Rethinking regulatory reform: toxics, politics, and ethics.

• Author: Michaelson, Jay

When do we kill people for a desired goal? With the value of life rhetorically paramount in American culture, only extreme cases--war and capital punishment, for instance--tend to be regarded (hardly unanimously) as "acceptable" instances of state-sanctioned killing. Yet the state allows lives to be lost all the time. In less obvious instances of state control, such as regulating safety(1) or allocating scarce resources,(2) the state must make difficult, "tragic" choices of how many lives to sacrifice in exchange for benefits that may not be coequal with life itself.(3) In the end, we Americans kill people when we want to do so; the important questions are what values justify our actions and how we weigh competing claims on human life.

Regulation, then, is more than simple control, more than a dry pantomime of acronyms and number crunching; it is a process of harm allocation that reflects the state's ethical values even as it subverts them. In regulating toxics,(4) for example, the Environmental Protection Agency (EPA) and others must set "acceptable" levels of risk posed by toxic substances, i.e., determine how much cancer is worth the benefits of a given toxic substance. Most discussions of toxics regulation, however, focus on the "science" of risk assessment and the politics of risk management, thus missing the heart of EPA's harm allocation effort: the initial decision of how much harm is to be allowed--how many people are to die. Now, as reform of the regulatory process is debated in Washington, it is worth rethinking what regulation is, and how we control and justify the allocation of toxic harms.

Part I of this Note attempts to do so by proposing a new framework for understanding toxic risk allocation with a focus on "risk determination," the process of quantifying "significant" risk. Historically, EPA has usually determined that only de minimis levels of risk (generally defined as one death per million exposed individuals) are acceptable for most toxic substances. This determination, though not one of zero risk, still legitimizes the subterfuge of "good science"--the myth that EPA is only measuring safety--and suggests that, when the state controls harm allocation, no nonnegligible amount of death is acceptable. Safety supposedly determines the level of harm allocation.

Reforms of the regulatory process now being debated in Congress would fundamentally alter this ethical and political(5) orientation, as discussed in Part II of the Note. By requiring that regulations "justify their cost,"(6) Congress would shift risk allocation from a process of determining a de minimis risk level and measuring how much of a toxin yields that amount, to one of defining acceptable risk itself as the amount that is profitable for industry to produce. Obviously, this shift creates enormous practical problems; most immediately, EPA would have to decide how to quantify the "benefit" of freedom from cancer. Yet with the analytical framework provided by this Note, it is clear that the problems with such reforms are ethical as well. Cost-benefit analysis used in this way affects risk determination as well as risk assessment and management, thus redirecting the entire risk allocation process. In effect, cost-benefit risk determination shifts toxic regulation from a proxy liability rule, with the entitlement given to the bearer of the protected body, to a proxy property rule, with the entitlement held by toxics producers.(7) Preferences expressed by toxics producers thus may trump the life interests of individuals; private interests in profit justify the allocation of cancer, death, and other toxic harms. The Note attempts at the end of Part II to provide a more articulate account of these sinister but vague concerns, and concludes by suggesting that, as regulatory reform continues to be debated in Washington, such ethical agons may be avoided through less hasty reform of environmental regulation and a clearer understanding of the subtle structural and ethical distinctions within the regulatory process.

1. TOXIC HARM ALLOCATION UNDER THE PRESENT REGIME

   From Silent Spring(8) to Love Canal(9) to the 104th Congress,(10) the risks and regulation of toxic substances have been the subject of considerable public attention. Toxics present a classic public choice dilemma: the balancing of desired goods against the threat they pose to human life. Though its rules vary with the statutes and substances in question, toxic harm allocation may be understood as a game with three players--industry, producing the harm; EPA, allocating it; and individuals, receiving it--who cooperate or compete to set, measure, and regulate the level of toxics in the environment. EPA ultimately "allocates" the harm, because it has final control (subject to judicial review) over what toxic harms are present, even though other actors produce them, and still others are exposed to them. Most commentary has focused on the measurement (risk assessment) and regulation (risk management) stages of the game,(11) yet has tended to ignore the fundamental step of setting the level of harm to allocate. In contrast, this Note proposes that centralized(12) toxics regulation be understood as a three-step process:

   1. Determine what level of risk is tolerable for a given identified substance: whether zero, de minimis, "reasonable,"(13) or some other amount ("risk determination").(14)

   2. Assess what amount/concentration of the substance yields the tolerable risk by a four-step, quantitative scientific method ("risk assessment")."

   3. Decide how to regulate the toxic substance in accord with: the conclusions of step (2), substitution risks, economic impact, and whatever other criteria may be appropriate ("risk management").(16)

      In discussing each of these steps, the order of which may vary from situation to situation, it should not be surprising that risk assessment and management are often treated as the entirety of the regulatory process. Statutory language on how the level of acceptable risk is to be set is typically vague, and the technical uncertainties of risk assessment frequently dwarf the dimensions of ethical or political decisions. Often, risk determination does not exist as a formal process in toxics regulation at all;(17) in some cases, it is better understood as an ex post characterization of risk allocation than as a formal depiction of the process. Yet only by comparing risk assessment results to some determined level of acceptability does the process have any meaning; only by recognizing the ethical decision at the heart of toxics regulation can the entire process be properly understood--and reformed.

      1. Risk Determination

      Risk determination may be viewed as a nonscientific, ostensibly nonpolitical threshold decision about what constitutes "acceptable" risk.(18) The level of risk/harm may be set by statute (though this is not generally the case), by EPA interpretation, or even by "lottery." Barring arbitrarily and capriciously set ("unreasonable") levels, four categories of determinations exist: zero acceptable risk, a near-zero de minimis level, a randomly selected nonzero level, or a level based on a nonzero conception of "reasonable" risk.(19)

      A preliminary step, of course, is deciding whether EPA has the authority to allocate the risk at all. Some statutes grant regulatory authority over specific substances,(20) while others leave it to EPA or other agencies to promulgate lists of toxic substances(21) or provide for wide, general coverage with certain specified exceptions.(22) Simply identifying hazards is no small task,(23) and, in fact, the vast majority of risk assessments performed by EPA are "screens" to identify potential hazards.(24) Nor is the identification of toxic substances free from controversy. Some substances are excluded from regulation for purely political reasons; nicotine, only recently deemed a "drug" by the Food and Drug Administration (FDA), is among the most obvious of these.(25) Others are excluded because regulation as required by statute would be too draconian.(26) Even most "identified" hazards are never further investigated.(27) The "preliminary" step of hazard identification is, in the vast majority of cases, the terminal point of EPA involvement.

      For those substances that EPA does regulate, though, risk determination is the next step: The agency must decide the level of "acceptable" risk against which scientific measurements will be compared. Setting this standard is a matter not of science or policy, but of literary criticism: EPA must translate relative terms such as "insignificant," "acceptable," and "safe" into numerical targets for regulation.(28) Sometimes, risk determination is the last, not the first, step of the process, driven more by how the numbers happen to come out than by any deliberate allocation program.(29) Yet when EPA does define acceptable risk, it historically has done so in one of three ways:(30) zero risk, a lottery-determined risk, and de minimis/"reasonable" risk.

   1. The Zero Standard

      Zero risk at first appears to be the easiest safety standard to embrace: It should be easy to measure, and it allows society to state categorically that it will not permit deaths from toxic substances. Yet the zero standard has proven all but impossible to institute. Most notorious of zero standards is the "Delaney Clause,"(31) which in theory forbids cancer-causing chemicals as food additives in any amount, but which in practice has led to tremendous formal obstacles and considerable criticism.(32) The main difficulty with a zero standard is that nothing can conform to it. In the Delaney Clause example, pesticides sprayed in only minuscule amounts could render fruits and vegetables legally inedible, and as measurement techniques have improved, previously undetectable trace amounts are now sufficient to trigger the statutory ban. The "zero" standard itself becomes a matter of risk determination: How closely one looks...