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SCIENCE, ECONOMICS & ENVIRONMENTAL POLICY simply point out that, under well-established scientific standards, the question of ETS and lung cancer has not been answered. They further call attention to the fact that even if one uncritically accepts EPA's conclusions, the resulting increase in risk from ETS is approximately the same as the lifetime risk of being killed on a bicycle u Perhaps more compelling is this statement: "It is a risk that is less than that associated with developing colon cancer by drinking chlorinated water, which is in most U.S. cities' water supplies."' Chlorination of drinking water supplies has been one of the most important weapons in the battle against water-borne diseases, such as cholera. Were the EPA to apply a non- threshold standard to chlorination of drinking water, America might see an enormous increase in water borne diseases. Because the relative increase in the risk of contracting lung cancer found by the EPA is so slight (even after carefully tweaking the confidence interval), any number of non-ETS risk factors could be the actual cause. For example, EPA apparently failed to adjust its results for the age of the study participants.27 As people grow older, they become more likely to develop cancer, including lung cancers. Poor dietary habits can contribute to the development of cancer, and these traits may be shared by spouses to some degree. The EPA did adjust its results to reflect the likelihood that people who are counted as nonsmokers are misclassified because of the way the question was posed or simply because they lied on their questionnaire. However, the EPA did not accept the degree of smoker misclassification that has been suggested by some who have researched this particular question.' One further point: the EPA Report focuses on lung cancer and ETS in the home, since it relied upon studies of the nonsmoking spouses of smokers. Yet it is being used to draw conclusions about workplace exposure and lung cancer risks. But workplace studies of ETS do not support the EPA's conclusions. In the final analysis, therefore, the EPA report is an inadequate basis for a federal ban on workplace smoking." EPA and the Economics of ETS To its credit, the EPA admits to the appropriateness of "biological plausibility" in ETS risk analysis. That is, if no known chemical or biological reaction could explain the observed health problem, it will not be blamed automatically on ETS exposure. This is an appropriately cautious, if somewhat insufficient, filter for theories of harm from environmental exposures of all types. Unfortunately, the EPA is r5pt similarly cautious with its economic analysis. In an analysis of the Smoke-Free Environment Act of 1993, EPA produced exaggerated estimates of potential economic benefits.'0 The bill under consideration "would effectively ban or restrict smoking in most [nonresidential] indoor environments."" EPA's analysis found that this, or similar, legislation "could achieve net benefits (i.e., benefits minus costs) ranging from $39 billion to $72 billion per year."32 These figures were widely reported in the press.'3 The EPA's economic calculations are no more rigorous than its risk assessments. Indeed, the claimed economic benefits of smoking bans are perhaps the primary impetus for several current legislative proposals 3` If this study is any indication, the EPA's economic calculations are no more rigorous than its risk assessments 3$ How did EPA generate such impressive economic benefits? Most of the calculated costs and benefits were relatively minor, particularly when one considers how many establishments would be covered under the bill. However, $33 billion to $60 billion of the EPA's "net benefits" are derived from a single category: surveys of how much people would be willing to pay to avoid a premature death due to ETS exposure. This controversial technique is being used to a growing degree in many environmental fields. In this case, the EPA found that individuals were'willing to pay" an average of $4.8 million each to avoid a premature death from ETS exposure. It is economically impossible -- not just "difficult" or "unlikely" -- for many individuals to spend the $4.8 million, so it matters little how much they say they would be "willing" to spend. In addition, insurance is 6

ENVIRONMENTAL TOBACCO SMOKE available for both cancer and for other catastrophic illnesses, yet the premiums are but a fraction of the EPA's survey results. In addition, it estimated the net benefits of reduced illnesses by using another willingness-to-pay survey. The assumption this time was that individuals would be willing to pay $1.5 million per avoided illness. Therefore, the cumulative net health benefits to so8ety of a smoking ban would range, according to EPA's figures, from $35 billion to $66 billion annually. EPA administrator Carol Browner has carried these highly questionable assertions to a higher level. In her testimony on the Smoke- Free Environment Act before a U.S. House of Representatives subcommittee she stated that "If one considered the economic value that people assign to reduced risk of death, our estimate would be on the order of $157 billion to $470 billion per year."36 The EPA's use and publicizing of "willingness-to-pay" surveys in this instance violates any sound "economic plausibility" test. And it is only through the use of these flawed techniques that the EPA is able to assert tens of billions of dollars in theoretical economic benefits from a smoking ban. If the EPA were limited to'more realistic economic measure- ments, the cost-benefit analysis of public smoking bans would produce much smaller figures, thereby reducing support for federal action. If the EPA were limited to more realistic economic measurements, the cost-benefit analysis of public smoking bans would produce much smaller figures, thereby reducing support for federal action. The EPA and its private sector contractors find willingness-to-pay surveys to be of great value. For example, the Exxon Valdez oil spill in Prince William Sound, Alaska encouraged economic researchers to survey the general public at the height of outrage over the accident. One estimate of the "value" of the waterway (in pristine condition) ranged from $5 to $10 billion 37 Yet if the same survey were conducted on each mile of U.S. coastline in turn, the "values" derived would reach astronomical figures. This is because of the simple fact that, if you aren't required to actually spend the money, there is no theoretical limit to your economic behavior.' The remainder of EPA's estimated "net benefits" are derived from calculated savings from reduced maintenance and cleanup costs minus the added costs of creating smoking lounges and enforcement. It seems,almost petty to criticize these comparatively rninor points, but even here EPA can be accused of exaggeration. For example, the EPA estimated potential total savings through reduced housekeeping and maintenance costs to range from $5 billion to $10 billion per year." One indoor air expert testified before Congress in March, 1994 and stated that "savings of this magnitude in housekeeping and maintenance costs are more figments of the imagination than hard data .' EPA's cost-benefit analysis is "funda- mentally flawed." Economist Robert Tollison, former director of the Bureau of Economics at the Federal Trade Commission, has analyzed the EPA's cost-benefit analysis and found it to be "fundamentally flawed"41 According to Tollison, EPA's "cost-benefit analysis involves the kind of numbers game for which govern- ment agencies have been justly criticized."' In so doing, Tollison raises the specter that EPA has seemingly fitted economic analysis to the policy conclusions it desired. Tollison found telling weaknesses within the EPA cost-benefit analysis. For example, EPA assumes in its cost-benefit analysis that eliminating exposure to ETS in workplaces and in public places would significantly reduce the incidence of heart disease. Incredibly, savings attributable to the EPA's hypothesized decrease in the incidence of heart disease among nonsmokers account for the overwhelming majority of all dollar benefits estimated by the EPA to be associated with national smoking restrictions, according to Tollison. Yet, the EPA's well-publicized risk assessment was 7

SCIENCE, ECONOMICS & ENVIRONMENTAL POLICY primarily concerned with alleged lung and respiratory complications from ETS - not heart disease. In fact, the EPA never developed a risk assessment between E'IS and heart disease undoubtedly believing that the evidence for such risks were weak. Instead, it merely assumed that such causation exists eyen though the EPA nor any other government agency has concluded that ETS is a cause of heart disease. This paper does not take the stance that net economic benefits from a smoking ban are impossible, but simply that the EPA has exaggerated its economic estimates. The fact that it consistently does so, coupled with its careful manipulation of the science, reveals that the EPA is not providing the American public and policy makers with impartial data. Conclusions Exposure to ETS is not a uniform risk, if it is a risk at all. Even the EPA Report admits there is a strong dose-related health response for active smokers. It is logical that there would be a dose-related response for ETS, as there is with every other potential risk factor confronting humanity. In any event, indoor air problems are not limited to tobacco smoke. The best method for dealing with all potential indoor air problems simultaneously is to provide adequate ventilation. This would insure that exposure levels (to whatever substance from whatever source) were kept well below potentially harmful levels. Skeptics should consider that whenever a tobacco firm makes a statement in regard to smoking and health, it is generally discounted by its critics because of the "special interest" it holds in the issue. This is no less applicable to the "special interests" of the EPA. The bureaucracies of the federal government are strongly interested in justifying budget increases and increasing the scope and importance of their assigned responsibilities. Yet that does not excuse disregard for the scientific method or sound economic analysis. EPA personnel have a duty to conduct the best science possible and report the results fully and houestly. The EPA is attempting to prove that serious medical risks are created by even casual exposure to secondhand stnoke. In its ef j`'ort to do so, the EPA has manipulated selected portions of the existing literature until it produced the desired result. If the EPA were merely attempting to prove that secondhand smoke is an annoyance to many people, it would be on solid ground. However, the EPA is attempting to prove that serious medical risks are created by even casual exposure to secondhand smoke. In its effort to do so, the EPA has manipulated selected portions of the existing literature until it produced the desired result. However pure the motivations of EPA personnel in this matter, it is unacceptable to distort the science for the sake of a policy goal. While Congress may eventually decide to ban smoking in public buildings it cannot do so under the pretense of sound science or economics. ### 8

Figure 1-1 Percentage of Adult Cigarette Smokers 1949 1970 Year 1980 1990 Source: Gallup Poll, National Qearinghouse for Smoking and Health, National Health Interview Survey of Cancer Epidemiology anO ControL

Flgura 1-2 Odds Ratio for Lung Cancer (all types) in the 432 Nan-Smolciag Women fiom Missouri 9 Beans and pe 0 5.7 2.1 Year Source: The National Cancer Institute 1.4 1 0.5 Z 10

ENVIRONMENTAL TOBACCO SMOKE 1. W. Kip Viscusi, Smoking: Making The RiskYDecision, (New York: Oxford University Press, 1992), p.1. 2. U.S. EPA, Office of Health and Environmental Assessment, Office of Research and Development "Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders" Washington, D.C., December 1992. Hereinafter cited as "U.S. EPA, Report." 3. U.S. EPA, Indoor Air Division 6607J, Office of Radiation and Indoor Air, "The Costs and Benefits of Smoking Restrictions: An Assessment of the Smoke-Free Environment Act of 1993 (H.R. 3434), Washington, D.C., April 1994. Hereinafter cited as "U.S. EPA, Costs and Benefits." ~. 4. Carol M. Browner, Letter to the Editor, Washington Post (May 6, 1994). 5. U.S. EPA, Report, at page 1-1. 6. See, for example, Elizabeth M. Whelan, Toxic Terror: The Truth Behind the Cancer Seares, Prometheus Books, Buffalo, NY, 1993. 7. U.S. EPA, Report, at page 5-1. 8. Gary L Huber, Robert E. Brockie, and Vijay K. Mahajan, "Smoke and Mirrors: The EPA's Flawed Study of Environmental Tobacco Smoke and Lung Cancer" Regulation (No. 3, 1993), p. 46. 9. U.S. EPA, Report, at page 4-1. 10. See, for example, Michael Gough, "Reevaluating the Risks From Dioxin," Journal of Regulation and Social Costs, January, 1991, pages 5-23; Bruce N. Ames and Lois S. Gold, "Chemical Carcinogenesis: Too Many Rodent Carcinogens," Proceedings of the National Academy of Science, 87: 7772-76, 1990. 11. Lois S. Gold, et al., "Rodent Carcinogens: Setting Priorities," 258 Science 261, October 9, 1992. 12. U.S. EPA, Report, at page 4-28. 13. See, for example, Michael Fumento, "Is EPA Blowing Its Own Smoke?" Investor's Business Daily, January 28, 1993, page A-1. 14. U.S. EPA, Report, at page 1-2, 1-3. 15. For a general discussion, see Michael Fumento, Science Under Siege, (William Morrow and Company, Inc., New York: 1993) 16. Jane G. Gravelle and Dennis Zimmerman, Congressional Research Service, Library of Congress, "Cigarette Taxes to Fund Health Care Reform: An Economic Analysis" March 8, 1994, at pages CRS-46, 47. Hereinafter cited as "Gravelle " 17. See, for example, Gary L. Huber, et al., "Smoke and Mirrors" supra, note 8. 18. Ibid., at page 45. 19. H.G. Stockwell, et al., "Environmental tobacco smoke and lung cancer risk in nonsmoking women" Journal of the National Cancer Institute, September 16, 1992, Vol. 84:1417-1422. 20. U.S. EPA Report, Addendum, at page ADD-1. 21. Huber, et al., "Smoke and Mirrors," at page 51. 11

SCIENCE, ECONOMICS & ENVIRONMENTAL POLICY 22.' Gravelle, supra note 16. 23. Ross C. Brownson, et al., "Passive Smoking and Lung Cancer in Women," American Iournal of Public Health, November 1992, voL 82, pp. 1525-1529. 24. Gravelle, at page CRS-48. 25. Huber, et al., at page 53. 26. hid. 27. bid., at page 54. 28. U.S. EPA Report, at Appendix B. 29. A major component of the indictment against ETS is the impact - real and potential - on children. Yet children would be one of the least benefited classes under H.R. 3434 (legislation prohibiting smoking in most public places). Most childhood exposure to ETS occurs in the home, which remains unregulated. The scientific literature on ETS does provide some indication that ETS is a risk factor for certain respiratory problems in infants and children under 18 months of age. This is an important issue, but it is one that must be dealt with in the home and in daycare facilities. 30. U.S. EPA, "Costs and Benefits," supra, note 3. 31. Ibid., at page ES-1. 32. Iid., at page ES-2. 33. See, for example, John Schwartz, "EPA Estimates Smoking Ban Could Save Up to $72 Billion" Washington Post, Apri122, 1994. 34. See, for example, Gravelle, supra, note 16. 35. And, it would appear, the EPA is not unique in this regard. The Centers for Disease Control recently announced, at a widely covered press conference, the results of a study estimating the societal costs of smoking. However, the actual report was not distributed, making it impossible to assess the accuracy of CDC's results. 36. Carol M. Browner, Administrator of the U.S. Envirot.mental Protection Agency, in testimony before the subcommittee on Health and the Environment, Committee on Energy and Commerce, U.S. House of Representatives, February 7, 1994, at page 9. This quote is a reference to EPA's estimate of the benefits from a reduction in smoker mortality. The total estimated value from direct medical cost savings and reductions in lost wages is from $5 to $16 billion annually. 37. See: Roger Bate, "Pick A Number: A Critique of Contingent Valuation Methodology and Its Application in Public Policy," Competitive Enterprise Institute, Washington, DC, January, 1994. ALso see: Robert K. Niewijk, "Misleading Quantification: The Contingent Valuation of Environmental Quality," Regulation. Number 1, 1994, pp. 60-71. 38. Ibid. 39. U.S. EPA, Costs and Benefits, at page 16. These figures are not corrected for the fact that many U.S. businesses already impose bans or restrictions on smoking. 12

ENVIRONMENTAL TOBACCO SMOKE ! 40. Gray Robertson, President of Healthy Buildings International, Inc., in testimony before the Subcommittee on Health and the Environment, Committee on Energy and Commerce of the U.S. House of Representatives, March 17, 1994, at page 4. 41. Robert D. Tollison, Duncan Black Professor of Economics, George Mason University, in a statement submitted before the Subcommittee on Clean Air and Nuclear Regulation, Committee on Environment and Public Works, U.S. Senate, May 11, 1994. 42. Ibid. ~ zn m oa ra 13

CASE STUDY NO. 2: RADON Introduction The EPA has decided that radon is the number one environmental health risk in America: worse than pesticides, worse than hazardous waste, worse than anything. However, it is less certain why this is the case: Is radon incredibly risky or is everything else not very risky at all? At extremely high exposure levels, it appears that radon can significantly increase the risk of lung cancer to rates. Yet, like so many other potentially harmful substances, at the lower levels of exposure which are commonly encountered, researchers have a hard time finding evidence of any harm. Because radon can be harmfuta the EPA insists that it is harmful. Because radon can be harmful, the EPA insists that it is harmful. Yet the average radon risk is so small that it is difficult to measure and is largely based on assumptions rather than observations. In the end, we are left with a risk that everyone agrees is bigger than anything else the EPA attempts to regulate, yet may cause disease so rarely that we can never be certain it is causing any harm at all. The implications of this paradox go far beyond the radon issue itself. It challenges the underlying justification for most of the EPA's regulations. As with so many other environmental issues, this uncertainty has spawned a national debate, but with a twist. Because there is no one to "blame" it has been difficult to inflame the passions of the public. Radon, after all, is a naturally occurring substance, it is not a by- product of industrial or consumer activities. Instead, the debate is over the scientific basis (or lack thereof) for EPA's efforts and the cost to citizens who heed EPA's warnings. The lengths to which the anti-radon lobby will go is perhaps best represented by a list of ideas for publicizing "National Radon Action Week (October 17-23, 1993). Among the standard suggestions (enlist the support of sports stars; issue a press release) was one eye-opener. "Go on a hunger strike until 10,000 homes are tested in your area."' Is radon truly such a dire threat that individuals should threaten to kill themselves unless something is done about it?2 Why Is Radon Considered a Health Risk? Radon is a colorless, odorless gas that is naturally present in varying amounts across almost all land environments. Most important, radon is also naturally radioactive. Further- more, radon, itself the product of the radioactive decay of uranium in the earth's crust, has but a brief existence before it decays further into "daughters" or "progeny" (which are actually the source of most of the risk concerns)' Although it has existed since long before life on Earth began, radioactivity was not discovered until late in the 19th century by researchers such as Wilhelm Roentgen and Henri Becquerel. Marie Curie and her husband experimented with radium (an intermediate breakdown product of uranium) and are creditedwith several important discoveries. In her honor, a common measurement of radiation was named the "Curie " This is equivalent to the number of disintegrations released by the decay of one gram of radium. Thus, a picocurie is one-trillionth of a Curie. One picocurie "represents the amount of a substance sufficient to produce 2.2 radioactive decays per minute "` In the United States, most home measurements 15

SCIENCE, ECONOMICS & ENVIRONMENTAL POLICY of radon are expressed in terms of picocuries of radon per liter of air (or pCi/I). An atom consists of a nucleus (com- prised of protons and neutrons) surrounded by electrons. Radioactivity exists when an atom's nucleus spontaneously releases a highly energeticparticle. Some forms of radiation are sufficiently energetic that they can collide with the nudeus of other atoms, strip away electrons, or split chemical bonds. For radon and its progeny, particularly polonium 218 and polonium 214s, the most important type of emission is the alpha particle (comprised of two protons and two neutrons). On an atomic scale, alpha particles are fairly massive and therefore travel only minute distances before inevitably striking a target. Even a few pieces of paper will block alpha particles. However, if inhaled into the human lung and deposited there, radon decayproducts can release their alpha particles at point blank range, causing damage to the unprotected cells of the lungs.b Although there is no way to tell when a particular radioactive atom will decay, the average rate for larger quantities is well known. Experts define this rate in terms of the time period required for one-half of the original amount to decay. These rates of decay are expressed as the "half-life" of the element. Thus, the half-life of uranium 238 is approximately 4.5 billion years while the half- life of radon 222 is only 3.8 days.' Interestingly, the human health consequences from exposure to high levels of radon were documented even before radio- activity was understood. It was noted as far back as the 16th century that silver miners in the Erz Mountains (of what is now Germany and the Czech Republic) suffered an unusually high rate of lung disease.a By the middle of this century medical researchers began to home in on the cause of unusually high rates of lung cancer among uranium miners.4 Most mines were poorly ventilated until recent decades. This could lead to a buildup of dangerous dusts and gases, including radon. Much research has been dedicated to mine worker exposures and this remains the basis for radon risk estimates in the home. However, miners are generally exposed to much higher levels of radon (and numerous other inhaled pollutants and particles) than the average family. Therefore, researchers rely on a set of assumptions drawn from their experience with high-dose exposures in orlder to estimate the potential risk from low-dose exposures. In other words, the EPA assumes that if a big dose'will kill a high percentage of the few exposed individuals, a smaller dose must kill a few of the many who will be exposed. At the EPA, this assumption continues down to the level of a single atom.1° Since very few of us ever wijl enter, let alone work in, a uranium mine, should we be concerned about radon? Perhaps. In the 1960s, it was discovered that the use of certain construction materials (such as uranium mine tailings) could release high amounts of radon into buildings." For several years it was assumed that such construction materials were the only potential source of elevated radon levels in the home. Then the world learned of Stanley J. Watras. The Remarkable Case of Stanley J. Watras In 1984, Mr. Watras was a construction engineer at the Limerick nuclear power plant site in Pottstown, Pennsylvania." As a standard precaution, radiation detectors were installed throughout the facility. Mr. Watras constantly set off the alarms, yet had no contact with any manufactured radioactive materials. The power company investigation turned up a remarkable -- and frightening -- fact. Mr. Watras' home had extremely high levels of radon gas, producing readings as high as 2700 pci/1.13 It was now clear that radon exposures in the home could reach dangerously high levels. Officials began to investigate regions of the country that had a high probability of excessive radon, for example, parts of Colorado and the Reading Prong geologic formation which extends through parts of New Jersey, Pennsylvania and New York. Congress responded to public fears by passing an amendment to the Superfund law named the Radon Gas and Indoor Air Quality Research Act of 1986." The Environmental Protection Agency published its first Citizen's Guide to Radon in that year.ls In 1988, the Indoor Radon Abatement Act (an amendment to the Toxic Substances Control Act) imposed specific requirements for the revised Guide (issued in 1992). Section 301 specified that the long-term national goal was to achieve indoor 16