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BENEFIT’COST ANALYSIS AND ENVIRONMENTAL DECISION-MAKING

ISSUE BRIEF NUMBER IB80012

AUTHOR:
Biniek, Joseph

Environment and Natural Resources Policy Division

THE LIBRARY OF CONGRESS
CONGRESSIONAL RESEARCH SERVICE

MAJOR ISSUES SYSTEM

DATE ORIGINATED gggggggg
DATE UPDATED Qlgjgggg

FOR ADDITIONAL INFORMATION CALL 287-5700

0115

CRS- 1 IB80012 UPDATE-01/14/81

l§§Q§-2§£l§£IlQE

Current debates on environmental regulations reflect strong concerns about
the costs of regulations and their impact on the economy. some individuals
contend that environmental regulations are too stringent and the costs
imposed on the Nation are too high. Others contend that benefits far exceed
the costs. The debates continue because of a lack of rigorous and
unambiguous measures of either benefits or costs. Legislative response to
the debates include numerous proposals which would impose a requirement that
Federal agencies’ regulations be promulgated only if benefits exceed costs.
At issue is whether the results of benefit-cost analysis should be
established as a decisive criterion for decision-making or as a tool for
organizing information and the results obtained, or as just one of the many
inputs in decision-making.

§é§§§§QQND A19 P0L£QX-A§ALZ§l§

The inability of the Nation to correct the numerous economic problems,
inflation, declining productivity, unemployment, regulatory delays, energy,
etc., has stimulated concern about the effect of Government programs. The
economic impact of environmental regulations is a key issue. The legislative
ind executive branches and academia have intensified the debates on the role
Jf economics in regulatory efficiency. Legislative proposals for regulatory
reform to improve efficiency often call for the use of benefit-cost analysis
to accomplish these objectives.

Benefit-cost analysis, as a technique, has evolved since first required by
the Flood Control Act of 1936. Proponents of benefit-cost analysis often

1 paraphrase the Act to stress that benefits of Federal projects must exceed
"costs but often overlook another provision of the Act which justifies Federal

Government participation "if the lives and social security of people are
otherwise adversely affected" (June 22, 1936, ch. 688, Sec. 1. 49 Stat.
1570).

At no time during the 43-year evolution of benefit—cost analysis in water
resource planning has a direct monetary value been placed on life, health, or
safety. The first proposed practices for economic analysis of river basin
projects (the Green Book) stressed that loss of life or improvement of health
may be assigned value “on the basis of agreed upon estimates of, acceptable
expenditures” (p. 27). The subsequent guidelines of 1962, Senate Document
97, stated that improvement of health and other intangibles could be
evaluated in terms of "the cost of achieving the results by the most likely
alternative ... as an approximation of value." The 1973 Principles and
Standards required the beneficial effects on security of life, health, and
safety as a result of reducing disaster, disease-carrying insects, water and
air pollutants, and improvement in national nutrition be addressed in a
"descriptive—qualitative interpretation and evaluation of the improvement"

p. 83).

§§§§FI2 A§§§55§ENI§

Attempts to assess the benefits of environmental programs outside the

CBS‘ 2 IB80012 UPDATE-01/1Q/81

water resource planning area have been much more controversial. A survey 0’
23 studies published between 1967 and 1977 by the American Lung Association
describes the heroic attempts of economists, statisticians, and public health
scientists to estimate the costs air pollution adds to the Nation's health
bill. The survey shows wide variations in values used for the cost of
disease and premature death. The National Academy of Sciences study in 197a
for the Senate Committee on Public Works used a value of $200,000 for each
death attributable to air pollution but used a lower value of $30,000 in
1975. The values used for illness due to oxidants also showed great
variations; for example, the National Academy of Sciences used $1-$10 per
day, while Gillette used $1-50 per hour. (Gillette, Donald G., "Ambient
oxidant Exposure and Health Costs in the United States - 1973," Journal of
the Air Pollution Control Association, April 1977: 331.)

Variations and uncertainties about benefit estimates arise from problems
in four steps in the estimation process: specification, measurement,
valuations, and aggregation.

Spegifiggtigg errors stem from inability to define or account for all
important variables and relationships.

ggagggggggt errors arise from inadequate information monitoring errors --
inability to separate effects of co-factors and errors in characterization of
the population at risk. .

Eglggtign errors appear because of inability to assign acceptable values
to certain physical, biological, aesthetic, and psychic effects.

ggggggatign errors result from attempts to exprapolate regional estimates
to national levels or from attempts to derive future values from past or
current estimates.

Many of the so—called benefit studies begin and end with a tabulation of
pollution damage estimates. Theoretically, the damages become benefits upon
removal of the pollutants through implementation of abatement programs.
Estimates of national air and water damage, compiled by Heintz et al., were
derived from interpretations of the results of numerous studies of varying
scope, methodology, and data quality. The "best estimate" of damage of air
pollution was $20.2 billion and the "best estimate" of water pollution was
$10.1 billion in 1973. The removal of pollutants would theoretically result
in benefits of $30.3 billion in 1973. It should be noted that the damages
reflect dollar values and socioeconomic variables for a specific year (1973)
and these conditions may not be present today. The authors caution that
substantial uncertainties are associated with these estimates including
availability and reliability of data.

In contrast to the damage estimates compiled by Heintz, Professor A.
Myrick Freeman III, of Bowdoin College, completed a review and synthesis of
benefits. Freeman's study had four objectives: review the theoretical
framework; explain differences in earlier studies; recalculate benefits to a
common set of assumptions; and present a "best judgement" estimate. He
arrives at a $21.u billion “most reasonable point estimate“ as the benefits
for air pollution control enjoyed in 1978 in terms of 1978 dollars. E
cautions that the "point estimate should not be used without citing the upper
and lower bounds ($4.6 - 51.2 billion); to do so would convey a false sense
of accuracy or certainty." In the author's judgement there is a 90%
certainty that the true value lies within the range.

CBS- 3 IB80012 UPDATE-01/1Q/81

Freeman's synthesis establishes the range of water quality benefits
between $6.5 billion and $25.0 billion, with a "most reasonable point
estimate" at $12.3 billion. The water pollution control benefits estimates
reflect benefits to be enjoyed in 1985 in terms of 1978 dollars. Tables 1
and 2 summarize benefits of air and water by category and pollutant source.

2D
3.

CRS- Q

TABLE 1

IB80012 upnarn-01/14/31

Air Pollution Control Benefits Being Enjoyed in 1978

E駧Q9.I

health

A. Stationary Source
nortality
Morbidity

Total-
B. Mobile Source

Total Health

§9;;;n9 and Cleaning
Xegesetien

A. Stationary Source

B. Mobile Source

Total Vegetation

ueserials

A. Stationary Source

B. Mobile Source

Total

2;22sr2x_!e;29§

A. Stationary Source
B. Mobile
Total

GRANDATOTAL(1)

SOUIZCBS

1In Billi2n§-9:_122§_29l;§rsL

-Q--.ZZ;..:.
-§;l-::;22;.
--:§-ZZ-.§:Q
O

_-=Z-::;.Z;&
-.;Z-::.-2;&

$.fl -- 1.1
-.:1-ZZ;..:§
-§:§ " 1:3

$.9 -- 6.9
_§;Z-::;_Z;.
§l:1_ZZ;.§:2
§&:§-ZZ._l:g

Host Reasonable
E9in£-§§2i§ese_

Because of overlap, only 30% of property value benefits are

added to other categories

Pollution Control:
Estimates.

Environmental Quality.

Freeman, A. Myrick III.

(see

PP-

119-22).

The Benefits of Air and Water
A Review and Synthesis of Recent

A report prepared for the Council on
December 1979.

c3s—.5 IB80012 uPDATE+o1/1n/31

TABLE 2

Benefits in 1985 from Removal of
Conventional Water Pollutants
(in billions of 1978 dollars)

Most
Likely
Point
32299 Eesinass
gggggagigg $4.1 - $1u.1 $6.7
fl9u:Q§2;-§sa2£;:§;
aesthetics,
ecology,
property
values 1.0 - 5.0 2.0
2iz§£§i9u-Q§e§
Drinking Water-
Municipal
Households 0.1 - 0.5 0.3
Industrial
Supplies 0.4 -- 0.8 0.6
§9u222s;al.§;§he.;_§ 0-“ -- 1-; _.9;§
Total §§;§-::--Zfl;§ §l2=§

Source: Freeman, Ibid.

CRS- 6 IB80012 UPDATE—01/1H/81

§Q§1.9E-§EGELA1l-§§

The rapid expansion of regulatory agencies in the 19605 and 1970s and ,the
accompanying increase in the costs they impose have brought wide belief that
something has to be done to halt the proliferation of regulation and to

D improve regulatory efficiency.n The burden of costs has been aggravated by

inflation and delays imposed by the regulatory process. Regulations are
alleged to have limited the initiatives of management, slowed the rate of
innovation, diverted capital to “nonproductive" uses and, thus, increased
unemployment. Despite those adverse impacts, the sharpest attention has
focused on the direct dollar costs of regulations. 6

Two Government agencies, the Council on Environmental Quality (CEQ) and
the Bureau of Economic Analyses (BEA) of the Department of Commerce, maintain
a statistical series on expenditures for pollution abatement and control.
McGraw—Hill also conducts an annual survey of expenditures for pollution
control. A comparison of the three estimates is presented in -Appendix A.
The differences among the estimates can be explained, in part, by the
variations in underlying assumptions. CEQ estimates include operation and
maintenance costs and an amortized (interest and depreciation) annual cost to
arrive at total annual costs. BEA  and Mccraw-Hill estimates are capital
expenditures during the year. Furthermore, CEQ estimates include public
expenditures; ucGraw-Hill's estimate does not.

All these studies have common definitional problems associated with the
tabulations of pollution abatement expenditures, including

1. the baseline problem, i.e., determination of incremental costs.‘

2. joint costs, i.e., costs of abatement techniques that
increase production;

3. expenditures not recognized as pollution abatement; and

a. separation of pollution abatement expenditures from
expenditures incurred for related purposes, such as
industrial safety.

These problems are evident in some industry-level estimates. Table 3
provides a comparison of three separate estimates. The HcGraw-Hill estimate
of $787 million for the mining industry is 16 times larger than the $49
million estimate of Data Resources Inc., (DB1), and about 8 times larger than
the $97 million estimate of BEA. HcGraw's estimate of $171 million for the
rubber industry is 10 times larger than DRI's $17 million estimate and nearly
n times larger than BEA's $47 million estimate. DRI's estimate of $648
million for the petroleum industry is approximately half of the estimates of
BEA and HcGraw—Hil1. '

CRS— 7 IB80012 UPDATE-01/1Q/81

Table93
POLLUTION CONTROL EXPENDITURES BY
SELECTED INDUSTRIES, 1977
(million of dollars)

Industry _§§A.....---..-§2§.a!:§;-;---..--..--.2§;_._-
Electric Utility 2,271 2,288 1,569
Petroleum 1,167 1,151 608
Chemical 701 717 809
Paper 468 R36 339
Mining 97 787 2 49
Rubber 47 171 17

Total   4,751 5,550 ' 3,031
Source:

(1) Data Resources, Inc. The macroeconomic impact of federal
pollution control programs: 1978 assessment. Jan. 11, 1979.

(2) 11th Annual McGraw-Hill Survey of Pollution Control
Expenditures.

(3) Rutledge, Gary I. and Betsy O'Connor. Capital Expenditures
by Business for Pollution Abatement, 1977, 1978, and Planned
1979. Survey of Current Business. June 1979.

Other cost studies are offered as evidence of the need for benefit-cost
analysis. The Business Roundtable QQ§§_Q§_R§gglgti9n study concludes much of
the regulatory costs are "considered by companies to be wasteful and
nonproductive." No attempt was made to assess benefits, however. The
muchépublicized study of Murray L. Weidenbaum directed at "raising the public
information level" to achieve a balance between benefits and costs provides
no information on benefits.

B9.L§.QE-§§F.§PIT-CQ ST-.1‘.\.E3.LZ§.I.§.

Economists have developed a technique for evaluating programs that involve
scarcity and tradeoffs. Proponents of benefit-cost analysis argue that
efficiency stems from weighing benefits and costs of a program before action
is taken. Opponents condemn benefit-cost analysis as crass and impersonal.
Others contend that the technique is a means of portraying valuable
information to enhance decision-making.

The 94th Congress engaged in an extensive study of "Federal Regulation and
Regulatory Reform." Twenty—eight days of hearings in the House Subcommittee
on Oversight and Investigation involved some 220 witnesses and resulted in a
hearing record of over 3,500 pages. The hearings became the background of a
subcommittee report which addressed, among other things, the “Use and Misuse

f Benefit/Cost Analysis." The subcommittee concluded “the limitations of
-he usefulness of benefit/cost analysis in the context of health, safety, and
environmental regulatory decisionmaking are so severe that they militate
against its use altogether" (p. 515). major difficulties were found to
include: overestimation, inability to measure some factors, bias against
public interest, and subjective valuations.

CRS- 8 IB80012 UPDATE‘01/1H/81

Obversely, A. Hyrick Freeman, professor of economics at Bowdoin College
argues that benefit-cost analysis, as an economic tool, does not dictate
choices or abrogate the authority or responsibility of the decision-maker.
Benefit-cost analysis, he contends, is very valuable as a framework and set
of procedures for organizing and expressing certain types of information on a
range of alternatives. Critical assumptions and uncertainities must be
identified and all weaknesses must be made known to decision-makers so as not
to mislead them. He cautions that, in the absence of complete information,
benefit analysis may be more damaging than useful. ("Critical Review of
Estimating Benefits of Air and water _Pollution Control." Edited by A.
Hershaft. EPA-600/5-78—01u. June 1978.)

Professor Peter Sassone, Georgia Institute of Technology, suggests the
critical test of a benefit—cost analysis is the accounting scheme. He
suggests the scheme must permit the comprehensive itemization of all project
effects and their quantification along with the qualitative assessment of the

‘ intangibles, all in a useful format. All project effects that have an

associate dollar value are listed under “monetized effects.“
Incommensurables and intangibles, not susceptible to monetization, must be
achnowledged and displayed as accurately as possible. He suggests a one-page
format for the accounting worksheet since the analysis is useful only when it
is accessible (Sassone, Peter G. and William A. Schaffer. "Cost—Benefit
Analysis: A Handbook." Academic Press. New York. 1978.)

Representative Dave Stockman, also Commissioner of the National Commission
on Air Quality, in his assessment of benefit-cost analysis suggested it would
be a mistake to pursue the economic science of benefit cost analysis "at th
macro level because our knowledge base is too weak" (monthly Bulletin of the
NCOAQ, December 1979). Instead he suggests development of new methodologies
of evaluation -- by pollutant, region, or source.

Q.Q§.’1.':§1Z§§-2L!§!§§§..§13Q!2l§§

Often benefit-cost analyses are called cost-effectiveness studies; this
terminology may be misleading. Benefit-cost analysis is a generic term
embracing analysis that leads to a statement of comparison of benefits to
costs relevant to a program - e.g-, do benefits exceed costs? Project or
program scaling to arrive at a favorable balance between benefits and costs
may fall short of the most cost-effective solution. Cost-effectiveness, an
application of the efficiency axiom, attempts to achieve a given goal with
the minimum of waste, efforts, or expense. The results of cost-effectiveness
studies can produce results far different than those equating benefits and
costs. For example, prior to 1975 the 3M Corporation fought pollution, like
most companies, with controls at the end of the discharge pipe. In 1975, 3M
implemented a program called "Pollution Prevention Pays“ (3P), with the
objective to eliminate or reduce pollution at the source before it was
created and thereby reduce the cost and complexity of environmental
compliance. The program reduces air pollutants by 75,000 tons, water
pollutants by 1,325 tons, sludge by 2,900 tons, and waste water by 500
million gallons, annually. In addition, the 3P program produces savings from
eliminated, reduced, or delayed capital pollution-control investments a1
operating costs, savings from improved products and processes, and some sales
retained from products purged of a pollutant or toxic component. (For
additional information on this approach and similar approaches see Issue
Brief 79025 -- Environmental Regulations: Economic Impact.)

CRS- 9 IB80012 UPDATE-O1/14/81
The challenges for Congress and economists are great:

Should attempts be made to place a dollar value on life or health risks?
If not, what method should be employed in deciding how much environmental
protection to buy?

Can benefit-cost relationships be established in an objective and
politically feasible manner?

Can dollar values be related to moral values in protecting life and
health? Comparable questions are raised in relation to health care, national
defense, etc.

If so, how can the Government foster this approach?

The direct cost of regulation is but one facet of the total impact of
regulation. other components include: regulatory delays, site selection,
conflicting Federal, State, and local requirements, etc. How can the
Government measure and mitigate these problems?

L§§l§Lé1l-§

In the 96th Congress, a number of bills were introduced which, among other
purposes, would require the use of benefit-cost analyses or other analyses to
reduce the cost of regulation. Representative of these were: H.R. 2039; H.R.
I023; H.R. 262; S. 755; S. 1969; and S. 2147.‘ One bill, S. 299, introduced
on Jan. 31, 1979, was referred to the Committee on Judiciary to amend
section 533 of Title 5 of the U.S. Code. The bill passed the Senate on Aug.
6, 1980, passed the House on Sept. 9, 1980, and was enacted on Sept. 19, 1980
(P.L. 96-35H). The purpose of this law, the Regulatory Flexibility Act, is
to utilize innovative administrative procedure in dealing with individuals,
small businesses, small organizations, amd small governmental bodies that
would normally be adversely affected by Federal regulation.

EEABlE§§
D.S. Congress. House. Committee on Banking, Currency and Housing.
Subcommittee on Economic Stabilization. Inflationary
impacts of government regulations. Hearings, 9uth Congress,
2d session. Hashington, U.S. Govt. Print. Off., 1977.

U.S. Congress. House. Committee on Interstate and Foreign
— Commerce. Subcommittee on Oversight and Investigations.
Regulatory reform. Hearings, 94th Congress, 1st and 2d sessions.
Washington, U.S. Govt. Print. Off., 1976.

U.5- Congress. House. Committee on Small Business. Subcommittee
on Special Small Business Problems. Impact of federal
regulations on small business. Hearings, 96th Congress, 1st
session. Washington, 0.5. Govt. Print. Off., 1979.

U.S. Congress. Senate. Committee on Commerce, Science and
Transportation. Subcommittee for Consumers. Cost of
government regulations to the consumer. Hearings, 95th
Congress, 2d session. Washington, D.S. Govt. Print. Off.,
1978.

CRS-10 IB80012 UPDATE-01/14/81

0.5. Congress. Senate. Committee on Governmental Affairs.
Subcommittee on Intergovernmental Relations. The
Regulatory Reform Act of 1977. Hearings, 95th Congress.
1st session. Washington, 0.5. Govt. Print. Off., 1977.

0.5. Congress. Senate. Committee on the Judiciary. Regulatory
reform. Hearings, 96th Congress, 1st session. Washington,
0.5. Govt. Print. Off., 1979.

0.5. Congress. Joint Economic Committee. Regulatory budgeting and
the need for cost-effectiveness in the regulatory process.
Hearing, 96th Congress, 1st session. Washington, 0.5. Govt.
Print. Off., 1979.

0.5. Congress. Joint Economic Committee. Subcommittee on
Economic Growth and Stabilization. The cost of government
regulation. Hearing, 95th Congress, 2d session. Washington,
0.5. Govt. Print. Off., 1978.

§E2QQI§-A!2-QQH§§§55IQBAL D°§Q!E!l§

0.5. Congress. House. Committee on Interstate and Foreign
Commerce. subcommittee on Oversight and Investigations.
Federal regulations and regulatory reform. Washington,
u.s. Govt. Print. Off., 1976.

0.5. Congress. Senate. Committee on Environment and Public
Works. Status of environmental economics: an update.
Washington, 0.5. Govt. Print- Off., 1979.

At head of title: 96th Congress, 1st session. Committee
print.
"Serial no. 96-6"

0.5. Congress. Senate. Committee on Governmental Affairs. Benefits

of environmental, health, and safety regulation. Prepared by

the Center for Policy Alternatives at the Massachusetts

Institute of Technology. Mar. 25, 1980. Washington, 0.5.

Govt. Print. Off., 1980.

At head of title: 96th Congress, 2d session. Committee

print.

Study of federal regulations. Volume VI -— Framework for
regulations. Washington, 0.5. Govt. Print. Off., 1978.

At head of title: 95th Congress, 2d session. Committee
print. Study of federal regulations. Appendix to Volume
VI -- Framework for regulations. Senate Document
96-1Q. 96th Congress, 1st session. Washington, 0.5. Govt.
Print. Off., 1978.

0.5. Congress. Senate. Committee on Public Works. Air quality
and automobile emission control. Volume 4: The cost and
benefits of automobile emission control. A report by the
Coordinating Committee on Air Quality Studies. National
Academy of Sciences. Washington, 0.5. Govt. Print. Off.,
1974.

At head of title: 93d Congress, 2d session. Committee

CRS-11 IB80012 UPDATE-O1/14/81
print.

-———- Evaluation of techniques for cost-benefit analysis of

water pollution control programs and policies. Report of the
Administrator of the Environmental Protection Agency to the
Congress of the United States. Senate Document 93-132.

93d Congress, 2d session. Washington, U.S. Govt. Print. Off.,
1975. 742 p.

QEBQEQLQGY 02 EVE!!§

09/19/80 -- Regulatory Flexibility Act, P.L. 96-354, was enacted.
O1/11/80 -- White House Conference on Regulatory Reform.
12/1a/79 ——Water Resource Council published new Principles

and Standards.
10/00/78 ——-Regulatory Council established by the President.

05/22/78 - 05/23/78 -— Hearings on anti-inflation, Senate
Committee on Banking, Housing and Urban Affairs.

03/23/78 -— Regulatory Analysis Review Group established by
Executive Order 12ouu.

08/07/77 —— Clean Air Act of 1977 (P.L. 95-95) enacted. Provides,
V among other things, for study by the National
Commission on Air Quality of the economic, technology,
and environmental consequences of achieving or not
achieving the purposes of the Act (Section 323) and
provides for an EPA-CEA study and assessment of
economic measures for control of air pollution
(Section 405).

05/21/75 —- senator Muskie and Er. Train, EPA Administrator,
debated and discussed the balancing of costs
against emission controls (hearings on the implementation
of the Clean Air Act - 1975).

11/19/7Q and 11/22/7u -— Joint Economic Committee held hearings,
pursuant to S.Con.Res. 93, on “The Economic Impact
of Environmental Regulations."

A22L$£QE§L-§_E§B§§§§-§.Q§Q§§
American Lung Association. The health costs of air pollution.
A Survey of Studies Published 1967-1977. New York, 1978.

Baram, Michael S. Cost-benefit analysis: an inadequate basis for
health, safety and environmental regulatory decisionmaking.
Ecology Law Quarterly, v. 8, no. 3, 1980.

Freeman, A. uyrick. The benefits of air and water pollution control:
a review and synthesis of recent estimates. A report
prepared for the Council on Environmental Quality.

CRS-12 IB80012 UPDATE-O 1/111/81
December 1979.

---— The benefits of environmental improvement: theory and
practice. Published for Resources for the Future by
Johns Hopkins Press. Baltimore, 1979.

Kraviec, Frank. Economic measurement of environmental damages. Hay
1980.  Prepared for the 0.5. Department of Energy. Colorado:
Solar Energy Research Institute.

Lave, Lester B. and Eugene P. Seskin. Air pollution and human
health. Published for Resources for the Future by the
Johns Hopkins University Press. Baltimore, 1977.

Miller, James S. and Bruce Yandle. Benefit—cost analyses of
social regulation. American Enterprise Institute.
Washington, 1979. '

Hishan, Edward J. cost—benefit analysis. George Allen and
Dnvin Ltd. London, 1975.

Sassone, Peter G. and William A. Schaffer. Cost—benefit analysis:
a handbook. Academic Press. New York, 1978.

0.5. Congress. Senate. Committee on Interior and Insular
Affairs. Policies, standards and procedures in the
formulation, evaluation and review of plans for use and
development of water and related land resources. Senate
Document no. 97. 87th Congress. 2d session. Washington,
0.5. Govt. Print. Off., May 1962.

0.5. Department of Commerce. Interagency Committee on Water
Resources. Proposed practices for economic analysis of
river basin projects. A report by the Subcommittee on
Evaluation Standards (green book). may 1958. NTIS.
Springfield, Virginia.

0.5. Environmental Protection Agency. Benefits of water quality
enhancement. A report by the Department of Civil Engineering.
Syracuse University. December 1970. 16110 DAJ 12/70

r’-—— Critical review of estimating benefits of air and water
pollution control. [Edited by] A. Hershaft. June 1978.
EPA-600/5-78-010

---- The economic damages of air pollution. A report by Thomas
E. W addell . (EPA-600/5-74-0 12)

-—-- Intra-urban mortality and air quality: an economic
analysis of the costs of pollution induced mortality.
A report by John J. Gregor, the Center for Study of
Environmental Policy. July 1977. (EPA-600/r.77-009)

—--- methods development for assessing air pollution control
benefits. Volume 1: Experiments in the economics of air
pollution epidemiology; Volume II: Experiments in valuing
non—market goods, etc. Volume III: A preliminary
assessment of air pollution damages for selected crops

CBS-13 IB80012 UPDATE-01/14/81

within southern California; Volume IV: Studies on
partial equilibrium approaches to valuation of environmental
amenities; Volume V: Executive summary.

---- Outpatient medical costs related to air pollution in the
Portland, Oregon area. A report by John A. Jaksch,
Oregon State University. July 197a. (EPA—600/5-7-017)

---- Physical and economic damage functions by receptors.
A report by Ben-chih Liu and Eden Siu-hung Yu. Midwest
Research Institute. September 1976. (EPA-600/5-76-O01)

0.5. Environmental Protection Agency. Office of Planning and
Hanagement. The cost of clean air and water. Report to
Congress. August 1979. (EPA 230/3-79-001)

Water Resources Council. Principles and standards for planning
water and related resources. Federal Register, v. 38.
No. 17¢. Sept. 10, 1973.

-—-- Principles and Standards for Planning Water and Related
Land Resources. Federal Register (an FR 72978). Dec. 14,
1979.

--- Procedures for evaluation of national economic development
(NED). Benefits and costs in water resources planning
(Level C); Final rule. Federal Register (an FR 72892).
Dec. 1Q, 1979.

————- Principles, Standards, and Procedures for Water Resources
Planning. Proposed Rules. Part II. Federal Register
(45 FR 25302) Apr. 14, 1980.

APPENDIX A

ESTIMATES OF POLLUTION ABATEMENT AND CONTROL EXPENDITURES IN 1977
( In Billions of Dollars)

COUNCIL ON ENVIRONMENTAL DEPARTMENT OF MCGRAW-HILL

QUALITY 1/’ COMMERCE 6/ SURVEY
INCREMENTAL COSTS_2/ '"
OPER- CAPITAL TOTAL TOTAL TOTAL BUSINESS INVESTMENT
ATION COSTS 2/ ANNUAL EXPEN- EXPEN- EXPEN- FOR
AND COSTS 4/ VDITURES 5/ DITURES (7) DITURES POLLUTION
MAINT-   7"7 1 ‘" FOR CONTROL (9)
ENANCE NEW
PLANT
AND
EQUIPMENT(8)
Air 5.9 6.3 12.2 14.1 15.6 3.6 4.5
Water 4.0 2 3 6 3 17.6 15.8 2.7 3.8
Solid
Waste 0.5 0.3 O 8 8.1 5 7 .46 .69
Other * * * 0.1 19/ ' 3 NA NA
Total 10.4 8.9 19 3 39.9 37 5 _l/ 6.9 8.99
:/ Less than 50 million.

_/ Environmental Quality. Ninth Annual Report of the Council on Environmental Quality.

‘_/ Incremental costs are expenditures made pursuant to Federal legislation.

._/ Interest and depreciation.

/ Operation and maintenance plus capital costs.

:E/ Operation and maintenance plus capital costs, including incremental expenditures
and expenditures beyond what is required by Federal legislation.

6/ Survey of Current Business. June 1979 and Feb. 1979.

:Z/ Includes personal consumption, business and Government pollution abatement ex-
penditures; Government regulation and monitoring expenditures, and public
and private research and development expenditures. Source: Survey of
Current Business, February 1979, p. 15.

8/ Survey of Current Business. June 1979. p. 21.

:§/ McGraw-Hill Publications Co. Economics Department. 10th Annual McGraw-Hill Survey.

.Pollution Control Expenditures, May 1978.
12/ Land reclamation and surface mining.
11/ Includes regulation, monitoring, research and development.

 

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