The Public Health Case for Risk-Based Regulation, George Gray

Center for Risk Science and Public Health

The Public Health Case for Risk-Based Regulation

George Gray

Center for Risk Science and Public Health Department of Environmental and

Occupational Health Milken Institute School of Public Health

Two Areas Regulatory Analysis Can Help

•  Rational allocation of resources – which risks?

•  Achieving the most good for our investments

Budgetary Costs of Federal Regulation Adjusted for Inflation

Source: Weidenbaum Center, Washington University and the Regulatory Studies Center, the George Washington University. Derived from the Budget of the United States Government and related documents, various fiscal years. 3

Environmental Costs

Senator Daniel Patrick Moynihan - 1980

“$150 billion per year is not necessarily too much to invest in environmental protection but it surely is too much to invest unwisely”

Making Decisions

•  Citizens desire protection from risks to health and safety •  Personal actions •  Government actions

•  Regulatory attention and resources are limited – as are those for complying with regulations

All Sorts of Risks

Danger Lifetime Risk

Die from dog bite 4 x 10-6

Die in flood caused by storm 5 x 10-5

Drown in bathtub 9 x 10-5 Death by electrocution 5 x 10-5

Die in house fire 7 x 10-4 Drown 1 x 10-3

Die in motor vehicle accident 1 x 10-2

Is There a Level of “Acceptable” Risk?

•  Risks so low they aren’t worth worrying about

•  Risks so big we will always do something

•  What if we look at how we regulate health and safety risks?

Searching for “Acceptable Risks”

Searching for “Acceptable Risks”

One in a Million

Activity Time (or Action) to Accumulate a 1 in a Million Risk of Death

Motor Vehicle Accident 100 Miles Fires 19 Days Electrocution 200 Days Tornado 5.5 Years Floods 2 years Police Officer 1.25 Days Working in Construction 3 Days Frequent Flyer 10 Days

Source: Wilson, R. and Crouch, E.A.C. (2001) Risk-Benefit Analysis. Harvard University Press

Public Perception Matters

•  Views on sources of risk influences personal actions

•  Public views on risk can influence regulatory agenda too

Example : Risk Rankings

Why Does Public Perception Matter?

•  Regulatory process is often driven by public concerns

•  “Overall, EPA’s priorities appear more closely aligned with public opinion than with our estimated risks.” U.S. EPA (1987) Unfinished Business: A Comparative Assessment of

Environmental Problems. Office of Policy Analysis and Office of Policy, Planning and Evaluation, pXV

•  Focus on smaller risks while bigger risks are neglected

(e.g. indoor air pollution versus outdoor air pollution) or avoiding fresh fruits and vegetables because of fear of pesticides

Are We Using Resources Effectively?

•  Managing human health and environmental risks consumes significant resources

•  Compete with other uses of resources at federal, state, and local level

•  Impose significant demands on private resources too

What Do We Buy With Our Money?

Median Cost/Life-Year Saved

• Federal Aviation Administration $23,000 • Consumer Products Safety Commission $68,000 • National Highway Transportation Safety Administration $78,000 • Occupational Safety and Health Administration $88,000 • EPA $7,600,000

Source: Tengs et al., (1995) Five Hundred Life-Saving Interventions and Their Cost-Effectiveness. Risk Analysis 15:369-390

What Do We Buy With Our Money?

Median Cost/Life-Year Saved

Health Care $19,000 Transportation $56,000 Occupational $350,000 Environmental $4,200,000

Source: Tengs et al., (1995) Five Hundred Life-Saving Interventions and Their Cost-Effectiveness. Risk Analysis 15:369-390

Comparing Alternatives

Source: Gray, GM and Cohen, JT (2003) Confronting Tradeoffs in Protecting Human Health and the Environment in Critical Issues in Setting Regulatory Standards, 2nd Edition. Rural Water Partnership Series.

Public Health Implications

•  Inefficient use of risk reducing resources

•  Efficient allocation of resources could save 60,000 more lives at same cost to society*

•  Misplaced priorities

•  Public attention focused on smaller risks while larger are ignored

*Source: Tengs T and Graham J. The opportunity costs of haphazard societal investments in life-saving. In R Hahn (Ed.) Risks, Costs, and Lives Saved: Getting Better Results from Regulation, Oxford University Press, 1996

The Way Forward: Good Analysis!

•  Set priorities

•  Evaluate interventions

•  Inform wise choices

“Good Science” is Not Sufficient

•  Suppose we knew exactly the consequences of abating and not abating CO2 emissions •  Future time path of climate (with regional detail) •  Future time paths of impacts on

•  Agriculture •  Sea level •  Wildlife habitat and ecosystem services •  Storm frequency and severity •  Human health •  Everything else that might be affected

•  Economic costs and consequences of abatement •  Would we agree on how much to abate CO2

emissions?

Value Questions Remain

•  Tradeoffs among valued goods •  How much of other good things are we (should we be) willing

to give up to avoid impacts of climate change? •  Smaller cars, car pooling, more expensive electricity?

•  Distribution among people •  Which people should sacrifice for the benefit of others? •  How much should current generations give up to benefit

future generations?

But Good Science is Important

•  In this workshop we will be looking at the science behind RIA

•  Estimating existing risk and the benefits of interventions

•  Looking for ancillary benefits and risk tradeoffs

OMB Guidance Circular A-4, Sept. 17, 2003

•  Need for regulatory analysis •  General issues •  Analytic approaches (BCA, CEA) •  Identifying and measuring benefits and costs •  Discounting •  Uncertainty

Key Elements of Analysis

•  Explain how actions required by rule are linked to expected benefits

•  Identify a baseline, from which effects are measured •  World without the proposed rule •  Changes in technology, external factors, other

rules •  Identify other effects

•  Ancillary benefits •  Countervailing risks and costs

•  Describe distributional effects

What is a Risk/Risk Tradeoff?

When actions to control a risk may themselves create risks to health

Risk Management Action

Target Risk Countervailing Risk

Statement of the Problem- A Public Health Perspective

•  Focus on target risk

•  Insufficient attention to risk tradeoffs and countervailing risks that might be created •  Changes in behavior •  Alternative technologies •  Foregone benefits •  Side effects of the risk management actions

•  May underestimate or exaggerate benefits of action when tradeoffs are ignored

Analyzing Countervailing Risks

Compared to the Target Risk,the Countervailing Risk is:

Same Type Different Type

Compared tothe TargetRisk, theCountervailingRisk affects:

SamePopulation Risk Offset

RiskSubstitution

DifferentPopulation Risk Transfer

RiskTransformation

Risk Tradeoff Examples

Summary

There is a strong public health argument for sound regulatory analysis

•  Identify priority risks in an objective manner •  Inform decisions to allocate society’s resources for

risk reduction •  Ensure ancillary benefits and risk tradeoffs are

considered