ARSENIC IN DRINKING WATER: CASE STUDY 5 1. How should an arsenic standard for drinking water be set from an economics perspective? Be specific and analytically rigorous.

Ideally, the arsenic standard for drinking water should be compliant with the maximum level of contamination goal of 0 ppb, however this is only a reflection of the environmentalist’s standpoint. From an economics point of view, the arsenic standard for drinking water should be determined by cost-benefit analysis. That is, the cost of reducing the maximum level of contamination to a “feasible” figure as close to the MCLG as possible, where the cost of reduction is justified by the benefits. In order to achieve this, a variety of factors must be taken into account: [1] Latency: Most cancers have a lag between exposure to the carcinogen and development of cancer. This value can be anywhere from months to years. Therefore any benefits accrued that will be used in cost-benefit analysis must first be discounted in order to account for the latency of actual cancer development.[2] Accurate quantifiers: While we have established that costs must be justified by the benefits, it is incredibly difficult to place dollar values on the direct and indirect effect of saved lives as some of the net benefit is the result of non-quantifiable benefits such as public health and environmental protection. Unfortunately, this makes our estimates of net benefit unreliable. For this problem sensitivity analyses could be conducted and an estimate of non-quantifiable benefits could be introduced.

Exemption and Variance: There must be a provision that allows for affordable compliance within small systems where the cost of upgrading technology is much higher due to economies of scale. That or variance technology. There must also be the possibility of exemption in order to allow regions that are unable to meet the standards in the allocated time to reach them in an extended period without repercussions.[3]

2. What criteria did the US Congress instruct the EPA to use when setting an arsenic standard? Evaluate the criteria from an economics perspective.

In order to set the arsenic standards, under SDWA, it was compulsory for the EPA to set a maximum contaminant level goal. At the MCLG, there are zero adverse health effects – either known or anticipated – to humans. In the case of arsenic and other carcinogens, the EPA chose to set the MCLG at zero. Part of the reason this was done too, is because the EPA assumes a linear dose response curve, and after exhaustive research by the NRC, there wasn’t enough evidence to debunk the assumption. After the MCLG is set, the EPA must then set the maximum contaminant level. The MCL but be as close to the MCLG as “feasibl[y]”[4] possible, with costs being taken into consideration.