Why do cost/benefit estimates, put out by industry and by non-profit policy organizations, differ so greatly?
A. Historically, the EPA has understated the benefits and overestimated the costs of complying with most air pollution standards. For example, in 1990, the EPA estimated the costs of an allowance to emit a ton of sulfur dioxide at $400 to $800. The actual costs today are less than $100.(14) Cost estimates produced by various industrial companies have been even more blatantly off target. On average, industry has overestimated the costs of pollution control by a factor of 14 in the last two major air quality rulemakings in California, based on actual costs of compliance.(14) Just as costs are chronically overestimated, the economic benefits of pollution control are systematically minimized. According to the EPA, the public health benefits of their proposed particle standard are at least ten times greater than the costs – $65 billion to $140 billion per year in benefits compared to $ 6.3 billion per year in pollution control costs. Yet, even this impressive cost / benefit ratio understate
