(How) is it ethical to expose humans to known toxic substances or carcinogens?

The International Agency for Research on Cancer (IARC) has labeled outdoor air pollution and diesel exhaust as “carcinogenic to humans”, These classifications are based on studies examining the risk from high level lifetime cumulative exposures.

There are many factors considered under the IARC cancer classifications. A critical factor is the intensity and duration of exposure. It is important to make the distinction between lifetime (or long-term) exposure to uncontrolled levels of pollutants, and the very short-term exposure to controlled levels of pollutants that occurs in experimental studies. For example, the risk of smoking two packs of cigarettes every day for thirty years is very different from smoking a single cigarette which does not increase risk in any meaningful way.   

The controlled human-inhalation exposure studies that EPA conducts last only a few hours.  According to a recently released committee report from the National Academies of Sciences, EPA controlled exposure “studies add very little cumulative lifetime pollutant exposures … any increase in chronic disease risk, such as from lung cancer, resulting from experimental exposures would be vanishingly small”. At the same time, the NAS acknowledged the benefits from conducting these studies by providing unique information that cannot be obtained from other studies and impacting NAAQS reviews and regulations.

Have there ever been permanent harms to participants in EPA research?

There have never been any permanent adverse effects as a result of EPA research.