CSG Webinar: Understanding How EPA Clean Air Rules are Derived. September 25, 2012

Breaking down the cost-benefit analysis and regulatory impact assessments that underpin EPA Clean Air Act rules can be difficult to understand. These complex studies have important impacts on states in a host of ways and are significant for environmental protection, public health and the economic implications associated with compliance. CSG’s webinar, “Understanding How EPA Clean Air Rules are Derived” featured toxicology experts from the Texas Commission on Environmental Quality and the director of the Clean Air and Climate Program with the Natural Resources Defense Council (NRDC) to help demystify how the agency determines public health and financial impacts of its proposed air rules. As state air agencies are on the front line of federal Clean Air compliance requirements, the presentations provided important context of the major sampling studies used by EPA and a lively policy debate between the presenters regarding the key issues surrounding their findings.

Dr. Michael Honeycutt, director of the Toxicology Division at the Texas Commission on Environmental Quality, and his colleague Dr. Stephanie Shirley, also with the division, provided a broad overview of how a regulatory impact analysis (i.e. cost-benefit study) is produced for air rules at EPA which took particular exception to the assumptions made with more stringent regulations for particulate matter (PM2.5). In their critique, there was no causal relationship between increasing mortality rates and exposure to particulate matter to justify more stringent regulatory requirements. They also stated that the public health benefits attributed to increased regulations had been overestimated. Honeycutt and Shirley’s presentation explained how EPA determines the economic values associated with air rules through its “value of statistical life” calculation, which is “a shorthand way of referring to the economic value or tradeoff between mortality and risk reduction.” The toxicologists said the calculation has caused significant confusion in the pubic which assumes that it refers to the saving or loss of an actual life rather than a change in risk. For example, their presentation showed that if risk was reduced in a cost-benefit study by one in 1 million for one year in a population of 200 million people, the calculation would derive a “savings” of 200 statistical lives (value of risk reduction) not 200 actual lives. The presentation concluded by offering a competing view to EPA when calculating the actual cost-benefit results from Clean Air regulation. According to Honeycutt and Shirley, EPA significantly overestimates the public benefits compared to the economic impacts of Clean Air rules.

Strong rebuttals to the TCEQ findings were offered by John Walke from the Natural Resources Defense Council. Before beginning his counterarguments, Walke gave a brief history of how and why the Clean Air Act was developed and covered the explicit exemption the agency has to issue regulations based solely on economic implications. EPA is required under executive order to conduct cost-benefit analyses of rules and Walke took exception to the notion that the regulatory impact work done by the agency is not open to public comment and review as he often issues formal comments himself on proposed rules. Walke disagreed with the assessments of the studies presented in the previous panel and offered up several other international organizations and additional analysis that showed causal relationships increased health problems and mortality rates from higher exposures to particulate matter. He believes that consensus scientific opinion on this issue favors more stringent regulation of particulates in the atmosphere, which led to a dynamic exchange of discussion topics during the question and answer portion of the webinar.

 Download the slides in PDF  

Supporting Documents from the Texas Commisson on Environmental Quality

 Additional Reference Slides   Valuing Mortality Risk Reductions

 The Value of a Statistical Life

Understanding How EPA Clean Air Rules are Derived