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Risk Analysis: Background on Environmental Protection Agency Mandates
Updated June 12, 1998
List of Tables
Table 1. Statutory Authority for Considering Risks,
Technological Capacity, and Costs in Developing Regulations
In recent years, Congress has been considering whether a legislative mandate to analyze and compare risks and costs would lead to more efficient and effective environmental regulations. Debate off en centers on the adequacy of existing legal mandates for risk and economic analysis of regulations. These include provisions of environmental statutes, President Clinton's Executive Order 12866 on Regulatory Planning and Review, and the Unfunded Mandates Reform Act (Public Law 104-4) that authorize, mandate, or constrain EPA's use of risk analysis, especially for cost-benefit comparisons, in developing environmental regulations. Debate also focuses on the impact these mandates have had on EPA's use of risk analysis.
Many of EPA's regulatory decisions are driven by provisions of environmental statutes dictating the degree of environmental protection to be achieved, the actions to be taken, and the criteria to be considered. For example, the Clean Air Act Section 109 requires ambient air quality standards that protect public health with an adequate margin of safety. Environmental laws differ greatly in the discretion they grant EPA to consider the significance of risks or the relationship between costs and reductions in risks expected to be achieved. Some recent amendments explicitly require EPA to balance risks of different kinds in selecting among regulatory options.
Presidents have attempted to encourage more consistent use of risk and economic analysis by federal agencies through executive orders. Compared to executive orders by previous presidents, President Clinton's Executive Order 12866 appears to require EPA to analyze more risks for more rules. On the other hand, fewer EPA analyses will be subject to oversight by the President's Office of Management and Budget (OMB). According to a U.S. General Accounting Office (GAO) analysis of EPA compliance with President Clinton's executive order, EPA economic analyses vary widely in type, form, and format.
Congress also has issued general mandates to federal agencies to encourage greater use of risk and cost-benefit analysis. The Unfunded Mandates Reform Act (P.L. 104-4), Title II, requires all federal agencies to quantitatively assess benefits, including the effect of the federal mandate on health, safety, and the natural environment, and to compare benefits to costs for all rules with an expected cost of $100 million or more in a year. However, of 110 economically significant rules promulgated in the first 2 years since enactment, 78 did not require assessments due to specific exemptions allowed by the Act, according to the GAO.
The 104th Congress added mandates for considering risks to two environmental statutes authorizing EPA's regulatory activities, the Federal Insecticide, Fungicide, and Rodenticide Act and the Safe Drinking Water Act. The 105th Congress may consider proposals to add similar requirements to the Comprehensive Emergency Response, Compensation, and Liability Act (Superfund); also it has before it proposals for an overriding statute to establish broad risk and cost analysis requirements.
In recent years, Congress has been considering whether a legislative mandate to analyze risks would foster more efficient and effective environmental regulations. Debate often centers on the adequacy of existing mandates. One argument heard is that President Clinton's executive orders as well as the Unfunded Mandates Reform Act enacted by the 104th Congress already require risk analysis for major environmental regulations. To the extent that this is true, congressional oversight may be the appropriate response to perceived failure by the U.S. Environmental Protection Agency (EPA) to promulgate efficient and effective regulations. Others contend that existing provisions of environmental laws limit EPA's flexibility in developing regulations, and thereby impede selection of more efficient or effective options. Those holding this view who favor risk analysis of proposed regulations tend to argue for an overriding statute to establish a direct role for risk analysis in every rulemaking or for amendments to incorporate risk assessment provisions into individual environmental statutes. Still others oppose increased use of risk analysis in environmental rulemaking. They argue that analysis simply delays development of new regulations and ultimately forces EPA to conform its decisions to the analytic results, regardless of the quality of underlying data and methods.
The 104th Congress added mandates to consider risks to key environmental statutes authorizing EPA's regulatory activities, the Federal Insecticide, Fungicide, and Rodenticide Act and the Safe Drinking Water Act. The 105th Congress may consider proposals (e.g., S.8, H.R. 2727, or H.R. 3000) to add similar requirements to the Comprehensive Emergency Response, Compensation, and Liability Act (Superfund); also it has before it a proposal (S. 981) for an overriding statute to establish broad risk and cost analysis requirements.
This report describes existing provisions of law that authorize, mandate, or constrain EPA's use of risk analysis in the development of regulations. It also examines the impact these mandates have had on EPA's use of risk analysis. For information on legislation in the 105th Congress, see CRS Issue Brief IB94036, The Role of Risk Analysis and Risk Management in Environmental Protection. For in-depth analysis of the value and limitations of risk analysis for environmental management, see CRS Report 98-618, Environmental Risk Analysis: A Review of Public Policy Issues. For analysis of issues related to cost-benefit analysis, see CRS Report 95-760, Cost-Benefit Analysis: Regulatory Issues.
Many of EPA's regulatory decisions are driven by specific statutory mandates concerning the degree of protection to be achieved, the actions to be taken, and the criteria to be considered. These mandates vary in specificity, sometimes granting EPA broad discretionary power, and other times little or no power, to consider the significance of risks or the relationship between costs and reductions in risks expected to be achieved. Some laws authorize or even require consideration of economic factors, but others do not. A few have provisions that prohibit EPA from considering costs. Selected relevant provisions of key environmental statutes are described below and are summarized in Table 1.
Section 109 of the Clean Air Act (CAA; 42 U.S.C. 7401-7626) mandates the establishment of national primary ambient air quality standards for pollutants from numerous or diffuse sources whose emissions may cause or contribute to air pollution that may "reasonably be anticipated to endanger public health or welfare" [§ 1 08(a)( 1)]. Under this provision, EPA is required to set standards such that their attainment and maintenance "are requisite to protect the public health" in the judgement of the Administrator, based on air quality criteria and allowing an adequate margin of safety. Air quality criteria are compilations of information reflecting the latest scientific knowledge relevant to the assessment of risks to public health or welfare posed by the presence of criteria pollutants in the ambient air [Section 1 08(a)(2)]. This statutory provision only authorizes consideration of environmental and human health risks, and was interpreted by the Court of Appeals for the District of Columbia Circuit in 1980 as prohibiting consideration of costs (Lead Industries Association v. EPA, 647 F.2d at 1 149).1
In the control of emissions of air pollutants from major new stationary sources, the Act does allow for considering costs. The CAA Section 11 1(a)(1) requires EPA to consider available technologies and costs (including non-air quality health and environmental impacts and energy requirements) in setting performance standards for emissions of pollutants by new stationary sources.
Table 1. Statutory Authority for Considering Risks,
* Based on the paraphrased or quoted statutory language under the heading"Degree of Protection." Other interpretations of the cited statutory provisions are possible and may have legal precedence.
The CAA Section 112 addresses emissions of 188 hazardous air pollutants(HAPs). CAA 112(d) requires EPA to consider risks, available technologies, ad costs in promulgating regulations to control emissions of HAPs from major industrial sources.3 It directs EPA to require source facilities to apply the "maximum achievable control technology," taking into account costs and other factors. However, subsection (f) of this section also requires EPA to evaluate and report to Congress on the need for health-based (i.e., based on risk alone)standards for these hazardous air pollutants. If Congress fails to act on the basis of EPA's report, EPA is required, if necessary, to promulgate technological standards for industries that provide an ample margin of safety to protect public health and reduce the lifetime excess cancer risks for the most exposed individual to less than one in a million. (this provision will take effect after 2001.) This latter provision does not permit EPA to consider the cost of regulation because the statute defines the level of protection EPA standards must provide.4 Subsection (f) also requires prevention of adverse environmental effects " with an ample margin of safety" but allows consideration of costs, energy, safety and other relevant factors.
The CAA section 202 requires EPA to establish emission standards for new motor vehicles which reflect the greatest degree of emission reduction achievable through available technology that does not itself pose an unreasonable risk to health, welfare, or safety. These emission standards are set after consideration of cost, energy, and safety factors.
Finally, Section 312 of the Clean Air Act requires EPA to conduct comprehensive analyses of the impact of the Act on the Public health, economy, and environment of the United States and to report to Congress every 2 years on the results. It requires consideration of the costs, benefits, and other effects associated with compliance. Specific instructions are given for assessment of costs and benefits of regulations.5
1 See CRS Report 97-722, Air Quality Standards: The decisionmaking Process. July 21, 1997.
2 The act neither encourages nor excludes consideration of costs.
3 Prior to enactment of the Clean Air Act Amendments of 1990, Section 112 was widely known as the "cost-blind" statutory provision that required EPA to base decisions on risk alone, that is , without regard to cost. However, the extremely slow pace at which EPA established risk-based regulations led Congress to amend the law.
4 The statute requires provision of " an ample margin of safety to protect public health in accordance with this section(as in effect before the date enactment of the Clean Air Act Amendments of 1990)." the reference to the Act prior to amendment indicates that Congress intended a strict interpretation of this language. The Court of Appeals for the District of Columbia Circuit decided in 1987 that Section 112 of the Act required EPA to determine what is "safe" based "solely upon the risk to health," and that EPA "could not under any circumstances consider cost and technological feasibility at this stage of the analysis" under the Act(Natural Resources Defense Council v. EPA, 824F.2d at 1164-1165). However, the Court stated that costs and technological feasibility could be considered in promulgating an emissions standard below the "safe" level to provide an "ample margin" and to " take into account the inherent limitations of risk assessment and the limited scientific knowledge of the effects of exposure to carcinogens at various levels."
5 EPA issued the first report, The Benefits and Costs of the Clean Air Act, 1970-1990, in October 1997.
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