Valuing Health Risks, Costs, and Benefits for Environmental Decision Making Report of a Conference (1990) / Chapter Skim
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8. Conclusions
8. Conclusions
Pages 189-208
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From page 189... ...
The steering commmitee, on the basis of its conference papers and discussions, believes that the current challenge for those who perform or use benefit-cost analysis is twofold: · to acknowledge and adequately identify the limited role of benefitcost analysis and analysts in the entire process of regulatory policy formation and enforcement and to distinguish systematically applications of current risk-control approaches and techniques that are appropriate for specific types of regulatory issues. These themes run through the comments of many conference participants, including those with sharply opposing views on specific topics debated in the various sessions.
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From page 190... ...
Therefore, we believe there is a need to develop commonsense criteria for applying current methods to problems encountered in health and safety regulation, by defining in terms helpful to both analysts and critics alike the limits to analysis and by developing systematic application of analytic approaches and techniques to appropriately matched policy issues.
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From page 191... ...
Much discussion focused on the current and potential roles for agency staff analysts in increasing understanding among decision makers and the public of the costs and benefits of regulation, including dilemmas and trade-oRs inherent in real decisions. Expression of these concerns, as well as suggestions for dealing with them, fall largely into five categories reflecting the most important aspects of the analytical process for environmental and other regulatory decisions: the administrative and legal context in which analysis is done, including its purpose; · the overall approach that is or should be taken in benefit-cost analysis; issues related to the specific analytic procedures and techniques; · the adequacy of underlying scientific information on risk (e.g., dose response or exposure)
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From page 192... ...
In particular, the adversarial tone associated with policy making for much of health and safety regulation has the effect of providing extremely strong, but rarely singular, messages to benefit-cost analysts regarding how analysis should be done and used. Statutes, court decisions, congressional intentions, and executive branch directives provide multiple, sometimes conflicting, guidance to agency decision makers and analysts on whether or how to include benefitcost considerations in risk-management activities.
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From page 193... ...
Second, agreement would be needed that previous improvements in the techniques of benefit-cost analysis now enable sophisticated assessments of variables, such as human life extension, temporal effects, and other important issues. Third, acknowledgment would be needed that benefitcost analysis is or can be decoupled from political motivations, such as the perception that valuation approaches may support or justify policies favoring industry or other special groups to the detriment of the wider public.
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From page 194... ...
If so, these issues must be addressed at the level of institutions (i.e., Congress, the President, and the courts) , and possibly through the conduct of further research, before specific guidance can be supplied to regulatory decision makers and analysts.
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From page 195... ...
MacLean describes what for many makes the issue absolutely unique: human life is sacred, a fact with many ramifications. For example, although few disagree that it makes sense to discount expenditures or the opportunity costs of health effects, MacLean claims that there are moral and logical difficulties when the value of life per se is discounted.
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From page 196... ...
The reasoning is that, in some cases, current standards so far exceed current attainment levels that there is little chance additional efforts will lead to complete compliance. Therefore, the argument goes, fewer such efforts are undertaken than would be if standards were set at a lower level.
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From page 197... ...
PROCEDURE Procedure, as used here, refers to the way the benefit-cost analyst actually goes about systematically examining values. The choice of specific methods, metrics, and measures will play an important role in providing understandable, believable information for decision makers and other interested parties in protective regulation.
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From page 198... ...
Other questions include: · Can balanced procedures, possibly including a combination of valuation techniques and nonquantitative factors, be found that would meet the approval of Congress, OMB, and the courts? · Is the use of a simple or single metric appropriate when there is variation among individuals, not just in terms of how much of a value is wanted or can be tolerated, but in terms of whether they want that particular value at all?
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From page 199... ...
benefitcost analysis may be only a small component of the entire regulatory process, analytic procedures must be constructed to account for the major characteristics of decision making. Harris raises the point that, whereas the usual way of thinking about analysis is as an input to decision making, decision making often effectively provides input for subsequent analysis, and that the best strategy may be to treat the whole process as dynamic.
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From page 200... ...
. The challenge shared by the scientist, the analyst, and the decision maker is to construct procedures for knowing when to recommend action, further information gathering, or both.
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From page 201... ...
As indicated previously in this discussion, the role of the agency analyst, as well as that of the agency decision makers at the apex, is often limited by a context in which myriad other voices, both outside and inside the agency, speak strongly. Moreover,
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From page 202... ...
It is not intended, however, nor can it give equal emphasis to all possible considerations bearing on a regulatory decision. Rather, analysis traditionally focuses on a few factors the decision maker would like to make explicit or those few for which quantitative values are available.
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From page 203... ...
The major role of benefit-cost analysis in environmental regulation should be as an organizing concept and as a way of helping the decision maker think about the factors that need to be looked at. A process involving peer review of benefit-cost analysis could assist decision makers by malting assumptions clear and by noting the strengths and weaknesses of results.
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From page 204... ...
Similarly, benefit-cost analysis is really a family of related techniques and approaches, only a few of which have been systematically evaluated for their application to specific topical and conceptual issues in health and safety regulation. Consequently, the application of benefit-cost analysis must be supported by better systematic distinctions or situational conditions that reflect accurately key variations among regulatory responsibilities and problems facing health and safety decision makers.
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From page 205... ...
At the heart of this recognition is the belief that there is an irreducible tension between a desire to reduce value considerations in regulation to a single metric and a desire for symbolic action. This conflict emerges most clearly with respect to issues involving human life (preventing deaths/saving lives)
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From page 206... ...
4. We believe that, among agency decision makers, the courts, Congress, and analysts, there is no consensus regarding the use of a specific set of analytical techniques for a specific purpose.
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From page 207... ...
For example, techniques based on willingness-to-pay will emphasize expressed preferences, while those based on human capital models emphasize forgone earnings. Although there is considerable debate within some agencies and among some analysts as to the appropriateness of specific techniques for valuing lives, there is a need to evaluate both the types of regulatory problems and the attributes and implications of techniques for benefit-cost analysis, in order to develop a more systematic basis for deciding when to apply which technique.
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From page 208... ...
OMB could be asked to respond to plans for expanding peer review for valuation analyses.- Such an expansion would complement existing agency peer reviews for scientific risk assessment prior to agency decision making.
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