Is the death of an older person as great a loss to society as that of a young person?
The Office of Management and Budget says no. The Environmental Protection Agency says yes. At stake are the cost of pollution regulations and the value of their benefits.
The OMB wants the EPA to stop assuming that all lives helped by pollution regulations are worth the same. It wants people over age 70 to be assigned a lower value, $2.3 million, vs. the $3.7 million now used for everyone.
Almost all economists who deal with the issue think that the lives of older people should be given less value. Indeed, hard-hearted as it seems, not discounting the value of the lives of older people is immoral and unjust.
That’s because one objective of the cost-benefit analysis of pollution control is to minimize illness or premature death for society as a whole. And life-and-death issues, like mundane ones, involve tradeoffs.
The tools of economic analysis, including cost-benefit calculations, are a structured way of weighing tradeoffs to arrive at the best — or at the least bad — outcome. Denying that any tradeoff exists almost always results in worse outcomes.
One starting point for thinking about this is one’s own family. My mother is 89, in a nursing home, and increasingly frail. Her only great-grandchild is 3, bright and energetic. Should society expend $3.7 million dollars to extend my mother’s life? What if doing so means that her great-grandson won’t be able to get childhood vaccinations, or tubes in his ears if he gets another bad round of infections? What if spending $3.7 million to keep my mother alive means he cannot go to college?
Alternatively, consider what our family should do if I got some treatable cancer and had no way to pay for treatment except by selling off our limited assets and taking on debt.
At age 52, would I sacrifice all our net worth to live another 30 years? Perhaps, though not if it meant that my older kids could not go to grad school or my younger son to college nor if it meant that my wife would be destitute in her old age. What if treatment would buy only 10 years of additional life, or five, or only one?
At some point, I would say that it was not worth sacrificing the future of the people I love to prolong my own life for a limited period. I am sure that is what my mother would say right now if there were any tradeoff between her living longer and the well-being of her descendants.
You may protest, as the late Sen. Paul Wellstone often did, that it is unfair to make any household face tradeoffs between the well-being of one generation and that of another. Yet people have done so throughout human existence. Only in recent decades and only in industrialized countries do we have insurance and government programs to insulate households from such choices.
Critics of adjusting the value of reducing pollution because of age say it will inflate the costs of pollution rules and diminish the perceived benefits. That makes it easier for less-stringent rules.
They are right that reducing spending on pollution control is no guarantee that the resources freed up will be used for other desirable programs. But the flip side is that if we do allocate unreasonably large amounts to pollution control, these resources will not be available to meet any other need or want in society.
It is important to emphasize that the argument is neither about whether pollution is harmful nor whether it should be reduced. The argument is about how many resources should be used to that end.
As an environmentalist who also cares about health, education, and other social needs, I am disappointed that EPA administrator Christie Whitman is letting popular politics overwhelm compassionate thinking on this issue.
And it is disheartening to contemplate the $3.7 million baseline value on any human life. Spending that much money to ensure I don’t die of pollution inherently means that I will die of some other cause that might have been avoided at a lower cost.
© 2003 Edward Lotterman
Chanarambie Consulting, Inc.