A Networker Index on Environmental Health Costs - May 2006
By Nancy Myers
"Economic analysis has had its successes and made its contributions," Lisa Heinzerling and Frank Ackerman wrote in 2002. "It has taught us a great deal over the years about how we can most efficiently and cheaply reach a given environmental goal. It has taught us relatively little, however, about what our environmental goals should be. Indeed, while economists have spent three decades wrangling about how much a human life, or a bald eagle, or a beautiful stretch of river is worth in dollars, ecologists, engineers, and other specialists have gone about the business of saving lives and eagles and rivers, without waiting for formal, quantitative analysis proving that saving these things is worthwhile." (Pricing the Priceless: Cost-Benefit Analysis of Environmental Protection, Georgetown University, 2002.)
But still we do the numbers, because numbers rule. When we can't argue by law, principle, or ethics alone, we pull out the numbers. We look to the numbers for truth, for irrefutability. Heinzerling and Ackerman are economists and they believe in numbers, just like the rest of us do.
I normally prefer words, but I find an odd comfort in numbers. Numbers rest the brain in a kind of certainty. Numbers are often not as definite as we think they are, but they show us things we need to consider. Numbers reveal patterns. They invite a different kind of logic than words.
I've been taking a romp through files of the last several years on environmental health and related costs. (Thanks to Peter Montague, publisher of the Rachel's newsletters.) As I sliced out quotes and factoids I wondered what patterns they revealed. I ordered them chronologically, demanding a story from them.
After a while these numbers, which I list below, began to read as a parable of the old Bull-and-Bear Economy--our current way of doing business, charging ahead with an endless throughput of stuff, looking only at the short-term bottom line, ignoring the costs we can't see even when we're the ones paying. That economy is bankrupting humanity as a whole and the planet. Even people who still benefit from it are starting to feel the pinch. Two symptoms that show up in this collection:
The ill health of people and the planet are largely a result of factors within our control. That's the bad news and the good news. Contemplate the connections: Personal habits like how much we move and eat combine in their effects with factors of global proportions like the tonnage of CO2 our jet travels shoot into the stratosphere. These costs add up and multiply themselves. You can't separate your child's health from the health of the economy, when the present economy is spewing out toxins that will make your child less productive in the future economy.
- Healthcare costs are going through the roof.
- Global warming is sending insurance costs through the roof. Three years ago this was the distant future; suddenly, after Katrina, it's the present.
The good news is that there are ways of living and doing business beyond the Bull-and-Bear Economy. Look around, and you can see the makings of what we might call the Owl Economy--enterprise combined with wisdom and common sense, an economy with a long-term bottom line. Efficient and renewable energy. Green chemistry, engineering, construction, design. Sustainable, locally based food systems. Socially responsible investing. Fair trade. Employee and cooperative ownership. Community-based business and investing. Zero waste. Clean production. These are just the beginnings of what we can do. Michael Shuman, author of Going Local: Creating Self- Reliant Communities in a Global Age, and others are fleshing out visions of the Owl Economy.
We will never know all the numbers and we don't need to. We do know enough to change our ways--that's the essence of the precautionary principle. We are coming up with more and more numbers on real costs associated with degrading the planet. These numbers, incomplete as they are, can be our baseline for action. An economy that helps us restore and maintain the health of people and the planet will generate good work and save money and lives. These numbers reflect the sorry present and a grim future. But we can imagine and create the kind of future we want. And then we'll do the numbers again and see how far we've come.
In this study, we aimed to estimate the contribution of environmental pollutants to the incidence, prevalence, mortality, and costs of pediatric disease in American children. We examined four categories of illness: lead poisoning, asthma, cancer, and neurobehavioral disorders. . . .
Total annual costs are estimated to be $54.9 billion (range $48.8–64.8 billion): $43.4 billion for lead poisoning, $2.0 billion for asthma, $0.3 billion for childhood cancer, and $9.2 billion for neurobehavioral disorders. This sum amounts to 2.8 percent of total U.S. health care costs. This estimate is likely low because it considers only four categories of illness, incorporates conservative assumptions, ignores costs of pain and suffering, and does not include late complications for which etiologic associations are poorly quantified. The costs of pediatric environmental disease are high, in contrast with the limited resources directed to research, tracking, and prevention.
-- Philip J. Landrigan, Clyde B. Schechter, Jeffrey M. Lipton, Marianne C. Fahs, and Joel Schwartz, "Environmental Pollutants and Disease in American Children: Estimates of Morbidity, Mortality, and Costs for Lead Poisoning, Asthma, Cancer, and Developmental Disabilities," Environmental Health Perspectives,Vol. 110 #7, July 2002
Spending on health care is increasing at the fastest rate in a decade, reflecting greater use of hospitals and prescription drugs and the declining influence of managed care, the government reported today. . . .
Spending averaged $5,035 for each person in the United States. The increase came even as the nation slipped into a recession, exacerbated by the terrorist attacks of Sept. 11, 2001.
--Robert Pear, "Spending on Health Care Increased Sharply in 2001," New York Times, Jan. 8, 2003
The treatment of illnesses related to obesity costs America $93 billion a year, rivaling the financial toll of smoking-related disease, according to an analysis being published today.
Health care for overweight and obese individuals costs an average of 37 percent more than for people of normal weight, adding an average of $732 to the annual medical bills of every American, the study found.
--Ceci Connolly, "Health Costs of Obesity Near Those of Smoking," Washington Post, May 14, 2003
The direct costs, such as medical care and special education, of . . . environmentally attributable childhood illnesses [in Massachusetts] are estimated to range between $56 million and $337 million for a single year. If we include the cost of school days missed and future earnings lost, the total cost to the Massachusetts economy for the preventable portion of these childhood illnesses is estimated to be $1.1 - $1.6 billion.
--Rachel Massey and Frank Ackerman, Costs of Preventable Childhood Illness: The Price We Pay for Pollution, Tufts University, Sept. 2003
This paper explores the relation between healthcare expenditures (HCEs) and environmental variables in Ontario, Canada. . . .
Main results: The results show that, after control for other variables that may influence health expenditures, both total toxic pollution output and per capita municipal environmental expenditures have significant associations with health expenditures. Counties with higher pollution output tend to have higher per capita HCEs, while those that spend more on defending environmental quality have lower expenditures on health care.
-- M Jerrett, J Eyles, C Dufournaud, S Birch, "Environmental influences on healthcare expenditures: an exploratory analysis from Ontario, Canada," J Epidemiol Community Health 2003;57:334–338
OMB reviewed 107 major Federal rulemakings finalized over the previous ten years (October 1, 1992 to September 30, 2002). The estimated total annual quantified benefits of these rules range from $146 billion to $230 billion, while the estimated total annual quantified costs range from $36 billion to $42 billion. The majority of the quantified benefits are attributable to a handful of clean-air rules issued by EPA pursuant to the 1990 amendments to the Clean Air Act. (Chapter I) It is important to note that of the 107 rules reviewed by OMB over the last ten years, four EPA rules – two rules limiting particulate matter and NOx emissions from heavy duty highway engines, the Tier 2 rule limiting the emissions from light duty vehicles, and the Acid Rain rule cited above -- account for a substantial fraction of the aggregate benefits reported in Table 2. These four EPA rules have estimated benefits of $101 to $119 billion per year and costs of $8 to
$8.8 billion per year. The aggregate benefits and costs for the other 103 rules are $41 to $107 billion and $29 to $34 billion, respectively. . . . The analysis assumes that the valuation of the estimated reduction in mortality risk is appropriately represented by studies of the tradeoff associated with wage premiums for workers facing fatality risks in the labor market.
--Office of Management and Budget, Office of Information and Regulatory Affairs, Informing Regulatory Decisions: 2003 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities, OMB 2003
In a report revealing how climate change is rising on the corporate agenda, Swiss Re said the economic costs of global warming threatened to double to $150 billion a year in 10 years, hitting insurers with $30 billion to $40 billion in claims, or one World Trade Center attack each year.
--The Business Report Mar. 4, 2004
What is a human life worth? There are various ways to measure:
The median award to a plaintiff in 200,000 wrongful death cases has been $900,000.
The 9/11 Victim's Compensation Fund has paid out an average of $1.8 million per life.
When trying to prevent future loss of life, the U.S. Department of Transportation estimates the value of a life saved at $3 million.
Under the Clinton administration, a life lost to pollution was assumed to be worth $6.1 million; the Bush administration says the same life is worth $3.6 million.
But nobody says, "Three million for my life? I'll take it!" All these calculations estimate the value of someone else's life.
--Bill Torpy, "Life -- Hard to Know What Price is Right," Atlanta Journal-Constitution, March 5, 2004.
The cost of fighting crime in the United States, for police, prisons and courts, rose to a record $167 billion in 2001, the latest year for which figures are available, according to a study by the Bureau of Justice Statistics.
That is $20 billion more than was spent on the criminal justice system in 1999, the last time the Justice Department calculated the cost. It is also an increase of about 350 percent over 1982, when the total cost was $36 billion, the report said. Adjusted for inflation, the increase was about 150 percent.
--Fox Butterfield, "With Longer Sentences, Cost of Fighting Crime Is Higher," New York Times, May 3, 2004
The diminished intelligence of children exposed to mercury contamination before birth costs the U.S. economy $8.7 billion a year in lost productivity. . . .
The study estimates that between 317,000 and 637,000 of the 4 million children born each year in the United States are exposed in the womb to mercury levels above the Environmental Protection Agency's safety level.
Coal-fired power plants, the single largest source of man-made mercury emissions in the United States, are responsible for $1.3 billion of the economic loss.
--Scripps Howard News Service, "Study: mercury costs billions in lost productivity," Feb. 28, 2005
In the report, part of a continuing project called the Millennium Ecosystem Assessment, more than 1,300 ecologists and other researchers from 95 countries focus on the capacity of ecosystems to perform valuable functions like filtering water, providing food and pollinating crops.
Their conclusion is bleak: over all, 60 percent of those functions are being degraded by human activities, both through direct actions like overfishing and through indirect ones, like the tendency of deforestation to raise the risk of floods.
The report -- which was released last week and online at http://www.millenniumassessment.org/en/index.aspx lists some instances in which destructive practices have changed and damage has been prevented, but says far more action is needed in the next several decades.
"We must learn to recognize the true value of nature -- both in an economic sense and in the richness it provides to our lives," said an accompanying statement by the board of scientists who led the project.
"Above all," it continued, "protection of these assets can no longer be seen as an optional extra, to be considered once more pressing concerns such as wealth creation or national security have been dealt with."
. . .
In one study in Costa Rica, Dr. Gretchen C. Daily of Stanford and other researchers measured the increase in coffee yields to a plantation from the pollinating efforts of bees living in two nearby fragments of forest.
From 2000 to 2003, they calculated, the presence of the forest bees lifted the plantation's income $60,000 a year.
--Andrew C. Revkin, "Report Tallies Hidden Costs of Human Assault on Nature," New York Times, April 5, 2005
British emissions of C02 from aircraft, expressed in millions of tons of carbon, shot up from 4.6 million tons in 1990 to 8.8 million tons in 2000. But based on predicted air passenger transport growth figures-- from 180 million passengers per year today to 476 million passengers per year by 2030 -- they are expected to rise to 17.7 million tons in 2030.
Aircraft emissions that go directly into the stratosphere have more than twice the global warming effect of emissions from cars and power stations at ground level and, based on the Government's own calculations, the effect of the 2030 emissions will be equivalent to 44.3 million tons of carbon -- 45 per cent of Britain's expected emissions total at that date.
-- Michael McCarthy, Marie Woolf, and Michael Harrison, "Revealed: The real cost of air travel," The Independent (London, UK), May 28, 2005
Worldwide cost of cleaning up major storms could rise [by 2080] by two-thirds to 27 billion dollars (22.35 billion euros) annually unless urgent action is taken to fight global warming, British insurers warned Wednesday.
--Terra Daily, "British insurers warn storm clean-up costs will soar with global warming," Agence France Press, June 30, 2005
With wealth and property values increasing, and more people moving to vulnerable coasts, by the year 2020 a single storm could cause losses of $500 billion – several times the damage inflicted by Hurricane Katrina. . . .
Hurricane Katrina, which devastated New Orleans and southwestern Mississippi in August, is No. 2 on the list [of destructive storms], with an estimated $80 billion in damage. No. 1 is a storm that received little attention in the historical comparisons that followed Hurricane Katrina: the Great Miami Hurricane of 1926. Similar to Hurricane Katrina in size and ferocity, it caused about $760 million in damage, in 2004 dollars. But if a hurricane of that magnitude followed the same track today, it would leave behind $130 billion of devastation across a Miami area that is far more crowded than it was in 1926, the scientists said.
-- Kenneth Chang, "In Study, a History Lesson on the Costs of Hurricanes," New York Times, Dec. 11, 2005
The study found that the . . . best estimate of the annual cost of combined adult/childhood diseases and disabilities attributable to environmental contaminants (asthma, cardiovascular disease, cancer, lead exposure, birth defects, and neurobehavioral effects) in Washington State is about $2,734 million, comprising $782.1 million in direct health care costs and $1,953 million in indirect costs. The range of costs is $2,800 million to $3,500 million a year, depending on the methods and assumptions used. To put these costs in context . . . the estimate for adult and childhood diseases and disabilities combined is equivalent to about 1 percent [of the Washington Gross State Product]. . . .
At the heart of these new economic studies is the recognition that the costs of environmentally related diseases and disabilities 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, Northwest Public Health, "How Much Do Environmental Diseases and Disabilities Cost?" Fall/Winter 2005
The United States cannot effectively address escalating health care costs without addressing the problem of chronic diseases:
- More than 90 million Americans live with chronic illnesses.
- Chronic diseases account for 70% of all deaths in the United States.
- The medical care costs of people with chronic diseases account for more than 75% of the nation's $1.4 trillion medical care costs.
- Chronic diseases account for one-third of the years of potential life lost before age 65.
- Hospitalizations for pregnancy-related complications occurring before delivery account for more than $1 billion annually.
- The direct and indirect costs of diabetes are nearly $132 billion a year.
- Each year, arthritis results in estimated medical care costs of more than $22 billion, and estimated total costs (medical care and lost productivity) of almost $82 billion.
- The estimated direct and indirect costs associated with smoking exceed $75 billion annually.
- In 2001, approximately $300 billion was spent on all cardiovascular diseases. Over $129 in lost productivity was due to cardiovascular disease.
- The direct medical costs associated with physical inactivity was nearly $76.6 billion in 2000.
- Nearly $68 billion is spent on dental services each year.
--CDC Chronic Disease Overview http://www.cdc.gov/php/overview.htm#3 Accessed March 9, 2006
Publicly held companies are beginning to report for the first time to the Securities & Exchange Commission (SEC) tens of millions of dollars in estimated liabilities that they face for retiring assets that contain hazardous materials, such as asbestos or other toxic compounds, to comply with a new accounting rule that took effect late last year.
Corporations are required to comply with the new accounting rule because it is considered a Generally Accepted Accounting Procedure under the Sarbanes-Oxley corporate reporting law.
Shareholder and environmental activists say the new liability disclosures will serve to warn investors about companies at risk of tort claims and government action that could severely weaken their bottom line. The disclosure requirement will also encourage management to be "forward-looking in terms of avoiding environmental liabilities," says a source with the Interfaith Center on Corporate Responsibility (ICCR), which lobbies for increased corporate disclosure.
--"Industry Reports Show Major Liabilities in Asset Retirements," Superfund Report, Feb. 13, 2006
Healthcare will account for one in five dollars spent in the US by 2015.
--Lisa Girion and Ricardo Alonso-Zaldiva, "Steep Rise Projected for Health Spending," LA Times Feb. 22, 2006.
One last thing. The psychologist James Hillman was discussing the precautionary principle with some of us back in 2001, just two months before 9/11. He pointed out how many things we can't talk about or admit to in American society, uncomfortable things conversations involving the precautionary principle might bring up. Here are some taboos he listed:
Numbers like these, therefore, should not be considered the final word on the "cost" of our way of life. They are just a way of opening the conversation in language our society understands.--NM
- No limits
- No coming in second (one of the five principles of the Sikh religion, he pointed out, is to always come in second)
- No speaking of redistribution of wealth
- No discussion of society -- only money
- No regress (as opposed to progress)
- No gloom and doom
- No immeasurables. Things we can't measure, like suffering, don't count.
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