Back in the 1970s, they rebuilt Steve Austin for six million dollars on the appropriately titled television show The Six Million Dollar Man. Today, the average American is worth a little bit more (minus the bionics, of course). According to a recent Associated Press review of agency programs, the Environmental Protection Agency (EPA) values an American life at $6.9 million-a figure that environmental advocates point out is actually 11% lower than it was five years ago. 

While putting an actual monetary value on a human life sounds callous, it is standard accounting procedure for government agencies tasked with implementing potentially life-saving programs. The "value of a statistical life" (VSL) is based on complex calculations that determine how much an individual person is willing to pay to reduce their risks and is an important tool in determining the cost-effectiveness of program implementation. 

For example, suppose the EPA determines that Pollutant X will kill 1,000 people each year. At $6.9 million per life, the total societal cost of these deaths would be $6.9 billion. That means that unless implementation of an anti-Pollutant X regulation costs less than $6.9 billion, it is not cost-effective enough to become a reality. And with the recent decrease in the VSL, critics are concerned that future regulations will be that much tougher to get passed.

"The EPA's decision to reduce the value of a human life when they consider the benefits of new environmental regulations is outrageous and must be reversed," said Senator Barbara Boxer (D-CA), chairman of the Senate Committee on Environment and Public Works. "The EPA may not think Americans are worth all that much, but the rest of us believe the value of an American life to our families, our communities, our workplaces and our nation is no less than it has ever been. This new math has got to go."

It is interesting to note, however, that the EPA's figure actually exceeds the calculations of many other government agencies. For example, in March, the Consumer Product Safety Commission valued an American life at $5 million per person when deciding to enact a proposal to make mattresses less flammable, while the Department of Transportation set an agency standard of $5.8 million per person last year. 

Morgan O'Rourke is editor in chief of Risk Management.