Paper Number: EE-0295

Document Date: 10/01/1997

Author(s):  U.S. Environmental Protection Agency, Office of Air and Radiation and Office of Policy, Planning and Evaluation

Subject Area(s):

Benefit-Cost Analysis, Clean Air Act, Economic Impact Analysis, Retrospective Analysis

Keywords:  Benefit-Cost Analysis, Economic Impact Analysis, air pollution control, retrospective

Abstract: 

Final report to Congress prepared in response to Section 812 of the 1990 Clean Air Act Amendments addressing the question of how the overall health, welfare, ecological, and economic benefits of Clean Air Act Programs compare to the costs of these programs in the period 1970-90. This final report has been approved by an advisory committee formed to review it, and has been transmitted to Congress.

This retrospective analysis focuses on the National Ambient Air Quality criteria pollutants sulfur dioxide, nitrogen oxides, carbon monoxide, particulate matter, ozone, and lead. The report compares and contrasts two regulatory scenarios. The "control scenario" reflects the actual conditions resulting from the historical implementation of the 1970 and 1977 Clean Air Acts. In contrast, the "no-control" scenario reflects expected conditions under the assumption that, absent the passage of the 1970 Clean Air Act, the scope, form, and stringency of air pollution control programs would have remained as they were in 1970. The "no-control" scenario represents a hypothesized "baseline" against which to measure the effects of the Clean Air Act. The differences between the public health, air quality, and economic and environmental conditions resulting from these two scenarios represent the benefits and costs of the Act's implementation from 1970 to 1990.

The retrospective study was designed and developed over a six year period, and received extensive outside peer review. This outside peer review, conducted on an ongoing basis throughout the full six-year period of study design and implementation, was provided by the EPA Science Advisory Board (SAB) Council on Clean Air Act Compliance Analysis (Council), an independent panel of distinguished economists, scientists and public health experts chaired by Dr. Richard Schmalensee of the Massachusetts Institute of Technology. In a July 8, 1997 letter to EPA concluding its review of the retrospective study, the SAB Council summarized its findings as follows: "The Council finds that the Retrospective Study Report to Congress by the Agency is a serious, careful study and employs sound methods along with the best data available. While we do not necessarily endorse all details of this study's findings, we believe that as a general matter that they are consistent with the weight of available evidence."

The report is broken down into the following major sections:　

• Cover page.
• Abstract - summarizes the overall study and its findings in two pages.
• Table of Contents - table of contents, acronyms and abbreviations, table of figures, table of tables, and acknowledgments.
• Executive Summary - ten page more detailed summary, including graphical representations of the historical benefits and costs of Clean Air Act programs.
• Chapter 1: Introduction.
• Chapter 2: Cost and Macroeconomic Effects.
• Chapter 3: Emissions.
• Chapter 4: Air Quality.
• Chapter 5: Physical Effects.
• Chapter 6: Economic Valuation.
• Chapter 7: Results and Uncertainty.
• Appendix A: Cost and Macroeconomic Modeling - estimation of direct compliance costs and the macroeconomic modeling of the effects of those expenditures.
• Appendix B: Emissions Modeling - methodologies used to estimate control and no-control scenario emissions and the results obtained by these methods.
• Appendix C: Air Quality Modeling - methodologies used to translate differences in emissions under the control and no-controls scenarios into changes in air quality conditions; includes summary characterizations of the results for target year 1990.
• Appendix D: Human Health and Visibility Effects of Criteria Pollutants - overview of the approach used to model human health and welfare effects of criteria pollutants; outlines the principles used to design and implement the physical effects analysis, presents the specific concentration-response functions used for each pollutant-endpoint combination (e.g., particulate matter-related premature mortality), and describes the physical incidence outcomes of the modeling.
• Appendix E: Ecological Effects of Criteria Pollutants - potential ecological benefits of Clean Air Act program criteria pollutant controls in the context of three types of ecosystems: aquatic, wetland, and forest.
• Appendix F: Effects of Criteria Pollutants on Agriculture - economic value of the differences in yields of some agricultural crops between the control and no-control scenarios.
• Appendix G: Lead Benefits Analysis - benefits resulting from the estimated reductions in lead in gasoline and from stationary sources achieved pursuant to the Clean Air Act.
• Appendix H: Air Toxics - quantitative estimates of the benefits of Clean Air act-related control of hazardous air pollutants for nonutility stationary source and mobile source categories. Noncancer effects and ecological effects are described qualitatively.
• Appendix I: Valuation of Human Health and Welfare Effects of Criteria Pollutants - the basis for the methods and coefficients used to translate most of the quantified human health, welfare, and environmental effect incidences into measures of economic value, and presents the results of those calculations by individual endpoint.
• Appendix J: Future Directions - examples of research topics which, if pursued, might improve the certainty and/or comprehensiveness of future section 812 benefit-cost studies of the Clean Air Act.

Report available from National Service Center for Environmental Publications.

This paper is part of the  Environmental Economics Research Inventory.

• The Benefits and Costs of the Clean Air Act, 1970 to 1990 (PDF)(378 pp, 82 MB, 10/01/1997, EE-0295)
  Final report to Congress prepared in response to Section 812 of the 1990 Clean Air Act Amendments addressing the question of how the overall health, welfare, ecological, and economic benefits of Clean Air Act Programs compare to the costs of these programs in the period 1970-90.