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EPA Use of Ecological Nonmarket Valuation
Citation:
WEBER, M. EPA Use of Ecological Nonmarket Valuation. IN: AERE Newsletter, Association of Environmental and Resource Economists, Washington, DC, 30(1):26 - 35, (2010).
Impact/Purpose:
To inform the public.
Description:
This essay was motivated by a workshop at which numerous investigators presented advancements in nonmarket valuation . Much of the research, and the workshop itself were US Environmental Protection Agency (EPA) funded, and indeed the typical expected application was environmental policy decisions. This was one venue of many where such research is advanced. The breadth and depth of these studies led to an inquiry: How is the federal government using nonmarket valuation research? It was decided to focus on EPA’s use of nonmarket valuation, the author’s home agency and thus a place where learning additional historical context would be helpful. A second boundary condition imposed was to focus only on ecological valuation, that is, to exclude all health-related valuation information such as morbidity and mortality research, e.g., the monetized costs of illness and lives lost due to toxic exposures. Third, only selected regulations over the past several years associated with the Clean Air Act and Clean Water Act were examined. These are relatively arbitrary bounds, and expanding the view of inquiry is planned in the future . This essay involved reviewing regulatory arm documents associated with the EPA Office of Air and Radiation, and the EPA Office of Water. This is not the first nor the most extensive review of EPA Regulatory Impact Analysis (RIA). An early example was titled EPA’s Use of Benefit-Cost Analysis 1981-1986, (U.S. EPA, 1987). Later came Economic Analyses at EPA: Assessing Regulatory Impact (Morgenstern, 1997). Next was Regulatory Economic Analysis at EPA (Anderson and Kobrin, 2000). These three studies were the most extensive for their era, covering both costs and benefits, and both human health and ecologic values. Iovanna and Griffiths (2006) critique several Clean Water Act RIAs. Harrington et al. (2009) make general RIA observations, viewing a few cases in great depth. There are retrospective analyses of costs and benefits of the CAA and CWA, see US EPA (2007), and Research Triangle Institute et al. (2000), respectively. This essay is designed to give a general overview of the issues and the state of valuation in RIAs, covering both the CAA and the CWA, including the most recent developments. It was illuminating to read through the challenges EPA has faced in applying valuation research results for purposes related to rulemaking. It is hoped the ensuing summary will be of interest to other researchers within this field.
