Particulate Matter: EPA Needs to Make More Progress in Addressing
the National Academies' Recommendations on Estimating Health	 
Benefits (19-JUL-06, GAO-06-992T).				 
                                                                 
Scientific evidence links exposure to particulate matter--a	 
widespread form of air pollution--to serious health problems,	 
including asthma and premature death. Under the Clean Air Act,	 
the Environmental Protection Agency (EPA) periodically reviews	 
the appropriate air quality level at which to set national	 
standards to protect the public against the health effects of six
pollutants, including particulate matter. EPA proposed revisions 
to the particulate matter standards in January 2006 and issued a 
regulatory impact analysis of the revisions' expected costs and  
benefits. The estimated benefits of air pollution regulations	 
have been controversial in the past, and a 2002 National	 
Academies report to EPA made recommendations aimed at improving  
the estimates for particulate matter and other air pollution	 
regulations. This testimony is based on GAO's July 2006 report	 
Particulate Matter: EPA Has Started to Address the National	 
Academies' Recommendations on Estimating Health Benefits, but	 
More Progress Is Needed (GAO-06-780). GAO determined whether and 
how EPA applied the National Academies' recommendations in its	 
estimates of the health benefits expected from the January 2006  
proposed revisions to the particulate matter standards. 	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-992T					        
    ACCNO:   A57120						        
  TITLE:     Particulate Matter: EPA Needs to Make More Progress in   
Addressing the National Academies' Recommendations on Estimating 
Health Benefits 						 
     DATE:   07/19/2006 
  SUBJECT:   Air pollution					 
	     Air pollution control				 
	     Air quality					 
	     Environmental law					 
	     Environmental monitoring				 
	     Environmental policies				 
	     Environmental research				 
	     Pollutants 					 
	     Public health					 
	     Public health research				 
	     Standards						 
	     EPA National Ambient Air Quality			 
	     Standards						 
                                                                 

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GAO-06-992T

     

     * Summary
     * Background
     * EPA Applied Some, but Not All, of the National Academies' Re
          * Recommendations EPA Applied or Partially Applied to Its Part
          * Recommendations EPA Did Not Apply to the Particulate Matter
     * Concluding Observations
     * GAO Contact and Staff Acknowledgments
          * Order by Mail or Phone

Testimony

Before the Committee on Environment and Public Works, U.S. Senate

United States Government Accountability Office

GAO

For Release on Delivery Expected at 9:00 a.m. EDT

Wednesday, July 19, 2006

PARTICULATE MATTER

EPA Needs to Make More Progress in Addressing the National Academies'
Recommendations on Estimating Health Benefits

Statement of John B. Stephenson, Director Natural Resources and
Environment

GAO-06-992T

Mr. Chairman and Members of the Committee:

I am pleased to be here today as the committee considers the science and
risk assessment supporting the Environmental Protection Agency's (EPA)
proposed revisions to the national air quality standards for particulate
matter. A large body of scientific evidence links exposure to particulate
matter-a ubiquitous form of air pollution commonly referred to as soot-to
serious health problems, including asthma, chronic bronchitis, heart
attack, and premature death. Under the Clean Air Act, EPA periodically
reviews the appropriate air quality level at which to set national
standards to protect the public against the health effects of particulate
matter. As you are aware, EPA proposed revisions to the particulate matter
standards in January 2006 and issued a draft regulatory impact analysis of
the revisions' expected costs and benefits.

EPA's estimates of the expected benefits from its air pollution
regulations have often been controversial, and the methods the agency has
used to prepare these estimates have been questioned. In 2000, at the
direction of the Senate Appropriations Committee, EPA asked the National
Academies (Academies) to evaluate EPA's overall methodology for estimating
the health benefits of proposed air regulations. In 2002, the Academies
issued a report that made recommendations focusing on conducting more
rigorous assessments of uncertainty, increasing the transparency of how
EPA estimates benefits, conducting more detailed analyses of exposure, and
estimating the benefits of each regulatory option under consideration. My
testimony summarizes the highlights of our report being released today on
the extent to which EPA applied the recommendations made by the Academies
to its January 2006 proposed revisions to the particulate matter
standards.1 Our report provides a more detailed discussion of each
recommendation, including whether and how EPA applied it to the regulatory
impact analysis on particulate matter.

                                    Summary

While the National Academies' report generally supported EPA's overall
approach to estimating benefits, it included 34 recommendations for
improvements. EPA has begun to change the way it conducts and presents its
analyses of health benefits in response to the National Academies'
recommendations. In the case of the January 2006 proposed rule on
particulate matter standards, EPA applied, at least in part, about
two-thirds of the recommendations to its particulate matter health benefit
analysis; it applied 8 and partially applied 14 more. For example, in
applying the recommendations, EPA evaluated how benefits might change
given alternative assumptions and discussed sources of uncertainty not
included in the benefit estimates. In addition, EPA applied an alternative
technique for evaluating one important source of uncertainty in its
analysis-the uncertainty underlying the causal link between exposure to
particulate matter and premature death. Consistent with the National
Academies' recommendation to assess uncertainty by developing ranges of
estimates of benefits and specifying the likelihood of attaining those
levels of benefits, EPA systematically gathered expert opinions about this
link and developed ranges reflecting the experts' confidence in attaining
reductions in premature death expected from the proposed revisions.
However, the health benefit analysis did not assess how the benefit
estimates would vary in light of other key uncertainties as the Academies
recommended. Consequently, EPA's response represents a partial application
of the recommendation. Agency officials told us that ongoing research and
development efforts will allow EPA to gradually make more progress in
applying this and other recommendations to future analyses.

1See GAO, Particulate Matter: EPA Has Started to Address the National
Academies' Recommendations on Estimating Health Benefits, but More
Progress Is Needed, GAO-06-780 (Washington, D.C.: July 14, 2006).

EPA did not apply the remaining 12 recommendations to the analysis, such
as the recommendation to evaluate the impact of using the assumption that
the components of particulate matter are equally toxic. EPA officials
viewed most of these 12 recommendations as relevant to its health benefit
analyses but noted that the agency was not ready to apply specific
recommendations because of, among other things, the need to overcome
technical challenges stemming from limitations in the state of available
science. For example, EPA did not believe that the state of scientific
knowledge on the relative toxicity of particulate matter components was
sufficiently developed to include it in the January 2006 regulatory impact
analysis, but the agency is sponsoring research on this issue.

                                   Background

EPA is required by the Clean Air Act to conduct reviews of the National
Ambient Air Quality Standards (NAAQS) for the six criteria pollutants,
including particulate matter, every 5 years to determine whether the
current standards are sufficient to protect public health, with an
adequate margin of safety. If EPA decides to revise the NAAQS, the agency
proposes changes to the standards and estimates the costs and benefits
expected from the revisions in an assessment called a regulatory impact
analysis. In January 2006, EPA prepared a regulatory impact analysis for
one such rule-particulate matter-that presented limited estimates of the
costs and benefits expected to result from the proposed particulate matter
rule. EPA developed the estimates by, for example, quantifying the changes
in the number of deaths and illnesses in five urban areas that are likely
to result from the proposed rule.

The National Academies' 2002 report examined how EPA estimates the health
benefits of its proposed air regulations and emphasized the need for EPA
to account for uncertainties and maintain transparency in the course of
conducting benefit analyses. Identifying and accounting for uncertainties
in these analyses can help decision makers evaluate the likelihood that
certain regulatory decisions will achieve the estimated benefits.
Transparency is important because it enables the public and relevant
decision makers to see clearly how EPA arrived at its estimates and
conclusions. Many of the recommendations include qualifying language
indicating that it is reasonable to expect that they can be applied in
stages, over time; moreover, a number of the recommendations are
interrelated and, in some cases, overlapping. Soon after the National
Academies issued its report, EPA roughly approximated the time and
resource requirements to respond to the recommendations, identifying those
the agency could address within 2 or 3 years and those that would take
longer. According to EPA officials, the agency focused primarily on the
numerous recommendations related to analyzing uncertainty. As is discussed
below, EPA applied some of these recommendations to the particulate matter
analysis.

EPA Applied Some, but Not All, of the National Academies' Recommendations to the
                 Particulate Matter Regulatory Impact Analysis

EPA applied-either wholly or in part-approximately two-thirds of the
Academies' recommendations in preparing its January 2006 particulate
matter regulatory impact analysis and continues to address the
recommendations through ongoing research and development. According to
EPA, the agency intends to address some of the remaining recommendations
in the final rule and has undertaken research and development to address
others.

Recommendations EPA Applied or Partially Applied to Its Particulate Matter
Health Benefit Analysis

The January 2006 regulatory impact analysis on particulate matter
represents a snapshot of an ongoing EPA effort to respond to the National
Academies' recommendations on developing estimates of health benefits for
air pollution regulations. Specifically, the agency applied, at least in
part, approximately two-thirds of the recommendations-8 were applied and
14 were partially applied-by taking steps toward conducting a more
rigorous assessment of uncertainty by, for example, evaluating the
different assumptions about the link between human exposure to particulate
matter and health effects and discussing sources of uncertainty not
included in the benefit estimates. According to EPA officials, the agency
focused much of its time and resources on the recommendations related to
uncertainty. In particular, one overarching recommendation suggests that
EPA take steps toward conducting a formal, comprehensive uncertainty
analysis-the systematic application of mathematical techniques, such as
Monte Carlo simulation-and include the uncertainty analysis in the
regulatory impact analysis to provide a "more realistic depiction of the
overall uncertainty" in EPA's estimates of the benefits.2

Overall, the uncertainty recommendations call for EPA to determine (1)
which sources of uncertainties have the greatest effect on benefit
estimates and (2) the degree to which the uncertainties affect the
estimates by specifying a range of estimates and the likelihood of
attaining them. In response, EPA examined a key source of uncertainty-its
assumption about the causal link between exposure to particulate matter
and premature death-and presented a range of expected reductions in death
rates. EPA based these ranges on expert opinion systematically gathered in
a multiphased pilot project. The agency did not, however, incorporate
these ranges into its benefit estimates as the National Academies had
recommended.

Moreover, the Academies recommended that EPA's benefit analysis reflect
how the benefit estimates would vary in light of multiple uncertainties.
In addition to the uncertainty underlying the causal link between exposure
and premature death, other key uncertainties can influence the estimates.
For example, there is uncertainty about the effects of the age and health
status of people exposed to particulate matter, the varying composition of
particulate matter, and the measurements of actual exposure to particulate
matter. EPA's health benefit analysis, however, does not account for these
key uncertainties by specifying a range of estimates and the likelihood of
attaining them. For these reasons, EPA's responses reflect a partial
application of the Academies' recommendation.

2Monte Carlo simulation refers to a computer-based analysis that uses
probability distributions for key variables, selects random values from
each of the distributions simultaneously, and repeats the random selection
over and over. Rather than presenting a single outcome-such as the mostly
likely or average scenario-Monte Carlo simulations produce a distribution
of outcomes that reflect the probability distributions of modeled
uncertain variables.

In addition, the Academies recommended that EPA both continue to conduct
sensitivity analyses on sources of uncertainty and expand these analyses.
In the particulate matter regulatory impact analysis, EPA included a new
sensitivity analysis regarding assumptions about thresholds, or levels
below which those exposed to particulate matter are not at risk of
experiencing harmful effects. EPA has assumed no threshold level
exists-that is, any exposure poses potential health risks.3 Some experts
have suggested that different thresholds may exist, and the National
Academies recommended that EPA determine how changing its assumption-that
no threshold exists-would influence the estimates. The sensitivity
analysis EPA provided in the regulatory impact analysis examined how its
estimates of expected health benefits would change assuming varying
thresholds.

In response to another recommendation by the National Academies, EPA
identified some of the sources of uncertainty that are not reflected in
its benefit estimates. For example, EPA's regulatory impact analysis
disclosed that its benefit estimates do not reflect the uncertainty
associated with future year projections of particulate matter emissions.
EPA presented a qualitative description about emissions uncertainty,
elaborating on technical reasons-such as the limited information about the
effectiveness of particulate matter control programs-why the analysis
likely underestimates future emissions levels.

Recommendations EPA Did Not Apply to the Particulate Matter Analysis

EPA did not apply the remaining 12 recommendations to the analysis for
various reasons. Agency officials viewed most of these recommendations as
relevant to its health benefit analyses and, citing the need for
additional research and development, emphasized the agency's commitment to
continue to respond to the recommendations. EPA has undertaken research
and development to respond to some of these recommendations but, according
to agency officials, did not apply them to the analysis because the agency
had not made sufficient progress.

3Recent EPA analyses used the natural background concentrations of
particulate matter, rather than zero, for its assumption of no threshold
level. The National Academies supported the assumption of no threshold
level, but it recommended that EPA conduct a consistent and transparent
sensitivity analysis to consider various threshold levels.

For example, EPA is in the process of responding to a recommendation
involving the relative toxicity4 of components of particulate matter, an
emerging area of research that has the potential to influence EPA's
regulatory decisions in the future.5 Hypothetically, the agency could
refine national air quality standards to address the potentially varying
health consequences associated with different components of particulate
matter. The National Academies recommended that EPA strengthen its benefit
analyses by evaluating a range of alternative assumptions regarding
relative toxicity and incorporate these assumptions into sensitivity or
uncertainty analyses as more data become available.6 EPA did not believe
the state of scientific knowledge on relative toxicity was sufficiently
developed at the time it prepared the draft regulatory impact analysis to
include this kind of analysis. In a separate report issued in 2004, the
National Academies noted that technical challenges have impeded research
progress on relative toxicity but nonetheless identified this issue as a
priority research topic. The Clean Air Scientific Advisory Committee also
noted the need for more research and concluded in 2005 that not enough
data are available to base the particulate matter standards on
composition. The Office of Management and Budget, however, encouraged EPA
in 2006 to conduct a sensitivity analysis on relative toxicity and
referred the agency to a sensitivity analysis on relative toxicity funded
by the European Commission.

4Particulate matter is a highly complex mixture comprising particles
emitted directly from sources and particles formed through atmospheric
chemical reactions. Particles span many sizes and shapes and consist of
hundreds of different chemicals. EPA identifies the major components of
fine particulate matter as carbon, sulfate and nitrate compounds, and
crustal/metallic materials such as soil and ash.

5Relative toxicity refers to the premise that different components of
particulate matter have different levels of potency affecting premature
mortality and illness. In the draft particulate matter regulatory impact
analysis, EPA assumed equivalent toxicity, stating that "while it is
reasonable to expect that the potency of components may vary across the
numerous effect categories associated with particulate matter, EPA's
interpretation of scientific information considered to date is that such
information does not yet provide a basis for quantification beyond using
fine particle mass." EPA, Draft Regulatory Impact Analysis for the PM-2.5
National Ambient Air Quality Standards (Washington, D.C., 2006), 3-21.

6In the context of the National Academies' recommendations, a sensitivity
analysis would assess how changes in one or more variables affect the
outcome, whereas a comprehensive or formal uncertainty analysis evaluates
the probability distributions of multiple variables.

We found that EPA is sponsoring research on the relative toxicity of
particulate matter components. For example, EPA is supporting long-term
research on this issue through its intramural research program and is also
funding research through its five Particulate Matter Research Centers and
the Health Effects Institute. In addition, an EPA contractor has begun to
investigate methods for conducting a formal analysis that would consider
sources of uncertainty, including relative toxicity. To date, the
contractor has created a model to assess whether and how much these
sources of uncertainty may affect benefit estimates in one urban area.
Agency officials told us, however, that this work was not sufficiently
developed to include in the final particulate matter analysis, which it
says will present benefits on a national scale.

Another recommendation that EPA did not apply to the particulate matter
analysis focused on assessing the uncertainty of particulate matter
emissions. The National Academies recommended that EPA conduct a formal
analysis to characterize the uncertainty of its emissions estimates, which
serve as the basis for its benefit estimates.7 While the agency is
investigating ways to assess or characterize this uncertainty, EPA did not
conduct a formal uncertainty analysis for particulate matter emissions for
the draft regulatory impact analysis because of data limitations. These
limitations stem largely from the source of emissions data, the National
Emissions Inventory8-an amalgamation of data from a variety of entities,
including state and local air agencies, tribes, and industry. According to
EPA, these entities use different methods to collect data, which have
different implications for how to characterize the uncertainty. EPA
officials stated that the agency needs much more time to address this data
limitation and to resolve other technical challenges of such an analysis.
While the final particulate matter analysis will not include a formal
assessment of uncertainty about emissions levels, EPA officials noted that
the final analysis will demonstrate steps toward this recommendation by
presenting emissions data according to the level emitted by the different
kinds of sources, such as utilities, cars, and trucks.

7Because the precise levels of total emissions are not knowable but rather
are approximations based on a sample of measurements, there is uncertainty
about the true quantity of emissions.

8EPA compiles the National Emissions Inventory, a national database of air
emissions data that includes estimates of annual emissions, by source, of
air pollutants in each area of the country on an annual basis.

Finally, EPA did not apply a recommendation concerning the transparency of
its benefit estimation process to the particulate matter analysis.
Specifically, the National Academies recommended that EPA clearly
summarize the key elements of the benefit analysis in an executive summary
that includes a table that lists and briefly describes the regulatory
options for which EPA estimated the benefits, the assumptions that had a
substantial impact on the benefit estimates, and the health benefits
evaluated. EPA did not, however, present a summary table as called for by
the recommendation or summarize the benefits in the executive summary. EPA
stated in the regulatory impact analysis that the agency decided not to
present the benefit estimates in the executive summary because they were
too uncertain. Agency officials told us that the agency could not resolve
some significant data limitations before issuing the draft regulatory
impact analysis in January 2006 but that EPA has resolved some of these
data challenges. For example, EPA officials said they have obtained more
robust data on anticipated strategies for reducing emissions, which will
affect the estimates of benefits. The officials also said that EPA intends
to include in the executive summary of the regulatory impact analysis
supporting the final rule a summary table that describes key analytical
information.

                            Concluding Observations

While EPA officials said that the final regulatory impact analysis on
particulate matter will reflect further responsiveness to the Academies'
recommendations, continued commitment and dedication of resources will be
needed if EPA is to fully implement the improvements recommended by the
National Academies. In particular, the agency will need to ensure that it
allocates resources to needed research on emerging issues, such as the
relative toxicity of particulate matter components, and to assessing which
sources of uncertainty have the greatest influence on benefit estimates.
The uncertainty of the agency's estimates of health benefits in the draft
regulatory impact analysis for particulate matter underscores the
importance of uncertainty analysis that can enable decision makers and the
public to better evaluate the basis for EPA's air regulations. While EPA
officials said they expect to reduce the uncertainties associated with the
health benefit estimates in the final particulate matter analysis, a
robust uncertainty analysis of the remaining uncertainties will
nonetheless be important for decision makers and the public to understand
the likelihood of attaining the estimated health benefits.

Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or other Members of the Committee may
have.

                     GAO Contact and Staff Acknowledgments

For further information about this testimony, please contact me at (202)
512-3841 or [email protected] . Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this statement. Individuals who made key contributions to this
statement include Christine Fishkin, Assistant Director; Kate Cardamone;
Nancy Crothers; Cindy Gilbert; Tim Guinane; Karen Keegan; Jessica Lemke;
and Meaghan K. Marshall.

(360741)

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www.gao.gov/cgi-bin/getrpt? GAO-06-992T .

To view the full product, including the scope

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For more information, contact John B. Stephenson at (202) 512-3841 or
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Highlights of GAO-06-992T , a testimony before the Committee on
Environment and Public Works, U.S. Senate

July 19, 2006

PARTICULATE MATTER

EPA Needs to Make More Progress in Addressing the National Academies'
Recommendations on Estimating Health Benefits

Scientific evidence links exposure to particulate matter-a widespread form
of air pollution-to serious health problems, including asthma and
premature death. Under the Clean Air Act, the Environmental Protection
Agency (EPA) periodically reviews the appropriate air quality level at
which to set national standards to protect the public against the health
effects of six pollutants, including particulate matter. EPA proposed
revisions to the particulate matter standards in January 2006 and issued a
regulatory impact analysis of the revisions' expected costs and benefits.
The estimated benefits of air pollution regulations have been
controversial in the past, and a 2002 National Academies report to EPA
made recommendations aimed at improving the estimates for particulate
matter and other air pollution regulations.

This testimony is based on GAO's July 2006 report Particulate Matter: EPA
Has Started to Address the National Academies' Recommendations on
Estimating Health Benefits, but More Progress Is Needed (GAO-06-780). GAO
determined whether and how EPA applied the National Academies'
recommendations in its estimates of the health benefits expected from the
January 2006 proposed revisions to the particulate matter standards.

While the National Academies' report generally supported EPA's approach to
estimating the health benefits of its proposed air pollution regulations,
it included 34 recommendations for improvements. EPA has begun to change
the way it conducts and presents its analyses of health benefits in
response to the National Academies' recommendations. For its particulate
matter health benefit analysis, EPA applied, at least in part, about
two-thirds of the Academies' recommendations. Specifically, EPA applied 8
and partially applied 14. For example, in response to the Academies'
recommendations, EPA evaluated how benefits might change given alternative
assumptions and discussed sources of uncertainty not included in the
benefit estimates. Although EPA applied an alternative technique for
evaluating one key uncertainty-the causal link between exposure to
particulate matter and premature death-the health benefit analysis did not
assess how the benefit estimates would vary in light of other key
uncertainties, as the Academies had recommended. Consequently, EPA's
response represents a partial application of the recommendation. Agency
officials said that ongoing research and development efforts will allow
EPA to gradually make more progress in applying this and other
recommendations to future analyses.

EPA did not apply the remaining 12 recommendations to the analysis, such
as the recommendation to evaluate the impact of using the assumption that
the components of particulate matter are equally toxic. EPA officials
viewed most of these 12 recommendations as relevant to the health benefit
analyses but noted that the agency was not ready to apply specific
recommendations because of, among other things, the need to overcome
technical challenges stemming from limitations in the state of available
science. For example, EPA did not believe that the state of scientific
knowledge on the relative toxicity of particulate matter components was
sufficiently developed to include it in the January 2006 regulatory impact
analysis. The agency is sponsoring research on this issue.

We note that continued commitment and dedication of resources will be
needed if EPA is to fully implement the improvements recommended by the
National Academies. In particular, the agency will need to ensure that it
allocates resources to needed research on emerging issues, such as the
relative toxicity of particulate matter components, and to assessing which
sources of uncertainty have the greatest influence on benefit estimates.
While EPA officials said they expect to reduce the uncertainties
associated with the health benefit estimates in the final particulate
matter analysis, a robust uncertainty analysis of the remaining
uncertainties will nonetheless be important for decision makers and the
public to understand the likelihood of attaining the estimated health
benefits.
*** End of document. ***