Sunday, March 23, 2008

Tradeoffs in Air Quality Policy

What do you think American policy should be regarding air quality? The EPA currently develops cost-benefit analysis of the Clean Air Act. This involves assessing the current state of our air quality, making assumptions about its impact on citizens, and then considering the options for improving the air. Various options are analyzed which consider the cost of implementation, and the total benefit achieved. This benefit requires placing a value on a human life.

A decade or so previous, the value of human life in an area was determined by taking the value (think “earnings potential”) of a human being and factoring in age demographics. In this system, older people (who had less future earnings potential that would be lost) were worth a lot less than young people. This arithmetic was not politically acceptable, so nowadays regardless of age we all have the same human value (~6 M$).

When assessing possible actions and their health benefits in various parts of the country, higher population areas will yield greater benefit than lower population areas. From a utilitarian point of view in a country with limited resources, it makes sense to spend our money in ways that benefit the most possible people. This choice means that urban areas will tend to benefit more than rural areas.

While this decision may be more efficient, is it moral to spend money to improve the air in a big city and ignore the air in rural areas? From a political standpoint, it seems to me that policies should be developed in which there results an equivalent risk to all citizens. There seems no other way to justify actions to the public.

Consider that the EPA sets concentration targets, such that if a National Ambient Air Quality Standard (NAAQS) is violated then the county is placed in nonattainment status and must develop methods to improve its area. It is always very urban/industrial areas that are in nonattainment status, so in some ways we are avoided the dilemma illustrated above. But then again, we tend to place the limited number of air quality monitoring stations in the major metropolitan areas. So we may be missing rural areas with similar problems.

Of course, we have certainly made reasonably sufficient gains in improving our air quality over the past 30+ years. But it is worth questioning the limitations of cost-benefit analyses when applied to immeasurable quantities, and being aware of the tradeoff between equity and resource efficiency. Such problems highlight the difficulties of developing sound policies based on a limited resource base, given insufficient information.

Imagine then why it is so difficult to develop a sound international policy on climate change…

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