In an effort to comply with new requirements to assess the impact of regulations it passes, the Environmental Protection Agency released a cost-benefit analysis of the Clean Air Act that concluded its total benefits between 1970 and 1990 ranged from 5.6 to 49.4 trillion dollars (its central estimate: $22.2 trillion), while its compliance costs were only half a trillion dollars. The study assumed no environmental improvement and indeed counter-historical environmental degradation in absence of the Act, along with highly speculative benefits including a population with a higher IQ, and a corresponding reduction in education costs, thanks to reductions in atmospheric lead. The study also failed to account for life years lost for people who are already unhealthy for reasons unrelated to the environment. Instead, it used the following method:

[S]uppose that a given reduction of pollution confers on each exposed individual a decrease in mortal risk of 1/100,000. Then among 100,000 such individuals, one fewer individual can be expected to die prematurely. If each individual's WTP [willingness to pay] for that risk reduction is $50, then the implied value of statistical premature death avoided is $50 x 100,000 = $5 million.

This "willingness to pay" does not mean one actually pays the sum, as one would when negotiating with an insurance agent when confronted with similar risks, but instead represents a stated willingness.

Objecting to the study's deficiencies, peer review was withheld by other federal agencies. Contradicting the EPA's self-estimation, a widely cited independent study by T.O. Tengs, et. al., published in Risk Analysis, concluded that the EPA costs $7,600,000 per life-year extended, contrasted with only $23,000 for regulations passed by the Federal Aviation Administration.

[Ed.: Note how IQ may be considered a valid measurement when gauging the impact of environmental toxins, but not when measuring the impact of educators.]

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