5360
001R82102
COST EFFECTIVENESS ANALYSIS OF
PROPOSED EFFLUENT STANDARDS
AND LIMITATIONS FOR
COPPER FORMING
Submitted to:
Environmental Protection Agency
Office of Analysis and Evaluation
401 M Street, S.W.
Washington, D.C. 20460
Submitted by: .
U.o. Environmental Protection Agency
JRB Associates Region V. l.brary
8400 Westpark Drive 230 South Durban, Street
McLean, Virginia 22102 Chicago, iiiinois 60604
October 15, 1982
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U,S. Environmental Protection Agency
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TABLE OF CONTENTS
CHAPTER TITLE
1 INTRODUCTION
2 BACKGROUND METHODOLOGY ON COST-EFFECTIVENESS
3 COST-EFFECTIVENESS ANALYSIS FOR COPPER FORMING
3.1 REGULATORY ALTERNATIVES
3.2 ANALYTICAL APPROACH
3.3 SELECTED POLLUTANTS
3.4 FINDINGS
PAGE
1-1
2-1
3-1
3-1
3-1
3-3
3-3
LIST OF TABLES
NUMBER
1
2
3
5
6
7
PAGE
EXAMPLES OF CALCULATION OF TOXIC WEIGHTING FACTORS 2-3
BASED ON COPPER FRESHWATER CHRONIC CRITERIA
POLLUTANTS AND TOXIC WEIGHTING FACTORS IN COPPER FORMING 3-3
COPPER FORMING INDUSTRY COMPARISON OF COST-EFFECTIVENESS 3-4
FOR DIRECT DISCHARGERS
COPPER FORMING INDUSTRY COMPARISON OF COST-EFFECTIVENESS 3-5
FOR INDIRECT DISCHARGERS
LOADINGS FOR COPPER FORMING DIRECT DISCHARGERS 3-6
LOADINGS FOR COPPER FORMING INDIRECT DISCHARGERS 3-7
INDUSTRY COMPARISON COST-EFFECTIVENESS FOR DIRECT 3-8
DISCHARGERS
INDUSTRY COMPARISON COST-EFFECTIVENESS FOR INDIRECT 3-9
DISCHARGERS
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COST-EFFECTIVENESS ANALYSIS OF PROPOSED EFFLUENT STANDARDS
AND LIMITATIONS FOR COPPER FORMING
1. INTRODUCTION
This paper reports the results of a cost-effectiveness (CE) analysis of
alternative water pollution control regulations on the copper forming industry.
These regulations include effluent limitations and standards based on BPT
(Best Practical Control Technology currently available), BAT (Best Available
Technology Economically Achievable), and PSES (Pretreatraent Standards for
Existing Sources), which are being proposed under authority of the Federal
Water Pollution Control Act, as amended (the Clean Water Act). For each of
these regulations EPA has identified several pollution control options, each
with different levels of pollution abatement and compliance cost. The CE
analysis is a useful tool for evaluating the options.
The primary cost of interest in this paper is total annualized direct
cost incurred by industry in complying with the regulations. Other economic
impacts are considered in the economic impact assessment report. The effec-
tiveness measure used is pounds of pollutant removed weighted by an estimate
of their perceived toxicity. The rationale for this measure, referred to as
"pound-equivalents removed," is described later in this paper.
1-1
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2. BACKGROUND METHODOLOGY ON
COST-EFFECTIVENESS
Cost-effectiveness (CE) is defined as the incremental annualized cost
of a pollution control option in an industry or industry subcategory per
incremental pound equivalent of pollutant removed by that control option.
CE offer a useful way of quantifying comparisons among alternative pollution
control options.
Cost effectiveness analyses account for differences in toxicity among the
pollutants by computing toxic weighting factors. These factors are necessary
because different pollutants have different potential effects on human and
aquatic life. For example, a pound of zinc in an effluent stream has a
significantly different potential effect than a pound of PCBs. Toxic weighting
factors for pollutants are derived using ambient water quality criteria
and toxicity values. In the majority of cases, toxic weighting factors
are derived using chronic freshwater aquatic criteria. However, in cases
where a human health criterion has also been established for the consumption
of fish, then the sum of both the human and aquatic criteria are used in
deriving toxic weighting factors. These factors are then standardized by
relating them to a particular pollutant.
Copper is selected as the standard pollutant for developing weighting
factors since it is a toxic metal pollutant and is commonly detected and
removed from industrial effluents. Some examples of the effects of different
aquatic and human health criteria on weighting factors are shown in
Table I.
2-1
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Table I
WEIGHTING FACTORS BASED
COPPER FRESHWATER CHRONIC
Pollutant
Copper
Hexavalent
Nickel
Cadmium
Benzene
Human *
Health
Criteria
(ug/1)
Chromium
100
400
Aquatic
Chronic
Criteria
(ug/1)
5.6
.29
96.00
.025
ON
CRITERIA
Weighting
Calculation
5.6/5.6
B.6/.29
5.6/100 + 5.6/96
5.6/.025
5.6/400
Final
Weight
1.00
19.30
0.114
224.0
0.014
* Based on ingestion of 6.5 grams of fish products/day.
As indicated in Table I, 224 pounds of copper pose the same relative hazard
in surface waters as one pound of cadmium since cadmium has a toxic weight
224 times as large as the toxic weight of copper. Benzene, on the other hand,
is less potentially toxic than copper, as 71 pounds (I/.014) of benzene
would pose the same hazard as one pound of copper.
The final weights are then used to calculate the "pound equivalent" unit:
a standard measure of toxicity. Pound equivalents are calculated as the
number of pounds of pollutant multiplied by the weighting factor. Thus,
in CE analyses, the amount of pollutant removed by a control option is
weighted by its relative toxicity. Cost-effectiveness is calculated as
the ratio of incremental annual cost of an option to the incremental pound
equivalents removed by that option.
2-2
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Indirect dischargers are treated differently from direct dischargers in the
CE analyses since the POTW removal efficiency of a pollutant is reflected in the
incremental pounds removed to surface waters. For example, if a plant is
discharging 100 pounds of cadmium in its effluent stream to a POTW and the
POTW has a removal efficiency for cadmium of 38 percent, then the cadimum
discharged to surface waters is only 62 pounds. If the regulation results
in a reduction of cadmium in the effluent stream to 50 pounds, then the
amount discharged to surface waters is calculated as 50 pounds multiplied
by the POTW removal efficiency factor (1-38 percent), i.e., 31 pounds (50 x 62
percent). Cost-effectiveness calculations reflect the fact that the reduction
i
of pollutant discharge to surface waters is not 50 pounds (the change in
the amount discharged to the POTW), but 31 pounds (the change in the amount
actually discharged to surface waters).
The pollutants included in CE analyses are the regulated pollutants and
selected non-regulated ones. Non-regulated pollutants are included because
they can be removed incidentally as a result of a particular treatment
technology, even though they are not specifically limited. Some of the
factors considered in selecting non-regulated pollutants include toxicity,
frequency of occurrence, and amount of pollutant in the wastestream.
Data sources for CE analyses include development documents from the Effluent
Guidelines Division, economic impact analyses from the Office of Analysis
and Evaluation, ambient water quality criteria documents from the Criteria
and Standards Division, and POTW removal efficiency data from the Monitoring
and Data Support Division.
2-3
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The data set for an industry specific CE analysis contains the following
information for each subcategory within the industry:
o Wastewater pollutants
o The pollution control options identified by EGD
o Annual volume of loadings by pollutant
-- Currently, and at each BAT or PSES control level
o Toxic weighting factor for each pollutant
o POTW removal efficiencies (applicable to indirect dischargers only)
o Annualized costs for each control option (where results are adjusted
to 1981 dollars for all industries).
Criteria or toxicity values have been developed for all of the priority
pollutants and were taken from data in the 1980 Ambient Water Quality
Criteria Document (EPA-440/5-80 Series). Criteria for a few of the non-
conventional pollutants were taken from the Quality Criteria for Water,
EPA-440/9-76-023, EPA 1976 (the Red Book.)
POTW removal efficiencies were taken from one of three sources. The
preferred source was the 40-city study, US EPA Determining National Removal
Credits for Selected Metals at POTWs. draft report, July 1981. When data
were not available, then the POTW removal efficiency was taken from the
20-city study, US EPA Fate of Priority Pollutants in Publicly Owned Treatment
Works Interim Report, October, 1980, EPA-440/1-80-301. When data were not
available from either of these studies, POTW removal efficiencies were
taken from the Federal Guidelines: State and Local Pretreatment Programs
Volume II Appendices 1-7. January 1977, EPA 430/9-76-0176b. Report 6.
2-4
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3. COST-EFFECTIVENESS ANALYSIS FOR COPPER FORMING
3.1 REGULATORY ALTERNATIVES
In the process of developing the regulatory alternatives, EPA has exten-
sively studied the technical and economic characteristics of the copper form-
ing industry. A discussion of the rationale for the regulatory alternatives
as well as general industry economic and technical characteristics appear in
the development document and the economic impact assessment report.
Three regulatory alternatives were considered for the copper forming in-
dustry. A summary of these alternatives and their costs appears in Chapter 5
of the Economic Impact Analysis. In that report, as well as in the analysis
later in this paper, the alternatives are arranged in order of increasing
cost and, generally, pollution abatement.
The economic impact study reported generally mild impacts for each of
the three regulatory alternatives. The added annual pollution abatement
costs are not expected to affect the prices of copper forming products.
Small profit reductions are predicted, but they are not significant enough to
cause plant closures or employee layoffs.
3.2 ANALYTICAL APPROACH
The number of pounds of each pollutant removed by direct and indirect
dischargers in the industry is provided by EPA's Effluent Guidelines Division.
For indirect dischargers, an adjustment is made to account for the pollution
removals by POTWs. That is, the pounds removed by the recommended treatment
system is multiplied by one minus the secondary treatment removal efficiency.
Four sources were used for these removal efficiencies:
3-1
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(1) "40 City Study" being performed for the monitoring
and Data Support Division (not yet published)
(2) Fate of Priority Pollutants in Publicly Owned
Treatment Works (20 City Study), October 1980,
(EPA 440/1-80-301)'"~"*~
(3) Federal Guidelines, - State and Local Pretreatment
Programs, (EPA 430/9-76-017a).
(4) Guide for Performing Cost-Effectiveness Analyses,
a draft report prepared by OA&E, July 29, 1982.
The estimated compliance costs in 1978 dollars were provided by the EPA
Effluent Guidelines Division. The cost for each alternative is reduced by
that of the previous alternative to provide the incremental cost for each
alternative. Before performing these calculations, the three regulatory
alternatives were arrayed in order of increasing annualized cost to the
industry. Total annualized costs are used throughout the CE analyses.
Total annualized costs include annual operating and maintenance costs plus
depreciation and interest charges on capital equipment.
For each category:
A $
CE
n
I ( Albi)(TWi)(STWi)
i
where CE = dollars per pound equivalent
A$ = the incremental total annualized compliance cost
£(A lb^) (TW^) (STW^) = the incremental changes in pound equivalents
discharged
= change in pounds discharged of toxic pollutant i (i.e., pounds
removed)
= toxic weighting factor for pollutant i
3-2
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n « number of toxic pollutants
STW£ « one minus the secondary treatment efficiency factor for
pollutant i (for direct discharges STW - 1)
3.3 SELECTED POLLUTANTS
The pollutants used in calculating CE ratios include all pollutants that
were considered for the regulation. These include both pollutants that are
specifically regulated and certain nonregulated pollutants. Although the
unregulated pollutants need not be monitored, they do provide a potential bene-
fit to the environment and, therefore, are included in the totals. The results
of the CE analysis are highly sensitive to which pollutants are included in the
analysis. Table 2 shows the pollutants selected for inclusion in the CE
analysis.
TABLE 2. POLLUTANTS AND TOXIC WEIGHTING FACTORS IN COPPER FORMING
POLLUTANT
Nickel
Zinc
Lead
Copper
Hexavalent Chromium
Trivalent Chromium
WEIGHTING FACTOR
0.114
0.119
1.5
1.0
19.3
0.127
3.4 FINDINGS
Tables 3 and 4 show the CE results for each option considered for direct
and indirect dischargers, respectively. The selected options are indicated
by asterisks. The cost-effectiveness figures shown are "incremental" from
the previous level. Tables 5 and 6 present the current loadings and removals
of each pollutant for each option for direct and indirect dischargers, respec-
tively. Tables 7 and 8 present industry comparisons of cost-effectiveness.
3-3
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