1602 alternative regulatory actions, which presumably is the risk information, it nevertheless uses this information both in its initial screening of source categories to determine whether they pose a significant public health risk and in its process should proceed on the basis of the best information available for both the public health gains and the economic costs. A choice can then be made among regulatory alterna- tives by explicitly considering both the best estimates of the likely effects of these alternatives and the uncertainties associated with these estimates. This approach is superior to a conservative approach that relies on ‘worst case” estimates of health and economic effects, because it provides a clear staternent of the likely effects and uncertainties of the available regulatory alternatives for those making the ultimate policy decisions. Policy decisions based solely on “worst case” assumptions about health risks yield “margins of safety” of unknown magnitude — making it impossible to assess the likely gains of selecting successively more stringent regulatory alternatives. - In addition, the direct weighing of the likely public health gains with the costs in assessing alternatives is, superior to obscuring the likely effects of regulation by neglecting information at important steps in the standard-setting process." As we have noted above, EPA’s present BAT approach imparts a conservative bias to the standard-setting process because it implicitly assumes that the benefits of a BATlevel of control exceed the costs without regard for the estimated public health gains, however negligible. In many cases, however, this implicit assumption appears to be wrong. An alternative approach that considered both the - " The wide range in cost-effectiveness using high and low popula- tion subcategories results from EPA's determination that BAT requires the contro! of the secondary emissions from matte and slag operations at the Kennecott-Garfield smelter. We noted above that this BAT determination appeared to be inconsistent with EPA's determination that no further contro] of emissions from converter operations would be considered to be BAT at this smelter, even though control of these latter emissions would be more cost-effective. We are not certain, however, of the criteria EPA uses in arriving at its BAT determinations, and therefore cannot be certain EPAhas been inconsistent in using these criteria. 1-13-64 recent National Academy of Sciences report recommending a cleat “_, distinction between assessment of risks and consideration of risk management alternatives; that is. the scientific findings and policy judgments embodied in risk assessments should be explicitly distinguished from the political, economic, and technical considerations that influence the design and choice of regulatory strategies” National Academy of Sciences, Committee on the Institutional Means for Assessment of Risks to Public Health, Risk Assessment in the Federal Government Managing the Process, NAS-NRC, ~ = March 1983. In our view, this distinction should he maintained in the analysis of alternative standards. Margin of safety considerations should be deferred to a later stage in the decision process where the uncertainties involved can be explicitly considered in designing a regulatory strategy. Published by THE BUREAU OF NATIONAL AFFAIAS, INC., Washington. 0.C. 20037 ' “48 FR 33116. “ EPA uses conservative assumptions in developingits risk information. For example, the quantitative risk estimates developed by EPAfor these three substances are based on a linear no-threshold model. EPA states (hat the resulting risk estimate “... represents a plausible upper-limit estimate in the sense that the risk is probably not higher than the calculated level and could be much lower.” 48 FR 33114. However, EPA’s quantitative risk assessment is generally based on a specific health effect, e.g, leukernia, without considering other likely health effects, these ought to be considered as well in assessing the likely public health gains from regulation. This emphasis on the use of “best” estimates accompanied by explanations of surrounding uncertainties is an extension of the | ie eo ees ee ee residual risk assessment. At the residual risk assessment stage, in particular, EPA relies heavily on risk assessment information by explicitly weighing the likely additional public health gains of going beyond BAT with the costs of a more stringent standard. The residual risk assessment step in the siandard-setting process directly considers whether morestringent controls resuiting in plant closures are warranted — the issue that appears, at least te outsiders, to be the major economic concern in EPA’s decision process. we The use of risk assessment information is critical, in our view, to making reasonable regulatory judgments. As outlined above, ignoring information about public health risks at a critical juncture in the standard-setting process results in standards with costs per health risk reduction that vary widely across plants and across hazardous substances. In this section, we discuss the issue of risk assessment more generallyand consider the use of risk information at other stages of the standard-setting process. We conclude with recommendations on the relative weighting to be given to reduction in individual risk as opposed to the population risks from exposure to hazardous air pollutants. 1. EPA’s Use of Risk Assessment Information EPAoffers the following rationale for its use (and nonuse) of risk assessment information at various stages in the standard-setting process."* - The use of risk estimates generally has been confined to areas of broad comparisons, e.g., in selecting source cate_ gories to evaluate, and in assessing the incremental change in risk that results from application of various - control options. The use of risk estimates in an absolute sense is avoided because of the many uncertainties of the estimates. These uncertainties are compounded as the focus is narrowed. In other words, in evaluating specific sources, aS opposed to source categories, the uncertainties associated with the risk estimates increase dramatically. Although EPAstresses the uncertainty associated with its Thereis, of course, some uncertainty associated with the risk information, just as there is some uncertainty with EPA's cost estimates." We believe that the decision-making ” D. Use of Risk Assessment Information in Standard-Setting a> ne OT alg ove ET Caoneatslemme each plant within a subcategory.” in setting technology-based (BAT) standards is to risk imposing regulatory requirements arbitrarily, and expending scarce resources without any commensurate gains in public health. ” determination of the level of control constituting BAT for issue of primary concern. Acting without such information : ‘ meavie aE Kahl tee gd a4 a * wertwe es Fea of control requirements; but a sensible result depends on the : risk may serve to narrow the range in the cost-effectiveness other stages as well. After all, the risk information is the best information available on the public health effects of * category on the basis of population exposure or public health high and Jow population or risk groups does not automatica)ly yield a sensible result. Sebcategorization of a source hin Since EPA uses risk information at this critical juncture in the decision process, it should use risk information at ty, oe my As these examples illustrate, taking risk and population exposure into consideration by subcategorizing sources into Bat] ENVIRONMENT REPORTER