The Environmental Protection Agency (EPA) has modified its approach to evaluating the economic costs and benefits associated with air pollution regulations. The agency will no longer assign monetary values to the health benefits of reducing fine particulate matter (PM2.5) and ozone, citing uncertainties in economic impact estimates. This revision was included in a new rule that adjusted air pollution regulations for fossil fuel power plant turbines. While an EPA press secretary confirmed that health benefits continue to be considered, the agency will defer assigning a dollar amount until a new assessment method is finalized.
Policy Revisions and Rationale
Historically, the EPA assigned monetary values to lives saved and health improvements when assessing new environmental regulations, considering both health costs for Americans and compliance costs for businesses. Under the revised methodology, the agency has opted to exclude the monetization of health benefits from reductions in PM2.5 and ozone from its economic impact calculations. The EPA attributes this change to a perceived lack of certainty in monetizing these impacts, suggesting that previous estimates might have implied a clearer understanding of these monetary benefits than the agency possesses.
This policy adjustment was incorporated into a new rule that also modified air pollution regulations pertaining to power plant turbines, which are known sources of fine particles. This marks a departure from long-standing practice, with a former EPA official noting it is the first time in a considerable period that the agency has not attempted to monetize the benefits of reducing PM2.5 and ozone.
Health Impacts of Air Pollution
Air pollution, including ozone and PM2.5, affects major human body systems, including the cardiovascular, respiratory, and neurological systems.
- Cardiovascular System: Exposure to PM2.5 is linked to increased mortality from cardiovascular diseases. Short-term exposure to PM2.5 or ozone can increase hospitalizations for heart attacks and strokes.
- Respiratory System: PM2.5 exposure is associated with an increased risk of respiratory diseases and symptoms in children.
- Neurological System: Evidence suggests PM2.5 exposure may increase the risk of Alzheimer’s disease and other cognitive disorders.
- Cancer Risk: The International Agency for Research on Cancer has classified PM2.5 as a carcinogen.
PM2.5 originates from sources such as fossil fuel power plants. Long-term exposure to these particles has been linked to conditions including asthma, heart attacks, dementia, and premature death.
Historical Context and Documented Benefits
The United States has seen reductions in air pollution since the enactment of the Clean Air Act in 1970, which empowers the EPA to set national air quality standards. Since 1990, ozone levels have decreased by 18%, and PM2.5 concentrations have fallen by 37% since 2000.
Previous EPA estimates indicated that reducing fine particle pollution saved over 230,000 lives annually and billions of dollars in recent years. An EPA study estimated that a 39% nationwide decrease in airborne PM2.5 from 1990 to 2010 correlated with a 54% reduction in deaths from ischemic heart disease, chronic obstructive pulmonary disease, lung cancer, and stroke. During the same period, a 9% decline in ozone was linked to a 13% drop in deaths from chronic respiratory disease. These illnesses incur substantial costs related to treatment and economic losses due to incapacitation.
Further studies have demonstrated benefits such as a correlation between the retirement of coal and oil power plants and a reduction in preterm births. In Louisville, Kentucky, the closure or upgrade of four coal-fired power plants coincided with a decrease in hospitalizations and emergency department visits for asthma, along with reduced asthma medication use.
Reactions and Potential Implications
Health experts, including Mary Rice, a pulmonologist at Harvard University, have stated that this shift could lead to a rollback of air pollution rules, potentially increasing pollution levels and health risks for individuals with chronic respiratory illnesses, children, and older adults. Environmental epidemiologists have noted that while uncertainties exist in precise monetary calculations of policy benefits, these estimates are considered valuable for policymakers in weighing the advantages against the costs of regulation.
Richard Revesz, an environmental law expert at NYU, suggests that quantifying only the economic costs to industry while omitting monetized health benefits could facilitate further deregulation. He notes that the economic benefits of air quality regulations, such as those under the Clean Air Act, have historically shown high benefit-to-cost ratios.
An executive order from 1981 mandated agencies like the EPA to consider both the costs and benefits of major regulations. The specific methodology for this consideration has been subject to agency discretion. The EPA under a previous administration has reportedly moved to reconsider economic benefits in other regulatory areas, such as vehicle emissions standards and greenhouse gas endangerment findings, by not assessing certain economic benefits to consumers or societal health savings. An EPA administrator's 2025 statement referenced priorities including "lower the cost of buying a car, heating a home and running a business."
Excluding health benefits from economic analyses could facilitate the construction and operation of infrastructure that emits high levels of air pollution. For instance, the Denver region, a growing data center hub, anticipates a substantial increase in power demand, which will necessitate more power plants. Under the EPA’s revised policy, these new facilities might be subject to different pollution standards.