Environmental, Health, and Safety Tradeoffs:
A Discussion of Policymaking
Opportunities and Constraints

John E. Blodgett
Assistant Chief
Environment and Natural Resources Policy Division

February 1, 1999

RL30043

Preface

A policymaker deciding whether to support a new action; a legislator deciding whether to vote for a new program; a regulator deciding whether to impose a stringent standard: each decisionmaker faces the question, What will be foregone if   I decide to commit the resources for this new activity? With increasing sensitivity to the costs of regulatory programs and support for regulatory reform initiatives, answering this question has become a more critical focus of attention.

Particularly with respect to environmental, health, and safety programs, decisions are often challenged on the grounds that alternative choices are available that would provide more risk reduction or other benefits at lower cost. For example, when Congress voted on the Clean Air Act Amendments of 1990, columnist George F. Will wrote, "Policy makers face difficult tradeoffs. Comparative returns to health must be considered. The $21 billion spent on cleaner air cannot be spent on immunization, infant mortality, care for poor pregnant women." 1

Similarly, at a 1997 hearing concerning the Environmental Protection Agency's (EPA's) proposal to tighten the National Ambient Air Quality Standards (AAQS) for ozone and particulate matter, a Congressman commented, "What are the alternatives to the ... rulemaking? There are clearly better investments that can be made to promote public health. Eight billion dollars could save 3 or 4 times as many women from breast cancer by paying for mammograms." 2

In a "viewpoint" article in Exxon's magazine for shareholders, its author states that sound science and sound economics would lead to smarter regulation. Geffing the biggest benefit may require reallocating regulatory expenditures: for example, "it may be smart to invest more in smoking-cessation education for pregnant women and less in making the groundwater in a Michigan rail yard cleaner than drinking water." 3

Tradeoffs can be compared in several ways, including qualitatively by personal preference or quantitatively by monetization or risk reduction. Economically, the fact that monies spent on one option are no longer available for competing options is called the "opportunity cost" of that choice. As Paul Portney of Resources for the Future has said, "A hundred dollars spent on environmental protection is $100 that can't be spent on housing, or space, or health, or other alternatives." 4

While techniques for evaluating potential tradeoffs have advanced substantially over the past several years, legislators and other policymakers have found it difficult to effect overt tradeoffs among environmental, health, and safety programs. This paper examines the reasons for this difficulty. It briefly reviews capabilities for assessing tradeoffs, primarily risk assessment and cost-benefit analysis, and then turns to constraints that arise from institutional contexts in which legislators and other policymakers address tradeoffs. These constraints include jurisdictional boundaries that limit alternatives that can usefully be considered, and the up-or-down nature of many regulatory decisions. Typically, a decisionmaker's only option is to approve or disapprove an action, to vote for or against a program, or to implement or delay a regulation with little power to redirect the resources to a more cost-effective alternative if the choice at hand is rejected.

Identifying Tradeoffs: Risk Assessment and Cost-Effectiveness

Making tradeoffs implies a basis for comparison. For environmental, health, and safety programs, a typical metric of tradeoffs becomes comparisons of dollars expended per life saved. However, other factors are often involved, such as characteristics of those at risk (for example, policies may distinguish the young and old), how the risk arises (for example, voluntary versus involuntary exposures to risks), and the nature of the risk (for example, acute and chronic health risks, ecological risks, and so on).

Even though the ability to assess the benefits and costs of environmental, health, and safety programs remains imperfect, many analysts are now willing to assign values on the relative cost-effectiveness of selected programs, particularly those involving mortality and cancer risks. 5 The results of such studies indicate that some programs are much more cost-effective than others; for example, that the lives saved or cancers avoided per dollar invested in regulations of chemicals vary by orders of magnitude. 6 Some analysts, caution, however, that estimates of the costs of saving lives are overly simplistic and can lead to misleading comparisons of tradeoffs. 7 Nevertheless, many economic and policy analysts have used comparative estimates of the costs of lifesaving interventions to conclude that some portion of the dollars spent on environmental, health, and safety programs could be more effectively spent - either redeployed from less cost-effective programs to more cost-effective ones, or left in the private sector.

For example, Tammy O. Tengs and John D. Graham of the Harvard Center for Risk Analysis analyzed the cost-effectiveness of 185 life-saving interventions (including, for example, laws, regulations, and building codes) for which national cost and benefit estimates were available. They found that these interventions cost $21.4 billion per year and averted 56,700 premature deaths and saved 592,000 years of life annually; but there was no relationship between the cost-effectiveness of the interventions and their implementation. Tengs and Graham concluded that if the $21.4 billion per year were devoted only to the most efficient interventions, approximately twice as many lives and years of life could be saved. Alternatively, they found that the nation could maintain the current level of survival benefits -averting 56,700 deaths per year - and "save $31.1 billion over the status quo, because there are many untapped investment opportunities that save both lives and money. That is, not only would we save the $21.4 billion that we are currently spending, but another $10 billion - all the while maintaining our present level of survival

This and other studies have led Robert W. Hahn, a long-time student of regulatory costs, to conclude: "We could save a substantial number of lives and money by reallocating resources from ineffective domestic regulations to other lifesaving interventions in the United States or the developing world." 9

So why don't policymakers reallocate resources to improve the cost-effectiveness of environmental, health, and safety regulatory programs? Numerous, overlapping reasons have been proposed for the apparent inconsistencies between the resources invested in the many regulatory programs and their benefits. Particular attention has focused on the following:

· Methodological concerns: many aspects of assessing the risks, costs, and benefits of alternatives to determine appropriate tradeoffs remain open to debate. Among the problematic issues are (1) accounting for nonhealth benefits of regulatory programs (and often of many health benefits, as studies often focus primarily on mortality and sometimes exclusively on carcinogenicity); (2) accounting for nontechnical dimensions of perceived risk (voluntary, catastrophic, etc.); (3) accounting for social values other than cost-effectiveness (such as equity across racial, ethnic, or economic groups, or for future generations); and (4) accounting for future technological developments that reduce costs of regulatory requirements. For some, especially many proponents of environmental, health, and safety regulations, these difficulties in evaluating risks, costs, and benefits pose formidable obstacles to any routine or prescribed use of risk assessment and cost-benefit analysis in actually evaluating regulations or making tradeoffs. 10

· Statutory limitations: environmental, health, and safety laws vary in risk criteria and the extent to which costs and benefits can be taken into account in standards-setting. For example, the Clean Air Act prohibits taking into account costs in the setting of National Ambient Air Quality Standards. Such limits, and the variations in standards among statutes, make comparisons of alternatives difficult.

· Political choices: it has been suggested that in establishing regulatory programs, politicians have responded to public concerns that are not based on scientifically sound assessments of risk. The Superfund program has often been cited in this regard, charged with being a cost-ineffective program established to respond politically to the Love Canal situation, 12 although some analyses suggest the program is more effective than such charges imply. 13 Other political dimensions involve equity impacts on groups, populations, and locales, and perceptions about the value of government intervention and preventative action in conditions of uncertainty.

To achieve more cost-effective environmental, health, and safety decisions, analysts like Tengs, Graham, 14 Portney, 15 and others, 16 as well as interests supporting regulatory reform, prescribe requirements for risk assessment and cost-benefit analysis, along with procedures to ensure that a centralized authority could have an opportunity to weigh tradeoffs. Initiatives in this direction have been taken by both the Executive and the Congress. A series of Executive Orders over the past 20 years have led to a process for assessing the impacts of regulatory proposals (most recently, President Clinton's E.O. 12866). 17 A regulatory reform effort in Congress has sought, with mixed success, to make statutory requirements for risk assessment and cost-benefit analysis. 18 A key thrust of these efforts has been to impose risk assessment and cost-benefit analysis requirements on the regulatory agencies, and to provide some centralized oversight of the process: the Unfunded Mandates Reform Act P.L. 100-4) requires agencies to prepare cost-benefit analyses for regulations costing $100 million or more in effect codifying a part of E.O. 12866. Agency-by-agency attention to the effectiveness of regulations has been heightened by the Government Performance and Results Act (GPRA, P.L. 103-62), as well.

E.O. 12866 and some legislative proposals are essentially informational in that they presume that better knowledge about costs and benefits and risk reduction will lead to more cost-effective decisions. Other legislative proposals would make cost-effectiveness an explicit criterion for decisions and would require administrators to decide on regulations on the basis of net benefits. Proponents contend that risk assessment and cost-benefit analyses will result in more cost-effective programs and in money saved potentially allowing the saved resources to be devoted to more rewarding alternatives. Opponents argue that analytic methods can be misleading because of methodological and informational shortcomings, and that requiring the calculation of risks, costs, and benefits could result in regulators being compelled to conform their decisions to the resulting data regardless of flaws.

These efforts to require cost-benefit analyses and risk assessments have had limited success in shifting allocations of resources among environmental, health, and safety programs, however. Some studies of potential tradeoffs, such as Tengs and Graham's finding that equivalent or increased health and safety could be gained at a savings, seem compelling, but identification of opportunities has proven difficult to translate into actual programmatic reallocations of resources. One reason, as noted, is the continuing debate over the measurement of cost-effectiveness and of identifying desirable tradeoffs that meet broad social goals. But further constraints that limit accomplishment of what seem desirable tradeoffs include -

· institutional/jurisdictional constraints that limit the alternatives decision-makers can choose among; and

· the limited ability of a decisionmaker to prescribe that resources freed up by declining to support an environmental protection program or regulatory option will go to a more beneficial alternative, leading to case-by-case decisions rather than tradeoffs.

Institutional and Structural Limits on Choosing among Tradeoffs

The rules and structures of organizations channel decisions in ways that limit the options of decisionmakers. In the Congress, rules of procedures and committee structures can limit tradeoffs available to Members. 19 In particular, jurisdictional limitations affecting congressional subcommittees' and committees' choices and procedural requirements governing floor actions - including especially the "germaneness" rule of the House - impede comprehensive treatment of the many environmental, health, and safety statutes. These procedural and structural limits play key roles in determining the availability of potential tradeoffs both among program goals and among alternatives for federal expenditures of treasury funds. Similarly, procedures and the bureaucratic structure of the Executive Branch limit choices of administrators and program managers.

Appropriations for Federal Programs

The process by which Congress considers annual appropriations illustrates how structure can constrain tradeoffs. 20 While the President, the Congress as a whole, each Chamber, and the full Committees on Appropriations, can comprehensively view flinding priorities and consider tradeoffs, only in exceptional cases can those with comprehensive authority devote attention to the level of detail at which most environmental, health, and safety tradeoffs occur. 21

The House and Senate Appropriations Committees each divide the total amount of funds available for discretionary spending among their 13 subcommittees. As a practical matter, most tradeoffs among programs whether to spend dollars here or there - occur within each subcommittee's jurisdiction. 22 For example, the Subcommittee on the Department of Veterans Affairs (VA), Housing and Urban Development (HUD) and Independent Agencies has combined responsibility for VA, HUD, Environmental Protection Agency (EPA), National Aeronautics and Space Administration (NASA), and several other independent agencies. The subcommittee may make judgrnents on the best use of a dollar within an agency's appropriation, or across agencies within its domain - so that EPA's dollars may be affected by appropriations decisions concerning HUD or NASA, for example. But there is essentially no opportunity to judge whether funds to be spent on water quality, for example, would be best spent by EPA, by the U.S. Department of Agriculture, or by the Department of the Interior, since each is under the jurisdiction of a different appropriations subcommittee. Thus the unchosen option of spending money through the USDA for water pollution control is only theoretically an opportunity cost of a choice to spend money on sewage treatment grants through EPA: those choosing to spend the money through EPA did not have the option of spending those dollars through USDA.

To illustrate, in 1997 the Administration proposed a Clean Water Initiative to improve and strengthen water pollution control efforts. EPA and USDA, working with other agencies, developed a coordinated action plan. To implement the plan, the President proposed a total of $568 million in increases for various water programs in the FY 999 budget. However, these programs were under the jurisdictions of five separate subcommittees of each Chamber's Appropriations Committee, so "there is no single opportunity for making funding tradeoffs where the several agencies are concerned, e.g., more for USDA, less for EPA." 23 In the end, each subcommittee weighed its component of the plan against its own priorities, so each agency's program was treated separately. EPA's programs got most of its proposed increases, while most of USDA's programs did not. The "coordinated action" of the plan was lost. 24

The competition among alternatives is not just on the basis of relative costs and benefits: there is also political reality. In an interview about Federal research and development, Senator Bennett Johnston was asked about R & D tradeoffs among departments. Johnston observed:

There is no research budget as such. So what happens at National Science Foundation, the National Institutes of Health and the Department of Energy are not connected to each other. You know, those silly scientists who said kill the SSC [Superconducting Super Collider] so there would be more money for something else. They did not fail economics 101, they failed freshman high school arithmetic. I mean [the budget process] just does not work that way. 25

For example, for FY1999 the scientists and the Administration have been supporting construction of a nuclear particle device: "But," as reported by the journal Science, "it's in the same funding bill as some politically popular water projects. The Administration wants to free up funds by throttling back on water projects, but [Senator] Domenici - who chairs the subcommittee that handles the bill - seemed doubtful. 'It's almost impossible to cut back on water projects when they are started,' he said." 26

These bounded tradeoffs become explicit in floor amendments to add funds in an appropriations bill: as net dollars within the bill cannot exceed a ceiling, offsetting funds must be found elsewhere in the bill. For example, during consideration of H.R. 4194, the FY1999 appropriations bill for the Departments of Veterans Affairs, Housing and Urban Development, and Independent Agencies [including EPA and NASA], an amendment was approved by the House to increase VA grants to construct state extended care facilities by $21 million and offset the increase from the Housing Opportunities for Persons with AIDS program funding. An alternative amendment, which was withdrawn, would have offset the $21 million increase for VA extended care facilities with a decrease in Space Station funding. Thus funds originally allocated to a HUD AIDS program were traded off to VA, in lieu of an alternative proposal that they come from funds originally allocated to the Space Station. In this way tradeoffs are typically contained within each of the 13 appropriations bills.

Authorizations for Federal Programs

The situation is analogous for authorizations of programs - i.e., the statutes that establish their intent, rules, and limitations: jurisdictions are divided among committees (and their subcommittees). For environmental, health, and safety statutes, tradeoffs are largely determined by the statutes/programs of the sub committee/committee of jurisdiction. 27 Opportunities for tradeoffs across committee jurisdictional lines can be limited, especially in the House.

At one level, legislative constraints hinder consideration of tradeoffs between regulatory impacts of programs; an example is the separate jurisdictions in the House for air pollution (Committee on Commerce) and water pollution (Committee on Transportation and Infrastructure). At the level of choosing between policy instruments, jurisdiction also has implications. Although most economists and many other policy analysts believe pollution reductions could be more efficiently achieved through economic mechanisms, such as pollution taxes, than through "command and control" regulations, the latter have been most often chosen. This tradeoff is constrained in large part because of split jurisdictional authorities. The committees establishing pollution control programs and policies can authorize regulations but cannot levy taxes. Adoption of pollution taxes would depend on favorable action by another committee an added step with uncertain outcome that the authorizing committee can avoid by employing regulations only. 28 Jurisdiction can also affect choices between regulatory programs and federally funded programs. Authorizing committees can authorize regulatory programs themselves. But when they authorize federally funded programs, the final funding decisions reside with the appropriations committees, whose priorities on such programs may differ from the authorizing committees' priorities. 29 One way authorizing committees have effected their view of the appropriate funded priority for their programs is to establish entitlement programs, which are not subject to annual appropriations.

Tengs and Graham tried to take institutional constraints into account in their assessment of cost-effective alternatives. They analyzed savings achievable if five government agencies 30 each independently invested its regulatory efforts most cost-effectively. The analysis examined 134 agency rules that result in about $4.11 billion spent per year by those regulated and save 94,000 life-years. In the analysis, the marginal cost per life-year saved by each agency's regulations vary from $1,510,000 for CPSC to $11,300 for NHTSA, but the more cost-effective application of those dollars within each agency's regulatory authorities would mean that the $4.11 billion in resource consumption would nearly double the life-years saved, to about 180,000. 31

But even this agency-by-agency assessment of tradeoffs does not frilly reflect the limitations on tradeoffs - especially for EPA. EPA's authorities derive from over a dozen statutes. Jurisdiction over these statutes is divided among several committees in the House; while jurisdiction over environmental laws is considerably more concentrated in the Senate, jurisdictional splits remain. Table 1 presents the House and Senate Committees that are among those with jurisdictions over selected environmental, health, and safety statutes. While this list may not capture all relevant committees with jurisdiction, it illustrates that programs often cited as candidates for tradeoffs are subject to separate legislative panels. One result is that each Act containing regulatory programs has its own criteria for decisions on setting standards, cleanup, etc. With strong leadership, negotiations may lead to cross-committee deals to coordinate program authorities, but this is the exception, not the rule.

Thus both legislators and EPA officials have limited opportunities to compare and make consistent standards and decision criteria among statutes. The resulting fragmented regulatory structure precludes EPA from proceeding with many tradeoffs and from weighing the costs and benefits decisions under different authorities on the same scales. Hence, at least for EPA, Tengs and Graham's analysis showing that regulatory actions could be more cost effective appears to be more conceptual and hortatory than implementable. EPA has some power to comprehensively assess the effectiveness of its programs, but the existing statutory patchwork that shapes EPA's administrative structure goes far to explain the variability in the cost-effectiveness of its many programs at least as measured by available cost-benefit analyses and risk assessments.

Despite Executive Orders and legislated requirements for cost-benefit studies, advances in evaluating potential tradeoffs have not resolved the issue of how requiring risk assessment and cost-benefit analysis can be applied coherently across the many environmental, health, and safety programs, given the differences among the statutes. The decision to diminish resources and effort in one area is usually separate from a decision and authority to apply those or related resources and effort in another area. Concluding that coordinated decisions among the programs can scarcely be achieved without changes in the authorizing statutes and their diverse standards for decisionmaking, some analysts have proposed combining EPA's diverse statutory authorities into one comprehensive "organic act." The idea was explored in "Integrated Pollution Control: A Symposium," 32 but while the contributors raised the issue of EPA's structure in constraining consistent decisions across media, they did not consider the implications of the committee structure of the Congress. The multiple committee jurisdictions make integrating risk reductions, as envisioned by an EPA "organic act" difficult. But reconstituting congressional and/or administrative structures to integrate risk reduction so that programs now handled more or less independently would go onto the same table for possible tradeoffs - would imply legislators reallocating their authorities and responsibilities. This is a rare undertaking of uncertain outcome.

Table 1: Congressional Committee Jurisdiction for Selected Environmental, Health, and Safety Statutes

Note: This table simplifies many jurisdictional complexities. The identified committees may not have exclusive jurisdiction over the indicated statutes, and some committees with jurisdiction extending over environmental, health, and safety statutes may not be included. Subcommittee jurisdictions are omitted. Also, specific provisions in a bill may lead to multiple referral to other committees for consideration of those provisions. Finally, some programs have elements that may be affected by separate legislative enactments, such as mass transit programs under transportation legislation having consequences for Clean Air Act programs.

Some see such restructuring as necessary. One analysis 33 of regulatory efficiency states, "As an institution, Congress is strikingly ill-equipped to place risks in comparative perspective. The committee system keeps Congress highly balkanized .." The authors' solution is "to create a [congressional] risk regulation committee that would be entrusted with compiling information about a wide range of risk levels and helping to produce priorities. This committee would have authority over both substantive statutes and the appropriations process." The Committee for Economic Development, an independent research and policy organization of business leaders and educators (CED), has made a series of recommendations for requiring cost-benefit analysis and risk assessment in regulatory processes. The CED recommends that committees prepare cost-benefit analyses of regulatory bills, statutes be amended to ensure cost-benefit analysis can be used, a congressional organization be established for reviewing the costs and benefits of regulations, and the requirement that regulatory agency analyze "significant regulatory initiatives before they are undertaken" be codified in a single statute. 34

In the 105th Congress, the House Committees on Judiciary and on Government Reform and Oversight reported H.R. 1704, Congressional Office of Regulatory Analysis Creation Act. This bill would have created a congressional office "to provide the Committee on Government Reform and Oversight... information that will assist the committee in the discharge of all matters within its jurisdiction, including information with respect to its jurisdiction over authorization and oversight of the Office of Information and Regulatory Affairs of the Office of Management and Budget." This office would also take over congressional review of agency rulemaking and prepare an annual report on an estimate of the total cost and benefits of all existing Federal regulations. No floor action occurred on HR. 1704.

Federal Decision Criteria, State and Local Choices, and Private Sector Preferences: When Tradeoffs Change

Decisionmakers Controlling Resources

In choosing among alternative tax-supported federal programs (e.g., grants, Superfund cleanups), federal decisionmakers decide where to direct resources from monies they control. In choosing among alternative federal environmental, health, and safety regulatory programs, federal decisionmakers mandate expenditures by state and local governments, the private sector, and/or individuals. It can be tempting to pose tradeoffs across these two situations - between federally funded programs and federal regulatory programs. Thus, among the examples cited in the preface, immunization, infant mortality, and care for poor pregnant women are proposed as tradeoffs against clean air; mammograms against stricter air regulations; smoking-cessation education of pregnant women against groundwater cleanup; and housing, or space, or health against environmental protection. Each putative tradeoff counterposes public programs paid for primarily by federal (or state) tax dollars with environmental protection programs paid for primarily by dollars mandated to be spent by individuals, state and local governments, and/or the private business sector.

The conceptual commingiing of federally funded programs and of federal regulatory mandates ignores a fundamental obstacle to making tradeoffs. This obstacle arises from the distinct identities and interests between those who establish the mandate and those who control the use of the money necessary to meet the mandate. In the case of tradeoffs among established federally funded programs, the decisionmaker for spending monies remains the same for selected alternatives: the appropriator and, ultimately, Congress. If the Congress decides not to spend the money on option A, it can spend it on option B, subject to institutional constraints.

In the case of tradeoffs between federally funded programs and regulatory programs (or between regulatory programs), however, the legislative decisionmaker mandating the program and the decisionmaker ultimately responsible for expenditures to meet regulations are separated. The latter, the decisionmaker responsible for meeting the regulation, would likely choose alternatives for that expenditure that respond to different needs and interests than the decisionmaker mandating the regulatory program.

As a result, the alternatives of spending tax monies on a federal program versus establishing a regulatory program not only trades off program benefits, but also changes the payer who decides on the alternative use of the dollars. Different decisionmakers, from their different settings, can be expected to employ different criteria in judging the return on the use of the monies. A federal program decisionmaker presumably makes tradeoffs on the basis primarily of national values and needs; a state or local program decisionmaker presumably makes tradeoffs on the basis primarily of state or local values and needs; a private sector business decisionmaker presumably bases tradeoffs primarily on profit and loss considerations; and an individual presumably bases tradeoffs on personal needs and preferences. These differences are shown in table 2.

Table 2: Decisiomnakers and Decisionmaking Criteria
Determining Regulatory Expenditures to Abate Pollution

To propose tradeoffs between an environmental regulation and a potential alternative federal program disregards the different circumstances of the decisionmakers involved. For the regulatory mandate, the federal decisionmaker knows what purpose the dollars will be spent on; if the federal decisionmaker decides not to impose that mandate, those dollars remain available to the state/local, private sector, or individual decisionmaker to spend. If the regulatory mandate is not imposed or is rescinded as not cost-effective, there is little reason to assume that the state/local, private sector, or individual decisionmaker controlling those dollars will view an alternative public service program as a preferred destination for the monies freed up. As a practical matter, the alternative to a specific federal regulatory mandate is some unknown option(s) on which other decisionmakers responding to other values or pursuing other goals will spend those unmandated dollars.

It is certainly possible - some would say highly likely, even indisputable - that the dollars spent to meet federal requirements would be better spent otherwise by state and local governments, private businesses, or individuals. Underlying this tradeoff is the debate over the share of incomes that most effectively and efficiently advances national interests by being spent by government (federal or state or local) rather than privately (individually or corporately). Compare the following viewpoint (referring to taxes, but the principles expressed apply analogously to regulation, often called a "hidden tax"):

"... Given a choice between keeping taxes high so the government has more money to spend and ... reducing the tax burden so families can put more money aside to invest in their own child-care needs, retirement needs, health-care needs or whatever needs they choose, my preference is the latter....

"Letting people keep their money is the best way to address the social problems that confront us, now and in the future." 35

"Sen. Pete Domenici R-N.M.) publicly tells me I 'ought to pay less taxes, ought to keep more' of my money because I 'can make better decisions than we [our elected leaders in Washington] can.'

"Thank you, Sen. Domenici, but I emphatically and sincerely disagree. My federal government does well hundreds of things I want done and which I would not have any idea of how to do by keeping every cent to myself. Because of the taxes we pay, the Great Lakes, the Chesapeake Bay, the Charles River, the Chicago River and the Potomac River are all cleaner, healthier and more alive than they were just a generation ago." 36

What seems clear is that even if state and local, corporate, or private investments in alternatives to pollution control mandates would contribute equally or even more - to net national welfare, there is little reason to assume the alternatives would be selected from comparable environmental, health, or safety programs such as immunization, education, or care for poor pregnant women. 37

In short, there are tradeoffs for each dollar paid out to abate and control pollution. But it is not $1 for pollution control versus $1 for some comparable public good. Rather, it is $1 for pollution control on the one hand, or $1 for an unknown purpose on the other - with the probability that the criterion for deciding on how otherwise to spend the money will not be national welfare. (Which is not to say that the alternative expenditure would necessarily fail to equally or better serve national wellbeing: one just cannot know.) Consequently, as a practical matter, it is not usually possible to specify tradeoffs for dollars expended on regulatory programs. Tradeoffs exist, but except through imposing alternative mandates, the policymaker seeking to protect the environment, health, or safety, is not in a position to direct those funds to particular options. 38 Consequently, the policymaker is motivated to achieve whatever is possible through the program at hand.

Weighing Tradeoffs: What Does It Mean?

In the end, comparative assessments of costs (and benefits and risks) of alternative programs benefiting the public welfare, or of alternative regulatory mandates, provide information to policymakers and the public. 39 The information can promote better understanding of risks, costs, and benefits. It may allow policymakers, within their constraints, to focus resources on the most cost-effective environmental, health, and safety interventions. Nevertheless, the information provides little guidance for making tradeoffs. It can tell the decisionmaker that a dollar is being spent on 'this' rather than on 'something else.' While the 'this' is in the decisionmaker's purview, the 'something else' may well be either outside his or her purview, or it may be completely open-ended, in the realm of the marketplace. The debate over enactment of the Clean Air Act Amendments of 1990 was not over whether the $21 billion tab 40 should be spent on clean air or on immunization, infant mortality, care for poor pregnant women, or something else; it was over whether to require $21 billion to be spent on clean air or more or less (or not at all). 41 Similarly, the debate of the new National Ambient Air Quality Standards for ozone and particulate matter was not over whether the multibillion dollar tab should be spent on cleaner air or on mammograms or some particular thing else, it was over whether to set standards that would result in those regulated to spend more (or less) money on cleaner air.

For a legislator who faces a vote on imposing costs - e.g., the Clean Air Act Amendments of 1990 or a policymaker who faces a decision on a regulation -e.g, the ozone and particulate matter standards - the choice is basically up-or-down and more-or-less, not on tradeoffs with other programs. To turn down the amendment or defer the regulation does not mean more cost-effective environmental, health, or safety alternatives will take its place: it is a question of following through or starting the policy process anew (see box, A Policymaker's Options). With choices tending be up-or-down and limited only to alternatives germane within relevant jurisdictional boundaries, environmental, health, and safety interests are loathe to forego or reduce any program, even if its cost-effectiveness is questionable, because they so seldom can ensure reinvestment of any saved resources in more cost-effective alternatives.

Only in the abstract, then, is any and every alternative an opportunity cost of each federal dollar spent and of every federal regulation imposing costs. In reality, the actual tradeoff faced by a policymaker at a particular time and place subcommittee, committee, or the floor of Congress; or Commission or Agency - is effectively limited. These limits include institutional structures and rules and the incommensurable criteria brought by different decisionmakers who would ultimately decide on the actual alternatives for spending any dollars the tradeoffs make available.

Price tags can be put on many programs. Knowing how many mammograms could be purchased by the estimated number of dollars a particular regulation costs society is information. But whether those expenditures are really alternatives depends on what the decisionmaker's options are and who can decide on how to spend the monies involved. The actual tradeoff is determined by the context in which the decisionmaker is making a choice; there may be definite options, as when an appropriations subcommittee allocates dollars among programs in its jurisdiction; but in other cases the tradeoff may be between an intended outcome and a nebulous consequence of not opting for that outcome.

Saying a dollar spent on an environmental, health, or safety program could be spent more cost-effectively otherwise can be more or less evaluated by estimating relative cost-effectiveness; but accomplishing the tradeoff is subject to constraints of procedure and institutional structure. Raising the issue of alternatives is thus only a step in forcing attention onto the methods for assessing tradeoffs and onto the opportunities and constraints that bind policymakers. Referring to tradeoffs without acknowledging the constraints can unfairly imply legislative or administrative misdirection of resources. The problem is depicted in figure 1: Putative tradeoffs among environmental, health, and safety expenditures presume that all programs (represented by cones) are on the table, as shown in figure 1-A, where the sizes of the cones reflect potential cost-effectiveness; but the voting legislator typically has only one program on the table at a time, the result of a deliberate, formal process of agenda setting, as shown in figure 1-B; and the administrator of several programs generally finds each program on a separate table, with the boundaries of each defined by a separate statute that gives little or no authority to an administrator to compare and reallocate resources across them, as illustrated in figure 1-C.

In the end, the underlying issue of environmental, health, and safety cost-effectiveness is how to foster decision processes and structures that enable tradeoffs that reflect the informed preferences of the citizenry. Evidence indicates that programs vary widely in cost-effectiveness. However, given that there is more to comparing programs than just costs, the current environmental, health, and safety program mix - the result of the present decisionmaking structure - may in fact reflect citizen preferences.

Where tradeoffs would appear to result in more consistent, cost - effective protection of health or the environment, better information may in the short run contribute to improved decisions in allocating resources, but legislators' and administrators' options are limited. In the long-run, better information about desirable tradeoffs may suggest realignments of decision structures - leading to a different, complex, and difficult set of institutional decisions. But better information on regulatory options is only a start: accomplishing the goal of allocating regulatory resources more effectively requires careful attention to the actual tradeoffs being made and feasible under current and proposed regulatory authorities.

References

1 George F. Will, 'Your Money and Your Life," Washington Post (March 8, 1990), p. A27.

2 Hon. David MacIntosh, in U.S. Congress, House, Subcommittee on National Economic Growth, Natural Resources, and Regulatory Affairs, Committee on Government Reform and Oversight, EPA '5 Particulate Matter and Ozone Rulemaking: Is EPA above the Law? Hearing, 105th Congress, 1st session, April 16, 1997 [Serial No.105-371 (Washington, D.C.: U.S. Govt. Print. Off, 1997), p.36.

3 "Bringing Reason to Regulation," The Lamp (Winter 1997-1998), 13.

4 Paul R. Portney, representing the economist's perspective in a debate Does Environmental Policy Conflict with Economic Growth? Two Views, Resources for the Future (1 December 1993); a printed version is David Gardiner and Paul R. Portney, "Does Environmental Policy Conflict with Economic Growth?" Resources (Spring 1994, no.115), pp.19-23

5 For a recent examination of the status of efforts to evaluate the costs and benefits of regulations, see Robert W. Hahn, ed., Risks, Costs, and Lives Saved: Getting Better Results from Regulation (Washington, D.C.: The AFI Press, 1996), pp.154-155.

6 W. Kip Viscousi, "The Dangers of Unbounded Commitments To Regulate Risk," in Robert W. Hahn, ed., Risks, Costs, and Lives Saved: Getting Better Results from Regulation (Washington, D.C.: The AEI Press, 1996), pp.154-155.

7 Lisa Heinzerling, "The Perils of Precision," The Environmental Forum (September/October 1998), 38-43.

8 Tammy O. Tengs and John D. Graham, "The Opportunity Costs of Haphazard Social Investments in Life-Saving," in Robert W. Hahn, ed., Risks, Costs, and Lives Saved: Getting Better Results from Regulation (Washington, D.C.: The AEI Press, 1996), pp.173-174; Tammy Tengs, et al., "Five-Hundred Life-Saving Interventions and Their Cost-Effectiveness," Risk Analysis, Vol. 15, no. 3 (1995), 369-390.

9 Robert W. Hahn, "Regulatory Reform: What Do the Government's Numbers Tell Us?" in Robert W. Hahn, ed., Risks, Costs, and Lives Saved: Getting Better Results from Regulation (Washington, D.C.: The AEJ Press, 1996), p.239.

10 For a review of the difficulties in applying these techniques, see Lester B. Lave, "Benefit-Cost Analysis: Do the Benefits Exceed the Costs?" in ibid., pp. 104-T34.

11 Schierow, Linda-Jo, Risk Analysis: Background on Environmental Protection Agency Mandates, CRS Report 98-619 (June 12, 1998)

12 Richard L. Stroup, "Superfund: The Shortcut That Failed," in Terry Anderson, ed., Breaking the Environmental Gridlock (Stanford, California: Hoover Institution Press, 1997, chapter 5; James T. Hamilton and W. Kip Viscusi, "How Costly is 'Clean'? An Analysis of the Benefits and Costs of Superfund Site Remediations," Journal of Policy Analysis and Management; Vol.18, No.1, (1999), 2-27.

13 Office of Technology Assessment, EPA Superfund Actions and ATSDR Public Health Data (July 1995) [OTA-BP-ENV-156].

14 Graham, "Edging Toward Sanity on Regulatory Risk Reform," Issues in Science and Technology (Summer 1995), 61-66; Graham, "Legislative Approaches to Achieving More Protection Against Risk at Less Cost," University of Chicago Legal Forum (1997), 1-47.

15 Paul R. Portney, "Reforming Environmental Regulation: Three Modest Proposals," Columbia Journal of Environmental Law, 13, 2 (1988), 207-214.

16 American Chemical Society/Resources for the Future, Understanding Risk Analysis (Washington, D.C.: American Chemical Society, 1998); Arrow, K. J. et al., "Is There a Role for Benefit Cost Analysis in Environmental, Health, and Safety Regulation?" Science (1996, 272), 221-222; Davies, J. Clarence, ed., Comparing Environmental Risks: Tools for Setting Government Priorities (Washington, D.C.: Resources for the Future, 1996; Robert W. Crandall, et al., An Agenda for Federal Regulatory Reform (Washington, D.C.: American Enterprise Institute and The Brookings Institution, 1997); National Research Council, Committee on Risk Characterization, Understanding Risk: Informing Decisions in a Democratic Society (Washington, D.C.: National Academy Press, 1996); The Presidential/Congressional Commission on Risk Assessment and Risk Management, Risk Assessment and Risk Management in Regulatory Decision-Making (Washington, D.C.: 1997).

17 Linda-Jo Schierow, Risk Analysis: Background on Environmental Protection Agency Mandates, CRS Report 98-619 (June 12, 1998); Linda-Jo Schierow, Environmental Risk Analysis: A Review ofPublic Policy Issues, CRS Report 98-618 (July 15, 1998).

18 Roglio Garcia, Federal Regulatory Reform: An Overview, CRS Issue Brief 1B95035; John E. Blodgett, Environmental Reauthorizations and Regulatory Reform: From the 104th Congress to the 106th, CRS Report 96-949 ENR. For hearings focused on the topic, see Committee on Science, House, Risk Assessment and Cost Benefit Analysis, 104th Congress, 1st session (Washington, D.C.: U.S. Govt. Print. Off., 1995); and Subcommittee on Commerce, Trade, and Hazardous Materials and Subcommittee on Health and the Environment, Committee on Commerce, House, Risk Assessment and Cost!Benefit Analysis for New Regulations, 104th Congress, 1st session (Washington, D.C.: U.S. Govt. Print. Off., 1995); and Committee on Environment and Public Works, Senate, Regulatory Reform and Environmental Laws, 104th Congress, 1st session (Washington, D.C.: U.S. Govt. Print. Off, 1995).

19 For more details on floor procedures, see: Stanley Bach, Senate Floor Procedure: A Summary, CRS Report 97-368 GOV and Stanley Bach, Floor Procedure in the House of Representatives: A Brief Overview, CRS Report 97-236 GOV; on jurisdiction, see Carol P. Hardy Vincent, Committee Jurisdiction and Referral in the Senate,CRS Report 98-242 GOV and Judy Schneider, House Committee Jurisdiction and Referral: Rules and Practice, CRS Report 98-175 GOV.

20 For more details, see Robert Keith, Manual on the Federal Budget Process, CRS Report 98-720 GOV and Richard Munson, The Cardinals of Capitol Hill (New York: Grove Press, 1993).

21 At many steps of congressional (and administration) decisionmaking, Members implicitly or explicitly tradeoff programs, issues, and/or funding. But, as measured by cost benefit analyses and risk assessments such as Tengs and Grahman's, environmental, health, and safety programs seem empirically inefficient. The question addressed here, then, why have not tradeoffs led to a more efficient array of programs.

22 The Office of Management and Budget, which constructs the President's Budget, is analogously split into compartments, each of which focuses on tradeoffs within its allotment of the full budget.

23 Clandia Copeland, Clean Water Action Plan: Budgetary Initiatives, CRS Report 98-745, p.4.

24 In theory, either full Appropriations Committee could have addressed the flinding comprehensively, but more often would defer to subcommittee decisions.

25 The Energy Daily (Jan.25, 1994), p.4.

26 "Cold Shower for Neutron Facility?" Science, 279 (13 March 1998), 1621.

27 David C. King, Turf Wars: How Congressional Committees Claim Jurisdiction (Chicago: University of Chicago Press, 1997).

28 See Steven Kelman, What Price Incentives? (Boston: Auburn House Publishing Co., 1981).

29 Authorizing committees frequently specify annual appropriations for a program; for the appropriations committees, however the authorization for appropriation is in effect a ceiling with actual fimding subject to available monies and competing programs.

30 The Consumer Product Safety Commission, the Environmental Protection Agency, the Federal Aviation Agency, the National Highway Traffic Safety Administration, and the Occupational Safety and Health Administration.

31 Tengs and Graham, p.176.

32 Frances H. Irwin, "An Integrated Framework for Preventing Pollution and Protecting the Environment" and David Clarke, "Chasing Rainbows: Is an Integrated Statute the Pot of Gold for Environmental Policy?" Environmental Law, Vol. 22, no. 1(1992), 1-76 and 281-300.

33 Timur Kuran and Cass R. Sunstein, "Availability Cascades and Risk Regulation," Stanford Law Review (forthcoming, April 1999).

34 Committee for Economic Development, Modernizing Government Regulation: The Need for Action ((1998), p.5.

35 Bill Archer, "Paying Down the Debt," The Washington Post (2 Feb.1998), p. A l8.

36 Mark Shields, "Taxes Well Spent," The Washington Post (4 August 1997), p. A19.

37 The disposition of the monies may have another implication for risk. Income levels correlate negatively with mortality, presumably because lower income means people have less to spend on health. If regulations lead to slower economic growth, the lower income levels imply there will be statistical loss of life. Isolating this tradeoff has proven highly problematic. The idea of incorporating an income-mortality tradeoff in actual policymaking has been broached but so far remains largely academic. See W. Kip Viscousi, "The Dangers of Unbounded Commitments To Regulate Risk," in Robert W. Hahn, ed., Risks, Costs, and Lives Saved: Getting Better Results from Regulation (Washington, D.C.: The AEI Press, 1996), pp. 159-162.

38 I.e., Congress enacting in lieu a comparable mandate, or an administrator imposing in lieu a comparable regulation.

39 Tengs and Graham, op. cit., pp. 191, 193.

40 These are not federally appropriated dollars provided by taxpayers; these are (estimated) costs of regulations and arise from forgone profits from alternative investments, lost wages or rents, and/or consumer expenditures to cover higher prices of goods.

41 During the 1990 debate on the Clean Air Act Amendments, a working agreement emerged that the bill could impose some $25 billion in costs per year afrer 2000. Some legislators argued that this was too much and others that this was not enough; but as a practical matter, the majority accepted this as a reasonable pricetag for the program. Given the difficulties in assessing costs and benefits, it is not surprising that estimates of costs of the legislation ranged greatly, from the low 20s to 90 billion dollars per year. E.H. Pechan & Associates, Clean Air Act Amendment Costs and Economic Effects: A Review of Published Studies (Prepared for National Clean Air Coalition, National Clean Air Fund, Washington, D.C.), in Congressional Record (October27, 1990), S16963-S 16969 [daily ed.j The test of the bill's adherence to $25 billion in costs was EPA's "Official" estimate.