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Yesterday, EPA Administrator Lisa Jackson went to a children’s hospital to announce the new regulations to control boiler emissions that will address 40-year old gaps in the Clean Air Act. As Jackson and commentators have noted, these regulations will save thousands of lives and have an economic value easily nine times greater than the costs to implement them. An 800 percent return on investment should look pretty good to any of us.  As David Roberts so accurately put it:

The Mercury Rules Announced Today Are a Bona-Fide Big Deal

Examining the discussion of the new regulations suggests a question: has the Environmental Protection Agency and all the advocates for action gotten the value calculation wrong?

Based on an initial look, the answer seems to be yes.

While this is an incredibly complicated arena (how much do we value the life of an American citizen (or resident …), the health of ecosystems, etc …), the EPA and other Boiler MACT advocates seem to have fallen into a long-term pattern of inadequate analysis of the cost/benefit equation for environmental action.

It seems that, yet again, advocates of action are significantly understating the value of action.

Here is one specific example that does not seem to be part of the equation: considering the impact of mercury on the IQ levels of Americans in a Bell Curve distribution and the potential impact this has on future economic performance.

Let’s put aside any question about the accuracy of the Intelligence Quotient, since the specific numbers are not the issue but we are concerned about the Bell Curve and the distribution and, for this post, the concept of the ‘tails’.  The ‘tail’ in the distribution are those extreme cases. Looking at the distribution to the right, perhaps one could suggest the tail to be the below 60 scores and above 140 scores where, total, we are speaking about a few percent of the population.

The scientific research shows a serious impact on IQ levels from mercury poisoning perhaps to the extent, across the entire nation, of lowering the average IQ by one point or more across all births.  In 2005, a Mount Sinai hospital study looked at this issue

The Mount Sinai study, “Public Health and Economic Consequences of Methylmercury Toxicity to the Developing Brain,” … examined the magnitude of the impact on America’s children of the loss of intelligence (IQ) caused by mercury pollution.

Reductions in intelligence due to mercury pollution affect between 316,500 and 637,200 American children each year and will cost the United States an estimated $8.7 billion in lost earnings annually

Putting aside any minor little issue of quality of life for the individuals and families involved, that $8.7 billion of lost wages annually isn’t something to scoff at. The study attributed $1.3 billion of this to power plant mercury emissions. (See also Physicians for Social Responsibility published Coal’s Assault on Human Health, chapter 5 looks at coal’s impact on the nervous system which is mainly an issue of mercury emissions and poisoning.)

Okay, so what is the gap.  After all, these sorts of costs are quite explicitly part of the EPA’s cost/benefit calculation.

There is an item of serious complexity and uncertainty that seems to be left out of these equations which, however, could have overwhelming impact.  When one pushes the average up or down, one is also changing the tail distributions.  E.g., mercury emissions from antiquated coal burning facilities is increasing the percentage of population below (let’s say) a 60 IQ, with all the potential implications for social costs (such as parents who work less to take care of intellectually disabled children, more intensive public school support, etc …), while reducing the percentage of children with IQs above 140.

Yes, again, IQ tests are filled with problems but a 140 IQ is a number often used as the separation point between smart and genius …  E.g., coal mercury emissions are reducing the number of genius Americans. And, reducing that pollution will — as a simple corollary — increase the number of tomorrow’s genius Americans.

Thus, an incredibly difficult question to calculate with exactitude but a very simple question for thinking about:

With the announcement of the Boiler MACT rules, how many future geniuses did the Obama Administration create for America?

How many more Einsteins, YoYo Mas, Spielbergs, Steve Jobs, and so on are now going to be part of America’s future that wouldn’t be without these regulations?  And, since everything devolves down to dollars and cents (without, at times, sense), how many $billions (or $trillions) of economic value will these future geniuses create?  Consider that …. consider Apple’s economic value or how much money Spielberg movies have brought to the economy or the differences Einstein’s brilliance has meant for a century.  As we seek to understand a cost-benefit calculation from this EPA rule announcement, consider this question:

Could just one of those future geniuses to be, fostered due to EPA’s action to reduce toxic mercury emissions, create more than $1.3 billion per year in new economic value for the nation?