2000 CPEO Military List Archive

From: Lenny Siegel <lsiegel@cpeo.org>
Date: Thu, 27 Jan 2000 17:22:08 -0800 (PST)
Reply: cpeo-military
Subject: [CPEO-MEF] HUD Lead Rule Costs & Benefits
I just received the General Accounting Office's analysis of the
Department of Housing and Urban Development (HUD) Lead Rule,
"Requirements for Notification, Evaluation and Reduction of Lead-Base
Paint Hazards in Federally Owned Residential Property and Housing
Receiving Federal Assistance."

As required by law, HUD conducted a cost-benefit analysis of the final
rule, which was issued September 15, 1999. GAO reports, "HUD estimated
the costs associated wth the rule to be $253.2 million for the first
year and the benefits to be $1,143.3 million using a 3-percent discount
rate for increased lifetime earnings and a $324.2 million using a
7-percent discount rate."

It adds, "The primary monetized benefit of childhood lead poisoning
prevention is increased lifetime earnings associated with the higher
cognitive abilities of people who were not lead poisoned as children."

I agree with the general premise. Protecting children from lead dust
will save those children, their families, and society as a whole much
more than it will cost to abate the hazards. 

But the numerical comparison is a case of apples and oranges. The costs
are somewhat predictable, eventually measurable, and allocatable to the
owners of the property. The savings are speculative; they vary
enormously with extraneous factors such as the appropriate discount
rate; and it's unclear to whom the savings will accrue. In fact, it's
not clear whether the agencies and private entities that pay the costs
of compliance will benefit or not from the increased earning power of
the protected children.

See GAO/OGC-99-67, Sepember 29, 1999.


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 222B View St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/968-1126

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