Abstract
Resek-Provenzano paper raises several interesting questions for energy policy-making, and highlights important methodological problems. The most immediate prerequisite for the application of cost-benefit techniques to public policy analysis is a generally acceptable method of translating qualitative measures of costs (or detrimental impacts) to some quantitative measure;2 and, as noted by the authors for the lead example, this is considerably easier for such impacts as reduced crop yields than for impacts on human health. Nevertheless, countless recent studies have made the attempt of monetarizing health impacts in areas of policy analysis that are of comparable if not greater significance to the national economy, and also involving trade-offs between economic, environmental and energy goals. Good examples include Sagan’s study of health costs in the coal mining industry (of relevance to the debate over fossil versus nuclear power generation);3 Buehler’s monetarization of the value of human life in connection with investments for flood control structures;4 or more general attempts applying utility theoretical concepts to public polciy analysis.5
This report was prepared as an account of work sponsored by the United States Government. Neither the United States nor the United States Energy Research and Development Administration, nor any of their employees, nor any of their contractors, subcontractors, or their employees, makes any warranty, express or implied, or assumes any legal liability of responsibility for the accuracy, completeness of usefulness of any information, apparatus, product or process disclosed, or represents that its use would not infringe privately owned rights.
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References
For a good overview of benefit cost analysis and policy making see R.H. Haverman et al., “Benefit-Cost and Policy Analysis,” Aldine, Chicago, 1974.
L. A. Sagan, “Health Costs Associated with the Mining Transport and Combustion of Coal in the Steam Electric Industry,” Nature 250 (July 12, 1974 ) 107–111.
B. Buehler, “Monetary Values of Life and Health,” Journal, Hydraulics Division, American Society of Civil Engineers 101 No. HY1, (Jan. 1975), 29–47.
J. Hirshleifer, T. Bergstron and E. Rappaport, “Applying Cost-Benefit Concepts to Projects Which Alter Human Morality,” University of California at Los Angeles, School of Engineering and Applied Science, Report UCLA-ENG-7478, Nov. 1974. These citations are chosen more as exemplars of alternative analytical approaches than as a complete sample, as the literature in this area has grown significantly over the past few years.
Environmental Law Reporter 2 10052–10056 (1975).
For a good review of the studies quoted by EPA as ground for its intention to impose gasoline lead reductions, see 5 Environmental Law Reporter 20109–20115 (1975).
W. W. Hogan, G. M. Lady and J. D. Pearson, “Petroleum Product Short Term Forecasting at FEA,” presented at National Petroleum Refiners Association Computer Conference, San Franciso, Calif., Nov. 1974.
M. Kennedy, “An Economic Model of the World Oil Market,” Bell Journal of Economics and Management Science 5 No. 2 (Autumn 1974) 540.
M. S. Houthakker, P. K. Verleger and D. P. Sheehan, in “Dynamic Demand Analyses for Gasoline and Residential Electricity,” American Journal of Agricultural Economics (1974), estimate a long-run price elasticity of -0.25.
Kennedy, see Note 9, supra.
Ethyl Corporation v. EPA (D.C. Circuit, Jan. 28, 1975 ) 5 Environmental Law Reporter 20096. Other petitioners, whose cases were consolidated into the Ethyl Corporation case for purposes of argument and decision, included PPG Industries, DuPont, NALCO Chemical and the National Petroleum Refiners Association.
The judicial basis for review of an agency action by the courts is the Administrative Procedure Act (5 U.S.C. 701, 1970), which allows judicial reversal or invalidation of an agency action found to be “arbitrary, capricious, and an abuse of discretion” or “unsupported by substantial evidence in a case subject to hearings” see, e.g., D. P. Cume and F. I. Goodman, “Judicial Review of Federal Action: Quest for the Optimum Forum,” Columbia Law Review Vol. 75, No. 1 (Jan. 1975) 1–86.
One should note, however, the distinctions between this case and an earlier case (Amoco Oil Company et al. v. EPA, 501 F 2d 722), in which the same court upheld an EPA regulation that gas stations must provide unleaded gasoline; the evidence that lead destroyed the catalytic converter was uncontested, and therefore fully empowered EPA to take appropriate steps under a provision of the Clean Air Act that would give authority to regulate or control a fuel or fuel additive “…if emission products of such fuel or fuel additive will impair to a significant degree the performance of any emission control device or system which is in general use or which the administrator finds has been developed to a point where in reasonable time it would be in general use,” (42 U.S.C. 1857, 1970).
Cases in the Circuit Appeals Court in the U.S.A. are normally heard by 3 judges; the court may elect, however, to rehear a controversial case en banc with all justices of that court present.
In that case, the Court of Appeals upheld strict new OSHA (Occupational Safety and Health Administration) standards-see Society of the Plastics Industry v. Occupational Safety and Health Administration, 5 Environmental Law Reporter 20157 (2nd Cir., Jan. 31, 1975 ).
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Meier, P.M. (1976). Comments on Resek-Provenzano Paper. In: Chatterji, M., Van Rombury, P. (eds) Energy, Regional Science and Public Policy. Lecture Notes in Economics and Mathematical Systems, vol 126. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-95284-5_16
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DOI: https://doi.org/10.1007/978-3-642-95284-5_16
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