AWWA ACE59966

Prior to 1996, drinking water standards were required to be as close to absolutely protective of human health as technically and economically feasible. The 1996 Amendments to the Safe Drinking Water Act gave the US Environmental Protection Agency (USEPA) the option to set standards that are less protective than feasible, based on benefit-cost criteria. However, the 1996 Amendments do not simply instruct USEPA to maximize net benefits, as is typical in an economic benefit-cost assessment. Instead, USEPA is instructed to "maximize health risk reduction benefits at a cost that is justified by the benefits". Exactly what this means is unclear. Many commentators on USEPA rules base their evaluations on maximizing net benefits. In contrast, USEPA has explicitly rejected simple maximization of net benefits by citing the priority given to health risk reduction in its legislative mandate. This study considers the impacts of different interpretations of the benefit-cost provisions of the 1996 Amendments. It concludes that the use of a higher monetary value for risk reduction than that currently used by USEPA would more closely reflect the statutory preference for health benefits. However, the author does not advocate this as the preferred decision-making criterion. Instead, an alternative procedure is described in which preference is given for outcomes likely to have positive net benefits over outcomes for which there is substantial uncertainty as to whether the net benefits will be positive. This approach will favor less dramatic regulatory actions in the short term, while allowing for more stringent regulations as uncertainties are reduced over time. Includes 6 references, figure.