Intervention Costs and Cost-Effectiveness
This chapter cannot follow the detailed format for the economic analysis of different preventive interventions devised for the disease-specific chapters, because the exposures, health effects, and interventions are too varied and because of the lack of overarching examples of economic assessments. Nevertheless, it does present a few examples of the types of analyses available.
Comparison of Interventions
A review of more than 1,000 reports on cost per life year saved in the United States for 587 interventions in the environment and other fields (table 43.2) evaluated costs from a societal perspective. The net costs included only direct costs and savings. Indirect costs, such as forgone earnings, were excluded. Future costs and life years saved were discounted at 5 percent per year. Interventions with a cost per life year saved of less than or equal to zero cost less to implement than the value of the lives saved. Each of three categories of interventions (toxin control, fatal injury reduction, and medicine) presented in table 43.2 includes several extremely cost-effective interventions.
[Table .]
The cost-effective interventions in the air pollution area could be of value in developing countries as their industrial and transportation pollution situations become similar to the United States in the 1960s. The review by Tengs and others (1995) does not report the extent to which the various interventions were implemented in existing pollution control or public health programs, and many of the most cost-effective interventions are probably already in wide use. The review did create a good deal of controversy in the United States, because professionals and nongovernmental organizations active in the environmental field accused the authors of overestimating the costs and underestimating the benefits of controls over chemicals (see, for example, U.S. Congress 1999).
Costs and Savings in Relation to Pollution Control
A number of publications review and discuss the evidence on the costs and benefits of different pollution control interventions in industrial countries (see, for example, U.S. Environmental Protection Agency 1999). For developing countries, specific data on this topic are found primarily in the so-called gray literature: government reports, consultant reports, or reports by the international banks.
Air Pollution
Examples of cost-effectiveness analysis for assessing air quality policy include studies carried out in Jakarta, Kathmandu, Manila, and Mumbai under the World Bank's Urban Air Quality Management Strategy in Asia (Gronskei and others 1996a, 1996b; Larssen and others 1996a, 1996b; Shah, Nagpal, and Brandon 1997). In each city, an emissions inventory was established, and rudimentary dispersion modeling was carried out. Various mitigation measures for reducing PM10 and health impacts were examined in terms of reductions in tons of PM10 emitted, cost of implementation, time frame for implementation, and health benefits and their associated cost savings. Some of the abatement measures that have been implemented include introducing unleaded gasoline, tightening standards, introducing low-smoke lubricants for two-stroke engine vehicles, implementing inspections of vehicle exhaust emissions to address gross polluters, and reducing garbage burning.
Transportation policies and industrial development do not usually have air quality considerations as their primary objective, but the World Bank has developed a method to take these considerations into account. The costs of different air quality improvement policies are explored in relation to a baseline investment and the estimated health effects of air pollution. A comparison will indicate the cost-effectiveness of each policy. The World Bank has worked out this "overlay" approach in some detail for the energy and forestry sectors in the analogous case of greenhouse gas reduction strategies (World Bank 2004).
Water Pollution
The costs and benefits associated with interventions to remove chemical contaminants from water need to be assessed on a local or national basis to determine specific needs, available resources, environmental conditions (including climate), and sustainability. A developing country for which substantial economic analysis of interventions has been carried out is China (Dasgupta, Wang, and Wheeler 1997; Zhang and others 1996).
Another country with major concerns about chemicals (arsenic) in water is Bangladesh. The arsenic mitigation programs have applied various arsenic removal technologies, but the costs and benefits are not well established. Bangladesh has adopted a drinking water standard of 50 Mug/L (micrograms per liter) for arsenic in drinking water. The cost of achieving the lower WHO guideline value of 10 Mug/L would be significant. An evaluation of the cost of lowering arsenic levels in drinking water in the United States predicts that a reduction from 50 to 10 Mug/L would prevent a limited number of deaths from bladder and lung cancer at a cost of several million dollars per death prevented (Frost and others 2002).
Alternative water supplies need to be considered when the costs of improving existing water sources outweigh the benefits. Harvesting rainwater may provide communities with safe drinking water, free of chemicals and micro-organisms, but contamination from roofs and storage tanks needs to be considered. Rainwater collection is relatively inexpensive.
