The Price of Air Cleanup: Putting a Value on Health : Pollution: The AQMD and critics of its plan are far apart on the cost. A huge economic impact is expected.

Rival estimates of the price tag for Southern California’s air cleanup plan might as well be using numbers from different planets.

The agency in charge of cleaning the air believes the plan more than pays for itself when economic benefits to the region are taken into account.

But the plan’s most influential critic, representing California business and labor, predicts pollution-control measures will cost the local economy billions of dollars annually by year 2010, when Southern California’s skies are supposed to meet state and federal clean air standards.

Informally, no one presumes to foresee the final accounting for the world’s most ambitious air pollution control program. Yet both sides are using these estimates in the ongoing debate over the cleanup.

In its most recent forecast, the South Coast Air Quality Management District figures the costs of air pollution controls to Southern California residents and businesses by 2010 will be just over $10 billion a year. But the district says this will be more than offset as the air becomes cleaner by the economic benefits of congestion relief, improved agricultural production, the joys of visibility and--primarily--improved public health. Less time will be lost from work and recreation due to illness, life spans will be longer and medical bills lower--particularly for school-age children.

By 2010, the district predicts, benefits will exceed costs by roughly $1.5 billion a year--or $254 a year per household.

Higher Costs Predicted

The district’s main antagonist, the California Council for Environmental and Economic Balance, sees things differently. The council says benefits will total billions less and pollution-control costs will be much higher.

The council’s most recent forecast shows costs exceeding benefits by $10 billion annually by 2010--a net loss of $1,600 annually per household.

The substantial difference stems partly from the difficulty of estimating the long-term impact of such a sprawling project. The most recent version includes 131 rules covering everything from the use of cleaner fuels in buses, trucks and cars to, ultimately, a mandate for zero-polluting paint and electric cars.

But there also are fundamental differences in underlying economic assumptions.

For instance, the district says its calculations of the value of lower health risks--which would produce the biggest savings from cleaner air--are, if anything, conservative. Although the air-quality plan is designed to curb four pollutants, the district considered the health-care savings from reducing only the two worst--ozone and particulate matter, or soot, dust and grit.

Moreover, the AQMD says, in the first two years of the program overall costs actually were lower than expected.

Researchers Doubtful

The council’s researchers, National Economic Research Associates Inc. of Cambridge, Mass., contend that the cleanup costs will be much higher than the AQMD expects. The rearchers point out that much of the technology called for in the plan has yet to be developed. And their economists also say although some rules in the plan are cost-efficient, other regulations produce little progress toward clean air, particularly when compared to their extraordinarily high implementation costs.

Moreover, the researchers discount many of the AQMD’s figures on benefits. They believe the AQMD’s estimates--largely based on a new method of evaluating health data--are high compared to older studies by such agencies as the U. S. Environmental Protection Agency.

Figuring health and environmental benefits, particularly when it comes to such sweeping projects, is a young science.

“The methodologies are still crude and there are large uncertainties,” Arthur M. Winer, director of the environmental science and engineering program at UCLA’s School of Public Health, acknowledged recently. Winer, an atmospheric chemist, worked on the AQMD’s health benefits study.

“I don’t think standard economic methods are yet capable of providing the answer the average guy on the street wants: ‘Is it worth it to me?” said Jane V. Hall, professor of economics at Cal State Fullerton and the principal author of the health benefits estimate.

“I’m going to gain a dollar a day but it’s going to cost me 90 cents, or $1.10 a day,’ ” she said. “Our methods don’t let you pin it down that closely.”

Even so, both sides agree the plan in some form must go forward, more data or not.

For one thing, scientists and environmentalists are increasingly united in their conviction that smog causes serious and expensive harm. The AQMD also is faced with federal and state deadlines to improve air quality in the South Coast Air Basin, the nation’s most polluted region.

Because of that, the prime issue has become not whether to restore clean air to Southern California but how cheaply the work can be done.

“We don’t argue with the merits of cleaning up the air,” said Lisa Bicker, vice president of California Council for Environmental and Economic Balance. “The argument lies in how you clean it up . . . .

“Two or three years ago, we weren’t so welcome in each other’s offices,” Bicker said of the council’s relations with the AQMD. “But now we’re moving toward a more collaborative role.”

This has brought, for instance, increased attention to the role market incentives could play in the cleanup plan. A council study released in December contends that market incentives could cut the plan’s emission-control costs by 25%, while continuing pollution reduction at the AQMD’s required pace.

Such incentives typically allow individual companies greater leeway in deciding how to meet air pollution standards, including the right to trade credits to emit certain amounts of pollution. The credits are bought from companies whose emissions already are below the legal limit.

Market’s Role

The AQMD now not only envisions greater use for market incentives but also has rearranged its timetable for imposing some rules to bring into play the most cost-effective measures first.

Still, noisy disputes over cost are likely to continue breaking out at virtually every step in the cleanup process.

Many business and labor leaders worry that the current plan could slow economic growth in the region. They say that because of added anti-pollution costs, businesses in the region will be at a disadvantage with outside competitors who are not under the same restraints.

“And for some companies it gets extremely expensive. You get a very uneven distribution of who has to pay,” said Victor Weisser, the council’s president.

An example, Weisser says, is rule 1109, which affects petroleum refineries. The average cost to remove a ton of the various pollutants is $8,800, “which isn’t so bad,” Weisser said. “But the actual range of costs, depending on which facility is used, is $2,080 to $400,800.”

Business and labor leaders believe implementing the least costly regulations first is the best way to proceed.

The studies by National Economic Research Associates conclude that if the most expensive regulations are left out, about 80% of the cleanup could be achieved for 40% of the cost. As economist David Harrison Jr. sees it, 80% may be enough.

“This is obviously a very sensitive issue,” he said. “But in other health areas this comes up as well. How many dialysis machines do we (as a society) provide? How much long-term care do we provide? . . . Our objectives sometimes outstrip our resources.”

Federal and state standards, however, would seem to require that 100% of the current plan be implemented.

Furthermore, scientists, environmentalists and the AQMD maintain that industries so far have adapted to air pollution rules better than business leaders had predicted and that complaints mainly are heard when companies first feel the regulations’ sticker shock.

Years ago, say supporters of the plan, when oil refiners, auto manufacturers and other companies were first forced to add such control devices as smokestack scrubbers and catalytic converters, they protested much the way auto repainters and furniture finishers--which joined the ranks of regulated businesses much more recently--are doing now. Similar reactions may soon come from others in the ever-broadening range of regulated businesses.

Impact Spreads

Among the next to feel the pinch of air pollution rules will be dry cleaners, small-boat refueling stations, restaurants using charbroilers, and farmers, who will be required to control emissions from cow urine and manure better and will be prohibited from plowing fields on the windiest days to cut down on dust.

The four counties of the South Coast Air Basin--Los Angeles, Orange, Riverside and San Bernardino--have lived under decades of air pollution control and most longtime observers agree that the big, easy targets--largely the so-called “smokestack” industries--already have been regulated. From here on, emissions reductions will come in smaller amounts and from almost every industry and individual.

“There’s always this assumption that there are hidden ways (to cut air pollution),” said James M. Lents, AQMD executive officer. “We don’t believe they exist. In the end, everyone’s got to clean up this basin.”

Two years ago, the California Council for Environmental and Economic Balance issued a study predicting that even the initial stage of regulation would cost the basin 55,700 jobs. Last December, the Southern California Coalition for Jobs and a Clean Environment, a group that includes the Los Angeles County Federation of Labor, the Los Angeles Area Chamber of Commerce, the Ethnic Coalition of Southern California and the California Manufacturers Assn., issued its own study.

Based on an opinion poll of 450 companies, the coalition study concluded that as many as 30,000 jobs or more will be lost in the next decade as a direct result of air-pollution controls.

The AQMD does not necessarily dispute the figures. But the district says that even if those jobs disappear, they represent only a slight slowing of massive growth--not a net loss of jobs. In the grand scheme of things, the AQMD argues, even thousands of lost jobs will be more than offset by more than 2 million new positions predicted for the South Coast Air Basin by the year 2010, according to the Southern California Assn. of Governments.

Beyond this, in figuring the costs of cleaning the air, the AQMD, like most government regulatory agencies, takes what is often called the public health view of policy.

When legislators pass laws to counter a public health threat--be it typhoid fever or air pollution--the regulatory agency assigned to carry out the task is expected to find the most cost-effective way of doing it. The larger question of whether removing that public health threat makes economic sense to people and their businesses is not at issue.

Yet most economists believe it is not only possible but necessary to put price tags on peoples’ lives and what they value--particularly as health care and environmental cleanup expenses have blown sky high. Assigning dollar values isn’t always easy.

“What’s it worth to you to live your full life expectancy?” asks AQMD consultant Hall. “The value of life is a big issue.”

Economists ask not only how much good health is worth, but how much people value a clean lake or a blue sky. Yet many health scientists and environmentalists complain that economists too easily ignore benefits they find difficult to price accurately, or they assign values that reflect their biases.

“How much would a typical resident pay per year for more clear days on which to gaze upon the mountains surrounding the South Coast area?” asked a group of skeptical economists in a 1989 critique of the AQMD plan that appeared in Issues in Science and Technology magazine.

“If it was $10 per year, visibility benefits (for all basin residents) would amount to $160 million annually by the year 2010. If $100 per year is more like it, visibility benefits would grow to $1.6 billion. We find it unlikely that the latter ($400 annually for a family of four) would be the case, but our intuition is surely open to second-guessing.”

Yet in Southern California, where the median resale price for a house is more than $200,000, some homeowners might well consider $400 a welcome and inexpensive price for enhancing real estate values, particularly their own.

“We may say, ‘Yeah, it’s sort of worth it,’ ” countered Harrison, one of those skeptical economists. “But for other people that may not be true--for people whose resources are more limited. So there is an issue of both what it’s worth and how it’s paid for by different groups in society.

“Couldn’t we try to do the cost-effective things first?” he asks.

As an example, Harrison cites the cost of controlling hydrocarbon emissions at gasoline stations and on ships.

Different Costs

Because different technologies are required, the cost of controlling the same pollutants differ at various sources. The study by the California Council for Environmental and Economic Balance estimated a cost of $110 a ton to control emissions at gas stations, but $467,000 a ton on marine vessels.

Contending that the council used an averaging method that does not reflect how ships operate, Hall said the true figure for marine vessels is a more modest $1,800 a ton.

As to the overall costs of the plan, Hall agrees that neither side has come up with a credible estimate. But she believes benefits clearly outweigh costs. For one thing, the health benefits she calculated are only part--perhaps less than half--of what Southern Californians would gain economically from completing the cleanup.

Hall cites a state Air Resources Board estimate, for example, that $150 million to $1 billion a year is lost because of smog damage to agricultural crops in California. The board also cites extensive damage to forests, range and pasture grasses, whose products are a $700 million-a-year industry.

Moreover, public expectations about cleaner air seem to be rising. Recent polls show strong support for extensive pollution cleanups, a trend Hall has also seen.

“The more research we do, we find that people value themselves more than we thought they did in earlier studies,” Hall said.

Focus on Ozone

The AQMD plan is designed to control four harmful gases that Southern Californians now breathe. But much of the debate over costs and benefits centers on ozone, considered by many health researchers to be the air basin’s worst pollution problem.

Hall places a much higher dollar value on the benefits of controlling ozone than does the business and labor study. She credits the computer model she and her team developed, which attempts to measure not just exposure--the general level of pollution in the air--but the dose received. An ozone dose--the amount of pollution that enters the lungs--varies according to age, the activity performed and the length of time spent in the polluted atmosphere.

“If I go outside and sit under a tree,” Hall explained, “I’m not getting a dose that a 12-year-old is by playing soccer--who is getting a much greater dose.”

Using this level of detail, Hall’s computer model is designed to estimate the health effects throughout the air basin. “In our analysis, there are literally thousands of different patterns an individual could follow during the day,” she said.

A. Myrick Freeman, a resource economist at Bowdoin College in Maine, calls Hall’s techniques “very sophisticated.”

“But the question is whether it’s sophisticated truth not realistic,” said Freeman, who produced a widely respected cost-benefit analysis of Carter Administration environmental legislation.

Harrison and his colleagues in the reports by National Economic Research Associates relied on earlier models, which found much lower health effects from ozone exposure.

“We found (the Hall estimates) to be real high, point by point, item by item,” EPA economist Leland Deck said.

The research associates’ analysis also estimates that 75% of the cleanup cost comes from tackling ozone. In the end, Harrison and other critics say the cost of ridding the air basin of ozone could be 10 times its economic benefit.

Several new health-effects studies, however, have found evidence of even greater health damage to humans exposed to air pollutants than had been supposed.

* Two studies by Kaye Kilburn, a USC researcher, found that children raised in the South Coast Air Basin already had 10% to 15% less lung function by the time they were in the 2nd grade than youngsters growing up in relatively smog-free Houston.

* Last May, Dr. Russell P. Sherwin, a USC pathologist, released results of 100 autopsies performed on young accident and homicide victims in Los Angeles, all seemingly healthy before death. Sherwin found unexpected levels of lung tissue damage. What the youths had in common was growing up in polluted air, he said.

* An 11-year UCLA study, released in March, confirmed that chronic exposure to smog damages lungs, leaving victims more vulnerable to respiratory diseases, including emphysema. The study of three middle-class Los Angeles County communities--Glendora, Lancaster and part of Long Beach--found that lung capacity was reduced as much as 75% in the most polluted neighborhoods.

In addition, a just-released EPA-sponsored study by the Argonne National Laboratory strongly suggests that long-term exposure to ozone causes irreversible lung scarring and other damage, which can impair exercise and reduce life spans. The report is based on an assessment of the effects on children and adults working outdoors in Los Angeles and New York City. The report estimates that 20% to 70% of individuals in Los Angeles showed lung scarring after 10 years of exposure--which could increase the benefits of ridding the air of ozone by as much as 25%.

“And that it is a big number because people here in the agency are getting really concerned,” said EPA economist Deck on the implications of this study. “Something is going on here.”

Robert Frank, professor of environmental health sciences at Johns Hopkins School of Public Health in Baltimore, recalls that early research on ozone effects focused on how ozone cracked the rubber in aircraft cockpits.

“And we know that if you put rubber out on the highways of Los Angeles, that rubber ages and cracks where ozone levels are high,” he said recently. “Rubber has a much shorter life in Los Angeles than it does in North Dakota. And without pushing it too far, the polymers that constitute rubber do have their analogs in the lung.”

Looking for Clues

Meanwhile, as the grand cleanup continues, a gallery of national policy-makers, business and government planners, economists and environmentalists observe the AQMD’s progress for clues about the costs of cleanup efforts they may face in their own futures. Their time is likely to come.

Mary Nichols, director of the urban program for the Natural Resources Defense Council, points out that getting sewer water out of drinking water in the 19th Century was the first public health regulation to make a lasting difference.

“Just as . . . that contributed more than anything else to the increase in longevity and overall quality of health of the population, the next big chunk of improvement in public health is probably air quality,” Nichols said. “The thrust of the (air-quality) program, which has been to try to get man-made chemicals out of the air, has been the right thing to do.”

Researcher Joyce Sherwood in the Times editorial library contributed to this story.

PROTECTING YOUR HEALTH ON SMOGGY DAYS Here are some of the adverse health affects associated with Los Angeles’ smog, along with tips on how to adjust one’s activities based on the severity of an episode. * How Smog Harms Your Health: Brain and nervous system: * Alters behavior and may decrease mental performance. * Brings on headaches and irritability. * Reduces tolerance to high altitudes. Key pollutant: Carbon monoxide. Immune system: * Alters immune system cells in blood and tissues. * Increases susceptibility to infectious and other diseases. * May worsen disease, especially for people with immune deficiencies. Key pollutant: Nitrogen Dioxide. Lungs: * Increases susceptibility to pneumonia, bronchitis, bronchiolitis, emphysema, and tissue scarring. * Causes coughing, wheezing, shortness of breath, chest discomfort or pain. * Damages air sacs, and may speed depletion of lung reserve tissue. * Decreases lung function and exercise performance. * Causes chest tightness. Key pollutant: Ozone and PM10. Heart and blood: * Is absorbed and spread throughout the body. * Reduces capacity of red blood cells to carry oxygen to the body. * Promotes and aggravates heart, blood, and other diseases. * Causes leaky and congested capillaries in eyes, sinuses, throat, and air tubes. Key pollutant: Carbon monoxide. * Pollutant Standards Index: The Pollutant Standards Index (PSI) is a simplified method of forecasting and reporting air quality conditions on a numerical scale ranging from 0-500 400 PSI- Stage 3 Smog Episode (HAZARDOUS) Last called in 1974. Stay at home, inside. 275 PSI- Stage 2 Smog Episode (VERY UNHEALTHFUL) Stop all physical activity. Stay indoors. Schedule nonphysical activities: board games, video games, arts and crafts, slow walking. 200 PSI-Stage 1 Smog Episode (UNHEALTHFUL) Avoid anything that causes hard breathing or mouth breathing - no soccer, volleyball, football, running, etc. Go indoors if you can. Schedule easy activities - shoot baskets, but don’t play basketball; play catch; swim, but don’t swim competitively; play on the swing set. Sensitive people should reduce activity even further. 100 PSI - Federal Clean Air Standard (MODERATE) 75 PSI - California Clean Air Standard 50 PSI (GOOD) Source: South Coast Air Quality Management District, American Lung Assn. of California.

KEY AIR POLLUTANTS A look at four major air pollutants: * Ozone: A colorless, sharp-smelling, highly reactive gas, ozone is the main component of smog (see chart, facing page). It is formed by a chemical reaction of two principal air pollutants--nitrogen oxides and reactive organic gases--in the presence of sunlight. The pollutant reaches peak levels at midafternoon and is usually carried inland by sea breezes. Ozone levels in the basin are sometimes three times higher than the federal standard. High concentrations can be harmful to children, elderly and those with heart and lung diseases. * NO2: Nitrogen dioxide is a brownish gas with a bleachlike odor. It is produced when nitric oxide (NO) reacts with oxygen in the air. NO2 and NO are often referred to as oxides of nitrogen. Motor vehicles account for two-thirds of these emissions, with stationary sources accounting for the rest. The highest concentrations are near pollution sources, such as oil refineries and power plants. NO2 may cause reduced resistance to infection. The Los Angeles Basin is the only region in the country that exceeds the federal standard for the pollutant. * CO: Carbon monoxide is a highly poisonous, colorless and odorless gas that is produced by the incomplete combustion of carbon-containing fuels such as gasoline. In the Los Angeles Basin, 90% of CO emissions come from motor vehicles. Concentrations are normally the heaviest downwind of areas of heavy traffic congestion. CO levels peak during the winter months. CO impedes the blood’s ability to carry oxygen and also poses a health problem for people suffering from heart and lung diseases. In 1987, Los Angeles ranked third in the nation for days exceeding federal standards, trailing New York City and Spokane, Wash. * PM10: Suspended particulate matter of 10 micrometers or less--about the diameter of a human hair--can lodge deep in the lungs, resulting in respiratory problems as well as premature death among individuals with existing respiratory problems. The particles include dust, sand and the products of fuel combustion, and they serve as mediums for carcinogenic and toxic substances.