The Benefits and Costs of Regulatory Reforms for Superfund
Viscusi, W. Kip
Hamilton, James, 1961-
The current policy approach used in the Superfund program is a peculiar halfway house. EPA devotes substantial effort to identifying chemicals at a site and ascertaining their potential risks. It also assesses the costs of a range of remedies in considerable detail. However, many key elements are missing in the agency's analyses. There is no explicit consideration of the size of the population at risk. Risks to a single individual have the same weight as risks to a large exposed population. Actual and hypothetical exposures to chemicals receive equal weight so that risks to a person who, in the future, may choose to live near a currently uninhabited Superfund site receive the same weight as risks to large populations that are currently involuntarily exposed.73 EPA also reports the conservative risk assessment value for each site, without focusing its policy attention on the expected risk level or most likely risk scenarios. Finally, explicit tradeoffs that balance benefits and costs do not enter remediation decisions. These problems arise in part because of decision-making constraints in the Superfund legislation and in part because of the manner in which regulators have implemented the program. Our data show that the core economic elements of the proposed regulatory reform bills would dramatically alter EPA's policy choices. Put simply, the reforms would require that agency regulations maximize the net gain to society (benefits less costs) using plausible risk assumptions. Sound risk assessment and benefit-cost analysis would force wiser spending and eliminate many of the problems that decrease the overall performance of those potentially desirable regulatory efforts such as hazardous waste cleanup...Risk reform is inevitably vulnerable to becoming a vehicle for ignoring environmental hazards rather than remediating them more efficiently. As our analysis shows however, there is a wide zone within which risk reforms can improve efficiency without sacrificing human health considerations.