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Welcome to PSR's Environmental Health Policy Institute, where we ask questions -- then we ask the experts to answer them. Join us as physicians, health professionals, and environmental health experts share their ideas, inspiration, and analysis about toxic chemicals and environmental health policy.


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Balance the Budget with Clean Air

Posted on April 14, 2011

By Alan H. Lockwood, MD

This essay is in response to: What is the most important achievement we've gained through air pollution management? What remains to be done to safeguard public health from air pollution?

Other essays this month will point to specific health-related outcomes that are attributable to the Clean Air Act (CAA) and its amendments. Here, I focus at the overall impact of the Act on our economy.

As a part of the budget-cut fever gripping Washington, Congressional Republicans propose deep cuts in the EPA budget and crippling its authority to enforce provisions of the CAA. The ensuing degradation of air quality will be a health and budgetary disaster. Let’s do the math.

In 1990, Congress required the EPA to conduct periodic, scientifically reviewed studies, to evaluate the benefits and costs of the CAA. The analysis of the first twenty years of the program was revealing. Costs associated with compliance were estimated to be about $0.5 trillion: not a trivial amount. However, the estimated benefits ranged from a low of $5.6 trillion to a high of $49.4 trillion, with a central estimate of $22.2 trillion! In other words, for each dollar that was spent to clean our air, there was a healthcare cost saving of about $44.

Again, as required by Congress, the Office of Management and Budget reviewed costs of unfunded mandates in 2003. In the decade that ended September 30, 2002, the estimated cost due to EPA rules was between $23.4 and $26.6 billion. The estimated benefits ranged between $120.7 and $193.2 billion. Most costs and benefits were due to the 1990 amendments to the CAA.

This is not the only evidence for highly favorable rates of return. In July, 2010, the EPA released its response to the US Supreme Court action that required a reworking of the Clean Air Interstate Rule. As a part of the required cost-benefit analysis, the EPA estimated that the benefits in 2015 would be between $86.3 and $101 billion per year, with costs between $2.6 and $3.1 billion. 

There are still dollars to be saved by making further improvements in the quality of our air. In 2009, the National Research Council reported that the annual hidden costs of burning coal to produce electricity were $62 billion. These costs were largely due to sulfur dioxide emissions and their adverse effects on health. In another peer-reviewed study published that same year, the authors estimated that the emission-related damages from coal-fired power plants were $30,000-$300,000 per ton of small particles, $6,000-$50,000 per ton of sulfur dioxide, or between $0.02 and $1.57 per kWh of electricity generated.

Earlier this month the EPA released its third cost-benefit report covering the years 1990 to 2020. Without enforcement of the 1990 CAA amendments, population and economic growth would cause pollutant emissions to soar to above those reported in 1970. With the benefit of the amendments, emissions remain below 1990 levels. The health and economic differences between these scenarios are enormous. Central estimates of compliance costs in 2020 are around $65 billion per year, $10 billion of which would be borne by utilities burning coal, while the economic benefits were projected to be $2 trillion per year. The savings are due mainly to reductions in premature mortality and chronic diseases, due to better control of particulate emissions and ground-level ozone.

These numbers do not just represent dollars -- they represent patients. Children and the elderly, particularly those with chronic health problems, are the most likely to be sickened or die as a consequence of polluted air. A partial list of the medical consequences of air pollution includes the following, all drawn from peer-reviewed studies: premature mortality, asthma, chronic bronchitis and emphysema, lung cancer, myocardial infarction, congestive heart failure, fatal abnormalities of heart rhythm, stroke, and the loss of intellectual capacity. Emerging data suggest that Type II diabetes mellitus and possibly Alzheimer’s disease may be linked to air pollution. These chronic conditions are expensive to treat and get more expensive each year as healthcare costs soar. They also have profound adverse impacts on the economy due to workplace absenteeism, emergency room visits, lost days at school, and other costs of poor health. The impact on individuals, families, and society is huge.

Who pays the bills? The Census Bureau reports that 18% of Americans under the age of 65 are Medicare or Medicaid beneficiaries or receive healthcare from the military, 59% have employer-sponsored health insurance, and 16% are not insured. Above the age of 65, the Centers for Disease Control report that 94% of Americans are enrolled in Medicare. In other words, Federal, state, and local governments all pay, and employers pay, right along with the rest of us who pay taxes and make out-of-pocket healthcare expenditures. Reducing healthcare costs attributable to air pollution will save enormous amounts of money -- money we all need to deal with the rising cost of living -- money that is being diverted from services that Americans value.

Even if the Federal Government paid for the installation of pollution control devices that achieved maximal control of pollutants such as particulates, sulfur and nitrogen oxides, and mercury, the benefits would far outweigh the costs.

Cleaner air will improve the health of Americans and reduce healthcare costs. Cleaner air translates into huge reductions in the costs to governmental programs and will make a huge measurable impact on the rising debt. You can bank on it.


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