- The Washington Times - Thursday, July 18, 2002

The Senate is about to vote on the reinstatement of taxes on oil and chemical companies to pay for the cleanup of certain toxic waste sites. Who could be against a program that taxes polluters and cleans up toxic waste? We are, and we expect anyone who looks at the program's results to agree.

Congress enacted Superfund (more formally, the Comprehensive Environmental Response, Compensation, and Recovery Act, CERCLA) in 1980 during the public hysteria about health effects at Love Canal. The law authorized the Environmental Protection Agency (EPA) to clean up hazardous sites and to bill companies legally associated with the sites for the costs. The law also established a tax on chemicals and petroleum producers to pay for cleanups when no such companies could be identified or had ceased to exist. The taxing provisions expired at the end of 1995, and the Superfund trust fund will be insolvent by the end of fiscal 2003.

Environmentalists, supported by many non-activists, have made the reinstatement of the taxes an important priority. They argue it is economically correct to make "polluters pay" and that Superfund cleanups have served important public health goals such as cancer prevention at reasonable cost.

Superfund supporters claim that making "polluters" pay promotes economic efficiency. Such reasoning has no economic basis because economic efficiency is about the present and the future, not about the past. Indeed, to the extent chemical and petroleum companies fear random unpredictable retroactive taxes are likely to be placed on them in the future by Congress, Superfund reduces investment in those sectors below efficient levels.

The $20 billion expended under Superfund between 1981 and 1992 has had no discernible effect on human health and may have had no effect at all. In their 1999 book, "Calculating Risks," James T. Hamilton and W. Kip Viscusi examined disease prevention and costs at 150 sites for which the EPA made remediation decisions in 1991-92.

Using EPA's methods for estimating risks, Messrs. Hamilton and Viscusi calculated that 731 cases of cancer could be expected over the next 30 years from those sites in the absence of any cleanup. They also show there is less than a 1 percent probability that anyone will ever be exposed to the concentrations used by the EPA in its predictions.

With more realistic exposure estimates used in the calculations, the number of expected cancer cases drops by two-thirds. Even when the EPA's exaggerated risks are accepted as predictive, only 10 of the 150 sites are expected to have one or more cancer cases over the next 30 years. Because no cancer is expected at the other 140 sites, Superfund expenditures at them have no cancer-prevention benefits.

Fully 652 of the 731 possible cancer cases calculated by EPA methods are expected at a single PCB-contaminated site. Given the results from the largest PCB-exposed worker population ever studied, which show PCBs have not caused cancer in humans (Renate D. Kimbrough et al., Journal of Occupational and Environmental Health, 1999), the 652 expected cancer cases may be overestimated by 652.

According to Messrs. Hamilton and Viscusi, the cost of averting a single cancer case can range as high as $7.2 billion, far in excess of the $5 million or so that the EPA places on the value of a life saved and by most analyses of the value of a human life. They calculate that 95 percent of the cancer cases averted by Superfund could be achieved with only 5 percent of the expenditure level.

No one can expect the $7 billion remaining to be spent from Superfund will purchase health benefits. After all, the EPA cleaned up the worst sites including those studied by Messrs. Hamilton and Viscusi first.

Even though Superfund appears to be like mom and apple pie, it is not. In reality, it gives the EPA billions of dollars to spend on an inefficient, costly, feel-good program that does little to reduce human health risks. Truly hazardous waste sites (if there are any) can be cleaned up without Superfund. The difference would be that the EPA would have to justify the worthiness of such projects against other projects considered for federal funding.

Peter VanDoren is editor of Regulation, the Cato Review of Business and Government, published by the Cato Institute. Michael Gough is an adjunct scholar of the Cato Institute (www.cato.org).

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