UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF THE ADMINISTRATOR
SCIENCE ADVISORY BOARD
January 19, 1999
EPA-S AB-EEAC-COM-99-001
The Honorable Carol Browner
Administrator
United States Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
Importance of Reinstating the Pollution Abatement and Control
Expenditures (PACE) Survey
Dear Ms. Browner:
This Commentary was developed by the Environmental Economics Advisory Committee
(EEAC) of the Science Advisory Board (SAB) in response to a discussion with members of the
U.S. EPA's Office of Policy (OP) at the EEAC public meeting on November 18, 1998. The
Committee developed this Commentary to address the importance of reinstating the Pollution
Abatement and Control Expenditures survey (PACE). The survey was conducted annually from
1973 through 1994 by the U.S. Bureau of the Census, but was suspended by the Bureau for
budgetary reasons. The Committee views the reinstatement of the PACE survey or an
appropriately redesigned successor as an exceptionally high priority.
The PACE survey data provide a unique tool for evaluation of the costs of compliance
with environmental regulations. The collection of these data has provided the United States with
an important source of information to facilitate the evaluation of environmental programs and, in
turn, to improve the design and performance of these programs. EPA has used the PACE data in
its Cost of Clean reports, the Section 812 Clean Air Retrospective Cost Analysis, numerous
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sector-specific studies, Regulatory Impact Analyses, analyses of recycling activities, and national
studies of environmental protection activities. The relatively low cost of the PACE survey,
combined with its tremendous benefits to EPA, means that a reinstated survey would provide the
Agency with a tremendous return on its investment.
At once, the PACE survey provides a means to assess the costs of environmental
regulations in general and individually, and it provides a means to compare the cost-effectiveness
of various regulatory approaches. The systematic collection of information on the costs of
regulation is essential to meet expanding legal requirements for review of the costs of regulation,
and it is important for EPA's efforts to develop sound and effective regulations.
The value of any set of data of the type collected through the PACE survey is significantly
enhanced as the longevity and consistency of the data series is expanded. The Agency has argued
that inconsistent funding of monitoring, leading to interruptions in monitoring data, has
undermined the achievement of environmental goals. The same reasoning applies to the collection
of data on the costs of compliance with environmental laws and regulations. There has been only
a brief interruption in the survey, and the series can be mended if the PACE survey is reinstated in
the near future.
The PACE survey has significant spill-over benefits affecting the various program offices
in the Agency, and a number of other agencies. Therefore, the cost of the survey should be
shared with offices across and even outside the agency, rather than being concentrated in any one
office or agency. The funding of the National Health and Nutrition Examination Survey
(NHANES) could serve as a useful model.
At this juncture, there is an opportunity to improve the design of the survey in important
ways. The PACE survey, as previously constituted, is valuable, but can be improved with little or
no increase in cost. A redesign could help the survey answer the types of policy questions that are
most salient today. For example, there is mounting circumstantial evidence that actual compliance
costs are frequently below projected costs; the PACE survey could help greatly in this regard.
Also, since process changes are increasingly important in meeting environmental goals, the survey
needs to improve the accounting of costs associated with market-based approaches to
environmental protection.
We hope this Commentary offers some insights into the importance of the PACE survey
to EPA for achieving its mission, and we urge you to take immediate action to support the
reinstatement of the PACE survey. The Committee will be pleased to answer any questions you
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or your staff may have. Further, the Committee would be pleased to enter into a consultation
with the Agency on PACE survey design modifications at the appropriate time. We look forward
to the response of the Assistant Administrator for the Office of Policy.
Sincerely,
/signed/ /signed/
Dr. Robert N. Stavins, Chair Dr. Joan M. Daisey, Chair
Environmental Economics Advisory Science Advisory Board
Committee
Science Advisory Board
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U.S. ENVIRONMENTAL PROTECTION AGENCY
SCIENCE ADVISORY BOARD
ENVIRONMENTAL ECONOMICS ADVISORY COMMITTEE
November 18, 1998
CHAIR
Dr. Robert N. Stavins, John F. Kennedy School of Government, Harvard University, Cambridge,
MA
MEMBERS/CONSULTANTS
Dr. Dallas Burtraw, Resources for the Future, Washington, DC
Dr. Trudy Ann Cameron, University of California, Los Angeles,CA
Dr. Dale W. Jorgenson, Harvard University, Cambridge,MA
Dr. Paul L. Joskow, Massachusetts Institute of Technology, Cambridge, MA
Dr. Catherine Kling, Iowa State University, Ames, IA
Dr. Richard L. Revesz, New York University, New York, NY
Dr. Hilary A. Sigman, Hoover Institute, Stanford University, Stanford, CA
Dr. W. Kip Viscusi, Harvard University, Cambridge, MA
Designated Federal Official
Mr. Thomas Miller, Designated Federal Official, Science Advisory Board (1400), U.S.
Environmental Protection Agency, Washington, D.C.
Management Assistant
Mrs. Dorothy M. Clark, Science Advisory Board (1400), U.S. Environmental Protection
Agency Washington, D.C.
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NOTICE
This report has been written as 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
balanced, expert assessment of scientific matters related to problems facing the Agency. This
report has not been reviewed for approval by the Agency and, hence, the contents of this report
do not necessarily represent the views and policies of the Environmental Protection Agency, nor
of other agencies in the Executive Branch of the Federal government, nor does mention of trade
names or commercial products constitute a recommendation for use.
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