Nitrogen saturation is discussed in terms of aquatic systems  (largely in terms of
       eutrophication).  Although the last ten years have seen the development of
       significant knowledge about nitrogen and  nitrogen saturation in terrestrial
       ecosystems (e.g., Vitousek et a/.,  1997), the report does not mention terrestrial
       nitrogen input. In addition, the draft report ignores the measurable and
       quantifiable effects occurring  when nitrogen is well below the  saturation level.  The
       FLEES recommends that the Agency recognize that nitrogen saturation is at the far
       end of a continuum of ecological responses, and that the entire continuum needs to
       be investigated and documented.

e)     The deSteiguer study (1990) provides the  basis for estimating the service flow
       from native or human-dominated ecosystems for ozone effects on timber.  This
       study, however, is grounded on "expert opinion." The Subcommittee finds this
       approach, in lieu of the multi-investigator  based data sets incorporating
       experimentally-derived exposure/response functions recently published, not
       acceptable. We recommend that the Agency drop its reliance  on the deSteiguer
       study, replacing it with a peer-reviewed data base that can be scaled from seedlings
       to mature trees.

f)     Given the complexity of anthropogenic nitrogen inputs to the Chesapeake Bay, we
       question why this approach was used as the basis for determining the effects of
       nitrogen deposition on an estuary.  We recommend that the Agency staff evaluate
       simpler estuary models. Also, the target-estuaries approach ought to be justified in
       The Committee believes that most population biologists would disagree with Equation 2 (and the paragraph preceding it) in
       Kahn and Kemp (1985). We recommend that the Project Team not adopt Equation 2 in Kahn and Kemp (1985) and, instead,
       they retain the more traditional form of the density-dependent response shown in Figure 1 of the same paper. The parabola in
       Figure 1 (not a truncated parabola as in Fig. 5) already accounts for compensatory mortality — otherwise, the C vs. F plot
       would be a positively-sloped straight line through the origin.


                                       7

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              the prospective study, because any attempt to extrapolate benefits or costs from
              those non-randomly selected estuaries to all of the estuaries in the U.S. will be
              suspect.

3.2 Benefits Issues

       Specific findings on the relevant issues follow below:

       a)     Choice of Agricultural Model for Commodity Crops: If resources are available, we
              recommend that a simple comparative analysis of the two proposed models should
              be considered: the Agricultural Simulation (AGSEVI) model and the Regional
              Model Farm (RMF) model4.  Based on that comparison, the Agency could select
              the model that is most robust in its treatment of agricultural commodities and
              ozone.

       b)     Non-commodity Crops: We endorse inclusion of non-commodity crops in
              California and an expansion to the national scale.

       c)     Choice of Ozone Averaging  Time for Agriculture: We endorse the selection of the
              SUM06 (the sum of the 6-peak daylight hour concentrations over the growing
              season) statistic as described by Lefohn et al. (1988; 1992).

       d)     Method of Calculating Ozone Exposure Levels for Agricultural Analysis: We
              endorse the grid-pattern interpolation method as proposed for assessing the effects
              of ozone on human health.

       e)     Ecological Effects of NOX Deposition: The Agency proposes  to assess the effects
              of reducing NOX deposition on aquatic ecosystems, fish stocks, and commercial
              fisheries harvests. There is evidence to  suggest that the benefits of improved
              recreational fishing for some of these species will be at least as large as, and
              perhaps substantially larger than, those for commercial harvests of these same
              species. We recommend that the Agency attempt to estimate the effect of
              increases in fish stocks on recreational angling success and on the economic value
              of recreational angling.

3.3 Disaggregation

       A major shortcoming of the Retrospective Study: Report to Congress was the inability to
disaggregate the costs and benefits by the Clean Air Act (CAA) title or by industry sector.  Such a
              The AGSIM model is an econometric, rather than a mathematical programming model. As a result, it has the potential for
              better representation of the impacts of small changes in ozone.

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disaggregated analysis would provide valuable information on the cost-effectiveness of various
parts of the CAA and or controls that target specific industry sectors.

        In the present prospective study effort, the Agency acknowledges that such disaggregation
will not be perfect because of non-linearities and uncertainties in linking emissions and
concentrations. Nevertheless, it is necessary to begin this type of analysis in the present
prospective analyses, at least at the industry sector-level. Future prospective studies can be used
to refine these estimates.

        The Agency identified a key decision, which needs to made now - whether they should
attempt a crude allocation/attribution to derive disaggregated results, or to focus on identifying
marginal benefits and costs of discrete increments of additional controls using a limited number of
supplemental scenario runs (e.g., analyze the effects of having an additional (speculated) 50%
reduction in utility SO2 emissions). Although the examination of such hypothetical future
scenarios is an interesting exercise, the HEES believes that it would be far more constructive to
disaggregate the costs and benefits on the basis of the existing titles and regulations imposed by
the CAAA of 1990. Further, knowing that benefits exceed costs is only one condition for
optimality.  The Agency should also estimate the marginal benefits and costs to examine whether
the mandated levels of control are approximately correct.5

3.4  Toxic Air Pollutants in the Section 812 Prospective Analyses

        A major challenge to EPA staff in dealing with the characterization of benefits of emission
controls on hazardous air pollutants (HAPS) arises from two major factors:

        a)      The available modeling approaches and data resources used in the retrospective
               phase of the CAAA Section 812 led to grossly unrealistic over-estimates of risk for
               vinyl chloride and asbestos, as well as negligible risks for the other pollutants
               addressed by the National Emission Standards for Hazardous Air Pollutants
               (NESHAPS).

        b)     The prospective analyses must deal with  189 HAPS.  The HEES believes that the
               Agency staff cannot realistically evaluate any large fraction of these, and there is
               no established approach for selecting a relatively small subset of toxic air
               pollutants that are likely to have the greatest impact.6
               Note, however, the Council believed that, although disaggrregation of results by Title would be useful, an alternative approach
               would be to examine the incremental costs and benefits of extending provisions of the 1990 CAAA.

               It has been suggested that the calculations used to regulate HAPS need to be adequate for sensible regulation and to provide
               information on the benefits of abatement. There are three categories of HAPS: a) short-lived which cause a risk only while
               airborne, b) sufficiently long-lived to enter surface water or become re-intrained (e.g., lead), and c) sufficiently long-lived to
               become bio-concentrated (e.g., mercury). These three categories need to be modeled very differently. The first category is
               relatively easy to model and probably the most important group. A simple box model is probably sufficient. For these
               pollutants, the relative toxicity can be multiplied by its emission, corrected for the number of people with non-trivial exposures.
               The second category has to deal with the surface-water pathway, to the extent to which these waters are ingested in a condition

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       One major reason for the exaggeration of the risks of vinyl chloride and asbestos was the
reliance on unit risk factors as a basis for the expected number of cases for the estimated level of
exposure. It must be recognized that unit risk factors, as well as reference concentrations, were
developed to serve a specific purpose — to be conservative for achieving health protection rather
than to be used as a predictive tool.  They generally contain  large safety factors, and therefore are
likely to over-predict population impact for a given level of exposure.

       Another major limitation facing the Agency staff in projecting the incidence of disease
resulting from exposure to HAPS is the paucity of toxic air pollutant data on population
exposures.  As with unit risk, the Agency procedures for exposure assessment of toxic air
pollutant data are based on conservative estimates, and are typically focused on the most highly
exposed individuals in a population. They are not very useful for reliable estimations of average
or cumulative  population exposure.  Furthermore, it is difficult to consider exposures on a
regional, national, or broader scale.  In situations where the  sources are numerous, and the
populations at potential risk become large (e.g., mercury, dioxin and related compounds, and
combustion-related fine particles), the computational exposure models, whose predictions extend
only to 50 km, cannot deal effectively with overall population exposures. The situation is further
complicated for pollutants such as mercury and dioxin, where most of the resultant exposure is
indirect, being mediated by deposition, accumulation in soil, and eventual movement through food
chains.

       Based  on the presentation at our public meeting on Jan. 29, 1998, it was also apparent that
the preliminary exposure analyses made using the Assessment System for Population Exposure
Nationwide (ASPEN) approach have little predictive power. The performance evaluation for CO
indicates that something in ASPEN's code, boundary conditions, or the quality of selected data
must be rectified before it can be relied upon to predict exposure concentrations.

       To deal with all the limitations associated with the Agency's ability to perform credible
prospective risk assessments for HAPS, we recommend that EPA staff establish a procedure for
screening the carcinogens among the list of 189 HAPS for candidate pollutants warranting more
in-depth analyses. We recommend the following steps:

       a)     Apply the admittedly conservative EPA unit risk factors or reference
              concentrations for carcinogenic pollutants to  determine how high average
              population exposure would have to be to yield a lifetime risk of cancer of 10"6.

       b)     Examine available records of concentration measurements in urban areas to see if
              any of the chemicals approach or exceed the  concentrations that were calculated in
              Step a) above.
              where the pollutant risk is unchanged. The third category is the more difficult to model.

                                            10

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       c)     For any chemicals that are "hits" in Step b), engage in a second level of screening
              focused on the basis for the unit risk factor and the extent to which it is
              conservative when used for estimating cancer risks in a population.

       d)     For chemicals, which do not have highly conservative unit risk factors , conduct a
              more in-depth review on a case-by-case basis. This review should include not only
              a further optimization of the risk coefficient, but also a more comprehensive
              review of air concentration data and the extent of secondary or indirect exposure
              from food chain accumulation of the toxicant.

  3.4.1  Air Toxics

       The databases and variables available to complete an air toxics benefits and costs analysis
are inadequate for the task of evaluating the prescribed 189 agents. An approach structured to
reduce the number of air toxics considered for a national analysis  should be developed. This
approach should focus on an in-depth cost-benefit analysis of those air toxicants which are most
likely to have adverse health effects.

       As a matter of organization and presentation of the materials, an effort should be made to
distinguish long-lived and persistent substances such as mercury and the dioxins from the volatile
and short-lived substances such as benzene and formaldehyde.  Source-release-exposure-dose
modeling for these two types of substances poses quite different problems.  It would be especially
helpful to make this distinction in the discussion of the effects of air toxics on aquatic ecosystems,
since the harmful effects stem primarily (if not solely?) from the former class of substances.

3.5 Recommendations for Specific Health Valuations Issues

  3.5.1  Choice of PM Mortality Response Functions

       FEES recommends against using short-term daily mortality studies as an alternative to the
cohort mortality studies to derive concentration-response (C-R) functions.  Short-term mortality
studies may either overestimate or underestimate the C-R coefficient, because these studies do not
account for cumulative mortality effects  of long-term  exposures.

       As recommended in the September 26, 1996 letter from the Physical Effects Review
Subcommittee (PERS) to the Administrator (SAB,  1996), HEES  recommends that other cross-
sectional epidemiological studies be considered in deriving C-R mortality estimates, since these
studies were used in the retrospective study. Studies of a relatively subtle insult, such as current
ambient levels of air pollution, are inherently difficult to perform with precision.  The effects of air
pollution are greatly exceeded by the effects of other factors, including individual predisposition
to disease, occupational and other exposures, and life  styles. Estimating air pollution effects
requires the use of large samples and controls for factors influencing health that might be
correlated with air pollution levels.  We stress that air pollution/human health studies should be
                                            11

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carefully peer reviewed and the data should be made available to qualified researchers for
independent replication.

       In particular, HEES recommends using the revised Pope Qt al. (1995) results. This is
consistent with the retrospective methodology. Caveats concerning the uncertainty of the
PM/mortality relationship must be included in the report.

  3.5.2  PM Neonatal Mortality

       HEES recommends that PM-related infant mortality data not be included in the analysis,
without further supporting peer-reviewed published reports.  The Agency must have an adequate
data base (i.e., at least two or more peer-reviewed published reports) in order to derive a C-R
coefficient.  The current information does not support use of neonatal mortality.  Thus, neonatal
mortality should not be included in the Prospective Study .

  3.5.3  Ozone-Related Premature Mortality

       Some available data suggest a statistical association between ozone and premature
mortality.  However, it is difficult to separate mortality associated with other pollutants, including
PM. Studies by Moolgavkar et al. (1995, 1996),  Kelsall et al. (1997) and Samet et al. (1997) did
not show an unambiguous relationship between ozone, PM and mortality. Therefore, inclusion of
an ozone-specific C-R function would likely result in double-counting.  The C-R functions
obtained from studies that independently consider ozone may be overestimates (See also U.S.
EPA 1995, 1994aand 1994b).

  3.5.4  Modeling Time Lags  for Cumulative Effects of Long-Term Exposure

        HEES agrees that consideration of time lags on  annual mortality outcomes might be
premature.  The current studies on animal mortality do not have an implied time lag, and selection
of a value for such a time lag would be arbitrary.  The long-term downward trend in pollutant
concentrations, especially for PM, presents an important research opportunity for revisiting the
issue of time lags using already assembled data bases, and would be a good candidate for
sensitivity analysis.  An effort of this nature, however, is most likely beyond the scope of the
current prospective study.

  3.5.5  Valuation of Premature Mortality

       Additional methods for  expressing the value of the health benefits of the CAA are needed.
Although it is appropriate to monetize health benefits, HEES recommends that the prospective
study also provide estimates of the ranges of benefits of pollution reductions relative to the total
national experience for each health endpoint, and relative to the health impact of one or more
common public health risks. These non-monetized benefits can be estimated once a specific
damage function is known and used to derive an estimate of the annual incidence of avoided
                                           12

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health effects (as was done in Table ES-1 on page ES-4 of the October 1997 report on the
Retrospective Study: Report to Congress (U.S. EPA/OAR, 1997)). For example, the upper
estimates of avoided premature deaths associated with PM and lead is approximately 200,000
cases for the 48-state population (Table ES-1). The total number of deaths in the 48 states in
1990 was approximately 2,000,000 cases. Thus, the upper bound mortality effect of PM and lead
reductions would appear to be 10% of total deaths.

       The range of air pollution avoided health effects can also be compared with EPA's
estimates of the health effects of environmental tobacco smoke (ETS). HEES judges that there is
reasonable similarity between ambient-air pollution and ETS in terms of individual exposure and
volume effects, and that a comparison of ETS and ambient air effects serves the purpose of
communicating health benefits to target audiences. These comparisons provide a perspective on
health benefits independent of monetary  valuations, thereby allowing incorporation of those health
benefits that could not be monetized. Likewise, duration of non-monetized valuations are readily
understood and easy to communicate.

  3.5.6 Inclusion of Ozone-Related Emergency Room Visits for Asthma

       Emergency room (ER) visits can be included, provided that double counting is avoided
due to overlap between ER visits and resulting admissions (which were separately totaled). It
would be useful to survey the literature for additional publications.  Further appropriate caveats
on causality relationships must be included,  since the records are derived from epidemiological
investigations (Weisel etal., 1995).

  3.5.7 Characterizing the Uncertainty in PM C-R Functions

       There is a fundamental issue in that there are regional differences in the C-R functions
that may well be due to chemical and/or physical differences in PM, and which may not be simply
'statistical' uncertainty.  The Subcommittee suggests that there should be a more detailed
explanation of the approach taken and an examination of the sensitivity of the benefits analysis to
the C-R uncertainty.

  3.5.8 Pollution Level Thresholds for Health Effects

       For purposes of analysis, FLEES recommends that the annual PM 2.5 level of 15 //g/m3 be
an assumed threshold for adverse health  effects.  However, a sensitivity analysis must be
performed for assumed thresholds below and above 15  //g/m3 ( e.g., 0,10, and 20 //g/m3). HEES
considered using background levels  as the assumed threshold, but since background levels differ
by region and over long time periods, and since background levels are not a feasible  target for
standard setting, HEES does not recommend background levels for a threshold analysis. HEES
also recommends against using lowest levels, as reported in any individual study, as an annual
threshold.  HEES also recommends  use of the monetized valuation methods from the
                                           13

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Retrospective Study: Report to Congress, including valuation by statistical lives lost and statistical
life-years lost.

  3.5.9  Estimating Chronic Bronchitis Incidence

        HEES endorses the use of the data reported by Schwartz and Abbey (See for instance
Abbey etal. 1998, 1996, 1995 and 1991; Schwartz 1997, 1996, 1995,  1994a, 1994b, 1989, as
well as Schwartz et al. 1996, 1995 and 1994).  Recent studies from other countries, especially
those with higher pollution levels, such as central Europe or some Asian cities, should be
considered and might provide data for refining C-R estimates (with appropriate caveats).

3.6 Uncertainties

       The Retrospective Study: Report to Congress (U.S. EPA/OAR 1997) provided a series of
summary tables on the unquantified uncertainties in the analysis. The tables identify sources of
uncertainty, identify the potential direction of bias, if any, and provide comments about the
potential significance of the uncertainties. In contrast, the prospective study briefing  materials
presented to the  Subcommittee paid only limited attention to uncertainties. The Subcommittee
believes it is not sufficient just to list uncertainties.

       The efforts to value ecological services and natural resources provide a good  example of
the problems arising from the EPA's use of the term "uncertainty."  The draft document
commonly refers to the uncertainty of benefits.  Given that the draft documents provide an
analysis of three (of nearly twenty) ecological service flows, it is inappropriate to state that the
analysis of ecological benefits is uncertain. The direction of the estimate of "true" benefits is
known;  true benefits are certainly underestimated.

       The Agency should continue to address the potential direction of bias and significance of
uncertainties. Further attention to the potential significance  of uncertainties can provide a useful
enhancement in the analysis and can be accomplished through more limited quantitative analyses
such as screening analyses, case studies, and sensitivity analyses.

       Subcommittee Members and Consultants expressed  concern that the term "uncertainties"
may cause  confusion because it is used to cover statistically  quantified uncertainty, unquantified
uncertainties, variability, and procedures and omissions with known directions of bias.  Perhaps
the phrase "...omissions, biases  and uncertainties..." would better communicate this aspect of the
analysis, once they are identified for specific economic, social, and pollution variables.
                                            14

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3.7 Other Issues

  3.7.1  Transboundary Effects

        Ozone and particulate matter from sources in the U.S. cross the U.S. boundary, especially
into eastern Canada, and may damage exposed populations.  To the extent that the air quality
models predict changes in concentrations outside of the U.S., the analysis should include the
benefits to foreign residents of reductions of emissions in the U. S. attributable to CAAA-90
controls.

       Some persistent pollutants such as mercury and poly chlorinated biphenyls (PCB's) have
residence times in the atmosphere on the order of years rather than hours or a few days.  Doses of
these pollutants to U.S. residents depend primarily on global emissions and are likely to be little
affected by reductions in U.S. emissions. The Agency should address this issue in developing its
plan for assessing the effects of controls on the omission and accumulation of persistent
pollutants.

  3.7.2  Other Criteria Pollutants

       The materials presented to the HEES focused on estimating the effects of changes in
concentrations of ozone and PM.  There was no discussion of additional analyses of changes in
emissions of lead or CO.  The omission of lead may be appropriate since there were no new
controls on lead emissions in the CAAA-90; but this should be made explicit in the Prospective
Study: Report to Congress.  Title II of the CAAA-90 included additional requirements for
controlling CO emissions, and this point should be addressed in the prospective study.
                                            15

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                             LIST OF ACRONYMS
AGSIM
AQMS
ASPEN
CAA
CAAA-90
CO
CO2
COUNCIL

C-R
EPA
ER
ES
ETS
HAPS
HEES

km
LTR
M/C
OAR
OEE
OPAR
OPPE
NESHAPS
NOX
PCBs
PERS

PM
RMF
SAB
SO2
SUM06
U.S.
Agricultural Simulation Model
Air Quality Models Subcommittee (U.S. EPA/SAB/COUNCIL/AQMS)
Assessment System for Population Exposure Nationwide
Clean Air Act
Clean Air Act Amendments of 1990
Carbon Monoxide
Carbon Dioxide
Advisory Council on Clean Air Compliance Analysis (U.S.
EPA/SAB/COUNCIU
Concentration-Response Functions
U.S. Environmental Protection Agency (EPA, or U.S. EPA)
Emergency Room
Executive Skimmary
Environmental Tobacco Shnoke
Hazardous Air Pollutants
Health and Ecological Effects Subcommittee (of the Council, U.S.
EPA/SAB)
Kilometer
Letter
Members/Consultants
Office of Air and Radiation (U.S. EPA)
Office of Economy and Environment (U.S. EPA/OPPE/OEE)
Office of Policy Analysis and Review (U.S. EPA/OAR/OPAR)
Office of Policy Planning and Evaluation (U.S. EPA)
National Emission Standards for Hazardous Air Pollutants
Nitrogen Oxides
Polychlorinated Biphenyls
Physical Effects Review Subcommittee (The predecessor Subcommittee to
the HEES of the Council, U.S. EPA/SAB/ COUNCIL/PERS)
Particulate Matter (PM25, 2.5 microns; PM10, 10 microns)
Regional Model Farm
Science Advisory Board (U.S. EPA/SAB)
Sulfur Dioxide
Sum of all hourly averages greater than 0.06 ppm.
Micrograms per cubic meter
United States
                                       A-l

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