United States      Office of A
           Environmental Protection  Plannim afti|;Sl»ridards     ' Ju|y 1SN85
           Agency     .           '

           Air
«>EPA     Regulatory
           Analysis of
           National Ambient
           Air Quality
           Standards for
           Carbon  Monoxide

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                                         EPA-45Q/5-85-007
          Regulatory Impact Analysis of the
     National Ambient Air Quality Standards for
                    Carbon Monoxide
                   U.S. ENVIRONMENTAL PROTECTION AGENCY
                      Strategies and Air Standards Division
                    Office of Air Quality Planning and Standards
                      Research Triangle Park, NC 27711
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                     ACKNOWLEDGEMENTS AND DISCLAIMER
     This final  regulatory impact analysis (RIA) was reviewed within the
U.S. Environmental  Protection Agency (EPA) and by the Office of Management
and Budget (OMB) and is being published in conjunction with publication
of EPA's final  decision on the carbon monoxide national ambient air
quality standards.

     This RIA was prepared by the Strategies and Air Standards Division
of the Office of Air Quality Planning and Standards (OAQPS').  The principal
authors include:  Thomas McCurdy, Harvey Richmond, and Dave McLamb.
Questions regarding this report should be addressed to Thomas McCurdy
at MD-12, U.S.  EPA, Research Triangle Park, N.C. 27711; (919) 541-5655
(FTS 629-5655).

     This report has been reviewed by OAQPS, U.S. EPA and approved for
publication.  Menion of trade names or commercial products is not intended
to constitute endorsement or recommendation for use.

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                                    n

                            TABLE  OF  CONTENTS

                                                                      page

  I.   INTRODUCTION 	     1

 II.   STATEMENT  OF NEEDS  AND CONSEQUENCES  	     3

      A.   Legislative Requirements Affecting Development
          and Revision of NAAQS  	     3

      B.   Nature of the Carbon Monoxide Problem 	     4

      C.   Need for Regulatory Action  	     6

III.   ALTERNATIVES EXAMINED  	     9

      A.   No Regulation 	     9

      B.   Other  Regulatory Approaches 	    10

      C.   Market-Oriented Alternatives  	    11

      D.   Regulatory Alternatives  within the Scope  of
          Present Legislation 	    13

 IV.   ASSESSING  BENEFITS  	    15

      A.   Assessing Benefits of  Air Pollution  Control  	    15

      B.   Estimating Benefits Associated with  Alternative
          CO NAAQS 	    19

          1.  Mechanisms  of  CO Toxicity 	    20
          2.  Nature of CO Health  Effects  and  Reported
              Effects Levels	    22
          3.  Sensitive Population Groups  	    27
          4.  Sensitive Population Exposure Estimates  for
              Alternative Standards 	    30

  V.   COST ANALYSIS 	    41

      A.   Introduction 	    41

      B.   RACM Control Costs 	    43

      C.   Alternative Control Strategies and Their  Costs	    48

      D.   Transaction Costs  (Secondary  Costs)  	    51

          1.  Governmental Regulatory Costs 	    51
          2.  Adjustment  Costs for Unemployed  Resources 	    53
          3.  Adverse Effects on Market Structure 	    54

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                                   iii
                                                                      Page
 VI.   EVALUATING BENEFITS AND COSTS 	    55
      A.  Introduction 	,	    55
      B.  Incremental  Cost Analysis 	    55
      C.  Incremental  Cost Analysis 	    58
      D.  Benefits Not Valued 	    61
      E.  Findings and Conclusions 	.,,,    62
 VII. SUMMARY OF RATIONALE FOR SELECTION OF STANDARDS 	    63
VIII. STATUTORY AUTHORITY 	    71
      REFERENCES 	    72

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I.  INTRODUCTION
     This final  Regulatory Impact Analysis (RIA) of the carbon monoxide
(CO) national ambient air quality standards (NAAQS) has been prepared in
accordance with Executive Order 12291,  which requires that an RIA be done
for every "major rule."   As discussed  below,  the Environmental Protection
Agency (EPA) has decided to retain the  current primary NAAQS for CO and
to revoke the existing secondary NAAQS  for CO.  Because full compliance
with the current primary standards could result in an annual impact of
$100 million or more on the economy, EPA has determined that this retention
is a major action.
     As provided for in sections 108 and 109 of the Clean Air Act as amended,
EPA has reviewed and revised the criteria upon which the existing primary
(to protect public health) and secondary (to protect public welfare)
standards are based to determine if revisions  are appropriate.  The
existing primary and secondary standards for CO are both currently set at
10 mg/m^ (9 ppm),  8-hour average and 40 mg/m^  (35 ppm), 1-hour average
neither to be exceeded more than once per year.  On August 18, 1980, EPA
proposed certain changes in the standards based on the scientific knowledge
reported in the revised criteria document for  CO (45 FR 55066).  Based on
developments subsequent to proposal and the Agency's review of public
comments, EPA's final decision, announced separately in the Federal
Register, is to retain the existing primary standards at this time
and to revoke the secondary (welfare) NAAQS for CO.  Since there are no
welfare effects associated with exposure to CO levels at or near ambient
levels, this RIA focuses on the review  of the  primary standards.
     The Clean Air Act specifically requires that primary and secondary
NAAQS be based on scientific criteria relating to the level that should

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                                    2
be attained to protect public health and welfare adequately.   The courts
have endorsed a reading of the Act that excludes reliance on  Lie cost or
feasibility of achieving such standards in determining the level  of the
primary standards.  Accordingly,  EPA has not considered the results of this
RIA in selecting the proposed standards or in its final decision to retain
the primary standards and revoke  the existing secondary standards.
     This RIA examines the benefits, costs, and other economic impacts of
alternative primary CO standards  on both the public and private sectors.
In specifying the alternatives to be analyzed, EPA took account of the
legislative requirements affecting the development and revision of primary
and secondary NAAQS and relied heavily on the document Review of the NAAQS
for Carbon Monoxide:  Reassessment of Scientific and Technical Information
(Staff Reassessment, EPA, 1984a).  The Staff Reassessment interprets the most
relevant scientific and technical informations reviewed in the revised
Air Quality Criteria for Carbon Monoxide (Criteria Document,  EPA, 1979b)
and the Revised Evaluation of Health Effects Associated with  Carbon
Monoxide Exposure:  An Addendum to the 1979 Air Quality Criteria Document
for Carbon Monoxide (Addendum, EPA, 1984b).  The Staff Reassessment, which
has undergone careful review by the Clean Air Scientific Advisory Committee
(an independent advisory group),  serves to identify those conclusions and
uncertainties in the available scientific literature that should be considered
in determining the  form, and level for both the primary and secondary
standards.

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II.  STATEMENT OF NEEDS AND CONSEQUENCES



     This chapter of the RIA summarizes the statutory requir-ients  affecting



the development and revision of NAAQS and briefly describes  the nature of



the ambient carbon monoxide (CO)  problem.  The need for regulatory  action



and the consequences of the regulation in terms of improving the functioning



of the market are also discussed.



     A.  Legislative Requirements Affecting Development and  Revision  of NAAQS



     Two sections of the Clean Air Act govern the establishment and revision



of national ambient air quality standards (NAAQS).  First, as a preliminary



step in developing standards,  section 108 (42 U.S.C.  § 7408) directs  the



Administrator to identify all  pollutants which may reasonably be anticipated



to endanger public health or welfare and to issue air quality criteria for



such pollutants.  Such air quality criteria are to reflect the latest



scientific information useful  in  indicating the kind  and extent of  all



identifiable effects on public health or welfare that may be expected from



the presence of the pollutant  in  the ambient air.



     Section 109(d) of the Act (42 U.S.C. § 7409(d))  requires periodic



review and, if appropriate, revision of existing criteria and standards.



If, in the Administrator's judgment, the Agency's review and revision of



criteria make appropriate the  proposal of new or revised standards, such



standards are to be revised and promulgated in accordance with section 109(b).



Alternatively, the Administrator  may find that revision of the standard is



not appropriate and conclude the  review by retaining  the existing standard.



Section 109(b)(l) defines the  primary standard as that ambient air  quality



standard the attainment and maintenance of which in the judgment of the



Administrator, based on the criteria and allowing adequate margin of  safety,



is requisite to protect the public health.  The secondary standard, as

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                                     4
defined in section 109(b)(2),  must  specify  a  level  of  air quality  the
attainment and maintenance of  which in  the  judgment of the Ad nnistrator,
based on the criteria,  is requisite to  protect  the  public welfare  from any  known
or anticipated adverse  effects associated with  the  presence of  the pollutant
in the ambient air.  Welfare effects are defined  in section 302(h) (42
U.S.C. § 7602(b)) and include  effects on soils, water, crops, vegetation,
man-made materials, animals, weather, visibility,  hazards to transportation,
economic values,  personal comfort and well-being,  and  similar factors.
     The Act, its legislative  history,  and  recent judicial decisions
(Lead Industries  Association.  Inc.  v. EPA,  1980;  American Petroleum Institute
v. EPA, 1981) appear to preclude reliance on  the  costs and technological
feasibility of attainment in setting primary  NAAQS.  Such factors  can be
considered to a limited degree in the development of state plans to implement
such standards.  Under section 110  of the Act,  the States are to submit to
EPA for approval  State Implementation Plans (SIPs)  that provide for the
attainment and maintenance of NAAQS by  certain  deadlines.
     Finally, section 109(d) of the Act directs the Administrator  to  review
all existing criteria and NAAQS at  5-year intervals.  When warranted  by
such review, the Administrator is to revise NAAQS.
     B.  Nature of the Carbon Monoxide  Problem
         Carbon monoxide is a colorless, odorless gas  that is  toxic to
mammals because of its strong tendency  to combine with hemoglobin  to form
carboxyhemoglobin  (COHb).  Thus, the oxygen-carrying capacity of the blood
is reduced since hemoglobin that has combined with CO  in this  manner is not
available to transport oxygen.  The  resultant hypoxemia  (deficient oxygenation
of the  blood) can  have detrimental  effects  on the cardiovascular,  central
nervous, pulmonary, and  other body systems.  Low-level CO exposures (producing

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                                     5
group mean COHb levels in the range of 2.9 to 4.5 percent)  have ieen  shown
to cause aggravation of cardiovascular disease.   This aggrava:.ion consists
of decreased time to onset of pain and increased duration of pain in  persons
with angina (Anderson et a!., 1973).  The Clean  Air Scientific Advisory
Committee (CASAC) CO Subcommittee has concluded  following a review of the
peer-reviewed scientific literature (not including the Aronow studies) that
the critical effects level for NAAQS-setting purposes is  approximately 3
percent COHb (not including a margin of safety)  (Lippmann,  1984).
     Carbon monoxide is a normal  constituent of  the plant environment.
Plants can both metabolize and produce CO.  This fact may explain the
relatively high levels of CO necessary to damage vegetation.  The lowest
level for which significant effects in vegetation has been  reported is
100 ppm for 3 to 34 days (EPA, 1979b).  The effect observed in this study
was an inhibition of nitrogen fixation in legumes.  Since CO concentrations
of this magnitude and duration are not observed  in the ambient air, it is
very unlikely that any damage to vegetation will occur from CO air pollution.
No other effects on welfare have been associated with CO  exposures at or near
ambient levels.  Because no standard appears to  be needed to protect  the
public welfare from any known or anticipated adverse effects from ambient
CO exposures, EPA is revoking the existing secondary standard.  Consequently
this RIA focuses on the primary standards only.
     Carbon monoxide air pollution is a problem  affecting most urban  areas
in the United States.  In 1983, man-made sources accounted  for about  67.6
million metric tons of CO emissions in the United States.  About 71%  of
the total CO emissions were from mobile sources  and most  high CO monitor
readings occurred in areas with heavy traffic concentration.  Thus, control
strategies for attaining the CO NAAQS have focused primarily on reducing

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                                     6



emissions from motor vehicles.   Additional  information  concerning sources



of CO emissions is contained in the Cost  and  Economic Assessment  of Alternative



National  Ambient Air Quality Standards  for  Carbon  Monoxide (EPA,  1985).



     The primary control  strategy for CO  emissions has  been the implementation



and enforcement of increasingly stringent CO  exhaust  emission  standards



in accordance with the federal  motor vehicle  control  program (FMVCP) pro-



visions of the Clean Air Act Amendments of  1977.   For example,  the CO



emission standard for non-California, light duty  vehicles  is 3.4  grams



per mile (gpm) for model  years  1981 and beyond.   This is  approximately  a



90% reduction in emissions when compared  to light  duty  vehicles manufactured



prior to 1970.  Two other basic control strategies exist  for reducing



mobile source emissions of CO including inspection and  maintenance (I&M)



programs for light-duty vehicles and transportation control measures



(TCM) which reduce emissions by reducing  travel  and improving  traffic



flow.  Additional information describing  the  FMVCP, I&M,  and TCM programs



and their costs and effectiveness are contained  in the  Cost and Economic



Assessment (EPA, 1985) and in the Control Techniques  Document  (EPA, 1979c).



The cost and effectiveness of control techniques  for stationary sources  are



also discussed in these documents.



     C.   Need for Regulatory Action



     In the absence of government regulation, market  systems have failed



to deal effectively with air pollution, because  airsheds  have been



treated as public goods and because most air  polluters  do not  internalize



the full damage caused by their emissions.   For  an individual  firm,



pollution is usually an unusable by-product which can be  disposed of at



no cost by venting it to the atmosphere.   However, in the atmosphere,

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                                     7
pollution causes real  costs  to be incurred  by others.   This  is  janerally
referred to as a negative externality in economic theory.
     The fact that the producer,  or consumer, whose activity results  in
air pollution, does not bear the  full costs of his action  leads to a
divergence between private costs  and social costs.  This  is  referred  to
as "market failure" because  it causes a misallocation  of  society's
resources, with more resources being devoted to the polluting activity
than would be if the polluter had to bear the full cost.
     There are a variety of  market and  nonmarket mechanisms  available to
correct this situation.  Some of  the principal market  mechanisms are
briefly described in Chapter III  of this RIA ("Alternatives  Examined").
Other than regulation, nonmarket  approaches would include  negotiations
or litigation under tort law and  general common law.   In  theory, these
latter approaches might result in payments  to individuals  to compensate
them for the damages they incur.
     Such resolutions might  not occur,  however, in the absence  of government
intervention.  Two major impediments block  the correction  of pollution
inefficiencies and inequities by  the private market.   The  first is high
transaction costs when millions of individuals are affected  by  thousands
of polluters.  The transaction costs of compensating individuals adversely
impacted by air pollution include contacting the individuals affected,
apportioning injury to each  from  each pollution source,  and  executing the
appropriate damage suits or  negotiations.  If left to  the  private market,
each polluter and each affected individual  would have  to  litigate or  negotiate
on their own or organize into groups for these purposes.   The transaction
costs involved would be so high as probably to exceed  the  benefits of the
pollution reduction.

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     The second factor discouraging private  sector  resolution  c   the  CO



pollution problem is that pollution abatement  tends to  be  a  pjolic  good.



That is, after CO pollution has been abated,  benefits  of the abatement can



be enjoyed by additional  people at no additional  cost.  This constitutes



the classic "free rider"  problem.   Any particular individual  is  reluctant



to contribute time or money to reduce CO emissions  knowing that  his actions



will have little impact on how clean the air he breathes actually is.



     In view of the clear legal requirements placed on  EPA by  the Clean Air



Act, the Agency is planning to retain the primary NAAQS for  CO to provide



adequate protection of public health.  As this regulatory  analysis  shows,



there are resource costs  associated with this governmental intervention



(see Chapter V, "Cost Analysis").   However,  in view of  the scientific data



on CO health effects this action is required by the Clean  Air Act.   In



addition, EPA believes that the cost of this abatement  through government



action is less expensive than with any reasonably available  private sector



alternatives.  Finally, these standards will mitigate the  negative  externalities



which would otherwise occur due to the failure of the marketplace.

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                                    9
III.  ALTERNATIVES EXAMINED
     This chapter briefly presents potential  alternatives  to one 1980 proposed
revisions of NAAQS for CO.   The outline for the chapter is adopted  from
Executive Order 12291  which requires that  at  a minimum the following
alternatives be examined:
     a)  No regulation
     b)  Regulations beyond the scope of present legislation
     c)  Market oriented alternatives
     d)  Alternative stringency levels and implementation  schedules.
Although Executive Order 12291  requires that  all alternatives be examined,
only the most promising ones need be analyzed in detail.
     A.  No Regulation
     Abandoning current regulatory requirements for CO would result in a
reliance on private efforts to  reduce emissions and on the absorptive
capacity of the atmosphere.  The most likely  avenues for  private efforts
would be either negotiation or  litigation  under tort and  general  common
law.  Generally speaking there  is no incentive for a single company to
enter into negotiations with individuals to reduce CO emissions.  For an
individual firm, the cost of reducing emissions would leave that firm at
a competitive disadvantage.  Litigation by those damaged  could be pursued
either to obtain a reduction in emissions  or  to obtain payment for  damages
incurred (or both).  The costs  of such litigation would likely be very
high since the individual or classes of individuals bringing suit would
have to prove damages.  Moreover, there is little incentive for all  those
affected by air pollution to join together in such a suit  since everyone
would enjoy the benefits of a successful suit to reduce emissions regardless
of the extent of their participation.

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                                   10
     Because the Clean Air Act requires the Administrator to prescribe
standards for pollutants,  such as CO, which have adverse effects on  public
health or welfare and because of the impracticality of private efforts,  the
option of no regulation has not been analyzed in any further detail.
     B.  Other Regulatory  Approaches
     Other regulatory approaches include such options as performance  and
technology standards and regional or State air quality standards.   Performance
and technology standards are required by the present law in a variety of
forms (e.g., new source performance standards (NSPS) for new and modified
sources, motor vehicle standards, lowest achievable emission rate (LAER)
and reasonably available control technology (RACT) in non-attainment
areas, etc.).  They are not based solely on health and welfare criteria
but are designed, in part, to augment control strategies for attainment
of the air quality standards.  These standards generally specify allowable
emission rates for specific source categories.  The LAER and RACT requirements
are intended to allow growth in non-attainment areas while promoting
progress towards eventual  attainment.  NSPS and motor vehicle standards
help to reduce the likelihood of future pollution problems by controlling
new sources.  EPA is required to consider technology and cost in setting
NSPS and RACT requirements.
     Performance and technology based standards serve as useful adjuncts
to ambient standards.  However, they cannot serve as substitutes for
ambient standards since even perfect compliance with them may not produce
acceptable air quality levels.  Despite the application of such standards,
local meteorology, the interaction of multiple sources, and the level of
the standard itself (the standards are set on the basis of technology and
cost) could produce air quality levels that do not protect public health
and we!fare.

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                                    11
     Regional  or State differences in terrain and meteorology us well  as
valuations of clean air have been cited as reasons for adopt" ig regional
or State air quality standards.   Variations in terrain and meteorology
are considered in setting SIP emission limits to achieve a NAAQS.   Such
variations do not generally change the effect of particular levels of
pollution on public health and welfare.  Moreover, transport of pollutants
across boundaries would make a system of regional or State air  quality
standards difficult to enforce.   The Clean Air Act requires national  not
regional standards.
     In summary, the regulatory  alternatives outlined above have not  been
analyzed in detail  in this RIA because of the Clean Air Act requirements
for setting and revising NAAQS.   However, the performance and technology
based standards are helpful in augmenting control strategies for meeting
ambient standards.
     C.  Market-Oriented Alternatives
     There are several market-oriented approaches which can be  considered
as means for achieving the NAAQS for CO, but not as a substitute for  NAAQS
These approaches include pollution charges, marketable permits, and
subsidies and are briefly discussed below.
     Charges.   This policy would involve a charge (or tax) being set  on
each unit of a pollutant emitted.  Firms would then choose the  amount  of
abatement that minimizes their total cost, including the pollution charge.
Pollution is abated until the marginal cost of abatement is equal  to  the
pollution charge.  The regulatory agency would have to set the  level  of
the charge or charges in a manner that would result in the desired air
quality.  This could be quite difficult and might require continued
adjustments to account for inflation and growth.

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                                    12
     Permits.  A permit system would allow a  pollution  source  to  purchase
a permit in order to emit a specified amount  of  a  pollutant  over  a  specified
period of time at a specified location.   A fixed number of  permits  could
be issued and auctioned off to the highest bidders.   Alternatively,  the
permits can be distributed among the sources,  who  could then trade  these
permits as they see fit.  If the number  of permits and  emission  allowances  are
correctly fixed in advance, then the desired  ambient  standard  would be
achieved.  Again, this may be difficult  in areas with numerous and  diverse
sources.
     Subsidies.  A subsidy system pays  sources for each unit of  pollution
that they do not emit.  This can take the form of  direct payments or tax
credits.  Subsidies and charges are similar in that both increase the
opportunity cost of polluting, the former by  causing  each unit of pollution
to entail forgoing the subsidy which could be received  if it were not
emitted.  Thus, the subsidy is similar to a charge,  except  in  two
respects:
     (a)  Administratively, there is the problem of determining  the
          actual abatement of each source.  There  must  be a determination
          of what its pollution would have been  in the  absence of the
          subsidy, and this determination must be  adjusted  as  conditions
          change.  These determinations  are difficult and may  depend upon
          information from the polluters, who could have the incentive
          to strategically misrepresent  their intended  emissions.
     (b)  The long-run effects of subsidies may  be quite different  than
          for permits or charges, since  the former increase profit
          levels or incomes for polluting industries  and the latter
          decrease them.  Thus, in the long-run, subsidies  will  result

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                                    13
          in firms entering the polluting industry,  but permits  or
          charges will  cause firms to leave it.   Consequently,  a fixed
          subsidy rate will yield greater pollution  levels than  equivalent
          permits or charges,  although each individual  firm will behave
          identically under the two systems.   Also subsidies would likely
          increase dependence  on capital  intensive solutions.
     Summary.  Although the Clean Air Act does not contemplate  consideration
of these market-oriented alternatives in  setting the NAAQS,  it  does  not
prevent States from using such approaches in  attaining  air quality standards.
Thus, to the extent they are permitted by EPA's  regulations  for  development
of SIPs, the States may consider such market-oriented approaches as
described above in the implementation of  the  NAAQS.
     D.   Regulatory Alternatives within  the  Scope of Present Legislation
     The Clean Air Act requires that primary  NAAQS be set at levels  which
protect the public health, including that of  sensitive  individuals,  with
an adequate margin of safety.   The secondary  NAAQS must be adequate  to
protect public welfare from any known or  anticipated adverse effects.
     The assessment of the available quantitative and qualitative health
effects data presented in the  Criteria Document,  Addendum, and  Staff
Reassessment, together with recommendations of CASAC and other  public
commenters, suggested several  alternatives.  For a comprehensive discussion
of the scientific data that served as the basis  for  these alternatives as
well  as the rationale for the  Administrator's approach  to this  decision,
the reader is referred to the  Criteria Document,  the Addendum Staff
Reassessment, and the preamble to the final action.

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                                    14



     Since August 18,  1980,  when  the revised  CO  standards  were  proposed,



a number of alternative 8-hour  standards  have been  considered.  The



alternatives being analyzed  in  this  final  RIA for the  8-hour  primary  standard



are shown in Table 1.   The 1-hour standard is not being  addressed  in  this



analysis because all  areas expected  to  attain the various  8-hour standard



alternatives are also  expected  to attain  any  1-hour standard  under



consideration,  and the amount of  control  needed  is  higher  for 8-hour



standards than  for their equivalent  1-hour standards.





                Table  1:  Alternative Levels  of  NAAQS  for  CO
Current Standard
Alternative A
Alternative B
Alternative C
Averaging Time
(hours)
8
8
8
8
Level (ppm)
9
9
12
15
Exceedances Allowed
per year
1 observed
1 expected
1 expected
1 expected

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                                     15

IV.  ASSESSING BENEFITS
     A.  Assessing Benefits of Air Pollution Control
     Air pollution has adverse effects on human health and welfare.
Controlling pollution means reducing these adverse effects.  The benefits
of air pollution control  are the values (both known and unknown) to  society
brought about by reduction in adverse health and welfare effects.
     A proper economic benefits analysis is based on  appropriate economic
theories and analytical tools to measure all values to all individuals in
dollar or other appropriate units for all expected impacts.  The translation
of impacts into dollar values, where possible,  allows the summation  of
impacts and direct comparison with the costs of pollution control.   Estimating
the benefits of air pollution control requires  an understanding of  how
changes in pollution emissions affect atmospheric conditions  and thereby
affect people's health and welfare, and how these effects are valued.
These links are illustrated in Figure 1.
Step 1
Step 2
Step 3
Step 4
Changes in
Emissions

r->
Changes in
Ambient Ai r
Quality

V
•/
1
Changes in
Health and
Welfare

\
/
r
Economic
Valuation
(changes in
well-being)

                                  Figure 1
                        STEPS IN MEASURING  BENEFITS

     A complete benefits analysis will  examine all  effects  of changes  in
air pollution in Steps 3 and 4 of Figure 1,  or in some cases  will  go  straight
from Step 2 to Step 4.

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                                     16

     The Clean  Air Act  is  designed  to prevent  adverse  effects,  such as:

     1.   Health

          adverse impacts  to  human  health—acute  or  chronic  effects
          that  result  in  increased  mortality or morbidity.

     2.   Welfare

          a.   adverse  impacts to  materials—corrosion,  soiling  and
              other damage to building materials, metals,  fabrics,
              equipment,  etc.

          b.   adverse  impacts to  vegetation—reduction  in  productivity
              or aesthetic appeal of  domestic  crops, ornamental plants
              and native  vegetation.

          c.   adverse  impacts to  animals—effects on health  and pro-
              ductivity of livestock, pets, and wildlife.

          d.   adverse  impacts on  climate—changes in temperatures
              and/or precipitation.

          e.   adverse  aesthetic  impacts—reduced  visibility  or  visual
              discoloration of the  air and objects  viewed  through it
              and other aesthetic effects such as unpleasant  odors.

     It  is the  effects  of  these  impacts  on well-being,  including the  risks  of

incurring them  and the  costs  of  avoiding or ameliorating them,  that determine

the economic  valuation  of  the changes in air quality.   This  valuation can

be positive or  negative depending on  whether air  quality improves or

deteriorates.  For improvements,  the  valuation is positive,  representing

benefits of the pollution  reduction,  and for deterioration,  the valuation

will represent  damages  of the additional pollution.   In order to avoid

confusion, the  term costs  will be reserved for reference to  the costs of

pollution control while damages  will  refer to  the adverse  effects of

pollution.

     The appropriate benefit  measure  of  pollution control  will  reflect  the

value of the reduction  in the need  to prevent  or  ameliorate  adverse effects,

the value of reduced risks of incurring  adverse effects, and the value  of

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                                     17
reductions in adverse effects actually incurred.   These benefits  are often
classified into three categories—user,  option,  and existence values.   User
values are the benefits of improved air  quality  that the individual  expects
to enjoy directly.  Option values result from uncertainty concerning
future demand for air quality.  For example,  an  individual  may wish  to know
that he will be able to obtain a particular level  of air quality  in  the
future due to uncertainty about changes  in  his susceptibility to  the adverse
health impacts of air pollution.  This may  be a  particularly  important
value when changes in air quality are difficult  to reverse.   People  may
also want to preserve a particular level of air  quality across the country
simply to know that it exists, although  they never expect to  experience it
directly in all locations.  This is called  existence value.
     The approach used in benefits estimation is  derived from economic
welfare theory.  The benefits of a change in air  quality are  said to be
equal to the change in well-being, or utility, that results.   Such a change
in utility is difficult to quantify,  but the standard dollar  measure is how
much of other goods and services the individual  is willing to give up  in
order to obtain or prevent the change.  The rational  consumer will only be
willing to make the exchange if his utility is enhanced or unchanged.   The
individual's maximum willingness to pay  (WTP) in  order to obtain  a desirable
change or prevent an undesirable change  is  that  amount that would keep his
utility constant at either the initial utility level  or at the utility
level that would be obtained if the change  were  to occur.  Dollars are used
to represent how much of other things he is giving up.
     For market goods, the marginal WTP  for an additional unit of a  good
service is typically represented by the  market price of the good  or
service.  WTP for different quantities can  therefore be taken from the

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                                     18
market demand curve for the good  or service (see Harberger,  197L).   For  non-
market goods, such as air resources,  market prices  do  not  exist  and  other
methods must be employed to estimate measures of WTP  (see  Rowe  and Chestnut,
1981, for a review).  WTP for air pollution control will depend  on income,
tastes and preferences, and the prices  of alternatives and other goods.
For example, if all the effects of air  pollution could be  ameliorated  with
air conditioning, an individual may not  be willing  to  pay  more  for air
pollution control than it would cost him for air conditioning.   Since  the
individual will not be sure whether he  will actually  incur the  potential
effects of air pollution, he may also be willing to pay an additional  amount
in order to reduce the risk of suffering undesirable  impacts.
     A slightly different measure than  WTP for the  benefits of  a change  in
air pollution is the willingness to accept compensation (WTA)  in return  for
incurring an increase in air pollution  or foregoing a  decrease  in air
pollution.  The difference between WTA  and WTP is whether  the  point  of
reference is the more preferred or less preferred level of air  quality.
The WTP measure presumes that an individual does not  have  a predetermined
right to any particular level of air quality, in which case the point  of
reference is the lower level of air quality.  The WTA measure  presumes that
the appropriate point of reference is the improved  level  of air quality.
The Clean Air Act states that the public has a right  to be protected from
adverse health effects of air pollution.  It might  be argued,  therefore,
that the appropriate benefit measure is the amount  the consumer is willing
to accept in compensation for incurring adverse health effects  or foregoing
reductions  in  adverse health effects.
     It has  been demonstrated theoretically that under typical  conditions
WTP and WTA  measures would not be expected to differ  greatly,  but several

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                                     19



empirical  studies concerning air pollution control  benefits hav-e found



significant differences between the two,  with empirical  WTA measures



exceeding  WTP measures (see Rowe and Chestnut,  1981).



     Changes in air quality will affect many people across many time  periods



so that a  total benefits measure must be some combination of benefits for



all affected individuals through all relevant time  periods.  The standard



procedure, which meets the economic efficiency criterion (Harberger,  1971),



is to simply sum WTP or WTA for all individuals and discount them through



time.  This ignores interpersonal differences in income  and other factors.



Distribution impacts of a change in air quality across different regions,



people, and time periods may be of concern and can  be  considered separately



(see Rowe  and Chestnut, 1981a).



     B.  Estimating Benefits Associated with Alternative CO NAAQS



     To perform a comprehensive benefits  analysis for  CO that is fully



consistent with economic welfare theory and available  scientific evidence



would require a number of complex research tasks that  have not yet been



undertaken for CO.  Existing scientific knowledge concerning the effects  of



CO suggests that only health related impacts are of serious concern at or



near ambient levels.  Current medical research, however, is inadequate for



benefits analysis because it does not provide a comprehensive understanding



of exactly how low-level CO exposures adversely affect the body.  At  present,



experimental evidence only demonstrates that cardiovascular patients



experience early onset of angina when exposed to low levels of CO while



exercising.  Considerable additional research would be required to provide



a better assessment of these and other CO-related health effects.



     Because of the uncertainties described above involving CO health



effects, EPA's approach to estimating benefits focuses on the number  of

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                                     20
people and the number of occurrences  of carboxyhemoglobin  (COHb)  levels  of
2.1% or higher that are expected upon attainment  of  each  alternative  standard.
Given the current state of knowledge, EPA believes that this  measure  is  the
most appropriate surrogate for estimating benefits associated with  alternative
CO standards.
     The remainder of this section provides  information in  summary  fashion
on:  (1) the mechanism of CO toxicity,  (2) the nature  of  CO health  effects
and reported effects levels, (3) the  population groups believed  to  be most
sensitive to CO exposures and estimates of their  size, and  (4) the  number
of sensitive people and occurrences at  or above 2.1% COHb upon attainment
of alternative CO standards.
     1.  Mechanisms of CO Toxicity
     The two principal sources of CO  that contribute to levels of CO  in  the
human body are: (1) endogenous CO production from the  normal  breakdown of
hemoglobin constituents in the body and (2)  inhalation of exogenous CO from
ambient exposures.*  Endogenous CO production contributes roughly 0.3 to 0.7
percent in the form of carboxyhemoglobin (COHb).
     Presently, the most important mechanism of CO toxicity at low-level  CO
exposures is thought to be CO hypoxia.   This mechanism generally involves
diffusion of exogenous CO through the lungs  into  the blood  with  resultant
formation of COHb.  Such an increase  in COHb levels  disrupts  normal delivery
of oxygen to the tissues in two ways.  First, CO  displaces  oxygen on  the
hemoglobin carrier so that the hemoglobin has a reduced capacity to carry
oxygen through the blood to the tissues.  Second, CO makes  it more  difficult
for the oxygen that is still transported by  hemoglobin to be  released at the
*The contribution of direct smoking to levels of CO in the body is not being
 considered as part of this rulemaking.

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                                     21



tissue.  Under these conditions,  the tissues must operate at lc, -er than normal



levels of oxygen, a condition known as hypoxia,  and this amount of oxygen



may be inadequate to meet the energy needs of the tissues.   The effects of CO



on the cardiovascular system, central  nervous system,  and other systems are



thought to be directly related to this reduction in the ability of the blood



to deliver oxygen to these systems and the resultant oxygen deficiency in



the tissues themselves.



     Other possible mechanisms of toxicity have  been discussed (Coburn, 1979;



EPA, 1984b).  These alternative mechanisms involve binding of CO  to such



intracellular hemoproteins as cytochrome oxidase, myoglobin, tryptophan



deoxygenase, and tryptophan catalase.   Because the affinity constants  for CO



with these proteins are much less than that for  hemoglobin, it is unlikely



that they play a major role in CO hypoxia.  However, in tissues with a high



oxygen gradient between blood and tissue,  it is  reasonable to assume that the



interaction of CO with these proteins  (particularly with myoglobin in  heart



muscle) may play a role in CO toxicity.  Myoglobin appears to facilitate the



movement of oxygen through muscle cells and, as  a short-term oxygen reservoir



in muscle, it releases oxygen during sudden increased  metabolic activity.



The affinity of CO for myoglobin is about 40 times greater than the affinity



of oxygen for myoglobin.  The ratio of CO content in heart muscle to CO



content in blood is approximately three.  Therefore, given human  exposure to



CO, substantial amounts of CO may be stored in heart muscle.  In  situations



of sudden, severe stress or exertion,  the heart  muscle's immediate oxygen



supply may be inadequate, even in healthy persons and  particuarly in persons



with a history of disease.  This alternative mechanism could provide theoretical



support for experimental evidence of myocardial  ischemia, such as electro-



cardiographic irregularities and decrements in work capacity discussed later

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                                     22
in this notice.   However,  it  is  not  known  whether  binding  of  CO  to  myoglobin
could cause health effects observed  at COHb  levels as  low  as  4-5 percent.
     In summary,  disruption of the normal  transport of oxygen by formation  of
COHb in the blood appears  to  be  the  primary  mechanism  of CO toxicity.   In
addition, EPA concludes that  regardless  of the mechanism of toxicity,  COHb
levels provide a  meaningful and  useful physiological marker of CO toxicity
and for estimating endogenous production of  CO and exposure to exogenous
sources of CO (EPA, 1984b).
     2.  Nature of CO Health  Effects and Reported  Effects  Levels
     Table 1  is a summary  of  key clinical  studies  reporting human health
effects associated with low-level  exposures  to CO.  This table is based
on evidence discussed in the 1979 Criteria Document (EPA,  1979a) and in the
Addendum (EPA, 1984b) but  excludes a series  of studies by  Dr. Aronow for  reasons
given below.   The table is included primarily as an aid for the  following
discussion and should be used only in conjunction  with qualifying statements
regarding the technical merits of each study made  in the  1979 Criteria Document,
in the Addendum,  in the Staff Reassessment,  or in  the  Federal Register
notice for the final rule.
     Cardiovascular Effects.   In reviewing the primary standards, a principal
area of concern to the Administrator has been evidence linking aggravation  of
angina and other cardiovascular  diseases to  CO exposures.   Angina patients
who have been exposed to low levels of CO while resting have  subsequently
exhibited, during exercise, reduced time to  onset of angina (Anderson et
al., 1973).   In proposing to revise the CO standards,  EPA  viewed aggravation
of angina, as reported above, to be an adverse health  effect  (45 FR 55066)
and CASAC concurred with EPA's judgment on this matter.

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      TABLE 2.
Lowest Observed
Associated With
        23
Effect Levels For Human Health Effects
Low Level Carbon Monoxide Exposure
      Effects

Statistically significant decreased
(^3-7%) work time to exhaustion
in exercising young healthy men

Statistically significant decreased
exercise capacity (i.e.,
shortened duration of exercise
before onset of pain) in  patients
with angina pectoris

Statistically significant decreased
maximal oxygen consumption and
exercise time during strenuous
exercise in young healthy men

No statistically significant
vigilance decrements after
exposure to CO
Statistically significant impair-
ment of vigilance tasks in
healthy experimental  subjects
Statistically significant diminu-
tion of visual perception, manual
dexterity, ability to learn, or
performance in complex sensorimotor
tasks (such as driving)
                        COHb concen-
                    tration (percent)a

                          2.3-4.3
Statistically significant
decreased maximal oxygen
consumption during strenuous
exercise in young healthy men
                          2.9-4.5
                          5-5.5
                          Below
                          5
                          5-7.6
                          5-17
                          7-20
                             References

                        Horvath et al., 1975
                        Drinkwater et al., 1974
                        Raven et al., 1974

                        Anderson et al., 1973
                        Klein et al., 1980
                        Stewart et al., 1978
                        Weiser et al., 1978
                        Haider et al., 1976
                        Winneke, 1974
                        Christensen et al., 1977
                        Benignus et al., 1977
                        Putz et al., 1976

                        Horvath et al., 1971
                        Groll-Knapp et al., 1972
                        Fodor and Winneke, 1972
                        Putz et al., 1976

                        Bender et al., 1971
                        Schulte, 1973
                        O'Donnell et al., 1971
                        McFarland et al., 1944
                        McFarland, 1973
                        Putz et al., 1976
                        Salvatore, 1974
                        Wright et al., 1973
                        Rockwell and Weir, 1975
                        Rummo and Sarlanis, 1974
                        Putz et al., 1979
                        Putz, 1979

                        Ekblom and Huot, 1972
                        Pi may et al. 1971
                        Vogel and Gleser, 1972
«The physiologic norm (i.e., COHb levels resulting from the normal breakdown
of hemoglobin and other heme-containing materials) has been estimated to be
in the range of 0.3 to 0.7 percent (Coburn et al., 1963).

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                                     24

     One controlled human exposure study (Anderson et al.  1973)  Deported that
experimental  subjects with angina exhibited statistically  significant reduced
time to onset of exercise-induced angina after exposure to low levels of CO
resulting in  mean COHb levels of 2.9 (range 1.3-3.8 percent)  and 4.5 percent
(range 2.8-5.4 percent).  There remain some concerns about the study findings
due to ambiguities regarding the design and conduct of the study and the
small number  of subjects (N=10) examined.  However, as discussed in the
Addendum, a revaluation of the Anderson et al. (1973) study  addressing
major points  of concern, found that the study provides reasonably good
evidence for  the hastening of angina occurring in angina patients at COHb
levels of 2.9 to 4.5 percent.
     Another  cardiovascular effect of concern is the possible detrimental
effect of increased blood flow that occurs as a compensatory  response to
CO exposure (Ayres et al., 1969; Ayres et al., 1970; and Ayres et al., 1979).
This effect may be related to coronary damage or cerebrovascular effects at
very high blood flow rates due to the added stress on the  cardiovascular
system.  However, community epidemiological studies have been inconclusive.
In particular, based on EPA's evaluation of the Goldsmith  and Landau (1968),
Kurt et al. (1978), and Kurt et al. (1979) epidemiological studies, the
relationship between CO exposures and effects such as mortality from myocardial
infarction (heart attack), sudden death due to arteriosclerotic heart disease,
and cardiorespiratory complaints remains in question.
     Maximum aerobic capacity and exercise capacity are indirect measures
of cardiovascular capacity which have been reported to be reduced in
several carefully conducted studies involving normal healthy adults exposed

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                                     25






to CO.  A linear decline in maximum aerobic capacity for health  individuals



was reported for COHb levels ranging from 5-20 percent in a series of studies



(Stewart et al., 1978; Weiser et al.t 1978; and Ekblom and Huot,  1972).



Horvath et al.  (1975) found decreases in maximum aerobic capacity when COHb



levels were 4.3 percent and that COHb levels of 3.3 and 4.3 percent reduced



work time to exhaustion by 4.9 and 7.0 percent, respectively.   The effects of



lower CO exposure levels in healthy individuals have also been investigated



under conditions of short-term, maximum exercise duration.  In a  series  of



studies involving different CO exposure levels, two alternative ambient



temperatures (25°C and 35°C), and two different healthy adult  populations



(young and middle-aged), no statistically significant reduction in maximum



aerobic capacity was observed for either group when CO exposures  were compared



with the clean  air control.  However, small (less than or equal to 5 percent)



decreases in absolute exercise time were consistently observed in the non-smoking



subjects whose  COHb levels reached 2.3 and 2.5 percent (Drinkwater et al.,



1974; Raven et  al., 1974).  These effects, while not as serious as aggravation



of angina, are  still a matter of concern since they have been  found to occur



in healthy individuals and such effects might impair the normal activity of



more sensitive  populations.  Therefore, these effects have been considered in



judging which CO standards provide an adequate margin of safety.



     Central Nervous System Effects.  Numerous studies (Putz et al., 1976;



Bender et al.,  1971; Schulte, 1973; O'Donnel et al., 1971; McFarland et  al.,



1944; McFarland, 1973; Salvatore, 1974; Wright et al., 1973; Rockwell and



Weir, 1975; and Rummo and Sarlanis, 1974) have reported effects on the central



nervous system for CO exposures resulting in COHb levels in the range 5-17



percent.  The range of effects reported included impairment of vigilance, visual



perception, manual dexterity, learning ability, and performance of complex

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                                     26

tasks.  While one study (Beard and Grandstaff,  1975) has suggested that
vigilance effects may occur at levels as low as 1.8 percent COHb,  several
other studies (Haider et al.,  1976; Winneke, 1976;  Christensen et  al.,  1977;
Benignus et al., 1977; and Putz et al., 1976) have  not found any vigilance
decrements below 5 percent COHb.   Measurement methods used to detect effects
may have been too insensitive  to detect changes in  the latter vigilance
studies. Based on the assessment of the above mentioned studies, the Addendum,
concluded that, at least under some conditions, small decrements in vigilance
occur at 5 percent COHb.  A series of studies (Putz et al., 1976;  Putz  et
al., 1979; and Putz 1979) has  also found that 5 percent COHb produced decrements
in compensatory tracking, a hand-eye coordination task.  EPA considers  hand-eye
coordination effects as well as decrements in vigilance to be important
since these functions are components of more complex tasks, such as driving,
and reduced alertness or visual sensitivity could lead to increased vehicular
accidents.
     Fetal Effects.  Based on  the limited animal toxicology data,  the 1979
Criteria Document (EPA, 1979)  and the Addendum (EPA, 1984b) suggest that CO
may produce effects on the fetus or newborn.  Long-term exposures  to CO may
result in a slower elimination of CO by the fetus and may lead to interference
with fetal tissue oxygenation  during development.  Because the fetus may be
developing at or near critical tissue oxygenation levels, even exposures to
moderate levels of CO may produce deleterious effects on the fetus such as
reduced birth weight and increased newborn mortality  (Longo, 1977), although
this remains to be demonstrated alone with pertinent dose-response relationships
(EPA, 1984b).  Evidence from smoking mothers is suggestive of similar fetal
and newborn effects due to CO exposures (Peterson,  1981).  While the fact
that cigarette smoke contains substances other than  CO prevents a direct

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                                     27

quantitative application of the results of these studies in setting the CO
primary standards, these studies do suggest the need for caution in protecting
unborn children from such potentially deleterious effects of CO exposures.
     As discussed in the Addendum and Staff Reassessment, research on
sudden infant death syndrome (SIDS) recently has suggested a possible link
between ambient CO levels and increased incidence of SIDS (Hoppenbrowers et
al., 1981).  It has been pointed out by Goldstein (1982) that indoor sources
of CO, as well  as other pollutants (e.g.,  nitrogen dioxide, lead), may be
at least as important as ambient CO in causing SIDS and that the relationship
between SIDS and ambient pollution levels  may be only coincidental.  Because
the number of potentially confounding factors makes finding an association
between CO and SIDS extremely difficult, further confirmation is needed
before any causal relationship can be inferred (EPA, 1984a; EPA, 1984b).
     3.  Sensitive Population Groups
     In EPA's judgment, the available health effects data identify persons
with angina or other types of cardiovascular disease (e.g., history of heart
attack) as the groups at greatest risk from low-level,  ambient exposures
to CO.  Based on 1980 census data (DOC, 1980) and earlier U.S. National
Health Examination Survey data (DHEW, 1975), this group is estimated to
number approximately 8.7 million individuals or approximately 5.0 percent
of the adult population.  As discussed previously, the  concern for persons
with cardiovascular disease results from the fact that  their condition is
due to an insufficient oxygen supply to cardiac tissue, so that persons
with this condition have an inadequate oxygen reserve capacity and an
impaired ability to compensate for the effects of excess CO.
     The Addendum and Staff Reassessment also identify  several other groups
as likely to be particularly sensitive to  low-level CO  exposures based on

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                                     28






EPA's review of the health  effects  evidence.   These  groups  inc'-.ide:   (1)



persons with chronic respiratory  disease  (e.g.,  bronchitis,  emphysema,  and



asthma), (2) elderly individuals, especially  those with  reduced  cardiopulmonary



function,  (3) fetuses and young  infants,  and  (4)  individuals suffering  from



anemia and/or those with abnormal hemoglobin  types that  affect oxygen  carrying



capacity or transport in the blood.   In  addition,  individuals taking  certain



medications or drinking alcoholic beverages may  be at  greater risk  for  CO-induced



effects based on some limited evidence  suggesting  interactive effects  between



CO and some drugs.   Visitors to  high  altitude locations  are also expected  to



be more vulnerable  to CO health  effects  due to reduced levels of oxygen in



the air they breathe.  Finally,  individuals with  some  combination of  the



disease states or conditions listed above (e.g.,  individuals with angina



visiting a high altitude location)  may  be particularly sensitive to



low-level  CO exposures, although  there  is no  experimental  evidence  to



confirm this hypothesis.



     Table 3 briefly summarizes  the rationale for the  judgments  that  these



groups are more likely to be affected by low-level CO  exposures  and presents



population estimates for each group.   For most of the  groups listed in  Table  2



there is little specific experimental evidence to clearly  demonstrate  that



they are indeed at  increased risk for CO-induced health effects.  However,



it is reasonable to expect  that  individuals with preexisting illnesses  or



physiological conditions which limit  oxygen  absorption into blood or  its



transport to body tissues would  be  more susceptible  to the hypoxic (i.e.,



oxygen starvation)  effects of CO.

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                                                 29
                                 Table  3.  Summary  of  Potentially  Sensitive Population Groups3
Group
Coronary Heart
Disease
Rationale
Anderson et al . (1973) suggests
reduced time until onset of
exercise-induced angina in
2.9-4.5% COHb range.
Population
Estimates
8.7 million (in 1980)
Percent of
Population
5.0 (of the adult
population)
Reference
DHEW, 1975
DOC, 1980
  Angina Pectoris
                                       7.0 million (in  1980)
                            4.0 (of the adult
                            population)
Chronic Obstructive   Reduced reserve capacities  for
Pulmonary Diseases

  Bronchitis
  Emphysema
  Asthma
dealing with cardiovascular
stresses and already reduced
oxygen supply in blood likely
to hasten onset of health effects
associated with CD-induced
hypoxia.
6.5 million (1970)        3.3
1.5 million (1970)        0.7
6.0 million (1970)        3.0
Anemia
  Pernicious and
  Deficiency Anemias
Oxygen carrying capacity of blood
is already reduced increasing
likelihood of CD-induced hypoxia
effects at lower CO exposure
levels than for non-anemic
individuals.
3.0 nillion (1973)        1.4
                                       .15 million (1973)        0.07
                                                                                     DHEW, 1973
Fetuses and
Young Infants
Several animal studies (Longo,
1977) report deleterious effects
in offspring (e.g., reduced
birth weight, increased newborn
mortality, and lower behavioral
activity levels).
3.1 million live
births/year (1975)
DHEW, 1978
DHEW, 1977
Peripheral
Vascular Disease
Reduced oxygen-carrying capacity
to limbs likely to hasten onset
of health effects associated with
CO-induced hypoxia.
0.75 million (in 1979)    0.3
DHEW, 1974
Elderly
CO exposures may increase
susceptibility of elderly
individuals to other
cardiovascular stresses due
to already reduced reserve
capacities to maintain
adequate oxygen supply to
body tissues.
24.7 million  (in 1979)
> 65 years old
DOC, 1980
     subgroups  listed are not necessarily sensitive to CO exposure at low levels.

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                                     30
     3.  Sensitive Population Exposure Estimates  for Alternative
         Standards
     Objective.   An important element in  assessing  alternative  air quality
standards is an  assessment of the population  exposure to pollutant
concentrations that would result if a given standard were just  attained.
Particularly important is an assessment of exposures for the most  sensitive
people.  EPA's revised exposure analysis  report and addendum,  "The NAAQS
Exposure Model (NEM) Applied to Carbon Monoxide," (Johnson and  Paul,  1983;
Paul and Johnson, 1985) contain estimates of  the  numbers and percentage of  urban
American adults  with cardiovascular disease that  would be exposed  to  various
ambient CO levels if alternative 8-hour CO standards were just  attained.
In addition, estimates have been made of  the  percentage of this population
that would exceed selected COHb levels each year.  These latter estimates
were derived by  applying the Coburn model, which  relates patterns  of  CO
exposure to resultant COHb levels, to the exposure  model outputs using a
typical set of physiological parameters for adult men and a separate  set  of
physiological  parameters for adult women.
     Both CO exposure estimates and COHb  level  estimates have been made
for four urban study areas.  Both types of estimates have also  been made
for the total  urban United States population, by  extrapolating  the four
urban study area estimates.
     A brief description of (1) the exposure  model  used to make the exposure
estimates,  (2) the model used to calculate COHb levels from patterns  of CO
exposure, and (3) the method of extrapolating these estimates to the  whole
urban U.S.  sensitive population are presented in  the following  paragraphs.
     Description of Exposure Model.  The exposure of an individual to an
air pollutant may be quantitatively expressed by  giving the duration  of the

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                                     31
exposure and the average concentration of the pollutant  in  the immediate
vicinity of the individual  during the exposure period.   The t:,ne periods
of exposure that are of interest for CO are one and  eight  hours.   The
exposure of a population to CO can be described by giving  the total
number of one hour exposures to concentrations at or above  given values
for a range of concentrations from zero to the highest  exposure concentrati  on
observed.  This is the cumulative distribution of one hour  exposures.  A
similar distribution can be given for eight hour exposures.  For either  one
or eight hour exposures the total number of possible exposures in one  year
is the product of the population and the total number of hours in one  year.
     Another measure of exposure is provided by counting the number  of
people who experience a given one or eight hour average  concentration  or
higher at least once during the year.  A third measure  is  the number of
people for whom a given one or eight hour average concentration is the
highest concentration experienced in a one year period.   The first two
measures are in the form of cumulative distributions.  The  third measure is
in the form of a density function.
     The exposure model is  used to estimate all  three exposure distributions
for a given geographical area, either for an existing situation or under
hypothetical conditions in  which the area is just in compliance with a
given NAAQS.  To estimate exposure when an area is just  in  compliance  with
a given NAAQS, the exposure model proportionally adjusts CO concentrations
observed at each of several selected monitors.  Air  quality indicators are
derived from the data base  of ambient CO concentrations  for each hour
throughout a given year.  The CO concentrations are  proportionally adjusted
so that the adjusted air quality indicator for the monitor  with the  highest
CO concentrations would be  just in compliance with the  given NAAQS.  Hence,

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                                     32
the concentrations at other monitors are adjusted to levels  that  are
generally lower.
     The exposure model  apportions the population of a given area among a
number of cohorts (up to 300 in this application).  Twelve age/occupation
categories are each subdivided into several  smaller subcategories.   A single
cohort represents all individuals of a given subcategory living in  the same
type of neighborhood.  Each hour of the calendar year a given cohort is
located in a particular neighborhood type and microenvironment and  engaged
in some level of exercise.  Assignment of individual cohorts to neighborhood
type, microenvironment,  and exercise level  for each hour is  made  by using
general data on human activity patterns and transportation data for the
area under study.  The manner in which this is done is discussed  in detail
elsewhere (Biller et al., 1981; Johnson and Paul, 1983).
     An important feature of the exposure model  is the way it partitions
concentrations, people,  place, and time into discrete groupings or segments.
Microenvironments are an important example of this feature (Duan, 1981).
The infinite number of possible places contained within a geographical
area where people are exposed to air pollutants is represented by a finite
number of types of environments where pollutant concentrations tend to be
relatively homogenous.  The microenvironments are defined such that an
individual is always assigned to one of five microenvironment types:
(1) work-school,  (2) home and other indoor, (3) inside transportation
vehicle, (4) roadside, and  (5) other outdoor.  Transformations are made of
base concentrations derived from the fixed monitoring system in order to
estimate concentrations to which people would actually be exposed in the
microenvironments.  Values for the multiplicative transformation factors

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                                     33
that would give the best exposure estimates  are uncertain.   The values  used
for these factors were estimated making use  of the available literature on
(1) indoor and inside-motor-vehicle air pollution and (2)  statistical
analyses of monitoring data (e.g.,  how ambient values change with  height
and distance from a monitor).   These estimates are made for conditions
under which the monitoring system is indicating compliance  with various
standards.  For example, the transformed value of the concentration  inside
a vehicle is higher than the base value derived from the monitoring  system
because studies have shown that in  general this is the case; the transformed
value in the other outdoor (away from roads)  microenvironment is lower, as
has also been found in exposure research.
     Obviously, the division of the day into  a set of twenty-four  one-hour
periods is an abstraction which only approximates actual  human activity.
For example, if a person is driving a vehicle ten minutes  and is indoors
fifty minutes between 2:00 p.m. and 3:00 p.m. the model  would have him
indoors the whole hour.  Thus,  the  assumptions made are reasonable modeling
assumptions, not a perfect depiction of reality.
     An air monitoring station  is associated  with each neighborhood  type to
estimate exposure concentrations for each  neighborhood type-microenvironment
combination.  The hourly average CO concentration observed  at the  monitor
each hour of the year is the concentration associated with  the neighborhood
type each hour of the year.  This concentration is further  transformed  to
take into account the microenvironment, additional contributions from indoor
sources, and the particular NAAQS specification.   The result is the  exposure
concentration that is associated with each neighborhood type-microenvironment
combination each hour of the year.

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                                     34

     By accounting for the whereabouts of each cohort each ho-;^ of the year
in terms of the neighborhood type-microenvironment and making appropriate
use of air monitoring data it is possible to follow the hour by hour exposure
of each cohort throughout the year.   The model performs the needed
transformations of the concentration for each NAAQS designation and calculates
the three exposure distributions described earlier (total  exposures, people
exposed, peak exposures) for one hour exposures and for running eight hour
exposures over the calendar year.
     Since the model accounts for the hour by hour exposure of each
cohort, it is possible to compute the COHb level  at the end of each hour
for each cohort by applying the Coburn model (Coburn, 1965) to the exposure
model outputs.  The Coburn model relates CO exposure to COHb levels, given
appropriate physiological parameters for each cohort of the sensitive
population.  Physiological parameters are estimated for each sex and for the
age/occupation category of each cohort on the basis of literature data.
     Extrapolation to U.S. Urban Population.  The exposure model described
in the preceding paragraphs is directly applicable to a particular urbanized
area.  To apply it to the total urban population area of the U.S. would
require that the model be run for each urbanized area in the U.S. and the
exposures in each applicable pollutant concentration range be added together.
Since such a procedure would have required a major effort, an estimate of
the sensitive urban adult population exposures to CO and resulting COHb
levels was made by extrapolation.  The extrapolation was based on exposures
estimated by application of the model to four urbanized areas:  Chicago,
Los Angeles, Philadelphia, and St. Louis.  The extrapolation procedure
was as follows:  Each urbanized area within the U.S. with population greater
than 200,000 was associated with one of the above mentioned four urbanized

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                                     35

areas.  The association was made on the basis of proximity,  average wind
speed, peak CO concentrations,  observed climate, and general  character of
the area.  By summing the populations of each of the areas associated with
a given base area, including the population of the base area,  it was possible
to estimate the sensitive urban population associated with each of the four
base areas.
     To apply the population exposure estimates associated with each of the
four base areas to the nation,  it was first necessary to normalize the CO
exposure and COHb distributions obtained for the sensitive group in each
base area by converting the distributions to a per person basis.  These
distributions were each multiplied by their respective associated, sensitive,
U.S.-wide, urban population values and summed over the four cities to obtain
the extrapolated distributions.
     Results.  Selected results are presented in Tables 4 and  5.  Estimates
of the number of sensitive people in the urban U.S. whose COHb levels
would exceed various selected concentrations upon attainment  of four alterna-
tive NAAQS are presented in Table 4.  The four situations assume that the
alternative standards are just  met in each urban area of the  U.S.  It is
anticipated that air quality in a number of urban areas will  be superior
to that required to meet the standards given in the tables due to nation-
wide control programs such as the FMVCP.
     Table 4 provides estimates for 1987 of the percentage of  the adult
population living in urban areas who would exceed various COHb levels upon
attainment of three alternative 8-hour standards.  For example, less than 0.01
percent of the adult population in urban areas is estimated to exceed 2.1
percent COHb due to CO exposures associated with attainment  of the current
(deterministic) 9 ppm standard, and approximately 20 percent  of the adult

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                                           36
                Table 4.   Cumulative  Percentage  of  Cardiovascular Adult
           Population in  Urban  Areas  Whose  COHb  Levels Would  Exceed  Specified
            COHb Values Upon  Attainment  of  Alternative 8-Hour Standards3''3*0
                       9 ppm
                       I Observed
                       Exceedance
8-Hour Standards

 9 ppm
 1 Expected
 Exceedance
12 ppm
I Expected
Exceedance
15 ppm
1 Expected
Exceedance
    COHb Level
Exceeded (Percent)
3.0
2.9
2.7
2.5
2.3 0.01
2.1 <.01 0.1
.01
.02
0.1
0.8
4.1
8.6
1.1
2.5
5.9
9.7
14
20
Projected cardiovascular disease population  in  all  urbanized  areas  in  the
 United States for 1987 is 5,240,000 adults.

DThese exposure estimates are based on air quality  distributions  which
 have been adjusted to just attain the given  standards.

GThese exposure estimates are based on best judgments  of microenvironment
 transformation factors.  Projections for one urban area based on lower
 and upper estimates of the microenvironment  transformation  factors  are
 provided in the Exposure Analysis report (Johnson  and Paul,  1983).

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                                          37
           Table 5.   Estimates  of  Number of Occurrences Among Cardiovascular
               Adults in  Urban  U.S.  of Carboxyhemoglobin Levels Exceeding
        Selected Concentrations Upon Attainment of Alternative 8-hour Standards9
                                    8-Hour Standards

COHb Level
Exceeded (Percent)
3.0
2.7
2.5
2.3
2.1
9 ppm 9 ppm
1 Observed 1 Expected
Exceedance Exceedance

-
-
-
570
12,000
12 ppm
1 Expected
Exceedance

570
14,800
76,700
473,000
1,580,000
15 ppm
1 Expected
Exceedance

106,000
810,000
1,880,000
4,100,000
8,580,000
alt is estimated  that  the  total  number  of occurrences for the sensitive population
 in urban areas  in  1987  will  be  45,900,000,000  (approximately 5,240,000 sensitive
 people times  8,760 8-hour periods  per  year)

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                                     38






population is estimated to exceed 2.1  percent COHb upon  attainment  of a  15



ppm standard with 1  expected exceedance  allowed per year.   It  should  be  noted



that the estimates given in Table 4 are  based on air quality  distributions



which have been adjusted to just attain  the given standards.



     The urban population of the United  States consists  of people  living in



urbanized areas of the country.   Urbanized areas consist of all  cities of



50,000 population or more and their contiguous incorporated places.



It is estimated that this population will  be 142 million in 1987 (based



on a 1% annual growth rate).  It is further estimated that approximately



110 million of these individuals will  be adults (over age 18).  Approximately



5.8% of the adult male population and approximately 4.2% of the  adult



female population have angina or other coronary heart disease (DREW,  1975).



It is estimated that approximately 52% of the adult population will  be



female.  Consequently, it is estimated that the size of  the most sensitive



population residing in urban areas will  be approximately 5.2 iTiillion  in



1987.



     Estimates of the percentage of the urban U.S. sensitive population



whose COHb levels would exceed various selected concentrations are presented



in Table 4.  For example, it is estimated that the percentage of the sensitive



population that would experience a COHb concentration exceeding  2.1% at



least once due to exposure to CO if the 9 ppm, 1 observed exceedance standard



were just met throughout the urban United States in 1987 is less than



0.01%.



     The estimated number of COHb concentration occurrences in 1987 exceeding



various COHb levels is presented in Table 5.  The number of occurrences



differs from the number of people in that if the same person exceeds a

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                                     39





given COHb level  N times it counts as N occurrences.   One occurrence occurs



every time a person's COHb level  exceeds the given concentration at the end



of an hour.  For example,  if a 9  ppm, 1 expected exceedance standard is



just attained, the number of occurrences where COHb levels exceed 2.1% is



estimated to be 12,000 while the  number of people exceeding 2.1% COHb is



approximately 5,200.  Thus, the number of occurrences  is  more than twice



the number of people due to multiple occurrences.



     Uncertainty.  Several factors make the accuracy  of the nationwide



exposure estimates uncertain.   They include:  (1) the  paucity of



information on several of the needed inputs (e.g., some of the microenvironment



multiplicative transformation factors) and (2) the fact that nationwide



estimates were extrapolated from  only four urbanized  areas.



     Ideally, the uncertainty in  each significant uncertain factor would



be addressed formally (probabilistically) within the  exposure model  so



that a formal (probabilistic)  representation of the uncertainty in each



exposure estimate would be part of the output of the  model.  In the future



the NAAQS Exposure Model (NEM) will be developed further  into a probabilistic



model (Biller et a!., 1981).  Due to limitations of time  and resources a



less extensive approach designed  to obtain a rough estimate of the degree



of uncertainty has been used in the present study.



     In this application of a NEM a limited analysis  has  been done of the



sensitivity of the exposure estimates to variations in some of the most



uncertain inputs.  Lower and upper estimates were made of the quantities



whose uncertainty had the largest impact on the estimates, namely, the



factors used to transform monitored CO concentrations  to  estimates of CO



concentrations to which people are actually exposed in the various micro-



environments.  NEM was applied to one city (Chicago)  for  one standard

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                                     40

(12 ppm,  1  Ex Ex)  using the lower and upper estimates.   The results  of this
application are presented in Tables 7-40 through  Table  7-44 o-  the more
detailed report of the CO exposure analysis (Johnson  and Paul,  1983).   It
is clear from the  large disparity between the lower and upper estimates
presented in these tables that the uncertainty about  the best values for
these transformation factors alone leads to significant uncertainty  about
the accuracy of the exposure estimates.
     Two of the physiological  parameters which determine COHb levels in
the blood resulting from given patterns of CO exposure  are another source
of uncertainty investigated via a limited sensitivity analysis.  The
results of a limited variation in the values assigned the Haldane constant
and the low exercise level ventilation rate are presented in Table 7-45
of the exposure report.  These variations have a  significant effect, but
not as large an effect as the variation in estimated  microenvironment  factors,
     Obviously, sensitivity analysis runs in which microenvironment
transformation factors and physiological parameters were varied together
would result in even more widely divergent estimates.  Also, other uncertain
factors and the uncertainty introduced in the nationwide extrapolation have
not been addressed in these limited analyses.  In sum,  the exposure  estimates
are as good as can be made given the state of the art,  but their accuracy
is quite uncertain.

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                                     41






V.  COST ANALYSIS



     A.  Introduction



     This chapter emphasizes the direct principal,  or real-resource,  costs



associated with controlling emission sources of carbon monoxide (CO)  air



pollution in order to attain alternative national  ambient air quality



standards.  These costs were estimated for 3 years—1987, 1990, and 1995.



Only the 1995 results are discussed here.   The costs are in constant  1984



dollars unless otherwise noted.   Cost estimates are derived from an EPA



report entitled Cost and Economic Assessment of Alternative National  Ambient



Air Quality Standards for Carbon Monoxide  (Revised) (EPA, 1985).



     The above report contains a number of detailed cost and economic



analyses that are not reproduced here.  These include an investigation of



the impacts of setting alternative CO standards on  specific population



income groups (all income categories), industrial  sectors,  local governments,



and small businesses.  Major findings from these specialized studies  are:



     1.  no particular segment of the population is forced  to pay a



         disproportionate amount of the total cost  of mobile source control.



         Therefore, there are no significant adverse income distribution



         impacts associated with any of the alternative CO  standards.



     2.  while "distressed cities" are definitely  affected  by various CO



         control programs, the probable overall impact on local government



         finances is considered  to be negligible.   The prime reason for



         this conclusion is that most of the direct costs of CO control



         programs are borne by motor vehicle owners and users,  not by local



         governments.  Inspection and maintenance  programs  are self-



         supporting, paid by for user fees; transportation  control measures



         are partly paid for by  the federal government under a U.S.

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                                     42
         Department  of  Transportation progran  intended to  reduce energy
         consumption associated  with  motor  vehicle  use.
     3.   small  businesses  are  not  affected  directly by CO  capital  and
         operating expenditures, because  no small business  as  defined  by  Small
         Business Administration criteria will  be required  to  install  air
         pollution controls  to attain the ambient CO standards  investigated.
     4.   financial capital  is  generally available for those few large
         industrial  sources  that need to  install CO pollution  control.
         Major  shifts in the firms' opportunity cost of  capital are  not
         anticipated.  For all but 2  or 3 firms in  the country, CO capital
         expenditures are  less than 5% of projected capital  expenditures.
         In no  case  are CO capital expenditures larger than 8% of  projected
         capital  expenditures.
     5.   for affected industries and  plants,  controls associated with  the
         alternative standards are judged to  be economically affordable.
         No significant product  output adjustments  are anticipated in
         response to product price changes, which should be quite  small  for
         all alternative standards (less  than 0.5%  in most cases).

The interested  reader is referred  to  EPA  (1985) for more information on  the
items discussed above.
     As  discussed in the above reference, the methodology  used to  estimate
regulatory impacts  associated with alternative CO standards is highly
sensitive to the value used to represent  air quality in  the base year  (the
so-called design value).  A small  change  in this value can substantially
alter non-attainment area projections and the amount of  control theoretically
needed in a particular location.  Similarly,  other  assumptions such  as the

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                                     43
form of the standard (i.e., statistical or discrete) growth rates, and base
year of the emissions inventory can affect predicted attainmen: and cost
projections.
     Cost projections also are affected by the nature and timing of the
control strategy program assumed for an area.  Numerical criteria were
developed based on the percent of emission reductions needed in an area to
determine what mix of CO strategies were assumed in that area.  These
strategies, such as inspection and maintenance programs and transportation
control measures, were applied and costed out to determine national CO
costs.  It should be recognized that the devised programs are hypothetical.
Actual control programs are developed by state and local air quality
management agencies in the state implementation planning process.  Actual
national costs of CO control programs will be the sum of many individual
state decisions, not the hypothetical program developed for this regulatory
impact analysis.
     For purposes of this regulatory analysis, no fuel  savings benefit is
claimed for factory installed automobile carbon monoxide control equipment.*
     B.  RACM Control Costs
     CO control equipment and strategies are divided into two major types.
     1.  reasonably available control measures (RACM).
     2.  best available control measures (BACM).
Reasonably available control measures and technologies  are the principal
mechanisms in state implementation plans which are developed to attain and
maintain a national ambient air quality standard.  For  this reason, RACM
control costs are the main focus of interest in this Regulatory Impact
*However, fuel economy savings are claimed for some of the control measures
that go beyond automotive hardware.  See below.

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                                     44
Analysis.  However, as will  be discussed in more detail  later,  some areas
may require more control,  or more stringently enforced control,  than RACM
to attain a particular standard.
     RACM control strategies include "normally operated"  inspection and
maintenance programs for automobiles (I&M), transportation control  measures
(TCM) oriented toward increasing  mass transit ridership and improving
traffic movement, and point  source-oriented technologies.  (See  EPA, 1979
and its backup material for  more  information on specific  RACM strategies
that were investigated.)  Total national annualized costs associated with
these RACM strategies for 1995 are depicted in Table 6.  All  estimates are
in constant 1984 dollars.   The geographic unit of interest for  the most
part is a Standard Metropolitan Statistical Area (SMSA) as defined by the
U.S. Census Bureau.
     Table 6 also includes an estimate of the number of SMSAs that cannot
attain the alternative standards  in 1995 with the use of RACM control strategies.
As can be seen, all SMSAs can attain the 12 and 15 ppm standards in 1995 but
that is not true for the other alternatives.
     Automobile and other mobile  source emissions controls are required by
Title II of the Clean Air Act (42 U.S.C. 7501, et_ se£.),  and are not affected
by alternative ambient air quality standards.  (Title II is also called the
federal motor  vehicle control program, or FMVCP.)  Thus,  for any particular
emission standard, FMVCP costs are identical in any single year for the
four ambient CO standards invest!gated--9 ppm, second-high 8-hour average
observed value (9/2; this is also called the one observed exceedance
standard, but  to avoid a wordy nomenclature, it is designated as the 9/2
standard); 9 ppm, one expected exceedance of the daily maximum standard
(9/1); 12 ppm, daily maximum one expected exceedance standard (12/1); and

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                                             45
                        Table 6.   Annualized 1995 RACM Control  Costs
                               for Four Alternative CO NAAQSa

                                        (1984 $106)
Control
Item

FMVCP

Additional  Mobileb
  I&M
  TCM

Stationary Sources0

Total RACM Costs

Residual Non-Attaining
  Areas
4,742
                                               Alternative NAAQS Standard
                                               (ppm/expected exceedances)
9 ppm
2nd-High
4,430
232
53
27
9/1
4,430
198
27
27
12/1
4,430
48
4
31
15/1
4,430
32
-2
16
4,682
4,513
4,476
Notes:aFor the "primary case;" see EPA 1985.   There are no fuel  savings (benefits)
        assumed for the FMVCP program.

        ^Additional mobile source controls include fuel  savings credits.

        cStationary sources controls include fuel  savings credits;  the modeling
        approach used cannot distinguish between "forms" of alternative
        standards,  which accounts for the same  number being used for the  two
        9 ppm standards.

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                                     46

15 ppm,  one expected exceedance of the daily  maximum standard  (15/1).   This

is shown in Table 6.  The FMVCP standard  assumed  throughout  tin's  report is

3.4 grams per mile.

     FMVCP costs are not directly  associated  with a  CO  ambient  air  quality

standard.  Incremental  costs  associated with  changing air  standards  are those

relating to different levels  of I£M,  TCM,  and stationary source programs

hypothetically needed in areas  which  require  more control  to attain  a  given

NAAQS than can be achieved through FMVCP  alone.*   Even  though  the FMVCP cost

is not directly attributable  to the CO ambient standards investigated,  its

cost is  shown in Table 6.  All  subsequent  discussions concerning  total  costs

to attain the CO ambient standard  include  that portion  of  the  FMVCP  program

associated with CO emission standards.

     Control costs associated with industrial stationary sources  of  CO emissions

are relatively minor.  For the  9 ppm  standards, both the 2nd-high and  one

expected exceedances, these costs  are estimated to be $27  million in 1995.

(This estimate includes fuel  savings  from the use of CO boilers or  incinerators

with primary and secondary heat recovery),  two heat-producing,  readily

available CO control techniques.)   For the 12 ppm, 1 exceedance standard,

control  costs increase to $31 million, reflecting less  fuel  savings  in those

industries with negative annualized costs  of  controlling CO.**  CO  control
*Likewise, costs of new source performance standards (NSPS)  should not be
attributed to the CO NAAQS since that program is required by another section
(111) of Title I of the Clean Air Act (42 U.S.C. 7409).   The NSPS program
is small for CO.  Only two process categories are affected by a CO NSPS:
catalytic cracker and submerged arc furnace.   Neither category incurs a
negative cost due to fuel  savings associated  with the CO NSPS (EPA,  1985).

**0f the seven industrial  categories that have plants theoretically  needing
CO controls to attain alternative ambient standards, four have negative
annualized costs due to fuel  savings potential.  The categories are  maleic
anhydride, carbon black, steel, and automobile manufacturing.  Industrial
categories incurring positive costs include gray iron,  primary aluminum,
and incineration.  It is estimated that, at most, only 29 plants in  the
country may be required to install air pollution controls to meet the
alternative CO NAAQS investigated.  See EPA (1985) for more information.

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                                     47
costs drop for stationary sources in 1995 for the 15/1 standard because
many fewer plants hypothetically have to install  controls in the first
place.
     The remainder of the costs shown in Table 6  refer to area-specific
mobile source programs designed to reduce CO emissions from in-use vehicles.
Two general types of programs are depicted:   inspection and maintenance
(I&M) programs focused on so-called light-duty vehicles (passenger automobiles
and small trucks) and transportation control measures (TCM).  In the
theoretical cost analysis, the type and timing of these programs varied
widely throughout the country, depending upon:
     1.  location of the urbanized area being analyzed.  California areas
         were treated differently than the rest of the country, because
         they have different base-year emission factors and different I&M
         effectiveness ratios.  The same is  true  for high altitude areas.
     2.  status of current I&M programs and  status of I&M legislation in
         the state containing the urbanized  area  being studied.  These
         considerations affected the hypothetical start date used in the
         cost analysis.
     3.  the number of vehicles failing an I&M program.  This is called the
         "stringency factor."
     4.  the particular mix of local and area TCM's used, and whether or
         not these were sufficient to attain the  CO standard without an I&M
         program.
     Because of these variables, it is difficult  to generalize and discuss
what sets of I&M/TCM programs were used in the cost analysis.  The interested
reader is referred to the Cost and Economic  Analysis (EPA,  1985) and its
backup report (Siddiqee, 1979) for more information.

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                                     48
     C.  Alternative Control  Strategies and Their Costs
     The cost data presented  in Table 6 are for a "primary case"  scenario
and RACM control  strategies.   As can be seen,  not all  areas can attain the
9/2nd-high and 9/1 ExEx alternative NAAQS in that case.  It is theoretically
possible to attain all  but the 9/2nd-high standard in  1995 by using additional
hypothetical control strategies or by making different analytic assumptions.
     Four alternative cases were investigated.  They are:
     1.  40% I&M Stringency.   This case differs from the primary  case only
in increasing the stringency  factor, or rejection rate of the I&M program
from a previous arbitrary maximum of 30% to a  new maximum of 40%.  (This
does not mean that all  SMSAs  used a 40% rejection rate.  Only those areas
that could not hypothetically attain with a 30% program and had more than
5% in residual overall  emissions reductions left to go, were assigned a 40%
stringent I&M program.)  Effectiveness of this technique varied by the length
of time an I&M program was assumed to be operating* and whether an area was
in California, in a high altitude area, or in  the rest of the country.  The
extra emissions reductions obtained via this increase in rejection rate
varied between 4% and 5%, depending upon the factors noted above (SRI
International, 1979).
     2.  100% I&M Effectiveness.  This case assumed that I&M would be 100%
as effective in reducing emissions from post-repaired vehicles in cold
weather areas as it is in warm weather areas.   The primary case assumed I&M
was 50% effective in areas with a November-January temperature of 20°F or
below, and 100% at said temperature of 70°F or above.   (Inbetween temperatures
*I&M programs were assumed to start in 1984, 1985, or 1986 depending upon
the legal status of I&M legislation in a state and local progress toward
implementing such a program,  see Siddiqee, et al. (1979).

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                                     49
were interpolated from a straight-line relationship between the two end
points.) Costs associated with this control strategy are negligible, as it
mostly involves changing operating procedures; a 10% increase in the inspection
fee was assumed to be associated with this strategy.  The strategy provided
extra emission reductions between 20% and 50% in the various SMSAs, depending
upon their November-January temperature value.
     3.  1 ppm CO Background.  The primary case assumes a CO ambient
background concentration of 0 ppm (i.e., no CO present).  This assumption
is open to question, and an analysis was undertaken using a 1 ppm CO background.
The net effect of doing this is to increase the amount of emissions reductions
that must be obtained from mobile sources.  This, of course, raises costs
and results in more residual non-attainment areas.
     4.  1984 Base Year.  The base year used in the primary case is 1982.
Since the air quality data come from the 1981-1983 time period,  and are
supposed to represent air quality as of January 1, 1984, a case  can be made
for using 1984 as the base year.  Doing so allows less time for  the FMVCP
program to operate,  resulting in fewer emission reductions from  motor
vehicles.  Thus,  additional  mobile source control measures are needed,
increasing costs  and the number of areas that cannot attain in 1995.
     Using the four cases results in the range of costs and residual non-
attainment areas  depicted in Table 7.   Also shown in the Table are the
incremental  costs -- and their range -- of going from one alternative NAAQS
to the next less  stringent standard.   Please remember that the costs and
areas estimates are based entirely upon hypothetical control  programs,  and
may not represent reality very well.

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                                   50
                 Table 7.  Range in  Armualized  1995  Control
                    Costs for Four Alternative  CO  NAAQS
                                (1984 $106)
                                       Alternative  NAAQS  Standard
                                       (ppm/expected  exceedances)

Case 1. 40% I&M Stringency
Additional Mobile
Stationary Sources
total Variable Costs
Residual Non-Attain. Areas
Case 2, 100% I&M Effectiveness
Additional Mobile
Stationary Sources
Total Variable Costs
Residual Non-Attain. Areas
Case 3. 1 ppm Background
Additional Mobile
Stationary Sources
Total Variable Costs
Residual Non-Attain. Areas
Case 4. 1984 Base Year
Additional Mobile
Stationary Sources
Total Variable Costs
Residual Non-Attain. Areas
9 ppm
2nd-High

311
27
$338
3

261
27
$288
1

297
27
$324
7

338
27
$365
10
9/1

219
27
$246
2

221
27
$248
0

239
27
$266
4

263
27
$290
6
12/1

53
31
$84
0

43
31
$74
0

43
31
$74
0

73
31
$104
0
15/1

33
16
$49
0

33
16
$49
0

28
16
$44
0

42
16
$58
0
Costs (x 106)
   Incremental Costs Range for Alternative NAAQS

9/2 to 9/1            9/1 to 12/1        12/1 to 15/1

 $40-$75               $174-$192           $30-$46

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                                     51

     D.  Transaction Costs (Secondary Costs)
     According to guidance on performing regulatory impact analyses, a
complete cost analysis of major governmental actions contains an evaluation
of certain secondary costs associated with that action.  These include
governmental regulatory costs, adjustment costs for unemployed resources,
and costs associated with adverse effects on market structure, innovation,
and productivity.  Most of these items were not specifically investigated
in the cost and economic assessment (EPA, 1985) underlying this Regulatory
Impact Analysis.  Consequently, what follows is a general qualitative
discussion of the secondary costs enumerated above.
     1.  Governmental Regulatory Costs
         Costs incurred by governments related to the CO NAAQS depend upon
the role each governmental agency plays in the federal-state system air
resource management established by the Clean Air Act.  As regards a NAAQS,
EPA provides scientific and technical  analyses in developing, reviewing,
and setting air standards.  It also provides technical support in developing
and maintaining computerized national  data systems that store ambient air
quality and emissions data.  Finally,  EPA provides technical guidance to
the states in operating and reporting ambient monitoring networks, developing
state implementation plans, and undertaking enforcement actions against certain
violators of the state's own rules and regulations.
     It is extremely difficult to separate out that part of the total costs
for these functions attributable to carbon monoxide, since it is only one
of seven NAAQS and numerous other pollutants that are more or less handled
simultaneously by EPA in performing the functions noted above.  However,
EPA's costs to review the CO NAAQS and promulgate a revised standard can be

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                                     52
estimated.  The items covered include:   (1)  scientific review of health
literature and development of the CO criteria document,  (2)  r-view of
existing ambient data to determine potential  problem areas,  (3)  development
of a set of control  strategies,  which are then costed out,  (4)  analysis of
the economic impacts associated  with these costs,  (5) analysis  of exposures
to alternative CO standards,  (6) development  of the regulatory  package for
proposal and promulgation, (7) analysis of public  comments,  and  (8) internal
review of the various regulatory documents.   EPA's estimated total  costs
for CO for these items are:
     1.  14 person years of staff time.
     2.  $1,160,000  of contract  funds.
     3.  $60,000 of  computer time.
This comes to a total of approximately  $2.5 million (in 1984 dollars).  It
is a one-time cost*  that occurred over  6 fiscal years.  This estimate does
not include any costs of maintaining CO air quality or emissions inventory
data.  It also does  not include any guidance activities costs.   The
problem of costing these activities is  difficult as data do  not  exist to
exactly apportion total costs of these  activities  to CO.  However, they are
estimated to be an order-of-magnitude lower than the cost incurred to review
and set the standard.
     States, and, if they so delegate,  local  governments, actually implement
Clean Air Act provisions directed toward attaining and maintaining NAAQS.
Their major implementing functions include operating air monitors and
reporting ambient air quality data (required under Sections  110 and 317 of
the Act), developing state implementation plans (required under Section
*Since section 109 of the Clean Air Act requies that all NAAQS be reviewed
every five years, it will be a repetitive one-time cost.

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                                     53
110), and enforcing these plans.   For the most part,  these are "abor-
intensive activities; hence, they are costly.  The Economic Inpact Assessment
of the lead NAAQS (EPA, 1978b) provides data that can be used to roughly
estimate the costs to state and local governments in  implementing the
promulgated CO NAAQS.  That report suggests that these annual costs would
be on the order of 50 person-years of effort plus $1.4 million in monitoring
equipment and other capital costs.  State/local control costs, then, would
be around $6.9 million (in 1984 dollars) annually.
     Total annual governmental CO control costs are derived simply by adding
the annualized one-time standard-setting costs with other miscellaneous
federal costs (assumed to be $0.4 million) and adding this sum to the $6.9
million state/local estimate.  Total  annual costs obtained in this manner
for a five-year review cycle are approximately $7.7 million (in 1984 dollars).
     2.  Adjustment Costs for Unemployed Resources
         Three types of costs occur if a regulatory action results in
unemployment of labor or underuse of  other productive resources.   These
are:  loss of value in the resources  required to produce lost output,
resource real location costs (such as  moving costs), and unemployment transfer
payments.  All three should be identified and costed  out in a Regulatory
Impact Analysis.
     EPA does not believe any significant unemployment impacts are associated
with the CO NAAQS.  While there is no direct data on  the point, there is
indirect evidence for the conclusion  contained in the economic analysis
done on affected industries theoretically needing to  install  CO pollution
control to meet alternative CO NAAQS.  This analysis  indicated that the
economic impacts of doing so were small (EPA, 1985).   Capital availability,

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                                     54



product price,  and import substitution  effects  were minor;  in  -aJdition,  no



plant closings  were predicted due to the installation  of CO controls.



     3.  Adverse Effects on Market Structure



         As discussed earlier,  the CO NAAQS has little impact  on  product



price, capital  availability, or import  substitution.   It also  has marginal



impact on increase in corporate debt or the debt/equity ratio  (EPA,  1985).



Thus, there will probably be little or  no impact on market  structure in  the



seven industrial categories affected by CO emission control needed to attain



alternative CO  NAAQS.

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                                    55
VI.  EVALUATING BENEFITS AND COSTS
     A.  Introduction
     Since it was felt that a credible attempt could not be made to estimate
the benefits of various CO ambient standards within project constraints,
and therefore a quantitative benefit-cost assessment could not be done,
analyses of the incremental costs to reduce potentially adverse exposures
to CO (hereafter referred to as ICAs) were performed instead.   Costs
associated with four alternative standards were analyzed along with changes
in the number of sensitive people with COHb levels exceeding 2.1% and 2.5%
and reductions in the total number of such exposures.
     While this information does not reveal which standard would be preferred
in an economic sense -- only the cost, and not the benefit, of reducing
adverse exposures to CO has been estimated — it does  provide  a partial
measure of the relative impacts of the alternative CO  standards.
     B.  Exposure and Cost Analyses
     The incremental cost analysis relies on the results of the cost model
discussed in Chapter V and the exposure analysis discussed in  Chapter IV.
The cost model uses a constrained least cost algorithm to determine the
approximate order of imposition of control measures to achieve specific
standards.  This algorithm is considered reasonable for aggregated nationwide
estimates, but it is not necessarily valid for specific nonattainment
areas.  Future control technologies are difficult to predict and, hence,
the associated control costs cannot be estimated with  precision.  Also,
human behavior patterns may change in ways that alter  costs.  For example,
changes in the real cost of energy in the 1970's caused significant
changes in the purchasing and driving habits of individuals in the U.S.

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                                    56

Consequently,  predictions based on projected human behavior patterns
should be viewed with caution.
     The human exposure estimates are based on the exposure model  described
in Chapter IV.  The exposure analysis was conducted in detail  for  four sample
cities.  To obtain nationwide estimates,  the populations  of other  cities
were assigned to one of the four cities based on geographic region,  climate,
peak CO concentrations, etc.  Exposure estimates were extrapolated to the
population assigned to each of  the four cities.   The sum  of these  values,
adjusted for population growth  and for other urban sites  not accounted for
in the city assignment, represent the nationwide estimates in  1987.*  There
is considerable uncertainty in  these nationwide exposure  estimates because
(1) there is limited data available on a number of inputs required for the
exposure analysis and (2) the estimates are extrapolated  from  only four
cities.
     In addition, the results of the cost and exposure analyses used in
the incremental cost analysis are not derived in a consistent  manner
because they were originally conducted for different purposes  with
different underlying assumptions.  These inconsistencies  may bias  the
results when the analyses are used together.
     The first such concern is  with the estimated ambient CO concentrations
that are the base case levels from which projected changes are calculated.
Although the estimated concentrations chosen are appropriate for the
purposes and requirements of each individual analysis, they are different.
     The estimated concentrations for the cost analysis were derived
from a review of ambient air quality data (EPA's SAROAD data base).  Because
*The exposure analysis 1987 results were extrapolated to 1995 by applying
population growth rates.

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                                     57

the allowable exceedances are expected to be calculated as avenges over
three years, the fourth highest occurrence in the three year aata set for
each urbanized area was selected as the  base case ambient CO concentrations
for the one expected exceedances form of the standard.  The second-highest
daily maximum 8-hour average in a year was used for the 2nd-high (deterministic)
form of the standard.
     The exposure analysis used air quality indicators derived from a
data base of ambient CO concentrations from monitoring stations for each
hour throughout a given year.  The year  chosen depended upon the complete-
ness of data.  The stations were chosen  as most representative of the
different types of urban neighborhoods used in the exposure model.  To
estimate exposures when an area was just in compliance with a given
alternative NAAQS, the exposure model proportionally adjusted the CO
concentrations observed at each of the selected monitors so that the
adjusted air quality indicator for the monitor with the highest CO concen-
trations would be just in compliance with the given NAAQS.  The direction
of bias resulting from the use of these different approaches is unclear.
     A second area of concern is the different use of assumptions regarding
attainment of the standards.  The exposure analysis assumes that the highest
monitor in each urban area will just attain the standard.  The monitor
station with the highest baseline reading is brought into compliance
and the others in the area are adjusted in proportion to the change at the
worst station.  The cost analysis, however, is based on projections of
baseline emissions given the nationwide FMVCP.  The expected reductions in
tailpipe emissions will result in some areas having ambient CO concentrations
below those required by the standard.  When full attainment cannot be reached,
cost estimates will be low relative to the exposure estimates since the

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                                    58
exposure analysis assumes attainment.   Consequently,  the ICA results  will
be biased downward.
     C.  Incremental  Cost Analysis
     The results of the incremental  cost analysis (ICA)  are presented in
Table 8 for increasing levels of control.   Cost and exposure information
from which the ICA results were derived are shown in  Table 9.  The ICA
was performed for 1995 instead of 1987 because fewer  residual non-attainment
areas were obtained and comparisons  should be made at full attainment.
However, since full attainment was not obtained in 1995, there are inconsistencies
between the exposure and cost analyses.  In those areas  that do attain,
increased stringency in the standard will  result in reduced exposures to
potentially harmful COHb levels over what would otherwise occur.
     Based on its reassessment of scientific evidence discussed previously
in this RIA, EPA concludes that adverse health effects clearly occur, even
in healthy individuals, at COHb levels in the range of 5 to 20 percent.
EPA also remains concerned that adverse health effects may be experienced
by large numbers of sensitive individuals with COHb levels in the range 3.0
to 5.0 percent.  On this point, the CASAC similarly concluded after reviewing
the scientific literature (not including the Aronow studies), "that the
critical effects level for NAAQS-setting purposes is approximately 3 percent
COHb (no including a margin of safety)" (Lippmann, 1984).  In addition to
concurring with EPA that cardiovascular effects are likely to occur at
approximately 3 percent COHb, the CASAC also indicated that several studies
(Drinkwater et al., 1974; Raven et al., 1974; and Davies  and Smith, 1980)
reporting physiological effects in the range 2.3-2.8 percent COHb lend
support to concerns about low level CO exposures and should be considered

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                                           59
                   Table 8.   Incremental  Costs  Per  Exposure Reduction
                                          1995
                             	Incremental Cost  Per  Exposure Reduction	

                                                           Reductions in the Number
                             Reductions  in  the  Number      of  Occurrences Among
                             of  Cardiovasular Adults       Cardiovascular Adults
                             Exceeding 2.1% COHb           Exceeding 2.1% COHb
                              (S/Person Reduction)          ($/Exposure Reduction)


15/1 to 12/1                          47-72                          4-6

12/1 to 9/1                           372-407                       106-116

9/1 to 9/2                          7,980-14,500                   3,140-5,850
     indicated standards are in  expected  exceedances  except  for  9/2 which  is based
 on second high observations.

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                                     61
in determining whether a given standard provides an adequate margin of
safety.  As discussed previously,  the Administrator has excluded Dr. Aronow's
studies from consideration in his  decision on the CO primary standards.
Given the uncertainties regarding  the lowest levels of COHb at which adverse
health effects may occur, the results of the ICA, which used a 2.1% COHb
cutpoint, should be viewed with caution.
     D.  Benefits Not Valued
     Although the ambient CO standard focuses upon protecting the sensitive
population from adverse health effects, benefits for other populations also
may result from required pollution reductions.  These benefits are not
reflected in the ICA and bias the  results in an upward manner.  According
to evidence evaluated in the Criteria Document (EPA, 1979b) and Addendum
(EPA, 1984b), the general population may begin to experience central nervous
system effects such as impaired vigilance, visual function, manual  dexterity
and ability to learn at COHb levels of 4-5%.  This implies an increase in
risks of accidents and reduced productivity or activity.  Economic values
on these vigilance and other unquantified effects (impaired fetal development,
health effects for elderly individuals, etc.) are unknown, but they could
add to the total benefits of lowered CO concentrations.
     Other unquantified benefits accruing to the general population include
certain option and existence values.  The former result from uncertainties
regarding the future demand for cleaner air.  An example of such uncertainties
would be not knowing whether an individual becomes part of the sensitive
population.  Existence values result from altruistic motivations by individuals
to improve air quality even though they may never directly experience the
change.  An example might be an individual's willingness to pay to improve
the air quality in the nation's major cities even though that person never
visits major cities.

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                                   62





     E.  Findings and Conclusions



     The chapter focused on estimation  of the incremental  costs associated



with alternative CO NAAQS.  The degree  of uncertainty in making such



estimates was identified by indicating  limitations in the methodologies



employed.  Despite this uncertainty,  deterministic estimates  of incremental



costs were developed for illustrative purposes.



     ICA, in general, embodies the same methodology as cost effectiveness



analysis (CEA).  The usefulness of such tools can allow one to identify  the



least cost way to achieve a given goal.  In addition, the methods can



eliminate inefficient ways of achieving given goals.  The techniques  used



above can in no way help identify the optimal goal in an economic efficiency



sense.  Hence, the ICA can only be used to identify the opportunity costs



of implementing more stringent standards and cannot identify  the socially



desired CO NAAQS from an economic point of view.

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                                    63

VII.  SUMMARY OF THE RATIONALE FOR SELECTING THE FINAL CARBON MCrlOXIDE STANDARDS
       This chapter summarizes the Agency's rationale for selection of the
final CO ambient standards.  A more complete discussion of the rationale
is contained in the Federal Register preamble for the final  rule.
     The Staff Reassessment (EPA, 1984a) and 1984 CASAC findings and
recommendations (Lippmann, 1984) set forth a framework for considering
whether revision of the primary CO standards is appropriate at this time.
The discussion that follows relies heavily on that framework and on
applicable supporting material in the Criteria Document (EPA, 1979b),
Addendum (EPA, 1984b), Staff Paper (EPA, 1979a), and earlier CASAC closure
letters (Hovey, 1979; Friedlander, 1982).
     Based on its assessment of scientific evidence discussed in the
Criteria Document and Addendum, EPA concludes that adverse health effects
clearly occur, even in healthy individuals, at COHb levels in the range
of 5 to 20 percent.  EPA also remains concerned that adverse health
effects may be experienced by large numbers of sensitive individuals with
COHb levels in the range 3.0 to 5.0 percent.  On this point, the CASAC
similarly concluded after reviewing the scientific literature (not including
the Aronow studies), "that the critical effects level for NAAQS-setting
purposes is approximately 3 percent COHb (not including a margin of
safety)" (Lippmann, 1984).
     In addition to concurring with EPA that cardiovascular effects are
likely to occur at approximately 3 percent COHb (Anderson et al., 1973), the
CASAC also indicated that several studies (Drinkwater et al., 1974; Raven
et al., 1974; and Davies and Smith, 1980) reporting physiological effects in

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                                    64
the range 2.3-2.8 percent COHb lend support  to concerns  about  1 :-,v  level  CO
exposures and should be considered  in  determining  whether  a  :-yen  standard
provides an adequate margin of safety.   The  Administrator  has  excluded
Dr. Aronow's studies from consideration in his decision  on the CO  primary
standards.
     Based on the exposure analysis results  summarized  previously  in
Chapter IV (Tables 4 and 5),  8-hour single exceedance CO standards in the
range 9 to 12 ppm are estimated to  keep more than  99  percent  of the
non-smoking cardiovascular population  below  3.0 percent  COHb.   Different
standards within this range would,  of  course,  provide different levels  of
protection.  For example, the current  9 ppm, 8-hour average  standard  is
estimated to keep more than 99.9 percent of  the adult cardiovascular
population below 2.1 percent COHb.   A  12 ppm,  8-hour  standard  is estimated
to keep more than 99 percent of the population below  2.5 percent COHb.
The 2.5 percent COHb level is in the range where physiological effects  of
concern to EPA and CASAC have been  reported.
     In considering whether revision of the  existing  primary  CO standards  is
appropriate at this time, the Administrator  has considered uncertainties
regarding the lowest levels of COHb at which adverse  health  effects may
occur, as well as uncertainties about  the levels of COHb likely to result
from CO exposure at the levels associated with attainment  of  alternative
standards.  More specifically, the  Administrator considered  the following
factors and sources of uncertainty, discussed in the Staff Reassessment (EPA,
1984a), in his decision:

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                                     65
     1.  Human susceptibility to health effects and the levels  a;  which
these effects occur vary considerably among individuals,  and £?A cannot
be certain that experimental  evidence has accounted for the full range of
susceptibility.  In addition, for ethical reasons,  clinical investigators
have generally excluded from their studies individuals who may  be  especially
sensitive to CO exposure, such as those with a history of myocardial  infarction
or multiple disease states (e.g., both angina and anemia).  Another factor is
that, once the Aronow et al. studies are excluded there are no  human  exposure
studies investigating effects on individuals with angina  at COHb levels below
the 2.9 percent level reported by Anderson et al. (1973).
     2.  There is some animal study evidence indicating that there may
be detrimental effects on fetal  development (e.g.,  reduced birth weight,
increased newborn mortality,  and behavioral effects) associated with  CO
exposure.  Similar types of effects have also been  found  in studies examining
effects of maternal smoking on human fetuses.  However, it is not  possible
at this time to sort out the confounding influence  of other components of
tobacco smoke in causing the effects observed in the human studies.  While
human exposure-response relationships for fetal effects remain  to  be
determined, these findings denote a need for caution in evaluating the
margin of safety provided by alternative CO standards.
     3.  Other groups that may be affected by ambient CO  exposures but for
which there is little or no experimental evidence include:  anemic individuals
(over 3 million individuals), persons with chronic  respiratory  diseases
(about 14 million individuals),  elderly individuals (over 24.7  million
individuals over 65 years old),  visitors to high altitude locations,  and
individuals on certain medications.  The levels of  COHb that might produce
adverse effects for each of these groups is uncertain.  However, elevated

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                                       66
COHb levels in even a small  percentage of  this very large potentially
sensitive population would translate to a  significant  number of  individuals.
The large size of the potentially sensitive population,  then,  argues  for
standards providing a greater margin of safety.
     4.  There are several uncertainties regarding the uptake  of CO,  including
those related to the accuracy of the Coburn equation,  in assessing  variations
in the population due to differing physiological  parameters  and  exposure to
varying air quality patterns.
     5.  Several factors contribute to uncertainties about the exposure
estimates of the expected number of individuals  achieving various COHb
levels upon attainment of alternative standards.   These factors  include:
the paucity of information on several of the needed inputs,  the  fact  that
nationwide estimates were extrapolated from only  four  urbanized  areas, and
the use of two representative sets (one for men  and one for women)  of  physio-
logical parameters (e.g., blood volume) rather than distributions of
physiological parameters in applying the Coburn  model  to derive  COHb  estimates
in the exposure analysis.  As indicated in the Staff Reassessment (pp. 18-21),
some individuals with physiological parameters that maximize uptake of COHb,
if exposed to certain patterns of air quality attaining a 12 ppm, 8-hour
standard, would likely exceed 3.0 percent  COHb.   Consequently, the Agency
is concerned that a 12 ppm, 8-hour standard may  not provide an adequate
margin of safety.  EPA is continuing its CO exposure research  efforts,
which should lead to future improvements in its  exposure analysis and a
better capability to assess the accuracy of the exposure estimates (Johnson,
1984; Hartwell et al., 1984).
     6.  There is uncertainty regarding adverse health effects that may
result from  very short duration, high-level CO exposures  (the bolus effect).

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                                    67
As discussed in the proposal  notice (45 FR 55077),  existing air quality
data indicate that attainment of a 9 ppm,  8-hour averaging time standard
should limit the magnitude of short-term peak concentrations.
     7.  There is some concern about possible interactions between CO and
other pollutants, although there is little experimental  evidence to document
such interactions at this time.
     8.  Given the unsettled  nature of the scientific information bearing on
the level of the standard, EPA believes that there  is much to  be said for a
policy that would maintain the status quo  until  the data become more
adequate.  That is particularly so given the absence of  the information
indicating with some assurance that the present  standard is set at an
incorrect level.  For the reasons stated in the  preamble,  the  available
information falls short of supporting such a finding.
     While the CASAC concurred that the ranges of 9 to 12  ppm  for the 8-hour
and 25 to 35 ppm for the 1-hour primary standards recommended  in the Staff
Reassessment are scientifically defensible, they recommended that the
Administrator consider choosing standards  that maintain  approximately the
same level of protection as that afforded  by the current standards (Lippman,
1984).  In making its recommendation the CASAC cited the uncertainties associated
with the scientific data base, margin of safety  concerns,  and  its belief
"... that where the scientific data, as in this  case are subject to large
uncertainties, it is desirable for the Administrator to  consider a greater
margin of safety than the numerical values of COHb  generated by the Coburn
equation might otherwise suggest" (Lippmann 1984).
     Several ongoing human health effect studies are being conducted by EPA
and other groups to investigate the effect of CO on aggravation of angina.
Subjects in these studies are being exposed to CO levels that  result in

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                                    68
blood COHb levels in the range 2.0 to 4.0 percent.   One study is being
conducted by EPA, several  are being conducted at the request of EPA by
the Health Effects Institute (HEI), and another study is being sponsored
by the California Air Resources Board (CARB).  The  Health Effects Institute
is an independent organization which sponsors research on automotive pollutants
and is jointly funded by EPA and automobile manufacturers.  The peer-reviewed
results of the these studies are expected over the  next 2 to 3 years.   EPA
will be initiating development of a new criteria document for CO in Fiscal
Year 1986.  Thus, the Agency should be in a good position to expeditiously
assess the results from the above health studies, as well as other scientific
evidence published since completion of the Addendum.
     Given the uncertainty in the current data base and the fact that  new
studies are in progress, the Administrator considered deferring a final
decision on the CO standards until these new studies have been completed.
While this might allow the Administrator to base the decision on better
information, the Clean Air Act appears to require periodic decisions on
NAAQS notwithstanding any uncertainty in the data base.  Deferring this
decision would imply that the Agency has inadequate evidence to select an
appropriate course of action at this time.  However, both EPA and the CASAC
have concluded that, even without the Aronow studies, a sufficient scientific
data base exists upon which to base a decision.  Given these findings, and
the concern that a deferral of the decision could be perceived as a signal
to relax or delay ongoing control programs, the Administrator has concluded
that final action now on the CO standards is warranted and justified.
     In reaching a final decision, the Administrator has focused primarily
on the level of  protection the CO standards should provide.  As previously
noted, after reassessing the available scientific data and EPA staff
recommendations, the CASAC has recommended that the CO standards provide

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                                    69
protection approximately equal  to the current standards.   Based on EPA's
assessment of the scientific data, the Administrator concurs w:ch this
recommendation.  Retention of the current standards would, of course, satisfy
this objective.
     As discussed above, the standards proposed in August 1980 would also
provide approximately the same level  of protection as that afforded by the
current standards.  In addition,  these standards would provide some technical
changes that the Agency believes  would be advantageous.  However, the
proposed changes would require some modification in the way attainment of
the standards is determined.  Given the uncertainties in  the existing data
base and the possibility that the results of the new studies in progress might
warrant further revisions within  a few years, the Administrator has concluded
that it would not be prudent to promulgate the proposed revisions at this
time, particularly when they would alter the manner in which attainment is
determined.
     In short, the Administrator has  concluded that it would not be prudent
to defer a decision on the CO standards pending the results of the new research
mentioned above, that the standards should provide approximately the same
level of protection as that afforded  by the current standards, and that
disruption of ongoing control programs should be minimized.  Given these
considerations, the Administrator has concluded that the  best course of
action is not to revise the CO primary standards at this  time.  Together
with the Administrator's decision to  rescind the secondary standards
(discussed below), this decision  completes the current review of the NAAQS
for CO under section 109(d).  The ongoing studies conducted by the Agency, by
the HEI, and by the CARB (all discussed above) will, of course, be considered
in the next 5-year review of the  CO criteria and standards.  Upon completion
of this series of studies, the Agency plans to review the results with the

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                                    70

CASAC and assess the need for any revisions in the primary stan-u^ds.   If
revisions in the standards seem appropriate, the Agency will  act expeditiously
to revise the standards.

WELFARE EFFECTS AND THE SECONDARY STANDARDS
     Carbon monoxide is a normal  constituent of the plant environment.
Plants can both metabolize and produce CO.   This may explain  the fact  that
relatively high levels of CO are  necessary  before damage occurs to vegetation.
The lowest level for which significant effects on vegetation  have been  reported
is 100 ppm for 3 to 35 days.  The effect observed in this study was an  inhibition
of nitrogen fixation in legumes.   Since CO  concentrations of  this magnitude
are rarely if ever observed in the ambient  air, it is very unlikely that any
damage to vegetation will occur from CO air pollution.   No other effects on
welfare have been associated with CO exposures at or near ambient levels.
Because no standards appear to be requisite to protect  the public welfare
from any known or anticipated adverse effects from ambient CO exposures, EPA
is rescinding the existing secondary standards.

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                                     71




VIII.  STATUTORY AUTHORITY



       The statutory authority for the retention of the CO pri.iary NAAQS



and revocation of the CO secondary NAAQS is contained in the Clean Air



Act.  Two sections of the Act govern the establishment and revision of



NAAQS.  Section 108 (42 U.S.C. 7408) requires EPA to document the most



recent scientific information (criteria) on the health and welfare effects



of certain air pollutants.  Section 109 provides authority for reviewing



the criteria and, as appropriate,  for establishing and revising primary



(health based) and secondary (welfare based) NAAQS.  A more complete



discussion of the legal authority  for this final regulation is contained



in the Federal Register preamble and in Chapter II of this RIA.

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                                 72



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                                     73




Biller,  W.F.;  Feagans,  T.B.;  Johnson,  T.R.;  Duggan,  G.M.;  Paul,  <.A.;



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                                     74
DHEW (1977).  Prevalence of Chronic Conditions  of the Genitourinary,  Nervous,
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Drinkwater, B.L.,  P.B. Raven,  S.M. Horvath,  J.A.  Gliner,  R.O.  Ruhling,
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EPA (1979a).  Preliminary Assessment of Adverse  Health Effects  from Carbon
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                                      75



EPA (1984a).   Review of the NAAQS  for Carbon  Monoxide:   Reassessment  of



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EPA (1985).  Cost and Economic Assessment  of  Alternative National Ambient



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     Planning and Standards,  Research Triangle Park,  N.C.



Ekblom, B., and R. Huot (1972).  Response  to  submaximal and maximal  exercise



     at different levels of carboxyhemoglobin.  Acta  Physio!.  Scand.



     86_: 474-482.



Fodor, G.G.,  and G. Winneke (1972).  Effect of low CO concentrations  on



     resistance to monotony and on psychomotor capacity.  Staub Reinhalt.



     Luft 32_:45-54.



Friedlander,  S.K. (1982).  Letter to Ann M. Gorsuch,  EPA Administrator.



     August 31.



Goldsmith, J.R., and S.A. Landau  (1968).  Carbon monoxide and  human health.



     Science 162:1352-1359.



Goldstein, I.  (1982).  Letter to the editor:   Seasonal  relationship of sudden



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     116:189-191.



Groll-Knapp,  E., H. Wagner, H. Hauck, and M.  Haider (1972).  Effects of  low



     carbon monoxide concentrations on vigilance and computer-analyzed



     brain potentials.  Staub Reinhalt. Luft 32:64-68.

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                                      76
Haider,  M.,  E. Groll-Knapp,  H.  Hoeller,  M.  Neuberger,  and  H.  S:idl  (1976).



     Effects of moderate CO  dose on the  central  nervous  syste;n--



     electrophysiological  and behaviour  data  and clinical  relevance.   In:



     Research Conference,  American Medical  Association,  San Francisco,



     California, December 5-6,  1974.   A.J.  Finkel  and  W.C.  Duel,  eds.,



     Publishing Sciences Group,  Inc.,  Acton,  MA.  pp.  217-232.



Harberger,  A.C. (1971).   Three  Basic Postulates  for Applied Welfare



     Economics, in Benefit Cost  Analysis 1971.   Aldine,  Chicago  and



     New York.



Hartwell, T. et al.  (1984).   Study of Carbon  Monoxide  Exposure of Residents



     of Washington,  D.C. and Denver,  Colorado.   Prepared by Research  Triangle



     Institute for U.S.  EPA, Environmental  Monitoring  Systems Laboratory,



     Research Triangle Park, N.C.



Hoppenbrouwers, T.,  M. Calub, K. Arakawa,  and J.E.  Hodgman  (1981).  Seasonal



     relationship of sudden  infant death syndrome  and  environmental



     pollutants.  Am. J. Epid.   113:623-635.



Horvath, S.M., T.E.  Dahms, and  J.F. O'Hanlon  (1971).   Carbon  monoxide and



     human vigilance:  A deleterious effect of present urban  concentrations.



     Arch. Environ.  Health 23;.343-347.



Horvath, S.M., P.B.  Raven, T.E.  Dahms, and  D.J.  Gray  (1975).  Maximal  aerobic



     capacity at different levels  of carboxyhemoglobin.   J. Appl. Physiol.



     3^:300-303.



Hovey,  H.H., Jr. (1979).  Memorandum to  EPA Administrator  from CASAC  CO



     Subcommittee.  October  9.

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                                     77





Johnson, T. and R.A. Paul  (1983).   The NAAQS  Exposure Model  (NEM;  Applied  to



     Carbon Monoxide.  Prepared by PEOCo Environmental,  Inc.  "or Office  of



     Air Quality Planning  and Standards, U.S. EPA,  Durham,  N.C.



     EPA-450/5-83-003.



Johnson, T.A. (1984).  Study of Personal Exposure to  Carbon  Monoxide  in  Denver,



     Colorado.  Prepared by PEI, Inc. for U.S. EPA,  Environmental  Monitoring



     Systems Laboratory, Research  Triangle Park,  N.C. EPA-600/54-84-014.



Klein, J.P., H.V. Forster,  R.D. Stewart, and  A.  Wu  (1980).   Hemoglobin



     affinity for oxygen during short-term exhaustive exercise.   J. Appl.



     Physiol. 48:236-242.



Kurt, T.L., R.P. Mogielnicki, and  J.E. Chandler (1978).   Association  of  the



     frequency of acute cardiorespiratory complaints  with ambient levels



     of carbon monoxide.  Chest 74:10-14.



Kurt, T.L., R.P. Mogielnicki, J.E. Chandler,  and K.  Hirst (1979).  Ambient



     carbon monoxide levels and acute cardiorespiratory  complaints:   an



     exploratory study.  Am. J. Public Health 69:360-363.



Lead Industries Association, Inc.  v. EPA, 1980.  647  F.2d 1130 (D.C.  Cir.



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Lippmann, M.  (1984). CASAC Findings and Recommendations  on the Scientific



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     EPA Administrator].  May 17.   Available  from:   U.S. EPA,  Central  Docket



     Section, Washington,  D.C.; docket no. OAQPS 79-7, IV-K-25.



Longo, L.D. (1977).  The biological effect of carbon  monoxide on the  pregnant



     woman, fetus, and newborn infant.  Am. J_A Qbstet. Gynecol.  129:69-103.



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     carbon monoxide exposure and human psychomotor performance.  Toxicol.



     Appl. Pharma-col. 18:593-602.

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                                     78
McFarland, R.A.,  F.J.W. Roughton,  M.H.  Halperin,  and J.I.  Niven (1944).   The
     effects of carbon monoxide and altitude on visual  thresholds.   J_._
     Aviat. Med.   15^:381-394.
McFarland, R.A. (1973).  Low level exposure to carbon monoxide and  driving
     performance.  Arch. Environ.  Health 27:355-359.
Paul, R.A. and T. Johnson (1985).   The  NAAQS Exposure Model  (NEM) Applied
     to Carbon Monoxide:  An Addendum.   Prepared  by PEI,  Inc.  for U.S.  EPA,
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Peterson, D. (1981).  The sudden infant death syndrome -  reassessment  of
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Pirnay, F., J. Dujardin, R. Deroanne,  and J.M. Petit (1971).   Muscular
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     31:573-575.
Putz, V.R., B.L.  Johnson, and J.V. Setzer (1976).  Effects  of  CO on Vigilance
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     of Health, Education, and Welfare, National  Institute  of  Occupational
     Safety and Health, Cincinnati, OH.  DHEW (NIOSH) Publication No.  77-124.
Putz, V.R., B.L.  Johnson, and J.V. Setzer (1979).  A comparative study of
     the effects  of carbon monoxide and methylene chloride  on  human
     performance.  In:  Proc. 1st. Ann. NIOSH Sci.  Symp.  Chicago: Pathotox
     Publishing Co.
Putz, V.R. (1979).  The effects of carbon monoxide  on dual-task performance.
     Human Factors 21:13-24.

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                                   79





Raven,  P.B.,  B.L.  Drinkwater,  S.M.  Horvath,  R.O.  Ruhling,  J.A.  'liner,



     J.C. Sutton,  and N.W.  Bolduan  (1974).   Age,  smoking  habil;,  heat  stress,



     and their interactive  effects  with  carbon  monoxide and  peroxyacetylnitrate



     on man's aerobic power.   Int.  J.  Biometeorol.  18:222-232.



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     maximal treadmill exercise.  CRC-APRAC-CAPM-22-75.

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                                  80




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     transport during exercise.   J.  Appl.  Physiol. 32:234-239.



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     healthy young  men to aerobic work at  an  altitude of 1,610 meters.



     In: Environmental Stress.   Individual  Human Adaptations.  L.J.



     Folinsbee,  J.A. Wagner,  J.F. Borgia,  B.L. Drinkwater,  J.A.  Gliner,



     and J.F.  Bedi,  eds.,  Academic Press,  New York.   pp. 101-110.



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     monoxide as assessed by  sensory and psychomotor performance.   In:



     Behavioral  Toxicology.  Early Detection  of Occupational Hazards,



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     and Health  and University  of Cincinnati, Cincinnati,  Ohio,  June 24-29,



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     of Health,  Education and Welfare.  DHEW Publication No.  (NIOSH) 74-126.



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     driving skills.  Arch. Environ. Health 27:349-354.

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                                   TECHNICAL REPORT DATA
                            (Please read Instructions on the reverse before completing/
1  REPORT NO.
 EPA-450/5-85-007
                              2.
4. TITLE AND SUBTITLE
 Regulatory  Impact Analysis of the  National  Ambient
 Air  Quality Standards for Carbon Monoxide
              6. PERFORMING ORGANIZATION CODE
                                                            3. RECIPIE'; "3 ACCESSION NO.
              5. REPO" ' OATS
                 July 1985
7. AUTHOR(S)

 Staff
                                                            8. PERFORMING ORGANIZATION REPORT NO.
9. PERFORMING ORGANIZATION NAME AND ADDRESS
                                                            10. PROGRAM ELEMENT NO.
 Ambient  Standards Branch and Economic Analysis Branch
 Strategies  anH Air Standards Division
 Office of Air Quality Planning and  Standards
              11. CONTRACT/GRANT NO.
12. SPONSORING AGENCY NAME AND ADDRESS
 Office  of Air Quality Planning  and  Standards
 Office  of Air and Radiation
 U.S.  Environmental Protection Agency
 Research  Triangle Park,  N.C.  27711
              13. TYPE OF REPORT AND PERIOD COVERED
                 Final
              14. SPONSORING AGENCY CODE
15. SUPPLEMENTARY NOTES
16. ABSTRACT
       This  report examines the  cost,  changes in exposures  seen by the public,  and
 economic impacts associated with  setting alternative  carbon monoxide NAAQS.   Four
 alternative 8-hour NAAQS were  analyzed:  9 ppm, one observed exceedance, and  9,
 12,  and 15 ppm one expected exceedance of daily maxima.   Three time periods of
 analyses are used:  1987, 1990, and  1995.

       Also discussed is the health evidence supporting the carbon monoxide  (CO)
 standard and the reduction in  exposures associated with  different CO standards.

       The report is intended to fulfill the requirements  of E.O. 12291, which
 requires that a regulatory analysis  be undertaken for every rule resulting  in an
 annual  impact of $100 million  or  more.
17.
                                KEY WORDS AND DOCUMENT ANALYSIS
                  DESCRIPTORS
b.IDENTIFIERS/OPEN ENDED TERMS  c. COSATI F'leld/Group
  Air Pollution
  Carbon Monoxide
  Air Quality Standards
  Regulatory Impacts
  DISTRIBUTION STATEMENT
  Release to Public
                                              i 19. SECURE Y CLASS !This Report)

                                              I Unclassified
                            21 NO. OF PAGES
                                 83
I 20 SECURITY CLASS iThii page)
  Unclassified
                                                                         '•22. PRICE
EPA Form :220-i (Rev. 4-77)
                      PREV'OUS EDITION IS OBSOLETE

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  11.  CONTRACT/GRANT NUMBER
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  12.  SPONSORING AGENCY NAME AND ADDRESS
       Include ZIP code.

  13.  TYPE OF REPORT AND PERIOD COVERED
       Indicate interim final, etc., and if applicable, dates covered.

  14.  SPONSORING AGENCY CODE
       Insert appropriate code.

  15.  SUPPLEMENTARY NOTES
       Enter information not included elsewhere but useful, such as:  Prepared in cooperation with, Translation of. Presented at conference of,
       To be published in, Supersedes, Supplements, etc.

  16.  ABSTRACT
       Include a brief (200 words or less) factual summary of the most significant information contained in the report.  If the report Contains a
       significant bibliography or literature survey, mention it here.

  17.  KEY WORDS AND DOCUMENT ANALYSIS
       (a) DESCRIPTORS - Select from the Thesaurus of Engineering and Scientific Terms the proper authorized terms that identify the major
       concept of the research and are sufficiently specific and precise to be used as index entries for cataloging.

       (b) IDENTIFIERS AND OPEN-ENDED TERMS - Use identifiers for project names, code names, equipment designators, etc. Use open-
       ended terms written in descriptor form for those subjects for which no descriptor exists.

       (.c) COSATI  HELD GROUP - Field and group assignments are to be taken from the 1965 COS ATI Subject Category List. Since the ma-
       jority of documents are multidisciplinary in nature, the Primary Field/Group assignment(s) will be specific discipline, area of human
       endeavor, or type of physical object. The application(s)  will be cross-referenced with secondary  Field/Group assignments that will follow
       the  primary postmg(s).

  18.  DISTRIBUTION STATEMENT
       Denote releasability to the public or limitation for reasons other than  security for example "Release Unlimited." Cite any availability to
       the  public, with address and price.

  19. &20. SECURITY CLASSIFICATION
       DO NOT  submit classified reports to the National Technical Information  service.

  21.  NUMBER OF PAGES
       Insert the toial number of pages, including this one and unnumbered pages, but exclude distribution list, if any.

  22.  PRICE
       Insert the price set by the National Technical Information  Service or the Government Printing Office, if known
EPA Form 2220-1 (Rev. 4-77) (Reverse)

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