"We recognise that cost-benefit analysis is an important tool for society in determining the most effective use of resources, and in ensuring that society does not devote so much resource to one issue that it results in more harm in other areas than the benefit it creates. It is a way of assessing the proportionality of any response to a health or safety issue."
The SAGE cost-benefit calculation proceeds as follows. We simply describe here what SAGE has done, without commenting on whether it is right or not. SAGE calculates the benefits first with reference to childhood leukaemia, then considers how to extend it to other adverse health outcomes.
Assumptions about risk
To assess the benefit that reducing exposure might bring, it is necessary to make an assumption about what the risk is.
SAGE makes two main assumptions.
- It assumes that there actually is a risk for childhood leukaemia. That is, it makes no allowance for the uncertainty in the scientific evidence.
- It assumes that there is no risk below 0.4 µT but that there is a two-fold increase in risk above 0.4 µT. This is derived mainly from the Ahlbom pooled analysis
The normal risk of childhood leukaemia is 1 in 24,000 per year so the extra risk from the assumed doubling is also 1 in 24,000 per year.
On this basis, magnetic fields would cause 2 cases per year of childhood leukaemia in the UK. One of those cases would be associated with power lines, and the other with a mixture of house wiring and distribution wiring.
Value to society of preventing a single case of childhood leukaemia
SAGE starts with a value used elsewhere in society (e.g. as recommended by HSE) for the value of preventing a fatality: £1M per fatal case prevented
It then increases the value by a factor of 2 because childhood leukaemia is a particularly unpleasant disease, and by another factor of 2 because it is considering involuntary exposure to children: £4M per fatal cases prevented
For non-fatal cases, SAGE makes estimates of the serious impairment to the child's quality and expectation of life, using figures advised by the National Institute for Health and Clinical Excellence (NICE): £0.5M per non-fatal case prevented
SAGE then assumes 30% of cases are fatal and 70% are not to give an overall value to society: £1.6M per case prevented
Value to society of preventing one case per year of childhood leukaemia
SAGE follows Government advice to discount future benefits. It uses the Government's figure of a discount rate of 3.5% per year for the first 30 years and 3% after that. It also assumes the value society places on preventing cases of disease increases by 2% per year. Finally, it considers a period of 50 years.
This gives: £50M per case per year prevented
SAGE applies its cost-benefit analysis to several of the options it considers, but the main issue is around the "corridors" option, so that is the one we consider here.
SAGE says there are two main financial costs of introducing "corridors" (SAGE also lists non-financial consequences).
- Land within the corridor that has not yet been developed but where there is an expectation of future development loses value because that development cannot now happen. SAGE estimates the cost of this as £1-2bn
- Existing homes within the corridor or close to it may lose value as living near a power line is seen as less desirable. SAGE considers this at length and concludes there is a lot of uncertainty as to what the effect on property values would be, but it estimates the cost of this as £0-2bn
In both cases, SAGE calculates the cost to society as a whole. In some cases, the landowner or homeowner would receive compensation, in some cases they would not, but SAGE just calculates the total cost.
Comparison of costs and benefits for childhood leukaemia
SAGE assumes that the entire future homebuilding programme near power lines, which would otherwise take place but would be prevented if "corridors" were introduced, would add between 50% and 100% to the number of homes already near power lines. That is, under the assumptions that SAGE chose to make which includes the assumption that magnetic fields actually do cause childhood leukaemia, the "corridors" option would, in the fullness of time, prevent 0.5 - 1 case of childhood leukaemia per year.
Therefore, SAGE concludes:
- Cost of introducing "corridors": £1-2bn
- Benefit of introducing "corridors" (for childhood leukaemia): £25-50M
Health effects other than childhood leukaemia
SAGE also considers alternative assumptions, that magnetic fields might cause adverse health effects other than childhood leukaemia. In this case, it says the benefit "could be a hundred or so times larger".
Expressing these figures "per home"
The calculation so far has considered the total cost and the total benefit to the UK. SAGE also presents the same calculation a different way, in terms of the cost and benefit per home removed from the magnetic field.
For costs, the total figure of £1-4bn is to introduce corridors which would prevent an estimated 25-50,000 homes being built. Therefore the cost per home is £20k - £160k.
For the benefits, the calculated value to society is £50M for preventing one case per year of childhood leukaemia. There is a 0.45 chance that a child lives in any given home, and, on the SAGE assumptions, the risk they are removed from when the house is removed from a field of 0.4 µT is 1 in 24,000 per year of getting leukaemia. So the value to society per home removed from a field of 0.4 µT is £50M x 0.45 x (1/24,000) = £1k
Therefore SAGE presents the cost-benefit calculation for corridors as:
- Cost per home removed from a field of 0.4 µT: £20k-160k
- Health benefit per home removed from a field of 0.4 µT on the "WHO/HPA" view of the science and assuming magnetic fields above 0.4 µT do cause childhood leukaemia: £1k
- Health benefit per home removed from a field of 0.4 µT on the "California" view of the science: perhaps a hundred or so times larger