The emerging role of benefit-cost analysis in the regulatory process at EPA

Almost since its inception, the U.S. Environmental Protection Agency (EPA) has been using analytical techniques related to the concept of balancing benefits and costs. As a result of the Reagan Administration's Executive Order 12291, benefit-cost analysis is playing an increasingly important role in the EPA regulatory process. Benefit-cost analysis has assisted in organizing information and improving cost estimates. It has influenced the choice of regulatory criteria and aided in the developing degrees of stringency for environmental regulations. The usage of benefit-cost analysis is limited by interpretations of portions of the Clean Air Act and Clean Water Act that restrict consideration of costs or establish technology standards. Benefit analysis is only as reliable as the underlying scientific data in the health effects area. Work by epidemiologists on the relationships between pollutant exposures and adverse health effects will play a vital role in EPA's ability to value in dollars the health improvements attributable to pollution control. EPA's Office of Policy, Planning and Evaluation is currently conducting combined economic and epidemiology research to develop methods and estimates of the health benefits of pollution control.