Benefits Working Group Meeting September 25, 1998
September 28, 1998
EXECUTIVE SUMMARY
Alexandria, VA
1. Attendance: absent -- Thomas Dietz, alternate (for
Bill Allan) -- Arlen Whitebird, all other Working Group Members in attendance
2. Background and Issues Discussed:
The Safe Drinking Water Act (SDWA) amendments of 1996 require that EPA
fully consider both quantifiable and non-quantifiable benefits that accrue
to drinking water regulations; these benefits must be compared with the
projected costs of the regulations. EPA will be developing a number of
regulations over the next few years which will need to consider costs
and benefits in accordance with the new requirements. Development of cost
information, while challenging, is fairly well understood. Benefits assessment,
by contrast, is less well understood.
The charge to the working group was: to review those quantifiable and
non-quantifiable benefits that could be considered when developing drinking
water regulations and provide recommendations to the Agency on which benefits
should be evaluated in developing its regulations. In addressing the charge,
the following questions were considered: 1. What categories of benefits
(both qualitative and non-qualitative) should EPA routinely consider in
the process of developing its drinking water regulations? 2. How (specifically)
should EPA consider qualitative (non-monetizable) benefits in its rulemaking
process? 3. How should EPA ultimately compare the results of its benefits
evaluations with its cost analysis when developing drinking water regulations?
This was the second face-to-face meeting of the working group. The first
meeting had addressed the first question associated with the charge, along
with related issues. In this meeting, following several presentations
by EPA staff, the group addressed the remaining two questions associated
with the charge. A case study was used to illustrate the issues, and was
discussed in detail. The EPA presentations included "Definitions (A Review
of Terminology)," Contaminant Identification and Selection under SDWA,"
"Cost-Benefit Analysis and Qualitative Information," and "Latent Health
Effects."
3. Issues Resolved: The Working Group agreed on the
following recommendations.
Recommendation #1: Categories of Benefits
The Working Group identified six categories of benefits that can
result from drinking water regulations: (1) health risk reductions; (2)
taste and odor improvements; (3) reduction of damage to water system materials;
(4) commercial water treatment cost reductions; (5) benefits due to source
water protection (e.g., ecological benefits and non-use benefits); and
(6) benefits derived from the provision of information on drinking water
quality (e.g., a household's improved ability to make informed decisions
concerning the need to test or filter tap water). The members agreed on
the following recommendation:
EPA should focus its benefits analysis efforts primarily on assessing
effects on human health, defining these effects as clearly as possible
and using the best available data to value them.
Recommendation #2: Assessing Health Risks and Valuing Benefits
The analysis of health risks is central to EPA's ability to establish
the appropriate MCLG and to assess the benefits of alternative levels
for the MCL. The Benefits Working Group discussed several concerns related
to the valuation of health benefits, and agreed on the following recommendation:
EPA should devote substantial efforts to better understanding
the health effects of drinking water contaminants, including the types
of effects, their severity, and affected sensitive subpopulations. Better
information is also needed on exposures and the effects of different
exposure levels, particularly for contaminants with threshold effects.
These efforts should pay particular attention to obtaining improved
information concerning impacts on children and other sensitive populations.
Recommendation #3: Addressing Uncertainty
The Benefits Working Group discussed several concerns related to
addressing uncertainty in benefits analysis, and agreed on the following
recommendation:
EPA should clearly identify and describe the uncertainties in
the benefits analysis, including descriptions of factors that may lead
the analysis to significantly understate or overstate total benefits.
Factors that may have significant but indeterminate effects on the benefits
estimates should also be described.
4. Next steps:
A new draft of a working group report to NDWAC, including the recommendations
cited, will be prepared and distributed. At least one additional recommendation
on the use of qualitative information and the comparison of cost to benefits
information will be included, based on the discussion of this meeting.
A followup teleconference is planned, after which a report will be submitted
to NDWAC.
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