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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: 

GAO Highlights: 

Highlights of GAO-06-992T, a testimony before the Committee on 
Environment and Public Works, U.S. Senate 

Why GAO Did This Study: 

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. 

What GAO Found: 

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. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-992T]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact John B. Stephenson at 
(202) 512-3841 or stephensonj@gao.gov. 

[End of Section] 

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.[Footnote 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. 

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.[Footnote 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. 

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.[Footnote 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. 

For example, EPA is in the process of responding to a recommendation 
involving the relative toxicity[Footnote 4] of components of 
particulate matter, an emerging area of research that has the potential 
to influence EPA's regulatory decisions in the future.[Footnote 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.[Footnote 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. 

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.[Footnote 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 Inventory[Footnote 8]-
-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. 

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 stephensonj@gao.gov. 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. 

FOOTNOTES 

[1] See 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). 

[2] Monte 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. 

[3] Recent 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. 

[4] Particulate 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. 

[5] Relative 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. 

[6] In 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. 

[7] Because 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. 

[8] EPA 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. 

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