United States
               Environmental Protection
               Agency
Air and Energy Engineering
Research  Laboratory
Research Triangle Park, NC 27711
               Research and Development
EPA/600/SR-94/139  December 1994
EPA      Project  Summary
               Economic  Growth Analysis
               System: Version  2.0
               Terri Young, Randy Randolph, and Daniel Bowman
                The two-volume report describes the
              development of, and provides informa-
              tion  needed to operate, the Economic
              Growth Analysis System  (E-GAS)
              model. The model will be used to project
              emissions inventories of volatile organic
              compounds (VOCs), oxides of nitrogen
              (NOX), and carbon monoxide (CO) for
              ozone  nonattainment areas and Re-
              gional Oxidation Model (ROM) model-
              ing regions.
                The report details the design and de-
              velopment of  E-GAS and includes de-
              tailed descriptions of the workings of
              the E-GAS computer modeling software
              components and external software.
                The system is an economic and ac-
              tivity forecast model that translates the
              user's assumptions regarding regional
              economic policies and resource prices
              into  Source Classification Code (SCC)
              level growth factors.  The  report  pro-
              vides E-GAS users with sufficient back-
              ground information to define and  cali-
              brate the E-GAS model, as well as the
              procedures and  syntax  necessary to
              operate  the system. The  organization
              of the user's manual is determined by
              the process used in operating the sys-
              tem,  providing images  of sample
              screens as well as text.
                This Project Summary was developed
              by EPA's Air and Energy Engineering
              Research Laboratory, Research Triangle
              Park, NC, to announce key findings of
              the research project that is fully docu-
              mented  in  two  volumes  (see Project
              Report ordering information at back).
Introduction
  On November 15, 1990, the Clean Air
Act Amendments (CAAA)  of 1990 were
signed into law. The CAAA require that
extreme,  severe, serious, and multi-state
moderate ozone non-attainment areas use
photochemical grid modeling to  demon-
strate future attainment with the ozone
national  ambient  air quality standard
(NAAQS) [Section 182(e)(2)(A)].  In addi-
tion to photochemical grid modeling, the
CAAA require that moderate, serious, se-
vere, and extreme  ozone non-attainment
areas submit rate-of-progress (ROP) in-
ventories demonstrating a  15% reduction
in   emissions  from 1990  to  1996
[Section 182(b)(1)(A)]. Further, ROP inven-
tories for serious,  severe, and  extreme
areas must  include demonstration of  a
3% reduction (averaged over 3 years) from
1996  until  attainment  is achieved
[Section 182(c)(2)(B)].
  Section 182(b)(1)(A) of the CAAA speci-
fies that the 15% reduction from  baseline
emissions accounts for any growth in emis-
sions after 1990. A key component of the
ROP inventories and photochemical grid
modeling demonstrations will be the de-
velopment of credible growth factors for
the existing inventories.
  Since growth in source emissions largely
depends  on the  amount of economic ac-
tivity growth in an area, a consistent set of
growth factors  requires forecasts  using
consistent Gross National Product (GNP)
forecasts and a consistent methodology
for estimating economic activity  in Urban
Airshed Model (UAM) and Regional Oxi-

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dant Model (ROM) modeling regions. The
need for consistent economic growth fac-
tors, however,  must be satisfied in a way
that allows states to use their own  esti-
mates of national and regional economic
activity.  The Economic Growth Analysis
System (E-GAS) is an economic and ac-
tivity forecast model which satisfies  both
of these standards.
  The existing inventories for ROP dem-
onstration and photochemical modeling will
be housed in the Aerometric Information
Retrieval System (AIRS). E-GAS can be
applied to AIRS inventories for the devel-
opment  of emission projections to 2010,
when extreme areas must  reach  attain-
ment. State users can create custom GNP
forecasts and may  modify input assump-
tions for the  regional models  in the E-
GAS system. The system also allows EPA
users to develop volatile organic compound
(VOC), nitrogen oxide (NOx), and carbon
monoxide  (CO)  growth  factors using  a
single GNP forecast,  providing baseline
emission growth estimates for comparison
with growth factors submitted by the states.
  The nonattainment areas modeled were
chosen on the basis of their nonattainment
designation. All serious,  severe, and ex-
treme areas were modeled, as were multi-
state moderate areas. These areas,  their
designations and area definitions, were
announced in the November 6, 1991,  Fed-
eral Register.
  To minimize both the  number and run
time of the models  in E-GAS,  eight mod-
els were developed. Separate models were
developed for EPA Regions 1, 4, 5, 6, 7,
and  9. In addition,  models were  devel-
oped that combine the areas in EPA Re-
gions 2 and 3 and EPA Regions 8 and 10.
Each model includes all extreme, severe,
serious,  and multi-state moderate  areas,
as well as each state and partial state in
the region.
  E-GAS  is a menu-driven system that
guides the user through a series of screens
which collect information for adapting the
model to the user's needs. User input is
limited to selecting menu items and set-
ting parameters  by  entering data  in text
boxes.
  The E-GAS  modeling  system contains
three tiers. Tier  1 includes available na-
tional economic forecasts which are used
to drive the regional  economic models;
Tier 2 includes regional economic models
for the UAM modeling areas,  as well as
the states in the ROM modeling regions;
and Tier 3 estimates fuel consumption,
physical output,  and Vehicle Miles Trav-
eled (VMT)  based  on Tier 2's regional
economic  forecasts.  The tiers  must be
sequentially executed, since data are cre-
ated by and passed from  early tiers for
transfer to later tiers. The three-tiered struc-
ture  of E-GAS  allows users flexibility in
modeling. While tiers must be run before
proceeding to  later tiers, the system al-
lows the  models to be rerun at the user's
discretion. For example,  users may run a
variety of national  models before perform-
ing regional modeling on the last national
model  run.
  The  National REMI Model allows  the
user to create a national-level growth pro-
jection. It is Tier 1 of the three-part  pro-
cess of creating estimated growth factors;
it generates data to drive  the  Regional
REMI  Model  (Tier 2). This tier  may be
rerun any number of times before  pro-
ceeding to Tier 2. Five national forecasts
are available: Bureau of Labor Statistics
(BLS),  Data Resources,  Inc.  (DRI),  Re-
search Seminar in Quantitative Econom-
ics (RSQE),  Wharton Econometric Fore-
casting Associates (WEFA), and user-en-
tered Gross National Product (GNP) Data.
  The  Regional REMI Model allows  the
user to develop a  regional growth simula-
tion.  This is Tier 2 of the three-part  pro-
cess of creating estimated growth factors;
it generates data to drive the Growth Fac-
tor Module (Tier 3). In the E-GAS model,
more than  100 regular  economic policy
variables, translator variables, and popu-
lation variables  can  be  adjusted. Chang-
ing these variables allows the user to simu-
late  the  economic impact of anticipated
government  policy changes,  market
changes, or other exogenous changes to
the regional economy. These variables are
accessed from the REMI EDFS-14 model
and  offer scenarios  for changes in  tax
rates (corporate profit tax, equipment tax,
investment tax,  personal income tax, and
property tax), costs (including relative pro-
duction cost, import cost,  and export cost),
wage rate, employment transfer payments,
purchasing power, and final demand. This
tier may  be rerun any number of times
before  proceeding to Tier 3.
  The  Growth Factor Module is the third
tier where growth factors are generated
and  written  to  files  in  the  \EGAS
subdirectory.  This  module  translates
changes  in the economic activity levels of
the most  recent regional forecast to growth
factors for physical output, fuel consump-
tion,  and VMT.  These growth factors  will
be developed for  two-, three-, and four-
digit Standard  Industrial Classification (SIC)
levels,  depending on  available  data  for
developing  and disaggregating  the  fac-
tors.  These
  SIC-level growth factors will be matched
with  SCC codes. The  user  is  given a
choice of file formats as either the Emis-
sion  Preprocessor System  (EPS) format
or an ASCII text file. The file is output by
year, county level, and SCC code.

E-Gas Reference Manual
  The  Reference  Manual provides back-
ground information on the  design,  devel-
opment, and implementation of the E-GAS
system, as well as information concerning
the execution of the system itself. Chapter
1 provides an overview of the system as
well  as discussions of basic system de-
sign  and  development  considerations.
Chapter 2 discusses the CAAA require-
ments related to the use of photochemical
grid  modeling  in  demonstrating  future
NAAQS attainment and the submission of
rate  of progress plans that will demon-
strate how an area will achieve the 15%
reduction in VOC emissions by 1996 vis-
a-vis the use of E-GAS.  Chapter  3 dis-
cusses the current EPA emissions projec-
tion  guidance and its relationship to E-
GAS. Chapter 4 explains the role and use
of national  and regional economic fore-
casts in E-GAS. Chapter 5 discusses how
fuel choice is forecast within E-GAS. Chap-
ter 6 discusses how electric  utility genera-
tion is estimated within E-GAS. Chapter 7
discusses how physical output is estimated
within  E-GAS.  Chapter  8  explains the
methodology used  within E-GAS to fore-
cast  vehicle miles traveled. Chapter 9 ex-
plains,  CROSSWALK, the  final compo-
nent of E-GAS. CROSSWALK assigns
growth factors from the other E-GAS mod-
ules  to point,  area, and  mobile  SCC's.
Appendix A lists the data used to develop
electric utility generation  estimates. Ap-
pendix B lists  the parameter values  by
state used  in the  electric utility module
within  E-GAS.  Appendix C lists the Bu-
reau  of Labor Statistics codes and SCC
matches within  CROSSWALK. Appendix
D  provides an example  of the CROSS-
WALK  output files.

E-Gas User's Guide
  The  User's Guide can be used to pilot
the user through the E-GAS system. Chap-
ter 1  introduces the terminology used with
the system  as  well as  the syntax and
format  of the program and user  guide.
Chapter 2 discusses the use of E-GAS by
explaining  the  logical progression  of the
program, presenting sample screens, pro-
viding explanations of input formats, and
describing  the  E-GAS  utilities  found
throughout  the  system.  Chapter  3 de-
scribes the role of national economic mod-
els in E-GAS and the five options avail-
able  to the user. Chapter 4 explains the
general function of E-GAS's policy vari-
ables;  it then describes the specific vari-
ables while explaining their input. Chapter
5 describes  the  role of  model suppres-

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sions  in E-GAS  and describes all  sup-
pressions available to the user. Chapter 6
describes the operation of and data re-
quired for the E-GAS National Model  (Tier
1). Chapter 7 provides similar descriptions
of the Regional Model (Tier 2), and Chap-
ter 8 describes Tier 3, the Growth Factor
Module. Chapter 9 identifies contacts for
further information regarding the  opera-
tion of E-GAS and the logic of the system.
Basic Hardware Requirements
  The program has been designed for an
IBM-compatible personal computer envi-
ronment. The system requires the follow-
ing minimum hardware configurations:

        IBM 80386 or 100% compatible
        personal computer
        Math coprocessor
        580 Kilobytes of Conventional
        Memory
        100 Megabytes of available fixed
        disk storage
        VGA graphics capabilities
        DOS 5.0 or higher
        5.25 or 3.5 in. floppy disk drive

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   T. Young, R. Randolph, and D. Bowman are with TRC Environmental Corp., 6320
     Quadrangle Dr., Suite 100, Chapel Hill, NC 27514.
   Sue Kimbrough  is the EPA Project Officer (see  below).
   The two-volume report, entitled "Economic Growth Analysis System:  Reference
     Manual, Version 2.0; and User's Guide,  Version 2.0,"  includes paper copy and
     eight sets of floppy disks (Order No. PB95-501961/AS; Cost: $360.00; subject to
     change).
   The set will be available only from:
           National Technical Information Service
           5285 Port Royal Road
           Springfield, VA 22161
           Telephone: 703-487-4650
   The EPA Project Officer can be contacted at:
           Air and Energy Engineering Research Laboratory
           U.S. Environmental Protection Agency
           Research Triangle Park,  NC 27711
United States
Environmental Protection Agency
Center for Environmental Research Information
Cincinnati, OH 45268

Official Business
Penalty for Private Use $300
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POSTAGE & FEES PAID
         EPA
   PERMIT No. G-35
EPA/600/SR-94/139

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