EPA ESTIMATES BENEFITS OF THE CLEAN AIR ACT AMENDMENTS OF 1990
03.01.11 10:29 AMThere is no question that the Clean Air Act of 1990 is responsible for significant health improvements. Just how much and cost benefit are frequently debated. Today (March 1, 2011) EPA released its report entitled “The Benefits and Costs of the Clean Air Act from 1990 to 2020.” EPA highlights the following:
In 2010 alone, the reductions in fine particle and ozone pollution from the 1990 Clean Air Act amendments prevented more than:
· 160,000 cases of premature mortality
· 130,000 heart attacks
· 13 million lost work days
· 1.7 million asthma attacks
In 2020, the study projects benefits will be even greater, preventing more than:
· 230,000 cases of premature mortality
· 200,000 heart attacks
· 17 million lost work days
· 2.4 million asthma attacks
EPA is required by the 1990 CAA Amendments to periodically submit progress reports. This is the so-called Second Prospective Report. The First Prospective report was issued in 1997 and estimated benefits through 2010.
The cost benefit of the CAA amendments will always be debated. For example using the "cost only" macroeconomic model, EPA predicted that the measure of household economic welfare in 2020 is lower with the CAA amendments by about 0.39% than without the CAA amendments. The actual economic welfare is less than corresponding impact on GDP using this model. The dollar equivalent of this 0.39% reduction in household economic welfare is about $75 billion. The implication of the “Cost Only” macroeconomic modeling is that 1990 Clean Air Act programs both shrank the economy relative to what it would have been without these programs, and caused the average household to incur a small decrease in economic well-being
However, in the report issued today EPA added “labor force improvements and avoided medical costs” as a second scenario. This model predicts that the GDP will eventually by 2020 improve by 0.02 percent and economic welfare would improve by 0.15 percent or $29 billion. That would amount to about $6,000 per family.
Of course, cost benefit is not necessarily a component of setting requirements for ozone and fine particulate matter, but the analysis helps understand some of the key issues in complying with them.
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