ECONOMIC COSTS OF ENVIRONMENTAL DISEASES AND DISABILITIES

From: Rachel's Democracy & Health News
Jan. 5, 2006
<www.rachel.org>

THE ECONOMIC COSTS OF ENVIRONMENTAL DISEASES AND DISABILITIES

By Kate Davies

[DHN introduction. In two other studies, found here
<http://healthlinks.washington.edu/nwcphp/nph/f2005/web_ex_davies_f2005.pdf>
and here <http://washington.chenw.org/pdfs/EnvironmentalCosts.pdf> , 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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Johnson E. Charles Dickens: His Tragedy and Triumph Vol. 2 p. 715. NY: Simon
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Salkever, DS. Updated estimates of earnings benefits from reduced exposure
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Trasande L, Landrigan PJ and Schecter C. Public health and economic
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- END ­

Rachel's Democracy & Health News is published as often as necessary to
provide readers with up-to-date coverage of the subject.

Editors:
Peter Montague - peter@rachel.org
Tim Montague - tim@rachel.org



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