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CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
Risk analysts systematically evaluate hazards and their possible effects. Most experts and policymakers agree that risk analysis is a valuable tool to inform decisions. There is disagreement, however, about the extent to which risk estimates should be conducted by agencies and allowed to influence public policies for health and environmental protection. Proponents of risk analysis believe that federal programs should be carefully targeted to address the worst risks to health and the environment first. Many favor regulating to achieve risk reduction in more cost-effective and flexible ways that minimize overall economic impacts. They argue that regulations are appropriate only when the risk reduction achieved is worth the cost. Proponents also believe that increased use of risk analysis would ensure that agency decisions were rational and based on sound science.
Opponents of risk legislation argue that excessive reliance on risk analysis, especially quantitative analysis, to evaluate problems and solutions ignores other equally important facets of policy decisions, such as timeliness, fairness, effects on democratic rights and liberties, practicality, morality, reversibility of effects, regulatory stability, flexibility, or aesthetic values. Critics charge that quantitative methods cannot assess very long-term or newly discovered threats. They also believe that quantitative cost-benefit analyses undervalue environmental and health benefits, exaggerate costs, and focus on relatively widespread but individually small costs and risks rather than on much larger costs and risks to smaller, and often more vulnerable, groups.
The quality of risk analysis depends on adequacy of data and validity of method. For environmental hazards and most health and ecological effects, there are few data, and methods are controversial.
Risk analysis is a potentially valuable tool for addressing concerns about the growing cost to regulated industries of compliance with environmental requirements. It may be used to assist EPA and Congress to set priorities among programs and to evaluate management options. However, considerable controversy revolves around the value of risk analysis and the role it should play in environmental decisionmaking. (For more detailed information, see CRS Report 94-961 ENR, Risk Analysis and Cost-Benefit Analysis of Environmental Regulations.)
Professional risk analysts do not agree on how key terms should be defined, but for the purpose of discussion, the following specific definitions have been adopted. In the context of environmental issues, "risk" is defined as the probability of occurrence of a particular adverse effect on human health or the environment as a result of exposure to a "hazard," which may be a hazardous chemical in the environment, a natural hazard, or a hazardous technology. "Risk assessment" refers to a formal or informal procedure producing a quantitative estimate of environmental risk. For example, risk assessment is often used to estimate the expected rate of illness or death in a population exposed to a hazardous chemical. "Risk analysis" is used more broadly to include quantitative and qualitative evaluation of all relevant attributes of environmental hazards, risks, adverse effects, events and conditions that lead to or modify adverse effects, and populations or environments that influence or experience adverse effects. "Risk management" is the process of deciding what should be done about a hazard, the population exposed, or adverse effects, implementing the decision, and evaluating the results. It also refers to decision making at the program or agency level, for example, deciding which hazards should be managed and in what order. Comparative (or relative) risk analysis and cost-benefit analysis are aids to risk management.
Most people seem to agree that risk analysis is a potentially valuable tool for summarizing scientific information obtained from animal experiments and studies of accidental or occupational human exposures to hazards. But, people disagree about how risk analysis should be used and how much influence it should have on the government's decisions.
Regulated industries and many academics support risk legislation. They argue that it is a scientific and objective basis for making rational risk management decisions. It allows comparisons of the importance of perceived problems and evaluation of the need for proposed solutions, they maintain. Thus, it permits efficient allocation of limited resources.
Other academics, most environmentalists, and the Clinton Administration stress the limitations rather than the virtues of risk analysis. Activists for environmental justice (that is, avoidance of disproportionate risks to low-income and minority communities) oppose efforts to increase the influence of risk analysis, and especially quantitative risk estimates, on environmental decisions, because it tends to focus attention on relatively small risks to large populations (for example, the U.S. population as a whole) rather than on large risks to smaller groups, such as workers, the economically disadvantaged, or ethnic minorities.
Some policymakers promote risk analysis as an objective scientific basis for environmental planning and decisions by federal agencies, Congress, and the public. In their opinion, more risk analysis would lead to more rational decisions and replace what they regard as the piecemeal environmental policy that has grown in response to real and imagined crises. They favor legislation mandating use of risk analysis of environmental, health, and safety problems to inform Congress and the public who may then evaluate and prioritize problems based on sound science.
Opponents of mandated risk analysis argue that the science used in risk analysis is immature and suitable only for assessing immediate threats or the risk of developing cancer. In addition, they warn that risk analysis oversimplifies the problems faced by policymakers and managers of environmental programs, for example, by generally focusing on one hazard and one effect at a time, or on problems or aspects of problems that already are well understood. On the other hand, critics of risk analysis also assert risk assessment methods are complex and easily manipulated for political purposes. Thus, it is argued, the decision-making process is less democratic to the extent it is based on risk.
Many who promote the use of risk analysis acknowledge that it has limitations, but they believe these can be overcome through data collection, research, or the establishment of guidelines for the consistent conduct of analysis and presentation of results.
Many policymakers in the 104th Congress wanted to use the results of risk analysis and cost analysis to identify economically reasonable environmental management strategies. Various decision criteria were proposed for identifying such strategies, all of which would have required comparisons of the estimated costs and environmental or health benefits of existing or proposed regulations and reasonable alternatives. However, the comparisons required by different proposals differed in whether they required 1) consideration of particular alternatives, 2) qualitative or quantitative analysis, and 3) comparisons of risks to costs for each alternative, costs of one to costs of another, or risks of one to risks of another. Different proposals also would have provided EPA with different levels of discretion. The Unfunded Mandates Reform Act (P.L. 104-4) enacted March 22, 1995, requires all agencies to select from a reasonable number of regulatory alternatives the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule and is consistent with law or to explain why such an alternative was not adopted.
Some critics of EPA assert that environmental regulations adversely impact the national economy and international competitiveness of American businesses. They want EPA to use cost-benefit analysis to identify less expensive strategies to reduce only the greatest risks. Some would prohibit promulgation of regulations expected to cost more than they save in economic terms (that is, that were not expected to produce a net benefit) or that cost more than an alternative that would also achieve the statutory objective. In contrast, proposals that advanced in the House and Senate of the 104th Congress did not require regulators to base decisions on national net benefits. Rather, they promoted adoption of "flexible," cost-effective alternatives and authorized consideration of risks and costs borne by special segments of the general population.
Some people object to quantitative comparisons of costs with the monetary value of benefits of environmental or health laws and regulations. Whether they object on moral or ethical grounds or for scientific reasons, they want benefits described in qualitative as well as quantitative terms. All the key proposals in the 104th Congress permitted or required qualitative descriptions of benefits as well as costs.
Critics of cost-benefit analysis argue that the process is easily manipulated for political purposes, and that evidence of manipulation is easy to conceal, especially from people who lack economic or scientific training. Moreover, the quality of economic analyses varies widely, they believe, and most quantitative cost-benefit analyses undervalue environmental and health benefits, exaggerate costs. Economic analysts also tend to focus on relatively widespread but individually small costs and risks rather than on much larger costs and risks to smaller, and often more vulnerable, groups, critics charge. Many of these concerns about the quality of cost-benefit analyses could be addressed through peer review or OMB oversight.
Another criticism aimed at proposals to require cost-benefit analysis was that they would consume scarce EPA resources, sometimes to no purpose, because some authorizing statutes do not permit EPA to consider costs.
Finally, many argued that cost-benefit analysis would delay EPA's issuance of many regulations, and delays would mean that lives or habitats might be irretrievably lost that could have been saved had the regulation been in effect. Thus, the net benefit of regulating would be reduced, they claimed. In addition, some feared that delays would increase the cost of analysis if the Agency missed statutory or judicial deadlines and environmental groups responded, as they often do, by filing lawsuits.
The results of risk analysis also can be used to weigh the relative need for various federal environmental programs. Some policymakers argue that EPA, the states, and localities should prioritize expenditures based on relative opportunity for risk reduction. The Senate Appropriations subcommittee with jurisdiction over EPA spending was particularly concerned about what it described as EPA's refusal to identify activities that address the greatest risks. Supported by the recommendations of a study by the National Academy of Public Administration (discussed below), the subcommittee directed EPA to determine its highest priorities and the funding needed to address them. EPA maintained that it was working on setting priorities based on relative risks, statutory and judicial deadlines, legal mandates, program costs and benefits and other factors.
Opponents of risk management based on relative risks and risk reduction potential contended that comparative risk analysis is an unscientific, ad hoc procedure that lends a false air of objectivity to the subjective judgments of scientists. Opponents questioned whether an exercise that combines the diverse views of an unrepresentative sample of government scientists to produce a single prioritized list of hazards would be more informative than a thorough recitation of the points on which scientists with diverse viewpoints agree and disagree, such as may occur in a hearing or an advisory committee. Critics argued that priority setting requires value judgments, and scientists are no more qualified than others to decide whether, for example, the risk of a small decrement in intelligence for 3 to 4 million children exposed to lead-based paint is more or less significant than the risk of approximately 13,600 deaths annually from lung cancer due to indoor levels of radon gas. It is even more difficult and less scientific to compare ecological risks with risks to human health, these critics contended.
Others protested that risk-based prioritization focuses on death or disease rates in the population as a whole, ignoring other equally important issues, such as the feasibility of controlling a risk or the fairness of the result. All means of risk reduction are not equally desirable, these critics contended, citing diverse examples such as the wearing of a gas mask and modification of a production process to reduce use of toxic chemicals. The nature of hazards also matters, according to some who pointed out that risk is sometimes desirable, and many risks, such as driving a car or skydiving, are taken voluntarily either for the benefits that may be obtained or for the thrill of the experience. Priorities should be based on all relevant information about hazards and available management options, not on risk alone, they argued. Since scientists are expert only at determining probabilities, the public or its representatives should be asked to contribute their expertise to the process of priority setting.
There appeared to be general agreement that more information is needed to inform decisions. Views diverged, however, regarding the type of information needed and whether it would be best provided by risk analysis.
Under ideal conditions, a risk analysis gathers, organizes, and summarizes all of the important information relevant to hazard management. It includes qualitative as well as quantitative information about the characteristics of the hazard, exposed population, potential effects, and available management strategies; describes scientific uncertainties; and provides a range of forecasts based on alternative, scientifically plausible assumptions about the relationship between exposure to the hazard and potential health or environmental effects.
In practice, however, the type of information provided by risk analysis varies from comprehensive to superficial, accurate to biased, and quantitative to qualitative, because risk analysis is a field of inquiry rather than a single method. Risk analysts use a variety of procedures and models adapted from other fields of study such as sanitary and industrial engineering, psychology, economics, sociology, statistics, and operations research. Methods developed for other purposes (for example, to determine life insurance rates) sometimes are difficult to apply to, and may be scientifically invalid for, environmental hazards.
A second consideration is that risk analysis is a tool for evaluating what is known about things that cannot be known with certainty -- that is, it is only used to describe the effects of hazards that are unpredictable due to their natural randomness or a lack of scientific understanding of the principles that govern their occurrence. Risk analysis always produces an estimate, never a prediction, and estimates vary in quality. (Weather forecasts, for example, are relatively well-informed risk estimates.) Thus, risk analysts can only discuss the likelihood of various outcomes and, at best, may present risks as statistical probabilities. If there is no past experience with a hazard, there is no basis for any forecast, much less a quantitative estimate. If there is experience but no record to ensure accurate recall, risk estimates are likely to be unreliable. The House-passed bill and three Senate-reported bills would have required agencies to report on the uncertainties surrounding risk estimates.
Finally, sometimes risk analysis can provide no information at all, even when data are abundant. Science cannot always explain complex or unusual relationships between the exposures to hazards and the potential health and ecological effects.
The quality of available data on exposure levels and potential effects determines the quality of information that can be provided by a risk analysis. The most effective way to improve risk assessment, the National Academy of Sciences (NAS) has concluded, is by improving the quality and comprehensiveness of knowledge. Data on human exposure to risk generally is acknowledged to be inadequate. The current situation for data relevant to assessing potential human health effects of chemical exposures was summarized in a recent report by the U.S. Office of Technology Assessment (OTA). It estimated that 62,512 chemicals are in commerce in the United States today, and another 1500 new chemicals enter the market annually. Environmental experts believe that "good" data on health effects exist for only 10% of commercial chemicals. Of course, many of these may be harmless, but data are also inadequate for many chemicals Congress has deemed "hazardous," according to NAS. NAS recently evaluated the availability of data for risk analyses of 189 hazardous air pollutants and concluded EPA did not have "sufficient data to assess fully the health risks ... within the time permitted by the Clean Air Act Amendments of 1990" (Science and Judgment in Risk Assessment, 1994, National Academy Press, Washington, p. 8-13). At least 12 federal agencies are currently conducting health risk assessment research to fill the gaps in scientific understanding, but according to OTA, their efforts are poorly coordinated and supported at a level that is less than 0.5% of the cost of complying with EPA regulations. The data situation is much worse for environmental effects.
Environmental risk assessment is a relatively new and immature field; this is evident in the state of development of its analytic methods for assessing exposure levels and their potential adverse effects. Current methods of estimating human or ecological exposure levels generally focus on individual hazards (e.g., arsenic or repetitive motions) and isolated incidents or constant long-term exposures. Therefore, they inadequately account for common, real-life conditions, such as fluctuating exposures to multiple hazards. The most developed and well established methods of estimating potential adverse effects probably are those used to analyze acute human health effects of high short-term risks (e.g., many occupational injuries). Methods also are fairly well developed for assessing human cancer risks of chemicals, although gaps in scientific understanding of cancer make these risk estimates very uncertain. These methods evaluate and model the results of animal experiments and human studies to estimate cancer risk due to exposure to individual chemicals. Due to the variety of models that may be used, estimates of cancer risk usually vary widely. Methods to evaluate risks of other health effects (such as impaired immunity, reproductive problems, or birth defects) are less well established. Methods for ecological risk analysis are still primitive. There are at least four ways to promote the development and use of the best available methods for risk analysis: peer review, research and training, oversight, and provision of guidelines. Such methods help to ensure that risk assessments are conducted consistently and are, therefore, more easily evaluated by independent experts. However, they do not ensure that scientists will agree with the resulting risk estimates. The NAS has identified at least 50 decisions required in conducting a cancer risk assessment that cannot be made on a scientific basis. Thus, controversy grows from the subjective judgments, the science policies, that make risk assessment possible and from the high stakes that ride on risk estimates.
Congress has periodically commissioned independent assessments of risk assessment policies and practices. The Clean Air Act Amendments of 1990 established a Commission on Risk Assessment and Risk Management to consider methods for measuring and describing risks of chronic human health effects from long-term exposure to hazardous substances, methods to reflect uncertainties, and risk management policy issues. The Commission also was directed to comment on the possibility of developing a consistent risk assessment methodology, or standard of acceptable risk, among various federal programs. In its June 1996 draft report, Risk Assessment and Risk Management in Regulatory Decision-Making, the Commission addressed numerous general and specific technical and policy issues. Some key general recommendations include:
Early in the 104th Congress, the Unfunded Mandates Reform Act (P.L. 104-4) was enacted. It requires analysis of costs and benefits of all proposed and final rules with an expected cost of $100 million or more. It also requires agencies to promulgate the alternative that is least costly, most cost-effective, or least burdensome, or to explain why such an alternative was not adopted. Congress also mandated economic analysis of federal regulations in the Small Business Regulatory Enforcement Fairness Act of 1996 (P.L. 104-121, Title II). Economic analysis of environmental regulations undoubtedly will involve some analysis of risks, because risk reduction is an important measure of benefits.
During most of the first session of the 104th Congress attention focussed on four bills that addressed risk analysis specifically, one in the House and three in the Senate. CRS Report 95-576 ENR, Risk and Cost-Benefit Provisions in House and Senate Bills--Update, provides a side-by-side comparison of these bills as passed by the House or reported in the Senate. The 104th Congress adjourned without enacting comprehensive requirements for risk analysis in the development of regulations or agency budgets. However, risk-based provisions were included in major legislation addressing drinking water (P.L. 104-182) and food safety (P.L. 104-170).
The 105th Congress is expected to consider legislation ensuring that environmental programs focus on the greatest risks to human health and the environment and manage those risks in a cost-effective manner. It may attach risk-based provisions to proposals reauthorizing Superfund, the Clean Water Act, and other environmental legislation. For more information on environmental legislation, see the CRS Issue Brief 9700X, Environmental Issues in the 105th Congress, updated regularly.
At this time, it is unclear whether the 105th Congress will pursue more comprehensive risk legislation (such as S. 343 or H.R. 9 in the 104th Congress) requiring agencies to promulgate regulations meeting specific cost-benefit criteria or to conduct risk analysis according to established principles.
CONGRESSIONAL HEARINGS, REPORTS, AND DOCUMENTS
United States Congress. House. Committee on Science. Risk Assessment and Cost Benefit Analysis. Hearings, 104th Congress, 1st sess., January 31; February 3, 1995. Washington, U.S. Govt. Print. Off., 1995. 810 p.
United States Congress. House. Committee on Commerce. Subcommittees on Commerce, Trade, and Hazardous Materials and on Health and Environment. Risk Assessment and Cost/Benefit Analysis for New Regulations. Joint Hearings, 104th Congress, 1st sess., February 1 - 2, 1995. Washington, U.S. Govt. Print. Off., 1995. 380 p.
United States Congress. Senate. Committee on Environment and Public Works. Regulatory Reform and Environmental Laws. Hearing, 104th Congress, 1st sess., March 22, 1995. Washington, U.S. Govt. Print. Off., 1995. 250 p.
CRS Products
CRS Report 94-961. Risk Analysis and Cost-Benefit Analysis of Environmental Regulations. 55 p., Appendix.
CRS Report 95-576. Risk and Cost-Benefit Provisions in House and Senate Bills--Update. 48 p.
CRS Report 96-777. Congressional Review of Agency Rulemaking: A Brief Overview and Assessment. 5 p.