United States
Environmental Protection
Ageno
Office of Air and Radiation
Washington, DC 20460
EPA-452/R-98-003J&
December 1998
REGULATORY IMPACT ANALYSIS
FOR THE NO\ SIP CALL, FIP, AND
SECTION 126 PETITIONS
Volume 2: Health and Welfare Benefits
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REGULATORY IMPACT ANALYSIS
FOR THE NOx SIP CALL, FIP, AND
SECTION 126 PETITIONS
Volume 2: Health and Welfare Benefits
Prepared bn
Office of Air Quality Planning and Standards
Office of Atmospheric Programs
L.S. Environmental Protection Agenc\
December 1998
U.S. Environmental Protection Agency
Region 5, Library (PL- 12J)
77 West Jackson Boulevard, 12th Ftoai
Chicago, IL 60604-3590
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ACKNOWLEDGMENTS
This Regulators Impact AnaKsis \\as prepared as a joint effort of the Office of Air Quaht\ Planning
and Standards (OAQPS). and the Office or Atmospheric Programs (OAP) The preparation of this report
\\as managed b> Scott Mathias (EPA/OAQPS). Sam "Napohtano (EPA/OAP). and Ra\ i Sn\ asta\ a
(EPA/OAP) Both offices thank the many individuals and companies that made significant contributions to
this stud\
OAQPS thanks John Bachmann (EPA/OAQPS). Tamrm Croote (EPA/OAQPS). Robin Dennis
(EPA/ORD). Ron E\ans (EPA/OAQPS). Richard Waynes (USDA). Bnan Hubbell (EPA/OAQPS). Norm
Possiel (EPA/OAQPS). Rosalma Rodngue/ (EPA/OAQPS). Alhson Snvik (EPA/Region 6). Eric Slaughter
(Association of National Estuan Programs). Lam Sorrels (EPA/OAQPS). Abt Associates. Inc . ASI. Dyntel.
Mathtech. Inc . Pechan-A\ anti Group, and Systems Applications International. Inc
OAP thanks Ke\m Culhgan (EPA/OAPj. Sarah Dunham (EPA/OAP). Gene Sun (EPA/OAP). Peter
Tsincotis (EPA'OAP). and ICF Resources. Inc
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Table of Contents
TABLE OF CONTENTS \n
LIST OF FIGURES . \
LIST OF TABLES . . . xi
LIST OF ACRONYMS AND ABBREVIATIONS . . xvn
EXECUTIVE SUMMARY . . ES-1
Chapter 1 INTRODUCTION AND BACKGROUND
1 1 Introduction 1-1
12 The Clean Air Act . . ... 1-2
121 0/one Requirements . . 1-?
122 NO\ Control and 0/one Reduction . 1-4
1 2 3 Title IV N0\ Requirements 1-6
1 2 4 New Source Performance Standards 1-7
1 2 5 Reasonabh Available Control Technology Requirements 1-8
1 2 6 Northeast Ozone Transport Region 1 -8
1 3 0\enie\\ of theNOx SIP Call Rulemakmg 1-9
1 4 Relationship Between NO\ SIP Call. FIP. and Section 126 Petitions 1-10
15 Statement of Need for theNOx SIP Call 1-11
151 Statuton Authority and Legislate e Requirements . 1-11
1 5 2 Health and Welfare Effects of N0\ Emissions 1-11
153 Need for Regulator^ Action . . 1-12
16 Requirements for this Regulators Impact Anah sis 1-13
161 Executive Order 12866 1-13
1 6 2 Regulator) Flexibility Act and Small Business Regulator} Enforcement Fairness
Art of 1996 " 1-13
163 Unfunded Mandates Reform Act . 1-14
164 Paperwork Reduction Act 1-15
165 Executive Order 12898 . 1-15
166 Health Risks for Children . 1-15
1 7 Structure and Organization of the Regulator} Impact Anah sis . 1-16
1 8 References . 1-18
Chapter 2 REGULATORY ALTERNATIVES
21 Elements Considered in De\ eloping Regulator. Alternatives . 2-1
2 1 1 Type of Control ... 2-1
2 1 2 Geographic Scope . . ... 2-2
2 1 3 Potentially Affected Sources . . . . ... 2-4
214 Stnngenc} of Control Le\ el .... . .... 2-4
2 1 5 Effective Dates 2-5
2 1 6 Emissions Budget Trading System Design ... 2-5
2 2 2007 Emissions Estimates for Air Qualit} Modeling . 2-6
VI
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Table of Contents (continued)
2 2 1 Electnciu Generating Unit (ECU) Point Source Emissions
222 Non-EGU Point Source Emissions
223 Area and Mobile Source Emissions
224 Natural Emissions
225 Summan of 2007 Emissions Projections
2 3 References
Chapter 3 AIR QUALITY IMPACTS
3 1 0/one Air Quality Estimates
1 1 Modeling Domain
1 2 Simulation Periods
1 3 UAM-V Model Output
I 4 Comertmg Episode Estimates to Full-Season Profiles
1 5 Extrapolating from Monitored to Unmomtored Grid Cells
1 6 Ozone Air Qualm Results
3 2 M Air Quality Estimates Using RPM
2 1 Modeling Domain
2 2 Simulation Periods
2 3 RPM Model Outputs
.2 4 Development of Total PM Estimates
2 5 RPM PM Air Quality Results
PM Air Quality Estimates Using the S-R Matrix
3 1 Chmatological Regional Dispersion Model
3 2 De-v elopment of the S-R Matrix
3 3 Fugitn e Dust Adjustment Factor
3 4 Normalizing S-R Matrix Results to Measured Data
3 5 De\ elopment of Annual Median PM;, Concentrations
3 3 6 S-R Matrix PM Air Quality Results
Nitrogen Deposition Estimates
Visibility Degradation Estimates Using RPM and the S-R Matrix
References
3 4
3 5
3 6
Chapter 4
4 1
4 2
BENEFITS OF REGIONAL NOx REDUCTIONS
O'vemexN of Benefits Estimation
Issues in Estimating Changes in Health Effects
4 2 1 Baseline Incidences
422 Thresholds
4 3 Ozone and PM Health-Related Benefits
4 3 1 Premature Mortaht}
432 Hospital Admissions
433 Bronchitis
434 Acute Respiratory Symptoms
435 Worker Productivity
4.3 6 Work loss days ... . . .
437 Minor restricted activity days
4 4 Ozone- and PM-related Welfare Effects
2-7
2-7
. 2-7
. 2-7
2-7
2-12
3-1
3-2
3-2
3-2
3-4
3-5
3-6
3-7
3-7
3-9
3-9
3-9
3-11
3-11
3-12
3-13
3-14
3-16
3-17
3-17
3-19
3-20
3-23
4-1
4-10
4-11
4-15
4-16
4-17
4-25
4-27
4-29
4-32
4-34
4-35
4-36
Vlll
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Table of Contents (continued)
4 4 1 Commodit} Agricultural Crops 4-37
442 Commercial Forests 4-39
443 Nitrogen Deposition 4-40
444 Household Soiling Damage . 4-43
445 Visibilm 4-44
4 5 Total Benefits . 4-48
46 Limitations of the Analysis 4-56
4 6 1 Projected Income Growth 4-56
462 Unquantifiable Benefits . . 4-56
463 Potential Disbenefits . 4-60
4 7 References 4-62
Chapter 5 BENEFIT-COST COMPARISONS
5 1 Summan of Cost Estimates 5-1
52 Summan of Benefits Estimates 5-2
53 Summan of Net Benefits . . 5-2
5 4 Limitations to the Benefit-Cost Comparison 5-3
5 5 References 5-5
Appendix A QUANTIFIED UNCERTAINTY IN HEALTH AND WELFARE BENEFITS
A 1 0\eme\\ A-l
A 2 Underh ing Sources of Uncertain!.} A-2
A 3 Quantified Uncertain!} for O/one-related Benefits A-4
A 4 Quantified Uncertain!} for PM-related Benefits A-4
A 5 Statistical Uncertainty and Plausible Ranges A-5
A 6 References A-5
Appendix B SUMMARY OF POPULATION-WEIGHTED AIR QUALITY METRICS B-l
Appendix C EMISSION SUMMARIES FOR BENEFITS-RELATED AIR QUALITY MODELING E-1
Appendix D NONLINEAR CHEMISTRY AND FINE PARTICLE PRODUCTION
D 1 Background D-l
D 2 What this means for NOx Emissions and Sulfate D-2
D3 Reference D-2
IX
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List of Figures
Figure 1-1
Flowchart of Analytical Steps . Page 1-16
Figure 2-1
States Included in EPA's N0\ SIP Call Page 2-3
Figure 3-1
UAM-V Modeling Domain Page 3-3
Figure 3-2
RADM-RPM Modeling Domain Page 3-8
Figure 3-3
S-R Matrix Air Qualitt Modeling Domain Page 3-15
Figure 4-1
Example Methodology of a Benefits Anah sis Page 4-3
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List of Tables
Table ES-1
Regulator} Alternates b> Source Categon Groupings for the NOx SIP Call Page ES-2
Table ES-2
Estimate of Emissions Reductions. Total Annual Costs, and Cost-Effectiveness in
2007 of the EPA's Selected Approach to NOx SIP Call . . PageES-3
Table ES-3
O/one. NOx. and PM Benefits from the NOx SIP Call . . . Page ES-5
Table ES-4
Summary of Benefits in 2007 b\ Major Categon for the Selected Regulator}
Altcrnam e (millions of 1990 dollars) Page ES-6
Table ES-5
Comparison of Annual Costs and Monetized Benefits in 2007 Associated with the
NOx SIP Call (millions of 1990 dollars) Page ES-7
Table 2-1
Emissions Inputs for Air Quahu Models - Page 2-6
Table 2-2
2007 Base Case Proiection Control Requirements b\ Major Sector Page 2-9
Table 2-3
Summar} of Regulator} Alternate es for the 2007 Air Quaht} Modeling
NOx Control Requirements b} Major Sector Page 2-10
Table 2-4
Percent Change from 2007 Base Case in 37-State NOx Emissions Page 2-1 I
Table?-!
Summar} of UAM-V Derived Hourh Ozone Air Quaht} for Da> light Hours (7am to ~pm)
During the Ozone Season . Page ?-6
Table 3-2
Summar} of RPM Derived PM Air Quaht} Page 3-12
Table 3-3
Summan of S-R Matrix Dem ed PM Air Quaht} . . . . . Page 3-18
Table 3-4
Summan of 2007 Nitrogen Deposition in RADM Domain .. . Page 3-19
X!
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List of Tables (continued)
Table 3-5
Summan of 2007 Visibility Degradation Estimates (decnie\\s) Page 3-22
Table 3-6
2007 Population-Weighted Sum of Annual Mean Extinction RPM Results Page 3-23
Table 4-1
Examples of Potential Benefits of Air Quaht> Impro^ements Page 4-5
Tablc-4-2
Unquantified Benefit Categories . Page 4-7
Table 4-3
Quantified and Monetized Health and Welfare Effects Page 4-10
Table 4-4
PM and 0/onc Health and Welfare Concentration-Response Function Summan.
Data Page 4-13
Table 4-5
Quantified 0/one-Relatcd Health Effects Included in the Benefits AnaK sis Page 4-18
Table 4-6
Quantified PM-Related Health Effects Included in the Benefits AnaK sis Page 4-19
Table 4-7
Summan of Mortality Valuation Estimates Page 4-22
Table 4-8
Range of A\oided Oxone-related MortaliU Incidences and Monetan Benefits Associated
\\iththeNO\SIPCall Page 4-23
Table 4-9
A\ ended Long Term PM-related Mortality Incidences and Monetan Benefits
Associated \\ ith the N7Ox SIP Call Page 4-25
Table 4-10
SensitiMU AnaK sis Premature Mortality Benefits Using A\oided Short Term
PM-related Mortality Incidences . . Page 4-26
Table 4-11
Sensitivit> AnaK sis Avoided Post Neo-natal PM-related Mortality Incidences . Page 4-27
XII
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List of Tables (continued)
Table 4-12
A\oided 0/onc-relatcd Hospital Admissions and Monetan Benefits Associated
\\ ith the N0\ SIP Call Page 4-28
Table 4-13
A\oided PM-related Hospital Admissions and Monetan- Benefits Associated
with the NOx SIP Call . Page 4-29
Table 4-14
A\oidcd Incidences of PM-related Chronic and Acute Bronchitis and Monetan,
Benefits Associated with the NOx SIP Call Page 4-31
Table 4-15
A\oided Incidences of O/one-related Respiraton Symptoms and Monetan
Benefits Associated \\ith the NOx SIP Call Page 4-33
Table 4-16
A\oidcd Incidences of PM-related Upper and Lo\\er Respiraton Symptoms
and Monetan Benefits Associated \\ith the NOx SIP Call Page 4-35
Table 4-17
Monetan Benefits from O/one-related A\oided Lost Worker Productnitx
Associated \\ ith the NOx SIP Call Page 4-36
Table 4-18
Axoided PM-related Work Loss Da>s and Monetan Benefits Associated with
the NOx SIP Call ' " Page 4-37
Table 4-1()
A\oided PM-related Minor Restricted Acti\ii> Da\s and Monetan Benefits
Associated \\ith the NOx SIP Call Page 4-38
Table 4-20
Quantified 0/onc- and PM- Related Welfare Effects Included in the Benefits
Anah sis Page 4-39
Table 4-21
Changes in Production of Commodity Crops and Monetan Benefits Associated
with the NOx SIP Call .. . . Page 4-41
Table 4-22
Sensitn it> Analysis AGSIM Generated Monetan- Benefits Due to Changes in Production
of CommoditA Crops Associated with the NOx SIP Call . Page 4-42
Table 4-23
Commercial Forest Monetan- Benefits Associated with the NOx SIP Call . Page 4-43
xin
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List of Tables (continued)
Table 4-24
Monetan Benefits Associated \\ith the N0\ SIP Call from A\oided Costs
of Nitrogen Rcmo\ al in Eastern Estuaries - Page 4-46
Table 4-25
Monetan Benefits from Reduced Household Soiling Associated \\ith the NO\ SIP
Call " ... Page 4-47
Table 4-26
Monetan Benefits from lmpro\ed Residential Visibility Associated with the
NOx SIP Call Page 4-48
Table 4-27
Monetan Benefits from Impro\ed Visibihtx in National Parks m the Southeast
Associated \\ nh the NOx SIP Call Page 4-50
Table 4-28
Monetan Benefits Associated \\ith Visibility Changes in National Parks
Outside the Southeast in the NOx SIP Call Region Page 4-51
Table 4-29
Total Quantified Monetan Benefits Associated \\ith the NOx SIP Call.
Incremental to the 2007 Base Case 0 12 Trading Alternam e Page 4-55
Table 4-30
Total Quantified Monetan Benefits Associated \\ith the NOx SIP Call.
Incremental to the 2007 Base Case 0 15 Trading Alternatn e Page 4-56
Table 4-? 1
Total Quantified Monctan Benefits Associated \\ith the NOx SIP Call.
Incremental to the 2007 Base Case Regionalm 1 Alternatn e Page 4-57
Table 4-32
Total Quantified Monetan Benefits Associated \\ith the NOx SIP Call.
Incremental to the 2007 Base Case 0 20 Trading Alternatn e Page 4-58
Table 4-33
Total Quantified Monetan Benefits Associated with the NOx SIP Call.
Incremental to the 2007 Base Case 0 25 Trading Alternam e . . Page 4-59
Table 4-34
Sources of Uncertainty in the Benefit Anah sis . .. . Page 4-61
Table 5-1
Estimated Total Annual Cost of NOx SIP Call Alternatives in 2007 . Page 5-1
xiv
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List of Tables (continued)
Table 5-2
"Plausible Range" of Annual Quantified Benefits Estimates for NOx SIP
Call Alternatn es in 2007 (million 1990S) . . Page 5-2
Table 5-3
Estimated Annual Quantified Net Benefits for NOx SIP Call Aternatn es
in 2007 (million 1990S) Page 5-3
Table A-1
Point Estimates and Assumed Distributions of MWTP for Health and Welfare
Endpomts in the NOx SIP Call Anah sis Page A-3
Table B-l
2007 Population-Weighted Sum of 1-Hour 0/onc Predictions Above 124 ppb
Adjusted and Extrapolated UAM-V Results Page B-1
Table B-2
2007 Population-Weighted Sum of 8-Hour Average Ozone Predictions
Abo\ e 84 ppb Adjusted and Extrapolated UAM-V Results Page B-2
Table B-3
2007 Population-Weighted Sum of Annual Mean PM:, Predictions
Abo\e 15 04 ...g/rrf RPM Results Page B-3
Table B-4
2007 Population-Weighted Sum of Annual Mean PM,,, Predictions
Abo\ e 50 4 ..g/m~' RPM Results Page B-4
Table C-l
0/one Season Daih NOx Emissions b\ Major Sector and Regulatory Alternatne
UAM-V Inputs Page C-2
Table C-2
Warm Season Annuah/ed NOx Emissions b\ Major Sector and Regulators Alternatne
RADM-RPM Inputs ' ~ Page C-2
Table C-3
Warm Season Annuahzed SO, Emissions b\ Major Sector and Regulatory Altematn e
RADM-RPM Inputs . . ... ... Page C-2
Table C-4
Cold Season Annuahzed NOx Emissions b> Major Sector and Regulator.1 Alternative
RADM-RPM Inputs . . . Page C-3
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List of Tables (continued)
Table C-5
Cold Season Annuah/cd S0: Emissions b\ Major Sector and Regulator. Alternate e
RADM-RPM Inputs Page C-?
Table C-6
Annual N0\ Emissions b\ Major Sector and Regulator.- Alternate e
S-R Matrix Inputs . . Page C-4
Table C-7
Annual SO- Emissions by Major Sector and Regulator. Alternate e
S-R Matrix Inputs Page C-4
xvi
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Select List of Acronyms and Abbreviations
AFS-AIRS Faciht} S>stem
AIRS - Aeromctnc Information Retnc\ al S> stem
ANPR - Ad\ anced Notice of Proposed Rulemakmg
bev - Total Atmospheric Light Extinction Coefficient
BACT - Best Available Control Technology
BEIS - Biogenic Emissions Imenton System
CAA - Clean Air Act
CAAA - Clean Air Act Amendments of 1990
CAPMS - Criteria Air Pollutant Modeling S\stem
CASAC - Clean Air Scientific Ad\isor\ Committee
CASTNet - Clean Air Status and Trends Network
CB - Chronic Bronchitis
CO - Carbon Dioxide
CO1-Cost of Illness
COPD - Chronic Obstructne Pulmonan Disease
C-R - Concentration-Response
CRDM - Chmatalogical Regional Dispersion Model
CV - Contingent Valuation
d\ - Decn ie\\
ECOS - Em ironmental Council of States
EGUs - Electricity Generating Units
EO - Executu e Order
EPA - Em ironmental Protection Agena
FIP - Federal Implementation Plan
H" - Fhdrogen Ion
H-CK- Hxdrogen Peroxide
HNO,-Nitric Acid
hr - Hour
IMPROVE - InteragencN Monitoring for Protection of Visual Emironments
IPM - Integrated Planning Mode!
Kg/ha - Kilograms Per Hectare
knr - Square Kilometer
k\Vh - Kilo\\ alt Hour
LAER - Lo\\est Achie\ able Emissions Rates
Ib - Pound
LDs - Loss Days
LRS - Lo\\er Respiraton Symptoms
MCL - Maximum Contaminant LCAC!
mills/kWh - Mills Per Kilowatt Hour
MM4 - Mesoscale Model, version 4
mmBtu - Millions of British Thermal Units
Mm- Megameter
MOU - Memorandum of Understanding
MRAD - Minor Restricted Activity Da\s
MRRAD - Minor Respiraton Restricted Acti\it> Days
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Acronyms and Abbreviations (continued)
M\V - \lcga\\atts
MWh - Mcga\\att Hours
MWTP - Marginal Willingness to Pa>
NAA - Nonattainment Area
NAAQS - National Ambient Air QuahU Standards
NAPAP - National Acid Precipitation Assessment Program
NCLAN - National Crop Loss Assessment Network
NET - National Emission Trends
NH-, - Ammonia
NLEV - National Lo\\ Emission Vehicle
NMSCs - Nonmelanoma Skin Cancers
NOAA - National Oceanic and Atmospheric Administration
N0\ - Oxides of Nitrogen
NO-, - Nitrate
NPR - Notice of Proposed Rulemaking
NPS - Non-Point Source
NSA - Nitrate. Sulfate. and Ammonium Components
NSPS - Ne\\ Source Performance Standards
NSR - Nc\\ Source Re\ie\\
0-, - 0/onc
OMB - Office of Management and Budget
QMS - Office of Mobile Sources
O&M - Operation and Maintenance
OTAG - 0/one Transport Assessment Group
OTC - 0/one Transport Commission
OTR - 0/one Transport Region
PM - Paniculate Matter
•ppm - Parts Per Million
PRA - Paperwork Reduction Act of 1995
PSD - Prc\ention of Significant Deterioration
R1A - Regulator, Impact Anahsis
RACT- ReasonabK A\ ailable Control Technolog;*.
RADM - Regional Acid Deposition Model
RFA - Regulator) Flexibility Act
RMF - Regional Model Farm
RPM - Regional Paniculate Model
SAB - Science Ad\ ison Board
SBA - Small Business Administration
SBREFA - Small Business Regulator) Enforcement Fairness Act of 1996
SNPR - Supplemental Notice of Proposed Rulemaking
S0; - Sulfur Dioxide
SO/' - Sulfate Ion
SOA - Secondary Organic Aerosols
S-R - Source-Receptor
TAMM - Timber Assessment Market Model
tpd - Tons Per Da>
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Acronyms and Abbreviations (continued)
tp\ - Tons Per Year
TSP - Total Suspended Particulates
..'.g/rrr - Micrograms Per Meter Cubed
UAM-V - Urban Airshed Mode! - Variable Scale
UMRA - Unfunded Mandates Reform Act
URS - Upper Respirator} S>Tnptoms
USDA - United States Department of Agriculture
UV-B - Ultra\iolet-B Radiation
VOCs - Volatile Organic Compounds
WLDs - Work Loss Da\s
WTP - Willingness to Pa\
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EXECUTIVE SUMMARY
EPA has finalized the nitrogen oxides (NOx) State implementation plan (SIP) call rule The "NO\
SIP call" requires selected eastern States to take actions to reduce emissions of NOx that contribute to
nonattainmcnt of ozone standards in do\vn\\md States. For the purposes of this anal} sis. EPA has modeled
an illustratne State implementation scenario This Regulator. Impact Anahsis (R1A) and associated anaKses
are intended to general!} inform the public about the potential costs and benefits that ma}- result from this
scenario, but specific State actions will ultimately determine the actual costs and benefits of the NOx SIP call
At the same time that EPA promulgates the NOx SIP call. EPA is proposing NOx Federal
implementation plans (FIPs) that may be needed if any State fails to comph with the final NOx SIP call
EPA is also proposing a response to Section 126 petitions \\hich \\ere filed b\ eight northeastern States
asking EPA to address air pollution transported from up\\md States Pursuant to Executne Order 12866.
this RIA presents the potential costs, economic impacts and benefits of these rulemakmgs
The existing 1-hour and new 8-hour national ambient air quality standards (NAAQS) for o/onc set
lex els necessan for the protection of human health and the environment Under the Clean Air Act
Amendments of 1990 (CAAA). attainment of these standards depends on the implementation of State-
specific pollution control strategies contained in SIPs. in conjunction \\ith EPA promulgation of national
controls for some sources of pollution, to reduce NOx and \olatile organic compound (VOC) emissions The
NOx SIP call creates an effecti\e. efficient and equitable approach for EPA and the States to promote
attainment with the current and ne\\ o/onc standards
In the NOx SIP call. EPA is setting ozone season NOx budgets for States that are in the SIP call
region In near!} all cases, these budgets \\ill require States to seek lo\\er emissions from their sources to
enable the State to meet its budget lex el To arrive at \\hat the NOx budgets should be for the States, the
Agenc} considered alternatne le\els of reductions that States could reasonabh require of selected stationan
sources to reduce their summer NOx emissions in the future The final set of sources that EPA based the
State NOx budgets on includes large electncit} generating units, industrial boilers and combustion turbines.
stationary internal combustion engines, and cement manufacturing operations Table ES-1 lists the major
regulator} alternatnes that EPA considered for each of the aboxe sectors v\hen it determined State-le\el NOx
emissions budgets m the NOx SIP call The shaded areas in the table sho\\ the options that EPA selected
based large!} on the Agenc} "s determination (as explained in the preamble to this rulemakmg) that the ozone
season NOx controls for a sector \\ere highh cost-effectn e and could be reasonabh implemented in the near
future For the electncit} generating units and industrial boilers and combustion turbines, the Agencx
estimates the costs and emissions changes based on an emissions cap-and-trade program For the remaining
sectors. EPA based its analysis on States placing direct controls on the units co\ered
In this rule. EPA has offered to administer an emissions trading program for the States However.
each State is free to join the program, or alternate eh set up their own program to meet their NOx budget
Therefore, the actual NOx SIP call costs could var\ from those that EPA estimates for the approach on which
it based the NOx budgets
Page ES-1
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Table ES-1
Regulatory Alternatives by Source Category Groupings
for the NOx SIP Call
Electricity Generating Units
(EGUs)--Emissions Budgets
Based on a NOx Limit of:
'< 25 lb mrnHtu"
() 2'i lb mmBtL!
(.' 15 lb mmBta in Northeast.
0 2' i lb mmBiu in Mid\\est &
Southeast
I1 12 lb 'mmBtu in Northeast.
d 15 Ib'mmBtu in Miduest
0 20 Ib'mmBlu in Southeast
(U51b/mmBtu
( ' 1 2 lb mmBtu
Non-Electricity Generating Units (non-EGUs)
Industrial Boilers and
Combustion Turbines— Emissions
Budgets Based on a Reduction
from Uncontrolled Le>els of:
40r; (,
50%
60%
7(1%
All Other Stationary Sources-
Emissions Budgets Based on
Highest Ozone Season NOx
Reduction Achie\ able without a
Source Paying More Than:
$1.500<'ton
S2.ono'ton
S3.000ton
S4 000. ton
S5,000/ton
• Sec Chap!." 1 tor a hreal-An\n ol the State- co\crcd in the NCK SIP call
Emission Reductions. Costs, and Cost-effectiveness
Table ES-2 summan/es EPA estimates of the emission reductions, costs, and cost-effectn eness for
the regulators approach that EPA selected as the basis for the NOx SIP Call's NOx budgets (Please note
Since these estimates uere calculated EPA has fine-tuned its estimates of the NOx budgets and an addendum
to this executix e summary pro\ ides re\ iscd emission reduction, cost and cost-effectn eness information)
Oserall. 82% of the emission reductions expected under this regulators alternate e are expected to come from
the electric po\\ er industn,. at an a^ erage ozone season cost-effectn eness of S1.468 per ton The table
indicates the estimates of direct control costs for sources including costs associated with emissions
monitoring and reporting The table also indicates the total administrative costs to State go\ernments and
EPA In EPA's anah sis to support this rule, the Agency has shown that for the electric po\\er industn. the
largest source of emissions for which it considered controls, a single trading program across the SIP call
region can provide a similar reduction to what direct command-and-control requirements would accomplish.
but do the job at lo\\er cost For this reason, the Agenq is encouraging States to participate in the trading
program that it plans to administer
Page ES-2
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Table ES-2
Estimate of Emission Reductions, Total Annual Costs,
and Cost-Effect!*, eness in 2007 of the EPA's Selected Approach to IS'Ox SIP Call
Sector
ElectnciU Generating Units *
Industrial Boilers and 1 urbines b
Internal Combustion Lngines ;
Cement Manufacturing '
Administrate e Costs lor H(u\
Administrate e Costs to States and KPA
Total
Ozone Season
NOx Emission
Reductions
(1,000 tons)
938
104
83
16
1.141
Total Annual Cost
(millions 1990S)
$1.378
$153
$100
$24
$6
$2
SI, 660"
Average Ozone
Season Cost-
Effecti\ eness
(S per ozone
season ton)
$ 1 .468
$1.46"
$1.215
$1.458
* Does not include additional monitoring costs (see later rou }
11 Include*, additional monitoring and other administratee costs associated with participating in the NO\ emissions trading program
' Includes additional monitoring and other administratee costs associated with the SIP call rule
t Numbers do nol add due to roundinc
Economic Impacts
EPA considered \\hat the economic impacts could be. if States implemented the regulator} approach
that EPA used to calculate the NOx SIP call budgets for electricity generating units Electricity prices could
potential!} rise in the NOx SIP call region b} as much as 1 6 percent in 2007, if the po\\er industry is pricing
its po\\cr on the basis of marginal costs in a full} competitne emironment The price increase \\ill be less, if
these assumptions regarding the nature of the competitn e em ironment do not hold There will be more nc\\
electric generation capacity built in response to the rule than will retire earl} (there will be little generation
capacit} that closes) On net. EPA expects this NOx SIP call to create more ne\\ jobs (from pollution control
operations and increased natural gas use) than it reduces (due to a small decline in forecasted coal demand]
The anah sis of non-EGU sources indicates that fe\\er than 5% of potential!} affected firms
experience costs in excess of 1% of re\enues. and just over 2% of potentially affected firms experience costs
in excess of 3% of re\enues EPA also examined the potential affect of the NOx SIP call on small entities
that meet the Small Business Administration's definition of "small " The Agency adopted several v\ays of
minimizing potential impacts on small entities for the final NOx SIP call rulemaking Of the nearly 1.200
small entities (both EGU and non-EGU) in the NOx SIP call region that have large NOx emissions sources.
onh 150 are potential!} affected by the SIP call rule, and only 41 have potential compliance costs in excess of
1% of total revenues EPA expects States to use these results to help them design control strategies that will
reduce or eliminate adverse impacts on small entities
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Benefits
The estimated change in the incidence of health and \\elfare effects is assessed for se\eral modeled
air quaht> scenarios The estimated changes in incidence are then monetized b> multiplying the estimated
change in incidence of each endpomt b> its associated dollar \alue of axoidmg an occurrence of an ad\erse
effect These endpomt-specific benefits are then summed across all affected areas to den\ e an estimate of
total benefits Because there are potential!) significant categories for \\hich health and \\elfare benefits are
not quantified or moneti/ed due to a lack of modeling and economic data, the benefit estimates presented in
this anahsis should be considered incomplete
There are se\ eral possible sets of assumptions underh ing the benefits estimates in this anal) sis The
set of assumptions underh ing the lo\\ end estimate represent a conservame approach which assumes that
both human health and the em ironment are less response c to changes in air pollutants For example, the lo\\
end assumes that no health effects are associated \\ith changes in PM,, concentrations belo\\ a threshold of
15 . g'lrf In addition, the \o\\ end assumes that reductions in XOx emissions ha\c less positue impacts on
PM air qualm relatn e to the high end case The high end estimate is based on a set of assumptions that
represent potential benefits \\hich \\ould result if human health and the environment are more response e to
reduced pollution le\els than estimated in the lew end In addition, the high end assumes that reductions in
NOx emissions ha\ e greater positn e impacts on PM air qualm relatn e to the lov\ end It should be
emphasi/ed that the high and lo\\ ends of the plausible range are not the same as upper and lov\er bounds
For mam of the quantltatne assumptions imohed in the anahsis. credible, though less plausible, arguments
could be made for an c\ en higher or lo\\er choice, \\hich could lead to an even greater spread between the
high end and lo\\ end estimates
Table ES-3 lists the anticipated health and \\elfare benefits categories that are reasonabh associated
\\ith reducing the regional transport of NOx. specifying those for \\hich sufficient quantltatne information
exists to permit benefit calculations Because of the mabihu to moneti/e some existing benefit categories.
such as changes in pulmonan function and altered host defense mechanisms, some categories are not
included in the calculation of the moneti/ed benefits
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Table ES-3
Ozone, NOx, and PM Benefits from the NOx SIP Call
Benefits of Ozone and NOx Reductions--
Reductions in:
Benefits of PM Reductions-
Reductions in:
Quantified
Health
Mortality (short-term exposures)
Hospital admissions for all respirators illnesses
Acute respirators ssmptoms
Mortality (long- and short-term exposures)
Hospital admissions for
all respirator, illnesses
congests e heart failure
ischemic heart disease
Acute and chronic bronchitis
Lower and upper respiraton symptoms
Minor restricted actisih dass
Work loss davs
Welfare
Commodit\ cropsield losses
Commercial loicst \icld losses
Worker productis its losses
Household soiling
Impaired sisibilm
Nitrogen deposition to estuanne and coastal \\aters
Unquantified
Health
Air\\a\ responsiseness
Pulmonan inflammation
Increased siisceptibilit\ to respirator.
infection
Acute inflammation and respiraton, cell damage
Chronic respiraton damage Premature aging of lungs
UV-B (disbcnefin
Changes in pulmonan function
Morphological changes
Altered host defense mechanisms
Other chronic respirators disease
Cancer
Welfare
Lcossstem and \egetation effects in Class I
areas (e g . national parks)
Damages to urban ornamentals (e g .grass.
flowers, shrubs and trees in urban areas)
1 run and \egetablc crop losses
Reduced \ield:> of tree seedlings and non-
commercial forests
Damage to ecoss stems
Materials damage (other than consumer
cleaning cost sa\mgsi
Nitrate-, in drinking water
Brown clouds
Passne fertilization (disbenellt)
Materials damage (other than consumer cleaning
cost sasmgs)
Damage to ecoss stems (e g . acid sulfatc
deposition)
Nitrates in drinking water
Brown clouds
Table ES-4 sho\\s the range of total monetized benefits for the mam health and welfare endpomt
groups associated with the emissions changes that most closely approximate the NOx SIP call budget The
range of \ alues in this table is intended to represent the plausible range of the benefits that may result from
this rule after accounting for important uncertainties
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Table ES-4
Summary of Benefit*, in 2007 b> Major Categor> for the
Selected Regulator} Alternate ea
(millions of 1990 dollars)
Categon
O/one Health and Welfare
Agriculture & Forestn
\itiogen Deposition
I'M Health and Welfare
Total
"Lo«" Assumption Set
$27
$260
$238
$5~5
SI, 100
"High" Assumption Set
$1.353
$574
$238
$2.005
S4,170
1 Potential benefit categone-. that ha\e not been quantified and monetized are listed in Table LS-?
Comparison of Costs and Monetized Benefits
Cost-benefit analx sis pro\ ides a \ aluable framework for organizing and evaluating information on
the effects of cm ironmental programs This benefit-cost comparison is intended to generallx inform the
public about the potential costs and benefits that max result when control strategies to limit NO\ emissions
for mitigating regional o/onc transport arc implemented bx the States Table ES-5 presents a comparison of
moncti/cd benefits and total annual costs for the selected alternative for setting State budgets in the N0\ SIP
call From EPA's examination of fi\ c major alternate cs for setting the NO\ budget, there are sex era! major
conclusions that can be drawn from this RIA
• For the "High" assumption set. moncti/ed net benefits are positixc and substantial for all regulator)
altemalixes
• As modeled. Regionahtx 1 is an inferior altcrname. i e . exen though 0 20 Trading is less stringent it
achicxcs greater benefits at loxxcr total costs
• Net benefits arc greatest at the most stringent regulator) alternatixc exaluated. i e . 0 12 Trading For
the "High" assumption set. net benefits are approximate!) 33 percent higher for the 0 12 Trading
relatixe to the 0 15 Trading alternatixc For the "Loxx" assumption set. net benefits are positix-c onlx
for the 0 12 Trading alternate e
• While net benefits are negatixe for the "Loxx" assumption set for all but the 0 12 Trading alternatixe.
it is important to remember that xvhilc all of the costs are included, mam benefit categories could not
be quantified In addition, the "Loxx" assumption set estimate assumes that there are no reductions in
premature mortality associated xxith ozone reductions Relaxing this one assumption xvould result in
positix e net benefits for all alternatives for the "Loxx" assumption set
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Table ES-5
Comparison of Annual Costs and Monetized Benefits in 2007 Associated with the NOx SIP Call
(millions of 1990 dollars)
Benefits
Case
"Lou ' Assumption Set
' High" Assumption Set
Total Annual
Costs
$1.660
$ 1 .66(1
Annual Monetized
Benefits*
SI. 100
S4.]7d
Annual Net
Benefits
($560)
$2.510
*There are man\ benefit^ of the \O\ SIP call thai EPA was not able to quantih or monetize
Limitations
Comparing the benefits and the costs pro\ ides one frame\\ork for pohc> makers and the public to
assess pohc\ altematncs Not all the potential costs and benefits can be captured in am anahsis Houcxcr.
EPA is generalh able to estimate reasonabh well the costs of pollution controls based on today's control
technology and assess the important impacts when it has sufficient information for its analysis EPA
compiled through the OTAG process and from mam other sources sufficient information for this
rulemaking There are. ho\\e\ er. important limitations in the RLA anah sis
• EPA is increasingly able to estimate benefits from pollution controls, but EPA belie\ es that
there are mam important benefits that it can not quantify or monetize that are associated
\\ilh the NOx SIP call, including mam health and \\elfarc effects. There are also potential
disbenefils that are not quantified, including passne nitrogen fertih/ation and UV-B
screening
EPA must empio) different pollutant models to characterize the effects of alternate c
policies on rele\ ant pollutants Not all atmospheric models ha\ e been widch \ ahdated
against actual ambient data The Agenc> has chosen the best a\ ailable models for its
application needs in this RIA and tried to make the most reasonable assumptions possible in
using them for predicting air qualit} changes
• There are some data limitations in some aspects of the RIA. despite the Agenc> "s extensn e
efforts to compile information for this rulemaking While the\ exist. EPA behe\ es that it has
used the models and assumptions that are made to conduct its anah sis in a reasonable wa\
based on the a\ ailable e\ idence. but this should be kept in mind \\hen reviewing various
aspects of the RJA's results
Another factor that adds to the uncertainty of the results is the potential for pollution control
innovations that can occur o\ er time It is impossible to estimate how much of an impact, if
any. ne\\ technologies that are just now emerging ma> ha\ e m lowering the compliance costs
for the NOx SIP call, which goes into effect in 2003 We can only recognize their possible
influence
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There is the uncertainty regarding future costs that exists due to the flexibility that occurs
under the emissions cap-and-trade program that EPA is encouraging the States to set up
The anah sis that EPA has done to date has been fairh consen ati\ e in considering the
electric power mdustn and large industrial boilers and combustion turbines operating
separate!} under their o\vn trading programs In reality. the> should enter the same trading
pool and there should be greater efficiency and lower costs that result
Qualitatne and more detailed discussions of the abo\s and other uncertainties and
limitations are included in the analysis Where information and data exists, quantitative
characterizations of these uncertainties are included Ho\\e\er. data limitations prevent an
cnerall quantitatn e estimate of the uncertainty associated \vith final estimates Nevertheless.
the reader should keep all of these uncertainties and limitations in mind \\hen reviewing and
interpreting the results
Despite the abo\ e limitations. EPA behe\ es that the RIA pro\ ides ex idence that the benefits
resulting from the NOx SIP call \\ill be up to t\\o and one-half times the costs
Addendum to Executive Summary
In response to comments. EPA has re\ ised the State NOx budgets that it set for the electric po\\er
mdustn on the basis of 15 Ibs/mmBtus in the final days of the rulemaking process The SIP call region
budget \\as lowered from 564 thousand tons of NOx during the o/one season to 544 thousand tons of NOx
The Agcnc> also decided to create a "compliance supplement pool" for use in 2003 and allow banking \\ith
flo\\ controls in the trading program that EPA is encouraging States to undertake
For the adiustment of the NOx budget to 544 thousand tons for the electncit} generating units, the
Agcncx estimates that there \\ill be a reduction of ozone season NOx emissions b> 958 thousand tons in 2007
at an annual cost of SI.440 million This is an axerage cosl-effectn eness of SI.503 per ton of NOx
reductions during the o/one season The total o/one season NOx emission reductions from the NOx SIP call
if the States implement the program the \\a> EPA used to set the budget is 1.161 thousand tons
An adjustment to the emissions im enton for the non-EGL" sources \\as also made as a result of
public comments The rcanahsis following these emission im enton adjustments indicated onh minor
changes in the costs Benefit estimates are not recalculated for either adjustments to the NOx budget or
emission in\ enlon. but the conclusions drawn from the RJA are not expected to differ sigmficanth
Page ES-8
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Chapter 1. INTRODUCTION AND BACKGROUND
1.1 Introduction
This document presents a Regulators Impact AnaK sis for the final NOx SIP call rule, which
addresses regional transport issues related to ozone attainment1 This rule requires certain States to take
action to reduce emissions of nitrogen oxides (NOx) that contribute to nonattainment of ozone standards in
downwind States2 This RIA also satisfies the analytical requirements for the proposed NOx Federal
Implementation Plan (FIP) and Clean Air Act (CAA) section \26 petition actions. The proposed FIP ma> be
needed if am State fails to re\ ise its SIP to compK \\ ith the final NOx SIP call The proposed action under
CAA section 126 responds to petitions filed \\ith EPA b> eight Northeastern States requesting that EPA
pro\ ide relief from emissions sources in se-\ eral up\vmd States that ma> be contributing to ozone
nonattainment in the petitioning States'
The Clean Air Act (CAA) requires States to demonstrate attainment of the National Ambient Air
Quality Standards (NAAQS) for ozone Mam States ha\ e found it difficult to demonstrate attainment of the
ozone NAAQS due to the \\idespread regional transport of ozone and its precursors. NOx and \olatile
organic compounds (VOCs) The Ozone Transport Assessment Group (OTAG) was established in 1995 to
undertake an assessment of the regional transport problem in the Eastern half of the United States OTAG
was a collaborate process among 37 affected States, the District of Columbia, the U.S Environmental
Protection Agenc\ (EPA), and interested members of the public, including emironmental groups and industry
representames
OTAG concluded that regional reductions in NOx emissions are needed to reduce the transport of
o/onc and its precursors OTAG recommended that major sources of NOx emissions (utility and other
stationan sources) be controlled under State NOx budgets, and also recommended dexelopment of an
emissions trading program
After a re\ lew of OTAG's anah sis. findings, and recommendations. EPA proposed a rule to limit
summer season NOx emissions in a group of States that the Agenc\ behe\ es are significant contributors to
o/onc in downwind areas In a No\ ember 7. 1997 Notice of Proposed Rulemaking (NPR). EPA made a
: This document is the seeond \olume a u\o \olume set Volume 1 co\er^ the estimated costs and economic
impacts of the final N()\ SIP call rule
: Ground level (or troposphenc) ozone is an air pollutant that forms when its two primary components, oxides
of nitrogen and \ olatile organic compounds . combine in the presence of certain meteorological conditions Ozone is
associated \\ ith a vanen of ad\ erse effects both to human health and to the environment For more information on these
ad\ erse effects refer to Chapter 4 of this RIA
3 Unless necessarv to provide specific emphasis, the term "NOx SIP call" \\ill be used (rather than "FIP" or
•'section 126 petitions") throughout this report when referring to the regulatory framework that is analyzed and reported
in this RIA See section 1 4 for additional detail on the analytical relationship between these three regulator) actions
4 NOx emissions reductions \\ere proposed for 22 States and the District of Columbia
Page 1-1
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determination that transport of o/one from certain States in the OTAG region" makes a significant
contribution to nonattamment. or interferes with the maintenance of attainment, \\ith the ozone NAAQS in
downuind States (FR 1997a) EPA proposed a summer season NO\ budget (in tons of NOx) for each of
these States These States \\ill be required to amend their State Implementation Plans (SIPs) through a call-in
procedure established in Section 110 of the Clean Air Act Amendments of 1990 (CAAA) In a Ma\ 1998
Supplemental Notice of Proposed Rulemakmg (SNPR). EPA made technical corrections to the State NOx
budgets, and dc\ eloped a proposed trading rule to provide for emissions trading (FR 1998a) The SNPR also
included an anaksis of the air quality impacts of the proposed rule The State NOx emissions budgets.
trading rule, and related provisions are no\\ being promulgated as a final rule
A technical background support document prepared for the November 7. 1997 NPR estimated costs
and emissions reductions associated \\ith an assumed strategy that States might take to achie\mg the
proposed budgets (EPA. 1997a) These analyses were updated to reflect technical corrections to the
population of sources and growth estimates on \\hich the State-specific budgets were based and assess the
effects of the proposed trading system, in an anaksis supporting the April 1998 SNPR (EPA 1998a)
This document pro\ ides the supporting Regulator} Impact Anah sis (RJA) for the final rule This
anah sis expands and updates the pre\ lous analyses, to reflect the pro\ isions of the final rule and to pro\ ide
anahsis of the potential benefits and economic impacts as well as the costs, emissions reductions and air
qualm impacts associated \\ith the rule
The remaining sections of this chapter address the following topics
1 2 Rele\ ant requirements of the Clean Air Act.
1 ? O\ en ie\\ of the NOx SIP call rulemaking.
] 4 Relationship betueen the NOx SIP call. FIP. and section 126 actions.
] 5 Statement of need for the NOx SIP call.
1 6 Administrate requirements addressed b\ this RIA.
1 7 Structure of the RIA and orgam/ation of this document, and
1 8 References for Chapter 1
1.2 The Clean Air Act
The 1970 Clean Air Act Amendments required EPA to issue, periodical!) revie\\. and. if necessary
rc\ ise. NAAQS for ubiquitous air pollutants (Sections 108 and 109) States are required to submit SIPs to
attain those NAAQS. and Section 110 of the CAA lists minimum requirements that SIPs must meet
Congress anticipated that all areas \\ould attain the NAAQS b\ 1975 In 1977. the CAA was amended to
pro\ ide additional time for areas to reach the NAAQS and included the requirement that States reach the
The OTAG region consists of 37 Slates east of 104° W longitude
Page 1-2
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NAAQS for o/onc b> 1982 or 1987 In addition, the 1977 amendments included proMSions that required
SIPs to consider ad\erse do\\Ti\vmd effects and allowed downwind States to petition for tighter controls on
upwind States that contribute to their NAAQS nonattainment status
In 1990. the Clean Air Act was again amended This section outlines requirements of the 1990
Clean Air Act Amendments (CAAA) related to NOx reductions and the NOx SIP call The discussion
includes the o/onc and NOx requirements and a re\ ie\\ of the guidelines for ne\\ or ad\ anced air emissions
control technologies
1.2.1 Ozone Requirements
The CAAA included provisions designed to address the continued nonattainment of the existing
ozone NAAQS. specified requirements that \\ould apply if EPA reused the existing standard, and addressed
transport of air pollutants across State boundaries
In 1991 and 1992. areas not in attainment \vith the 1-hour ozone NAAQS \\ere placed in one of five
classifications, based on the degree of nonattainment Requirements for moving to\\ard attainment including
definitions of "major source" for VOCs and NOx. attainment dates and ne\\ source offset ratios, were
established for each of the fi\e classifications Within an area known as the Northeast Ozone Transport
Region (OTR). all sources emitting 50 tons or more of ozone forming pollutants a \ear are defined as "major
sources." regardless of their current attainment classification Certain emissions limits apph to major
sources, and e\cn more stringent requirements apph for ne\\ major sources in nonattainment areas
Since passage of the 1990 CAAA. EPA has reused the NAAQS for oz.onc EPA is required to
reuew the NAAQS at least e\er> fi\e \ears to determine whether, based on new research, reusions to the
standards are necessaiy to continue to protect human health and the em ironment As a result of the most
recent re\ ie\\. EPA rc\ ised the NAAQS for both paniculate matter and ozone The pre\ lous ambient air
quaht> standard for ozone \\as 0 12 ppm based on 1-hour a\eragmg of monitoring results The reused
standard \\as set at 0 08 ppm based on an 8- hour a\eragmg period The 1-hr standard remains in effect until
EPA determines that a gnen area has air quahh meeting its 1-hour standard This is necessary to ensure
continued progress in those areas and a smooth transition between the two standards
On Juh 16. 1997. President Clinton issued a directne to EPA on the implementation strategy for the
new ozone and paniculate NAAQS The goal of the implementation strateg> is to pro\ ide flexible, common-
sense, and cost-effectn e means for communities and businesses to comph with the new standard The EPA
has issued proposed guidance for public comment on implementation of the revised standards (August 24.
1998. 63 FR 45060; Additional guidance will be proposed in October 1998 The August and October
guidance will be combined and issued as one document in December 1998 The implementation strategy
includes
Endorsement of a Regional Approach' Citing EPA's work with the OTAG. the implementation
strategy notes that ozone needs to be addressed as a regional problem. The Directive indicates that.
based on OTAG recommendations. EPA will propose a rule to provide a flexible, common-sense,
and cost effective means for communities and businesses to comph with the new standards The
strategy states that EPA will encourage and assist the States to de\ elop a regional emissions cap-and-
trade system, modeled on the current acid rain program, as a way to achieve reduction in NOx
emissions at lower cost
Page 1-3
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Transitional Classifications Areas that attain the 1-hour standard but that do not attain the ne\\ 8-
hour standard will be eligible for a specific "transitional" classification, if the> participate in a
regional strateg> and/or submit earh plans addressing the ne\\ standard EPA \\ill re\ ise its rules for
ne\\ source re\ ie\\ (NSR) and conformin so that States \\ill be able to comph \\ith the ne\\
standards \\ith onK minor re\ isions to the existing programs in such transitional areas Areas which
\\ill achieve attainment as a result of the regional strategy need not implement am additional local
controls Areas that \vill not achieve the 8-hour standard e\ en \Mth the regional strategy are eligible
for transitional status if the\ submit revised SIPs in the \ ear 2000 demonstrating attainment of the 8-
hour standard on the same schedule as the regional transport requirements
Cost-E/tective Implementation Strategies EPA \\ill encourage States to design strategies for both
the PM and o/one standards that focus on getting low cost reductions and that limit the cost of
control to under SI0.000 per ton for all sources EPA will encourage market-based strategics to
lo\\er the cost of attainment and stimulate technology innovation
The X0\ SIP call, therefore. pla\s an important role in the implementation strategy for the ne\\ o/one
NAAQS. b> instituting a regional strategy that \\ill encourage cost-effecti\e attainment of the ne\\ standard
1.2.2 NOx Control and Ozone Reduction
To address the CAAA pro\ isions regarding continued nonattamment of the existing ozone NAAQS.
EPA's post-1994 attainment strateg) guidance for the 1-hour ozone standard called for continued emissions
reductions \Mthm o/one nonattamment areas together \\ith a national assessment of the o/one transport
phenomenon Recogni/mg that no mdn idual state or jurisdiction can effectn eh assess or resoh e all of the
issues rele\ ant to o/one transport, the Em ironmental Council of States (ECOS) formed a national \\ork
group to address o/one pollution ' OTAG \\as established to assist states east of the Mississippi Ri\er to
attain federal o/onc standards and to dc\ elop regional strategies to address regional transport problems The
multi-state, multi-stakeholder OTAG process included input from State and local governments, industry.
em ironmental groups, and the Federal go\ emmcnt The stated goal of OTAG was to
Identif) and recommend a strategy to reduce transported ozone and its precursors which, in
combination \\ith other measures, \\ill enable attainment and maintenance of the national ambient
o/one standard in the OTAG region A number of criteria will be used to select the strategy
including, but not limited to. cost effectneness. feasibility and impacts on o/one le\els (OTAG.
1995)
OTAG's \\ork included de\elopment of a comprehensne base-} ear (1990) emissions imenton for
use in all OTAG anah ses The im enton. contained information pro\ ided b> the States and re\ ie\\ed b>
OTAG for point, area, and mobile sources State-specific growth factors were used to project emissions for
the \ears 1999 and 2007. which represent the CAAA attainment dates for certain nonattamment areas
11 ECOS is a national organization of environmental commissioners with members from the 50 States and
territories
Information on OTAG and copies of documents produces b\ the group can be accessed on-line at
http //\v\v\\ epa gov/ttn/otag
Page 1 -4
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Baseline 2007 emissions \\ere also adjusted to reflect the effect of \ anous controls required under existing
regulator) programs or expected from future programs
OTAG then conducted modeling of N0\ and ozone across the OTAG region for several scenarios
using geographic and atmospheric models
Strategy Modeling OTAG Strategy Modeling \\ as done in sex eral phases, and included analx sis of
more than 25 emission control strategies OTAG found that domain xxide emissions of NOx in the 2007
baseline are approximate!) 12 percent lo\\er than 1990 and emissions of VOC are approximate!) 20 percent
lower Thus, existing CAA programs are expected to produce a reduction in ozone concentrations in mam
nonattainment areas Ho\\e\er. the anal) sis sho\ved that some areas current!) in nonattainment will likelx
remain so in the future and that new 8-hour nonattainment and/or maintenance problem areas ma) develop as
a result of economic growth in some areas
Geographic Modeling OTAG conducted geographic modeling to isolate the effects of NOx
reductions on specific subregions Among other results. OTAG found that a regional strategy focusing on
NOx reductions across a broad portion of the region \\ill help mitigate the ozone problem in manx areas of
the East Further, a regional NOx emissions reduction strategy coupled with local NOx and/or VOC
reductions max be needed to achie\e attainment and maintenance of the NAAQS in the region
This analxses conducted bx OTAG (OTAG 1997). as well as EPA's analxses in support of the new
ozone NAAQS (EPA 1997b). sho\\ed the important role that reducing NOx emissions plays in the reduction
of ozone le\els The extensixe air qualit) modeling performed b) OTAG indicated that both ozone and NOx
can be transported long distances, up to 500 miles While reductions in either NOx and VOCs max reduce
o/one in localized urban areas, onlx NOx reductions xxould result in lower ozone lex els across the region
The OTAG analxses showed a correlation bet\\een the magnitude and location of NOx reductions and the
magnitude of reductions in ozone lex els in downwind areas OTAG. therefore, reached the folloxvmg
conclusion
Regional NOx reductions are effectixe in producing ozone benefits, the more NOx reduced.
the greater the benefit Ozone benefits are greatest \\here emission reductions are made and
dimmish \\ ith distance Elex ated and low lex el NOx reductions arc both effectix e (OTAG
1997. pp 51-52)
Based on the exidence of the relationship betxxeen NOx emissions and regional ozone lexcls. OTAG
recommended that a range of NOx controls be applied in certain areas of the OTAG region A \\ide vanet) of
sources arc responsible for NOx emissions, including electncit) generating units, other (non-utihtx )
stationary sources, area sources, non-road mobile sources, and highxvax vehicle sources OTAG did not
suggest anx one "right" approach to reducing major source NOx emissions Hoxxexer. OTAG developed a
number of specific recommendations for EPA pertinent to the NOx SIP call, including the following *
Summaries of the OTAG findings and recommendations are prox'ided in OTAG 1997
Page 1 -5
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OTAG-relatcd controls should be implemented in the "fine grid" states &
The range of utilm N0\ controls should fall between Clean Air Act controls and the less stringent of
85" u reduction from the 1990 rate (Ib/mmBtu) or 0 15 Ibs of N0\ /mmBtu summer heat input
The strmgenc} of controls for indn idual large non-utiht} point sources should be established in a
manner equitabh \\ith utilm controls, and RACT should be considered for individual medium non-
utilit} point sources where appropriate "' OTAG recommended that EPA calculate statewide NOx
tonnage budgets based on a specified relationship between control le\els for coal-fired po\\er plants
and control targets (emission reduction percentages) for large and medium non-utiliU point sources
OTAG stated that market-based approaches are recogni/ed as having a number of benefits in relation
to traditional command and control regulations, and that States ha\e the option to select market
s} stems that best suit their needs Thc> described t\\o basic approaches that States might use to
implement NOx emissions market s> stems, and recommended that a joint State/EPA Workgroup be
formed to dc\ elop design features and implementation pro\ isions for market s\ stems that could be
selected b> the States
OTAG also made recommendations that EPA de\elop and adopt a \ anet} of specific national regulations that
\\ere assumed for the modeling to result in reduced emissions of VOCs and/or NOx. and to reach closure on
the Tier 2 Motor Vehicle Stud>
The recommendations resulting from the extensne anal} sis and air qualih modeling conducted b\
OTAG ha\e plaxcd a major role in the design of the NOx SIP call
1.2.3 Title IV NOx Requirements
Title IV of the CAAA requires annual reductions in NOx emissions The Acid Rain NOx Program
under Title IV incorporates a t\\o-phased strategy to reduce NOx emissions In the first phase, starting
Januarv 1. 1996. some Group 1 boilers (i e . drv bottom \\all-fired boilers and tangential!} fired boilers) are
required to comph \Mth specific NOx emission limitations In the second phase, starting Januan 1. 2000.
the remaining Group 1 boilers must comph \\ith more stringent NOx emission limits :: Further. Group 2
I he fine grid .slates include those modeled using UAM-V at a grid resolution of 12 knr All other areas
constitute the coarse grid \\hich is modeled at a grid resolution of 36 knr Coarse grid states are Florida. Louisiana.
'1 exas Arkansas. Oklahoma. Kansas. Nebraska. North Dakota. South Dakota, and Minnesota
K O IAG prouded specific definitions of large and medium point sources, for purposes of their
recommendations
'' The affected dn-bottom \\all-fired boilers must meet a limitation of 0 50 Ibs of NOx per mmBtu averaged
o\er the > car. and tangential!} fired boilers must achieve a limitation of 0 45 Ibs of NOx per mmBtu. again a\eraged
o\er the \ ear (FR 1995)
:- Annual a\erages of 0 46 Ib/mmBtu for dn -bottom wall-fired boilers and 0 40 Ib/mmBtu for tangential!}
fired boilers
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boilers (i c . \\ ct bottom \\ all-fired boilers. c\ clones, boilers using cell-burner technology. and \ ertically fired
boilers) must coinph \\ith recenth established emission limits !'
Compliance results for 1996 shov> that, from 1990 to 1996. the Phase I affected population's
a\erage X0\ emission rate declined b\ 40 percent O\erall N0\ emission reductions between 1990 and
1996 for the affected boilers totaled about 340.000 tons, i e a reduction of 33 percent (EPA. 1997c) In
Phase II . about 1 17 million tons per \ ear of NOx reductions are projected to result from the Acid Rain NO\
Program requirements (EPA. 1996)
In de\ eloping State budgets for the NOx SIP call. EPA considered the NOx reductions commuted to
b\ Title IV NOx Program requirements
1.2.4 New Source Performance Standards
The EPA is under court order to promulgate a nc\\ source performance standard (NSPS) on fossil-
fuel-fired utihtA and industrial boilers in September 1998. and subpart GG of Part 60 regulates NOx
emissions from combustion turbines The final standards re\ ise the NOx emission limits for steam
generating units in subpart Da (Electric Utility Steam Generating Units) and subpart Db
(Industnal-Commercial-Institutional Steam Generating Units) Onh those electricity generating units and
industrial steam generating units for \\hich construction, modification, or reconstruction is commenced after
JuK 9. 1997 \\ould be affected b\ these re\ isions
The NOx emission limit in the final rule for ne\\ subpart Da units is 201 nanograms per joule (ng/J)
[ 1 6 lb/mega\\att-hour (\l\Vh)] gross energy output regardless of fuel t>pc For existing sources that become
sub|ect to subpart Da through modification or reconstruction, the NOx emission limit is 0 15 Ib/million Btu
heat input For subpart Db units, the NOx emission limit being proposed is 87 ng/J (0 20 Ib/million Btu)
heat input from the combustion of am gaseous fuel, liquid fuel, or solid fuel. ho\\e\er. for lo\\ heat release
rate units firing natural gas or distillate oil. the current NOx emission limit of 43 ng/J (0 10 Ib/million Btu)
heat input is unchanged
In developing the State budgets for the NOx SIP call. EPA considered the potential NOx reductions
attributable to this NSPS
13 The limits are 0 68 Ib/mmBtu for cell burners. 0 86 Ib/mmBtu for cyclones greater than 155 MWe 0 84
Ib/mmBtu for \\et bottom boilers greater than 65 MWe. and 0 80 Ib/mmBtu for verticalh fired boileis (FR 19uoa
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1.2.5 Reasonably Available Control Technology Requirements
In the 1977 amendments to the CAA Congress required that all SIPs for nonattamment areas contain
reasonably a\ailable control measures (RACM) or reasonably a\ailable control technology (RACT) In the
1990 Amendments to the Act. Congress created RACT requirements specifically for o/one nonattamment
areas under the 1-hour standard (see subpart 2 of part D of title 1). Since 1977. EPA has defined RACT for
ozone as the lo\\est emission limitation that a particular source is capable of meeting by the application of
control technology that is reasonabK available considering technological and economic feasibility The EPA
historical!} has interpreted the RACT requirement in ozone nonattainment areas to apply independent of a
State's ability to demonstrate that an area \\ill attain the ozone standard, with certain exceptions
In the o/one-specific RACT requirement enacted in 1990. States \\ere required to correct all existing
deficiencies in RACT rules in marginal nonattamment areas to ensure the rules \\ere adopted consistent!) on
a national basis In addition, all nonattainment areas classified moderate and abo\e were required to adopt
RACT for each source category for \\hich EPA issued a Control Techniques Guideline (CTG) Cher the
years. EPA has issued CTG documents to assist the States in determining RACT for VOCs Each CTG
contains information on a\ ailablc air pollution control techniques and pro\ ides a "presumptn e norm" for
RACT for a specific source category Finally. RACT for controlling NOx was also required in certain
nonattainment areas classified moderate and abo\e
In de\ eloping implementation guidance for the re\ ised 8-hour NAAQS. EPA is addressing the
RACM/RACT requirement under subpart 1 of part D of title I. rather than subpart 2 The EPA has proposed
implementation guidance for the reMScd ozone NAAQS \\hich addresses se\eral issues, including
RACM RACT The proposed pohc> states that "For the 8-hour ozone NAAQS. if the | nonattainment] area
is able to demonstrate attainment of the standard as expeditious!} as practicable \\ith emission control
measures in the SIP. then RACM/RACT will be met and additional measures \\ould not be required as being
reasonabK a\ ailablc " (August 24. 1998. 63 FR 45060) The polic} \\ill be finalized by December 31. 1998
1.2.6 Northeast Ozone Transport Region
Section 184 of the CAAA delineated a multi state ozone transport region (OTR) in the Northeast and
required specific additional NOx and VOC controls for all areas in this region (not only nonattainment areas)
Section 184 also established the Ozone Transport Commission (OTC) for the purpose of assessing the
degree of o/onc transport in the OTR and recommending strategies to mitigate the interstate transport of
pollution The OTR consists of the States of Connecticut. Delauare. Maine. Maryland. Massachusetts. Ne\\
Hampshire. Ne\\ Jersey. Ne\\ York. Pennsy K ania. Rhode Island. Vermont, parts of northern Virginia, and the
District of Columbia The OTC was first com ened in 1991. and began analysis and e\ aluation of ozone
reduction strategies for the region They concluded that regional reductions of NOx emissions are
particularly important in reducing ozone The OTR States confirmed that they would implement RACT on
major stationary sources of NOx. and agreed to a phased approach for additional controls, beyond RACT. for
pouer plants and other large fuel combustion sources
This agreement, known as the OTC Memorandum of Understanding (MOU) for stationary source
NOx controls was appro\ed on September 27. 1994 All OTC States, except Virginia, are signatories to the
OTC NOx MOU The OTC NOx MOU establishes an emissions trading system to reduce the costs of
compliance \\ith the control requirements
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In de\ eloping State budgets for the N0\ SIP call. EPA considered the NOx reductions committed to
b\ the OTR states in the OTC NOx MOU. alone \\ith the OTAG recommendations discussed abo\e
1.3 Overview of the NOx SIP Call Rulemaking
EPA relied extensn ely on the OTAG analyses and recommendations in developing the NOx SIP call
As recommended by OTAG. the rule establishes ozone season14 NOx emission budgets for 22 States and the
District of Columbia '" The 23 jurisdictions will be required to amend their SIPs by the > ear 2000. to allocate
emissions control requirements among sources and to develop compliance programs for each affected source
category to ensure that the NOx budget is met These compliance programs should include necessary
pollution control measures, monitoring, reporting, and accounting procedures to ensure source emissions are
not exceeding the State's NOx budget, and enforcement requirements
Consistent \\ith OTAG's recommendation that NOx emissions reductions be achieved primarily
from large stationary sources in a trading program. EPA is encouraging States to consider additional controls
on electricity generating units and other large stationary sources as a strategy for meeting statewide budgets
State budgets \\ere de\ eloped using assumptions consistent \\ith such a strategy The budget for each State
\\as de\ eloped for components of major source categories For non-road and highway vehicle sources.
budgets are based on estimates of the effectneness in each State of national measures that EPA is taking to
control emissions from mobile sources For electricity generating units and other stationary sources, the
budgets arc based on apph ing further reasonable controls A major factor in determining controls is the cost-
effectncness of control measures
EPA also followed OTAG's recommendation in urging States to consider implementing market
based s\ stems to reduce the costs of comph mg \\ith the ne\\ limits on NOx emissions EPA is encouraging
the States and the District of Columbia to join a trading program administrated b\ EPA. which is reflected in
a model NOx Budget Trading Rule This trading system \\ould place a collects e cap on NOx emissions from
electricity generating units and other large boilers and combustion turbines, and pro\ ide for trading of
allowances similar to the CAAA Title IV SO- Allowance Trading Program already in place
Chapter 2 of Volume 1 of this report describes a number of regulatory alternatives that EPA
considered in the de\elopment of this final rule Chapter 2 of Volume 2 describes the regulatory altemames
that EPA used to model air quality effects for the purpose of estimating benefits of the final rule
IJ The ozone season for this rule is the period Ma\ 1 - September 30
'' The States covered b> the rule include Alabama. Connecticut, Delaware. Georgia. Illinois. Indiana.
Kentucky, Man land. Massachusetts. Michigan. Missouri. Ne\\ Jerse\. Ne\\ York. North Carolina. Ohio. Penns\l\ani,;
Rhode Island. South Carolina. Tennessee. Virginia. West Virginia, and Wisconsin
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1.4 Relationship Between NOx SIP Call, FIP, and Section 126 Petitions
In conjunction with promulgating the NO\ SIP call. EPA has begun efforts to respond to petitions
filed b> eight northeastern States (FR 1998b) These petitions were filed under section 126 of the CAA.
\\hich authon/cs States to petition EPA to address air pollution transported from upwind States The
petitions request that EPA make a finding that N0\ emissions from certain major stationary sources
significant!} contribute to ozone nonattamment problems in the petitioning States If EPA makes such a
finding, the Agency \\ould be authorized to establish Federal emissions limits for these sources The
petitions recommend control le\els for EPA to consider In an April 30. 1998 Advanced Notice of Proposed
Rulcmaking (ANPR) (63 FR 24058). EPA presented a schedule for taking actions on the petitions, made a
preliminary identification of upwind sources that max significant!} contribute to 1-hour and 8-hour ozone
nonattamment problems in the petitioning States (using information de\ eloped for the NOx SIP call NPR).
and requested comment on legal and polic} issues raised b\ section 126 of the CAA In responding to the
section 126 petitions. EPA intends to be consistent \\ith the approaches taken in the NOx SIP call
At the same time that EPA promulgates the NOx SIP call rule. EPA is proposing NOx Federal
Implementation Plans (FIPs) that ma} be needed if am State fails to comph with the final NOx SIP call rule
The FIP requirements are intended to be consistent \\ith the approaches taken in the final NOx SIP call.
including a proposed federal NOx Budget Trading Program for electric utility sources and other large
industrial boilers and combustion turbines
Since the final NOx SIP call and the proposed FIP and section 126 petition actions are general!}
consistent in the manner in \\hich the} assess affected emissions sources. EPA is preparing on!} a single RIA
for all three actions E\ en though the facts of the anal} sis contained in this report do not differ significant!}
for am of the three actions, the results have slight!} different interpretations In the case of the final NOx SIP
call, the results in this report are illustralne of potential benefits that ma} result from the SIP call The NOx
SIP call itself docs not direct!} impose regulator} requirements on emissions sources Instead, the SIP call
requires States to de\ clop strategies to meet the State NOx budgets contained in the final NOx SIP call rule
States ha\c discretion on \\hich emissions sources to control to reali/e the required reductions
Ho\\e\ er. the FIPs. if needed, and the section 126 petition responses \\ill direct!} impose regulator.
requirements on emissions sources EPA is proposing to regulate sources under the FIP and section 126
petition actions \\ith strategies that are modeled in this RIA In these cases the results presented in the RIA
reflect potential outcomes from direct federal regulation, and. depending on the outcome of the final actions.
ha\e a higher probability of reflecting the actual outcome of the rules
The proposed section 126 actions will potential!} affect onh a subset of the sources potential!}
affected b} the broader NOx SIP call Sources in Georgia. South Carolina, and Wisconsin are not affected b\
the proposed section 126 rule Therefore, the benefits associated with the proposed section 126 rule are
hkeK to be smaller than for the final NOx SIP call Since Georgia. South Carolina, and Wisconsin are
affected under the final NOx SIP call, and \\ould be subject to a final FIP if the}- fail to comph- with the
pro\ isions of the final NOx SIP call. EPA did not see the need to separately address the potential!} smaller
benefits for the proposed section 126 rule
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1.5 Statement of Need for the NO\ SIP Call
The following sections discuss the statuton authority and legislatis e requirements of the N0\ SIP
call, health and \\elfare effects of N0\ emissions, and the basis for the regulatory actions of the NOx SIP
call
1.5.1 Statutory Authority and Legislative Requirements
Section 110(a)(2)(D) presides that a SIP must contain provisions pre\entmg its sources from
contributing significant!} to nonattamment or interfering with maintenance of the NAAQS in a downwind
State This section applies to all pollutants covered by NAAQS and all areas regardless of their attainment
designation Section 110(k)(5) authorizes EPA to find that a SIP is substantially inadequate to meet am
CAA requirement, as \\ell as being inadequate to mitigate interstate transport as described in Sections 184
and 176A Such a finding \\ould require States to submit a SIP re\ ision to correct the madequacx within a
specified period of time
1.5.2 Health and Welfare Effects of NOx Emissions'6
K0\ emissions contribute to the formation of ozone during the summer season Ozone is a major
component of smog and is harmful to both human health and the environment Research has shown the
following health effects of ozone
Exposure to ambient ozone concentrations has been linked to increased hospital admissions for
respirators ailments, such as asthma Repeated exposure to ozone can make people more susceptible
to respirators infection and lung inflammation, and can aggras ate preexisting respiraton diseases
• Children arc at risk for the effects of ozone because thc> are actise outside during the summer
months \\hen ozone lesels are at their highest Adults \\ho are outdoors and moderate!} actnc during
the summer months are also at risk These indisiduals can experience a reduction in lung function
and increased respirators symptoms, such as chest pain and cough, sshen exposed to relameh loss
ozone lesels during periods of moderate exertion
• Long-term exposures to ozone can cause repeated inflammation of the lung, impairment of lung
defense mechanisms, and irresersible changes in lung structure, which could lead to premature aging
of the lungs and/or chronic respirators illnesses such as emphysema and chronic bronchitis
• Ses era! peer res icsved epidemiology studies recent!} published suggest a possible association
betss een ozone exposure and mortalit}. though ses era! other studies find no significant association
Ozone has also been shossn to adversely affect s'egetation. including reductions in agricultural and
commercial forest yields, reduced grossth and decreased survivabihty of tree seedlings, and increased tree and
plant susceptibility to disease, pests and other ens'ironmental stresses
16 A comprehensis-e discussion of health and ens'ironmental issues related to NOx appears in HPA. 1997d
Page 1-11
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N0\ emissions also contribute to fine particle matter formation (PM). Exposure to airborne PM has
a \\ idc range of ad\ erse health effects The kc> health effects associated with PM include 1) premature
mortalit). 2) aui>ra\ at ion of respirator, and cardio\ ascular disease (as indicated b> increased hospital
admissions and emergenc) room \isits. school absences, \\ork loss da\s. and restricted acti\it> da>s). 3)
changes in lung function and increased respirator, symptoms. 4) changes to lung tissues and structure. 5)
altered respirator) defense mechanisms, and 6) chronic bronchitis Most of these effects ha\e been
consistent!) associated \vith ambient PM concentrations, which have been used as a measure of population
exposure, in a number of communit) epidemiological studies Although mechanisms b\ \\hich particles
cause effects ha\ e not been elucidated, there is general agreement that the cardio-respiraton system is the
maior target of PM effects Paniculate matter also is associated \\ith \\elfare effects, which include T, isibilit)
impairment, soiling, and materials damage
Based on its rex ie\\ of the scientific e\ idencc. EPA established standards for PM;, and retained the
standards for PM The EPA re\ ised the secondan (welfare-based) PM NAAQS b\ making them identical
to the pnman standards
FmalK. NOx emissions contribute to a wide range of health and cm ironmental problems
independent of their contribution to ozone or PM formation Among these problems are acid deposition.
nitrates in the drinking \\ater. and nutrient loading in \\aten\a\s. particular!) in sensitne coastal estuaries
\\here air deposition is a major portion of nitrogen loadings
1.5.3 Need for Regulator) Action
The existing and re\ ised ambient air quaht) standards for o/one set le\els necessan for the
protection of human health and the cm ironmcnt Under the CAA. attainment of these standards depends on
the implementation of State-specific pollution control strategies contained in SIPs to reduce NOx and \ olatile
organic compound emissions, in conjunction \\ith EPA promulgation of national controls for some sources of
pollution
It is clear that. c\cn \\ith planned national measures in place, several States cannot bring existing
nonattainment areas into compliance with the current ozone standard, or a\oid the application of yen costh
local control measures, unless the transport of ozone from other upwind areas is reduced Furthermore, mam
States \\ill find it hard, if not impossible, to a\oid nonattainment \\ith the reMsed ozone NAAQS. or come
into attainment \\ith it in the future, unless mitigation of the ozone transport problem occurs This dilemma
has raised concerns o\er the fairness of downy, ind areas having to cope with the pollution coming from areas
up\\md The current regulator) framework requires States to de\elop SIPs that demonstrate air quality
imprcn cmcnts sufficient to reach specific attainment le\ els States have no control o\ er neighboring States'
actions, and ma\ be unable to meet their air quahK goals due to pollutants transported across State lines
The contribution of upwind sources outside of nonattainment areas creates a dilemma for States seeking to
reach air quaht> goals
States could de\elop local ozone mitigation strategies to address the impact of transported ozone,
Howe\er. local efforts could lead to undesirable outcomes Some States might de\elop SIPs that do not
achie\e compliance in some serious and se\ere ozone nonattainment areas, because the States would deem
local measures needed to achie\ e attainment as too dracoman
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The NOx SIP call is designed to mitigate these problems through a coordinated Federal and Stale
effort to address regional o/one transport This rule \\ill create a more effective, efficient and equitable
approach for EPA and the States to promote attainment with the current and ne\v ozone NAAQS
1.6 Requirements for this Regulatory Impact Analysis
This section describes \ anous legislative and executn e requirements that go\ em the analytical
requirements for Federal rulemakmgs. and describes ho\\ each analytical requirement is addressed in this
R1A
1.6.1 Executive Order 12866
Executn e Order 12866. "Regulator}, Planning and Re\ie\\" (FR. 1993). requires EPA to pro\ide
the Office of Information and Regulator} Affairs of the Office of Management and Budget \\ith an
assessment of the costs and benefits of significant regulator) actions A "significant regulator} action" is
defined as "am regulator) action that is hkeh to result in a rule that ma\
• Ha\e an annual effect on the econorm of SI 00 million or more or ad\ersel> affect in a material way
the econorm. a sector of the econorm. productn it). competition, jobs, the em ironment. public health
or safety or State, local, or tribal go-vernments or communities.
• Create a serious inconsistency or otherwise interfere with an action taken or planned b\ another
agenc\.
Material!) alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights
and obligations of recipients thereof, or
Raise no\el legal or pohc> issues arising out of legal mandates, the President's priorities, or the
principles set forth in the Executn e Order" (FR. 1993)
For am such regulator, action, the Agenc) must pro\idc a statement of the need for the proposed action.
must examine altematnc approaches, and must estimate social benefits and costs
EPA has determined that the NOx SIP call is a significant regulator) action because its effect on the
econorm is expected to exceed $100 million per year This \olume of the RIA proMdes the benefits
information required b) E O 12866 for a significant regulator) action. Volume 1 fulfills the associated cost
and economic impact requirements
1.6.2 Regulatory Flexibility Act and Small Business Regulatory Enforcement Fairness Act of 1996
The Regulator) Flexibility Act (RFA) of 1980 (PL 96-354) requires that agencies conduct a
screening anah sis to determine whether a regulation will have a significant impact on a substantial number of
small entities, including small businesses. go\ernments and organizations If a regulation will have such an
impact, agencies must prepare a Regulatory Flexibility Analysis, and comply with a number of procedural
Page 1-13
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requirements to solicit and consider flexible regulator, options that mmimi/e adverse economic impacts on
small entities The RFA's analvtical and procedural requirements \\ere strengthened b> the Small Business
Regulator) Enforcement Fairness Act (SBREFA) of 1996
For reasons explained more fullv in the Federal Register notice for the final NOx SIP call, it is EPA's
position that the RFA as amended bv SBREFA does not applv to the final NOx SIP call, because the rule
does not impose direct requirements on emissions sources States will ultimate!} decide what emissions
limits are imposed for specific sources Hovvev er. the EPA has determined that the RFA as amended b>
SBREFA does apph to both the proposed FIP and section 126 actions Therefore. EPA has examined the
potential for small entitv impacts to proude pohcv makers and States with additional decision information
The RFA and SBREFA require use of definitions of "small entities", including small businesses.
gcncmments and non-profits, published b> the Small Business Administration (SBA) ' Screening analvses
of economic impacts presented in Volume 1 of the RJA examine potential impacts on small entities
1.6.3 Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act (UMRA) of 1995 (PL 104-4) was enacted to focus attention on
federal mandates that require other gov ernments and private parties to expend resources without federal
funding, to ensure that Congress considers those costs before imposing mandates, and to encourage federal
financial assistance for mtergo\ crnmental mandates The Act establishes a number of procedural
requirements The Congressional Budget Office is required to inform Congressional committees about the
presence of federal mandates in legislation, and must estimate the total direct costs of mandates in a bill in
am of the first fi\e vears of a mandate, if the total exceeds $50 million for intergovernmental mandates and
S100 million for pn\ atc-sector mandates
Section 202 of UMRA directs agencies to pro\ide a qualitative and quantitative assessment of the
anticipated costs and benefits of a Federal mandate that results in annual expenditures of SI00 million or
more The assessment should include costs and benefits to State, local, and tribal go\ ernments and the
pmatc sector, and identify am disproportionate budgetary impacts Section 205 of the Act requires agencies
to identify and consider alternatives, including the least costlv. most cost-effective. or least burdensome
alternative that achieves the objectives of the rule
EPA has not reached a final conclusion as to the applicability of the requirements of UMRA to the
NOx SIP call rule EPA has determined that UMRA docs affirmativ eh apph to both the proposed FIP and
proposed section 126 rules Volume 1 of this RJA presents a summarv of analyses of the potential impacts of
the NOx SIP call on State and local governments, to support compliance with section 202 of UMRA This
analvsis includes administrative requirements of State and local governments associated with revising SIPs
and collecting and reporting data to EPA It also includes the compliance and administrate e costs to
emissions sources owned bv gov ernment entities In addition. EPA has prepared a more detailed written
statement consistent with the requirements of section 202 and section 205of the UMRA and placed that
statement in the docket for this rulemakinti
1 Where appropriate, agencies can propose and lustifv alternative definitions of "small entitv " This RIA relies
on the SBA definitions
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1.6.4 Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (PRA) requires Federal agencies to be responsible and
public!) accountable for reducing the burden of Federal paperwork on the public EPA has submitted an
Information Collection Request (ICR) to the Office of Management and Budget (OMB) in compliance with
the PRA The ICR explains the need for additional information collection requirements and pro\ides
respondent burden estimates for additional paperwork requirements to State and local go\ernments
associated \Mth the N0\ SIP call
1.6.5 Executive Order 12898
Executive Order 12898. "Federal Actions to Address Environmental Justice in Minont} Populations
and Lo\\-Income Populations." requires federal agencies to consider the impact of programs, policies, and
activities on minont) populations and lov\ -income populations Disproportionate ad\erse impacts on these
populations should be av oided According to EPA guidance, agencies are to assess whether minority or lo\\-
mcome populations face risk or a rate of exposure to hazards that is significant (as defined ON the National
Environmental Pohc\ Act) and that "appreciably exceeds or is hkeh to appreciabh exceed the risk or rate to
the general population or other appropriate comparison group " (EPA. 1996b) This guidance outlines EPA's
En\ ironmental Justice Strategy and discusses em ironmental justice issues, concerns, and goals identified b)
EPA and environmental justice ad\ocates in relation to regulator) actions
The NOx SIP call is expected to pro\ ide health and \\elfare benefits to eastern U S populations.
regardless of race or income Chapter 3 of this R1A presents information on the changes in potential o/one
and PM exposure for \\hite and non-\\hite populations and lo\\ income populations, and compares these
rclatne changes to the general populations
1.6.6 Health Risks for Children
Executne Order 13045. "Protection of Children from Emironmental Health Risks and Safet)
Risks." directs Federal agencies developing health and safet> standards to include an e\ aluation of the health
and safet) effects of the regulations on children Regulator) actions co\ ered under the Executn e Order
include rulemakmgs that are economicall) significant under Executive Order 12866. and that concern an
emironmcntal health risk or safct) risk that the agenc\ has reason to behe\e ma\ disproportionate!) affect
children EPA has de\ eloped internal guidelines for implementing the E O 13045 (EPA, 1998b)
The NOx SIP call is a "significant economic action." because the annual costs are expected to
exceed S100 million Both NOx and ozone formed b) NOx are known to affect the health of children and
other sensitiv e populations, which were addressed in the dev elopment of the new ozone NAAQS However.
the NOx SIP call is not expected to ha\ e a disproportionate impact on children Chapter 3 of this RJA
presents information on the changes in potential ozone and PM exposure for persons under the age of 18
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1.7 Structure and Organization of the Regulatory Impact Analysis
The potential costs, economic impacts and benefits ha\e been estimated for this rulemaking The
flo\\ chart in Figure 1-1 summarizes the anahlical steps taken in dc\ eloping the results presented in this RIA
Figure 1-1
Flowchart of Analytical Steps
Model Air Quality
I
Select Control Strategies
\
BENEFITS
Estimate Control Cost
Estimate Post-Control Air Quality
I
Estimate Small Business and Other
Economic Impacts
Estimate Human Health
and Welfare Effects
Estimate Monetized Value of
Health and Welfare Effects
The assessment of costs, economic impacts, and benefits consists of multiple analytical components.
dependent upon emissions and air quahr> modeling In order to estimate baseline air qualiU in the \ear 2007.
emission imcntoncs are de\ eloped for 1995 and then projected to 2007. based upon estimated national
gro\uh in industry earnings and other factors Current CAAA-mandated controls (e g . Title I reasonabh
a\ailable control measures. Title II mobile source controls. Title III air toxics controls. Title IV acid rain
sulfur dioxide (SO-) controls) are applied to these emissions to take account of emission reductions that
should be achie\cd in 2007 as a result of implementation of the current PM and ozone requirements These
2007 CAA emissions in turn are input to several air quality models that relate emission sources to area-
specific pollutant concentrations This modeled air quality is used as the base against which se\eral
alternatn e control options are measured and cost estimates developed Given the estimated costs of the
alternate e regulator} control options, the potential economic impacts of these estimated costs on potentially
affected mdustn sectors is subsequent!) analyzed Potential health and welfare benefits are also estimated
from modeled changes in air qualm as a result of control strategies applied in the cost analysis FinalK.
benefits and costs are compared
e 1-16
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The RIA anaKscs ha\c been constructed such that benefits and costs are estimated incremental to
those dem ed from the effects of implementing the CAAA in the \ ear 2007 These anah ses pro\ ide a
"snapshot" of potential benefits and costs of this rulemakmg in the context of implementation of CAA
requirements between no\\ and 2007 and the air qualm effects that derive from economic and population
gro\\lh
States ha\ c discretion in ho\\ they achie\ e their NOx budgets, and different States ma> choose
different strategies The RJA must, therefore, be based on assumptions about how the States \\ill choose to
implement the NOx SIP call requirements Consistent \\ith EPA's recommendation that States focus on
maior stationary sources, this RJA assumes that States impose additional controls — incremental to those
alreadx required b> other national programs that address NOx emissions — onh for major stationary sources.
and that States implement the cap-and-trade s\ stem for electricity generating units and industrial boiler and
turbine sources This assumption is illustrative of one cost-effective approach States could take to meeting
the NOx SIP call budgets States ma\ choose different allocations of controls across major stationan sources
than assumed here, or ma\ choose to impose additional controls on area or mobile sources as well Costs and
economic impacts \\ould differ from those estimated in this R1A to the extent that States" compliance
strategies differ from the R1A assumptions
Anah sis of costs, changes in emissions, and economic impacts is conducted separate!} for t\\o
groups of sources elcctnciU generating units and other stationary sources The Integrated Planning Model
(IPM) allo\\s anah sis of trading and industry-le\ el adjustments for electricity generating unit sources Other
stationan sources are anah/ed separate!}, using assumptions about baseline conditions and control costs that
are gcneralh consistent \\ith the IPM modeling assumptions used for electricity generating units
Predicted changes in emissions due to the additional controls for electncit} generating units and other
stationan sources are then combined to estimate changes in air quaht} and to calculate the benefits of the
NOx SIP call The estimation of benefits from em ironmental regulations poses special challenges These
include the difficult) of quantising the incidence of health, \\elfare. and emironmental endpomts of concern.
and the difficult} of assigning monetized A alues to these endpomts As a result, mam categories of potential
benefits ha\ e riot been moneti/ed at all. and those that ha\ e been arc gn en in ranges Specificalh. this RIA
has adopted the approach of presenting a "plausible range" of moneti/.cd benefits to reflect these
uncertainties b\ selecting alternate e \alues for each of se\eral ke> assumptions Taken together, these
alternate e sets of assumptions define the range for the moneti/ed benefits categories
The remainder of the RIA is orgam/ed in the following chapters and appendices
• Chapter 2 presents a discussion of the regulatory alternatn es modeled for the benefits analysis of
this rulemakmg.
Chapter 3 describes the methodology used to estimate baseline and post-control air quality impacts.
• Chapter 4 presents the analysis of the benefits of the rule, and
Chapter 5 provides an integrated summan of costs and benefits, and compares costs and benefits for
the NOx SIP call as a whole
Page 1-17
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Where appropriate, each chapter includes a discussion of limitations of the anahsis A series of appendices
follo\\ Chapter 5 and pro\ ide more detailed descriptions of specific methodologies and results
1.8 References
Federal Register. 1993 Executne Order 12866. Regulatory Planning and Review Vol 58. October 4.
1993.pg51735
Federal Register. 1995 Acid Rain Program. Nitrogen Oxides Emission Reduction Program Vol 60. No
71. April 13. 1995
Federal Register. 1996 Acid Rain Program. Nitrogen Oxides Emission Reduction Program Final Rule
Vol 61. No 245. December 19. 1996
Federal Register. 1997a landing of Significant Contribution and Rulemaking for Certain States in the
Ozone Transport As^c^ment Group Region for Purposes of Reducing Regional Transport of Ozone
Proposed Rule Vol 62. No 216. No\ ember 7. 1997. pg 60318
Federal Register. 1997b Memorandum of Juh 16. 1997 from William J Clinton. President of the United
States, to the Administrator of the Em ironmental Protection Agenc\ Subject '•Implementation of the
Reused Air Quaht> Standards for 0/one and Paniculate Matter" Vol 62. Juh 18. 1997. pg 38421
Federal Register. 1997c National Ambient Air Quality Standards for Ozone and Paniculate Matter.
Notice of Proposed Rulemaking Vol 62. No 241. December 13. 1997
Federal Register. 1998a Supplemental Notice for the Finding of Significant Contribution and Rulemaking
for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional
Transport of Ozone Vol 63. No 90. Ma> 11. 1998
Federal Register. 1998b 1-inding of Significant Contribution and Rulemaking on Section 126 Petitions for
Purposes olReducing Interstate Ozone Transport Vol 63. No 83. April 30. 1998
0/one Transport Assessment Group. 1995 Pohcx Paper appro\ed b\ the Pohc\ Group on December 4.
1995
Ozone Transport Assessment Group. 1997 Executive Report 199"
U S Em ironmental Protection Agenc\. 1996a Fact Sheet on Nitrogen Oxides Emission Reduction Program
Office of Air and Radiation. Washington. D C . December 1996
US Em ironmental Protection Agenc> .1996b Guidance for Incorporating Environmental Justice
Concerns in EPA 's NEPA Compliance Analyses (Re\ie\v Draft) Office of Federal Activities. Washington.
DC. July 12. 1996
U S Em ironmental Protection Agenc>. 1997a Proposed Ozone Transport Rulemaking Regulatory-
Analysis Office of Air and Radiation. Washington. D C . September 1997
Page 1-18
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U S Em ironmental Protection Agencx. 1997b Regulatory Impact Analysis for the Paniculate Matter and
Ozone \diiuiuii Ambient Air Qualm Standards and Proposed Regional Haze Rule Office of Air Quaht\
Planning and Standards. Research Triangle Park. NC. JuK 1997
I' S Em ironmental Protection Agenq . 1997c 1996 Compliance Report EPA Report 430/R-97-025.
Office of Air and Radiation. Washington D C . June 1997
U S Em ironmental Protection Agenc\. 1997d Nitrogen Oxides Impacts on Public Health and the
Environment EPA Report 452/R-97-003. Office of Air and Radiation. Washington. D C . August 1997
U S Em ironmental Protection Agencv 1997e EPA Interim Guidance for Implementing the Small Business
Regulatory Enforcement Fairness Act and Related Provisions of the Regulatory Flexibility Act Februan 5.
1997
U S Emironmental Protection Agcnc\. 1998a Supplemental Ozone Transport Rulemaking Regulatory
Ana'iy ws Office of Air and Radiation. Washington. D C . April 7. 1998
U S Emironmental Protection Agenc\. 1998b Memorandum from Tro\ato and Kelh to Assistant
Administrators Subject "Implementation of Execute e Order 13045. Protection of Children from
Emironmental Health and Safet> Risks" April 21. 1998
Page 1-19
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Chapter 2. REGULATORY ALTERNATIVES AND EMISSIONS IMPACTS
This chapter explains the \ anous regulator* altcrnatn es considered in the benefits anal) ses Section
2 1 pro\ides background on the elements that differentiate the alternatnes that \\ere considered, and Section
2 2 pro\ ides information on the emissions impacts used to generate air quaht) changes for the benefits
anahses
2.1 Elements Considered in Developing Regulatory Alternatives
EPA's NOx SIP call sets summer N0\ emissions budgets for eastern States that the Agenc\ has
found significant!) contribute to the nonattamment b> other States of the pre-existing ozone standard (1-
hour) and \\ill contribute in the future to nonattainment b\ other States \\ith the revised ozone standard (8-
hour') EPA relied hea\ il\ on Us estimation of the NOx reductions that the electric power industry and other
stationary sources could provide cost-effectn el\ in setting the State budgets Other factors, such as the
feasibiht> of implementing controls in a reasonable time frame, also influenced the Agenc\ "s final decisions
To estimate the cost-effccmeness of controls for \anous sources, the Agencx considered se\eral \va\s that
controls could be implemented in the SIP call region Howe\ er. States can place controls on their sources of
NOx emissions different!) than the approach that EPA used in the budget setting process, if the\ can sho\\
that control strateg\ \M!! proude the same le\el of NOx reduction in the SIP call region
This section describes the elements that make up the \anous regulator) alternatnes considered for
this anal)sis The regulator) alternatnes used in the benefits anal)sis (described in Section 2 2) represent
\ anous combinations of these elements Some elements of the rule remain the same for all the options
considered Other elements are considered in \ an ing combinations, including stnngcnc) of controls.
geographic scope, affected sources and design of the trading s\stem For all options anal) zed. the timing of
regulator) requirements \\as also considered, as this issue is critical in terms of feasibiht) of compliance and
attainment of both the pre-existing ant the re\ ised o/one standard
2.1.1 Type of Control
EPA had to decide on the t\pes of regulator) approaches that the Agenc) \\anted States to consider
m their efforts to lov.cr NOx emissions from \ anous source categories EPA used those approaches in
estimating the cost-effectn eness of ozone season NOx controls at \anous le\els for different t)pes of
sources OTAG recommended that the Agencx consider controls that allo\\ for emissions trading, rather
than traditional command-and-control regulation OTAG's anaksis of trading programs had shown that
there could be considerable sa\ ings from this type of approach for the electric pouer mdustn (OTAG.
1997)
EPA also demonstrated the potential sa\ ings from a NOx emissions trading program that could
result in its regulator) analysis for the proposed NOx SIP call (EPA. 1997a) That anal) sis showed that in
2005 a command-and-control program for the electric power industry would cost about 30 percent more than
a trading program in the NOx SIP call region For that reason, the Agency has focused heavily on developing
regulatory approaches that States can use collectneh that are based on allowance-based NOx emissions
trading It \\as also clear from OTAG analysis and EPA's own work that further sa\ ings and flexibility
Paae2-l
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could be gained from aliening banking as pan of a trading program EPA's regulator, analysis o\er the last
year has also considered banking options for inclusion in the Model Trading Rule for States (EPA. 1997b)
2.1.2 Geographic Scope
After considering OTAG's recommendations and other relevant information. EPA identified 22
States plus the District of Columbia (i e . 23 jurisdictions) as significantl} contributing to nonattamment \\ith.
or interfering \\ith maintenance of. air quality standards in a downwind State The SIP call region is shown in
Figure 2-1 and consists of Alabama. Connecticut. Delaware. District of Columbia. Georgia. Illinois. Indiana.
Kentucky. Massachusetts. Maryland. Michigan. Missouri. North Carolina. Ne\\ Jersey. Ne\\ York. Ohio.
Pennsyhama. Rhode Island. South Carolina. Tennessee. Virginia. West Virginia, and Wisconsin
The final rule reflects State NOx budgets that are developed using the same region-\Mde stringency
targets and region-wide analyses of cost-effectneness for all 23 jurisdictions EPA also considered dividing
the SIP call region into t\\o or three subregions in an effort to make a distinction among the States that may
contribute the most to the ozone transport problem and those \\here the wind patterns may be less likely to
affect air quality in the other States The SIP call region \\as divided into two regions-Northeast and
Southeast, or into three regions—Northeast. Mid\\est. and Southeast Different le\els of stringency arc then
applied in the different regions, as described below
The two region area consists of Connecticut. Delaware. District of Columbia. Massachusetts.
Maryland. N'e\\ Jersey. Nev\ York. Ohio. Pennsylvania. Rhode Island. Virginia, and West Virginia m the
Northeast, and Alabama. Georgia. Illinois. Indiana. Kentucky. Michigan. Missouri. North Carolina. South
Carolina. Tennessee, and Wisconsin in the Southeast
The three region area consists of Connecticut. Delaware. District of Columbia. Maryland.
Massachusetts. Nc\\ Jersey. New York. Pennsy h ama. and Rhode Island in the Northeast. Illinois. Indiana.
Kentucky. Michigan. Missouri. Ohio. Virginia. West Virginia, and Wisconsin in the Midwest, and Alabama.
Georgia. North Carolina. South Carolina, and Tennessee in the Southeast
Page 2-:
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Figure 2-1
Slates Included in KIWs NOx SIP ca
1 Ozone Transport Region States in the NOx SIP Call
Other States in the NOx SIP Call
l':ige 2-3
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2.1.3 Potentially-Affected Sources
EPA has de\ eloped State budgets based on the effects of additional controls (bexond those alreadx
required by the CAAA-related or reflected in existing SIPs) onh for major stationary sources of NOx
emissions These sources include (1) electricity generating utihu boilers. (2) industrial, commercial and
institutional boilers. (3) combustion turbines. (4) reciprocating internal combustion engines. (4) cement
manufacturing operations, and (5) other industrial processes that emit NOx Only existing or planned
CAAA-related controls are considered in calculating budgets for other sectors (area and mobile sources) that
contribute to NOx emissions States ultimate!) ha\ e discretion to determine which sources to regulate to
achie\ e the budget le\ el
The analyses of benefits in this R1A are based on a range of assumptions about which major
stationary sources \\ill actually be targeted for additional controls by the States in implementing the NOx SIP
call The primary assumption in this analy sis is that States will allocate NOx emissions reduction
requirements to the largest electricity generating utility boilers, industrial, commercial and institutional
boilers, combustion turbines, cement manufacturing units, and internal combustion engines
Large electricity generating units are defined as those generating more than 25 megawatts (M\V)
Large industrial boilers, combustion turbines, reciprocating internal combustion engines, and other industrial
NOx sources arc those capable of firing greater than 250 mmBtu/hour. or that emit greater than one ton of
NOx per summer day
2.1.4 Stringency of Control Level
In order to de\elop a cost-effective NOx reduction strategy as a basis for establishing State budgets.
EPA considered \ anous emission reduction le\ els for the affected sources for the summer ozone season
defined as Ma> 1 through September 30 For the electricity generating units (EGUs). EPA considered
emissions budgets based on emission limits of 0 12 Ib/mmBtu. 0 15 Ib/mmBtu. 0.20 Ib/mmBtu. and 0 25
Ib/mmBtu For the large industrial boilers and combustion turbines. EPA considered a uniform percent
emission reduction from uncontrolled projected 2007 emission levels ranging from 40 percent to 70 percent
For the remaining large nonutihty sources. EPA considered source category-specific control ^els
corresponding to cost-effectncness cut-offs ranging from Sl,500/ton to 55.000/ton
Taking into consideration the emission reductions and associated costs projected under each of the
abo\ e scenarios. EPA identified cost-effectn e NOx reduction strategies Based on the reduced emissions
achie\ed by this strategy. EPA then established State-specific budgets for ozone season NOx emissions
Altematu e budgets are calculated for the different stringency le\ els considered for EGUs The details of
NOx budget de\ elopment can be found in the budget technical support document (EPA, 1998b)
1 Limits for each electncin generating unit are expressed as a specific NOx limit of pounds of NOx per mniB'.i
of summer heat input projected for 2007. the year \\hich was the focus of OTAG's analysis (the year for \\hich an
qualm modeling was done)
Paee 2-4
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2.1.5 Effective Dates
States subject to the NO\ SIP call must submit rex ised SIPs bx September 1999 The affected
sources in the States must implement N0\ controls b> Max 2003. and EPA will assess how each State's SIP
has actuallx performed in 2007
2.1.6 Emissions Budget Trading System Design
To allcm for use of the most cost-effectix e emission reduction alternatix es. an emissions budget
trading program is an optional component of the N0\ SIP call Each of the States subject to the NO\ SIP
call are encouraged to participate in this model NOx Budget Trading Program and therebx proxide a
mechanism for sources to achiex e cost-effecti\ e NOx reductions The trading unit is a NOx Alloxx ance. equal
to one ton of emitted NOx Details of the trading program are described in the Federal Register notice
accompanx ing the final rule
Under the NOx Budget Trading Program, each of the participating States x\ould determine hoxx its
seasonal State trading program budget is allocated among its sources Each source would be given a certain
quantitx of NOx allowances If a source's actual NOx emissions exceed its allocated NOx allowances, the
source max purchase additional allowances Conxerselx. if a source's actual NOx emissions are beloxx its
allocated NOx allowances, then it max sell the additional NOx allo\\ances Such a program creates a
competitixe market for NOx alloxxances that encourages use of the most efficient means for reducing NOx
emissions
For purposes of this analx sis. trading max occur among anx of the sources xvithin the entire SIP call
region or within each of the subrcgions Where subregions arc dc\ eloped for the SIP call region, only intra-
regional (within the region) trading is allowed
Banking \xould allow sources that do not use all of their NOx alloxxances for a gixen \ear to save
them for later use If banking is allo\\ed. howexer. mechanisms such as floxv controls can be put in place to
limit the lex el of exceedance of the emissions cap Floxx controls restrict the use of the banked NOx
alloxvances bx restricting their use at certain times or within certain areas For example, a restriction max be
placed on the banked allowances that allows onlx a set amount to be used during a defined time period
For this R1A. EPA analx zed a xanetx of trading options, and trading xxith banking onlx for the 15
trading option, xxhere banking begins after the start of the program in 2003 Banking of "earh" reductions
was not modeled for the 0 15 option because earlier IPM analx sis suggested that owners of eicctncitx
generating units \\ould xxant to use it to a xerx limited degree to loxver the costs of future compliance (EPA.
1997) The folloxxmg considerations xxere part of the 1997 analx sis
• Beginning in 2003 (and each xear thereafter), the fossil fuel-fired electncitx generating units over 25
M\V in the SIP call region are assumed to hold NOx alloxxances during the summer ozone season
equal to 489 thousand tons
• Electncm generating units could trade allowances xvithout restrictions or bank them for later use or
sale to another generation unit Trading could occur within the entire SIP call region
• Analysis x\ ith and xvithout flow controls
Page 2-5
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EPA's anal} sis in 1997 \\as conducted using the 1996 \ersion of the Integrated Planning Model (1PM) This
model is described in EPA. 1996 EPA's anah sis sho\\s that on strict economic grounds, (i e . under
mmimi/ation of the total direct operating costs over the simulation period) limited banking \\as forecasted b>
the 1PM based on the scenarios described above Ho\\ever. EPA behe\es that some banking, which the 1PM
could not estimate, should occur when some power plants o\ ercontrol their NOx emissions in order to bank
allowances for use in } ears in which units experience utilization greater than forecasted More discussion of
this issue can be found in Chapter 6 of Volume 1 of this RIA
2.2 2007 Emissions Estimates for Air Quality Modeling
The initial step in the assessment of changes in air qualit} attributable to each regulator} alternate e
is the de\ elopment of future > ear 2007 emissions estimates These estimates generalh start off with 1995
emissions data, which are then grown to 2007 Table 2-1 identifies the emissions inputs used for the air
qualit} models These include nitrogen oxides (NOx). volatile organic compounds (VOC). sulfur dioxide
(SO-), direct!} emitted paniculate matter (pnman PM, and PM: <). carbon dioxide (CO), and ammonia
(NH-J RADM and RPM \\ork in tandem and therefore require the same emissions inputs Emissions are
estimated onh for the geographic area co\ered b> each air quaht> modeling domain, which in each case is
roughh equn alent to the 37 easternmost states Air qualit} estimation is not restricted to the smaller SIP call
region because the SIP call regulator} alternates ma} result in shifts in power generation, and hence shifts in
emissions, among utihu sources located inside and outside the SIP call domain The broad 37 state area
modeled for air qualit} purposes more clearh captures the effects of an} modeled shifts in power generation
All emissions estimates were de\ eloped using information that was accurate as of March 1998. before final
NOx SIP call emissions imcntones and control altematnes were established The emissions imentones and
control altcrnatnes proposed in the original No\ ember 7. 1997 and supplemental Ma\ 11. 1998 Federal
Register notices ha\e changed as a result of public comments reccned on both proposal notices These
changes arc not reflected in the air qualit} modeling results used in the benefits anah sis
The subsections that follow- brief!} describe emissions development for each emissions sector.
including electncit} generating utihn point sources, other stationan point sources, area and non-road mobile
sources, highwa} mobile sources, and non-anthropogenic sources A final subsection identifies differences
between the air qualit} modeling emissions imenton and the final emissions imenton. and discusses the
implications for interpreting the air qualit} results used in this anah sis
Table 2-1
Emissions Inputs for Air Qualit) Models
Air Qualit> Model
UAM-V
RADM-RPM
S-R Matrix
Emissions Inputs |
npical summer da\ hourh VOC and NOx
warm season (Ma\ - September) and cold season (October - April) NOx, SO,,
VOC, and NH,
SO4. CO,
annual NOx, SO:. CO. VOC. NOx. pnman- PM10. pnman- PM, <. and NH,
Page 2-6
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2.2.1 Electricity Generating Unit Point Source Emissions
EPA dc\ eloped projections of 2007 NO\ and S0: emissions from electncin generating units
(EGL's) using the latest \ersion of the Integrated Planning Model (U S EPA. 1998a) The CO and VOC
profiles for each EGU arc added based on data from EPA's National Emission Trends (NET) imenton
proiections Primary PM,,, and primary PM:, are derned using IPM-generated ash content data and the latest
AP-42 emission factors (U S EPA. 1998c) AP-42 emission factors are also used to derne NH3 emissions
These emissions estimates arc made for the 2007 base case and each control alternate e
2.2.2 Non-EGL Point Source Emissions
EPA de\ eloped proiections of 2007 NOx and VOC emissions using information gathered by the
0/one Transport Assessment Group in 1997 These projections \vere later rex ised based on more recent
information, including public comments submitted on the proposed NOx SIP call Emissions of S0:. primary
PM;II. pnman PM~ A. and NH-, are taken from EPA's NET projections2 These emissions estimates are made
for the 2007 base case and each control altematne
2.2.3 Area and Mobile Source Emissions
All area source, non-road mobile source, and highway mobile source emissions are taken direct!)
from EPA's NET protections Emissions are de\ eloped for all counties and then allocated to UAM-V and
RADM grid cells Additional reductions in area and mobile source emissions are not part of the control
alternatn es. therefore emissions estimates arc made for these source categories only for the 2007 base case
2.2.4 Natural Emissions
Natural emissions come from geogemc. biogemc. and wild fire sources For some pollutants, natural
emissions comprise a significant fraction of total emissions For example, man-made emissions of ammonia
are a small component of total ammonia emissions The majority of the ammonia that enters the atmosphere
is produced b> the biological decomposition of organic material in soils, plant residues, and \\astes from
animals and humans (NAPAP. 1991) Biogemc VOC emissions are de\eloped based on EPA's Biogemc
Emissions Imcnton System (BE1S) (Pierce el al . 1990) Natural sources of PM emissions (i e . \\ind
erosion) are taken from the NET Additional reductions in natural emissions arc not part of the control
alternatn es. therefore emissions estimates for these sources are made onh for the 2007 base case
2.2.5 Summary of 2007 Emissions Projections
Table 3-2 summarizes the major control requirements that are accounted for in the 2007 Base Case
emissions projection These include all federal motor vehicle controls and nonattamment area (NAA)-related
controls required by the Clean Air Act. additional reductions from large stationary NOx sources required by
2 EPA's NET does not currently include estimates of pnman PM: ? Pnman PM:, emissions are estimated
from pnman PMr emissions using regionally derived relationships between PM10 and PM: ,
Page 2-7
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the O/onc Transport Commission in the northeast L'.S . and a national lo\\ emission \ehicle fNLEVj
standard starting in model \ear 1999
The control requirements included in the alternatne pohc\ scenarios modeled for air qualm
purposes, and hence for the purpose of estimating benefits, are shown in Table 2-3 The tables in Appendix
B pun ide additional information on the emissions associated with the scenarios that are modeled for the
benefits anal) ses Since the scenarios modeled differ slight!) from the regulator) alternatn es e\ aluated in the
cost analyses (0 15 trading for EGUs. and 60%/$5.000 for non-EGUs) in Volume 1 of this RJA. Table 2-3
also indicates the controls associated with preferred regulator) alternatne upon which EPA based the final
emissions budgets The air quaht) changes associated with the set of control requirements in the actual final
emissions budgets ha\ e not been estimated in this analysis
Table 2-4 pro\ ides some perspective on the potential differences between the emissions reductions
associated \\ith the air quaht) modeling alternatn es and the cost analysis alternatives The table indicates the
percent change in NOx emissions associated with the air qualm scenarios that are modeled for the benefits
anal) ses. and the percent changes associated \\ith similar alternatn es modeled in the cost anal) ses The
RADM-RPM reductions for the warm season are general!) higher than the annual reductions for the S-R
Matrix input The seasonal RADM-RPM reductions and the annual S-R Matrix reductions can be reconciled
b\ considering the simple linear combination of RADM-RPM \\arm and cold season emissions For instance
for the 0 15 trading alternatne. the linear combination of the warm and cold season reductions is 24 7%
(37 }%*5/12 - 15 8"o*7/12). \\hich is ver\ close to the annual S-R Matrix reduction of 24 0%
Cnerall. the emission reductions associated \Mth the air quaht) modeling inputs are larger than the
emission reductions associated \\ith the cost anal) ses For most of the regulator) alternatn es. the difference
in modeled point source NOx reductions across the 37 states is about 5% The difference for EGU sources is
small, around 2'V but the difference for non-EGLJ sources is much larger at about 10% As indicated in
Table 2-3. this is because the air quaht) modeling inputs for non-EGU sources are based on the proposed
emissions budget lc\el. the final emissions budget for non-EGU sources is less stringent than proposed
budget The actual benefits associated \\ ith the preferred regulator) alternatn e and the final emissions
budgets \\ill depend exact!) on the specific seasonal and geographic distribution of emissions changes
Page 2-8
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Table 2-2
2007 Base Case Projection Control Requirements bj Major Sector
Major Sector
Major Base Case Requirements
I.GU Point
Sources
'] ilk IV Phase I and Phase II NO\ and SO; limits for all boiler t\pes
250 ton Pre\ention of Significant Deterioration (PSD) and Neu Source Performance Standards
(NSPS) for NOv NO-. VOC CO. and SO-
RAC'I and Neu Source Re\ie\\ (NSR) NO\ limits for all non-\\ai\ed NAAs
Phase 1 of the Ozone Transport Commission (OTC) NO\ memorandum oi'understanding (MOU)
Non-KGl' Point
Sources
\'OC and NOX RACT for all NAAs (except NO\ \vai\ers)
Neu control technique guidelines (C'i Gs) for VOC
() IAG Le\ el 2 NOx controls across O'l AG States
MAC! standards (pnmarih affects VOC)
Area Sources
VOC and NOx RACT requirements
Neu C 1 (>s lor VOC
MAC 1 Standards (pnmarih affects VOC i
PM NAA controls
Onboard \ apor reco\ en (\ chicle reluehng—VOC )
Stage II \ apor reco\ en s\ stems (VOC)
I-edcral rules (consumer/commercial product limits, architectural and industrial maintenance
(AIM ) coatinc limits) (VOC i
Nonroad Mohi
Sources
1-edcra! 1 icr 2 and ? . 50 hp compression ignition (CT) engine standards (VOC. NOx. PM i
I-ederal '1 lei 1 and 2 < 50 hp Cl engine standards
1-edera! Phase 1 and 2 small «1 9 k\\) spark ignition (SI) engine standards (CO.VOC. NOx. PM)
I-ederal loeomotnc standards (VOC. NOx. PM'i
1-edera! 5" hp C I marine engine standards i VOC NOx. PM)
Federal spark ignition recreational marine engine standards i VOC. NOx. PM i
her 1 tailpipe standards (CO VOC . NOx. PM .
49-State (national i LLV progiam (CO VOC. NOx PMi
2004 hea\A dut\ diesel iHDDi engine standards (NOx. VOC i
Phase 2 Reid \ apor pressure (RVP) limits (CO NOx. VOC i
I'"M programs for o/one (V()C NO\i and carbon monoxide (COi NAAs
1-ederal reformulated gasoline lor O, NAAs (CO. VOC. NOx SO-i
Diesel fuel sulfur content limits i S(). i
Ox\ genated fuel in C O N -\As (CO)
Onboard refueling \apor rcco\en (VOC i
Stage 2 refueling \ apor reco\ en ( VOC)
Lnhanced e\aporation emission standards (VOC)
Page 2-9
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Table 2-3
Summary of Regulator* Alternatives for the 2007 Air Quality Modi-ling:
INO\ C'ontrol Requirements by Major Sector
Major Sector
I'XH! Point Sources'
Non-1 '(HI Point
Sources
Area
Nonroad Mobile
Sources
1 Iighv\'ay Mobile
Sources
Control Requirements by Alternative
0.25 Trading
1 ;mi ssi ons budget
based on 0 25
!b/minBHJ limit
60% (U AM- V) or
70% (RPM/S-R)
reduction foi >2SO
nimBlu/hour inpul
capacity, RAC 1 lor
all other sources
>1 Ipd '
0.20 Trading
(•'missions budgcl
based on (120
Ib/mmBIU limit
70% i eduction lor
>250 mmBlu/liour
input capacity.
RAC! I'oi all other
souices >l Ipd
Regionality 1
1 .missions budget
based on 0 1 5
Ib/mmH 1 1 ) limit in
Nb and 020
Ib/mmBIU in
MW/Si;1'
70% reduction lor
>2^0 mniBtu/hour
inpul capacih .
RACI Ibrallother
souices -1 tpd
O.I 5 Trading
1 ''missions budget
based on 0 1 S
Ib/mmBIU limil
70% reduction lor
•^250 inmBlu/hour
input capacity.
RAC 1 Ibi all olhei
souices -1 Ipd
0.12 Trading
I'inissions budget
based on 0 1 2
Ib/mmBIU limil
70% i eduction lor
>250 mmBlu/hour
input capacity.
RACI lor all olhei
souices >1 t|xl
Preferred
Alternative
['.missions budget
based on 0 IS
Ib/mmBIU limit
60% reduction Ibi
boilers and turbines,
90% reduction Ibi
reciprocating 1C'
engines, .10%
reduction Ibi cement
kilns'1
No additional conliol rec|iiirerneiHs
No additional conliol ie(]iiitenienls
No additional control requirements
* All l,Ul 1 control requirements apply lo fossil-fuel fired mil s greater Ihan 2^ M\V
* All l.Ut 1 control requirements apply lo fossil-fuel fired units greater Ihan 2^ M\V
" N1-. M reduction strategy was used in the 1 'AM-V and RADM modeling 1 o save additional time lor the S-R M,itn\ modeling. .1 70"n reduction stiatcg\ was used to he consistent with the icmaining
regulatory alternatives
Ml non-1,(it! point source lequircmenls for the preferred alternative appK to souites 250 nimlitu hoiu inpul capacity or where such data docs not applv. I ton per d.iv ,\'()\ emission". 1 or 1C engines
and cement manur.icliinng. the emission reduction requirements loiiespond to the highest i eduction achievable lor the source catcgon at less Ihan SS.OOO per o/one season ton
Page 2-10
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Table 2-4
Percent Change from 2007 Base C'ase in 37-Slate NOx Emissions
Major Sector
0.25 Trading
0.20 Trailing
RegionaliU 1
0.15 Trading
0.12 Trading
O/.one Season NOx Corresponding to UAM-V Inputs
IX JU Sources
Non-1 X HJ Sources
'lolal Point Sources
-26 1
-21 9
-24 1
-IS "?
-277
-"527
-V) 0
-27 7
-is 2
-4 1 5
-27 7
-IX X
-492
-27 7
-41 X
Warm Season Annuali/.ed NOx Corresponding to RADM-RPM Inputs '
IXil ' Sources
Non-1 XUI Sources
lotal I'omt Sources
-257
-I5X
-22 0
-"U 7
-200
-^1 S
-IX -1
-2S 9
-11 X
-41 7
-25 9
-17 1
-4X 5
-25 X
-40 1
Cold Season Annuali/c-il NOx Corresponding to RADM-RPM Inputs '
XHJ Sources
Mon-HGU Sources
Total Point Sources
-9 1
- 1 6 0
-1 1 X
-9 1
-261
-1SS
-9 1
-26 1
-I5X
-92
-26 1
-I5X
-94
-261
- 1 5 9
Annual NOx Corresponding to S-R Matrix Inputs
Xil ) Sources
Mon-h(!U Souiccs
1 dial I'oinl Sources
- 1 5 ()
-24 5
-i the 5-month .mcf 7-month NOx reductions will yield .m approximation ol the annual \O\ reductions
' '1 ho \(K reduction estimates for the non-I-.Cfl ' sources is based on the d()".. S5.000 per Ion altoi native ulnc.li is described as the "piolcirod allenialivo" in 1 able 2-1
'age 2-11
-------
2.3 References
OTAG. 1997a Draft of Costs of NOx Control Strategics on Electric Power Generation Using the
Integrated Planning Model For incorporation into the OTAG Final Report. June 1997
OTAG. 1997b Trading and Incentives WorkGroup Report - Draft of OTAG Final Report Chapter?.
June 1997
U S Environmental Protection Agenc>. 1996 Analyzing Electric Power Generation under the CAAA
Office of Air and Radiation. Washington. D C . Juh 1996
U S Em ironmental Protection Agenc>. 1997a Proposed Ozone Transport Rulemaking Regulatory
Analysis Office of Air and Radiation. Washington. D C . September 1997
U S Em ironmental Protection Agenc\. 1997b Model NOx Cap and Trade Rule Workshop Working
Papers Office of Atmospheric Programs. Washington. D C . December 1997
U S Em ironmental Protection Agenc\. 1998a Analyzing Electric Power Generation under the CAAA
Office of Air and Radiation. Washington. D C . March 1998
U S Em ironmental Protection Agcncx. 1998b Development of Modeling Inventory and Budgets for
Regional NOx SIP Call Office of Air Quaht> Planning and Standards. Research Triangle Park. September
1998
Page 2-12
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Chapter 3. AIR QUALITY IMPACTS
This chapter describes the methods for estimating air qualm for the 2007 base case and several
altematn e policy scenarios EPA has estimated the air quality changes that have been linked to health.
\\elfare. and ecological benefits, including changes in ambient paniculate matter (PM10 and PM:5), ambient
ozone, nitrogen deposition, and visibility degradation First, emission levels corresponding to the base case
and alternative pohc> scenarios are estimated, and this data is used to run air quality models Using the
methods identified and described m Chapter 4. air quality changes are then associated with human
populations and ecos\ stems to estimate changes in health and welfare effects
EPA has used a regional-scale \ersion of the Urban Airshed Model (UAM-V) to estimate ozone air
quality The Regional Acid Deposition Model (RADM) is used to estimate nitrogen deposition To estimate
PM air quality and \ isibihty degradation. EPA has used both the Regional Particulate Model (RPM) and a
Source-Receptor Matrix (S-R Matrix) based on the Chmatological Regional Dispersion Model (CRDM)
T\\o different PM models are used because the results of each model can be interpreted to represent the range
of atmospheric chemistry that may exist in the year 2007 The results of RPM are used to represent a future
eastern U S atmosphere \\here acid sulfate levels are still high enough to control atmospheric chemistry. and
more specifically ammonium nitrate particle formation In this circumstance, reductions in NOx emissions
may result in non-linear responses in total fine particle \c\ els. mvoh ing both decreases and increases' The
results of the S-R Matrix are used to represent a future eastern U S atmosphere where acid sulfate levels do
not dominate particle formation chemistry In this case, reductions in NOx emissions would be expected to
result more directly in reductions in PM
Section 3 1 co\ers the estimation of ozone air quality using UAM-V Section 3 2 co\ers the
estimation of paniculate matter air quality using RPM. and section 3 3 discusses the S-R Matrix Section 3 4
discusses the estimation of nitrogen deposition using RADM Finally, section 3 5 co\ers the estimation of
\isibihty degradation using both RPM and the S-R Matrix
3.1 Ozone Air Quality Estimates
The EPA has used the emissions inputs discussed m Chapter 2 with a regional-scale version of the
Urban Airshed Model (UAM-V) to estimate ozone air quality UAM-V \\as the primary modeling tool relied
on by the OTAG process that pro^ ided the foundation for the NOx SIP call Because it accounts for spatial
and temporal \ anations as v\ell as differences in the reactivity of emissions, the UAM-V is ideal for
e\aluatmg the air-quality effects of emission control scenarios
Model inputs are prepared from obsen ed meteorological, emissions, and air quality data for the
episode day s using prognostic meteorological modeling and/or diagnostic and mterpolative modeling
techniques The model is then applied with these inputs, and the results are evaluated to determine model
performance Once the model results have been evaluated and determined to perform within prescribed
levels, the same base-case meteorological inputs are combined with modified or projected emission
inventories to simulate possible alternative future emission scenarios
See Appendix D for a more thorough discussion of non-linear chemistn and fine particle formation
Page 3-1
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For this stud>. EPA uses the UAM-V modeling s>stem for the eastern U S The modeling s\stem is
applied for a base-Near of 1995 and for seNeral future-Near scenarios, including a 2007 baseline and several
control strategy options The UAM-V modeling SNstem requires a \anet\ of input files that contain
information pertaining to the modeling domain and simulation period These include gridded. da\ -specific
emissions estimates and meteorological fields, initial and boundary conditions, and land-use information
3.1.1 Modeling Domain
The modeling domain for this application is identical to that used b\ OTAG in their modeling
anah ses The domain encompasses most of the eastern U S and consists of two grids, as illustrated in Figure
3-1 The horizontal resolution for the inner grid, or fine grid, \\hich is the shaded area of Figure 3-1. is
approximately 12 km. this grid consists of se\en vertical lasers The horizontal resolution for the outer grid.
\\hich is the unshaded area of Figure 3-1. is approximate!} 36 km. this grid consists of fne \ertical
la>ers The top of the modeling domain is 4000 meters above ground le\el
3.1.2 Simulation Periods
The four OTAG multi-da\ simulation periods are used in this stud\ to prepare the future-Near ozone
profiles These include the following 31 days 4-11 Juh 1988. 16-21 Juh'l991. 22-29 Juh 1993. and 4-18
JuK 1995 (the start-up da> s for each simulation period are not listed here) All four simulation periods are
characten/ed b> high ozone concentrations in one or more portions of the eastern U S . numerous
exceedances of the 1 -hour National Ambient Air Quality Standard for ozone were recorded during each of the
periods
3.1.3 UAM-V Model Output
Standard output from the UAM-V modeling s\stem includes (1) hourh. gridded surface-la\er ozone
concentrations (pro\ided as hourh a\erages). (2) instantaneous o/one \alues for all grid cells and laxers for
each hour of the simulation, and (3) detailed information on the sub-gnd-scalc plume-in-gnd treatment For
this stud\. hourh. gridded. surface-la> cr o/one concentrations \\ere extracted from the file containing hourh
a\ eragc o/onc \ alues This information \\ as used in the calculation of adjustment factors as described in the
follo\\mL! section
Page 3-2
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Figure 3-1
UAM-V Modeling Domain
Page 3-3
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3.1.4 Converting Episode Estimates to Full-Season Profiles
The UAM-V runs generate surface la\er hourh average o/.one \ alues for each of the 31 episode da\ s
for a total of 744 hourh predictions for each model grid cell These predictions are used in conjunction \\ith
actual 1995 obsen ations to generate ozone \ alues for the entire ozone season :
This procedure uses observed hourh ozone data obtained from EPA's AIRS monitor database for
1995 Indn idual monitors are mapped onto the gridded UAM-V output, and the concentrations of the
corresponding grid cells are used to calculate an adjustment factor for each monitor-\ear-scenario The
adjustment factor at monitor / is calculated as
Adjustment factor =
Mean(Conct
\\hcre Cone ,L is the estimated hourh ozone concentration at monitor j. in ppm. for the indicated \ear and
pohc> option The adjustment factor is calculated onh for concentrations abo\e continental background.
\\hich is assumed to be 0 04 ppm
The estimated 2007 hourh ozone concentrations are obtained as follows
Cone ^ , :oo- r&: ( c/_; //r - (Cone ,nuut ]995 - 0 04) x (Adjustment Factor) ^ 0 04
°4
C°IK. he,,.,. 20T^,',c, oP,.on = C°"C; ho;,, . 1995
for Cone hou, , ]99; < 0 04
: The 5-month ozone season for this anah sis is defined as Ma\ to September for health benefits For
agricultural benefits for some crops, the rele\ ant growing season extends into April and into October and November In
this anah sis. no changes in ozone concentrations are assumed to occur outside the 5-month ozone season However, the
ozone metric (SUM06) used to estimate certain crop yield benefits requires that the baseline level of ozone
concentrations be estimated for months outside the 5-month ozone season
Page 3-4
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Therefore, \alues loss than 0 04 ppm are assumed msensitne to control strategies and are not adjusted
These air quality modeling procedures result in a set of estimated hourh ozone le\ els for each
existing monitor for e\ en hour in 2007 for the baseline and for each pohc\ option Certain hourly
observations are identical in all scenarios (specificalh hours outside the ozone season and 1995 observation?
belo\\ 0 04 ppm) Hours with ozone le\els abo\ e 0 04 in the base >ear have ne\\ predicted values based on
the a\ erage change in the UAM-V modeling results for the four modeled Juh periods
3.1.5 Extrapolating from Monitored to Unmonitored Grid Cells
Gn en monitor-specific hourh ozone data, ozone measures (e g . daih average) for each grid-cell are
obtained in t\\o steps (1) hourh data are com erted to an ozone measure of interest, such as the daily a\ erage.
and (2) monitor-specific ozone measures are used to estimate ozone measures at each grid cell The
comersion from hourh data to ozone measures of interest is straightforward The estimation of ozone
measures at each grid cell uses a com ex pohgon interpolation procedure method
Diagram 1: Convex Polygon
The com e\ polygon method interpolates air
quahh estimates from the monitors to the center of each
population grid cell The com ex poh gon is a
generalization of the planar interpolation method Rather
than limit the selection of monitors to. sa\. three, the
com ex pohgon method identifies the set of monitors that
best "surrounds" the center of each grid cell The result of
the com ex pohgon method is illustrated in Diagram 1
The set of monitors that best surround the grid cell are
determined b\ identifying which monitor is closest
(considering both angular direction and horizontal
distance] in each direction from the grid cell center The
set of monitors found using this approach \\ill form a
com ex poh gon around the grid cell center The
agricultural and forest effects anahsis also uses air qualm
interpolated using the com ex polygon method However.
calculating the benefits for these \\elfare categories is best accomplished b> using air qualiU data at the
count} le\el. rather than the grid cell le\el Therefore, the convex pohgon approach is used to estimate the
ozone le\ els at the count} centroid locations for these anah ses
In an effort to a\ oid extrapolating from monitored grid cells that are too far remo\ ed from the
unmomtored cell to be representative, yet still maintain relatnely complete geographic coverage of the UAM-
V modeling domain, monitors are dropped from the set of defining monitors for a population grid cell if the
monitor is greater than a 200 km Grid-cells that have no monitors within 200 km are dropped from the
health effects analysis An exception to this rule is made for the analysis of agricultural and forest effects
\\hich uses the SUM06 index at the county level3 Since ozone monitors are generally located m areas of
greatest population density, rather than in rural areas where crop and forest land are more dense, the 200 km
3 The SUM06 is a crop exposure index \\hich sums the ozone concentration for even hour that exceeds 0 06
ppm. within a 12-hour period from 8 00 A M to 8 00 P M
Page 3-5
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rule docs not pro\ idc sufficient coverage m mam- rural counties in the OTAG region Therefore, for the
SLM06 data set a 1.000 km range is used for am count} that is not \vithm 200 km of a monitor This affects
214 counties. primanK those on the \\estern edge of the region, including all of South Dakota After
determining the final set of surrounding monitors, the location's air quality le\el is calculated as an imerse-
distance \\emhted a\ erase of the selected monitors
3.1.6 Ozone Air Quality Results
A summan of the ozone air qualm profiles used to assess the benefits of alternative pohcx scenarios
is presented in Table ?-1 The a\ erage change in da\time hourh ozone values across the entire UAM-V
model domain ranges from -0 0005 ppm to -0 0008 ppm across alternatives The population-weighted
a\eragc change across the same model domain ranges from -0 0004 person-ppm to -0 0007 person-ppm
The SUM06 index used in the agriculture and forest benefits analysis indicates a range of changes from -9 to
-16 percent
Population-weighted changes in predicted 1-hour a\erage and 8-hour a\erage concentrations abo\e
the le\ el of each ambient air quality standard are presented in Appendix B These changes are estimated for
the total exposed population and for \anous subpopulations. including minority groups, children, the elderly.
and the impo\enshed In the SIP call states, the predicted decline in total population exposure above the 1-
hour o/one standard k\ el ranges from 51% to 74% The predicted decline in total population exposure
abo\ e the 8-hour o/one standard le\ el ranees from 31% to 5 1%
Table 3-1
Summary of I'AM-V Derhed Hourl> O/one Air Quality for Daylight Hours (7am to 7pm)
During the O/one Season
Statistic
Minimum (ppm > '
Maximum i ppm !
Spatial A\ erage (ppnVi
Pop ulation- Weighted
A\ erage (per.son-ppm'i '"
SLIM06 c
2007 Base
Case
002?''i
d 0532
(i d42(i
0 04 1 1
2535
Change RelatKe To 2007 Base Case"
0.25
Trading
-00020
() (K)d?
-0 0005
-0 0004
-23"1
0.20
Trading
-0 002"
(i 0008
-( I Q( I' 16
-0 0005
-3 12
Reg. 1
-00029
0 0004
-0 000"
-0 0006
-3 28
0.15
Trading
-0 0029
0 0004
-0 000 "
-0 0006
-367
0.12
Trading
-0 0036
0 0004
-0 0008
-0 0007
-4 14
' The change is defined as the control case \alue minus the base ease \alue
b The base ca.se minimum (maximum) is the \alue for the counU with the lowest (highest) seasonal 7am to 7 pm average where the season is defined
as Ma\ through September The change relati\ e to the base case picks the minimum (maximum) from the set of changes in all counties
c Calculated b\ summing the product of the projected 2007 counU population and the estimated 2007 counts seasonal ozone concentration, and then
dividing b\ the total population
" SUM06 is defined as the cumulative sum of hourh ozone concentrations o\er 0 06 ppm that occur from Sam to 8pm in the months of May through
September ( Vs noted, the other statistics in this Table are for the hours of 7am to 7pm )
Page 3-6
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Note that onh o/onc concentrations during da> light hours are assumed to be affected b> the control
strategics : UAM-V predictions of changes in nighttime values ha\e not been validated in this analysis, and
therefore EPA has assumed no changes in nighttime \ alues Benefit \ alues are therefore potential!}
understated to the extent that the pohc> alternates e\aluated in this anahsis result in improvements in
nighttime \ alues. and to the extent that nighttime \ alues are associated with health and \\elfare effects
The air quality technical support document for this RIA (Abt Associates. 1998) contains maps
showing the base case ozone concentrations and ozone concentration changes for each of fi\e regulator}
alternatn es (0 25 Trading. 0 20 Trading. Regionaht} 1.015 Trading, and 0 12 Trading) These maps onh
come\ information about the 5-month ozone season used for the health benefits analysis
3.2 PM Air Quality Estimates Using RPM
Ambient concentrations of PM are composed of direct!} emitted particles and of secondan aerosols
of sulfatc. nitrate, ammonium, and organics The EPA has used the emissions inputs discussed in section 3 1
with both the Regional Paniculate Model (RPM) and the Source-Receptor Matrix (S-R Matrix) to estimate
PM air quaht} Relatne to the S-R Matrix. RPM is designed to more realistically account for the complex
chemical interactions that take place in the atmosphere in the secondan, formation of PM This section
discusses the use of RPM and section 3 4 discusses the S-R Matrix
RPM is an "Eulenan" model that functions in tandem with the Regional Acid Deposition Model
(RADM) RPM predicts the chemistry transport, and d\namics of the secondan aerosols of sulfate. nitrate.
ammonium, and organics An e'valuation of RPM predictions of sulfate. nitrate, and ammonium against the
Clean Air Status and Trends Network (CASTTset) was performed and RPM's predictions \\ere deemed
reasonable for pohc> assessment purposes RPM predictions of organic aerosol were not used because RPM
has a laree under prediction for organics. the sources of \\hich ha\e not >et been thorough!} characterized
Inputs to RPM include RADM-processed fields of \\ater and RADM-predicted fields of oxidants. nitric acid
(for total nitrate), and ammonia (for total ammonia) The field of total nitrate is partitioned between
particulatc nitrate and nitric acid, depending on numerous factors, including the a\ailabihty of ammonia.
relatnc acid sulfate le\els. and ambient temperature RPM also uses a subset of the RADM emissions inputs
and the RADM meteorological fields as inputs
3.2.1 Modeling Domain
The RPM domain is also the same as RADM. unermg the eastern U S and southern Canada from
James Ba> to the Florida Ke\s (see Figure 3-2) The RPM grid size and vertical resolution is the same as
RADM's. 80-km and 15 layers up to the top of the free troposphere, respectn eh. with the lowest layer
ha\ ing a nominal height of 40 meters This relatively large grid areas (e g.. compared to UAM-V) is though
reasonable for estimating large scale deposition, but introduces uncertainty in estimating the location of PM
changes that are related to estimating health effects in the benefits analysis
4 In the UAM-V anahsis, daytime hours are 7 00 A M to 7 00 P M
Page 3-7
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(RADM-RPM and S-R Matrix) used to estimate visibility improxements produces estimates of the
improx emcnts at all locations throughout the SIP call region Ho\ve\ er. there are no direct \ aluation studies
ax ailablc for these other areas
To explore the potential magnitude of the value of improved visibility outside the Preservation
Values Stud> "s Southeast region, \aluation information about the demand for visibility in the Southeast from
the Presen ation Values study is used to approximate the value of visibility improxements at national parks
outside the Southeast In order to account for geographic variability in WTP. the Preservation Values
valuation method dix ided the recreational areas of the United States into three regions Separate values were
estimated for households hxmg in each region, as \\ell as for households living in other parts of the United
States for \ isibihty impro\ements in each region In-region respondents placed higher values on x isibihtx
impro\ements at a local recreational area than out-of-region respondents The lo\\est resident and non-
resident \ alues for am national parks examined in the Preservation Values study was for visibility in the
Southeast The out-of-region values in the Southeast will be used as an approximation of the \alue of national
parks in the Central and Northeastern U S that are impacted by the NOx SIP call
For the low Central and Northeastern recreational visibility estimates, out-of-region x alues per
household for the Southeastern non-indicator parks (equal to 60 percent of the total value per decn ie\\. or
S2 40) are used to approximate the x alue to populations both outside and inside the Central and Northeastern
U S of x isibihtx at Central and Northeastern national parks Out-of-region values are used for both sets of
populations to a\oid the possibility of double-counting benefits already accounted for in the calculation of
residential \ isibihrx benefits Non-indicator park values are used to account for the fact that indicator parks
in a region ma\ hax e unique \ alues relatix e to non-indicator parks and therefore x alues for these indicator
parks arc not appropriate to transfer to non-indicator parks For the high Central and Northeastern
recreational x isibihtx estimates, out-of-region \ alues per household for the Southeastern non-indicator parks
are used to approximate the x alue to populations outside the Central and Northeastern US of \ isibihtx at
Central and Northeastern national parks, and m-region x alues per household for the Southeastern non-
mdicalor parks are used to approximate the \ alue to populations \\ithm the Central and Northeastern U S
The sum of monetarx benefits for Southeast and Central and Northeastern visibihtx benefits xvill be used in
the calculation of total benefits
Table 4-28 presents the recreational xisibihtx x alues for national parks outside the Southeast Table
4-28 includes both unadjusted x isibihtx \ alues and x alues adjusted based on the ax erage adjustment factor of
0 82 for the RADM-RPM set As described in the beginning of this section, recreational xisibiiity results
generated using the S-R Matrix do not need to be adjusted Recreational x isibihtx benefits are predicted to be
reduced when using the S-R Matrix generated x isibihtx changes This is due to predicted increases in PM in
Minnesota and Maine, \\here txvo of the major parks outside the Southeast are located
Total loxv-end recreational visibility benefits (Southeast plus Northeast) using RADM-RPM
generated xisibihtx changes range from $24 million for the 0 25 trading alternatixe to $71 million for the
0 12 trading alternatix e Total RADM-RPM based high-end recreational visibility benefits range from $29
million for the 0.25 trading alternatix e to $85 million for the 0 12 trading alternative Total S-R Matrix based
low-end recreational visibility benefits range from $5 million for the Regionahty 1 alternatix e to $22 million
for the 0 12 trading alternative Total S-R Matrix based high-end recreational visibility benefits range from
$2 million for the Regionahtx 1 alternatix e to $21 million for the 0 12 trading altematix-e
Page 4-47
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indicator park alone Prior to pro\ iding their \ alues. respondents were instructed that "These questions
concern only \ isibihty at national parks in the Southeast and assume there will be no change in visibility at
national parks in other regions Other households are being asked about \ isibihty. human health and
\ egetation protection in urban areas and at national parks in other regions" Therefore, the estimated
\ aluation functions for the Southeastern National Parks are specifically designed to be in addition to any
\ alue for urban visibility Note that the total value of recreational \ isibihty improvements in Southeastern
National Parks is the sum of the value for indicator and non-indicator parks The high Southeast recreational
visibility estimate applies the "m-region" value for Southeastern visibility changes to the total population
inside the Southeastern region, and the "out-of-region" value for Southeastern visibility changes to all other
populations in the U S The total m-region WTP per household is $6 50 per deciview change, while the total
out-of-region WTP per household is $4 per deciview change
To take into account the possibility that the study did not fully account for double-counting, the lo\\
Southeast recreational visibility estimate will apply values of non-Southeast residents for Southeastern
National Parks to populations both in and out of the Southeast region The out-of-region value should not
include any \alue for impuned residential visibility, because non-Southeast residents, by definition. h\e
outside the region, and thus arc not included in the Southeast residential visibility calculation
Table 4-27 presents estimates of monetary benefits arising improxements in recreational \isibihty
due to reductions in PM associated \\ith the fi\ e regulatory alternatives for the NOx SIP call Table 4-27
includes both unadiusted \isibihty values and values adjusted based on the a\erage adjustment factor of 0 82
for the RADM-RPM set As described in the beginning of this section, recreational visibility results
generated using the S-R Matrix do not need to be adjusted
Table 4-27
Monet an Benefits from Impiwed Visibility in National Parks in the Southeast
Associated with the NOx SIP Call
Regulatory AiternatKe
0 12 Iradirm
0 1 5 '1 railing
Regionaht\ 1
0 20 Trading
0 25 Trading
Monetary Benefits (millions 1990S)
RADM-RPM
Unadjusted
1 ,o\\
$64
$36
$40
$36
$28
High
$"7
$43
$49
$43
$34
Adjusted
Lo\\
$52
$30
$33
$30
$23
High
$63
$35
$40
$35
$28
S-R Matrix
Lo\\
$21
$15
$11
$14
$12
High
$22
$15
$10
$14
$11
The SIP call will impact visibility at other national parks than the specific parks examined in the
Presen ation Values Study's Southeast region Visibility conditions will improve at additional national parks
and recreation areas in the Southeast, as well as parks in the Northeast and Midwest The air quality model
Page 4-46
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Residential Visibility
The residential \ isibilih valuation estimate is dern ed from the results of an extensive \ isibilit} stud>
(McClelland et al. 1991) A household WTP value is dern ed by dividing the value reported in McClelland et
al b> the corresponding h>pothesized change in decn ie\\. yielding an estimate of $14 per unit change in
decn ie\\ This WTP \ alue is applied to all households in am area estimated to experience a change in
visibility
Table 4-26 presents estimates of monetary benefits arising from improvements in residential
visibility due to reductions in PM associated \vith the fn e regulatory alternatives for the NOx SIP call. Table
4-26 includes both unadjusted visibility values and values adjusted based on the average adjustment factor Of
0 82 for the RADM-RPM set and 0 65 for the S-R Matrix set
Table -4-26
Monetan Benefits from Impro\ed Residential Visibility Associated with the NOx SIP Call
Regulator}
Alternate e
0 1 2 Trading
0 15 Irudmg
Regionahu 1
() 20 Trading
0 25 Trading
Monetan Benefits (millions 1990S)
RADM-RPM
Unadjusted
$144
$34
$42
S46
$3d
Adjusted
$118
$28
$34
$38
$25
S-R Matrix
Unadjusted
$92
$59
$41
$48
$46
Adjusted
$60
$38
$27
$31
$30
Recreational Visibility
The \ alue of \ isibilit} impro\ ements in certain National Parks in the Southeast is based on the
results of a 1990 Cooperatne Agreement project jointh funded b> the EPA and the National Park Sen ice.
"Prescn ation Values For Visibihu Protection at the National Parks" Based on that contingent valuation
stud> of MSibihn impro\ ements. Chestnut (1997) calculates a household willingness to pa> (WTP) for
\ isibihh impro\ ements. capturing both use and non-use recreational values, and accounts for geographic
\ anations in the \\illmgness to pay This method was used in the PM and ozone NAAQS RIA analysis, and
is adopted for the SIP call benefits analysis
The Preservation Values study examined the demand for visibility in three broad regions of the
countn. but onh the Southeast region is directly relevant for the SIP call Respondents both inside and
outside the Southeast region were asked their willingness to pay to protect visibihu at four National Parks in
the region Shenandoah. Mammoth Cave. Great Smoky Mountains, and Everglades National Parks Photos
from Shenandoah (the "indicator park" in the Southeast region) were provided as part of the survey
instrument Respondents were first asked for their value for preserving "onh visibility at National Parks in
the Southeast" The> were later asked to state what portion of their stated total \ alue was for \ isibility at the
Page 4-45
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Table 4-25 presents estimates of monetary benefits arising from the avoided household soiling
associated \\ ith the fn e regulator, alternatn es for the NOx SIP call Household soiling benefits are not
affected b\ the threshold assumption
Table 4-25
Monetan Benefits from Reduced Household Soiling Associated with the NOx SIP Call
Regulator) Alternate e
0 12 Trading
0 15 Trading
Regionalm 1
0 20 Iradmg
025 Trading
Monetary Benefits (millions 1990S)
RADM-RPM
$26
$10
$10
$10
$7
S-R Matrix
$11
$7
$6
$6
$6
4.4.5 Visibility
Visibility effects are measured in terms of changes in deci\ie\v. a measure useful for comparing the
effects of air quahu on \ isibility across a range of geographic locations This measure is directly related to
t\\o other common MsibiliU measures \isual range (measured in km) and light extinction (measured in km")
The decn ie\\ measure characten/es \ isibiliK in terms of perceptible changes in haziness independent of
baseline conditions Based on the decn ie\\ measure. t\\ o types of \ aluation estimates are applied to the
expected usibihu changes residential \isibilih and recreational \isibiht>
Visibility is a function of the abilit) of gases and aerosols to scatter and absorb light RPM onk
computes the loss of \ isibihu due to sulfates. nitrates, organic matter, and elemental carbon, but not other
\ anables. such as coarse PM and fine soil B> not including these other terms, the resulting estimates of
\VTP for residential and recreational \ isibiht> improvement are overestimated Based on the full suite of
\ anables a^ ailable at IMPROVE sites, the WTP estimates should, on a\erage. be multiplied by 0 82 to
correct for this bias The range of correction factors is from 0 40 to 1 00. depending on the site and to a
lesser extent the policy alternatn e SimilarK. \\hen calculating residential \ isibihty. the S-R matrix estimate
includes terms for sulfates. nitrates and coarse PM. but does not include organic matter and other variables
The results from the IMPROVE monitors suggest that to correct this bias, the WTP estimates should be
multiplied b> 0.65 at the mean, with the correction factors ranging from 0.28 to 1.00 Note that the S-R
matrix recreational \ isibility estimates include the full suite of visibility variables, so no correction is
necessan
Page 4-44
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Table 4-24 presents estimates of monetary benefits arising from the avoided costs of nitrogen
remo\ al for the 12 estuaries \\ith directh modeled nitrogen deposition changes and for the full set of 43 East
Coast estuaries including extrapolated benefits associated with five regulators- alternates for the NOx SIP
call Estimates in Table 4-24 assume that 10 percent of nitrogen deposited over the watershed reaches the
estuary. costs for non-stud} estuaries are equal to the average of the costs for the three case studies, and
benefits are applied only to nutnent-sensitn e estuaries
Table 4-24
Monetan Benefits Associated with the NOx SIP Call from Avoided Costs
of Nitrogen Remo>al in Eastern Estuaries
Regulator} Alternate e
0 1 2 "1 radmg
0 15 Trading
Rcgionalu\ i
0 20 Trading
0 25 Trading
Monetan Benefits (millions 1990S)
12 Modeled Eastern Estuaries
SI 29
SI 23
$115
$109
$^9
Extrapolation to 43 Eastern Estuaries
S248
$238
$221
$210
$152
4.4.4 Household Soiling Damage
Welfare benefits also accrue from a\oided air pollution damage, both aesthetic and structural, to
architectural materials and to cultural!) important articles At this time, data limitations preclude the ability
to quantify benefits for all materials \\hose deterioration ma> be promoted and accelerated b> air pollution
exposure Ho\\e\ er. this anah sis addresses one small effect in this category, the soiling of households b\
particulate matter
Assumptions regarding the air qualitv indicator are necessan to e\aluate the concentration-response
function PM , and PM^ arc both components of TSP Ho\ve\er. it is not clear which components of TSP
cause household soiling damage The Criteria Document cites some s\ idence that smaller particles ma\ be
pnmarih responsible, in \\hich case these estimates are consenatne
Several studies have pro\ ided estimates of the cost to households of PM soiling The study that is
cited b\ ESEERCO (1994) as one of the most sophisticated and is relied upon by EPA m its 1988 Regulaton
Impact Anah sis for SO; is Manuel et al (1982) Using a household production function approach and
household expenditure data from the 1972-73 Bureau of Labor Statistics Consumer Expenditure Survev for
over twenty cities in the United States. Manuel et al estimate the annual cost of cleaning per ug/m3 PM per
household as $1.26 (SO 48 per person times 2.63 persons per household) This estimate is low compared
with others (e g . estimates provided by Cummings et al. 1981, and Watson and Jaksch. 1982, are about
eight times and five times greater, respectively) The ESEERCO report notes, however, that the Manuel
estimate is probably downward biased because it does not include the time cost of do-it-yourselfers
Estimating that these costs ma\ comprise at least half the cost of PM-related cleaning costs, they double the
Manuel estimate to obtain a point estimate of $2 52 (reported by ESEERCO in 1992 dollars as $2 70)
Page 4-43
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a\ailable. more complete estimates of the commercial and ecological benefits of reduced atmospheric
deposition of nitrogen can be incorporated into regulator, analyses
The fixed capital costs for non-point controls in the case study estuaries is ranged from $061 to
$45 27 per pound for agricultural and other rural best management practices and from $35 to $142 64 per
pound for urban nonpomt source controls (storrmvater controls, reservoir management, onsite disposal
system changes, onsite BMPs) Using these as a base, the total fixed capital cost per pound (weighted on the
basis of fractional relationship of nitrogen load controlled for the estuan goal) is calculated for each of the
case-stud) estuaries and applied m the valuation of their avoided nitrogen load controlled The weighted
capital costs per pound for the case-stud> estuaries are $32 88 for Albemarle-Pamlico Sounds. $22 31 for
Chesapeake Ba>. and $88 25 for Tampa BayJ. For the purposes of this anal) sis. EPA assumes that estuaries
that ha\e not >et established nutrient reduction goals will utilize the same tvpes of nutrient management
programs as protected for the case study estuaries For the other nine estuaries, an average capital cost per
pound of nitrogen (from the three case-estuaries) of $47 65/lb ($105/kg) is calculated and applied, this cost
ma) understate or o\ erstate the costs associated \\ith reductions in these other estuaries The other nine
estuaries general!) represent smaller, more urban estuaries (like Tampa Ba\). which typicalh ha\e fe\\er
technical and financial options a\ ailable to control nitrogen loadings from nonpomt sources This may result
in higher control costs more similar to the Tampa Ba> case On the other hand, these estuaries may have
opportunities to achieve additional point source controls at a lower costs Also, increased public awareness
of nutnfication issues and technological innovation mav in the future, result in States finding lower cost
solutions to nitrogen remo^ al
The 12 estuaries directh analw.ed represent approximate!) 48% of the estuanne watershed area
along the East Coast (there are 43 East Coast estuaries of \\hich 10 \\ere in the sample, and 31 Gulf of
Mexico estuaries of \\hich 2 are in the sample) Because NOAA data indicate that approximate!) 89%
(92 6% b\ watershed area plus surface area) of East Coast estuaries are highh or moderately nutrient
scnsitne. it is reasonable to expect that estuaries not included in this analysis would also benefit from reduced
deposition of atmospheric nitrogen Total benefits from the 12 representative estuaries are scaled-up to
include the remainder of the nutrient sensitive estuaries along the East Coast (92 6% of all East Coast
estuaries) on the basis of estuan \\atershed plus water surface area Since the 12 representatn e estuaries
account for 48 percent of total eastern estuanne area, estimates are scaled up b\ multiplying the estimate for
the 12 estuaries b) 2 083 and then taking 92 6 percent of this estimate to adjust for nutrient sensitivity
All capital cost estimates are then annuahzed based on a 7% discount rate and a typical
implementation hon/on for control strategies Based on information from the three case stud) estuaries, this
t) pically ranges from 5 to 10 \ ears EPA has used the midpoint of 7 5 years for annuahzation. which yields
an annuahzation factor of 0 1759 Non-capital installation costs and annual operating and maintenance costs
are not included in these annual cost estimates Depending upon the control strateg). these costs can be
significant Reports on the Albemarle-Pamlico Sounds indicate, for instance, that planning costs associated
with control measures comprises approximately 15% of capital costs Information received from the
Association of National Estuary Programs indicates that operating and maintenance costs are about 30% of
capital costs, and that permitting, monitoring, and inspections costs are about 1 to 2% of capital costs For
these reasons, the annual cost estimates mav be understated
4 The value for Tampa Ba\ is not a true \\eighted cost per pound, but a midpoint of a range of $58.54 to
$117 65 de\ eloped b\ Apogee Research for the control possibilities (mosth urban BMPs) in the Tampa Bay estuan
Page 4-42
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estuaries are chosen because of the a\ailabiht> of necessan data and their potential representatneness This
anal} sis uses the following data for each estuan (1) total nitrogen load from all sources. (2) direct nitrogen
load from atmospheric deposition to the estuan surface. (3) indirect nitrogen load from atmospheric
deposition to the estuan \\atershed and subsequent pass-through to the estuan. itself. (4) established
nitrogen thresholds and reduction goals adopted b\ the communit}. and (5) costs associated with using
agreed upon non-point water pollution control technologies
Atmospheric nitrogen reductions are valued in this anal} sis on the basis of a\oided costs associated
\\ith agreed upon controls of nonpomt water pollution sources Benefits are estimated using an average.
localh -based cost for nitrogen remo\ al from \\ater pollution (EPA. 1998) Valuation reflects water pollution
control cost a\ oidance based on average cost/pound of current non-point source water pollution controls for
nitrogen in three case stud} estuaries Albemarle/Pamlico Sounds. Chesapeake Bay. and Tampa Ba> Taking
the \\eightcd cost/pound of these a\ ailable controls assumes States \\ill combine lo\\ cost and high cost
controls, \\hich could inflate a\oided cost estimates
In a recent adMSon statement, the EPA's Science Aduson Board (SAB), charged \\ith re\ie\\mg
the benefits methodology for the §8 12 Prospectne report on the benefits and costs of the Clean Air Act
Amendments, raised concerns about the use of the a\oided cost approach to \alue reduced ecosystem
damages Spccificalh. the} identified a key requirement which should be met in order for a\ oided costs to
approximate em ironmental benefits This requirement is that there is a direct link bet\\een implementation
of the air pollution regulation and the abandonment of a separate costK regulators program b> some other
agenc>. i e a state em ironmental agenc> Reductions in nitrogen deposition from the N0\ SIP call are
expected to impact estuaries all along the eastern seaboard and the Gulf Coast Many of the estuaries in these
areas are current!} being targeted b\ nitrogen reduction programs due to current impairment of estuanne
\\ater qualit} b\ excess nutrients Some of the largest of these estuaries, including the Chesapeake Bav ha\e
established goals for nitrogen reduction and target dates b\ \\hich these goals should be achie\ ed Using the
best and most easih implemented existing technologies, mam of the estuaries will not be able to achie\e the
stated goals b\ the target dates For example, the Chesapeake Ba\ needs an additional 9.000 tons of nitrogen
reductions per year and Long Island Sound needs an additional 3.500 tons of reductions per year Meeting
these additional reductions \\ill require de\elopment of ne\\ technologies, implementation of cost!} existing
technologies (such as storm\\ater controls), or use of technologies \\ith significant implementation
difficulties, such as agricultural best management practices (BMPs) Reductions in nitrogen deposition from
the atmosphere due to the NOx SIP call \\ill direct!} reduce the need for these additional costl} controls
Thus \\hile the NOx SIP call does not eliminate the need for nutrient management programs alread} in place.
H ma} substitute for some of the incremental costs and programs (such as an agricultural BMP program)
necessan to meet the nutrient reduction goals for each estuan This then meets the SAB requirement since
the NOx SIP call \\ill direct!} reduce the need for elements of separate costK reduction actions
EPA be!ie\ es that the use of an avoided cost approach in this RIA is consistent with the SAB advice
for appropriate use of a\ oided costs The SAB did not provide direct guidance on alternative approaches to
measuring the benefits of reduced nitrogen deposition to estuaries Howe\ er. EPA recognizes the fact that
a\ oided costs do not directly measure the benefits of reduced ecological impacts due to nitrogen deposition
Thus, \\hile a\ oided cost is only a proxy for benefits, and should be viewed as inferior to wilhngness-to-pay
based measures, it is preferred to excluding am quantitative estimate of benefits for this category Current
research is undenva} to develop other approaches for valuing estuarine benefits, including contingent
valuation and hedomc propert} studies However, this research is still sparse, and does not contain sufficient
information on the marginal willmgness-to-pa\ for changes in concentrations of nitrogen (or changes in water
qualm or \\ater resources as a result of changes in nitrogen concentrations) As more studies become
Page 4-41
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Table 4-23 presents estimates of monetan benefits of \ield changes of commercial forests associated
\\ith the fn c polic> alternatn es for the NOx SIP call EPA did not estimate monetan- benefits for all pohc>
altematn es Benefits for excluded alternatn es can be easih estimated using a ratio of estimated benefits to a
similar benefit categon. such as commodity crops Benefits for the 0 25 trading and RegionaliU 1
alternatn es are estimated b> applying the ratio of forestn to agricultural benefits for the 0 15 trading
altematn e. equal to 0 59. to the agricultural benefits for these two alternatives.
Because of the long harvesting cycle of commercial forests and the cumulative effects of higher
gro\\th rates, the benefits to the future economy will be much larger than the estimates reported in Table 4-
23 For example, the 0 12 trading policy alternative would result in about $8 0 billion additional forest
im entones b> 2040 The estimated annuahzed benefits for this alternative, $233 million, are much lower
because of smaller benefits in earlier years (i e : the 2010 and 2020 decades) and because the higher benefits
reah/ed in later \ears are hea\ iK discounted
Table 4-23
Commercial Forest Monetan Benefits Associated »ith the NOx SIP Call
Regulator)
Alternate
0 1 2 Trading
0 1 5 Trading
Regionalm 1
0 20 Trading
0 25 Tradinu
Monetary Benefits
(millions 1990S)
$233
$213
$188
$185
$143
4.4.3 Nitrogen Deposition
Excess nutrient loads, cspecialh that of nitrogen, are responsible for a -saneU of ad\ersc
consequences to the health of estuanne and coastal waters These effects include toxic and/or noxious algal
blooms such as bro\\n and red tides. \o\\ (h\poxic) or zero (anoxic) concentrations of dissolved oxygen in
bottom \\aters. the loss of submerged aquatic \egetation due to the light-filtering effect of thick algal mats.
and fundamental shifts in ph>loplankton community structure Direct concentration-response functions
relating deposited nitrogen and reductions m estuanne benefits are not available The preferred \\ilhngness-
to-pa\ based measure of benefits depends on the a\ ailabihu of these concentration-response functions and on
estimates of the value of environmental responses Because neither appropriate concentration-response
functions nor sufficient information to estimate the marginal value of changes in water quality exist at
present, an avoided cost approach is used instead of willmgness-to-pay to generate estuary related benefits of
the NOx SIP call
The benefits to surrounding communities of reduced nitrogen loadings resulting from various control
strategies for atmospheric NOx emissions are calculated for 10 East and 2 Gulf Coast case study estuaries,
and extrapolated to all 43 Eastern U S estuaries The 10 East Coast case study estuaries represent
approximately half of the estuanne watershed area in square miles along the East Coast. The 12 case study
Page 4-40
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\\hilc differences are much larger \\hen the most sensitn e culm ars are used Values for AGSIM exceed
those from RMF b> 40 to 44 percent, depending on the regulator, altematn e
Table 4-22
Sensithity Analysis: AGSIM Generated Monetary Benefits Due to Changes in
Production of Commodity Crops Associated with the NOx SIP Call
Regulator Alternate e
012 Trading
015 1 radmg
Regionahu 1
02'' ! radmg
'"' 25 I radmc
Monetary Benefits
(millions 1990S)
Least Sensitn e Cultn ars
$51
$44
S3 8
$3"
$29
Most Sensitive Cultivars
$595
$521
$451
$440
$338
4.4.2 Commercial Forests
Am attempt to estimate economic benefits for commercial forests associated \\ith reductions in
o/one arising from implementation of the NOx SIP call is constrained b\ a lack of exposure-response
functions for the commercial!) important mature trees Although exposure-response functions ha\e been
dc\ eloped for seedlings for a number of important tree species, these seedling functions cannot be
extrapolated to mature trees based on current knowledge Recognizing this limitation, a stud\ (P>c. 1988
and dcStcigcr & P\ e. 1990) im oh ing expert judgment about the effect of o/one le\ els on percent growth
change is used to de\elop estimates of o/one-relatcd economic losses for commercial forest products
An anahsis b\ Mathtech in conjunction \\ith the USDA Forest Sen ice (Mathtech. 1998b) of forestry
sector benefits quantifies the effect of o/onc on tree gro\vth and the demand and supph characteristics of the
timber market The estimates do not include possible non-market benefits such as aesthetic effects Forest
aesthetics is discussed qualitative!) later in this chapter
The economic value of yield changes for commercial forests \\as estimated using the 1993 timber
assessment market model (TAMM), TAMM is a U S Forest Sen-ice (Adams and Haynes, 1996) spatial
model of the solid\\ood and timber inventory elements of the U S forest products sector The model provides
projections of timber markets b> geographic region and wood tvpe through the year 2040 Nine regions
co\enng the continental U S are included in the analysis TAMM simulates the effects of reduced 0,
concentrations on timber markets by changing the annual growth rates of commercial forest growing-stock
inventories The model uses applied welfare economics to value changes in ambient O3 concentrations
SpecificalK. TAMM calculates benefits as the net change in consumer and producer surplus from baseline O3
concentrations to the 0, concentrations resulting from implementation of the NOx SIP call policy.
Page 4-39
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(Lee ct al . 1996) Four mam areas of the RMF have been updated to reflect the 1996 Farm Bill and USDA
data projections to 2005 (the >ear farthest into the future for which projections are available) These four
areas are > icld per acre, acres han ested. production costs, and model farms Documentation outlining the
2005 update is prouded in EPA. 1997a
Table 4-21 presents estimates of monetan, benefits due to changes in the production of all six
commodiu crops associated with fi\e regulator* alternatives for the NOx SIP call Estimates for both most
and least ozone sensitn e crops are presented in Table 4-21 The highest benefit estimate of S415 million
(assuming relatneh sensitn e cultnars for the 0 12 Trading alternatne) is a relatnely small 0 6% of the total
1997 crop \ alue This suggests that individual farmers are not hkeh to identify ozone sensitivity as a major
factor in obsen ed > leld changes in the presence of other more ob\ lous factors, such as meterolog).
fertih/ation. and pest resistance Likewise. gi\ en the relatn e importance of other > icld enhancing crop traits.
such as pest resistence. it is unhkcK that seed de\ elopers \\ill focus on de\elopment of ozone tolerant
\ aneties Nonetheless, to the extent that ozone resistant cultn ars are a\ ailable and farmers respond to
increased ozone le\els b> subtituting to\\ards more ozone resistant cultivars. crop losses \\ill be reduced
Table 4-21
Changes in Production of Commodity Crops and Monetary
Benefits Associated »ith the NOx SIP Call
Regulators Alternate e
0 12 Trading
(i 15 Irading
RegionaliU 1
0 20 Trading
(| 25 Tradirm
Monetan Benefits
(millions 1990S)
Least Sensitn e Cultn ar>
$53
$4-
$4?
$42
S34
Most Sensitn e Cultnars
$415
$361
$318
$312
S242
AGSIM is an alternatne agricultural sector model which has gamed popularity in the agricultural
economics field It has been extensn eh peer-re\ icwed and it estimates a more complete set of responses to
> icld changes than RMF The pnman difference is that AGSIM models planted acreage as a beha\ loral
response to > leld and relative price changes, \\hile RMF treats planted acres as a fixed factor As a sensitn it>
anah sis. AGSIM was run for the fn e regulators alternate es to determine how AGSIM performs relative to
RMF RMF was chosen for the primary anah sis because it has been extensive!) tested and used in previous
regulator* impact anah ses For a complete description of AGSIM. see the AGSIM technical support
document (Abt Associates. 1998b)
Table 4-22 presents AGSIM generated estimates of monetan- benefits due to changes in the
production of all six commodity crops associated with the five regulatory- alternatives for the NOx SIP call
Estimates for both most and least ozone sensitive crops are presented in Table 4-22 As might be expected.
differences between the results of the models are relatnelv small when the least sensitn e cultn ars are used.
Page 4-38
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Table 4-20
Quantified Ozone- and PM- Related Welfare Effects
Included in the Benefits Anahsis
Welfare Effect
Agriculture - Commodity Crops
Nitrogen Deposition in I stuarme and
Coastal Waters
Decreased Woiker Productnm
Visibilm -Class 1 Areas ( SF. only")
Visibility -Residential
Household Soiling
Pollutant
Ozone
NO\
Ozone
PM
PM
PM
Stud^
Mathtech. 1 998
EPA. 1998
Crocker and Horst. 1981 and
EPA. 1 994
Chestnut et al . 1 997
McClelland et al . 1991
ESEERCO. 1994
4.4.1 Commodity Agricultural Crops
The economic xaluc associated \\ith van ing lex els of yield loss for ozone-sensitive commodity crops
is analyzed using a rcMsed and updated Regional Model Farm (RMF) agricultural benefits model (Mathtech.
1998a) The R.V1F is an agricultural benefits model for commodity crops that account for about 75 percent of
all U S sales of agricultural crops The RMF explicitly incorporates exposure-response functions into
microeconomic models of agricultural producer beha\ lor The model uses the theory of applied \\elfare
economics to x alue changes in ambient o/one concentrations brought about by particular policy actions such
as the N0\ SIP call
The measure of benefits calculated b> the model is the net change in consumers' and producers'
surplus from baseline o/one concentrations to the ozone concentrations resulting from attainment of
alternate c standards Using the baseline and post-control equilibria, the model calculates the change in net
consumers' and producers' surplus on a crop-by -crop basis-' Dollar \ alues are aggregated across crops for
each standard The total dollar \ alue represents a measure of the change in social welfare associated with the
regulatory alternate e Although the model calculates benefits under three altematn e welfare measures
(perfect competition, price supports, and modified agricultural policy), results presented here are based on the
"perfect competition" measure to reflect recent changes in agricultural subsidy programs Under the recently
reused 1996 Farm Bill . most eligible farmers ha\e enrolled in the program to phase out government crop
price supports for the RMF-rele\ ant crops \\heat. corn, sorghum, and cotton
For the purpose of this analysis, the six most economically significant crops are analyzed corn,
cotton, peanuts, sorghum, soybean, and \\mter wheat In the 37-state region modeled in this analysis, these
crops were valued at over $70 billion in 1997 The model employs biological exposure-response information
derived from controlled experiments conducted by the National Crop Loss Assessment Network (NCLAN)
3 Agricultural benefits differ from other health and \\elfare endpomts in the length of the assumed ozone
season For agriculture, the ozone season is assumed to extend from April to September This assumption is made to
ensure proper calculation of the ozone statistic used in the exposure-response functions The only crop affected by
changes in ozone during April is winter wheat
Page 4-37
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the single s\mptoms e\aluated b\ the studies listed in Exhibit 4 5 are not se\ere. then the estimate of WTP to
a\oid a MRRAD should be somewhere between $15 72 and $83 00 Because the lEc estimate of $38 37 falls
\\ithin this range (and acknowledging the degree of arbitrariness associated with am estimate within this
range), the lEc estimate is used as the point estimate of MWTP to avoid a MRRAD
Table 4-19 presents point estimates of avoided incidences of PM-related Minor Restricted Activiu
Da\ s and monetan benefits associated with the fi\ e regulator} alternatn es for the NOx SIP call
Table 4-19
Avoided PM-related Minor Restricted Acthin Da>s and Monetan Benefits
Associated with the NOx SIP CalP
Regulator*
Alternate e
0 12 Irading
0 151 rading
Rcgionalm 1
0 20 Trading
0 25 'Irading
A\oided Incidences (cases/year)
RADM-RPM
15u.g/m3
1394.423
62d.l93
614.892
537.468
358.285
Back
ground
1.621.039
611.497
648.058
617 ]73
434."?83
S-R Matrix
15ug/m3
423.788
298.208
24^.195
268.453
249.224
Back
ground
742.97"
498.840
389.994
430.935
402.875
Monetan Benefits (millions 1990S)
RADM-RPM
15u.g/m3
$53
$24
$24
$21
$14
Back
ground
$62
$24
$25
$24
$17
S-R Matrix
1 5 u.g/m3
$16
$11
$10
$10
S10
Back
ground
S29
Sly
$15
$17
$16
* Annual baseline incidence is. 780.000 da\s \ear per 100.000 population between the age.-, of 18 and 65 Total annual baseline
incidence for the NOx SIP call reeion is 1.060 59".322 da\s \ear
4.4 Ozone- and PM-related Welfare Effects
In addition to the effects on human health described abo\e. reducing NOx emissions in the eastern
United States \\ill also ha\ e \\elfare (i e . non-health) effects Welfare effects co\ er a potential!} broad range
of ad\erse effects, including ad\erse impacts on plants, animals, structural materials, \isibility and
ecos\ stem functions Like health effects, in order to be included in a quantified monetan benefits anah sis.
all of the analytical links between changes in emissions and the monetan. \alue of the effects must be
available While the required analytical components are available for certain welfare endpomts. mam other
hkeh or possible welfare categories are omitted from the anahsis The availabihu of information on each
anahtical step limits the total coverage of the welfare effects All of the welfare benefits that are quantified
and included m the benefits anahsis were included in the PM and ozone NAAQS RJA. However, there have
been some changes in the quantification of certain welfare effects, which are described in this section. Table
4-20 lists the welfare categories that are included in the benefits analysis
The welfare categories included in the SIP call analysis that use the identical procedures previous!)
used are described in the technical support document for this RIA (Abt Associates. 1998a) The remainder of
this section describes aspects of the welfare analysis that are different than the ozone and PM NAAQS RIA
Page 4-36
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Table 4-18
Avoided PM-related Work Loss Days and Monetary Benefits Associated with the NOx SIP Call*
Regulator}
Alternate e
0 12 Trading
0 1 5 '1 rading
Regionalm 1
(I 20 Trading
0 25 Iradiniz
Avoided Incidences (casesAear)
RADM-RPM
15ug/m3
167.124
74.345
73.703
64.608
43.136
Back
ground
194.481
73.325
77.953
74.176
52.333
S-R Matrix
15 ug/m3
53.315
38.262
32.149
34.696
32.391
Back
ground
91.557
62.300
49.258
54.163
50.801
Monetary Benefits (millions 1990S)
RADM-RPM
15 ug/m3
$14
$6
$6
$5
$4
Back
ground
$16
$6
$6
$6
$4
S-R Matrix
15 ng/m3
$4
$3
$3
$3
• S3
Back
ground
$8
$5
$4
S4
$4
' Annual baseline incidence is 1 50.750 da\s \ear per 100.000 \\orkers bet\\een the ages of 1 8 and 65
4.3.7 Minor restricted activity days
No studies are reported to ha\e estimated WTP to avoid a minor restricted acti\it> da> (MRAD)
Ho\\ e\ er. lEc (1993) has dem ed an estimate of WTP to a^ oid a minor respiratory restricted actn it> da>
(MRRAD). using WTP estimates from Tolle\ et al (1986) for a\oidmg a three symptom combination of
coughing, throat congestion, and sinusitis This estimate of WTP to a\oid a MRRAD. so defined, is S38 37
Although Ostro and Rothschild (1989) estimated the relationship bet\\een PM-2 5 and MRADs. rather than
MRRADs (a component of MRADs). it is hkch that most of the MRADs associated \\ith exposure to PM-
2 5 are in fact MRRADs For the purpose of \ alumg this health endpomt. then, it is assumed that MRADs
associated \\ith PM exposure ma\ be more specificalK defined as MRRADs. and the estimate of MWTP to
a\ oid a MRRAD is used
Am estimate of MWTP to a\oid a MRRAD (or am other type of restricted acti\it> da> other than
WLD) \\ill be somewhat arbitran because the endpomt itself is not precisely defined Mam different
combinations of s\ mptoms could presumably result in some minor or less minor restriction in activity It has
been argued (Krupmck and Kopp. 1988) that mild symptoms \\ill not be sufficient to result in a MRRAD. so
that WTP to a\ oid a MRRAD should exceed WTP to a\ oid am single mild symptom A single se\ ere
symptom or a combination of s\mptoms could. ho\\e\ er. be sufficient to restrict actn it> Therefore WTP to
a\oid a MRRAD should, these authors argue, not necessanh exceed WTP to a\oid a single severe symptom
or a combination of symptoms The "se\ enty " of a s\Tnptom. ho\\ever. is similar!} not precise!) defined.
moreoN er. one \c\ el of seventy of a s\mptom could induce restriction of activity for one mdi\ idual \vhile not
doing so for another The same is true for am particular combination of s\mptoms
Given that there is inherentl} a substantial degree of arbitrariness in any point estimate of WTP to
a\oid a MRRAD (or other kinds of restricted activity days), the reasonable bounds on such an estimate are
considered B\ definition, a MRRAD does not result in loss of work WTP to avoid a MRRAD should
therefore be less than WTP to avoid a WLD At the other extreme. WTP to avoid a MRRAD should exceed
WTP to a\ oid a single mild symptom The highest lEc midrange estimate of WTP to avoid a single s\mptom
is $15 72. for eye irritation The point estimate of WTP to avoid a WLD in the benefit analysis is $83 If all
Page 4-35
-------
Table 4-17
Monet an Benefits from Ozone-related A>oided Lost Worker ProducthiU
Associated with the NO\ SIP Call
Regulator^
Alternate e
0 1 2 Trading
0 1 5 Trading
Regionalm 1
0 20 Trading
0 25 Trading
Monetan Benefits
(millions 1990S)
$25
$22
$20
$19
$14
4.3.6 \Vorklossda\s
Willingness to pa\ to a\oid the loss of one day of \\ork \\as estimated b> dmding the median \\eekh
\\age for 1990 (U S Department of Commerce. 1992) b\ 5 (to get the median daily \\age) This values the
loss of a da> of \\ork at the median \\age for the da\ lost Valuing the loss of a da> "s work at the wages lost
is consistent \\ith economic theon. \\hich assumes that an mdnidual is paid exactly the \alue of his labor
The use of the median rather than the mean. ho\\ e\ er. requires some comment If all mdn iduals in
society \\ere equalh hkeh to be affected b> air pollution to the extent that the> lose a da> of work because of
it. then the appropriate measure of the \alue of a \\ork loss da\ \\ould be the mean daih wage It is highh
likeh, ho\\e\er. that the loss of \\ork da\s due to pollution exposure does not occur with equal probability
among all mdn iduals. but instead is more hkch to occur among lo\\er income mdn iduals than among high
income mdn iduals It is probable, for example, that mdn iduals \\ho are vulnerable enough to the negatn e
effects of air pollution to lose a da\ of \\ork as a result of exposure tend to be those with general!} poorer
health care Indn iduals \\ith poorer health care ha\ c. on a\erage. lo\\er incomes To estimate the a\erage lost
v\ages of mdniduals \\ho lose a da> of \\ork because of exposure to PM pollution, then, would require a
\\eighted a\eragc of all daih \\ages. \\ith higher \\eights on the lou end of the wage scale and lower weights
on the high end of the \\age scale Because the appropriate \\eights are not known. howe\er. the median \\age
\\as used rather than the mean wage The median is more hkeh to approximate the correct \ alue than the
mean because means are highh susceptible to the influence of large \ alues in the tail of a distribution (in this
case, the small percentage of \en large incomes in the United States), whereas the median is not susceptible
to these large \ alues The median daih \\age in 1990 \\as $83 00
Table 4-18 presents point estimates of avoided PM-related work loss days and monetary benefits
associated \\ith the fh e regulatory alternatn es for the NOx SIP call
Page 4-34
-------
Table 4-16
A>oided Incidences of PM-related Upper and Lower Respiratory Symptoms
and Monetar\ Benefits Associated with the NOx SIP CalF
Regulator)
Alternati\ e
0 1 2 Trading
URSr
LRS
0 1 5 'I rading
URS
IRS
Regionalm 1
1TRS
LRS
0 2>'i Trading
URS
LRS
0 25 1 rading
URS
LRS
Avoided Incidences (cases/year)
RADM-RPM
15 ug/m3
1.639
16.051
623
-.162
642
6.853
585
6. 1 90
392
4.10"
Back
ground
1.683
18.675
655
7.151
667
7.313
650
7.057
462
4.934
S-R Matrix
15 ug/m3
682
4.604
459
3.208
343
2.567
389
2.858
372
2.6"7
Back
ground
748
8.328
494
5.5-2
368
4.189
414
4.-71
396
4.521
Monetary Benefits (millions 1990S)
RADM-RPM
15 ug/m3
$00
$02
$00
$0 1
$00
$0 1
$00
$0 1
$00
$0 0
Back
ground
$00
$02
$00
$0 1
$00
$0 1
$00
$0 1
$00
$0 1
S-R Matrix
15 ug/m3
$00
$0 1
$00
$00
$00
$00
$00
$00
$00
$0 0
Back
ground
$00
$0 1
$00
$0 1
$00
$00
$00
$0 1
$00
$0 1
' Annual baseline incidence in the applied population (asthmatics, ages 9-11)
on baseline incidence is not a\ailable for lo\\er respiraton sxmptoms
''URS upper re-,piraior\ symptom. LRS lo\\er respirator, sxmptom
is 38.187 for upper respiraton s\mptoms Information
Page 4-33
-------
The point estimates derned for MWTP to a\oid a da\ of URS and a case of LRS are based on the
assumption that \\TPs are additn e For example, if WTP to avoid a da\ of cough is $7 00. and \VTP to
a\oid a da) of shortness of breath is S5 00. then WTP to avoid a day of both cough and shortness of breath is
S12 00 If there are no synergistic effects among s\mptoms. then it is hkeh that the marginal utility of
a\ oiding s> mptoms decreases v\ ith the number of s\Tnptoms being a\ oided If this is the case, adding WTPs
\\ould tend to overestimate WTP for avoidance of multiple svmptoms However, there may be s\nergistic
effects -- that is. the discomfort from two or more simultaneous s)inptoms may exceed the sum of the
discomforts associated \\ith each of the mdi\ idual symptoms If this is the case, adding WTPs \\ould tend to
underestimate WTP for a\ oidance of multiple s\Tnptoms It is also possible that people ma\ experience
additional symptoms for \\hich WTPs are not a\ ailable. again leading to an underestimate of the correct
WTP Howe\er. for small numbers of symptoms, the assumption of additivity of WTPs is unhkeh to result
in substanti\e bias
Table 4-16 presents point estimates of a\oided incidences of PM-related upper and lo\\er respiratory
s\ mptoms and monetaiy benefits associated \\ith the fne regulatory altcrnatnes for the NOx SIP call Note
that the magnitude of incidences and the magnitude of monetaiy benefits arc very different This is due to the
small \ alue per a\ oidcd incidence for upper and lower respirator) s> mptoms
4.3.5 \\orkerProductivity
The \ aluation used to monetize benefits associated \\ith increased \\orker products it\ resulting from
impro\ed ozone air qualm is based on information reported in Crocker and Horst. 1981 and summarized in
EPA. 1994 Crocker and Horst (1981) examined the impacts of ozone exposure on the products it> of
outdoor citrus workers Products in impacts \\ere measured as the change in income associated \\ith a
change in ozone exposure, gncn as the elasticity of income \\ith respect to ozone concentration (-0 1427)
The reported elasticit). \\hich is used as the central estimate in this analysis, translates a 10 percent reduction
in ozone to a 1 4 percent increase in income Gi\ en the a\ erage daiK income for outdoor workers engaged in
strenuous actniU reported b\ the 1990 U S census. S73 per da\. the 10 percent reduction in ozone yields
approximate!) SI in increased dail) \\ages
Table 4-17 presents estimates of monctan benefits arising from ozone-related a\oided lost \\orker
products it) associated \\ ith the fi\ e regulator) alternate es for the NOx SIP call
Page 4-32
-------
PM Related Upper Respiratory Symptoms
The concentration-response function for URS is taken from Pope et al (1991) Pope et al describe
URS as consisting of one or more of the following symptoms runny or stuff} nose, wet cough, and burning.
aching, or red e\ es The children in the Pope stud\ were asked to record respirators s>mptoms in a daily
diar\. and the daih occurrences of URS and LRS. as defined above, were related to daih PM-10
concentrations Estimates of WTP to a\oid a da\ of symptoms are therefore appropriate measures of
benefit
Willingness to pa> to a\oid a da> of URS is based on symptom-specific WTPs to a\oid those
symptoms identified b> Pope et al as part of the URS complex of symptoms Three contingent v aluation
(C V) studies ha\ e estimated WTP to a\ oid \ anous morbidit} symptoms that are either within the URS
symptom complex defined b\ Pope et al or are similar to those symptoms identified b} Pope et al In each
CV stud\. participants \\ere asked their WTP to a\ oid a day of each of several symptoms The three
indmdual s\mptoms that v\ere identified as most closeh matching those listed b\ Pope et al for URS are
cough, head-sinus congestion, and e\e irritation A day of URS could consist of am one of sex en possible
"s>mptom complexes" consisting of at least one of these symptoms It is assumed that each of the seven
t>pes of URS is equalh hkeh The ex ante MWTP to a\oid a da} of URS is therefore the axerage of the
MWTPs to a\ oid each t} pc of URS. or S18 70 This is the point estimate for the dollar value for URS used
in the benefit anah sis FmalK. it is \\ orth emphasizing that what is being \ alued here is URS as defined by
Pope ei a! 1991 While other definitions of URS are certain!} possible, this definition of URS is used in
this benefit analysis because it is the incidence of this specific definition of URS that has been related to PM
exposure b\ Pope et al . 1991
PM Related Lower Respiratory Symptoms
Sch\\art/ et al (1994) estimated the relationship between LRS and PM-10 concentrations The
method for dem ing a point estimate of MWTP to a\oid a da\ of LRS is the same as for URS Schwartz et
al (1994) define LRS as at least t\\o of the following s\mptoms cough, chest pain, phlegm, and wheeze
The symptoms for \\hich WTP estimates are a\ ailable that reasonabh match those listed b\ Schwartz et al
for LRS are cough (C). chest tightness (CT). coughing up phlegm (CP). and \\heeze (W) A da} of LRS. as
defined b\ Sch\\art/ et al. could consist of am one of the 11 combinations of at least t\\o of these four
s\mptoms
It is assumed that each of the ele\ en upes of LRS is equalh like!} The ex ante MWTP to a\ oid a
da> of LRS as defined b\ Sch\\artz is therefore the a\erage of the MWTPs to avoid each type of LRS. or
SI I 82 This is the point estimate used in the benefit analysis for the dollar \ alue for LRS as defined b}
Scrmart/ et al The WTP estimates are based on studies which considered the value of a day of a\oided
symptoms, \\hereas the Sch\\artz stud} used as its measure a case of LRS Because a case of LRS usual!}
lasts at least one da\. and often more. WTP to avoid a da> of LRS should be a consen alive estimate of WTP
to a\oid a case of LRS
FmalK. as with URS. it is worth emphasizing that what is being valued here is LRS as defined by
SC/?M artz ct al. 1994 While other definitions of LRS are certainly possible, this definition of LRS is used in
this benefit anal} sis because it is the incidence of this specific definition of LRS that has been related to PM
exposure b} Schv\art/ et al. 1994
Page 4-31
-------
\\ere kno\\n and WTP estimates could be obtained for all 19 s>Tnptoms. the assumption of additivih of
WTPs becomes tenuous with such a large number of s\Tnptoms The likelihood that all 19 s>Tnptoms would
occur simultaneous!). moreo\er. is very small
Acute respirator* s\Tnptoms must be either upper respiratory symptoms or lo\\er respirator,
symptoms In the absence of further knowledge about which of the two tvpes of s>Tnptoms is more likeK to
occur among the "am of 19 acute respiratory symptoms." it was assumed that they occur with equal
probability Because this health endpomt may also consist of combinations of symptoms, it was also
assumed that there is some (smaller) probability that upper and lower respiratory symptoms occur together
To \ alue avoidance of a day of "the presence of am of 19 acute respiratory symptoms" it \\as
therefore assumed that this health endpomt consists either of URS. or LRS. or both It was also assumed that
it is as hkeh to be URS as LRS and that it is half as likely to be both together That is. it was assumed that
"the presence of am of 19 acute respirator.- symptoms" is a da> of URS with 40% probability, a da\ of LRS
with 40% probability. and a da> of both URS and LRS with 20% probabihu Using the point estimates of
WTP to a\oid a da> of URS and LRS derned abo\e. the point estimate of WTP to a\oid a day of "the
presence of am of 19 acute respirator, symptoms" is
(040)($1870) + (040)($1182) ^ (020)($1870 + $1182) - $1831
(1)
Because this health endpomt is onh vagueK defined, and because of the lack in information on the relative
frequencies of the different combinations of acute respiratory symptoms that might qualify as "am of 19
acute respirators s\Tnptoms." the unit dollar \ alue derived for this health endpomt must be considered only a
rough approximation
Table 4-15 presents point estimates of a\oided incidences of ozone-related respirator, symptoms and
monetary benefits associated \\ith the five regulator, altematnes for the NOx SIP call
Table 4-15
A-voided Incidences of O/one-related Respiratory Symptoms and Monetary Benefits
Associated nith the NOx SIP Call
Regulator} Alternate e
0 12 Trading
0 1 5 Trading
Regionalm 1
0 20 Trading
0 25 Trading
Abided Incidences
(cases/} ear)
68.919
61,015
54.757
51,053
37,908
Monetary Benefits
(millions 1990S)
$1 3
$1 2
$1 0
$1 0
$07
Page 4-30
-------
Table 4-14
A\oided Incidences of PM-related Chronic and Acute Bronchitis and Monetary Benefits
Associated with the NOx SIP Call
Regulator}
Alternati\ e
0 12 Trading
Chronic
Acute
0 15 Trading
Chronic
Acute
RegionahU 1
Chronic
Acute
020 Trading
Chronic
Acute
025 Trading
Chronic
Acute
Avoided Incidences (cases/year)
RADM-RPM
15 ug/m3
2 060
1.148
787
535
825
51"
"85
-T2
550
"52
Back
ground
2.054
2:17i
782
827
823
859
784
809
548
574
S-R Matrix
15 ug/m3
891
424
587
313
449
257
499
294
469
2~6
Back
ground
909
917
595
609
455
453
500
519
471
490
Monetary Benefits (millions 1990S)
RADM-RPM
15ug/m3
$589
$0 1
$225
$00
$236
$0 0
$216
$00
$148
$( i 0
Back
ground
$574
$0 1
$213
$00
$223
$00
$221
$00
$150
$0 0
S-R Matrix
15 ug/m3
$240
$00
$158
$00
$121
$00
$134
$00
$126
$00
Back
ground
$245
$00
$160
$00
$122
$00
$135
$00
$12"
soo
4.3.4 Acute Respiratory Symptoms
There are three sources of uncertain!} in the \ aluation of upper or lower respirator} s}Tnptoms (1) an
occurrence of URS or of LRS may be comprised of one or more of a \anety of symptoms (i e . URS and LRS
are each potential!} a "complex of symptoms"), so that what is being valued may van from one occurrence to
another. (2) for a given s}Tnptom. there is uncertainty about the mean WTP to avoid the s}Tnptom. and (3) the
WTP to avoid an occurrence of multiple s\Tnptoms ma} be greater or less than the sum of the WTPs to avoid
the indn idual s}mptoms
Ozone-Related Respiratory Symptoms
"Presence of any of 19 acute respirator}' symptoms" is a somewhat subjective "health endpomf" used
b\ Krupnick et al (1990) Moreover, not all 19 s\mptoms are listed in the Krupnick stud}' It is therefore
not clear exactly what s\mptoms were included in the stud}' Even if all 19 s}mptoms were known, it is
unlikeh that WTP estimates could be obtained for all of the symptoms Final!}, even if all 19 symptoms
Page 4-29
-------
Sch\\art/. 1993). \\hich consider onh ne\\ cases of the illness While a ne\\ case ma} not start out being
se\ere. chronic bronchitis is an illness that ma> progress in seventy from onset throughout the rest of the
indn idual's life It is the chronic illness that is being \ alued. rather than the illness at onset
The WTP to a\oid a case of pollution-related chronic bronchitis (CB) is derived by starting with the
WTP to a\oid a se\ere case of chronic bronchitis, as described b\ Viscusi et al (1991). and adjusting it
downward to reflect (1) the decrease in se\enty of a case of pollution-related CB relative to the se^ere case
described in the Viscusi stud}. and (2) the elasticity of WTP with respect to sevent} reported in the Krupmck
and Cropper stud} The adjustment procedure is described in more detail in the technical support document
(Abt Associates. 1998a) The mean \ alue of the adjusted distribution is S260.000
Estimating WTP to a\ oid a case of acute bronchitis is difficult for se\ eral reasons First. WTP to
a\oid acute bronchitis itself has not been estimated Estimation of WTP to avoid this health endpomt
therefore must be based on estimates of WTP to a\ oid symptoms that occur with this illness Second, a case
of acute bronchitis ma\ last more than one da}. \\hereas it is a da\ of abided symptoms that is t}picalh
\ alued Finalh. the concentration-response function used in the benefit anal} sis for acute bronchitis was
estimated for children, \\hereas WTP estimates for those symptoms associated with acute bronchitis were
obtained from adults
With these ca\eats in mind, a rough estimate of WTP to a\oid a case of acute bronchitis was derned
as the midpoint of a lo\\ and a high estimate The lov\ estimate (S13 29) is the sum of the midrange values
recommended b\ lEc (lEc. 1994) for t\\o s}mptoms behe\ed to be associated \\ith acute bronchitis coughing
(S6 29) and chest tightness (57 00) The high estimate \\as taken to be twice the \ alue of a minor respirator}
restricted actn it\ da} ($38 37). or $76 74 The midpoint between the lo\\ and high estimates is $45 00 This
\ alue \\as used as the point estimate of M WTP to a\oid a case of acute bronchitis in the benefit anal} sis
Table 4-14 presents point estimates of a\oided incidences of PM-related chronic and acute bronchitis
and monetan benefits associated \\ith the fi\e reuulatorx alternate es for the N0\ SIP call
Page 4-28
-------
Table 4-13
A>oided PM-related Hospital Admissions and Monetary Benefits
Associated with the NOx SIP Call'
Regulator)
Alternati\ e
0 i: Trading AR"
cm-
HID
(i 15 'I radio 12 AR
Cl !!•
II ID
RcEionalm AR
1 CHF
IHD
(i 20 Iradioc AR
CHI-
HID
c 25 Iradine AR
CHI-
II II)
A\oided Incidences (casesAear)
RADM-RPM
15 ug/m3
305
61
67
135
2?
25
13?
24
77
ir
-> -)
24
78
14
15
Back
ground
354
63
70
133
24
1 "*
139
26
28
133
24
27
94
r
19
S-R Matrix
15ug/m3
518
26
29
491
17
19
479
13
14
484
14
16
480
13
15
Back
ground
589
28
31
535
18
20
511
14
15
520
15
r
515
14
16
Monetary Benefits (millions 1990S)
RADM-RPM
15 ug/m3
$1 9
$05
$07
$09
$02
SO 3
$08
$02
SO 3
$07
$02
$02
$05
$0 1
$02
Back
ground
52 2
$05
$07
$08
$02
$0 3
$09
$02
$03
$08
$02
$0 3
$06
$0 1
$02
S-R Matrix
15 ug/m3
$3 3
$02
$03
$3 1
$0 1
$02
$30
$0 1
$01
$3 1
$0 1
$02
$30
$0 1
$02
Back
ground
$"> ->
3 /
$02
$0 3
$34
$0 1
$02
$32
$0 1
$02
$33
$0 1
$02
$3 3
$0 1
$02
' Annual baseline incidence in the general population is, 504 100.000 for all respiratorv 231 100.000 for congests e heart failure, and
450 100.000 for ischemic heart disease "lotai annual baseline incidence for the NOx SIP call region is 1 109.68~ admissions for all
respirators 508.6''" admissions for congests c heart failure, and 990.792 admissions for ischemic heart disease
• AR refers to all respiratorv CHI- refers to congestive heart failure, and DID refers to ischemic heart disease
4.3.3 Bronchitis
Chronic bronchitis is the onK measured morbidity endpomt that ma\ be expected to last from the
initial onset of the illness throughout the rest of the mdn idual's life WTP to avoid chronic bronchitis \\ould
therefore be expected to incorporate the present discounted \ alue of a potential!} long stream of costs (e g .
medical expenditures and lost earnings) and pain and suffering associated \\ith the illness Tv\o studies.
Viscusi et al (1991) and Krupmck and Cropper (1992) provide estimates of WTP to avoid a case of chronic
bronchitis The stud> b> Viscusi et al. ho\\e\er. uses a sample that is larger and more representatn e of the
general population than the stud> b> Krupmck and Cropper (which selects people who have a relative with
the disease) The \ aluation of chronic bronchitis in this analysis is therefore based on the distribution of
WTP responses from Viscusi et al (1991)
Both Viscusi et al (1991) and Krupmck and Cropper (1992). howe\er. defined a case of severe
chronic bronchitis It is unclear \\hat proportion of the cases of chronic bronchitis predicted to be associated
with exposure to pollution would turn out to be severe cases The estimated incidence of pollution-related
chronic bronchitis related to the SIP call emission reductions is based on two studies (Abbe> et al. 1993 and
Page 4-27
-------
Ozone-related Hospital Admissions
The benefits anahsis includes a single ozone-related effect categon for hospital admissions all
respirator, diseases The stud\ that estimated the C-R function (Thurston et al.. 1992) examined hospital
admissions for all ages in the population Because of the comprehensiveness of the Thurston stud\. it is
selected o\ er other a\ ailable studies that are restricted to limited age ranges (e g . the population aged 65 year
and older), and/or specific diagnoses (e g . hospital admissions for pneumonia) The age- and disease-
specific effect categories are subsets of the all-age, all-respiratory disease hospital admission categon
Therefore, the benefits of a\oided hospital admissions for respiratory illnesses for all ages should be larger
than the benefits for more restricted categories However, that is not true for the estimated benefits, based on
the a\ ailable studies The Thurston estimated relationship produces fe\\er benefits than either of the t\\o
a\ ailable alternate es all respiratory disease admissions for the population over 65. or the sum of pneumonia
and chronic obstructs e pulmonan disease (COPD) admissions for the population over 65 ClearK adding
the results for these stud\ types \\ould imohe a serious amount of double counting Therefore, selecting the
Thurston stud\ max underestimate the total benefits of hospital admissions
Table 4-12 presents point estimates of a\oided incidences of hospital admissions for all o/onc-
related respiratory symptoms and monetary benefits associated with the fne regulatory alternatives for the
NOx SIP call
Table 4-12
A\oided Ozone-related Hospital Admissions and Monetary Benefits
Associated with the NOx SIP Calf
Regulatory Alternate e
0 12 Trading
0151 rading
Regionalm 1
0 20 Trading
0 25 1 rading
A\oided Incidences
(cases/) ear)
7)9
637
5~1
533
396
Monetary Benefits
(millions 1990S)
S5
$4
S4
$4
$3
' Annual baseline incidence lor all respirator)-related hospital admissions (not lust ozone related) in the general population is
504 lOO.OCid Total annual baseline incidence for the NOx SIP call reeion is 1.109.687 admissions
PM-related Hospital Admissions
The benefits analysis includes three PM-related hospital admissions, due to all respiratory illnesses.
congests e heart failure, and ischemic heart disease As with ozone-induced hospital admissions, the benefits
analysis relies on a study of all respirator.' hospital admissions for all age groups, rather than studies
examining the population over 65 Table 4-13 presents point estimates of avoided incidences of PM-related
hospital admissions and monetary benefits associated with the five regulatory alternatives for the NOx SIP
call
Page 4-26
-------
Table 4-11
SensithiU Anahsis: Abided Post Neo-natal PM-related Mortality Incidences
Regulator^ Alternate e
0121 radmg
0 15 Trading
Regionaht\ 1
020 "I lading
0 25 Trading
Avoided Incidences (casesAear)
RADM-RPM
15 Hg/m3
5
2
T
2
1
Back
ground
5
2
2
t
}
S-R Matrix
15 fig/m3
2
7
A,
\
\
1
Back
ground
•>
2
1
1
1
4.3.2 Hospital Admissions
An indn idual's WTP to a\ oid a hospital admission \\ill include, at a minimum, the amount of mone>
the\ pa\ for medical expenses (i e . \\hat the\ pa\ towards the hospital charge and the associated ph\sician
charge) and the loss in earnings In addition. ho\ve\ er. an indn idual is hkeh to be \\illmg to pa> some
amount to a\oid the pain and suffering associated with the illness itself That is. e\en if the> incurred no
medical expenses and no loss in earnings, most indniduals \\ould still be willing to pa\ something to a\oid
the illness
Because medical expenditures are to a significant extent shared by society. \ia medical insurance.
Medicare, etc . the medical expenditures actualh incurred b> the mdmdual are hkeh to be less than the total
medical cost to societ> The total \alue to socieh of an individual's avoidance of hospital admission, then.
might be thought of as ha\ ing t\\ o components (1) the cost of illness (COI) to socieh. including the total
medical costs plus the \aluc of the lost products it}. as well as (2) the individual's WTP to a\oid the
disutility of the illness itself (e g . the pain and suffering associated \\ith the illness)
In the absence of estimates of social WTP to a\oid hospital admissions for specific illnesses
(components 1 plus 2 abcue). estimates of total COI (component 1) are typically used as consenatne (lo\\er
bound) estimates Because these estimates do not include the -^ aluc of avoiding the disutility of the illness
itself (component 2). the\ are biased downward Some analyses adjust COI estimates upward b\ multiplying
by an estimate of the ratio of WTP to COI. to better approximate total WTP Other analyses have avoided
making this adjustment because of the possibility of over adjusting — that is. possibly replacing a known
downward bias with an upward bias The pre\ lous RIAs for PM and ozone, as well as the revised RJA for
ozone and PM NAAQS. did adjust the COI estimate upward The COI values used m the benefits analysis
for the SIP call benefits will not be adjusted to better reflect the total WTP This is consistent with the
guidance offered b> the §812 SAB committee
The COI estimates used in this RIA include the estimated hospital and physician charges, based on
the average length of a hospital stay for the illness, and the estimated opportunity cost of time spent in the
hospital
Page 4-25
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Table 4-10
Sensiti\it\ Anahsis: Premature Mortality Benefits
Using A\oided Short Term PM-related Mortalin Incidences2
Regulatory
Alternate e
0121 radmg
0 1 5 Trading
Regionahu 1
0 20 Trading
0 25 Trading
Avoided Incidences (cases/year)
RADM-RPM
15 ug/m3
293
130
129
113
76
Back
ground
339
128
136
129
91
S-R Matrix
15 ug/m3
136
110
99
103
99
Back
ground
203
152
129
138
132
Monetary Benefits (millions 1990S)
RADM-RPM
15 ug/m3
$1.393
$619
$614
$536
$360
Back
ground
$1,634
$615
$666
$619
$434
S-R Matrix
15 ug/m3
$649
$523
$473
$493
$473
Back
ground
$969
$726
$6P
$658
$630
' Annual baseline incidence lor non-accidental deaths in the general population is 803 100.000 Total annual baseline incidence for
the XO\ SIP call region is 1.768.014 non-accidental deaths for the population aged o\er 30
A ne\\ stud> (Woodruff et al. 1997) finds a significant association between annual PMKI le\els and
post-neonatal (infants aged 28-51 \\eeks) mortality Conceptual!} am additional mortality from this
function would be additrve to the Pope results (because the Pope function covers onh the population over 30
}ears old), although not additn c to the daih mortality studies (\\hich cover all ages) The SAB recently
ad\ ised the §812 Prospectn e project to not include this in the §812 primary anal} sis at this time, pnmanh
because the stud} is of a ne\\ endpomt and the results ha\e not been replicated in other studies in the U S
The coherence and consistenc} arguments which support the use of the Pope stud}' are not present with this
stud} at this time For the SIP call anah sis. this endpomt is presented as a sensitivit} analysis PM: 5
changes associated \\ith the NO\ SIP call are used \\ith this PM... C-R function This will produce a
consen atn e estimate of infant mortaht} for two reasons First, there ma} be some reductions in the coarse
fraction (PM bct\\een 2 5 and 10 microns in diameter) that result from the NO\ reductions \\hich \\ill be
omitted from the anah sis Perhaps more important!}. estimating infant mortality using the estimated change
in PM-, le\ els in a PM, function implicit!} assumes that the fine fraction of PM is no more toxic than the
coarse fraction EPA's decision in 1997 to set an additional NAAQS using PM,, in addition to a PMif,
standard, is based in part on a growing scientific consensus that the fine fraction of the total PMK, mass is
likeh to be most associated \\ ith adverse health effects If in fact the toxiciry of PM- 5 is greater than the
toxiciry of PM,,,. then using changes m PM- 5 in a C-R function based on PMU, will underestimate the total
effect on infant mortaht}
Table 4-11 presents a sensitivity anah sis using neo-natal mortaht} Monetary benefits associated
\Mth the avoided incidences are not presented due to a lack of information about the value of avoided neo-
natal mortality It is likely that a\ oided infant mortalities will be \ alued higher than mortalities for adults
However, at present, no studies have been conducted to determine this value For this reason, onh avoided
incidences of neo-natal mortality are presented in Table 4-11
Page 4-24
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the "Six-cities" cohort stud) ). the Pope stud} found a smaller increase in excess mortaht} for a gnen PM air
qualit} change
Table 4-9 presents point estimates of a\oided incidences of long-term PM-related mortaht} and
monetan benefits associated with the fn e regulator} alternate es for the NOx SIP call As noted earlier, non-
hnearities inherent in the RADM-RPM air quaht} model lead to an inconsistent ranking of results bet\\een
the RADM-RPM and S-R Matrix results With the exception of the 0 12 trading alternate e. estimated
premature mortaht} incidences are higher for S-R Matrix generated PM changes than for RADM-RPM
generated PM changes
Table 4-9
A\oided Long Term PM-related Mortality Incidences and Monetary Benefits
Associated with the NOx SIP call'
Regulator}
Alternate e
() 12 Trading
0 1 5 Trading
Regionalin 1
0 2>! Iradmg
('25 '] railing
A\oided Incidences (cases/year)
RADM-RPM
15 ug/m3
310
53
6"
"8
44
Back
ground
657
101
94
149
75
S-R Matrix
15ug/m3
306
231
190
216
202
Back
ground
561
370
278
315
294
Monetary Benefits (millions 1990S)
RADM-RPM
15 ng/m3
$1.468
$251
$317
$3^0
$208
Back
ground
$3.173
$482
$459
$715
$358
S-R Matrix
15 ng/m3
$1.459
$1.099
$904
$1.028
$962
Back
ground
$2.6"72
$1.763
$1.326
$1.499
$1.400
* Annual baseline incidence for non-accidental deaths in the general population aged oxer 30 is 759 100.000 Total annual baseline
incidence for the NOx SIP call region is 929.557 non-accidental deaths
The estimates of excess mortaht} from the short-term studies are presented as an important
scnsitn it} anal} sis Because there is onh one short-term stud} (presenting results from 6 separate U S
cities) that uses PM:, as the metric of PM (Sch\\art/ et al. 1996). an estimate based on the pooled cit\-
specific. short-term PM:, results \\ill be presented
Table 4-10 presents the results of a sensitn it} analysis using mortaht} associated \\ith short-term
exposure to PM: ^ In some cases, the a\ oided incidences of mortaht} (and corresponding monetan, benefits)
predicted using the short-term function are higher than those predicted using the long-term function, and in
other cases the re\ erse is true For the RADM-RPM background threshold results, the magnitude of the
difference between the value of avoided incidences of short- and long-term mortality ranges from $-1.539
million for the 0 12 trading alternative to $207 million for the Regionality 1 alternative For the S-R Matrix
background threshold results, the magnitude of the difference ranges from $-1,703 million for the 0.12
trading alternatn e to $-709 million for the Regionahty 1 alternative As with long-term mortaht}, the
relationship between the RADM-RPM and S-R Matrix generated results is not consistent across alternatives,
due to the differences in air chemistr} modeling between the two models In addition, the rank ordering
across threshold levels is not consistent across alternatives
Page 4-23
-------
benefits domed from the distribution of concentration-response functions generated from the meta-analysis
described abo\ c The limiting upper end for ozone-related mortality is generated by assuming that the
highest concentration-response function applies e\ emvhere This would generate a benefits estimate
considerably higher than the high estimate in Table 4-8
Table 4-8
Range of A>oided Ozone-related Mortality Incidences and Monetary Benefits
Associated »ith the NOx SIP Call"
Regulator} Alternative
0 12 Trading
(.' 151 rading
RegionahtA 1
0 20 Trading
0 25 Tradinc
A>oided Incidences
(cases/year)
Low
0
0
0
0
0
High
315
279
251
234
174
Monetary Benefits
(millions 1990S)
Low
$0
$0
$0
$0
$0
High
$1.496
$1.326
SI. 191
$1.108
$824
'Annual baseline incidence for non-accidental deaths in the general population for all ages is 803 100.000 Total annual baseline
incidence for the NOx SIP call region is 1."768.014 non-accidental deaths
PM-r-elated Mortality
PM-associated mortality in the benefits analy sis is estimated using the PM: 5 relationship from Pope
ct al . 1995 This decision reflects the Science Ad\ isory Board's explicit recommendation for modeling the
mortality effects of PM in both the completed §812 Retrospectne Report to Congress and the ongoing §812
Prospectn e Study The Pope study estimates the association bet\\een long-term (chronic) exposure to PM: 5
and the sun i\ al of members of a large stud> population This relationship is selected for use in the benefits
analy sis instead of short-term (daily pollution) studies for a number of reasons
The Pope long-term study is selected as pro\ iding the best available estimate of the relationship
between PM and mortality It is used alone, rather than considering the total effect to be the sum of
estimated short-term and long-term effects, because summing creates the possibility of double-counting a
portion of total mortality The Pope study is selected in preference to other available long-term studies
because it uses the best methods (i e.. a prospectn e cohort method with a Cox proportional hazard model).
and has a much larger cohort population, the longest exposure interval, and more locations (51 cities) in the
United States, than other studies It is unlikely that the Pope study contains any significant amount of
short-term han estmg First, the health status of each individual tracked in the study is known at the
beginning of the study period Persons with known pre-existing serious illnesses were excluded from the
study population Second, the Cox proportional hazard statistical model used in the Pope study examines the
question of survivabiht> throughout the study period (10 years) Deaths that are premature by only a few
days or weeks within the 10-year study period (for example, the deaths of terminally ill patients, triggered by
a short duration PM episode) are likely to ha-\e little impact on the calculation of the average probability of
sunning the entire 10 year interval In relation to the other prospective cohort study (Docker,-, et al. 1992.
Page 4-22
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ov er time This suggests that it ma> take mam v ears of data before the ozone effect can be separated from
the dailv \\eather and seasonal patterns \vith which it tends to be correlated
In 1997. as a part of the ozone NAAQS promulgation RIA. EPA staff re\ ie\ved this recent literature
The> identified 9 studies that met a defined set of selection criteria, and conducted a meta-anaKsis of the
results of the 9 studies The result of this work was included as Appendix J in the NAAQS RJA.
"Assessment and S>nthesis of Available Epidemiological Evidence of Mortality Associated \vith Ambient
Ozone from Dailv Time-series Analyses" (EPA. 1997a)
The NOx SIP call related benefits analysis implements the same basic meta-anaKsis approach to
quantifying ozone mortalitv as the NAAQS RJA. with the exception that a subset of 4 of the 9 studies is used.
representing onK U S based analyses In a post-NAAQS RIA review of the methodology for assessing
ozone mortality effects, it was determined that the relationships between ambient ozone and mortality in the
non-U S stud> locations included in the original NAAQS-related meta-anaKsis may not be representative of
the range of ozone-mortalitv concentration-response relationships in the United States Although ozone is the
same everywhere (in contrast to PM). its effects on mortality ma\ depend on its interactions \\ith other
pollutants and with meteorological \ anables In addition, there are population and societal differences (air
conditioning incidence, building construction, human activit} patterns, etc ) across locations that could affect
the relationship between ambient ozone le\ els and mortality To reduce the potential for applv ing
inappropriate concentration-response functions in analysis of the ozone mortality benefits from the NOx SIP
call, onh U S studies are included, based on the assumption that demographic and environmental conditions
on average would be more similar between the studv and policy sites However, the full bod} of peer-
rev icvved ozone mortalitv studies should be considered when evaluating the weight of evidence regarding the
presence of an association between ambient ozone concentrations and premature mortahtv
Because of differences in the averaging times used in the underlying studies (some use dailv average
ozone levels, while others use 1-hour daily maximum values), it is not possible to conduct a meaningful meta-
anaKsis dircctK on the coefficients of the C-R functions Instead, for each pair of air qualiK modeling results
(for the baseline and a given regulator} alternative) for the NOx SIP call, each C-R function is translated into
a set of predicted mortalitA incidence changes that would be estimated by that C-R function, given the set of
air qualitv changes The meta-anah sis approach is then applied to the predicted mortahtv incidence changes
that \vould be estimated bv each of the studies Additional details of the approach are described in the
technical support document for the NOx SIP call (Abt Associates. 1998a)
Table 4-8 presents the range of estimates of avoided incidences of ozone-related mortahtv and
monetarv benefits associated \Mth five regulator} alternatives for the NOx SIP call Note that the lower
estimate for this endpomt is zero to reflect both the number of peer-reviewed studies finding no significant
relationship between ozone and premature mortality and the lack of a directly established biological
mechanism linking ozone and premature mortality In its review of the epidemiological ozone-mortality
literature. EPA has determined that there is a reasonable probability that increased ozone concentrations are
associated with incidences of premature mortality In Table 4-8 the higher estimate allows for the existence
of an ozone-mortalitA relationship, but assumes there is some probability that for any specific location within
the SIP call region that the effect of ozone on premature mortality is zero This probability is embedded in
the previously discussed meta-analysis approach, which includes studies both with and without findings of a
statistical!} significant relationship between ozone concentrations and premature mortality.
Note that the high estimate presented in Table 4-8 does not represent the limiting upper end of
potential ozone-related mortalitv benefits The high estimate in Table 4-8 represents the mean estimate of
Page 4-21
-------
There are. similarly t\\o basic types of epidemiological studies of the relationship bet\\een mortality
and exposure to pollutants Long-term studies (e g . Pope et al. 1995) estimate the association between long-
tern: (chronic) exposure to air pollution and the sunnal of members of a large stud> population o\er an
extended period of time Such studies examine the health endpomt of concern in relation to the general long-
term le\cl of the pollutant of concern - for example, relating annual mortalm to some measure of annual
pollutant le\ el DaiK peak concentrations would impact the results only insofar as the> affect the measure of
long-term (eg. annual) pollutant concentration In contrast, short-term studies relate daily levels of the
pollutant to daiK mortalm B\ their basic design. daiK studies can detect acute effects but cannot detect the
effects of long-term exposures A chronic exposure study design (a prospective cohort stud\. such as the
Pope stud\ j is best able to identify the long-term exposure effects, and will hkeK detect some of the short-
term exposure effects as \\ell Because a long-term exposure study may detect some of the same short-term
exposure effects detected b> short-term studies, including both types of study in a benefit analysis would
hkeK result in some degree of double counting of benefits
Another ma]or ad\ antage of the long-term study design concerns the issue of the degree of
prematurity of mortalm associated with air pollution It is possible that the short-term studies are detecting
an association between air pollution and mortalm that is primarily occurring among termmalK ill people
Critics of the use of short-term studies for pohc> anaKsis purposes correctK point out that an added risk
factor that results in a termmalK ill person d>mg a feu da\s or \\eeks earlier than the> otherwise \\ould ha\e
(known as "short-term harvesting") is potential!) included in the measured air pollutant mortalm "signal
detected in such a stud\ As the short-term stud) design does not examine mdn idual people (it examines
daiK mortality rates in large populations, typicalK a large cm population ). it is impossible to knov\ anything
about the o\ erall health status of the specific population that is detected as dying earK While some of the
detected excess deaths max ha\c resulted in a substantial loss of life (measuring loss of life in terms of lost
\ears of remaining life), others ma> ha\e lost a relatneh short amount of hfespan
While the long-term stud> design is preferred, these types of studies are expensne to conduct and
consequent!) there are relatn eh few well designed long-term studies For PM. there has only been one high
qualm stud\ accepted b\ the Science Advisor) Board, and for o/one. no acceptable long-term studies ha\e
been published For this reason, short-term ozone mortalm is used as the basis for determining o/one-related
mortalm benefits for the XOx SIP call
The next t\\o sections pro\ ide details on the measurement and -^ aluation of changes in incidences of
premature mortalm associated \\ith changes in o/one and PM arising from implementation of the NOx SIP
call
Ozone-related Mortality
The literature on the possible relationship between exposure to ambient ozone and premature
mortalm has been Q\ oh ing rapidly Of the 28 time-series epidemiology studies identified in the literature
that report results on a possible association between daiK ozone concentrations and daiK mortalm (see EPA.
1997a. Appendix J). 21 \\ere published or presented since 1995 In particular, a series of studies published
in 1995 through 1997 (after closure on the ozone Criteria Document) from multiple cities in western Europe
has significant!) increased the body of studies finding a positive association Fifteen of the 28 studies report
a statistically significant relationship between ozone and mortalm-, with the more recent studies tending to
find statistical significance more often than the earlier studies The ozone-mortalm datasets have also tended
to become larger in more recent studies as longer series of air quality monitoring data have become available
Page 4-20
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Table -1-7
Summan of Mortalit> Valuation Estimates'
Stuth
Kneisner and Leeth ( 1 99 1 j (U S )
Smith and Gilbert ( 1 984')
Dilhnghami 1985.1
Butler (1983)
Miller and Guria f 1991)
Moore and VISCUM ! 1988a)
VISCUM Magat and Huber ( 1991 h i
Gegax et al ( 1 985 i
Mann and Psacharopoulos f 1 982 )
Kneisner and Leeth f 1 991 ) (Australia)
Gerkmg de I laan. and Schul/e ( 1 988 )
Cousmeau. Lacroix. and Girard ( 1988)
Jone>-l.ee (1989;
Dilhngham ( 1 9S5 •
Viscusi (1978 19~9i
RS Smith i 197oi
VK Smith' 19~6i
OKon ( 1981 i
\;iseusi ( J9N1 i
RS Smith ,19-4,
Moore and VISCUM ( 1988a!
Kneisner and Leeth ( 1991 ) (Japan)
Ileivog and Schlottman (1987)
Leigh and Poison (1984)
Leigh (1987)
Gaten(1988)
Tjpe of Estimate
Labor Market
Labor Market
Labor Market
Labor Market
Contingent Valuation
Labor Market
Contingent Valuation
Contingent Valuation
Labor Market
Labor Market
Contingent Valuation
Labor Market
Contingent Valuation
Labor Market
Labor Market
Labor Market
Labor Market
Labor Market
Labor Market
Labor Maiket
Labor Market
Labor Market
Labor Market
Labor Market
Labor Market
Labor Market
Valuation per Statistical
Life (millions of 1990 S)
06
07
09
1 1
1 2
25
2 7
3 3
28
3 3
34
3 6
3 8
3 9
4 1
46
4^
52
65
7 ^
7 3
76
9 1
97
104
135
'Source Viscusi. 1992
Page 4-19
-------
Table 4-6
Quantified PM-Related Health Effects Included in the Benefits Analysis
Endpoint
Population to Which Applied
Stud\
Mortality
PM- .-related long-term exposure
mortahr\
ages 30+
Popeetal. 1995
Hospital Admissions
' all respiratoiV"
Congesme heart failure
Ischemie heart disease
all ages
age 65+
age 65~
Thurston et al . 1 994
Scrmartz and Moms. 1995
Schu artz and Morris. 1 9C>5
Chronic Bronchitis
De\ elopment of chronic bronchitis
all
Sch\\art/. 1993
Respiratory Symptoms/Illnesses Not Requiring Hospitali/ation
Acute bronchitis
PM- , -related kn\er respirator,
N\mpiom> (I RS)
1 :pper respn aton -A mploms (URS i
MRADs
\Vorklov>days(WI.IVi
ages l(i-12
ages 8- 12
asthmatics, age 9-1 1
ages 18-65
ages 18-65
Dockery eta! 1989
Schu art/ et al . 1 994
Popeetal. 1991
Ostro and Rothschild. 1 989
Ostro. 198"
There arc t\\ o t> pes of exposure to elc\ ated le\ els of air polluation that may result in premature
mortality Acute (short-term) exposure (e g . exposure on a gn en da>) to peak pollutant concentrations ma>
result in excess mortality on the same day or \vithin a fe\\ da> s of the ele\ ated exposure Chronic (long-term \
exposure (e g . exposure oxer a period of a year or more) to le\els of pollution that are generalh higher ma>
result in mortality in excess of \\hat it \\ould be if pollution le\els \\ere generally lo\\er The excess mortality
that occurs will not necessarily be associated \\ith am particular episode of ele\ated air pollution le\els
Both t\pes of effects are biologically plausible, and there is an increasing body of consistent corroborating
e\idence from animal toxicity studies indicating that both types of effects exist
Page 4-18
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Table 4-5
Quantified Ozone-Related Health Effects Included in the Benefits Analysis
Health Effect
Affected Population
Study
1
Mortality
O/one-related short-term exposure
mortality
all ages
pooled anahsis of 4 U S studies
Hospital Admissions
"All Respirator} "
all ages
Thurston el al . 1 992
Respiratory Symptoms/Illnesses Not Requiring Hospitalization
Acute respiraton s\mptoms(an\ of 19)
aces 18-65
Krupmck et al . 1990
Although the priman em ironmental purpose of the NO\ SIP call is to help achie\ e attainment of the
o/one NAAQS in the eastern United States, significant monetan benefits will also be associated with
changes in ambient le\ els of PM Se\ eral PM health endpomts are included in the quantified benefits
estimation The PM-related effect categories that are included in this analysis are shown in Table 4-6 For all
of the PM-rclatcd endpomts. benefits are estimated using both the RADM-RPM and S-R Matrix generated
PM concentrations In addition, for health endpomts. benefits are estimated under both a background
threshold assumption and an assumed threshold of 15 ug/m1
4.3.1 Premature Mortality
Both o/one and paniculate matter ha\ e been associated with increased risk of premature mortality in
adult populations A\ oided mortality is a \ er> important health endpomt in this economic anal} sis due to the
high monetary \ alue associated with risks to life
The benefits anal}sis uses the "statistical lues lost" approach to \alue a\oided premature mortalit}
The mean \ alue of avoiding one statistical death is estimated to be S4 8 million This represents an
intermediate \ alue from a \ aneh of estimates that appear in the economics literature, and is a value that EPA
has frequent!} used in RIAs for other rules This estimate is the mean of a fitted Weibull distribution of the
estimates from 26 \aluc-of-hfe studies identified in the §812 stud} as "applicable to polic\ analysis " The
approach and set of selected studies mirrors that of Viscusi (1992) (with the addition of two studies), and
uses the same criteria used b\ Viscusi in his re\ ie\\ of \ alue-of-hfe studies The $4 8 million estimate is
consistent with Viscusi"s conclusion that "most of the reasonable estimates of the value of life are clustered in
the S3 to $7 million range " Five of the 26 studies are contingent valuation (CV) studies, which direct!}
solicit WTP information from subjects, the rest are wage-risk studies, which base WTP estimates on
estimates of the additional compensation demanded in the labor market for riskier jobs The 26 studies used
to form the distribution of the value of a statistical life are listed in Table 4-7
Page 4-17
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4.3 Ozone and PM Health-Related Benefits
While a broad range of ad\ erse health effects ha\ e been associated with exposure to ele\ ated o/one
and PM levels, onh subsets of health effects are selected for inclusion in the quantified benefit anahsis
Effects are excluded from the current anahsis (1) in order to prevent double counting (such as hospital
admissions for specific respirator, diseases). (2) due to uncertainties in applying effect relationships based on
clinical studies (\\here human subjects are exposed to various le\els of air pollution in a carefully controlled
and monitored laboratory situation) to the NOx SIP call affected population, or (3) due to a lack of an
established concentration-response relationship
The general format for the following sections detailing benefits for each endpomt is to begin with a
discussion of the method and studies used for economic valuation, then present the studies used to obtain the
concentration-response function for estimation of a\ oided incidences Following these discussions, tables of
avoided incidences and associated monetary benefits for ozone-related effects and PM-related effects are
presented Benefits estimates are presented for a subset of the regulatory alternatives presented in chapters 6.
7 and 9 Air qualm changes used to generate the benefits estimates are not based on the final NOx SIP call
control requirements For additional information on air qualm modeling scenarios for the benefits anal} sis.
see Section 1015 Numbers presented in the tables represent changes in the number of incidences and
associated monetan benefits geen the illustrate e implementation of particular NOx control strategics
relate e to the 2007 baseline air qualm For endpomts which are affected b\ both ozone and PM. ozone-
related benefits are presented first, followed b\ PM-related benefits
A preliminary explanatory note on the calculation of the point estimates presented in the tables below
is \\arranted Each point estimate of monetan benefits in the tables belov, is the mean of a distribution of
monetary benefits dereed through a Monte Carlo procedure2 The estimate dereed b\ this method
approaches the simple product of the mean of the unit dollar distribution and the mean of the incidence
change distribution, but for a finite number of iterations ma\ be slight!} off For an illustrative example of
the procedure and for further details, see Appendix A and the technical support document for this RIA (Abt
Associates. 1998a)
For o/one. three health effects are selected for inclusion mortalm associated with short-term
exposure, hospital admissions for all respirators diseases, and acute respiratory s}inptoms One other human
health-related effect, decreased \\orker producte m. is included as a \\elfare effect rather than a health effect
(see Section 434) The o/onc-related effect categories that are included in the NOx SIP call analysis are
sho\\n in Table 4-5 Premature mortalm is the onh ozone-related endpomt for \\hich a range of benefits is
presented
: Each point estimate of a\oided incidences presented in the tables belo\\ is the mean of a Latin Hypercube approximation
of a distribution of avoided incidences reflecting the uncertainty in the pollutant coefficient in the C-R function In the Latin
Hxpercube method 100 percentile points (in this case, the (n-0 5)th percentile points of the distribution, for n = 1. 2. . 1001 are
selected to represent the distribution This reduces the computational burden associated with presen ing the full distribution
Page 4-16
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4.2.2 Thresholds
A \en important issue in applied modeling of changes in ozone and PM is whether to apph the
concentration-response functions to all predicted changes in ambient concentrations. e\ en small changes
occurring at le\ els approaching "anthropogenic background" Different assumptions about how to model
thresholds can ha\e a major effect on the resulting benefits estimates
The Criteria Documents. Staff Papers and the Federal Register Notices promulgating the ne\\ ozone
and PM standards conclude that there are no known threshold levels for am of the health effects to be
included in the SIP call anal} sis (EPA. 1996c-1996f) For example, the Federal Register Notice
promulgating the ozone standard included the following
The Administrator's consideration of an appropriate le\el for an 8-hour standard to protect public
health \Mth an adequate margin of safeu necessanl\ reflects a recognition, as emphasized b\ CASAC.
that it is like!} that "O, may elicit a continuum of biological responses down to background
concentrations' (Wolff 1995bl Thus, in the absence of am discernible threshold, it is not possible to
select a le\e! bekn\ \\hich absolute!} no effects are hkeh to occur Nor does it seem possible, in the
Administrator's judgment, lo identifv a le\el at \\hich it can be concluded vuth confidence that no
"ad\erse" effects are hkeh to occur (Federal Register, Vol 62. No 138. p 38863. Jul\ 18.1997)
SimilarK. the Administrator did not identif} a PM threshold for the same reasons
The underh mg epidemiological functions used in most of the analysis are in fact continuous down to
zero le\ els Howe\ er. in order to remain consistent with the available scientific information, the anal} sis does
not model effects belo\\ certain le\ els The approach used in the benefits analysis is identical to the approach
used in the ozone and PM NAAQS RJA. mdmdual concentration-response functions will not be applied to
ambient concentrations occurring belov\ the Icwest obsened Ie\els reported by the authors of the underh ing
epidemiological studies Where no lowest observed level \\as reported, the functions will be applied down to
the "anthropogenic background" le\ el Theoretical!}. C-R functions should be reestimated when a threshold
is assumed to insure consistent with the obsen ed correlation between mortality incidences and the pollutant
If no threshold is assumed in the epidemiologica! stud}. then the slope of the C-R function \\ill be flatter than
for a function \\ith a threshold This reflects the fact that all of the observed changes in mortality \\ould ha\ e
to be associated vuth changes aboxe the threshold, rather than being associated with changes along the full
spectrum of pollutant concentrations Unadjusted C-R functions are used in this benefits anal} sis due to a
lack ofa^ ailabilm of the under!} ing data used to estimate the C-R functions These data are necessary to
de\ elop threshold adjusted C-R functions Use of an unadjusted C-R function \\ill result in an underestimate
of total a\oided incidences
Because the issue of possible thresholds can ha\ e a major effect on the benefits estimation, estimates
for individual benefit endpomts will be generated using alternative assumptions of thresholds for PM
Following advice from EPA's Science Advisor} Board, both high and low threshold assumptions will be used
to generate benefits estimates The low threshold assumption will assume a threshold equal to anthropogenic
background concentrations and the high threshold assumption will assume a threshold equal to the PM
standard of 15 u.g/m3
Page 4-15
-------
Enclpoint
Pollutant
Concentration-Response Function
Source
Functional
Form
A^ eraj«inj> Time
Studied
Applied
Population'
Pollutant
Coefficient1'
Welfare Endpoints
Decreased worker
productivity
O/OI1C
Cioekei S i ) in a specific geographical are.i I his an.il\sis applies the leporled pollnt.ini Loellii-ieiil to all individuals in the age gioup nationuide
'' A single pollulant coefficient reported for several studies indicates a pooled anaKsis see te\l lor discussion ol pooling LoiKenlralion-iespouse lelationships across studies
' All I -dav averages are 24-hour averages, 2-da\ a\eiages aie 'IX hour a\eiai',es etc
'age 4-14
-------
Endpoint
Pollutant
Concentration-Response Function
Source
Functional
Form
Averaging Time-
Studied
Applied
Population'
Pollutant
C'oefllcient1'
Hospital Admissions
All respiratory illnesses
Congestive heart failure
Ischemie heart disease
All respiratory illnesses
PM^/PM,,,
I'M,,,
I'M,,,
O/one
1 Illusion el al ,
mi
Sclmarl/ &
Morns 1<)95
Sch\\arl/
-------
Table 4-4
PIM and O/one Health and Welfare Concentration-Response Function Summary Data
Fndpoint
Pollutant
Concentration-Response Function
Source
Functional
Form
A\craginj> Time
Studied
Applied
Population'
Mortality
Mortality (long-term
exposure) -PM2,
Mortality (short-term
exposure) -I'M-, ,
Mortality (short-term
exposure)
I'M,,
I'M,,
O/one
Pope el al . 199S
Schuail/ el nl .
l')%;i (6 cities)
Kinnev. ;il ill .
199.S (|.os
Angeles)
Ho and 1 Illusion.
1996 (Chicago)
Moolga\knr. el
ill . 1 995
(Philadelphiii)
Siiinel.et nl ,
1997
(Philadelphia)
log-linear
log-lineai
log-lineai
log-linear
log-linear
log-linear
iinnual median
2-da\ axeiage
diiilv 1 -hour max
l-da\ aveiage
1 -day a\erage
l-da\ avei.-ige
iinnual median'
1 -da\ aveiage
daih 1 -houi m;ix
1 -da\ ayeiage
1 -da\ ii\er.'ige
1 -day ayeiage
ages "UH
all
all
nil
all
all
Pollutant
Coefficient1'
(1 (KKvlOX
00007X2
0 000000
0 000677
000061 1
0 000936
Page 4-12
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4.2.1 Baseline Incidences
The epidcmiological studies of the association between pollution levels and ad\ersc health effects
general!} pro\ ide a direct estimate of the relationship of air quahu changes to the relatne risk of a health
effect, rather than an estimate of the absolute number of a\ oided cases For example, a typical result might
be that a 10 ug'm* decrease in daiK PM,, le\els might decrease hospital admissions b\ three percent The
baseline incidence of the health effect is necessary to corner! this relatne change into a number of cases
United States count}-le\ el baseline mortality rates for 1990 \\ere obtained from the National Center
for Health Statistics (US Department of Health and Human Semces. 1994) Because most PM and ozone
studies that estimate C-R functions for mortalit} considered onK non-accidental mortality count}-specific
baseline mortality rates used in the estimation of PM- and ozone-related mortalit} \\ere adjusted to pro\ ide a
better estimate of count) -specific non-accidental mortality Each count\ -specific mortality rate \vas
multiplied b\ the ratio of national non-accidental mortality to national total mortality (0 93)
Although total mortalit} incidences (o\er all ages) are available for counties, age-specific mortality
incidences is not generalh a\ ailablc at the count} le\ el Therefore, count} -specific baseline mortalit}
incidences among indniduals aged 30 and oxer (necessan for PM; ^-related long-term exposure mortalit}.
estimated b> Pope et al. 1995) are estimated b\ apphing national age-specific death rates to count}-specific
age distributions, and adjusting the resulting estimated age-specific incidences so that the estimated total
incidences (including all ages) equals the actual count}-specific total incidences
Page 4-1
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Endpoint
Pollutant
Mean WTP per incident (SI 990)
Endpoints Presented as Sensitivity Analyses
Mortahu. Shon-tcrm Hxp -- Onl\ significant studies
Mortality Shon-term L\p - O\er age 65
I - '
Post-Neonatal Mortalm
Commercial Crops - AGSIM model
O/.one
PM-,
PM,0
NO\
$4.800,000
$4.800.000
quantified but not monetized
$105/kg
' Measured in ierm> of decmcv. chanse
4.2 Issues in Estimating Changes in Health Effects
This benefits anahsis relies on concentration-response (C-R) functions estimated in published
epidemiological studies relating ad\erse health and \\elfare effects to ambient air quahu The specific C-R
functions used are included in Table 4-4
When a single published stud> is selected as the basis of the C-R relationship between a pollutant
and a ei\ en health endpomt. apph ing the C-R function is straightforward This is the case for most of the
endpomts selected for inclusion in the benefits anahsis A single C-R function may be chosen over other
potential functions because the underhing epidemiological stud> used superior methods, data or techniques.
or because the C-R function is more generalized and comprehensn e For example, the stud\ that estimated
the effects of PM on hospital admissions for all ages and all respiratory diseases is selected o\er studies
limited to the o\er 65 \ear old population or specific categories of respirator} diseases
The exceptions to the "single stud>" selection in the benefits anahsis are mortality associated \\ith
exposure to o/one and chronic bronchitis associated \\ith exposure to PM. \\hich ha\e multiple studies
selected for use Mortahn associated \\ith short-term exposure to PM, 5. presented as a sensitnity anahsis.
is based on six C-R functions estimated in a single stud\ When se\eral estimated C-R relationships
between a pollutant and a gi\ en health endpomt ha\ e been selected. the> are combined or pooled to dem e a
single estimate of the relationship The details of the procedures used to combine multiple C-R functions arc
presented in a separate technical support document (Abt Associates. 1998a)
Whether the concentration-response relationship bet\\een a pollutant and a gnen health endpomt is
estimated b> a single function from a single stud> or b> a pooled function of concentration-response functions
from se\eral studies, that same concentration-response relationship is applied everywhere in the benefits
anahsis Although the concentration-response relationship may in fact \ an somewhat from one location to
another (for example, due to differences in population susceptibilities or differences in the composition of
PM). location-specific concentration-response functions are general!) not available While a single function
applied e\eryv\here ma\ result in overestimates of incidence changes in some locations and underestimates of
incidence changes in other locations, these location-specific biases will to some extent cancel each other out
when the total incidence change is calculated It is not possible to know the extent or direction of the bias in
the total incidence change based on application of a single C-R function everywhere
The remainder of this section discusses two ke\ issues imolvmg the use of C-R functions to estimate
the benefits of the NOx SIP call baseline incidences and health effect thresholds, i e. levels of pollution
belo\\ \\hich changes in air qualit) have no impacts on health
Page 4-10
-------
altcrname agricultural models, and an anahsis of the effect of using onh ozone mortality studies \\ith a
significant o/onc coefficient to generate a\oided ozone mortality incidences
Table 4-3 lists the specific health and welfare effects that are included in the benefits anahsis.
indicating the specific effect categories that are included in the plausible range of benefits, as well as effects
that are presented (or explored in greater detail) as quantified sensitivity analyses Also included in Table 4-
3 are the estimates of mean Willingness to Pay (WTP). or "unit values" used to monetize the benefits for each
endpomt
Table 4-3
Quantified and Moneti/ed Health and Welfare Effects
Endpoint
Pollutant
Mean WTP per incident ($1990)]
Health Effects in the Benefits Anahsis
Mortahtv Long-term Exposure - Cher age 30
Mortahu Short-term Expo.suie
Chronic Bronchus - All Ages
Hospital Admissions - All Respirator}. All Ages
1 lospital Admissions - Conge.stne heart failure
Hospital Admissions - Isehemie heart disease
Am of 19 Acute Respiraton S\mptoms -Adult
Acute Bronchitis - Childien
Louer Respiraton. S\mptoms - Children
Upper Respiraton S\mptom> - Children
Work Loss Da\s - Adult
Minor Restricted Actnm Da\s (MRADi - Adult
PM- ,
Ozone
PMc,
Ozone &
PM.c/PM;.
PM,c
PM.C
Ozone
PM,,/15M:<
PM,;,
PMio
PM: ,
PM:<
$4.800.000
$4.800.000
$260 000
$6.712 (Ozone)
$6.344 (PM)
$8.280
$10.308
S18
$45
$12
$19
$83
$38
\\elfare Effects in the Benefits Anahsis
Agriculture - Seleet CommodiU Crops
:1 lousehold Soiling
Nitrogen Deposition in Estuarme and Coastal Waters
Decreased Worker Productn m
Visibihn - Residential
Visibihu - Select Class I areas
Ozone
PM1C
NOx
Ozone
Light
Extinction"
Light
Extinction2
Direct Valuation
$2 52/household/ug/m;
change in PM]C
$105/kg of nitrogen
$1 /worker/ 10% change in Ozone
$ 1 4/household/decivie\v
$4/household/decivie\\
Page 4-9
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A A en, important component in estimating PM-related health and welfare benefits is the
characten/ation of air quality changes Se\ cral models de\ eloped in recent years are capable of estimating
PM concentrations, but ha\ e not been rigorous!} tested for estimating ambient concentrations of PM: <
because there is currently sparse monitoring of the data necessan to benchmark model performance As
indicated in Chapter 3. two air quality models. RADM-RPM and the Source-Receptor (S-R) Matrix, are used
in this anal\ sis to predict changes in ambient PM levels given changes in NOx and SO: emissions The
defining characteristics of each of these models are laid out in Chapter 3 It is not clear which of these models
\\ill better predict the Eastern U S atmosphere in the 2007 policy year In order to reflect this uncertainty.
the plausible range for indnidual PM-related health and welfare endpomts \\ill incorporate estimates of
a\oided incidences and monetary benefits generated under each modeling framework
Because of the nonlinear chemistry used by RADM-RPM to predict changes in PM: 5. estimates of
a\oided incidences and associated monetan benefits may not follow a predictable pattern across regulator.
altemam es Pre\ lous experience with PM air quality models would suggest that benefits will increase as
controls become more stringent, however, these models lacked or used incomplete characterizations of the
role of NOx emissions in the production of oxidant fields that convert SO2 to acid sulfates. leading to a
simplified charactcn/ation of the interactions between acid sulfates. nitrates, and ammonium The role of
NOx emissions in photochemistry can introduce non-hneanties which, given the right set of atmospheric
conditions, can result in situations where decreases in NOx can lead to increases in PM in some regions1
This can lead to smaller benefits for a more stringent regulator} alternate e relatne to a less stringent
regulator} altematnc (Dennis. 1998) This seems to be occurring in the 0 15 trading altematne. especial!} in
the Northwest. Upper Midwest and Upper New England regions of the OTAG domain In addition.
implementation of specific control strategies, such as shifting of power generation and emissions trading
under the Acid Rain Trading program can result in increases in S0; emissions in states outside the NOx SIP
call region In the 0 15 and 0 12 trading altematnes. significant shifts in power generation seem to be
occunng between SIP call states and Gulf Coast states, leading to increases in both NOx and SO: emissions
along the Gulf Coast, relatn e to the anal} sis baseline Increases in PM in the Northeast and northwestern
regions of the SIP call region seem to be caused b} a combination of atmospheric chemistry and emissions
trading, as well as transport of pollutants, especial!} in Pennsyhama and the upper New England area
Because the modeled distributions of PM concentrations are non-normally distributed, the ordering
effect is dependent on whether health effects are calculated using the median versus mean PM: 5
concentration The non-linearities in the air-chemistry change with mo\ement from the lower tail to the upper
tail of the distribution of PM concentrations Non-linearities arc more pronounced at the 50th percentile of
the distribution than at the 90th percentile (Dennis. 1998) This can result in a greater degree of non-linearity
in benefits results that arc dependent on the median \ ersus the mean Implications of this for the SIP call
benefits anaK sis arc that relatne to other endpomts. estimates of PM-related long-term mortalities, which are
based on median PM, <, concentrations, are more sensitn e to the non-linear chemistr} effects between
altematnes
Throughout this benefits analysis, sensitivity analyses for assumptions affecting only a single
endpomt and with no expected directional effect will be presented direct!} following the plausible range
These sensitn it\ analvses include short-term PM-related mortality. PM-related neo-natal mortality.
1 See Chapter 3 Sections 3 3 and 3 4 for a more detailed discussion of the air qualm- models See Appendix E
for a more thorough discussion of the affect of non-linear chemistry on particle formation
Page 4-8
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Table 4-2
Unqualified Benefit Categories*
Unquantified Benefit Categories Associated
with Ozone and Nitrogen Oxides
Unquantified Benefit Categories
Associated with PM
Health
Categories
Am\a\ responsneness
Pulmonan inflammation
Increased susceptibility to respiraton
infection
Acute inflammation and respiraton cell
damage
Chronic respiraton damage/Premature aging of
lungs
I'ltraMolet-B radiation (disbenefit)
Changes in pulmonary function
Morphological changes
Altered host defense mechanisms
Cancer
Other chronic respirators' disease
Welfare
Categories
Iicos\stem and \egetation effects in Class I
areas (eg. national parks)
Damage to uiban ornamentals (e g .grass
flouers. shrubs, and trees in urban
areas')
I-ruit and \egetable crops
Reduced \ields of tree seedlings, commercial
and non-commercial forest;,
Damage to ecos\ stems
Materials damage (other than consumer
cleaning cost sa\ ings)
Nitrates in drinking \\ ater
Broun Clouds
Materials damage (other than consumer
cleaning cost savings ")
Damage to ecos\ stems (e g . acid sulfate
deposition)
Nitrates in drinking \\ater
Bro\\n Clouds
* Note thai there are other pollutant*, that are reduced in comunction with strategies implemented to reduce \O\ emissions for the SIP call I hese
include carbon (a pollutant associated with elobal climate change) and mercun (a toxic pollutant) These emission reductions are also not considered
in this benefits anaK sis
There are mam subiectne judgements that must be made in order to select the set of relationships
and \ alues for the benefits anaK sis The specific selections used to develop the plausible range are designed
to reflect the EPA's best current judgement on each issue, considering the state of current scientific
knowledge, previous Agenc> anahscs. and the most recent ad\ ice provided b\ EPA's Science Ad\ ison
Board on performing benefits anaK sis for criteria air pollution control programs There are. howe-\ er.
defensible altematn es to virtualK e\ er\ decision about the makeup of the plausible range In order better to
inform the reader of important altematn e assumptions that could have been made, and to provide an
understanding of the impact of each altematn e on the overall assessment of the monetary benefits, the
benefits anaK sis includes a number of quantitative sensitivity analyses Indmdual sensitivity analyses
examine the effects of using altematn e assumptions about indnidual choices incorporated in the benefits
anaK sis. such as the impact of using short-term (daily) mortality functions instead of a long-term (chronic
exposure) function
Sensitivity analyses are also used to explore the impacts of including other endpomts. such as PM-
related infant mortality, that are not as well understood as the effects included in the benefits anaK sis
Sensitn lU anaK ses will also be used to explore the effects of alternative valuation approaches, such as the
use of alternatn-e agricultural market simulation models
Page 4-7
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It is also difficult to identify all the types of benefits that might result from em ironmental regulation
and to \ alue those benefits that are identified A cost analysis is expected to provide a more comprehensn e
estimate of the cost of an em ironmental regulation because technical information is axailable for identifying
the technologies that \\ould be necessan to achie\e the desired pollution reduction In addition, market or
economic information is available for the mam components of a cost analysis (e g . energy prices, pollution
control equipment, etc ) A similar situation rxpically does not exist for estimating the benefits of
em ironmental regulation This problem is due to the non-market nature of mam benefits categories Since
mam pollution effects (e g . ad\ erse health or ecological effects) traditionally have not been traded as market
commodities, economists and anahsts cannot look to changes in market prices and quantities to estimate the
\ alue of these effects This lack of observable markets ma> lead to the omission of significant benefits
categories from an em ironmental benefits analysis. Likewise, difficulties in measuring disbenefits ma> lead
to a positn e bias in net benefits The net result of underestimating benefits and disbenefits \\ill depend on
hem complctel) each categon, is measured
Because of the inability to quantify mam of the benefits categories listed in Table 4-1. as well as the
omission of unknown but rele\ant emironmental benefits categories, the quantified benefits presented in this
report ma) underestimate total benefits It is not possible to quantify the magnitude of this underestimation
The more important of these omitted effect categories are shown in Table 4-2 Underestimation of total
benefits ma\ be mitigated to some extent if there are also rele\ant disbenefit categories that are omitted or
unqualified
Within each effect categon.. there max be se\eral possible estimates of health and \\elfare effects or
monetan benefit \ alues Each of these possibilities represents a health or welfare "endpomt " The basic
structure of the method used to conduct the benefits anal) sis is to create a set of benefit estimates reflecting
different ke\ assumptions concerning emironmental conditions and the response eness of human health and
the em ironment to changes in air quaht) Total benefits are presented as a plausible range representing the
sensitn it) of benefits o\er the set of maintained assumptions The upper and lower ends of the plausible
range of total benefits are constructed using estimates of non-o\ erlapping endpomts for each effect categon,.
selected to a\ oid double counting Double counting occurs when t\\o endpomts contain \ alues for the same
thing For example, an endpomt measuring a\oided incidences of all hospital admissions \\ould incorporate
a\ oided incidences of hospital admissions just for heart disease Thus including \ alues for a\ oiding both
types of hospital admissions \\ould double count the \ alue of axoided hospital admissions for heart disease
The upper and lower ends of the plausible range do not necessanh represent the sum of the highest \alues for
each endpomt Instead, the) represent the points associated with the combinations of assumptions that are
expected to generate the lowest and highest benefit estimates for the majority of regulator) alternatn es The
plausible range does not pro\ide information on the likelihood of am set of assumptions being the correct
one Thus, \\hile the plausible range indicates the sensitn ir\ of benefits to the \anous assumptions, it
requires a sub]ecti\e determination of which assumption set most closel) represents reaht)
Page 4-6
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Table 4-1
Examples of Potential Benefits of Air Quality Impro\ements
USE BENEFITS
Direct
Indirect
Option Value
Aesthetic
NON-USE BENEFITS
Bequest
1 \)>tence
EXAMPLES
Human Health Improvements (e g . less incidences of coughing1)
Increased Crop Yields
Non-Consumptive Use (e g . impro\ed visibihtv for recreational activities)
Risk Premium for Uncertain Future Demand
Risk Premium for Uncertain Future Supplv (e g . treating as insurance, the protection
of a forest iust in case a ne\\ use for a forest product \\ill be discovered in the
future)
Residing, \\orking. tra\ehng. and/or owning property in reduced smog locations
Intergenerational Lquitv (e g . an older generation \\ anting a vounger generation to
inherit a protected environment)
Stewardship Preservation' Altruistic Values (e g . individuals wanting to protect a
forest even if thev know that thev will never use the forest)
Ideological Benefits
Non-use \ alues mav be related to the desire that a clean em ironment be av ailable for the use of
others now and in the future, or mav be related to the desire to know that the resource is being presen ed for
its own sake, regardless of human use The component of non-use v alue that is related to the use of the
resource bv others in the future is referred to as the bequest v aluc This v alue is typicallv thought of as
altruistic in nature For example, the v alue that an indiv idual places on reducing the general population's risk
of PM and or o/onc exposure either now or in the future is referred to as the bequest value Another potential
component of non-use value is the value that is related to presen ation of the resource for its own sake, even if
there is no human use of the resource This component of non-use \ alue is sometimes referred to as existence
v alue An example of an existence v alue is the v alue placed on protecting the habitats of endangered species
from the effects of air pollution, ev en if the species have no direct use to humans
The maiontv of health and welfare benefits categories included in this anaKsis can be classified as
direct use benefits These benefits are discussed in greater detail than other benefits categories presented in
Table 4-1 because more scientific and economic information has been gathered for the direct use benefits
categorv Detailed scientific and economic information is not as readilv av ailable for the remainder of the
potential benefits categories listed in Table 4-1 Information pertaining to indirect use. option v alue.
aesthetic, bequest, and existence benefits is often more difficult to collect For example, lowering ambient
ozone concentrations in an area is expected to reduce physical damage to ornamental plants in the area
Homeowners liv ing in the affected area with ornamental plants in their yards are expected to benefit from the
reduced damage to their plants, with the plants possiblv exhibiting an improved appearance or experiencing
an extended life Although scientific information can help identify the benefits categorv- of decreased damage
to urban ornamentals, lack of more detailed scientific and economic information (e g . exposure-response
relationships for urban ornamentals and values associated with specific tvpes of injuries and mitigation)
currentiv prevents quantification of this benefits categorv
Page 4-5
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A "damage function" approach is used to estimate the ad\erse physical effects from air pollution that
\\ill be a\ oided in the eastern United States due to implementation of the emission reductions required by the
N0\ SIP call (the exception to this is the estimation of nitrogen deposition benefits, which uses an a\ oided
cost approach) An "economic unit \ alue" approach is used (for most effect categories, e g . premature
mortalm or chronic bronchitis) to estimate socieu 's aggregate demand (i e . willingness to pa>) for avoiding
each t> pe of ph> sical effect on a per incidence le\ el Total value for a gi\ en physical effect is simply the
product of the number of incidences a\ oided and the value per incidence a\ oided All dollar estimates of
monetan benefits presented in this chapter are in 1990 dollars
The \aluation of a\ oided incidences of health effects and a\ oided degradation of \\elfare effects
relies on benefits transfer The benefits transfer approach takes values or value functions generated b>
prc\ lous research and transfers them from the stud> to the pohc\ of interest For example, the \ alue of
reduced mortalm is obtained from a distribution of values of statistical life based on 26 \\age-nsk and
contingent \aluation studies None of the \alues for the health and \\elfare categories \alued in this benefit
anal} sis \\cre generated specifically in the context of the NOx SIP call
The first step in a benefits anahsis using this approach is the identification of the types or categories
of benefits associated \\ith the anticipated changes in ambient air quality conditions The second step is the
identification of rele\ am studies examining the relationships between air quality and these benefit categories
and studies estimating the \ alue of a\ oiding damages Table 4-1 pro\ ides an example of the types of benefit?
potential!) observed as a result of changes in air qualih The t>pes of benefits identified in both the health
and \\elfare categories can generalh be classified as use benefits or non-use benefits
Use benefits are the \alues associated \\ith an mdmdual's desire to a\oid exposure to an
em ironmental risk Use benefits include both direct and indirect uses of affected ambient air. and embrace
both consumptn c and non-consumptn e acti\ ities In most applications to air pollution scenarios, the most
prominent use benefits are those related to human health risk reductions, effects on crops and plant life.
\isibility and materials damage
Non-use (intrinsic) benefits are values an mdn idual ma\ ha\ e for lowering air pollution
concentrations or the le\ el of risk unrelated to his or her own exposure lndi\ iduals apart from am past.
present, or anticipated future use of the resource in question can \ alue impro\ ed em ironmental quality Such
non-use \aiucs ma> comprise a significant portion of the total monetan benefits Howe\er. the dollar
amount to assign to these non-use \ alucs often is a matter of considerable debate While human uses of a
resource can be obsened directK and \alued \Mth a range of technical economic techniques, non-use \alucs
must be ascertained through indirect methods, such as asking sune> respondents to rexeal their -\alues
Page 4-4
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Figure 4-1 Example Methodology of a Benefits Analysis
Specif} SIP call Pohc>
E\ aluatc Changes in Production Processes
and/or Treatment
Estimate Reductions in Pollutant
Emissions
1
Model Reductions in Ambient 0/one and
PM Air Quaht}
Estimate Changes in Plant Damage. Crop
Yields, and Other Welfare Effects
Estimate Changes in Supph and Value of
Crops. Vegetables, and Other Welfare
Effects
\
Estimate Changes in Ad\erse Human
Health Symptoms and Risk
I
Estimate Value of A\ erted Ad\ erse
Human Health S\mptoms and Risk
Page 4-3
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em ironmental quahu impro\ ements). ho\\ e\ er. other methods of measuring benefits must be used In
contrast to market goods, non-market goods such as em ironmental quality impro\ ements are public goods.
whose benefits are shared b> mam people The total \alue of such a good is the sum of the dollar amounts
that all those \\ho benefit are \\illmg to pa>
In addition to benefits, regulator} actions ma\ also lead to potential disbenefits. i e outcomes that
have a negatn e impact on social \\elfare In general these disbenefits will be incidental to the stated goals of
the regulation, otherwise (in an efficient regulator} emironment) the regulation would not ha\e been
promulgated In order to full) quantify the benefits and costs of a regulator} action, both the benefits and
disbenefits should be calculated, so that net benefits (equal to benefits minus disbenefits minus costs) \\ill not
be biased upwards In mam cases. ho\\e\ er. disbenefits are difficult to quantify. as it is often unclear where
and hov\ disbenefits will occur Benefits max also be difficult to quantify. since mam benefits are not
measurable using market based measures
This conceptual economic foundation raises se\eral relevant issues and potential limitations for the
benefits anaksis of the regulation First, the standard economic approach to estimating environmental
benefits is anthropocentnc - all benefits \ alues arise from how em ironmental changes are percen ed and
\alued b> people in present-da\ \alues Thus, all near-term as \\ell as temporal!) distant future phxsical
outcomes associated \\ith reduced pollutant loadings need to be predicted and then translated into the
framework of present-da> human acti\ities and concerns Second, as noted below, it is not possible to
quantif> or to \aluc all of the benefits resulting from em ironmental quality impro\ ements
Conducting a benefits anahsis for anticipated changes in air emissions is a challenging exercise
Assessing the benefits of a regulators action requires a chain of e\ents to be specified and understood As
shown in Figure 4-1. illustrating the causahh for air quaht> related benefits, the estimation of benefits
requires information about (1) institutional relationships and pohc\-making. (2) the technical feasibility of
pollution abatement. (3) the ph\sical-chemical properties of air pollutants and their consequent linkages to
biological or ecological responses in the emironment. and (4) human responses and \alues associated \\ith
these changes
The first t\\o steps of Figure 4-1 reflect the institutional and technical aspects of implementing the
N0\ SIP call regulation (the impro\ ed process changes or pollutant abatement) The estimated changes in
ambient PM or o/one concentrations are direct!) linked to the estimated changes m precursor pollutant
emission reductions through the use of air qualm modeling, as described in Chapter 10
Page 4-2
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Chapter 4. BENEFITS OF REGIONAL NOx REDUCTIONS
The changes in o/one and PM ambient concentrations described in Chapter 3 will result in changes in
the ph\ sical damages associated with ele\ ated ambient concentrations of these pollutants The damages
include changes m both human health and welfare effects categories
This chapter presents the methods used to estimate the physical and monetan benefits of the
modeled NOx and SO- emissions changes from implementing the revised SIPs. the estimates of the avoided
ph\ sical damages (e g . incidence reductions), and the results of the benefits analysis for a range of regulator.
alternatn es considered for the SIP call EPA decided to analyze the benefits of the most significant
alternatu es that it considered for determining state NOx budgets for the electric power industry and other
stationary sources The fi\e altematnes are described in Table 2-3 in Chapter 2 of Volume 2 of the RIA In
order to consene analytical resources, the benefits of Regionaht\ 2 are not anahzed Regionally 2 achie\es
emission reductions and air qualm impro\ements that are similar, though not identical, to Regionaht) 1 and
0 15 Trading It is likeh that total benefits for Regionaht) 2 \\ould fall somewhere in bet\\een the benefits
estimates for Regionalm 1 and 0 15 Trading
The remainder of this chapter is laid out as follows Section 4 1 pro\ides an oAeniev, of the
benefits methodology Section 4 2 discusses issues in estimating health effects Sections 4 3 discusses
methods and pro\ ides estimated \ alues for a\ oided incidences and monetan benefits for ozone and PM
related health effects Section 4 4 discusses methods and pro\ides estimated values for o/one and PM related
\\elfare effects Section 4 5 pro\ ides estimates of total health and \\elfare benefits associated \\ith alternatn e
NOx emission limn policies Fmalh. Section 4 6 discusses potential benefit categories that are not quantified
due to data and/or methodological limitations, and pro\ides a list of anaklical uncertainties, limitations, and
biases
4.1 Overview of Benefits Estimation
Most of the specific methods and information used in this benefit anahsis are similar to those used in
the §812 Retrospective of the Benefits and Costs of the Clean Air Act and forthcoming §812 Prospective
EPA Reports to Congress, which \\ere reMe\\ed b\ EPA's Science Ad\ison Board (EPA. I997c).as \\ell as
the approach used b> EPA in support of reusing the ozone and PM NAAQS in 1997 (EPA. 1997a and
1997b)
Prior to describing the details of the approach for the benefits analysis, it is useful to pro\ ide an
o\ervie\\ of the approach The o\eme\\ is intended to help the reader better identify the role of each issue
described later in this chapter
The general term "benefits" refers to any and all outcomes of the regulation that are considered
positne. that is. that contribute to an enhanced level of social welfare. The economist's meaning of
"benefits" refers to the dollar value associated with all the expected positive impacts of the regulation; that is.
all regulatory outcomes that lead to higher social welfare. If the benefits are associated with market goods
and sen ices, the monetan value of the benefits is approximated by the sum of the predicted changes in
"consumer (and producer) surplus." These "surplus" measures are standard and wideh accepted measures in
the field of applied welfare economics, and reflect the degree of well being enjoyed b> people given different
le\ els of goods and prices If the benefits are non-market benefits (such as the risk reductions associated with
Page 4-1
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U S Em ironmental Protection Agenc>. 1998b. Development of Modeling Inventory and Budgets for
Regional NOx SIP Call Office of Air Qualit> Planning and Standards. September 1998
U S Em ironmental Protection Agenc>. 1998c. Compilation of Air Pollutant Emission Factors. I 'oiume I
Stationary Point and Area Sources. Fifth Edition (AP-42) Office of Air Quality Planning and Standards.
Research Triangle Park. NC Supplement D. August 1998
U S Em ironmental Protection Agenc>. 1998d. The Regional NOx SIP Call and Reduced Atmospheric
Deposition of Nitrogen Benefits to Selected Estuaries. Washington. DC. September 22. 1998
Page 3-26
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Pierce. T . B Lamb, and A VanMeter. 1990. "Dexelopment of a Biogemc Emissions Inventon Sxstem for
Regional Scale Air Pollution Models " Proceedings of the 83rd Air and Waste Mangement Association
Annual Meeting. Pittsburgh. PA 1990
Sisler. J F . 1996 Spatial and Seasonal Patterns and Long Term Variability of the Composition of the
Haze in the United States An Analysis of Data from the IMPROVE Network Cooperative Institute for
Research in the Atmosphere. Colorado State Umxersm; Fort Collins. CO. Julx. 1996
U S Em ironmental Protection Agencx. 1995 Acid Deposition Standard Feasibility Study Report to
Congress. EPA Report 430-R-95-001a. Office of Air and Radiation. Acid Rain Division. Washington. D C
US Em ironmental Protection Agencx. ]996a Review of the National Ambient Air Quality Standards for
Paniculate Matter Policy Assessment of Scientific and Technical Information. OAQPS Staff Paper EPA-
452 -R-96-01 ? Office of Air Quaht> Planning and Standards. Research Triangle Park. NC. Julx. 1996
U S Em ironmental Protection Agencx. 1996b. Proposed Methodology for Predicting PM^ 5 from PM,,,
! 'aim's KI Assess the Impact of Alternative Forms and Levels of the PM NAAQS Prepared bx Terence Fit/-
Simons. Da\id Mint/ and Miki Wax land (U S Em ironmental Protection Agencx. Office of Air Qualm
Planning and Standard. Air Qualm Trends Analysis Group). June 26. 1996
U S Environmental Protection Agencx. 1997a Regulatory Impact Analyses for the Paniculate Matter and
Ozone National Ambient Air Quality Standards and Proposed Regional Haze Rule Office of Air Qualm
Planning and Standards. Research Triangle Park. NC. Julx 1997
U S Em ironmental Protection Agencx. 1997b "The Effects of SO\ and NOX Emission Reductions on
Sulfate and Nitrate Paniculate Concentrations" Thomas Bra\erman. Air Quality Modeling Group. Office of
Air Qualm Planning and Standards Research Triangle Park. NC Max 1997
US Enx ironmental Protection Agencx. 1997c National Air Pollutant Emission Trends Procedures-
Document 1990-1996 Section 4 0 National Criteria Pollutant Estimates. 1985-1996 Office of Air
Qualm Planning and Standards. Research Triangle Park. NC Draft Document June 1997
US En\ ironmental Protection Agencx. 1997d Memorandum to the docket from Terence Fit/-Simons
(Office of Air Qualm Planning and Standards. Air Qualm Trends Analxsis Group). Subject "Response to
Comments Made b> A1S1 on EPA Methodoloux for Predicting PM-, from PM ." Februan 6. 1997
U S En\ ironmental Protection Agencx. 1997e Deposition of Air Pollutants to the Great Waters. EPA
Report 453/R-97-011. Office of Air Qualm Planning and Standards. Research Triangle Park. NC
U S Enx ironmental Protection Agencx. 1997f Memorandum from Dax-id Mintz. Air Quality Trends
Analxsis Group. Office of Air Qualm Planning and Standards to Allyson Sixvik Innox alive Strategies and
Economics Group. Office of Air Quality Planning and Standards Subject '"Methodology Used to Create
PMU, and PM: 5 Air Qualm Databases for R1A Work " July 15, 1997
U S En\-ironmental Protection Agencx. 1998a Analyzing Electric Power Generation under the Clean Air
Act Office of Air and Radiation. Washington. D C . May 1998
Page 3-25
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Dennis. R L 1997 "Using the Regional Acid Deposition Model to Determine the Nitrogen Deposition
Airshed of the Chesapeake Ba> Watershed " In Joel E Baker, editor. Atmospheric Deposition to the Great
Lakes and Coastal Waters. Societx of Em ironmental Toxicology and Chemistry. Pennsacola. FL. pp 393-
413
Dennis. R L . W R Barchet. T L Clark, and S K Seilkop. 1990 '"E\aluation of Regional Acid Deposition
Models (Part I) NAPAP SOS/T Report 5 " In Acidic Deposition State of Science and Technology.
I 'olume 1 National Acid Precipitation Assessment Program. Washington. D C . September 1990
Dennis. R L . F S Binko\\ski. T L Clark. J N McHenn. S J Reynolds, and S K Seilkop. 1990 "Selected
Applications of the Regional Acid Deposition Model and Engineering Model Appendix 5F (Part 2) of
NAPAP SOS/T Report 5 " In National Acid Precipitation Assessment Program State of Science and
Technology Volume I. National Acid Precipitation Assessment Program. Washington. DC . September
1990
EH Pechan and Associates. 1996 Regional Paniculate Control Strategies Phase II Prepared for the U S
Emironmental Protection Agencv Office of Pohc\. Planning, and E\aluation. Washington. DC. September.
1996
E H Pechan and Associates. 1997 Control Measure Analysis of Ozone and PM Alternatives
Methodology and Results Prepared for Inno\ am e Strategies and Economics Group. Office of Air QualiU
Planning and Standards. U S EPA Research Triangle Park. NC JuK 1997
Eder. B K . S K LeDuc and F D Vestal. 1996 "Aggregation of selected RADM simulations to estimate
annual ambient air concentrations of fine particulate matter " In Preprints. Ninth Joint conference of
Applications of Air Pollution Meteorolog> \\ith A&WMA. Januan 28-February 2. 1996. Atlanta. Georgia
American Meteorological Societ\. Boston. MA. pp 390-392
Eder. B K and S K LeDuc. 1996 "Can selected RADM simulations be aggregated to estimate annual
concentrations of fine paniculate matter9" In Measurement of toxic and related air pollutants VIP-64
Proceedings of an International Specialty Conference. Research Triangle Park. NC. Ma\ 7-9. 1996 Air &
Waste Management Association. Pittsburgh. PA. pp 732-739
Husar. R B and W E Wilson. 1993 "Ha/c and sulfur emission trends in the eastern United States "
Environmental Science and Technology. 29. pp 13-16
Latimer and Associates. 1996 Paniculate Matter Source - Receptor Relationships Betv een All Point and
Area Sources in the United States and PSD Class Area Receptors Prepared for Bruce Polkowsk}. Office
of Air QuahfA Planning and Standards. U S EPA Research Triangle Park. NC September 1996
National Acid Precipitation Program. 1991 NAPAP 1990 Interim Assessment Report Volume II Emissions
and Controls Washington. DC November 1991
Pechan-A% anti Group. 1998 PMandRHAir Quality Analysis for the NOx SIP CallRlA. Prepared for the
U S. Environmental Protection Agenc>. Office of Air Qualm Planning and Standards, Research Triangle
Park.NC September 9. 1998
Page 3-24
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Table 3-6 presents changes in the population-weighted \isibihu degradation estimates from the
RPM in terms of annual mean extinction As shown, the change is much less than 1% for each alternate c
except 0 12 trading
Table 3-6
2007 Population-Weighted Sum of Annual Mean Extinction:
RPM Results
Percent Change from Base Case
0.25
Trading
-d ?
0.20
Trading
-04
Regionalit>
1
-04
0.15
Trading
-03
0.12
Trading
-1 3
The air qualih technical support document for this R1A (Abt Associates. 1998) contains maps
showing the base case \ isibihh degradation and \ isibiht) degradation changes generated using both RPM
and the S-R Matrix for each of fi\e regulatory alternatives (0 25 Trading. 0 20 Trading. Regionality 1.015
Trading, and 0 12 Trading) Maps showing visibility degradation changes for selected Class I areas can also
be found in Pechan. 1998
3.6
References
Abt Associates. Inc. 1998 Air Quality Estimation for the ,\()x SIP Call RJA Prepared for the U S
Em ironmental Protection Agencv Office of Air Quahh Planning and Standards. Research Triangle Park.
NC September 1998
Brooks. J R . P J Samson and S Sillman. 1995a "Aggregation of selected three-da\ periods to estimate
annual and seasonal \\et deposition totals for sulfate. nitrate, and acidit} Part I A synoptic and chemical
cllmatolog^ for eastern North America " Journal of Applied Meteorology. 34(2). 297-325
Brooks. J R . P J Samson and S Sillman. 1995b "Aggregation of selected three-da\ periods to estimate
annual and seasonal \\et deposition totals for sulfate. nitrate, and acidih Part II Selection of events.
deposition totals, and source-receptor relationships " Journal of Applied Meteorology. 34(2). 326-339
Chang. J S . R A Brost. I S A Isaksen. S Madromch. P Middleton. W R Stock\\ell. and C J Walcek. 1987
"A Three-Dimensional Eulenan Acid Deposition Model. Physical Concepts and Formulation " J. of
Geophysical Research. 92. 14.681-14.700
Chang. J S . P B Middleton. W R Stockwell. C J Walcek. J E Pleim, H H Lansford. F S. Bmkowski. S
Madromch. N L Seaman, and D R Stauffer. 1990 "The Regional Acid Deposition Model and Engineering
Model NAPAP SOS/T Report 4 '' In Acidic Deposition. State of Science and Technology. Volume 1
National Acid Precipitation Assessment Program. Washington D C . December 1990
Page 3-23
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Table 3-5
Summary of 2007 Visibility Degradation Estimates
(deciview s)
Visibility Degradation
2007 Base
Case'
Change Relati\e To 2007 Base Case b
0.25
Trading
0.20
Trading
Reg. 1
0.15
Trading
0.12
Trading
Southeast '
RPM Annual A\erage~
Residential
RPM Annual A\eragc—
Recreational ;
S-R Matrix .Annual
A\ erage--ReMdential
S-R Matrix Annual
A veracc— Recreational L
21 87
2027
20 13
23 06
-007
-0 12
-0 08
-0 0"
-008
-0 16
-008
-0 07
-007
-0 16
-0 0"
-0 06
-0 11
-0 15
-0 10
-008
-022
-024
-0 12
-0 09
Central <& Northeast '
RPM Annual A\erage--
Residential
RPM Annual A\erage--
Recreational
S-R Matrix Annual
A\ erage— Re>i Jential
S-R Matrix Annual
A\ erace—Recreational "
17 12
1587
IS""
1939
-002
-001
-0 02
002
-004
-0 03
-001
002
-0 03
-0 03
0 00
0 02
-003
-0 06
-002
002
-009
-0 10
-005
-0 0 1
' The RPM onh account for \isibiln\ degradation due to sulfates and nitrates hut not other \anables such as coarse P.M and organic matter This
lead-- RPM to ,,i7^i>i.-i,».j;e tola! residential and recreational \isihiht\ degradation However the absolute change from the base case to the control
option1- is essentulh Correct since the change in sulfates and nitrates dominates the change in other \anables affecting \isibilit\ The S-R Matrix
rt;'\Ki.ocu' estimate-, are correct since thex include all visibility variables but the S-R Matrix residential estimates onh account for sulfate.s. nitrat
and coarse PM and thus underestimate total residential \isibih:\ As \\ith RPM the S-R matrix correct 1\ estimates the change in Msibihts from th.
base case to the Control option-. The effect of underestimating \isibiht> on the dollar \alue of \isibilit\ change is discussed in Cnapter 11
c I he chance is defined as the control case deci\ie\\ le\el minus the base case decmeu le\e!
' The four Southeastern national parks are Shenandoah. Mammoth Ca\e Great Smok) Mountains, and the Lserlglades
" The three Central and Northeastern national parks are Yo\ageurs Isle Roxale and \cadia
' The Southeast region includes the following 12 states plus Washington D C AL. DE. FL. G A. KY. MD. MS. \'C. SC. TN. V.A. \V\" The
remaining states in the 3~! stale OTAG region comprise the Central and Northeast regions
Page 3-22
-------
\\hcrc
] (r = constant to com ert Mm'' to km"'
A change of one deci\ iev\ represents a change of approximate!} ten percent in bal. "which is a small but
perceptible scenic change under mam circumstances" (Sisler. 1996. p 1-7)
Visibility degradation estimates in "recreational" (e g . federal!} designated Class I areas such as
national parks and recreation areas) and "residential" (non-Class 1 areas) areas are generated using the results
of both RPM and the S-R Matrix RPM computes the light extinction due to the combined scattering of light
b} sulfates. nitrates, and orgamcs \\hich are part of the bsp term of the extinction equation RPM does not
include the soil part of bs;. but it does indirect!}' account for the soot part through a slight modification of the
index of refraction for particles RPM does not include gas absorption (by N0;) because it is quite small.
Ra}leigh scattering is accounted for in RPM's calculation of deci\ie\\. because Rayleigh is taken as the
"floor" for deciuc\\. ho\\e\er. Rayleigh scattering is not in RPM's calculation of/>ft. Therefore. RPM
estimates underpredict total light extinction A correction for this underprediction is discussed in Chapter 4.
section 445
The S-R Matrix results are also used to estimate count} -le\ el light extinction The recreational
\isibiht} calculations use the full set of parameters in the extinction equation, due to the availabiht} of data
from IMPROVE monitors, \\hile the residential \isibilit} calculations use count}-le\ el sulfate. nitrate and
coarse particle estimates Using less than the full set of terms in the residential visibility calculations leads to
an underestimate of light extinction, and as noted for RPM a correction for this underprediction is presented
in Chapter 4. section 445
The \isibilit} benefits anal}sis (see Chapter 4) distinguishes between general regional visibiht}
degradation and wsibilm degradation in certain Federal!}-designated Class I areas (i e . national parks.
forests, recreation areas, wilderness areas, etc ) Therefore \ isibiht} degradation estimates are separated into
"residential" and "recreational" categories depending upon the geographic area co\ered b} the estimate
Table 3-5 pro\ ides a summan of the \ isibilit} degradation estimates demed both from the RPM and
the S-R Matrix results in terms of deci\ie\\s The valuation methodolog} for recreational \isibilit} requires
separate treatment of MSibiliU changes in Class I areas in the Southeast region versus Class I areas in the
Central and Northeast regions Table 3-5 pro\ ides \ isibilm degradation estimates for both regions All
predicted \ isibiht} changes are small, with the largest residential changes occunng the the Southeast region
The S-R Matrix predictions are similar to the RPM predictions in the Southeast for each altername except
0 12 trading, but are slight!} smaller than the RPM predictions in the Central and Northeast regions
Page 3-21
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Table 3-4
Summar\ of 2007 Nitrogen Deposition in RADM Domain
Statistic
Minimum Annual
Deposition (kg'ha \
Maximum Annual
Deposition (kg'ha)
A\ erage Annual
Deposition (kg ha i
2007 Base
Case
074
31 91
483
Change Relative To 2007 Base Case
0.25
Trading
000
-262
-033
0.20
Trading
000
-3 19
-04-
Reg. 1
-001
-322
-050
0.15
Trading
-001
-3 58
-055
0.12
Trading
-001
-366
-05^
3.5 Visibilit) Degradation Estimates Using RPM and the S-R Matrix
Visibility degradation is often directh proportional to decreases in light transmittance in the
atmosphere Light transmittance is attenuated b> scattering and absorption b\ both gases and particles The
light-extinction coefficient is a measure of the total fraction of light that is attenuated per unit distance (Sisler.
1996)
+ b - b
\\hcre
h^. = total light extinction coefficient (1/Mm).
b,,^, = light extinction coefficient due to natural Ra\leigh scatter (I/Mm).
/?,. = light extinction coefficient due to scattering by particles (I/Mm).
b^ = light extinction coefficient due to absorption b> gases (I/Mm), and
h^ = light extinction coefficient due to absorption b\ particles (1 /Mm)
The light extinction coefficient is calculated b\ multiplying the concentration of aerosol species and particles
species b> their corresponding light-extinction efficiencv and summing o\cr all species
The term hif can be broken into the \ anous species of fine and coarse particles that scatter light
Because fine particles are much more efficient at light scattering than coarse particles, several fine particle
species are specified, \\hereas coarse particles are kept as one category Fine particles with significant light-
extinction efficiencies include sulfates. nitrates, organic carbon, elemental carbon (soot), and soil (Sisler.
1996)
Once the light-extinction coefficient is determined, the visibility index called decivie\\ (dv) can be
calculated (Sisler. 1996)
dv = 10 • \n(berl-\Q-3/00\km-})
Page 3-20
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3.4 Nitrogen Deposition Estimates
Nitrogen deposition estimates are generated using RADM The RADM was de\ eloped over a ten
\earperiod. 1984 - 1993. under the auspices of the National Acid Precipitation Assessment Program to
address polic> and technical issues associated \\ith acidic deposition The model is designed to provide a
scientific basis for predicting changes in deposition and air quality resulting from changes in precursor
emissions and to predict the levels of acidic deposition in certain sensitn e receptor regions To do so requires
that RADM be a multipollutant model that predicts the oxidizing capacity of the atmosphere, including the
prediction of o/one. and chemical transformations mvoh ing oxides of sulfur and nitrogen
The de\elopment. application, and e\ aluation of the RADM has been documented extensiveh b>
NAPAP (Chang, et al 1987 & 1990. Dennis et al 1990) RADM has been used in several recent studies of
acidic deposition, including EPA's 1995 Acid Deposition Standard Feasibility Stud) Report to Congress
(U S EPA. 1995). EPA's 1997 Deposition of Air Pollutants to the Great Waters Report to Congress (U S
EPA. 1997e). and in \\ork estmatmg the nitrogen deposition airshed of the Chesapeake Bay watershed
(Dennis. 1997)
RADM estimates deposition in units of kilograms per hectare (kg/ha) Wet deposition is estimated
in the form of SO;:\ NO,". NH3. H" Dr> deposition is estimated in the form of S0:. SO., as aerosol. 0_,.
HNO-,. NO,. H-O^ The deposition estimates are mapped to specific East Coast and Gulf Coast estuaries and
their \\atersheds : Land deposited nitrogen in each \\atershed is multiplied b\ a factor of 10% to obtain the
nitrogen load delnered Ma export (pass-through) to the corresponding estuan
Table 3-4 proxidcs a summan of the nitrogen deposition estimates for each cell in the RADM
domain The changes range from 0 01 kg/ha to 3 66 kg/ha The results for the 0 15 option represent an 11%
reduction in the a\eragc annual deposition across the entire domain The air qualiU technical support
document for this R1A (Abt Associates. 1998) contains maps sho\\mg the nitrogen deposition changes
generated using RADM for each of fi\e regulators altcrnatnes (0 25 Trading. 0 20 Trading. Regionally 1.
0 15 Trading, and 0 12 Trading) Another technical support document for this RJA (EPA. 1998d) contains
additional information on the reduction in mtroaen loads to 12 stud\ set estuaries
'• F.PA has de\eloped a methodology to assess nitrogen deposition benefits direct!) for 12 different estuaries
Albemarle,' Pamhco Sounds. Cape Cod Ba\. Chesapeake Ba\. Delaware Bay, Delaware Inland Ba\s. Gardmers Ba\.
Hudson R •' Rantan Ba\. Long Island Sound. Massachusetts Ba}. Narragansett Ba>. Sarasota Ba\. and Tampa Ba\
Page 3-19
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Table 3-3
Summan of S-R Matrix Derived PM Air Qualin
Statistic
Minimum Annual Mean
PM,( (..g'mV'
Maximum Annual Mean
>Mir, (..g'nV) !
A\cragc .Annual Mean
3M,, (. gm''i
Population-\\ eighted
A\ erage Annual Mean
5M (person-, e'mV
Minimum Annual Mean
PM:,(. g'mV
Maximum Annual Mean
PM-, (..g'mV
A\ erage /Vnnual Mean
PM- . f . g m'i
Population- Weighted
A\ erage Annual Mean
PM- , (person-, e'm' i l
2007 Base
Case
539
66 3"
2262
25 96
3 49
2~ 63
10 "4
1262
Change Relath e To 2007 Base Case "
0.25
Trading
-0 56
020
-0 03
-0 03
-052
0 20
-00?
-0 03
0.20
Trading
-056
021
-003
-004
-052
021
-0 03
-0 04
Reg. 1
-053
026
-002
-0 03
-049
025
-0 02
-0 03
0.15
Trading
-057
026
-004
-004
-053
026
-0 04
-004
0.12
Trading
-0 6"
0 16
-0 06
-o u"
-0 6~
0 17
-0 05
-0 06
The chanec is defined as the eontrol case \alue minus the ba*-e ease \ alue
s The base ^a-.e minimum i maximum) is the \alue tor the counu uith the louest (highest) annual average The change relatne to ih
the minimum i maximum i from the set of ehange-. in all counties
• Calculated m summmc the product of the protected 2r'0~ counts population and the estimated 2007 counts P\I concentration and
the total populalior in the 3 1 sute^ modeled u^mg the S-R Matrix
; base case picks
then dr. idi:iL r.'-
Population-weighted air quahtx changes \\ere not estimated using the S-R Matrix results The
results generated from the RPM modeling sho\vn in Appendix B should be generalh representalne of the
direction and magnitude of changes that would be estimated using the S-R Matrix results
The air qualm technical support document for this R1A (Abt Associates. 1998) contains maps
showing the base case PM concentrations and PM concentration changes generated using the S-R Matrix for
each of fi\ e regulator) alternatives (0 25 Trading. 0.20 Trading. Regionally 1.015 Trading, and 0 12
Trading) Similar maps can also be found in Pechan. 1998
Page 3-18
-------
1997d) The standardi/.ation for temperature and pressure was eliminated from this concentration data based
upon proposed rc\ isions to the reference method for PM,,, "
Because there is little PM,, monitoring data a\ ailable. a general linear model was de\ eloped to
predict PM,« concentrations directh from the 1993 - 1995 PMKJ \alues (U S EPA. 1996b) A SASrN1
general linear model (i c . GLM) procedure \\as used to predict PM;< values (dependent \anable) as a
function of independent ^ anables for season, region, and measured PMU. value These dern ed PM; 5 data
\\ere used to calibrate model predictions of annual average PM:5
3.3.5 Development of Annual Median PM2 ? Concentrations
The CRDM procedure does not direct!} produce estimates of daih 24-hour a\erage PM
concentrations or annual median PM concentrations Some health benefits have concentration-response
functions that reh on estimates of either the daih 24-hour average or annual median concentrations Using
historical data. EPA de\ eloped 24-hour a\erage estimates corresponding to the 99th percentile A alue for PM
and the 98th percentile \ alue for PM, ^ reflecting forms of PM,,, and PM:, daih standards
Peak-to-mean ratios (i e . ratio of the 24-hour a\erge value to annual a\erage \alue) are established
from actual PM,, monitor data for 1993 to 1995 from Tier 1 through Tier 3 monitored counties For PMK,.
the peak \ alue is defined cxacth the \\a> it is for the new PMK, NAAQS. i e . the \ alue corresponding to the
99th percentile \aluc of the distribution of actual daih 24-hour a\eragc PM,,, \alues For PM:5. the peak
value is also defined exactly the \\ay it is for the ne\\ PM,, NAAQS. i e . the \ alue corresponding to the 98th
percentile \ alue of the distribution of estimated daih 24-hour a\ erage PM:, \ alues These historical peak-to-
mean ratios for each monitored count} are assumed to hold for the 2007 model \ear in this anah sis and arc
applied to the annual a\ erage PM estimates generated b> the S-R Matrix Peak \ alues in nonmomtored
counties are estimated using the regional a^ erage peak-to-mean ratios in Tier 1 monitored counties
Starting with the annual mean and peak values de\ eloped from the S-R Matrix, maximum likelihood
is then used to estimate the parameters of a Gamma distribution that are most consistent \\ith the S-R Matrix
results The parameters of the Gamma distribution are then used to estimate the annual median concentration
and the concentration corresponding to each decile of the distribution
3.3.6 S-R Matrix PM Air Quality Results
Table 3-3 pro\ ides a summan of the predicted ambient PM,, and PM: s concentrations used in this
stud\ Similar to the results using the RPM approach, the concentration changes are general!} ven small
For the 0 15 option, annual mean PM,,, changes range from an increase of 0 26 ug/m3 to a decrease of-0 57
tig/m3. with an average annual mean change across the 31 state domain of -0 04 ^g/m? Therefore, the
absolute changes in PM occur within a slightly wider band than with the RPM. and the average annual mean
change is slightly lo\\er (-0 04 ,^.g/m3 \ersus -0 06 ^,g/m3)
" See Appendix .1 - Reference Method for PM10, Final Rule for National Ambient Air Quahn Standards for
Paniculate Matter (Federal Register. Vol 62. No 138. p 41. July 18. 1997)
Page 3-17
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To address this bias, a multiplicatne factor of 0 25 is applied national!) to fugitn e dust emissions as
a reasonable first-order attempt to reconcile differences between modeled predictions of PiYL ^ and actual
ambient data This is the same adjustment that \\as used in the 1997 PM NAAQS RIA A 0 25
multiphcatn e adjustment results in a fugitn e dust contribution to modeled ambient PM;, concentrations of
10% to 17% " E\en after this adjustment the fugitne dust fraction of total eastern PM:^ mass is 104%.
which is still greater than the 5% indicated by IMPROVE monitors Ho\ve-\ er: given that the 0 25
multiphcatn e factor appears to bring the modeled fugitn e dust contribution to PM: 5 mass more within the
range of \ alues reported from speciated monitoring data, the fugitive dust contribution to total PM that is
estimated b> the S-R Matrix is adjusted by this factor Since this factor still max result in an overprediction
of the fugitne dust contribution, the S-R Matrix may tend to underpredict the effectneness of strategics that
affect NSA
3.3.4 Normalizing S-R Matrix Results to Measured Data
In an attempt to further ensure comparability between S-R Matrix results and measured annual
a\ eragc PM \ alues. the S-R results are calibrated using factors de\ eloped for the PM and Ozone NAAQS
RIA (U S EPA. 1997a) For the NAAQS RIA. a "normalization factor" \\as de\ eloped for each Tier 1 to
Tier 3 monitored count} :' Nonmomtored counties \\ere calibrated using the appropriate regional
normah/ation factor calculated as the a\erage of Tier 1 normalization factors across a en'en modeling region
The normah/ation factor was calculated as the monitored \ alue dn ided b> the modeled value
All S-R Matrix predictions \\ere normalized regardless of overprediction or underprediction relatne
to monitored \ alues This factor \\as applied equalh across all particle species contributing to the annual
a\erage PM \aluc at a count)-le\ el receptor
The calibration procedure \\as conducted emplo\mg 1993 - 1995 PMlu ambient monitoring data
from the AIRS database following the air quaht) tier data completeness parameters discussed abo\c The
PM; data represent the annual a\erage of design value monitors a\eraged o\er three years (U S EPA.
"" Sec l: S EPA 199 'b. page 6-5 for a map delineating modeling region Using 0 25 mulliphcame factoi.
fugime dust as percentage of P.M. = mass for Central US =1" 2%. Eastern U S = 104%. Western U S = 10 6% B>
comparison, \\ithout using a multiphcame factor, fugitn c dust as a percentage of PM., mass for Central US =44 6%
Eastern U S = .10 9%. Western U S =31 5%
10 The normalization procedure was conducted for count) -\e\ el modeled PM10 and PM;, estimates falling into
one of four air qualit) data tiers The tiering scheme reflects increasing relaxation of data completeness criteria and
therefore increasing uncertainty for the annual design \alue (U S EPA. 1997f) Nationwide. Tier 1 monitored counties
co\er the 504 counties \\ith at least 50% data completeness and therefore have the highest level of certainty associated
with the annual design value Tier 2 monitored counties cover 100 additional counties \Mth at least one data point (i e .
one 24-hour value) for each of the three \ears during the period 1993 -1995 Tier 3 monitored counties cover 107
additional counties u ith missing monitoring data for one or tw o of the three) ears 1993-1995 In total. Tiers 1. 2 and 3
co\er7H counties currenth monitored for PM10 in the 48 contiguous states In 1997 the PM,0 monitoring network
consisted of approximate!;* 1600 individual monitors with a coverage of approximate!) 711 counties in the 48
contiguous states Tier 4 covers the remaining 2369 nonmomtored counties
Page 3-16
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• Because ammonium nitrate forms onh under relatively lo\\ temperatures, annual axerage particle
nitrate concentrations are di\ ided b> four assuming that sufficient!) lo\\ temperatures are present
onK one-quarter of the > ear
Final!}. the total particle mass of ammonium sulfate and ammonium nitrate is calculated
For application to the NO\ SIP call, emissions data for onh those counties located in the 37 OTAG
states plus the District of Columbia are used Because nationwide emissions are not used, the S-R Matrix
results are incomplete for air qualih predictions m the counties located in states along the western border of
the OTAG domain For example, emissions from New Mexico are expected to have a significant downwind
impact on ambient PM concentrations in neighboring counties m Texas However. New Mexico emissions
are not estimated in this anal} sis Incomplete air qualit} predictions for the six western border states make
unreliable am anal} sis that imposes a threshold for health effects (see Chapter 11) As shown in Figure 3-3.
EPA has chosen not to include the air quality results from the six "buffer"' states in the benefits anah scs that
are performed using the S-R Matrix results Since the 31 remaining states are generally located more than
525 km (approximate!) 330 miles) from the states for which emissions information is not a\ ailable. the air
qualit} results for the 31 states is belie\ed to be more reliable
3.3.3 Fugitive Dust Adjustment Factor
As indicated in subsection 34 1. the 1990 CRDM predictions for fugitive dust are not consistent
\\ith measured ambient data The CRDM-predicted a\ eragc fugitn e dust contribution to total PM;, mass is
3 1% in the East and 32°«in the West (E H Pechan. 1997b) Speciated monitoring data from the IMPROVE
net\\ork show that minerals (i e . crustal material) comprise approximate!} 5% of PM;< mass in the East and
approximate!) 15°o of PM- < mass in the West (U S EPA. 1996a) These disparate results suggest a
s> stematic o\ erbias in the fugitn c dust contribution to total PM This o\ erestimatc is further complicated b>
the recognition that the 1990 NPI significant!} o\ erestimates fugitn e dust emissions The most recent
National Emissions Trends imcnton indicates that the NPI o\ erestimates fugitn e dust PM,, and PM:,
emissions b} 40% and 73% respectneh" (U S EPA. 1997c)
To calculate total particle mass of ammonium sulfate and ammonium nitrate, the anion concentrations of
sulfate and nitrate are multiplied b\ 1 375 and 1 290 respectneh
8 Natural and man-made fugitive dust emissions account for 86% of PM10 emissions and 59% of P.M.,
emissions in the most recent 1990 estimates in the National Emission Trends Inventon
Page 3-14
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because it relates closeh to 1990 emissions and meteorological data used in the CRDM Since the
IMPROVE network monitors are primanh concerned with e\aluatmg visibility impairment in predominant!}
rural Class I areas, these comparisons are incomplete due to the lack of coverage in urban areas With the
exception of the fugitne dust component of PM: * and PM1(1. modeled and measured concentrations of sulfate.
nitrate and organics are comparable (Latimer. 1996)
The CRDM has also been benchmarked against the RADM-RPM for the Eastern U S using 1990
emissions and meteorology (U S EPA. 1997b) RADM-RPM incorporates more comprehensn e physics and
chemistry to enable better characterization of secondarih -formed pollutants than Lagrangian-based methods
In general, the CRDM results shew a similar trend in sulfate and nitrate concentrations \\ithm the same
modeling region Also, the CRDM-predicted annual a\ erage concentrations of sulfate are within the range of
RADM-RPM base-case predictions Relative to RADM-RPM base case results. CRDM appears to
o\erpredict nitrate concentrations in the Midwest and underpredict nitrate concentrations in the Mid-Atlantic
states
3.3.2 Development of the S-R Matrix
To de^elop the S-R Matrix, a nationwide total of 5.944 sources (i e . industrial point, utility area.
nonroad. and motor \ chicle) of pnmaiy and precursor emissions were modeled with CRDM In addition.
secondary organic aerosols formed from anthropogenic and biogemc VOC emissions were modeled Natural
sources of PM, and PM:, (i e . \\ind erosion and wild fires) \\ere also included Emissions of SO:. NOx. and
ammonia were modeled in order to calculate ammonium sulfate and ammonium nitrate concentrations, the
pnmarx particulate forms of sulfate and nitrate The CRDM produced a matrix of transfer coefficients for
each of these primary and particulate precursor pollutants These coefficients can be applied to the emissions
of am unit (area source or indnidual point source) to calculate a particular source's contribution to a county
receptor's total annual a\ erage PM,,, or PM; < concentration Each indrudual unit in the imentory is
associated \\ith one of the modeled source types (i e . area, point sources with effectne stack height of 0 to
250 m. 250 m to 500 m. and mdnidual point sources \sith effectne stack height abo\e 500 m) for each
county
The S-R Matrix transfer coefficients \\ere adjusted to reflect concentrations of secondanh-formed
participates (Latimer. 1996) First, the transfer coefficients for SO;. NOx. and ammonia \\ere multiplied b>
the ratios of the molecular \\eights of sulfate/SO-. nitrate/nitrogen dioxide and ammonium/ammonia to obtain
concentrations of sulfate. nitrate and ammonium 6 The relatne concentrations in the atmosphere of
ammonium sulfate and ammonium nitrate depend on complex chemical reactions In the presence of sulfate
and nitric acid (the gas phase oxidation product of NOx). ammonia reacts preferential!} \\ith sulfate to form
particulate ammonium sulfate rather than react with nitric acid to form particulate ammonium nitrate Under
conditions of excess ammonium and low temperatures, ammonium nitrate forms For each county receptor.
the sulfate-nitrate-ammonmm equilibrium is estimated based on the following simphfing assumptions
• All sulfate is neutralized b\ ammonium.
• Ammonium nitrate forms onh when there is excess ammonium.
1 Ratio of molecular \\eights Sulfate/SCK= 1 50. nitrate/nitrogen dioxide = 1 35. ammonium/ammonia = 1 06
Page 3-13
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Table 3-2
Summar} of RPM Derived PM Air Quality
Statistic
Minimum Annual Moan
PMlcu;g'nV)b
Maximum Annual Mean
PM;0 (-g'mV
A\erage Annual Mean
PM : (,. g rn'i
Population-Weighted
A\erage Annual Mean
PM ^ (person-, g'm'i '
Minimum Annual Mean
PM:. (.-g rrf) "
Maximum .Annual Mean
PM:,L.g''mV
A\ erage Annual Mean
PM:< (. g;m"')
Population -\\'eighted
A\ erase Annual Mean
PM,, (person-, g m'> '
2007 Base
Case
1545
3591
26 76
26 46
665
22 63
1 4 96
14 53
Change Relathe to 2007 Base Case2
0.25
Trading
-049
024
-( i 04
-0 03
-(|49
024
.0 04
-003
0.20
Trading
-046
024
-005
-0 05
-0 46
024
-0 05
-0 05
Reg. 1
-045
026
-005
-005
-0 45
026
-0 05
-0 05
0.15
Trading
-049
029
-006
-0 05
-049
029
-006
-005
0.12
Trading
-052
0 18
-0 12
-0 13
-052
0 18
-0 12
-0 1 3
1 The change i1- defined as the Control ca--e \a!ue minus the base case %a!ue Note that there is no difference between the changes in PM;« and ]
because R U)M RPM onl\ estimates the change in nitrates and sullates \\hich are both in the PM_. fraction
1 1 he hase case minimum (ma\mium > is the \ aluc for the «.ounu \\ ith the lo\\est (highest) annual a\ erage The change relati\e to the base case picks
the minimum (maximum i irom the ->et oi changes m all countie*-
' C alculaled b% summing the product oflhc pro] jclcd 2r>()~ counl\ population and the estimated 2007 counl> PM concentration, and then di\ idinc b\
the total population
3.3.1 Climatological Regional Dispersion Model
The CRDM uses assumptions similar to the Industrial Source Complex Short Term (ISCST?). an
EPA-recommended short range Gaussian dispersion model CRDM incorporates terms for wet and dn
deposition and chemical comersion of S0: and N0\. and uses climatological summaries (annual average
mixing heights and joint frequency distributions of wind speed and direction) from 100 upper air
meteorological sites throughout North America Meterological data for 1990 coupled with emissions data
from version 2 0 of the 1990 National Paniculate Imenton were used to develop the S-R Matrix
In order to evaluate the performance of the Phase II CRDM. model-predicted PM concentrations and
measured ambient PM concentrations were compared Measured annual average PM concentrations b\
chemical species from the Interagency Monitoring for Protection of Visual Enuronments (IMPROVE)
network \\ere examined for the three-year period March 1988 - February 1991 This period was chosen
Page 3-12
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scenario A similar procedure is used to estimate PM x alues in the control scenarios Additional detail on
these procedures can be found in Abt. 1998
3.2.5 RPM PM Air Quality Results
Table 3-2 proMdes a summan of the predicted ambient PM]fj and PM;^ concentrations used in this
stud> Since onl\ the NSA fraction of total PM changes, the estimates of changes for PMir and PM; ^ are
identical The concentration changes are general!} xer\ small For the 0 15 option, annual mean PM changes
range from an increase of 0 29 ug/m3 to a decrease of-0 49 ^g/m\ with an axerage annual mean change
across the RPM domain of -0 06 .'.g/rrf
Population-weighted changes in RPM predicted annual mean PM- 5 and PM,,, concentrations above
the lex el of each ambient air quahu standard are presented in Appendix B These changes are estimated for
the total exposed population and for various subpopulations. including minority groups, children, the elderlx.
and the impox enshed In the SIP call states, the predicted decline in total population exposure abox e the
PM; ^ annual standard le\ el ranges from 5% to 15% There is no predicted change in total population
exposure abo\ e the PM: annual standard lex el because there is no predicted baseline exposure abox e the
standard
The air qualm technical support document for this RIA (Abt Associates. 1998) contains maps
show ing the base case PM concentrations and PM concentration changes generated using RPM for each of
fixe regulator* alternatixes (0 25 Trading. 0 20 Trading. Regionaht} 1.0 15 Trading, and 0 12 Trading)
3.3 PM Air Qualitx Estimates Using the S-R Matrix
The Source-Receptor Matrix (S-R Matrix) reflects the relationship betx\een annual axerage PM
concentration \ alues at a single receptor in each count} (a hypothetical design value monitor sited at the
countx population ccntroid) and the contribution bx PM species to this concentration from each emission
source (E H Pcchan. 1996) The receptors that are modeled include all U S count} centroids plus receptors
in 10 Canadian pro\ mces and 29 Mexican cities/states The methodolog} used in this RIA for estimating PM
air quaht} concentrations using the S-R Matrix is similar to the method used in the Julx 1997 PM and 0/one
NAAQS RIA (U S EPA. 1997a) The S-R Matrix was dexeloped using the Chmatalogical Regional
Dispersion Model (CRDM). and has been calibrated using 1993 - 1995 PM,, and PM:5 monitoring data
These calibration factors, referred to as "normali/ation factors." are applied to all S-R Matrix predictions
Page 3-1
-------
RPM results, it is neccssan to first use the NSA concentrations to estimate total PM concentrations at each
location under the baseline and each control scenario for the N0\ SIP call'
A first step in using information supplied b> RPM is to estimate distributional statistics for total PM.
using ambient air quaht\ data currenth being developed for the CAAA §812 analysis The location-specific
inputs axailablc from RPM and the upcoming §812 analysis are as follows
« mean and peak PM in the §812 data (PMmean 8!:. PM,,9f, 8]:).
• mean and peak NSA in the §812 data (NSAmcar, 8!:. NSA,,9,, 8::).
• mean, median, and peak NSA in the N0\ SIP call baseline (NSAmean ba,e,Lr,e. NSAm,d ^ basc:i!,e. NSAr .„
i^,,).
• mean, median, and peak NSA in each control scenario of the N'Ox SIP call (NSAmea, ,.,„...,]. NSAniei. ..
„„..,.. NSA, , cor..R.)
Subtracting the mean NSA from mean total PM. one obtains the "other" component of PM (which
includes such components as soil and elemental carbon)
It is assumed that the mean of this (location-specific) "other" component is the same in the NO\ SIP
call baseline as it is in the §812 data
Othern,ea. b<^ ,,c = Othernea. , -
Total PM is estimated in the baseline as
To obtain an estimate of the 90th percentile le\el of PM in the baseline, it is assumed that the
proportion (p) of NSA,ea. ba
-------
3.2.2 Simulation Periods
To de\elop annual estimates \\ith seasonal controls, an aggregation set of 30 meteorological cases is
separated into a \\arm season set and a cold season set Because RADM predicts chemistn on a s>noptic: or
daih. time scale (chemical meteorology) an aggregation technique developed during NAPAP is used to
calculate annual estimates of acidic deposition The de\ elopment and evaluation of the aggregation
simulation set is described by Brooks et al. 1995 Meteorological cases with similar 850-mb wind flo\\
patterns were grouped b\ applying cluster anahsis to classify the wind flo\\ patterns from 1982 to 1985.
resulting in 19 sampling groups, or strata Meteorological cases were random!} selected from each stratum.
the number selected v»as based on the number of wind flo\\ patterns in that stratum relatne to. the number of
patterns in each of the other strata, to approximate proportionate sampling A total of thirt> cases are used in
the current aggregation approach Each case is run for 5 days, using a separate initial condition for each
season specific to the scenario being run Outputs from onh the last 3 da\ s are used to a\ oid the influence of
initial conditions For each emissions scenario modeled, seasonal initial conditions are de\ eloped b\ running
for 10 da\s \\ith those emissions after starting with ambient concentrations representatne of clean continental
conditions Results for the 30 selected 3-da> cases are \\eighted according to the strata sampling frequencies
to form annual axeragcs Application of the aggregation technique is described in Dennis et al. 1990 Note.
the aggregation method results in an annual a\erage produced by meteorology that is representatne of many
\ears of meteorology a decade or more, rather than for a single, gnen \ear
While the aggregation method v\as de\ eloped for acidic deposition, it has been extended to daiK
a\eragc paniculate concentrations to calculate the annual mean, median and 90L"' percentiie of the distribution
The applicability of the aggregation method to particulate matter \\as studied by Eder. et al. 1996 using an
extinction coefficient (bev) for mid-da> estimate from human obser\ations of \isible range at airports (Husar
and Wilson. 1993) The thirt) RADM aggregation cases \\ere found to be \ er> representatn e from an
extinction coefficient (inferred fine particulate matter) pcrspectne and sufficient to derne annual estimates of
fine particulate matter
3.2.3 RPM Model Outputs
RPM outputs used in this anah sis include ambient concentrations (measured in units of micrograms
per cubic meter. ..g/irf) of particulate SO/. NO-/, and NH/" The outputs produced b\ the simulation period
aggregation method described in section 332 include the annual mean of daiK a\erage ambient
concentrations, and each decile of the distribution of daiK a\erage ambient concentrations Ho\\e\er. the
health effect concentration-response functions that are used to estimate changes in health effects for each
polic> scenario require estimates of total PM Section 334 discusses the procedures used to estimate the
remamine fraction of total PM at each location
3.2.4 Development of Total PM Estimates
RPM provides the mean, the median, and the peak (90th percentiie value) of daily concentrations, but
onh for the major portion of PM that will change as a result of the NOx SIP call --1 e. the nitrate, sulfate.
and ammonium components (NSA). According to the latest assessment of PM data for the NAAQS review.
NSA comprise 48 2% of total fine particulate in the eastern US (US. EPA. 1996a) To proceed with the
Page 3-9
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l'~ij»ure 3-2
RADM-RPM Modeling Domain'
P. .«
— - . .) . . . J . . .- ., . - .-•>. - - -
• • •, ' s --•
:::.... •.... . . .3 ** . < . . .
"r-"--(V " " v;c
.-./'. . - . I V •*'
. . .1 . A . V:
V
?'
• -->V
'-i ;--:x." : \
\
\
;; r
I *. ' '
ff - K-K*
X*
W-,.
pnd s«,,,aa-s ll,at cover ,hc caMc,,, I. S ,,„) s,,,,,hcrn Canada
f'n^o VS
-------
Table 4-28
Monetary Benefits Associated with Visibility Changes in National Parks
Outside the Southeast in the NOx SIP Call Region
Regulatory Alternate e
(' 12 Ira Jini:
('15 "Iradms:
Regionaht\ 1
0 2<> Trading
(i 25 'Irading
Monetan Benefits (millions 1990S)
RADM-RPM
Unadjusted
I. cm
S22 8
S134
S~ 1
$83
SI 3
High
S2"7 0
$159
$85
S9 8
SI 6
Adjusted
Lo\\
$18^
$11 U
$5 8
S68
$1 1
High
S22 1
SI 3(i
S"0
S8 (i
SI 3
S-R Matrix
I,o\\
$05
$-54
$-65
$-58
$-52
High
$06
$-64
$-7"
S-69
$-62
4.5
Total Benefits
The dollar benefits from reducing o/onc and PM le\els resulting from implementing the SIP call
NOx reductions is the sum of dollar benefits from the reductions in incidence of all non-o\erlappmg health
and \\clfare cndpomts associated \\ith PM and o/onc for a an en set of assumptions If t\\o endpomts are
o\erlapping. then adding the benefits associated \\ith each will result in double counting of some benefits
Although studx-specific point estimates of dollar benefits associated \\ith specific, possibh cnerlapping
endpomts are presented separate!}, estimation of total benefits requires that the benefits from onh non-
ox erlapping cndpomts be included in the total Four non-en erlappmg broad categories of health and \\elfare
endpomts \\ill be included in the estimation of total dollar benefits for the SIP call (1) mortality (2) hospital
admissions. (?) respirator) s\mptoms/illnesscs not requiring hospital admission, and (4) \\clfare cndpomts
When considering onh point estimates, aggregation of the benefits from different endpomts is relatneh
straightforward Once a set of non-en erlappmg categories is determined, the point estimate of the total
benefits associated \\ith the health and \\elfare endpomts in the set is just the sum of the endpomt-specific
point estimates If each endpomt-specific point estimate is the mean of a distribution of dollar benefits
associated \\ith that endpomt. then the point estimate of total dollar benefits is ]ust the sum of those means
There is uncertain!} about the magnitude of the total moneti/ed benefits associated \\ith am of the
SIP call regulator) alternate es examined in the benefits anal} sis The benefits are uncertain because there is
uncertamt) surrounding each of the factors that affect these benefits the changes in ambient pollutant
concentrations that \\ill result from the SIP call implementation, the relationship bet\\een these changes in
pollutant concentrations and each of the associated health and welfare endpomts. and the value of each
ad\ erse health and welfare effect a\ oided b> the reduction in pollutant concentrations
Much of the uncertamt} dernes from uncertainty about the true \alues of anal} sis components, such
as the \ alue of the o/one coefficient in a concentration-response function relating ozone to a particular health
endpomt. or the true dollar value of an a\ oided hospital admission for congestive heart failure The analysis
relies on estimates of these parameters, but the true \ alues being estimated are unknown This type of
Page 4-48
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uncertain!) can often be quantified For example, the uncertainty about pollutant coefficients is typicalh
quantified b\ reported standard errors of the estimates of the coefficients in the concentration-response
functions estimated b\ epidemiological studies Appendix A presents a formal quantitative anal) sis of the
statistical uncertain!) imparted to the benefits estimates b\ the \ anabihu in the underh ing concentration-
response and valuation functions
Some of the uncertamt) surrounding the results of a benefits anal) sis. howe\er. imohes basicalh
discrete choices and is less easih quantified For example, the decision of \\hich air quality model to use to
generate changes in ambient PM concentrations is a choice between t\\o models, embodying discrete sets of
air chemistn and mathematical assumptions Decisions and assumptions must be made at many points in an
analysis in the absence of complete information The estimate of total benefits is sensitne to the decisions
and assumptions made Among the most critical of these are the following
Ozone mortaliu: There is some uncertain!) surrounding the existence of a relationship betueen
troposphcric o/one exposure and premature mortaht) The two possible assumptions are (1) that
there is no relationship bctuecn o/one and mortaht). and (2) that there is a potential relationship
bet\\cen o/one and mortaht). \\hich \\e can quantif) based on the meta-anahsis of current U S
o/onc mortaht) studies
• Ozone agriculture effects: The existing set of exposure-response functions relating crop yields to
changes in o/.one exposure include both o/one-sensitn c and o/one-msensitn e cultn ars Possible
assumptions are (1) plantings of commodity crop cultn ars are pnmanh composed of sensitne
\aneties. (2) plantings of commodity crop cultn ars are pnmariK composed of non-sensitne
\aneties
PM, 5 concentration threshold: Health effects are measured onh down to the assumed ambient
concentration threshold Changes in air quaht) belo\\ the threshold \\ill ha\ e no impact on estimated
benefits EPA's Science Adxison Board has recommended examining alternatnc thresholds.
including background and 15 ...g'm5
• Sulfate Dominance: There are u\o possible interpretations of PM-related health and \\elfare
benefits depending on the model used to assess air quaht) changes (1) results generated with
RADM-RPM are indicatne of a future eastern L" S atmosphere \\here acid sulfate le\els are still
high enough to control atmospheric chemistn. and more specificalh ammonium nitrate particle
formation In this circumstance, reductions in NOx emissions ma\ result in non-linear responses in
total fine particle le\ els. in\ oh ing both decreases and increases, and (2) results generated with the
Source-Receptor Matrix are indicatne of a future eastern U S. atmosphere where acid sulfate levels
do not dominate particle formation chemistn. In this case, reductions in NOx emissions would be
expected to result more direct!) in linear reductions in PM
• Recreational visibility: Recreational \isibiht) benefits for residents of the Southeast may overlap
with "residential" visibilit) benefits T\\ o alternatn e assumptions may be considered for in-region
residents (1) recreational ^ isibiht) benefits overlap with residential visibility benefits, and to avoid
this o\erlap. the recreational Msibiht) value of $4 per deciview for out-of-region residents is used for
in-region residents ($2 40 for non-indicator parks, and $1 60 for the indicator park), or (2)
recreational visibilit) benefits are in addition to residential visibility benefits, and the m-region \alue
of S6 50 is used (S3 25 for non-indicator parks, and $3 25 for the indicator park)
Page 4-49
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Benefits from \isibiht\ impro\ements ma\ also occur in N0\ SIP call states outside of the
Southeast The current literature on the \alue of recreational \isibiht> in national parks is limited to
studies of \alucs in California, the Soutrmest. and the Southeast, and thus excludes the Central and
Northeast (CNE) portion of the NOx SIP call region Three altematn e assumptions ma\ be
considered \\hen \aluing \isibiht> changes in the CNE (1) recreational visibility ^ alues in the CNE
are much less than that in the Southeast and therefore to insure benefits are not o\ erstated. no \ alue
should be associated \\ith visibihtx changes in the CNE. (2) recreational \ isibility values in the CNE
are similar to the \ alues for non-indicator parks in the Southeast, and recreational and residential
benefits overlap people in and out of the CNE region \ alue CNE recreational visibility at $2 40 per
decn ie\\. or (?) recreational \ isibihtv \alues in the CNE are similar to the \alues for non-indicator
parks in the Southeast, and there is no overlap of recreational and residential benefits the m-region
CNE \ alue is based on the Southeast m-region \ alue of S3 25 per decn ie\\. and the out-of-region
CNE \ alue is based on the Southeast out-of-region \ alue of S2 40 per decn ie\\
Tables 4-29 through 4-33 present summaries of the endpomt specific monetan \ alues and the
estimate of total benefits for each of the fi\e regulator) altematn es Aggregate results are presented for t\\o
assumption sets 1) a "lo\\" assumption set reflecting the assumptions that human health and the emironment
ha\c lo\\ responsn eness to changes in ambient air quahtv and 2) a "high" assumption set reflecting the
assumptions that human health and the em ironmcnt arc highh responsn e to changes in ambient air quaht\
The "lo\\" assumption set includes the following assumptions 1) there are no PM-related health effects
occurring belo\\ a threshold of 15 jig/m'. 2) changes in PM concentrations are more accurate!} represented b\
the RADM-RPM air quaht> model. 3) there is no relationship betueen o/one and premature mortality. 4)
agricultural commodiK crops are less sensitne to o/one 5) Southeastern recreational \isibilitA \alues are not
transferable to changes in recreational \ isibilit) in the Northeast and Central U S . and 6) the lo\\-end
recreational \ isibilm \ aluation method is correct The "high" assumption set includes the follo\ung
assumptions 1} P\I-related health effects occur down to the anthropogenic background threshold. 2) changes
in PM concentrations are more accuratch represented b> the S-R Matrix air quaht\ model. 3) the relationship
bet\\een o/one and premature mortalit} is characten/ed b\ the distribution of axoided incidences derned
from the o/one mortality meta-anaKsis. 4) agricultural commodit) crops arc more sensitne to o/one. 5)
Southeastern recreational \isibiht\ \alues arc transferable to the Northeastern and Central U S . and 6) the
hiuh-end recreational \isibiht\ method is correct
Page 4-50
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Table 4-29
Total Quantified Monetan Benefits Associated with the NO\ SIP Call,
Incremental to the 2007 Base Case: 0.12 Trading Regulator} Alternative*
Endpoint
Monetary Benefits (million 1990S)
"Lxnv" Assumption Set
"High" Assumption Set
Ozone-related Endpoints
Short-term moriaht\
Hospital admissions
Acute respirator, sMnptoms
N\ orker products ir\
Commodm crops
Commercial forests
$0
$5
SI
S25
S53
$233
$1.496
$5
SI
$25
S415
$233
PM-related Endpoints
Long-term mortality
Hospital admissions
Chronic bronchitis
Acute bronchi;^
Acute respirators s\mptoms
Woik lo>> da\s
MRADs
1 louschold soiliny:
Residential M>ibiht\
Recieationa! Msihihtx
Nitrogen deposition
TOTAL
SI. 468
S3
S589
S
$0
$8
$29
Sll
560
S21
$248
S5,473
* Not all pobiiblc benefits are quantified and monetized in this analxsis Potential benefit categories that ha\e not been quantified anc
monetized are listed in Table 4-2
Page 4-51
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Table 4-30
Total Quantified Monetan Benefits Associated with the NOx SIP Call,
Incremental to the 2007 Base Case: 0.15 Trading Regulator} Alternate e"
Endpoint
Monetary Benefits (million 1990S)
"Low" Assumption Set
"High" Assumption Set
O/one-related Endpoints
Short-term mortaliu
1 lospita! admission-!
Acute respirators s\rnptoms
X\ orkei products it\
Commodm crops
I ommereid! forests.
$0
$4
SI
$22
S4~
$21?
$1.326
$4
SI
$22
S?6!
S213
PM-related Endpoints
! one-term mo:ulit\
Hospital admissions
Chrome bronchitis
•\cute honchrus
•\ciite lespiraton s\mpioms
Vk'ork loss ja\ s
MRADs
I loiiscliold >oilnij;
Residential \isibili;\
Recieationa! \i.Mbilit\
Nitrogen deposition
TOTAL
S251
SI
S225
S"
SO
S6
S24
Sid
$2*
S30
S2?8
SI, 100
$1.~6?
$4
$160
$i>
Sfl
S5
Siv
s~
S?8
S9
$238
S-4.170
a Not all possible benefits are quantified and moneti/ed in this anahsis Potential benefit categories that ha\e not been quantified and
moncti/ed are listed in Table 4-2
Page 4-52
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Table 4-31
Total Quantified Monetary Benefits Associated with the NOx SIP Call.
Incremental to the 2007 Base Case: Regionally 1 Regulator* Alternate ea
Endpoint
Monetan Benefits (million 1990S)
"Low" Assumption Set
"High" Assumption Set
O/one-related Endpoints
Short-term moriaim
Hospital admissions
Acute respiraton s\mptom.s
\\oiker producmm
C ommoditx crops
Commercial loicsts
$0
$4
$1
$20
S43
SI 88
$1.19.
S4
SI
$2<>
S3 IS
S1HS
PM-related Endpoints
,ont>term monaim
Hospital admissions
Chronic bionchitis
Acute bionch'.lis
•\cuic tespiraion s\mptoms
\\ cirk loss da\ s
MRADs
I iouseh(ilJ -^iilinii
Residential MMhilm
Recicational \ isibi;i;\
Nitrogen deposition
TOTAL
S3 IT
SI
S236
Sd
So
S6
S24
Sin
S?4
S3?
$221
SI, 138
$1.326
$4
$122
SO
$0
S4
$15
$t,
$2"
SK)
$221
S3.45''
1 Not all possible benefits arc quantified and monetized in this anal)sis Potential benefit categories that ha\e not been quantified and
moneti/ed are listed in 1 able 4-2
Page 4-53
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Table 4-32
Total Quantified Monetary Benefits Associated with the NOx SIP Call,
Incremental to the 2007 Base Case: 0.20 Trading Regulatory Alternate e"
Endpoint
Monetary Benefits (million 1990S)
"Low" Assumption Set
"High" Assumption Set
Ozone-related Endpoints
Short-term mortuhn
Hospital admissions
Acute resp;:aton s\mptom>
\\orker product p. in
Commodm crops
Commeicidl lorests
$0
$4
SI
S20
S42
S1S5
$1.108
S4
SI
$2()
S3 12
S185
PM-related Endpoints
I ong-tenr. mor^i'in
1 iospitul admissions
Chionic bionch.Us
•\cutc bronchus
\cuic respnaion v\:r.ptomN
\\ ork loss da\ s
MRADs
I iousehold soilins:
Residential \ iMbilif
Rccreati.'nal \ i^ibn.u
Nitrogen deposition
TOTAL
S3~d
SI
S2 1 6
S'|
S'i
S5
S24
SI"
S?S
S"d
S2 1 0
SI, 156
SI 409
S4
Sl?5
Si '
Sd
S4
sr
$6
S?l
S"
S2 1 0
S3.543
a Not all possible benefits are quantified and moneli/ed in this anaKsis Potential benefit eategones that have not been quantified and
moneti/ed are listed in 1 able 4-2
Page 4-54
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Table 4-33
Total Quantified Monetary Benefits Associated with the NO\ SIP Call,
Incremental to the 2007 Base Case: 0.25 Trading Regulatory Alternate ea
Endpoint
Monetary Benefits (million 1990S)
"Low" Assumption Set
"High" Assumption Set
O/one-related Endpoints
Short-term mortalm
Hospital admissions
Acute respirator. s\mptoms
Worker productn it\
C ommodm crops
Commercial forests
$0
S3
SI
S14
S?4
SI 43
S824
$3
SI
$14
S242
$143
PM-related Endpoints
Long-term mortaht\
Hospital admissions
Chronic bronchitis
Acute bronchitis
Acute respiraton s\mptonis
Work loss da\s
MRADS
1 lousehold soiling
Residential \isib:h;\
Recreational Msibihu
Nitrogen deposition
TOTAL
S208
SI
S148
Sc
S"
54
S14
S~
S25
S23
SI 52
S777
SI. 400
S4
S12^
S"
Sd
$4
S16
So
S3d
S5
$152
S2,971
' Not all possible benefits are quantified and monetized in thib analysis Potential benefit categories that ha\e not been quantified and
monetised are listed in Table 4-2
Page 4-55
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4.6 Limitations of the Anah sis
Gnen incomplete information, this national benefits anal) sis \iclds approximate results because of
the uncertain!) associated \\ith am estimate Potential!) important sources of uncertain!) exist and mam of
these arc summan/ed in Table 4-34 In most cases, there is no apparent bias associated \\ith the uncertamt)
For those cases for \\hich the nature of the uncertainty suggests a direction of possible bias, this direction is
noted in the table
4.6.1 Projected Income Growth
This anal) sis does not attempt to adjust benefits estimates to reflect expected growth in real income
Economic theon. argues. ho\\e\er. that \VTP for most goods (such as en\ ironmental protection) \\ill increase
if real incomes increase The degree to \\hich \VTP ma) increase for the specific health and \\elfare benefits
pro\ ided b\ the N0\ SIP call cannot be estimated due to insufficient income elasticity information Thus, ail
else being equal, the benefit estimates presented in this anal)sis arc hkeh to be understated
4.6.2 I nquantifiable Benefits
In considering the moneti/ed benefits estimates, the reader should be a\\are that mam limitations for
conducting these anahses are mentioned throughout this RIA One significant limitation of both the health
and \\elfare benefits anahscs is the inabiht) to quantif) mam PM and ozone-induced adxerse effects Table
4-2 lists the categories of benefits that this anal) sis is able to quantif) and those discussed onh in a
qualitatnc manner In general, if it \\cre possible to include the unquantified benefits categories in the total
moncu/ed benefits, the benefits estimates presented in this RIA \\ould increase Specific examples of
unquantified benefits explored in more detail bclo\\ include other human health effects, urban ornamentals.
aesthetic injun to forests, nitrogen in drinking \\ater. and brov,n clouds
The benefits of reductions in a number of o/one- and PM-mduced health effects ha\e not been
quantified due to the una\ ailabiht) of concentration-response and or economic \ aluation data These effects
include reduced pulmonan. function, morphological changes, altered host defense mechanisms, cancer, other
chronic respirator) diseases, infant mortality air\\a\ response eness. increased susceptibihu to respiratory
infection, pulmonar) inflammation, acute inflammation and respirator) cell damage, and premature aging of
the IUITJS
Page 4-56
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Table 4-3-J
Sources of Uncertaint\ in the Benefit Analysis
1. Uncertainties Associated With Concentration-Response Functions
There is uneertamtv surrounding the ozone or PM coefficient in each C-R function
1 here is uncerlamt\ about apphing a single C-R function to pollutant changes and populations in all locations
It is uncertain ho\\ similar future \ear C-R relationships \\ill be to current concentration-response relationships
The correct functional form of each C-R relationship is uncertain For example, it is uncertain \\hether there are
thresholds and. if so \\hat the\ are
There is uncertamn associated \\ilh extrapolation of C-R relationships beyond the range of ozone or PM
concentrations observed in the stud\
2. Uncertainties Associated With Daih Ozone and PM Concentrations
1 here is uncertamn surrounding the protected hourh ozone and daih PM concentrations
1 he changes in ozone and PM concentrations resulting from the SIP call pro\isions are uncertain
3. I ncertainties Associated W ith Possible Lagged Effects
It is uncertain \\hat portion of the PM-related long-term exposure mortality effects associated with changes in annual
PM le\els would occur in a single \ear. and \\hat portion might occur in subsequent \ears
4. Uncertainties Associated With Baseline Incidence Rates
me riasehne incidence rates arc not location-specific (e g . those taken from studies) and ma\ therefore not
accurate!} represent the actual location-specific rates
It is uncertain how well current baseline incidence rates approximate what baseline incidence rales will be in the \ear
2' i(>~ gi\en either "as is" o/one and PM concentrations or am altemame SIP call scenario
It is uncertain how well the proiected population and demographics used to derne incidences, approximate what the
actual population and demographics will be in the \cm 200"
5. Uncertainties Associated With Economic Valuation
Unit dollai \ alue.s associated \vith health and welfare endpomts are onh estimates of MWTP and therefore ha\e
ancertamu surrounding them Possible directions of bias are discussed in the technical support document (Abt
l.\en using constant dollars (e g l'»0 dollars!, it is uncertain whether MWTP for each t\pe of risk i eduction will be
the same in the \ear 20' ~ as the current M\\ 1 P
'I here is uncenainn about the appiopnate discount rate for benefits achie\ ed in the future i200~)
6. U ncertainties Associated W ith Aggregation of Moneti/ed Benefits
Because benefit estimation is limited to those health and welfare endpomts for which concentration-response functions
ha"\e been estimated, there ma\ be components of total benefit omitted This would lead to a downward bias in the
estimated total monetized benefit
Page 4-57
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In addition to the abo\c non-moncti/ed health benefits, there are a number of non-monetized \\elfare
benefits of NO\ emission controls from reduced ad\erse effects on \egetation. forests, and other natural
CCOSN stems The CAA and other statutes, through requirements to protect natural and ecological s> stems.
indicate that these are scarce and highh \ alued resources Lack of comprehcnsn e information, insufficient
\ aluation tools, and significant uncertainties result in understated \\elfare benefits estimates in this R1A
Ho\\e\cr. a number of expert biologists, ecologists. and economists (Costanza. 1997) argue that the benefits
of protecting natural resources are enormous and increasing as ecos> stems become more stressed and scarce
in the future Additional!}.. agricultural, forest and ecological scientists (Heck. 1997) believe that v egetation
appears to be more sensitn e to ozone than humans and consequent!}. that damage is occurring to \ egetation
and natural resources at concentrations below the ozone N AAQS Experts also belie\ e that the effect of
ozone on plants is both cumulame and long-term The specific non-monetized benefits from reductions in
ambient ozone concentrations \\ould accrue from decreased foliar injun . a\erted growth reduction of trees in
natural forests, maintained integrity of forest ecos\ stems (including habitat for name animal species), and
the aesthetics and utilit> of urban ornamentals (e g . grass, flowers, shrubs and trees) Other welfare
categories for \\hich there is incomplete information to estimate the economic \alue of reduced adverse
effects include existence value of Class 1 areas, materials damage, reduced sulfate deposition to aquatic and
terrestrial ecos\ stems, and usibihu impairment due to "brown clouds" (i e . distinct brown lasers of trapped
air pollutants close to the ground)
Other Human Health Effects
Human exposure to PM and ozone is known to cause health effects such as airwa\ response eness.
increased susceptibility to respirator, infection, acute inflammation and respirator, cell damage, premature
aging of the lungs and chronic respirator, damage An impro\ement in ambient PM and ozone air quality is
expected to reduce the number of incidences \\ithm each effect categon that the U S population \\ould
experience Although these health effects are kno\\n to be PM or ozone-induced, concentration-response data
is not a\ ailablc for quantising the benefits associated \\ith reducing these effects The mabiht\ to quantify
these effects leads to an underestimation of the monetized benefits presented in this anaKsis
I rban Ornamentals
Urban ornamentals represent an additional \egetation categor. hkeh to experience some degree of
effects associated \\ith exposure to ambient ozone le\els and hkeK to impact large economic sectors In the
absence of adequate exposure-response functions and economic damage functions for the potential range of
effects rele\ ant to these r\pcs of •<. egetation. no direct quantitati\e economic benefits anaKsis has been
conducted Ornamentals used in the urban and suburban landscape include shrubs, trees, grasses, and
flowers The t\pes of economic losses that could potential!} result from effects that ha\e been associated
with ozone exposure include 1) reduction in aesthetic sen ices o\er the realized lifetime of a plant. 2) the loss
of aesthetic sen ices resulting from the premature death (or earK replacement) of an injured plant. 3) the cost
associated \\ith remo\mg the injured plant and replacing it \\ith a ne\\ plant. 4) increased soil erosion. 5)
increased energy costs from loss of shade in the urban emironment. 6) reduced seedling sunn ability, and 7)
am additional costs incurred o\er the lifetime of the injured plant to mitigate the effects of ozone-induced
injun It is estimated that more than $20 billion (1990 dollars) are spent annually on landscaping using
ornamentals (Abt Associates. 1995). both b\ private property owners/tenants and b> governmental units
responsible for public areas, making this a potential!}, important \\elfare effects categon. However.
information and valuation methods are not a\ ailable to allow for plausible estimates of the percentage of
these expenditures that may be related to impacts associated with ozone exposure
Page 4-58
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Aesthetic Injury to Forests
O/one is a regional!) dispersed air pollutant that has been sho\\n conclusive!) to cause discernible
to forest trees (Fox. 1995) One of the \\clfare benefits expected to accrue as a result of reductions in
ambient o/onc concentrations in the United States is the economic \ alue the public receives from reduced
aesthetic m]ur> to forests There is sufficient scientific information available that ambient ozone le\ els cause
visible miun to foliage and impair the growth of some sensitn e plant species Ozone inhibits photos\nthesis
and interferes with nutrient uptake, causing a loss in \ igor that affects the abiht> of trees to compete for
resources and makes them more susceptible to a \ anety of stresses (EPA. 1996a. p 5-251) Extended or
repeated exposures ma\ result in decline and e\ entual elimination of sensitn e species Ozone concentrations
of 0 06 ppm or higher arc capable of causing injun to forest ecos\ stems
The most notable effects of ozone on forest aesthetics and ecosystem function ha\e been documented
in the San Bernardino Mountains in California Visible ozone-related injun. but not necessanh ecosvstem
effects. ha\ e also been obsen ed in the Sierra Ne\ ada in California, the Appalachian Mountains from
Georma to Maine, the Blue Ridge Mountains in Virginia, the Great Smoky Mountains in North Carolina and
Tennessee, and the Green Mountains in Vermont (EPA. 1996a. pp 5-250 to 5-251) These are all locations
\\here there is substantial recreation use and \\here scenic quaht) of the forests is an important characteristic
of the resource Economic \ aluation studies of lost aesthetic value of forests attributed to plant injuries
caused b\ o/onc arc limited to t\\o studies conducted in Southern California (Crocker. 1985. Peterson et al .
1987) Both included contingent \ aluation sun e> s that asked respondents \\hat the> \\ould be \\ illmg to pa>
for reductions in (or prc\ entions of increases in) •*, isible ozone injuries to plants Crocker found that
indniduals are \\illmg to pa\ a fe\\ dollars more per da> to gain access to recreation areas \Mth onh slight
o/one miun instead of areas \vith moderate to se\ere injun Peterson et al estimated that a one-step change
(on a 5 point scale) in \ isible ozone injun in the San Bernardino and Angeles National Forests \\ould be
\alued at an aggregate amount of between S27 million and SI 44 million for all residents of Los Angeles.
Orange, and San Bernardino counties A reassessment of the sune\ design, in light of current standards for
contingent \ aluation research, suggests that it is plausible that concerns for forest ecosx stems and human
health could ha\c been embedded into these reported \ alues The extent of this possible bias is uncertain
Present anahtic tools and resources preclude EPA from quantifying the benefits of impro\ed forest
aesthetics in the eastern U S expected to occur from the NOx SIP call This is due to limitations in our
abiht} to quantifx the relationship between ozone concentrations and \ isible mjun. and limited quantitatn e
information about the \alue to the public of specific changes in \isible aesthetic quality of forests Hov\e\er.
there is sufficient supporting e\ idence in the ph\ sical sciences and economic literature to support the finding
that the proposed NOx SIP call can be expected to reduce mjun to forests, and that reductions in these
miunes \\ill likeK ha\e a significant economic \alue to the public
Nitrates in Drinking Water
Nitrates in drinking water are currenth regulated b\ a maximum contaminant level (MCL) of 10
mg/L on the basis of the risk to infants of methemoglobinemia. a condition which ad^ersel\• affects the
blood's ox>gen cam-mg capacity In an analysis of pre-1991 data. Raucher. et al (1993) found that
approximately 2 million people were consuming public drinking water supplies which exceed the MCL
Supplementing these findings, the National Research Council concluded that 42 percent of the public
drinking water users in the U S (approximately 105 million people) are either not exposed to nitrates or are
exposed to concentrations below 1 3 mg/L (National Research Council. 1995)
Page 4-59
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In a recent cpidemiological stuch b\ the National Cancer Institute, a statistical!) significant
relationship bet\\ccn nitrates in drinking \\ater and incidence of non-Hodgkin's lymphoma \\ere reported
(\\ ard. et al . 1996) Though it is generalh acknowledged that traditional water pollution sources such as
agricultural runoff are mosth responsible for \iolations of the MCL. other more diffuse sources of nitrate to
drinking \\ater supplies, such as that from atmospheric deposition. ma> also become an important health
concern should the cancer link to nitrates be found \ ahd upon further study
Brown Clouds
NOx emissions, especially gaseous NCK and NO\ aerosols, can cause a brownish color to appear in
the air (EPA. 1996c) In higher elexation \\estern cities \\here wintertime temperature imersions frequently
trap air pollutants in atmospheric layers close to the ground, this can result in distinct brown la> ers In the
eastern L S . a la\ered look is not as common, but the ubiquitous haze sometimes takes on a brownish hue
To date, economic \aluation studies concerning visual air quahtx ha\e focused primanh on the clant> of the
air. and ha\c not addressed the question of ho\\ the color of the ha/e might be related to aesthetic
degradation It ma> be reasonable to presume that brown ha/e is hkeh to be perceived as dirt> air and is
more hkeh to be associated \\ith air pollution in people's minds It has not. ho\\e\er. been established that
the public \\ould hax e a greater \ alue for reducing bro\\n ha/e than for a neutral colored ha/c Results of
economic \ aluation studies of x isibihh aesthetics conducted in Dem er and in the eastern U S (McClelland
ct al . 199] i are not directh comparable because changes in \isibiht> conditions are not defined in the same
units of measure Ho\\e\cr. the \VTP estimates for impro\ements in \isibiht> conditions presented in this
assessment are based on estimates of changes in clanu of the air (measured as deciMC\\) and do not take into
account am change in color that ma\ occur It is possible that there ma> be some additional \ alue for
reductions in bro\\msh color that max also occur \\hcn N0\ emissions are reduced
Other I nquantifiable Benefits Categories
There are other \\elfarc benefits categories for \\hich there is incomplete information to permit a
quantnatn e assessment for this anah sis For some endpomts. gaps exist in the scientific literature or ke>
anahlical components and thus do not support an estimation of incidence In other cases, there is insufficient
economic information to allo\\ estimation of the economic x alue of ad\ ersc effects Potential!} significant.
but unquantified \\clfarc benefits categories include existence and user x alues related to the protection of
Class 1 areas (e g . Shenendoah National Park), damage to tree seedlings of more than 10 sensitne species
(e g . black cherry aspen, ponderosa pinej. non-commercial forests, ecosx stems, materials damage, and
reduced sulfate deposition to aquatic and terrestrial ecos\ stems Although scientific and economic data are
not axailablc to allo\\ quantification of the effect of o/one in these categories, the expectation is that, if
quantified, each of these categories \\ould lead to an increase in the moneti/ed benefits presented in this RIA
4.6.3 Potential Disbenefits
In this discussion of unquantified benefits, a discussion of potential disbenefits must also be
mentioned Se\ eral of these disbenefit categories are related to nitrogen deposition while one category is
related to the issue of ultraMolet light
Page 4-60
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Passive Fertilization
Sc\ eral disbencfit categories are related to nitrogen deposition Nutrients deposited on crops from
atmospheric sources are often referred to as passn e fertilization Nitrogen is a fundamental nutrient for
pnman production in both managed and unmanaged ecos> stems Most producm e agricultural s\ stems
require external sources of nitrogen in order to satisfy nutrient requirements Nitrogen uptake b\ crops
\aries. but t\pical requirements for \\heat and corn are approximate!) 150 kg/ha/yr and 300 kg/ha/yr.
respecm el\ (N APAP. 1990) These rates compare to estimated rates of passive nitrogen fertilization in the
range of 0 to 5 5 kg/haVr (NAPAP. 1991) So. for these crops, deposited nitrogen could account for as much
as 2 to 4 percent of nitrogen needs Holding all other factors constant, farmers" use of purchased fertilizers or
manure ma\ increase as deposited nitrogen is reduced EPA has not estimated the potential A alue of this
possible increase in the use of purchased fertilizers, but a quahtatne assessment of several factors suggests
that the o\ erali \ alue is \ en small relam e to the \ alue of other health and welfare endpomts presented in this
anah sis First, reductions in N'0\ emissions affect onl\ a fraction of total nitrogen deposition
Approximate!) 70 to 80 percent of nitrogen deposition is in the form of nitrates (and thus can be traced to
N0\ emissions) \vhile most of the remainder is due to ammonia emissions (personal communication \\ith
Robin Dennis. NOAA Atmospheric Research Lab. 1997) Table 3-4 in Chapter 3 indicates the annual
a\erage change in nitrogen deposition attributable to the 0 15 Trading alternatne of the N0\ SIP call is
about 11 percent of baseline le\els. suggesting a relatneh small potential change in passn e fertilization
Second, some sources of nitrogen, such as animal manure, are a\ ailable at no cost or at a much lo\\er cost
than purchased nitrogen In addition, in certain areas nitrogen is current!) applied at rates \\hich exceed crop
uptake rates, usualh due to an o\ erabundance of a\ ailable nutrients from animal waste Small reductions in
passive fertilization in these areas is not hkeh to ha\e am consequence to fertilizer application The
combination of these factors suggests that the cost associated \\ith compensating for reductions in passn e
fertih/ation is rclatnel) minor
Information on the effects of changes in passn c nitrogen deposition on forestlands and other
terrestrial ecos\ stems is \er\ limited The multiplicity of factors affecting forests, including other potential
stressors such as ozone, and limiting factors such as moisture and other nutrients, confound assessments of
marginal changes in am one stressor or nutrient in forest ecos\ stems Ho\\e\ er. reductions in deposition of
nitrogen could ha\e ncgatne effects on forest and \egetation growth in ecos> stems \\hcre nitrogen is a
limiting factor (EPA. 1993)
On the other hand, there is CMdence that forest ecos> stems in some areas of the United States are
nitrogen saturated (EPA. 1993) Once saturation is reached. ad\erse effects of additional nitrogen begin to
occur such as soil acidification which can lead to leaching of nutrients needed for plant growth and
mobilization of harmful elements such as aluminum Increased soil acidification is also linked to higher
amounts of acidic runoff to streams and lakes and leaching of harmful elements into aquatic ecos> stems
Ultraviolet Light
A reduction of troposphenc ozone is likely to increase the penetration of ultraviolet light, specificalh
UV-b. to ground le\el UV-b is an issue of concern because depletion of the stratospheric ozone layer (i e ,
ozone in the upper atmosphere) due to chlorofluorocarbons and other ozone-depleting chemicals is associated
with increased skin cancer and cataract rates Currenth. EPA is not able to adequately quantify these effects
for the purpose of \ alumg benefits for this pohc>
Page 4-61
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Other EPA programs exist to address the risks posed b\ changes in UV-b associated \\ith changes in
total column o/one As presented in the Stratospheric Ozone RIA (EPA. 1992). stratospheric ozone le\els
are expected to significant!) improxe o\er the next centun as the major ozone depleting substances are
phased out globalh This expected impro\ ement in stratospheric ozone le\ els is estimated to reduce the
number of nonmelanoma skin cancers (NMSC's) b> millions of cases in the U S b> 2075
4.7 References
Abt Associates. Inc 1992 The Medical Costs of Five Illnesses Related to Exposure to Pollutants
Prepared for the U S Em ironmcntal Protection Agencv Office of Pollution Pre\cntion and Toxics.
Washington. DC
Abt Associates. Inc 1995 I'rhan Ornamental Plants Sensitivity to Ozone and Potential Economic Losses
Prepared for the L' S Em ironmental Protection Agencv Office of Air QualiU Planning and Standards.
Research Triangle Park. \ C . Jul\
Abt Associates. Inc 1998a Selectee/Health and Wei/are Benefits Methods for the NOx SIP Call RIA.
Prepared for the U S Em ironmcntal Protection Agenc>. Office of Air Quaht> Planning and
Standards. Research Triangle Park. N C . September
Abt Associates Inc 1998b Agricultural Benefits I'.sing AGSIM for the .\()x SIP Call Draft Report
Prepared for the I S Em ironmental Protection Agencv Office of Air Quality Planning and Standards.
Research Triangle Park. N C . September
Chestnut. L 1997 Draft Memorandum .\fethodoiog\ for Estimating I'alues for Changes in 1'isihihtvat
National ParL\ (April 15)
Costanza. R . d'Arge. R . de Groot. R . Farber. S . Grasso. M . Hannon. B . Limburg. K. Naeem. S . O'Neill.
R V . Paruelo. J . Raskin. R G . Sutton. P . and \an den Belt. M (1997). The Value of the \Vorld~sEcos\stcm
Scnices and Natural Capital Mature. Yol 387 253-259
Crocker T D . Horst R L . Jr 1981 Hours of Work. Labor Producm it\. and Em ironmental Conditions a
Case Stud\ Jne Revie\\ ol Economics and Statistics 63 361-368
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Page 4-(V]
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Chapter 5. BENEFIT-COST COMPARISONS
This Regulator. Impact AnaKsis (RIA) provides cost, economic impact, and benefit estimates that
are potentially useful for e\ aluatmg alternative pohc> options for the NOx SIP call Benefit-cost analysis
provides a systematic framework for assessing and comparing such alternatives According to economic
theory the efficient alternative maximizes net benefits to society (i e.. social benefits minus social costs)
Hovve1. er. there are practical limitations for the comparison of benefits to costs m this analysis This chapter
also discusses the ke\ limitations and uncertainties associated with the benefit and cost estimates
Nonetheless, if one is mindful of these limitations, the relative ordering and magnitude of the benefit-cost
comparisons presented here can be useful policy information
5.1 Summary of Cost Estimates
This section provides a summan of cost results presented in Volume 1 of this RIA Table 5-1
summarizes the total annual control cost estimates developed in this analysis for the > ear 2007 for a selected
set of regulator, altematnes that closeh approximate the alternate es anahzed in the benefits anahsis
These costs include potential changes in the nationwide costs of electricity generation for the network of
electricity generating sources (EGUs). direct control costs to potentialh affected non-EGU sources, emissions
monitoring costs associated with the administrative costs associated with monitoring The majority of the
total annual cost is due to control on electnciU generating units (EGUs) for each altematne
Table 5-1
Estimated Total Annual Cost of NOx SIP Call Alternate es in 2007
Regulator* Alternate
0 1 2 Trading
60°, o/S5.00d
0 1 5 Trading
60%/S5.000
Regionaht\ 1
60%/S5.000
0 20 Trading
60%/S5.000
0 25 Trading
60%/$5,000
Total Annual Costs
(million 1990S)
$2.128
$1.660
$1.400
S1.230
$925
Page 5-1
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5.2 Summary of Benefits Estimates
Table 5-2 summarizes the total annual benefits developed m this anaKsis for the year 2007 for the
"plausible range" of assumptions Not all possible benefits are quantified and monetized in this analysis
Potential benefit categones that ha\e not been quantified and monetized are listed in Table 4-2 in Chapter 4
of Volume 2 of this RJA
Table 5-2
"Plausible Range" of Annual Quantified Benefits Estimates
for NOx SIP Call Alternatives in 2007
(million 1990S)'
Regulator) Alternative
0 12 Trading
60%/S5.000
(< 1 5 Irading
60'VS5.00U
Regionally 1
60%, '$5. 000
0 2d Trading
60% S5.00H
(i 25 Trading
60% 55 000
Annual Quantified Benefits—
"Ixw" Assumption Set
$2.888
$1.100
SI. 138
$1.156
S~"~
Annual Quantified Benefits-
"High" Assumption Set
$5.473
$4.17()
$3.457
$3.543
$2.97]
' \ot all possible benefits are quantified and moneti/ed in thi-. anaKsis Potential benefit categories that ha\e not been quantified and monetized are
listed ir, I able 4-2 in Chapter 4 of this Rl \
5.3
Summary of Net Benefits
Table 5-3 summarizes the total annual quantifiable net benefits for NOx SIP call regulatory
alternatn es for the \ ear 2007 There are se\ eral conclusions that can be drawn from Table 5-3
For the "High" assumption set. monetized net benefits are positne and substantial for all regulatory
alternatn es
As modeled. Regionality 1 is an inferior alternatn e. i.e . even though 0 20 Trading is less stringent it
achie\ es greater benefits at lower total costs
Net benefits are greatest at the most stringent regulatory alternative evaluated, i e . 0.12 Trading For
the '"High" assumption set. net benefits are approximately 33 percent higher for the 0.12 Trading
relative to the 0 15 Trading alternative For the ''Low" assumption set. net benefits are positive only
for the 0 12 Trading alternative
While net benefits are negative for the "Lov\" assumption set for all but the 0 12 Trading alternative,
it is important to remember that while all of the costs are included, mam benefit categories could not
Page 5-2
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be quantified In addition, the "Lou" assumption set estimate assumes that there are no reductions in
premature mortality associated \\ith ozone reductions Relaxing this one assumption would result in
positi\ e net benefits for all alternate es at the low end
Table 5-3
Estimated Annual Quantified Net Benefits'
for NOx SEP Call Alternatives in 2007
(million 1990S)
Regulator)
Alternative
0 12 Trading
60%''S5.00n
0 1 5 Trading
60%/$5.000
Regionaht} 1
60%/S5 000
0 20 Trading
60%/S5.000
025 Trading
60%.'S5.000
Quantified Net Benefits—
"Low" Assumption Set
$760
($5601
($262)
(S~4;
(SI 48)
Quantified Net Benefits—
"High" Assumption Set
$3345
$2.510
$2.057
$2.313
$2.046
' Calculated as quantified benefits minus costs Not all possible benefits are quantified and moneti/ed in this anaK sis Potential benefit categories that
not been quantified and monetized are listed in Table 4-2 in Chapter 4 of this \olume of the RI A.
5.4 Limitations to the Benefit-Cost Comparison
Cost-benefit anaKsis pro\ ides a \ aluable framework for organizing and e\ aluating information on
the effects of em ironmental programs When used proper!). cost-benefit anaK sis helps illuminate important
potential effects of alternative policies However, not all potential costs and benefits can be captured in am
anaK sis. and there always the issue of hou much technological changes will lower future pollution abatement
costs, or change the nature of compliance actions b> the regulated community over time EPA is general!)
able to estimate reasonably well the costs of pollution controls based on toda\ "s control technology and
assess the important impacts when it has sufficient information for its analysis EPA is developing an
increasing abiht> to estimate benefits associated with changes in emissions, but EPA believes that there are
mam important benefits that it can not quantify or monetize that are associated with the NOx SIP call,
including many health and welfare effects Potential benefit categories that have not been quantified and
monetized are listed in Table 4-2 in Chapter 4 of this volume of the RIA and should be remembered in
comparing the above quantitative benefits
Several other important limitations deserve to be mentioned:
• The state of atmospheric modeling is not sufficiently advanced to provide a workable ''one
atmosphere" model capable of characterizing ground-level pollutant exposure for all
pollutants of interest (e g.. ozone, paniculate matter, carbon monoxide., nitrogen deposition,
Page 5-3
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etc) Therefore. EPA must emplo> several different pollutant models to characterize the
effects of alternative policies on relevant pollutants Also, not all atmospheric models have
been widely validated against actual ambient data In particular, since a broad-scale
monitoring network does not yet exist for fine paniculate matter (PM: 5). atmospheric
models designed to capture the effects of alternative policies on PM-, 5 are not fully validated
The Agenc\ has chosen the best available models for the application needs of this RJA and
tried to make the most reasonable assumptions possible in using them for predicting air
quahu changes Limitations are noted in appropriate areas of the RJA
There are limitations in some aspects of the data that are available to perform these analyses
These limitations have been identified along the way in this RJA While they exist. EPA
behe\ es that it has used all models and assumptions in this analysis in a reasonable way
based on the a\ ailable e^ idence Qualitative and more detailed discussions of the above and
other uncertainties and limitations are included in the analysis Where information and data
exists, quantitative characterizations of these uncertainties are included An illustrative
example of ho\\ one aspect of uncertaintx can be quantified is pro\ ided in Appendix A of
Volume 2 However, data limitations pre\ ent an o\ erall quantitatn e estimate of the
uncertainfA associated \\ith final estimates Nevertheless, the reader should keep all of these
uncertainties and limitations in mind \\hen reviewing and interpreting the results
Another dimension adding to the uncertainty of the results is the potential for pollution
control inno\ ations that can occur o\ er time For the NOx SIP call. EPA expects that the
most significant costs of this regulation (i e . the costs associated with installation and
operation of NOx pollution control equipment at coal-fired electricity generating units
throughout the SIP call region) \\ill occur b> May 2003 The Agenc\ is a\\are of some
mno\ ations that equipment \ endors are considering now for application at some units before
200? that are not part of the cost anah ses presented in Volume 1 These mno\ ations
include the possible use of SCR and SNCR in h\bnd technologies, or improved combustion
controls be\ ond what \ endors ha\ e installed in the past that could be used with and without
the addition of post-combustion control technolog} It is impossible to anticipate exacth
ho\\ much of an impact, if am. these ne\\ technologies ma\ ha\e in lowering the compliance
costs for the NOx SIP call in the future Their possible influence can onh be recognized
There is also the uncertainty o\er future costs due to the flexibility afforded b\ an emissions
cap-and-trade program that EPA is encouraging the States to set up under this rule The
anahsis that EPA has completed to date has been fairh consen ati\ e—the anah sis of the
electric power mdustn, and large industrial boilers and combustion turbines assumes these
sources operate under separate trading programs In realit}. the\ should enter the same
trading pool and there should be greater efficiency resulting from their ability to trade NOx
emissions allowances with each other There is also the possibility of unforeseen innovation.
which a cap-and-trade program fosters, since it allows the regulated community to work out
the best approaches to future compliance Therefore, the Agency believes that its cost
anahsis is a reasonably conservative estimate of the future compliance costs that will occur
if States enter into the trading program that the Agency has described in the Model NOx
Budget Trading Rule as part of the NOx SIP call rule If some States do not enter the
program, any inefficiencies that result for the regulated community in those States should not
be viewed as a cost of this rule
Page 5-4
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Despite the abo\ e limitations and uncertainties. EPA behe\ es that the analysis pro\ ided in this report
pro\ ides the Agenc\ with a basis for believing that in the year 2007. benefits resulting from the regulator}
alternatnes that EPA anahzed for N0\ SIP call \\ill be up to t\\o and one-half times costs
5.5 References
US Em ironmental Protection Agenc\. 1997 Proposed Ozone Transport Rulemalang Regulatory
Analysis Office of Air and Radiation. Washington. D C September. 1997
Page 5-5
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APPENDICES
to the
REGULATORY IMPACT ANALYSIS
FOR THE NOx SIP CALL, FIP, AND
126 PETITIONS
Volume 2: Health and Welfare Benefits
-------
Appendix A. QUANTIFIED UNCERTAINTY IN HEALTH AND WELFARE BENEFITS
A.I Over\ie«
Chapter 4 presents point estimates of the monetan benefits associated with each health and welfare
endpomt For most endpomts. an estimate of the statistical uncertainU range based on measured \ariabihu
in the underh ing health effects and \ aluation components of the anah sis can also be computed UncertainU
regarding other aspects of the anah sis (such as emissions and resulting air qualm) is not included in the
uncertainU anah sis. resulting in a likeh underestimate of the o\erall uncertainU of the monetized benefits for
each categon
The t\\o sources of uncertainU that are quantified in the NOx SIP call benefits anahsis are the
uncertainU about the concentration-response functions (and thus about changes in incidence) and the
uncertainU about mean \\ilhngness to pa\ for each unit change in incidence (i e . unit dollar values) The
total dollar benefit associated with a gn en endpoml depends on how much the endpomt will change if a gu en
NOx SIP call alternatnc is implemented (e g . ho\\ mam premature deaths will be a\oided) and hov* much
each unit of change is \\orth (e g . ho\\ much a premature death a\ oided is \\orth) Not all endpomts ha\ c
quantified uncertainU for both the concentration-response function and \aluation function
The uncertainU about each component is characterized b\ a distribution of \ alues that the
component might ha\e This distribution is essential!} a Ba\esian posterior distribution, based on the
a\ailable information A distribution of possible incidence changes and a distribution of possible unit dollar
\ alues for each endpomt is constructed from available information whenex er possible The uncertainU about
the true incidence change (or the true unit dollar \ aluc) for a gn en endpomt is expressed as a 90 percent
credible mten al This is the inten al from the fifth percentile point to the nmeU -fifth percentile point of the
Ba\ esian posterior distribution of incidence changes (or unit dollar values) for that endpomt The 90 percent
credible mten al is a "credible range" within which, according to the available information (embodied in the
Ba\esian posterior distribution of possible \alues). the true \alue lies with 90 percent probability
The uncertainty surrounding estimates of total monetan benefits for each endpomt is similarh
characten/ed b> a distribution of possible \alues. the fifth and nmeu-fifth percentile points of \\hich
comprise the 90 percent credible intcnal of total monetan benefits for the endpomt The distribution of total
monetan benefits for an endpomt is generated from the distribution of incidence changes and the distribution
of unit dollar \ alues for that endpomt. using Monte Carlo techniques In this procedure, on each of mam
iterations, a \ alue is randomh drawn from the incidence distribution and a \ alue is randomh drawn from the
unit dollar ^ alue distribution, and the total dollar benefit for that iteration is the product of the t\\o ! If this is
repeated for mam (e g . thousands of) iterations, an estimate of the distribution of total dollar benefits
associated \\ith the endpomt is generated2 The mean of this Monte Carlo-generated distribution is presented
as the point estimate of total monetan benefits for the endpomt As the number of Monte Carlo draws gets
larger and larger, the Monte Carlo-generated distribution becomes a better and better approximation to the
1 This method assumes that the incidence change and the unit dollar value for an endpomt are stochasticalh
independent
: To improxe computer efficienq. a Latin Hvpercube technique is actual!) used for the incidence change
distribution \\hen implementing all phases of the Monte Carlo anahsis
Page A-1
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undcrh me Ba> csian distribution of total monetan benefits In the limit, it is identical to the underh ing
distribution, and its mean, presented as the point estimate, is identical to the mean of the underlying
distribution of total monetan benefits for the endpomt
The distributions of unit dollar \ alues for those health and welfare endpomts considered in this
uncertaint} anahsis. and the means of those distributions, are gi\en in Table A-l bekrn In addition, the
means and 90 percent credible mtenals (the fifth and nmet>-fifth percentile points of the distributions of
possible \alues) of axoided incidences and the corresponding means and 90 percent credible intervals of total
monelan benefits associated with these endpomts can be found in the results technical support document
(Abt Associates. 1998a)
A.2 Underlying Sources of Uncertainty
For most health endpomts (with the exception of o/.onc-related mortality and short-term PM-related
mortaht) ). the concentration-response function is obtained from a single epidemiological stud\ For all of
these studies, the uncertain!) about the unknown parameter in the concentration-response function is
characten/ed b\ a normal distribution \\ith mean equal to the estimate of the parameter \ alue reported in the
stud\ and standard de\ lation equal to the standard error of the estimate reported in the stud> To the extent
that a\ oidcd incidence is a linear function of this concentration-response function parameter, the distribution
of a\oided incidence \\ill also be normalh distributed "
For o/one-rclated mortality and short-term PM-related mortaht>. the distribution of incidence
changes is based on a pooling of the information in se\eral concentration-response functions In the case of
short-term PM-relatcd mortaht) . the input components to the concentration-response (C-R) functions
estimated in the studies (e g . functional forms, pollutant a\eragmg times. stud\ populations) are all the same
or \er\ similar, so that a pooled, "central tendcncx" C-R function can be dcrned from multiple stud} -specific
C-R functions For o/onc-relatcd mortalit). ho\\c\er. the pollutant a\eragmg time is not the same across all
studies Some of the four studies measured daih 1-hour maximum o/one concentrations while others
measured daih (or some other) a\erage ozone concentrations It is therefore not possible to pool the C-R
functions to dern e a central tendenc) "pooled" C-R function for oxone-related mortality Instead, using the
o/one data appropriate to each stud) (cither one-hour daih maxima or daih a\erages). national ozone
mortalin incidence distributions are dern cd corresponding to the C-R function from each stud\. and these
stud\ -specific national incidence distributions are then pooled That is. the pooling of results is done in
"national incidence space" rather than in "ozone coefficient space " For a more detailed discussion of the
methodology of pooling results from studies, see the report titled Selected Health and Welfare Benefits
Mcihoch for the \()x SIP Call RIA (Abt. Associates. September 1998b)
Construction of distributions of unit dollar \alues. or mean willingness to pa\ (MWTP) for a case
a\ oided. is often not as straightforward to describe Estimates of MWTP can be complicated functions of
estimated parameters, for \\hich information about the statistical distributions are not a\ailablc in published
studies The assumed distributions for MWTP for each endpomt are listed in Table A-1 For a more
complete description of the underlying studies and derivation of the distributions of MWTP. see Chapter 4
and the benefits technical support document (Abt Associates. 1998b). For some endpomts. while uncertainty-
is recognized and a range of possible \ alues is a\ ailable. there is insufficient information to construct
•' The concentration-response functions are almost linear functions of the parameter
Page A-2
-------
Table A-l
Point Estimates and Assumed Distributions of MVVTP for Health and
Welfare Endpoints in the NOx SIP Call Anahsis
Endpoint
Mortalm
Chronic hi onchitis
URS (as defined b\ Pope el al .
199H
LRS (as defined b> Sehuart/ el al
1994)
"Presence of an\ of 1 l) acute
respiraton s\mptoms"
Acute Bronchitis
Minor Restricted Aeti\ m Da\ s
(MRADsi
V\'ork Loss Da\s
V. orker Pi oducln it\
Yisibihu - Residential
Visibihn - Recreational
Consumer Cleaning Cost Saungs
Point Estimate of MWTP
$4.800.000
$260 000
$19
$12
S18
$45
$38
$8?
SI \\orker 10°-(, change in O,
$14 per unit change in d\
$6 50 per unit change in d\
dn-region)
$4 per unit change in d\
lout-ol'-region)
$2 52 per ug;m' change in
PM.o per household
Derived Distribution of the Estimate of
MWTP (1990S)
A Weibull distribution. Std De\ = $3 24
million
A Monte Carlo-generated distribution.
based on three underh ing distributions, as
described in the technical support
document
Continuous uniform distribution oxer the
mtenal [$7 00. $32.72]
Continuous uniform distribution over the
mtenal |S52?,$1857J
Continuous uniform distribution o\er the
mtenal [SO 00. $36 62]
Continuous uniform distribution o\er the
mtenal [$13 29. $"1674j
triangular distribution centered at $38 3"
on the mtenal [SI 5 "2. $61 02]
N A a
N A
Triangular distribution centered at $ 1 4 on
the mtenal [SS. $21)
Normal distribution \vith std de\ equal to
0 42 (m-region) and 0 10 (out-of-region'i
Beta distribution \\ith. std de\ =$1 00 on
the interval [$ 1 26. $ 1 0 08] The shape
parameters of this distribution are cc=l 2
and P=7 3
"N \ indicates that a distribution is not a\ ailahk
Pase A-3
-------
anything other than a uniform distribution of unit dollar \alues. \\hich assumes that each point in the range is
equalh hkeK
For agricultural, forestn. and nitrogen deposition benefits, there are no distributions or ranges of unit
\ alues a\ ailable Variation in the endpomts occurs due to changes in the underlying assumptions in the
models generating the benefit estimates, i e sensitnity of cultnars to ozone for agricultural benefits Thus.
for these endpomts. uncertainty ranges are not reported Sensitn it> to changes in the underly ing assumptions
can be examined through the plausible range approach, \\here assumptions can be grouped to form a range
\\ith lo\\ and hmh estimates
A.3 Quantified Uncertainty for Ozone-related Benefits
The quantification of the uncertainty about the magnitude of the ozone mortality relationship is a
\er\ important issue in the economic benefits estimation While the growing bod) of epidemiological studies
suggests that there in a positn e relationship bet\\ een o/onc and premature mortality. it is still unclear \vhether
the apparent o/onc effect on mortality is real There is a di\ersit> of published results and substantial
measured uncertain!.) \\ithin each stud) This high degree of uncertainty has lead to some countenntuitn e
"results " Based on the meta-anah sis generated distribution of a\ oided o/.one-related cases of premature
mortalit) corresponding to the NOx SIP call estimated future air qualit). there is approximate!) a 13 percent
probability that there is a negatne relationship betueen o/one exposure and premature mortalit) (i e . that
ele\ ated o/one prevent premature mortalit) ) This "result" should be interpreted \\ith caution. ho\\e\er It
is biologically implausible that ele\ated o/one lc\els are beneficial to human health The portion of the
estimated incidence change distribution in the negatne range is most like!) the result of random error in the
estimation of the o/one coefficients in concentration-response functions and/or the result of modeling
misspccification (the underl)ing models do not pre\ent negatne results apnon. and the estimated
coefficients are asymptotical!) normal, \\hich results in a negatne lo\\er tail of the distribution) B\
construction, the meta-anah sis distribution incorporates both bet\\een-location \ anabilit) and \\ithin-
location sampling error As more studies become a\ ailable. and. in particular, as neuer studies incorporate
information from longer periods of time and therefore ha\e results based on more obsen ations. the sampling
error component of the meta-anahsis distribution \\ill decrease As this occurs, the mcta-anahsis
distributions \\ill better approximate the underhing distributions of \\hich the) are estimates, and the
portions of the distributions in the negatne range are likcl) to diminish according!)
A.4 Quantified Lncertainty for PM-related Benefits
For household soiling damage and visibility, no point estimates or distributions are presented for
a\ oided incidences This is because PM-related household soiling is direct!) \ alued on a per household basis.
rather than measuring some unit of incidence (such as hours lost) and multiplying b\ a ^ alue per unit
Visibility is \ alued on a constant percentage decivie\\ change per household, so there are no avoided
incidences The correct unit measure is percent change in decivie\\. which is then input into a \ aluation
function to get \ alue per household, which is then summed over all households in the NOx SIP call region
Thus, uncertamt) is measured m the \ aluation stage, but not in the generation of changes in visibility
Page A-4
-------
A.5 Statistical I ncertaint> and Plausible Ranges
The tables of benefit estimates presented in Chapter 4 represent monetan benefits estimates for fi\c
NOx SIP call regulator* altematncs under the "Lou" and "High" sets of assumptions regarding the PM
threshold lex el. o/one mortality. agricultural benefits, and the PM air quahh model Benefits estimates
associated \\ith the "High" and "Lo\\" assumption sets \\a\e corresponding statistical uncertainty ranges as
well. \vith 5d percentile. mean, and 95!h percentile estimates of benefits As discussed in Chapter 4. the range
of \alues from the mean of the "Lo\\" assumption set to the mean of the "High" assumption set represents a
"plausible range" across the different assumptions Ho\ve\er. this range does not prc>-\ ide information on the
likelihood of am set of assumptions being the correct one Thus, while the plausible range indicates the
sensitivih of benefits to the \ arious assumptions, it does not express the uncertainty associated with am
particular benefits estimate To understand the uncertaint} associated with a particular estimate, it is
nccessan to kno\\ both the underh ing assumption set and the statistical distribution around the estimate
determined b\ the \ anance of the underK ing concentration-response functions and \ aluation functions
A.6 References
Abt Associates. Inc 1998a Benefit Analyse Results of Selected Health and Welfare Endpomts for the .\'Ox
SIP Call RIA. Prepared for the U S Em ironmental Protection Agency. Office of Air Quaht> Planning and
Standards. Research Triangle Park. N C . September
Abt Associates. Inc 1998b Selected Health and Welfare Benefits Methods for the NOx SIP Call RIA.
Prepared for the U S Em ironmental Protection Agcnc\. Office of Air Quaht\ Planning and
Standards. Research Triangle Park. N C . September
Page A-5
-------
Appendix B. SUMMARY OF POPULATION-WEIGHTED AIR QUALITY METRICS
This appendix summan/es the predicted air quahh changes used in the benefits anahses for this
R1A. \\eightcd b\ population The population-weighted air quahn changes arc calculated for se\eral
"metrics." or measures of air quality based on results of the air quaht> modeling described in Chapter 3 For
o/one. these metrics include 1 -hour and 8-hour a\ erage concentration predictions above the level of the
respecmc health standards For PM. the metrics include annual mean PM,, and annual mean PMK,
predictions abo\ e the le\ el of the respective health standards The metrics are calculated for the total
population and for \arious subpopulations. including minority groups (represented b> the Census Bureau's
"non-\\hitc" category ). the eldcrh (65 years of age and older), children (under 18 \ears old), and the lo\\
income group (1990 annual income under $ 13.359 for a famih of 4) The air quality changes co\ er the entire
area of each modeling domain, data is presented for the entire modeling domain (37 States & D C ) and for
the SIP Call region states The population-weighted metric for modeled \ isibiht\ degradation is presented in
Chapter 2. Section 2 6. rather than in this appendix A population-weighted metric is not calculated for
modeled nitrogen deposition changes Additional detail on all population-weighted metrics can be found in
the report titled Air Quality Estimation Jor the \()x SI]' Call RIA (Abt. Associates. September 1998)
Table B-l
2007 Population-Weighted Sum of 1-Hour O/one Predictions Abo>e 124 ppb":
Adjusted and Extrapolated LAM-V Results
Population
Percent Change from Base Case
0.25
Trading
0.20
Trading
Regionally
1
0.15
Trading
0.12
Trading
SIP Call States
Ali Population*.
Xon-\\!i;;c
Undei IS
65 and o\ei
I.o\\ Income
-5('9
-4S 9
-50 "
-492
-585
-63 0
-61 6
-62 8
-ol 3
-69 0
-66 6
-64 (i
-66 2
-65 5
-71 4
-69 4
-6~ 8
-69 2
-684
- ' ^ i
-~3 9
-"3 7
-738
-73 1
-780
37 States & D.C.
All Populations
Non- White
Under 1 8
65 and over
Lou Income
-192
-147
-17 3
-25 1
-183
-24 1
-189
-21 7
-31 5
-22 1
-253
-195
-228
-335
-227
-260
-147
-173
-25 1
-183
-27 3
-21 4
-245
-366
-236
1 he 1 -hour ozone standard allou s an a\ erage of 1 exceedance abo\ e 120 ppb (rounded to the nearest ppb) o\ er a 3 \ ear period This analysis does
not predict three \earj. uorth of air qualify, and is therefore nol direct!) comparable lo the official standard
Page B-1
-------
Table B-2
2007 Population-NX eighted Sum of 8-Hour A^ erage Ozone Predictions Abo\ e 84 ppbj:
Adjusted and Extrapolated L'AM-V Results
Population
Percent Change from Base Case
0.25
Trading
0.20
Trading
Regionally
1
0.15
Trading
0.12
Trading
SIP Call States
All Populations
Non-White
I'ndei IS
65 and o\c;
Lo\\ Income
-31 0
-268
-31 4
-?" S
-38 S
-399
-354
-40 3
-39"
-48 3
-44 0
-395
-443
-43 9
-54 3
-468
-42 3
-4" 2
-46"
-56 "
-51 0
-468
-51 5
-50 9
-604
37 States & D.C.
All Population-
N'on- White
I'nde; IS
65 and o\ e'
I.o\\ Income
-24 I
-20 d
-2? 6
-260
-IS?
-3! 2
-26 4
-304
-33 6
-22 1
-34 3
-29 3
-33 3
-3" 2
-) ~i ~
-36 5
-31 4
-35 5
-39 5
-225
-39 6
-34 6
-38 5
-429
-23 6
I he 8-hour o/one M.ind.irci ol S(° pph irounded to the nearest ppb i i^ based on each \ear s 4th hiehc^t dail% ma/imum S-hour axcraee o/onc
con^entraiior a\ craved ON ei a 3 war period Ihi-- anaKM*- doe- not predict three \ear- \\orth of air qualiU. and n therefore not direct 1\ comparable to
tht. olTieial ^tan^^rd
Page B-2
-------
Table B-3
2007 Population-Weighted Sum of Annual Mean PM;5 Predictions Abo've 15.04
RPM Results
Population
Percent Change from 2007 Base Case
0.25
Trading
0.20
Trading
Regionally
1
0.15
Trading
0.12
Trading
SIP Call States
All Populations
Xon- White
Undei 18
(o and o\cr
I,o\\ Income
-46
-45
-46
-4 5
-5 4
-60
-60
-60
-5 9
-87
-68
-65
-68
-68
-11 4
-6~
-63
-68
-6 5
-62
-14 5
-148
-145
-143
-19 1
37 States & B.C.
All Population-.
Non-White
I'ndcr IS
65 and o'\er
Lo\\ Income
-3 0
-3 8
-3 0
-28
-44
-4 1
-5 1
-4 1
-3 9
~~ ~>
-4 5
-5 5
-4 5
-4 4
-93
-46
-5 4
-46
-4 3
-5 2
-100
-128
-99
-95
-159
8 The PM_. annual mear ^landard o! 1 5 g m' (rounded to ihc neaicst 1 ] Oth i a\ craned o\er a ^ \ ear period 1 his anal\Ms i> nol based on an
evien^ne network ol actual P\i_, oh^jnation*- and dtt*.^ nol predict ihree \ears \\orlh ol ajr qualiT\. and i^ therefore not directl\ comparable to the
ofllcia! standard
Page B-3
-------
Table B-4
20(17 Population-Weighted Sum of Annual Mean PM,0 Predictions Abo\e 50.-I //g/m3 a:
RPM Resultsb
Population
All Populations
Non-While
Under IS
(o and o\c;
1 ou Income
Percent Change from Base Case
0.25
Trading
-00
-fj 0
-00
-00
-00
0.20
Trading
-00
-00
-oo
-(,0
-0 0
Regionally
1
-00
-o o
-00
-0 0
-00
0.15
Trading
-00
-00
-0 0
-0 0
-0 0
0.12
Trading
-00
-00
-00
-0 0
-00
' Tlu P\l. annual mean Mandard ol 50 . g m' i rounded U> the nearer . g) a\eraged o\er a ^ \ear penod Ihi-. anaK^i-- doe^ not predia thiee \i.
\\onh o! air quahu and is therefore no! dueclK wompa^ahle to the official -.tandard
111 Kvations ha\e predietioiT- helou the PMKi standard hence there are no reduction1- in e\po-;ure<- relatne a 50 ug nr annual mean threshold
Page B-4
-------
Appendix C. EMISSION SUMMARIES FOR BENEFITS-RELATED
AIR QUALITY MODELING
This appendix presents emissions summaries rele\ ant to the air qualm modeling that is used as an
input to the benefits anah ses co\ ered in Chapter 3 The tables in this appendix contain summary emissions
estimates for the entire modeling domain, not just the area co\ered by the SIP call rule Table C-l contains a
summaiA of the ozone season NOx emissions used to drive the regional-scale ozone prediction model. UAM-
V Tables C-2 through C-5 present summaries of the warm and cold season emissions of NOx and SO. used
to drive the secondan PM prediction model. RADM-RPM Tables C-6 and C-7 contain summaries of NOx
and SO- emissions used to dm e the secondan PM prediction model. S-R Matrix Fmalh. for compansion
purposes. Table C-8 presents the emissions associated with the cost anahses for EGU and non-EGU sources
presented in Volume 1 of the RIA Each of these tables presents the emissions for each regulators alternate e
for which benefits estimates are de\eloped
PageC-1
-------
Table C-1
O/.onc Season Dailv NO\ Kmissions l>v Major Sector and Regulator) Alternative:
HAM-V Inputs
Major Sector
IX 11 I Poml Sources
Non-IXrU I'oint Sources
2007 Base Case
2.25S 112
MM. 177
0.25 Trading
1 (idd 001
()()S,7I7
0.20 Trading
1.4V) Sh')
X40694
Reg. 1
1.17 Major Sector and Regulatory Alternative:
RADM-RPM Inputs
Major Sector
I'XHJ I'oint Sources
Non-l'XHJ I'oint Sources
2007 Base Case
4,')S').()4!
7.9IX.<)4X
0.25 Trading
1.70X,4l>S
6.175.17.1
0.2(t Trading
!.257,42(>
5.424.5X2
Reg. 1
1,075.07')
5.244.24X
0.15 Trading
2,81 1,652
4.XXO.X52
0.12 Trading
2.568,2.15
4,742,169
Table C 3
Warm Season Annuali/,ed SO, Kmissions 1>> Major Sector and Regulators Alternative:
RADM-RPM Inputs
Major Sector
I'XHJ Point Sources
Non-IXHJ Point Sources
2007 Base Case
10,4.57 .8-10
14.100,5X2
0.25 Trading
10. 196, 5X7
14,271.520
0.20 Trading
10.400,771
14.041.149
Reg. 1
10.19x291
14,017.691
0.15 Trading
10,115,766
11,958,1X5
0.12 Trading
i 0,071.X 15
11.715,866
Page C-2
-------
1 able (-4
Cold Season Annuali/,ed NO\ Kmissions by Major Sector and Regulatory Alternative:
RADM-RPM Inputs
Major Sector
1'X'rU Pomt Sources
Non-1 i(HJ Point Sources
2007 Base Case
•J.S60.9M
7/l8l.ln9
0.25 Trading J 0.20 Trading j Reg, 1
•1 IS |.| 47
6,(>00.}25
• 1 151 643
6 300 4X9
LI SO 23(,
6.29X.746
0.15 Trading
4.I4X7SI
6 2V7.002
0.1 2 Trailing |
-I I "') "iX"?
d.2XX.2'.>')
Talilt- C-5
Cold Season Annuali/ed SO, Kmissions In Major Sector and Regulatory Alternative:
RADM-RPM Inputs
Major Sector
I'XHJ Point Sources
Non-1 'X!U Point Sources
2007 Base Case
1>.()XO,7'H
13.623.675
0.25 Trailing
10.100.2X7
nj.n,oss
0.20 Trading
10,1 16,509
M, 759. 3X5
Reg. I
10.156 XX4
n,775.3S3
O.I 5 Trading | O.I 2 Trading
io.nx.9xx
H. 79 1,381
10, 204, 3 IX
I3,X47,!47
-------
Table C-6
Annual NO\ Emissions h\ Major Sector and Regulators Alternative:
S-R Matrix Inputs
Major Sector
1'Xil ) Point Sources
Non-1 •.(HI Point Sources
2(107 Base Case
4 8(v| Xh')
1,141,0X0
0.25 Trading
1 nx1). 7S(.)
2.172.24X
0.20 Trading
i <)02.UH
2.172 24X
Ri'K- I
l.X2(O(,()
2.372.24S
((.ISTradinj-
\715.75I
2.W2.2.IX
O.I 2 Trading
Tf.l 1,(-7I
2."?72.2'I8
Table ( -7
Annual SO, Emissions b> Major Sector and Regulators Alternative:
S-R Matrix Inputs
Major Sector
1'XiU 1'oint Sources
Non-1 'XilJ Point Sources
2(K>7 Base(ase
10,277.251
\7n.552
0.25 Trading
10.121. 1S^
"?. 711.552
0.20 Trading
10 112,1X4
\711.SS2
Reg. 1
I0.isi.dl5
\7n.552
O.I 5 Trading
I0.10l).')|4
3,711,552
0.12 Trading
10,247.11 1
1,71.1.552
Page C-i
-------
Appendix D. NONLINEAR CHEMISTRY AND FINE PARTICLE PRODUCTION
E\ aluating the effect of major reductions m emissions of nitrogen oxides on particles in made more
difficult because N0\ pla\s an important role in the atmospheric chemistry including formation of nitrate.
organic, and sulfate particles The extent to \\hich Nox reductions reduce fine particle le\els is dependent on
a number of factors that \ an. \vith time and location, including the concentration of ke> reactne gases and
particles, as well as emissions and meteorology The following discussion pro\ ides some background on the
nature of these chemical reactions as a basis for understanding the rele\ ance of non-linear modeling results
D.I Background
The h\ dro\\ 1 radical. OH. is a major oxidi/ing specie in the atmosphere The largest single source of
OH is the breakdown of ozone. O3. b\ ultra\ lolet light in the presence of \\ atcr Clearh. reduction of NOx
can affect the production ofo/one and OH radical in particular locations Sulfate. a major component of fine
particles, is formed b\ the oxidation of SO- through t\vo main path\\a\s gas-phase oxidation and aqueous-
phase oxidation (in \\ater droplets) Sulfate is formed in the gas phase b\ oxidation of SO: b> OH This
process does not use up OH. b\ and large, so a change in SO- produces approximate!} an equnalent change
in S0: Also, an incrcasc'decrease in OH \\ill cause an increase/decrease in gas-phase produced SO4
Sulfate (SO,) is also formed in the aqueous phase in cloud droplets This occurs b\ comersion of
SO- b> h\drogen peroxide. H-0-. and O-, The \ast proportion of the aqueous-phase S0: is produced b\
H-0- for eastern North American conditions This process does use up oxidants If SO- is \ cry high, then
there can be oxidant-hmited conditions, i c . the nonhncarit\ that \\as of concern in NAPAP with respect to
the cffectn eness of acid rain controls Under oxidant-hmited conditions, the production of SO, \\ill be
mosth determined b\ the a\ ailabihn of the oxidant. not b> the a\ ailabihty of SO- Modeling anah sis with
RADM estimates that a majority of the eastern L S sulfate comes from the aqueous-phase oxidation of
sulfur dioxide, the second path\\a\
Nitric acid. HNO,. the precursor to aerosol nitrate, in formed b> N0; combining with OH The
formation of HNO, is a termination reaction and uses up both OH and NO- This reaction is part of the
photochemical process that accounts for the production of O,
The radicals that arc produced during am one da> all disappear or terminate during that da> in a
matter of tens of minutes Production equals termination in the photochemical process There are t\\o
important path\\a\s of termination that are in constant competition
a) OH combines \\ith NO-, taking out one radical If there is a lot of NOx around, this pathwa\ out
competes and inhibits the a\ailabihh of radicals b\ taking so mam OH's out of the action so
quickly If NOx is scarce, then this pathwa> cannot compete as well and a second termination
path\\a> becomes most important
b) In the second mam termination path\\ay. OH combines \\ith itself, to form H-O;. hydroxy radicals
combine with perox> radicals to form organic peroxides Two radicals are taken out
The relatn e fraction of nitrate that exists in the particle phase (as opposed to vapor phase nitric acid
or ammonium nitrate) depends in turn upon the relatne concentration of acid sulfate species and ammonia
In areas \\ith high acid sulfate concentrations (e g the eastern U S. in the summer), nitrate tends to occur in
the vapor phase and reductions of NOx emissions could not result in a large reductions in fine particle
nitrates Where sulfate le\ els are much then nitrate particle le\ els would be higher
PageD-1
-------
D.2 \\ hat this means for NOx Emissions and Sulfate
In urban areas with rclatnch high NOx emissions radical formation and propagation is inhibited If
NOx emissions are reduced b\ small to moderate amounts. O3 and OH \\ill increase Note, the response for
a\ erage 0-. can be different than the response for peak O, If S0: is a^ ailable. then \\here the OH increases.
an increase in the amount of S0; \\ill be oxidized to S0.; in the gas phase This produces a "nonlinear"
response in S>Q. (increase) to a reduction in NOx
In rural areas \\ith relatneh models NOx le\els. O3 and OH \vill decrease \\hen NOx is reduced
Percentagewise, the decrease m O, and OH v>ill less than NOx and NO- The ratio of OH to T\O: \\ill
therefore increase and more of the OH budget \\ill terminate as H:O; This ma\ or ma\ not lead to an
increase in H-O- In the RADM simulations there \\as an increase in H:O; in certain areas, especially o\er
Ohio and western Pcnns\Kama If there is excess S0:. then \\here H:O- increases, in increased amount of
S0: \\ill be comerted to SO, in the aqueous phase This produces a ••nonlinear" response in SO4 The larger
and more pen asn c source of the nonhneanU in these model results seems to be the change in H-0;
The projected relatue abundance of sulfatc \s nitrate particles m future > ears depends upon
assumptions about the cffectneness of acid rain and as \et undecided strategies to implement regional haze
and fine particle standards Under the scenarios examined for this RIA. the sulfate le\ els \\ere high enough to
limit the amount of nitrate aerosol reduction that \\ould accompam a regional NOx reduction If. ho\\e\ er.
future strategies further reduced SOx emissions, the expected reductions in fine particles from NOx
reductions \\ould be decided!) larger, and more linear Because of the uncertainties in the atmospheric
chemistn for these future \ears. the RIA relies on modeling tools that estimate both linear and non-linear
responses for PM reductions
D.3 Reference
Dennis. R L Memorandum to Scott Mathias and John Bachmann. U S EPA Office of Air Quality Planning
and Standards from Robin Dennis. U S EPA. Office of Research and De\elopment. September 17. 1998
Page D-2
-------
TECHNICAL REPORT DATA
(Please read Ins{mi.tic»is on reverse before completing)
1 REPORT NO
ITA-452/R-98-003ft
3 RECIPIENT'S ACCESSION NO
4 TITLE AND SI BTJTLE
Regulatory Impact Analysis for the NOx SIP Call. FIP. and
Section 126 Petitions
Volume 1: Costs and Economic Impacts
Volume 2: Health and Welfare Benefits
5 REPORT DATE
Volume 1: September 1998
Volume 2: December 1998
6 PERFORMING ORGANIZATION CODE
OAQPS/AQSSD
7 AUTHORiS)
Office of Air Quality Planning and Standards
Office of Atmospheric Programs
8 PERFORMING ORGANIZATION REPORT NO
PERFORMING ORGANIZATION NAME AND ADDRESS
U.S. Environmental Protection Agency
Office of Air Quality Planning and Standards &
Office of Atmospheric Programs
Research Triangle Park. NC 27711
10 PROGRAM ELEMENT NO
11 CONTRACT GRANT NO
i: SPONSORING AGENCY NAME AND ADDRESS
Director
Office of Air Quality Planning and Standards
Office of Air and Radiation
U.S. Environmental Protection Agenc\
Research Triansle Park. NC 27711
13 TYPE OF REPORT AND PERIOD COVERED
M SPONSORING AGENC1 CODE
EPA/200/04
1? SUPPLEMENTARY NOTES
If ABSTRACT
This report contains EPA's estimates of the annual costs and benefits of the final NOx SIP call and the
proposed NOx FIP and CAA section 126 petition actions. The report also contains a brief profile of
potentially affected sources and potential economic impacts.
17 KE^ WORDS AND DOCUMENT ANALYSIS
a DESCRIPTORS
Regulator}7 impact analysis: benefits-cost
comparison
18 DISTRIBUTION STATEMENT
Release Unlimited
b IDENTIFIERS OPEN ENDED TERMS
Air Pollution control
19 SECURITY CLASS (Report)
Unclassified
20 SECURITY CLASS (Page)
Unclassified
c COSATI Field Group
21 NO OF PAGES
22 PRICE
EPA Form 2220-1 (Re\. 4-77) PREVIOUS EDITION IS OBSOLETE
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