Rachel's Democracy & Health News  [Printer-friendly version]
January 5, 2006

THE ECONOMIC COSTS OF ENVIRONMENTAL DISEASES AND DISABILITIES

[Rachel's introduction: "What it comes down is this: The economic
costs of environmental diseases and disabilities are very significant
and they are largely preventable. By taking action to reduce or
eliminate exposures to toxic chemicals, the US could save billions of
dollars a year in health and related costs and significantly improve
public health."]

By Kate Davies

[DHN introduction. In two other studies, found here and here, Kate
Davies has estimated that enviromment-related diseases in Washington
state cost somewhere betwen $2.8 and $3.5 billion per year. If these
costs were generalized to the entire U.S. population, the total cost
of environment-related diseases would be $132 to $165 billion each
year. However, as this article makes clear, there are large
uncertainties in these estimates. And of course such estimates
completely ignore the psychological and emotional costs of the human
suffering involved for the victims, their families, and their
communities.--DHN Editors]

Introduction

It has been said that economics is the only subject in which two
people can get a Nobel Prize for apparently contradictory research.
Joking aside, economics is quite literally a deadly serious business.
Especially when it comes to the health effects of toxic chemicals.

Environmental health advocates have long claimed that economics, and
more specifically the high costs of implementing environmental
protection measures, have been used to justify the continued use of
many toxic chemicals. They assert that government and industry are
reluctant to protect public health from exposure to toxic chemicals,
if it means implementing measures that would cost too much money and
reduce profitability. For example, lead based paint was banned in some
European countries as early as 1921 because of health concerns, but it
was not outlawed in the US until the 1970s. Similarly, information on
the risks of leaded gasoline was available for many years before
regulatory action was taken. Today, the health risks of asbestos,
mercury and many other toxic chemicals are generally acknowledged by
the scientific community, but these substances continue to be used and
released into the environment.

Environmental health policy decisions focus on the costs of taking
action to protect public health, while often ignoring the costs
associated with inaction. In particular, the continued use of toxic
chemicals has been associated with many chronic diseases and
disabilities, including cancer, birth defects, and learning and
developmental disabilities. These and other chronic diseases now cause
major limitations in daily living for more than one in every ten
Americans and account for more than 70 percent of the $1 trillion
spent each year on health care in the US . Although exposure to toxic
chemicals is only one factor in chronic disease causation,
environmental health policy decisions should take account of both
sides of the metaphorical coin -- both the costs of taking action to
protect public health, and the costs of inaction and continued
exposures to environmental hazards.

The idea that the health costs of environmental hazards should be
considered in policy decisions is not new. About 150 years ago,
Charles Dickens argued that the high cost of typhus in London (440,000
pounds in 1848 alone) should be considered in decisions about whether
to implement new public health measures. He commented: "This cold-
blooded way of putting the really appalling state of the case is,
alas, the only successful mode of appealing.... His heart is only
reached by his pocket." Placing an economic value on people's
suffering may be "cold-blooded", but it is necessary because
environmental health policy decisions are based primarily on an
economic metric. Nevertheless, monetary valuations can never take
account of the psychological and emotional costs of disease to
patients or to their families, friends and communities.

THE ECONOMIC COSTS OF ENVIRONMENTAL DISEASES & DISABILITIES

So what are the economic costs of environmental diseases and
disabilities today? This is a tricky question because it is difficult
to be precise about the proportions of different diseases and
disabilities attributable to environmental exposures, and because of
the challenges of estimating the economic costs of health conditions.

But in the past few years, a growing consensus has emerged on the
fractional amounts or percentages of some common diseases and
disabilities generally linked to exposure to environmental
contaminants. This is a result of increasing knowledge about gene-
environment interactions in disease causation, the determinants of
health, and the health effects of toxic chemicals. At the same time,
health economists have made significant improvements in "cost of
illness" models for most common health conditions. These models now
include direct healthcare costs, such as hospitalization, physician
and nursing services, prescription medications and home care, and
indirect costs, such as lost productivity and costs associated with
special educational and social services.

These advances are paving the way for the development of sophisticated
estimates of the costs of diseases and disabilities attributable to
environmental contaminants. Using cautious assumptions about health
and related costs, the environmentally attributable fractions of a
limited number of health conditions, and disease rates in populations,
researchers are beginning to generate conservative estimates of the
costs of diseases and disabilities attributable to environmental
contaminants.

The studies on the health and related costs of environmental
pollutants fall into three general categories. Early studies focused
on the costs of lead exposure. Key among these are Schwartz's and
Salkever's estimates of the earnings benefits from reduced childhood
exposure to lead. More recently in 2002, Grosse et al. were the first
to estimate the national economic gains resulting from increased
worker productivity associated with reduced lead exposure since the
1970s. Subsequent studies on the costs of lead exposure have gone
beyond looking at productivity and earnings, and have estimated costs
for special education and juvenile justice. Most recently, Trasande
et al. have calculated the costs of mental retardation attributable to
exposure to another heavy metal, methyl mercury.

The second type of study to estimate the health costs of environmental
pollution has focused on the costs of air pollution. An early study
in Pennsylvania estimated the hospitalization costs resulting from air
pollution and a major study conducted by the Ontario Medical
Association used a software model to estimate that air pollution costs
in the Province amounted to more than $1 billion a year in hospital
admissions, emergency room visits, and absenteeism .

The third type of study has focused on multiple disease outcomes,
especially in children. The first major national study considered
childhood asthma, cancer, neurobehavioral disorders, and lead
poisoning, and it estimated that the environmentally attributable
costs of these diseases and disabilities were $55 billion. This
study was followed by similar studies in Massachusetts, Washington,
and Montana.

These studies are important because they provide estimates of economic
costs that have been traditionally externalized from environmental
health policy decisions. Classic examples of costs usually
externalized from decision making include the costs of the raw goods
and services provided "free" by nature, such as: trees for lumber;
fish and agricultural crops for food; oil, coal and hydro-electric
power for energy; and air and water for industrial processing. Then
there are free waste disposal services provided by nature, also
usually externalized from decision making. These costs include water
purification functions provided by wetlands and other aquatic
ecosystems, and the ability of micro-organisms to break down some
environmental pollutants into less harmful substances. The emerging
discipline of ecological economics is beginning to estimate the costs
of these "free" goods and services provided by nature. This is a
useful way of pointing out the need to take account of all costs in
environmental policy decisions. The recent estimates of the health and
related costs of environmental diseases and disabilities add to this
emerging body of knowledge.

COST BENEFIT ANALYSIS

So how can information on the health and related costs of
environmental diseases and disabilities be internalized into
environmental health decision-making? One way is to incorporate it
into cost-benefit analyses. This can be done by seeing these costs as
economic benefits that would accrue if exposures were eliminated or
reduced. Indeed, one recent study has estimated the economic benefits
of public health improvements attributable to air pollution
regulations in the US . Cost-benefit analysis can be most useful to
policy-makers if it includes both types of information -- the costs of
protecting environmental health, and the health and related benefits
of doing so. To be comprehensive cost-benefit analyses should include
all costs and benefits to public health and to industry, not just
some.

A related issue is that the health and related costs of the continued
use of toxic chemicals are borne mostly by individuals, communities
and ultimately by society as a whole, rather than by those who are
responsible for producing, using, disposing of, and releasing toxic
chemicals into the environment. In contrast, the economic benefits of
the continued use of toxic chemicals go mostly to individual
companies. Hence, there is a disparity between who benefits and who
pays. This is a common problem with externalized costs: those who pay
the price are usually different from those who reap the benefits.

THE BOTTOM LINE

Incorporating health costs into environmental health cost benefit
analyses and other policy processes would provide decision makers with
more complete, balanced and accurate information. This would
strengthen decision making processes considerably. Indeed, a recent
study found that environmental health policy makers identified
information on the links between environmental health and the economy
as one of their key needs. Some may argue that we can never know the
exact costs of environmental diseases. This is a valid point, but even
if the recent conservative estimates are inaccurate by a significant
margin, the estimates show that the costs of environmental diseases
and disabilities run into tens of billions of dollars a year in the
US, possibly outweighing the costs of environmental protection.
Moreover, the estimated costs of environmental protection measures are
themselves based on many assumptions that are unlikely to be
completely precise or accurate.

What it comes down is this: The economic costs of environmental
diseases and disabilities are very significant and they are largely
preventable. By taking action to reduce or eliminate exposures to
toxic chemicals, the US could save billions of dollars a year in
health and related costs and significantly improve public health.

Kate Davies MA DPhil
Core Faculty, Environment & Community
Associate Director
Center for Creative Change
Antioch University Seattle

==============

References

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