Reassessing the Human Health Benefits from Cleaner Air

Recent proposals to further reduce permitted levels of air pollution emissions are supported by high projected values of resulting public health benefits. For example, the Environmental Protection Agency recently estimated that the 1990 Clean Air Act Amendment (CAAA) will produce human health benefits in 2020, from reduced mortality rates, valued at nearly $2 trillion per year, compared to compliance costs of $65 billion ($0.065 trillion). However, while compliance costs can be measured, health benefits are unproved: they depend on a series of uncertain assumptions. Among these are that additional life expectancy gained by a beneficiary (with median age of about 80 years) should be valued at about $80,000 per month; that there is a 100% probability that a positive, linear, no-threshold, causal relation exists between PM2.5 concentration and mortality risk; and that progress in medicine and disease prevention will not greatly diminish this relationship. We present an alternative uncertainty analysis that assigns a positive probability of error to each assumption. This discrete uncertainty analysis suggests (with probability >90% under plausible alternative assumptions) that the costs of CAAA exceed its benefits. Thus, instead of suggesting to policymakers that CAAA benefits are almost certainly far larger than its costs, we believe that accuracy requires acknowledging that the costs purchase a relatively uncertain, possibly much smaller, benefit. The difference between these contrasting conclusions is driven by different approaches to uncertainty analysis, that is, excluding or including discrete uncertainties about the main assumptions required for nonzero health benefits to exist at all.