Accident Epidemiology and the U.S. Chemical Industry: Accident History and Worst-Case Data from RMP*Info

This article reports on the data collected on one of the most ambitious government-sponsored environmental data acquisition projects of all time, the Risk Management Plan (RMP) data collected under section 112(r) of the Clean Air Act Amendments of 1990. This RMP Rule 112(r) was triggered by the Bhopal accident in 1984 and led to the requirement that each qualifying facility develop and file with the U.S. Environmental Protection Agency a Risk Management Plan (RMP) as well as accident history data for the five-year period preceding the filing of the RMP. These data were collected in 1999-2001 on more than 15,000 facilities in the United States that store or use listed toxic or flammable chemicals believed to be a hazard to the environment or to human health of facility employees or off-site residents of host communities. The resulting database, RMP*Info, has become a key resource for regulators and researchers concerned with the frequency and severity of accidents, and the underlying facility-specific factors that are statistically associated with accident and injury rates. This article analyzes which facilities actually filed under the Rule and presents results on accident frequencies and severities available from the RMP*Info database. This article also presents summaries of related results from RMP*Info on Offsite Consequence Analysis (OCA), an analytical estimate of the potential consequences of hypothetical worst-case and alternative accidental releases on the public and environment around the facility. The OCA data have become a key input in the evaluation of site security assessment and mitigation policies for both government planners as well as facility managers and their insurers. Following the survey of the RMP*Info data, we discuss the rich set of policy decisions that may be informed by research based on these data.     

Utilizing Third-Party Inspections for Preventing Major Chemical Accidents

This paper proposes using certified third parties, coupled with Model Risk Management Programs (Model RMPs), to implement EPA's Proposed Rule on the prevention of chemical accidental releases. We concentrate on the insurance aspects of this third-party approach and show that it could enable insurers to more cost-effectively provide coverage against the risks of chemical accidental releases. The third-party approach may also signal the facility's safety and reduce the enforcement costs of regulations.     

Use of an ISO 14000 Option in Implementing EPA's Rule on Risk Management Programs for Chemical Accidental Release Prevention

EPA's rule of Risk Management Programs for Chemical Accidental Release Prevention applies to facilities that manufacture, process, use, store, or otherwise handle regulated substances at or above specified threshold quantities. EPA estimates that approximately 66,000 facilities nationwide will be regulated under the rule. This paper examines the use of a structured ISO 14000 mechanism as option-regulated facilities could elect for implementation of the rule. Under the ISO 14000 option, facilities would commit to additional obligations regarding information disclosure, discussions with potentially affected publics, and timely correction of deficiencies noted in annual ISO 14000 audits of their compliance with the Risk Management Program they submit to the EPA under the rule. In return, facilities would be granted significant relief in regard to both EPA audit frequency and the penalties that might be applied for any items of noncompliance with the rule noted during the course of implementing agency reviews of the facility. The paper concludes with a discussion of the advantages and disadvantages of this option to potentially affected stakeholders.     

The Role of Hazardousness and Regulatory Practice in the Accidental Release of Chemicals at U.S. Industrial Facilities

This article presents the results of an analysis of the accident history data reported under section 112(r) of the Clean Air Act Amendments. These data provide a fairly complete record of the consequences of reportable accidental releases occurring during the time frame 1995-1999 in the U.S. chemical industry and covering 77 toxic and 63 flammable substances subject to the provisions of section 112(r). As such, these results are of fundamental interest to the affected communities, regulators, and insurers, as well as to owners and managers in the chemical industry. The results show the statistical associations between accident frequency and severity and a number of characteristics of reporting facilities, including their size, the hazardousness of the processes and chemicals inventoried, and the regulatory programs (in addition to section 112(r)) to which these facilities are subject. The results are interpreted in light of economic drivers of protective activity and regulatory priorities for monitoring and enforcement.     

Impact of Hazardous Substances Regulations on Small Firms in Delaware and New Jersey

Regulations under the 1990 Amendments to the Clean Air Act impose significant requirements on firms handling hazardous chemicals. The nature of the regulations would suggest that small firms, because of limited resources and other structural limitations, would experience more difficulty complying with the regulations than large firms. To understand the difficulties imposed by the regulations on small firms, we interviewed ten small firms in Delaware and New Jersey, states with existing hazardous regulations similar to those being considered by the U.S. Environmental Protection Agency, and evaluated their responses to state regulations. The impacts of the environmental regulations on the firms and on the risk levels of their businesses are discussed. Propositions for research into small firms compliance are developed. Possible means for reducing the regulatory burden on small firms while enhancing regulatory effectiveness are suggested.     

The Role of the Community in the Implementation of the EPA's Rule on Risk Management Programs for Chemical Accidental Release Prevention

Regulations under the 1990 Clean Air Act Amendments (CAAA) include requirements for preventing accidental chemical releases. Section 112(r) of the CAAA, the Accidental Release Provisions, requires the U.S. Environmental Protection Agency (EPA) to develop and implement regulations for preventing accidental releases to the air of regulated substances and to minimize the consequences of releases that do occur. The regulations require regulated facilities to have in place the structural elements of a sound process safety program, and to practice, document, and communicate the elements of their program. The rule requires also that registered facilities calculate and make available worst case accidental chemical release information. The rule does not set a level of risk that a facility must achieve after it takes the required compliance steps, the level of risk a community must accept, the limit of consequences the community might suffer from a worst case chemical release, nor the specific actions a community must take in its response plan. These are issues that local communities and local officials must decide. Because the regulation involves the community in many unsettled risk issues the Wharton School initiated a project within the City Philadelphia to evaluate the proposition that productive dialogue on the implementation of the Rule and resolution of unsettled risk issues can take place in advance of a crisis occasioned by a major accidental release. This paper describes the steps taken by Wharton to bring together various stakeholders in the community to explore the implementation of the rule and the reaction of those stakeholders to be involved in such a process. It outlines some principal choices communities will have to make in order to implement 112(r) and explains some of the dilemmas associated with these choices. It describes the stakeholder-based implementation effort being undertaken in Philadelphia in the hope that others may benefit from what has been learned there.     

The Application of Genetic Information for Regulatory Standard Setting Under the Clean Air Act: A Decision-Analytic Approach

In 2002, the U.S. Environmental Protection Agency (EPA) released an “Interim Policy on Genomics,” stating a commitment to developing guidance on the inclusion of genetic information in regulatory decision making. This statement was followed in 2004 by a document exploring the potential implications. Genetic information can play a key role in understanding and quantifying human susceptibility, an essential step in many of the risk assessments used to shape policy. For example, the federal Clean Air Act (CAA) requires EPA to set National Ambient Air Quality Standards (NAAQS) for criteria pollutants at levels to protect even sensitive populations from adverse health effects with an adequate margin of safety. Asthmatics are generally regarded as a sensitive population, yet substantial research gaps in understanding genetic susceptibility and disease have hindered quantitative risk analysis. This case study assesses the potential role of genomic information regarding susceptible populations in the NAAQS process for fine particulate matter (PM_2.5) under the CAA. In this initial assessment, we model the contribution of a single polymorphism to asthma risk and mortality risk; however, multiple polymorphisms and interactions (gene‐gene and gene‐environment) are known to play key roles in the disease process. We show that the impact of new information about susceptibility on estimates of population risk or average risk derived from large epidemiological studies depends on the circumstances. We also suggest that analysis of a single polymorphism, or other risk factor such as health status, may or may not change estimates of individual risk enough to alter a particular regulatory decision, but this depends on specific characteristics of the decision and risk information. We also show how new information about susceptibility in the context of the NAAQS for PM_2.5 could have a large impact on the estimated distribution of individual risk. This would occur if a group were consequently identified (based on genetic and/or disease status), that accounted for a disproportionate share of observed effects. Our results highlight certain conditions under which genetic information is likely to have an impact on risk estimates and the balance of costs and benefits within groups, and highlight critical research needs. As future studies explore more fully the relationship between exposure, genetic makeup, and disease status, the opportunity for genetic information and disease status to play pivotal roles in regulation can only increase.     

Communicating Under Section 112(r) of the Clean Air Act Amendments

Regulations under Section 112(r) of the 1990 Clean Air Act Amendments require fixed facilities having threshold quantities of materials on the U.S. Environmental Protection Agency's list of regulated substances to disclose to the general public the expected offsite consequences of worst-case accidental chemical releases. This paper describes the communication practices of small firms in Delaware and New Jersey and the practical problems these facilities might encounter complying with the proposed rule. The paper reports an interesting difference between the apprehension voiced by small firms required to report worst-case release information and the public's apparent lack of interest in such information. Unlike the difficulty expected by small firms in calculating and communicating worst-case chemical release information, this paper includes some observations on the ability of large chemical firms to comply with the proposed requirements.     

Managing Technological and Environmental Risks in Japan

This paper is primarily concerned with environmental risks arising from utilizing modern technology. Our attention focuses on the interface between policy decisions and regulatory measures. The interface involves not only science and technology but also politics and social values, and perceptions which are deeply rooted in the industrial countries. A case of setting air quality standards and regulatory practices in Japan is studied on the basis of scientific and technological knowledge, economic cost, and subjective judgment of what constitutes an acceptable level of risk or health hazard.     

Informational Regulation of Environmental Risks

This paper examines the law and economics of informational regulation (IR) of environmental risks. Informational regulation here means regulation which provides to affected stakeholders information on the operations of regulated entities, usually with the expectation that such stakeholders will then exert pressure on these entities to comply with regulations in a manner which serves the interests of stakeholders. As such, IR reinforces and augments direct regulatory monitoring and enforcement through third-party monitoring and incentives. The paper provides two contrasting frameworks, from law and economics, to analyze the costs and benefits likely to arise from IR and concludes with a discussion of the appropriate scope of IR as a substitute for and complement of traditional environmental regulation and law.     

Evaluating the Effectiveness of Risk-Reduction Strategies for Consumer Chemical Products

Communication about risks offers a voluntary approach to reducing exposure to pollutants. Its adequacy depends on its impact on behavior. Estimating those impacts first requires characterizing current activities and their associated risk levels, and then predicting the effectiveness of risk-reduction strategies. Characterizing the risks from chemical consumer products requires knowledge of both the physical and the behavioral processes that influence exposures. This article presents an integrated approach that combines consumer interviews, users' beliefs and behaviors, and quantitative exposure modeling. This model was demonstrated in the context of consumer exposure to a methylene chloride-based paint stripper, showing how it could be used to evaluate current levels of risk and predict the effectiveness of proposed voluntary risk-reduction strategies.     

Reproductive and Developmental Risks from Ethylene Oxide: A Probabilistic Characterization of Possible Regulatory Thresholds

Ethylene oxide is a gas produced in large quantities in the United States that is used primarily as a chemical intermediate in the production of ethylene glycol, propylene glycol, non-ionic surfactants, ethanolamines, glycol ethers, and other chemicals. It has been well established that ethylene oxide can induce cancer, genetic, reproductive and developmental, and acute health effects in animals. The U.S. Environmental Protection Agency is currently developing both a cancer potency factor and a reference concentration (RfC) for ethylene oxide. This study used the rich database on the reproductive and developmental effects of ethylene oxide to develop a probabilistic characterization of possible regulatory thresholds for ethylene oxide. This analysis was based on the standard regulatory approach for noncancer risk assessment, but involved several innovative elements, such as: (1) the use of advanced statistical methods to account for correlations in developmental outcomes among littermates and allow for simultaneous control of covariates (such as litter size); (2) the application of a probabilistic approach for characterizing the uncertainty in extrapolating the animal results to humans; and (3) the use of a quantitative approach to account for the variation in heterogeneity among the human population. This article presents several classes of results, including: (1) probabilistic characterizations of ED10s for two quantal reproductive outcomes-resorption and fetal death, (2) probabilistic characterizations of one developmental outcome-the dose expected to yield a 5% reduction in fetal (or pup) weight, (3) estimates of the RfCs that would result from using these values in the standard regulatory approach for noncancer risk assessment, and (4) a probabilistic characterization of the level of ethylene oxide exposure that would be expected to yield a 1/1,000 increase in the risk of reproductive or developmental outcomes in exposed human populations.     

Intuitive Toxicology: Expert and Lay Judgments of Chemical Risks

Human beings have always been intuitive toxicologists, relying on their senses of sight, taste, and smell to detect harmful or unsafe food, water, and air. As we have come to recognize that our senses are not adequate to assess the dangers inherent in exposure to a chemical substance, we have created the sciences of toxicology and risk assessment to perform this function. Yet despite this great effort to overcome the limitations of intuitive toxicology, it has become evident that even our best scientific methods still depend heavily on extrapolations and judgments in order to infer human health risks from animal data. Many observers have acknowledged the inherent subjectivity in the assessment of chemical risks and have indicated a need to examine the subjective or intuitive elements of expert and lay risk judgments. We have begun such an examination by surveying members of the Society of Toxicology and the lay public about basic toxicological concepts, assumptions, and interpretations. Our results demonstrate large differences between toxicologists and laypeople, as well as differences between toxicologists working in industry, academia, and government. In addition, we find that toxicologists are sharply divided in their opinions about the ability to predict a chemical's effect on human health on the basis of animal studies. We argue that these results place the problems of risk communication in a new light. Although the survey identifies misconceptions that experts should clarify for the public, it also suggests that controversies over chemical risks may be fueled as much by limitations of the science of risk assessment and disagreements among experts as by public misconceptions.     

Gender, Race, and Perception of Environmental Health Risks

This paper reports the results of a national survey in which perceptions of environmental health risks were measured for 1275 white and 214 nonwhite persons. The results showed that white women perceived risks to be much higher than did white men, a result that is consistent with previous studies. However, this gender difference was not true of nonwhite women and men, whose perceptions of risk were quite similar. Most striking was the finding that white males tended to differ from everyone else in their attitudes and perceptions–on average, they perceived risks as much smaller and much more acceptable than did other people. These results suggest that sociopolitical factors such as power, status, alienation, and trust are strong determiners of people's perception and acceptance of risks.     

Judgments of Chemical Risks: Comparisons Among Senior Managers, Toxicologists, and the Public

Nineteen Senior Managers of a major chemical company in the United Kingdom participated in a survey to determine their attitudes, beliefs, and perceptions regarding risks from chemicals. Similar surveys had previously been conducted with toxicologists and members of the general public in the United States and Canada. In general, the Senior Managers tended to judge risks to be quite small for most chemicals. Moreover, they had lower risk perceptions than did members of the British Toxicological Society and even far lower perceptions of risk than a comparison group of members of the Canadian public. The managers held views that were similar to British toxicologists working in industry and government and dissimilar to the views of toxicologists working in academia. The observed differences between views of managers, toxicologists, and the public must be recognized and understood in order to facilitate communication and constructive efforts to manage chemical risks.     

Intuitive Toxicology. II. Expert and Lay Judgments of Chemical Risks in Canada

This study is a replication and extension in Canada of a previous study in the United States in which toxicologists and members of the public were surveyed to determine their attitudes, beliefs, and perceptions regarding risks from chemicals. This study of "intuitive vs. scientific toxicology" was motivated by the premise that different assumptions, conceptions, and values underlie much of the discrepancy between expert and lay views of chemical risks. The results showed that Canadian toxicologists had far lower perceptions of risk and more favorable attitudes toward chemicals than did the Canadian public. The public's attitudes were quite negative and showed the same lack of dose-response sensitivity found in the earlier U.S. study. Both the public and the toxicologists lacked confidence in the value of animal studies for predicting human health risks. However, the public had great confidence in the validity of animal studies that found evidence of carcinogenicity, whereas such evidence was not considered highly predictive of human health risk by many toxicologists. Technical judgments of toxicologists were found to be associated with factors such as affiliation, gender, and worldviews. Implications of these data for risk communication are briefly discussed.     

Terrorism Risks and Cost‐Benefit Analysis of Aviation Security

We evaluate, for the U.S. case, the costs and benefits of three security measures designed to reduce the likelihood of a direct replication of the 9/11 terrorist attacks. To do so, we assess risk reduction, losses, and security costs in the context of the full set of security layers. The three measures evaluated are installed physical secondary barriers (IPSB) to restrict access to the hardened cockpit door during door transitions, the Federal Air Marshal Service (FAMS), and the Federal Flight Deck Officer (FFDO) Program. In the process, we examine an alternate policy measure: doubling the budget of the FFDO program to $44 million per year, installing IPSBs in all U.S. aircraft at a cost of $13.5 million per year, and reducing funding for FAMS by 75% to $300 million per year. A break‐even cost‐benefit analysis then finds the minimum probability of an otherwise successful attack required for the benefit of each security measures to equal its cost. We find that the IPSB is costeffective if the annual attack probability of an otherwise successful attack exceeds 0.5% or one attack every 200 years. The FFDO program is costeffective if the annual attack probability exceeds 2%. On the other hand, more than two otherwise successful attacks per year are required for FAMS to be costeffective. A policy that includes IPSBs, an increased budget for FFDOs, and a reduced budget for FAMS may be a viable policy alternative, potentially saving hundreds of millions of dollars per year with consequences for security that are, at most, negligible.     

Perception and Acceptance of Technological and Environmental Risks: Why Are Poor Countries Less Concerned?

The research has been aimed at answering two questions: (1) What factors impact perception and acceptance of technological and environmental hazards? (2) Why are rich societies involved more in protecting their environment and health than poor societies? Data has been collected from representative samples of two countries—Poland and Sweden. The results indicate that (1) contrary to earlier findings, the inverse relations between perceived benefits and dangers of hazards has not been observed, (2) acceptance of a risk has been mostly influenced by perceived benefits, (3) rejection of a risk has been mostly influenced by its perceived harmful consequences. Concerning the second question, it has been found that: (1) perceived hazard's danger and benefit is not the only factor that impacts its acceptance, and (2) a broader economic context can impact acceptance (tolerance) of hazards. It has been found that being aware of high dangers and not very high benefits of hazardous activities, Poles still have accepted them. Thus, Poles seem to follow an old proverb: “When one does not have what one likes, one has to like what one has.”     

Economic and Environmental Assessment of Remanufacturing Strategies for Product + Service Firms

This article provides a data‐driven assessment of economic and environmental aspects of remanufacturing for product + service firms. A critical component of such an assessment is the issue of demand cannibalization. We therefore present an analytical model and a behavioral study which together incorporate demand cannibalization from multiple customer segments across the firm's product line. We then perform a series of numerical simulations with realistic problem parameters obtained from both the literature and discussions with industry executives. Our findings show that remanufacturing frequently aligns firms' economic and environmental goals by increasing profits and decreasing the total environmental impact. We show that in some cases, an introduction of a remanufactured product leads to no changes in the new products' prices (positioning within the product line), implying a positive demand cannibalization and a decrease in the environmental impact; this provides support for a heuristic approach commonly used in practice. Yet in other cases, the firm can increase profits by decreasing the new product's prices and increasing sales—a negative effective cannibalization. With negative cannibalization the firm's total environmental impact often increases due to the growth in new production. However, we illustrate that this growth is nearly always sustainable, as the relative environmental impacts per unit and per dollar rarely increase.     

Air Toxics and Health Risks in California: The Public Health Implications of Outdoor Concentrations

Of the 188 hazardous air pollutants (HAPs) listed in the Clean Air Act, only a handful have information on human health effects, derived primarily from animal and occupational studies. Lack of consistent monitoring data on ambient air toxics makes it difficult to assess the extent of low-level, chronic, ambient exposures to HAPs that could affect human health, and limits attempts to prioritize and evaluate policy initiatives for emissions reduction. Modeled outdoor HAP concentration estimates from the U.S. Environmental Protection Agency's Cumulative Exposure Project were used to characterize the extent of the air toxics problem in California for the base year of 1990. These air toxics concentration estimates were used with chronic toxicity data to estimate cancer and noncancer hazards for individual HAPs and the risks posed by multiple pollutants. Although hazardous air pollutants are ubiquitous in the environment, potential cancer and noncancer health hazards posed by ambient exposures are geographically concentrated in three urbanized areas and in a few rural counties. This analysis estimated a median excess individual cancer risk of 2.7E-4 for all air toxics concentrations and 8600 excess lifetime cancer cases, 70% of which were attributable to four pollutants: polycyclic organic matter, 1,3 butadiene, formaldehyde, and benzene. For noncancer effects, the analysis estimated a total hazard index representing the combined effect of all HAPs considered. Each pollutant contributes to the index a ratio of estimated concentration to reference concentration. The median value of the index across census tracts was 17, due primarily to acrolein and chromium concentration estimates. On average, HAP concentrations and cancer and noncancer health risks originate mostly from area and mobile source emissions, although there are several locations in the state where point sources account for a large portion of estimated concentrations and health risks. Risk estimates from this study can provide guidance for prioritizing research, monitoring, and regulatory intervention activities to reduce potential hazards to the general population. Improved ambient monitoring efforts can help clarify uncertainties inherent in this analysis.