July 8, 1997
EPA-SAB-COUNCIL-LTR-97-008
Honorable Carol M. Browner
Administrator
U.S. Environmental Protection Agency
401 M Street, SW
Washington, DC 20460
RE: Review of the Draft Retrospective Study Report to Congress Entitled "The
Benefits and Costs of the Clean Air Act, 1970 to 1990" by the Advisory Council
on Clean Air Compliance Analysis (Council)
Dear Ms. Browner:
Pursuant to requirements of the Clean Air Act Amendments (CAAA) of 1990, Section
812 (CAAA-1990, Pub. Law 101-549, November 15, 1990, 104 Stat. 2399), the Advisory
Council on Clean Air Compliance Analysis ("the Council") has reviewed the Agency's
Retrospective Study Report to Congress entitled "The Benefits and Costs of the Clean Air Act,
1970 to 1990." Most recently, in the process of closure on this review, the Council has reviewed
several drafts and excerpts of the Agency's Retrospective Study Report to Congress in a series of
public teleconferences following the November 7 and 8, 1996 face-to-face meeting of the Council.
Specifically, the Council met March 14, 19 and 26, 1997, May 15 and June 30, 1997 in order to
reach closure on the Retrospective Study. In the course of these public discussions with the
Agency staff, we have reviewed the data and methods used by the Agency for this analysis as well
as the findings obtained. Because we were consulted regarding the design of much of the
analysis, it has been possible to avoid much needless delay and controversy.
The Council finds that the Retrospective Study Report to Congress by the Agency is a
serious, careful study and employs sound methods along with the best data available. While we
do not necessarily endorse all details of this study's findings, we believe that as a general matter
that they are consistent with the weight of available evidence. Several major issues that arose in
the course of our work, however, deserve your attention. The Council believes that further
research is warranted to address the causal relationship between mortality and particulate matter
(PM). In addition, emerging evidence on ecosystem evaluation supports the need for more
studies in this area.
Finally, the Council believes that, in the future, the Agency should focus more attention on
the ages of persons whose lives are extended by reducing exposure to air pollution. The
Retrospective Study provides estimates of the numbers of statistical lives saved by age for
reduced PM and lead. These estimates show that the vast majority (in the range of 80%) of the
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statistical lives saved are for persons age 65 and over and that the average number of life years
saved is 14 or less (six years for individuals over age 84). The value of a statistical life used in the
Retrospective Study ($4.8 million) is based on a set of studies of workers and others with a
substantially lower age (in the range of 40 years) and higher remaining life expectancy (in the
range of 35 years). We continue to believe that it is important here and in general to measure the
value of a statistical life for persons of different ages, values that are likely to differ substantially,
and to apply those values to the number of statistical lives saved at each age.
During the course of the Council review of the draft Retrospective Study Report to
Congress, it became evident that the task was far more complex and difficult than envisioned by
the Congress, the Agency, or the Council. The Retrospective Study Report to Congress identifies
numerous areas where: 1) quantitative data on exposure-response relationships are incomplete or
non-existing; 2) usable literature on valuation of known effects is either sparse or non-existent; 3)
current exposures create the potential for important adverse effects, but current knowledge is
inconclusive; and 4) there are large uncertainties with many of the costs and benefits tabulated in
the Retrospective Study Report to Congress.
Over the course of the past five years of this review, the lessons learned by EPA staff and
the Council have made it possible to study the post-1990 costs and benefits of the Clean Air Act
(the Prospective Study) in a more timely and efficient fashion. However, it must be recognized
that the Prospective Study Report to Congress faces additional challenges. We believe that in
order to inform decision-makers, the Prospective Study must, to the extent scientifically and
technically feasible, provide cost/benefit on a provision-specific basis, as Section 812 of the Clean
Air Act (CAA) appears to contemplate. This will require considerably greater investment in
computation than currently appears to be contemplated. In addition, a focused research program
aimed at the knowledge gaps that are identified in the Retrospective Study as limiting factors in
the performance of benefit-cost studies will make it possible to greatly improve the accuracy and
reliability of the ongoing and future Prospective studies for guiding policy formulation and
operational programs in EPA.
We thank the Agency for the opportunity to have participated in the Retrospective Study
Report to Congress, and we look forward to productive and efficient dialogue on the upcoming
Prospective Study Report to Congress. We hope that EPA and the Congress will mobilize the
resources needed to generate the data to mount more thorough and satisfactory analyses of air
pollution costs and benefits in future projects of this kind.
Sincerely,
Dr/RiJchara Schmalensee, Past Chair Dr. Maureen L. Cropper, Chair
advisory Council on Clean Air Advisory Council on Clean Air
Compliance Analysis Compliance Analysis
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NOTICE
This letter report has been written as part 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
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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U.S. ENVIRONMENTAL PROTECTION AGENCY
SCIENCE ADVISORY BOARD
ADVISORY COUNCIL ON CLEAN AIR COMPLIANCE ANALYSIS
CHAIR
Dr. Maureen L. Cropper, Principal Economist, The World Bank, Washington, DC
MEMBERS AND CONSULTANTS
Dr. Ronald G. Cummings, Professor of Economics and Noah Langdale, Jr. Professor of
Environmental Policy, Policy Research Center, Georgia State University, Atlanta, GA
Dr. Daniel Dudek, Senior Economist, Environmental Defense Fund, New York City, NY
Dr. A. Myrick A. Freeman, Professor, Department of Economics, Bowdoin College,
Brunswick, ME
Dr. Jane V. Hall, Professor of Economics, School of Business Administration, Department of
Economics and Institute for Economic and Environmental Studies, California State University,
Fullerton, CA
Dr. Paul Lioy, Deputy Director, Environmental and Occupational Health Sciences Institute
(EOSHI) and Director, Exposure Measurement & Assessment Division, Robert Wood Johnson
School of Medicine, Piscataway, NJ
Dr. Paulette Middleton, Principal, Science & Policy Associates, Inc., Boulder, CO
Dr. Richard Schmalensee, Deputy Dean, Sloan School of Management,
Massachusetts Institute of Technology, Cambridge, MA (Past Chair of the Council)
Dr. Thomas H., Tietenberg, Professor, Department of Economics, Colby College, Waterville,
ME
SAB COMMITTEE LIAISONS AND PAST CHAIRS
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)
Dr. Wayne M. Kachel, Project Manager, MELE Associates, Brooks Air Force Base, TX
(Liaison from the Environmental Engineering Committee)
Dr. Morton Lippmann, Professor, New York University Medical Center, Nelson Institute of
Environmental Medicine, Tuxedo, NY (Past Physical Effects Review Subcommittee Chair)
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Dr. George T. Wolff, Principal Scientist, Environmental and Energy Staff, General Motors
Corporation, Detroit, MI (Past Chair of the Air Quality Models Subcommittee and Liaison from
the SAB's Clean Air Scientific Advisory Committee)
FORMER COUNCIL MEMBERS
Dr. Robert Mendelsohn, Edwin Weyerhaeuser Davis Professor, School of Forestry and
Environmental Studies, Yale University, New Haven, CT
Dr. William C. Nordhaus, Professor, Department of Economics, Yale University, New Haven,
CT
Dr. Wallace E. Gates, Professor, Department of Economics, University of Maryland, College
Park, MD
Dr. Paul R. Portney, President, Resources for the Future, Washington, DC
Dr. W. Kip Viscusi, Professor of Law and Economics, Harvard University Law School,
Cambridge, MA
SCIENCE ADVISORY BOARD STAFF
Dr. K. Jack Kooyoomjian, Designated Federal Official, Science Advisory Board (1400), U.S.
Environmental Protection Agency, 401 M Street, SW, Washington, DC 20460
Mrs. Diana L. Pozun, Staff Secretary, Science Advisory Board (1400), U.S. Environmental
Protection Agency, 401 M Street, SW, Washington, DC 20460
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