REGULATORY IMPACT ANALYSIS:
PROTECTION OF STRATOSPHERIC OZONE
VOLUME II: APPENDICES TO REGULATORY
IMPACT ANALYSIS DOCUMENT
PART 2: APPENDICES J-M
PREPARED BY
STRATOSPHERIC PROTECTION PROGRAM
OFFICE OF PROGRAM DEVELOPMENT
OFFICE OF AIR AND RADIATION
U.S. ENVIRONMENTAL PROTECTION AGENCY
AUGUST 1, 1988
-------
REGULATORY IMPACT ANALYSIS:
PROTECTION OF STRATOSPHERIC OZONE
VOLUME II: APPENDICES TO REGULATORY
IMPACT ANALYSIS DOCUMENT
PART 2: APPENDICES J-M
PREPARED BY
STRATOSPHERIC PROTECTION PROGRAM
OFFICE OF PROGRAM DEVELOPMENT
OFFICE OF AIR AND RADIATION
U.S. ENVIRONMENTAL PROTECTION AGENCY
AUGUST I, 1988
-------
-------
APPENDIX J
SUMMARY OF CONTROL OPTIONS SIMULATED
This appendix presents the control options simulated to be undertaken in the
CFC 50%/Halon Freeze case. This case is specified to correspond to the major
provisions of the Montreal Protocol (see Chapter 5 for a description of the
case). The method used to simulate the implementation of the control options is
presented in Appendix I. Each of the control options and applications is
described in the addenda in Volume III.
The control options simulated to be undertaken are listed for the years
1989, 1991, 1993, and 1998.* For these years the simulated increases in CFC and
halon prices (weighted by ozone-depleting potential) are reported. As described
in Appendix I, the simulated increases in the compound prices drive the
selection of control options. The reduction in CFC or halon use simulated by
each control option is also displayed.
As discussed in Chapter 9, several different sets of assumptions were used
to evaluate costs. This appendix lists control options simulated for two sets
of cost assumptions. Case 1 assumes that the implementation of many control
options is delayed, limited, or prevented. Case 2 assumes that sufficient
information is available for markets to respond efficiently and quickly to
restrictions in the supply of CFCs.
Control options simulated in Case 1 are summarized first. Separate lists
are shown for each year. Options simulated in Case 2 are presented next. Only
control options for CFCs are shown on the Case 1 and Case 2 lists. Assumptions
regarding the reductions achieved by halon controls were not varied in the cost
analysis, therefore control options simulated for halon compounds are presented
once following the Case 2 list.
The following information is presented for each year:
• Simulated price increase for the CFCs. As described in Appendix
I, the CFCs are simulated to be controlled as a group based on
each compound's ozone-depleting potential. Thus, the price
increase across compounds, weighted for ozone-depleting
potential, is the same.
• Simulated price increases for Halon 1211 and Halon 1301. The
two halon compounds are simulated to be controlled together,
resulting in one ozone-depletion weighted price increase for
halons.
• Control options simulated. For each application, controls
simulated to be undertaken in that year are listed.
1 The engineering studies on which the cost analysis was based described
control options available in the next ten years. Thus, there is little
variation in the control options simulated after 1998.
-------
J-2
Applications for which no controls are simulated do not appear
on the lists.
• Weighted trigger price and social costs. For each control
simulated, the weighted trigger price and weighted social cost
are reported. The trigger price indicates the increase in the
CFG or halon price (weighted for ozone-depleting potential)
required before the control option would be profitable to be
undertaken. The social cost indicates the real resource costs
to society of undertaking the action, expressed per kilogram of
CFC or halon reduced.^
• Reduction in CFC or halon use achieved by control option. For
each control option simulated, the reduction in CFC or halon use
achieved by the control is shown. Simulated reductions are
reported as a percentage of: (1) compound use in the
application, (2) total use of the relevant CFC or halon
compound, and (3) aggregate weighted CFC or halon use across all
compounds.
In Case 2 there is no price increase simulated for the CFCs in 1989.
Nevertheless, reductions in CFC use are required and actions are simulated to be
undertaken. All of the options shown have negative or zero switch prices,
indicating that the data in the addenda imply that it is less expensive to adopt
these options than to continue to use CFCs.
For example, in 1989 the Conveyorized Vapor Degreasing application has
aqueous cleaning and terpenes simulated. The switch price for this option is
negative. Switching to aqueous cleaning and terpenes is simulated to reduce
CFC-113 use by 20 percent in Case 2, representing a 1.4 percent decline in
aggregated weighted CFC use for all CFC compounds.
After 1991 there are simulated increases in CFC prices in Case 2. Positive
price increases occur in all years in Case 1. In these years control options
with positive switch prices and social costs are listed.
The summary lists illustrate the impact of time on the cost analysis. After
1989, additional options are simulated to become available. Also, the compound
reductions that can be achieved by each option are simulated to increase over
time as information about the options becomes available and technical
constraints are overcome. For example, in Case 2 the aqueous cleaning and
terpenes control in conveyorized vapor degreasing achieves 20 percent reduction
in 1989 but 40 percent by 1991.
The control options listed in this appendix reflect the substantial
revisions made to the cost analysis since the publication of the original
Regulatory Impact Analysis (RIA) in December 1987. The analysis has benefitted
from additional information obtained during industry meetings and from comments
received on the original RIA. Revisions to the control options simulated in the
cost analysis are described in Part 10 of Volume III of this RIA.
2 In the evaluation of costs presented in Chapter 9, all negative social
costs were set to zero.
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J-3
•Some options included in the original RIA were dropped from this cost
analysis. Examples include CFC-132b (a potential chemical substitute for CFC-
113 in solvent applications), carbon dioxide (replaces CFC-12 in sterilization,
commonly referred to as "10/90"), and certain innovative product substitutes for
CFC-blown foam applications. The costs of other control options were revised.
Examples of revised options include modified polyol systems in flexible
slabstock foams and aqueous cleaning in solvent applications.
The cost analysis now also includes new control options identified since the
original RIA. For example, options were added to replace CFC-113 in solvent
applications, including CFC-113 azeotropes (mixtures of CFC-113 with non-ozone
depleting compounds) and terpene-based chemical substitutes. HCFC-22, recently
approved by the U.S. Food and Drug Administration for use in certain food
packaging applications, also has been added as an option in CFC-blown packaging
foams.
-------
CASE 1 -- 1989
-------
Control Options Simulated
Year: 1989
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 6.69
Application
Aerosol Propellent
Aerosol Propellant
Centrif Chillers (CFC-IK)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-12)
Control Option
Carbon Dioxide
HCFC-22 Blends
Recovery at Service and Disposal
Recovery at Service and Disposal
Recovery at Service and Disposal
Alt Leak Test Gas
Centrif Chillers (CFC-500) Recovery at Service and Disposal
Cnvyrzd Vapor Degreasing
Cnvyrzd Vapor Degreasing
Cnvyrzd Vapor Degreasing
Cnvyrzd Vapor Degreasing
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-502)
Cold Storage (CFC-502)
Commercial R&O Labs
Commercial R&O Labs
Contract Sterilization
Contract Sterilization
Contract Sterilization
Dehunidifiers
Dry Cleaning
Dry Cleaning
Dry Cleaning
Ext PS Bdstk
Aqueous Cleaning and Terpenes
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
Petroleum Solvents
Methyl Chloroform
Cover; Drainage; & Increased Freeboard
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
Aqueous Cleaning and Terpenes
HCFC-22
Alt Leak Test Gas
CFC-502
HCFC-22
Alt Leak Test Gas
N2 Purge then Pure EO
Contract Out
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Recovery at Rework
Refrigerated Condenser
Aqueous Cleaning
Methyl Chloroform
HCFC-22
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985S/kg) (19B5$/kg) Application
Reduction in Compound Use
-0.74
2.21
0.47
1.60
0.74
1.26
-0.47
0.73
-2.64
-0.64
6.69
0.88
-0.74
2.21
0.26
1.22
0.56
1.26
-0.68
-16.60
-0.36
0.00
0.00
-2.36
-1.34
-0.61
-0.32
0.00
0.00
6.60
0.81
1.26
2.79
-7.19
-7.13
-0.27
0.00
-2.34
-0.36
-0.17
-17.20
-0.36
0.00
0.00
-2.36
-1.34
-0.64
-0.32
0.00
0.00
6.17
0.81
1.26
2.79
-7.19
-7.13
-0.41
0.00
-2.34
-0.48
-0.62
0.20
-3.01
-1.14
4.07
0.88
ration CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
15. OX
25. OX
7.2X
2.3X
2.2X
5.1X
6.1X
9.6X
2.7X
2.6X
10.6X
13. 3X
30. 3X
4.2X
1.6X
2.9X
7.6X
3.8X
5. IX
3. OX
6.7X
6.1X
0.2X
9.6X
6.8X
4.5X
21. 5X
11. IX
1.2X
16. 3X
3.7X
79.9X
0.663X
1.106X
0.026X
0.058X
0.021X
0.047X
0.019X
0.678X
0.191X
0.186X
0.750X
0.229X
0.522X
0.072X
0.027X
0.050X
0.131X
0.066X
0.062X
0.037X
0.081X
0.019X
0.001X
0.005X
0.004X
0.027X
0.127X
0.065X
0.002X
0.085X
0.019X
0.417X
0.86X 0.78X
1.43X 1.30X
0.19X
0.04X
0.09X
0.05X
0.12X
0.07X
0.16X
0.01X
0.01X
0.05X
0.25X
0.13X
O.OOX
1.71X
4.37X
1.23X
1.20X
4.84X
1.48X
3.37X
0.46X
0.17X
0.32X
0.84X
0.43X
3.88X
0.11X
0.55X
0.12X
2.69X
44.9X 0.616X
1.21X
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Control Options Simulated
Year: 1989
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 6.69
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Reduction in Compound Use
Application
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Flex PU Foam-Molded
Flex PU Foam-Slabstock
Freezers
Hospitals
Hospitals
Hospitals
Liquid Food Freezing
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Mobile Air Conditioners
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
PE Foam
PE Foam
PE Foam
PE Foam
Pharmaceutical
Pharmaceutical
>henolic Foam
'rocess Refrig
_ • • • •»*• Mwa* i «ji Mciynieu
Control option <1985$/kg) (1985$/kg) Application CFC Use
Product Substitutes for Stock Food Trays
Product Substitutes for Egg Cartons
Product Substitutes for Single Service Plates; Cups;
Product Substitutes for Hinged Containers
HCFC-22
MDI-TDI/Uater-Blown Systems in HR Process
Modified Polyol Systems
Recovery at Rework
Disposables
Contract Out
C02 (10/90 EO/C02)
Cryogenic
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Recovery at Service -- Large Shops
Refrigerated Freeboard Chiller
Aqueous Cleaning and Terpenes
Manual Cover; Drainage; Increased Freeboard; & Thermo
CFC-113 Automatic Cover
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
CFC-113 Automated Hoist
Alternate Packaging Materials
Rubber or Plastic Floatation Devices
Rubber or Plastic Gaskets
HCFC-22
Contract Out
H2 Purge then Pure EO
Other Insulation Materials-Equiv Insul Capacity
Hydrocarbons
0.00
0.00
0.00
0.00
0.39
1.95
5.88
0.07
0.00
0.00
1.55
5.32
-2.31
-0.20
-0.17
0.00
1.84
-11.81
-11.65
-10.40
-1.55
-0.35
0.00
0.00
0.20
-9.87
-9.70
0.00
0.38
0.00
0.28
0.50
-3.29
0.00
0.00
0.00
0.00
0.35
1.19
5.81
-0.50
0.00
0.00
1.17
5.03
-2.31
-0.37
-0.61
0.00
0.73
-12.04
-12.40
-10.75
-1.80
-0.35
0.00
0.00
-0.81
-9.87
-9.90
0.00
0.38
0.00
-0.10
0.50
-3.29
1.3X
0.7X
0.9X
0.5X
89.9X
33. 3X
6.7X
0.9X
6.6X
1.4X
3.7X
10. OX
4. OX
18.0X
3. IX
11. 2X
2.2X
5.8X
9.4X
0.8X
16. 3X
2. OX
3.9X
15. 4X
13. 5X
3.7X
2.9X
1.9X
68. 6X
5.3X
8. OX
12. OX
1.5X
0.038X
0.019X
0.026X
0.014X
2.618X
0.513X
0.357X
0.002X
0.213X
0.045X
0.119X
0.140X
0.059X
0.262X
0.045X
0.164X
0.545X
0.344X
0.558X
0.050X
0.966X
0.120X
0.234X
0.915X
0.798X
0.054X
0.042X
0.027X
0.991X
0.014X
0.022X
0.070X
0.005X
CFC-11 CFC-12 CFC-113
0.07X
0.04X
0.05X
0.03X
5.14X
1.65X
1.15X
O.OOX
0.42X
0.09X
0.23X
0.27X
0.12X
0.52X
0.09X
0.32X
1.07X
2.22X
3.60X
0.32X
6.23X
0.78X
1.51X
5.90X
5.15X
0.05X
0.04X
0.03X
0.97X
0.03X
0.04X
0.13X 0.20X
0.01X
CFC-114 CFC-115
1.77X
1.36X
0.88X
32.43X
-------
Control Options Simulated
Tear: 1989
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 6.69
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Reduction in Compound Use
Application
Process Refrig
Process Refrig
Process Refrig
Reciprocating Chillers
Reciprocating Chillers
Refrigerated Transport
Refrigerated Transport
Refrigerators
Retail Food (CFC- 12)
Retail Food (CFC- 12)
Retail Food (CFC- 12)
Retail Food (CFC- 12)
Retail Food (CFC-502)
Retail Food (CFC-502)
Retail Food (CFC-S02)
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-lnd
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Control Option
Ammonia
HCFC-22
CFC-S02
HCFC-22
Alt Leak Test Gas
HCFC-22
CFC-S02
Recovery at Rework
HCFC-22
Alt Leak Test Gas-At Installation
CFC-502
Recovery at Service and Disposal
HCFC-22
Alt Leak Test Gas-At Installation
Recovery at Service and Disposal
CFC- 11/22
CFC- 11/22
Other Packaging Materials
EPS Bead Board
CFC-11/H20
CFC- 11/22
(1985S/kg) (1985S/kg) Application CFC Use CFC-11 CFC-12 CFC-113 CFC-1H CFC-115
-2.61
0.81
2.79
0.63
0.89
0.63
2.77
-0.97
0.81
1.01
2.79
2.92
-7.19
-5.73 .
1.43
0.30
0.30
•27.65
-17.06
-0.48
0.30
-2.61
0.81
2.79
0.63
0.89
0.63
2.77
-1.20
0.81
1.01
2.79
2.15
-7.19
-5.73
-0.03
0.30
0.30
-27.65
-17.06
-0.48
0.30
3.2X
6.4X
6.0X
7.5X
6.3X
2.8X
2.8X
1.3X
3. IX
2.7X
9. OX
2.7X
1.6X
0.4X
1.8X
10.0X
10. OX
18.0X
14. 8X
10.0X
9. OX
0.011X
0.021X
0.019X
0.015X
0.012X
0.007X
0.007X
0.010X
0.068X
0.059X
0.197X
0.058X
0.010X
0.003X
0.011X
0.151X 0.34X
0.024X 0.05X
0.285X 0.65X
0.234X 0.53X
0.431X 0.98X
0.388X 0.88X
0.02X
0.04X
0.04X
0.03X
0.02X
0.01X
0.01X
0.02X
0.13X
0.12X
0.39X
0.1 IX
0.09X
0.01X
0.16X
0.14X
0.25X
0.22X
2.09X
0.53X
2.34X
Spice funigant
N2 Purge then Pure EO
-0.05
-0.27
13.5X 0.011X
0.02X
-------
CASE 1 -- 1991
-------
Control Options Simulated
Year: 1991
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: * 1.84
Application
Aerosol Propellent
Centrif Chillers (CFC-114)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-12)
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
C1985$/kg) (1985*/kg) Application
Reduction in Compound Use
Carbon Dioxide
Recovery at Service and Disposal
Recovery at Service and Disposal
Recovery at Service and Disposal
Alt Leak Test Gas
Centrif Chillers (CFC-500) Recovery at Service and Disposal
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degressing
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degressing
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-502)
Cold Storage (CFC-502)
Commercial R&O Labs
Commercial RftD Labs
Contract Sterilization
Contract Sterilization
Contract Sterilization
Dehuni differs
Dry Cleaning
Dry Cleaning
Ext PS Bdstk
Ext PS Sht
Ext PS Sht
Ext PS Sht
Aqueous Cleaning and Terpenes
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
Petroleum Solvents
Methyl Chloroform
Cover; Drainage; & Increased Freeboard
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
HCFC-22
Alt Leak Test Gas
HCFC-22
Alt Leak Test Gas
N2 Purge then Pure EO
Contract Out
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Recovery at Rework
Refrigerated Condenser
Aqueous Cleaning
HCFC-22
Product Substitutes for Egg Cartons
Product Substitutes for Stock Food Trays
Product Substitutes for Single Service Plates; Cups;
-0.74
0.47
1.60
0.74
1.26
•0.47
0.73
-2.64
-0.64
0.88
0.00
0.00
0.00
-0.74
0.26
1.22
0.56
1.26
-0.68
-16.60
-0.36
0.00
0.00
-2.36
-1.34
-0.61
-0.32
0.00
0.00
0.81
1.26
-7.19
-7.13
-0.27
0.00
-2.34
-0.36
-0.17
-17.20
-0.36
0.00
0.00
-2.36
-1.34
-0.64
-0.32
0.00
0.00
0.81
1.26
-7.19
-7.13
-0.41
0.00
-2.34
-0.48
-0.62
0.20
-3.01
-1.14
0.88
0.00
0.00
0.00
n Heiyiiieu
:ation CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
25. OX
12. OX
3.7X
3.7X
5. OX
10. IX
19.2X
2.4X
8.9X
7. IX
26. 7X
25. 6X
3.5X
1.3X
6.4X
7.4X
8.5X
2.9X
10.2X
0.2X
16.0X
10. 5X
7.5X
34.6X
14.4X
1.8X
21. 8X
3.4X
90. IX
2. OX
3.9X
2.7X
1.106X
0.044X
0.096X
0.035X
0.047X
0.031X
1.354X
0.171X
0.628X
0.498X
0.460X
0.442X
0.061X
0.023X
0.111X
0.127X
0.102X
0.035X
0.031X
O.OOOX
0.009X
0.006X
0.044X
0.204X
0.085X
0.003X
0.1 HX
0.018X
1.238X
0.058X
0.1 14X
0.078X
1.43X 1.30X
0.31X
0.07X
0.09X
0.08X
0.20X
0.07X
0.02X
0.01X
0.09X
0.40X
0.17X
O.OOX
2.43X
0.11X
0.22X
0.15X
2.85X
8.73X
1.10X
4.05X
3.21X
2.97X
2.85X
0.39X
0.15X
0.71X
0.82X
6.46X
0.10X
0.73X
0.12X
-------
Control Options Simulated
Year: 1991
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: S 1.84
Application
Ext PS Sht
Ext PS Sht
Freezers
Hospitals
Hospitals
Hospitals
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985S/kg) (1985$/kg) Application
Reduction in Compound Use
Product Substitutes for Hinged Containers
HCFC*22
Recovery at Rework
Disposables
Contract Out
C02 (10/90 EO/C02)
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Mobile Air Conditioners Recovery at Service -- Large Shops
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Vpr Degrees ing
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Open Top
Open Top
Open Top
Open Top
Open Top
Open Top
Open Top
Open Top
PE Foam
PE Foam
PE Foam
PE Foam
Pharmaceutical
Pharmaceutical
Phenolic Foam
Phenolic Foam
Process Refrig
Process Refrig
Process Refrig
Reciprocating Chillers
Reciprocating Chillers
Refrigerated Transport
Refrigerators
Refrigerated Freeboard Chiller
Aqueous Cleaning and Terpenes
Manual Cover; Drainage; Increased Freeboard; & Thermo
CFC-113 Automatic Cover
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
CFC-113 Automated Hoist
Alternate Packaging Materials
Rubber or Plastic Floatation Devices
Rubber or Plastic Gaskets
HCFC-22
Contract Out
N2 Purge then Pure EO
Other Insulation Materials-Equiv Insul Capacity
CFC-HIb
Hydrocarbons
Ammonia
HCFC-22
HCFC-22
Alt Leak Test Gas
HCFC-22
Recovery at Rework
0.00
0.39
0.07
1.84
0.00
0.35
-0.50
0.00
0.00
1.55
-2.31
-0.20
-0.17
0.00
0.00
0.00
1.17
-2.31
-0.37
-0.61
0.00
0.73
•11.81
-11.65
•10.40
-1.55
-0.35
0.00
0.00
0.20
-9.87
-9.70
0.00
0.38
0.00
0.28
0.50
1.76
-3.29
-2.61
0.81
0.63
0.89
0.63
-0.97
-12.04
-12.40
-10.75
-1.80
-0.35
0.00
0.00
-0.81
-9.87
-9.90
0.00
0.38
0.00
-0.10
0.50
1.76
-3.29
-2.61
0.81
0.63
0.89
0.63
-1.20
h/l 1
ret ion I
1.4X
89.9X
1.3X
11. OX
2.2X
6.9X
4. OX
30. OX
2.6X
15. 8X
6.5X
5.8X
18.9X
0.8X
14. 5X
1.8X
7.0X
12. 8X
11. 2X
5. OX
2.9X
1.8X
90.3X
8.9X
12.8X
20.0X
13.3X
2.5X
5.4X
10.4X
12. 5X
5.9X
4.7X
1.9X
CFC Use CFC- 11
0.041X
2.618X
0.003X
0.355X
0.072X
0.224X
0.059X
0.438X
0.039X
0.231X
1.635X
0.344X
1.118X
0.045X
0.859X
0.107X
0.416X
0.761X
0.664X
0.072X
0.041X
0.027X
1.304X
0.024X
0.035X
0.117X 0.21X
0.078X 0.14X
0.008X
0.017X
0.034X
0.025X
0.012X
0.012X
0.016X
CFC-12 CFC-113
0.08X
5.14X
0.01X
0.70X
0.14X
0.44X
0.12X
0.86X
0.08X
0.45X
3.21X
2.22X
7.21X
0.29X
5.54X
0.69X
2.68X
4.91X
4.28X
0.07X
0.04X
0.03X
1.28X
0.05X
0.07X
0.34X
0.22X
0.02X
0.03X
0.07X
0.05X
0.02X
0.02X
0.03X
CFC- 114 CFC-115
2.36X
1.35X
0.87X
42.68X
-------
Control Options Simulated
Year: 1991
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 1.84
Application
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985S/kg) (1985S/kg) Application
Reduction in Compound Use
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-502)
Retail Food (CFC-502)
Retail Food (CFC-502)
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
HCFC-22
Alt Leak Test Gas-At Installation
HCFC-22
Alt Leak Test Gas-At Installation
Recovery at Service and Disposal
Other Insulation Naterials-Equiv Insul Capacity
Thick Fiberglass Batts
CFC-1416
Thick Fiberglass Batts/Thick Walls/Wide Stud Spacing
Other Insulation Materials-Equiv Insul Capacity
CFC-Ulb
Thick Fiberglass Batts/Thick Walls/Conv stud Spacing
Other Insulation Materials-Equiv Insul Capacity
CFC-141b
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam- Prd- Cons -Ind
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam- Prd- Packaging
Rgd PU Foam- Prd- Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Spd-Cns-Bldg
Rgd PU Foam- Spd-Cns- Ind
Rgd PU Foam-Spd-Cro-Ind
CFC- 11/22
CFC-141b
CFC- 11/22
CFC-141b
Other Packaging
EPS Bead Board
CFC-141b
CFC-11/H20
CFC- 11/22
CFC-141b
CFC-141b
CFC-141b
Thick Fiberglass
CFC-141b
Materials
Batts
Rgd PU Foam-Spd-
Spice funigant
Trans CFC-141b
N2 Purge then Pure EO
0.81
1.01
-7.19
-5.73
1.43
0.50
0.50
1.60
0.50
0.50
1.60
0.50
0.50
1.60
0.30
1.54
0.30
1.54
•27.65
•17.06
1.54
-0.48
0.30
1.54
1.54
1.59
0.50
1.59
1.59
-0.05
0.81
1.01
-7.19
-5.73
-0.03
0.50
0.50
1.60
0.50
0.50
1.60
0.50
0.50
1.60
0.30
1.54
0.30
1.54
-27.65
-17.06
1.54
-0.48
0.30
1.54
1.54
1.59
0.50
1.59
1.59
-0.27
'i Hciyiiieu -
:ation CFC Use
5.2X
2.7X
2.7X
0.4X
3.6X
8. OX
13.8X
13. 1X
0.9X
8.0X
15. 2X
1.0X
9.9X
14.9X
10. OX
15.0X
10.0X
15. OX
30. OX
21. OX
8.2X
10.0X
9.0X
13.5X
16.7X
16.6X
20.0X
13.3X
16. 7X
22. 5X
0.1 UX
0.059X
0.017X
0.003X
0.023X
0.007X
0.012X
0.012X
0.012X
0.101X
0.191X
0.060X
0.590X
0.885X
0.151X
0.227X
0.024X
0.036X
0.475X
0.333X
0.129X
0.431X
0.388X
0.581X
0.262X
0.616X
0.278X
0.185X
0.098X
0.019X
CFC-11
0.02X
0.04X
0.04X
0.04X
0.32X
0.61X
0.19X
1.90X
2.85X
0.34X
0.52X
0.05X
0.08X
1.08X
0.76X
0.29X
0.98X
0.88X
1.32X
0.60X
1.B3X
0.83X
0.5SX
0.29X
CFC-12 CFC-113 CFC-114 CFC-115
0.22X
0.12X
0.09X
0.13X
0.01X
0.02X
0.27X
0.19X
0.07X
0.25X
0.22X
0.34X
0.15X
0.09X
0.04X
0.03X
0.01X
0.04X
3.48X
0.53X
4.67X
-------
CASE 1 -- 1993
-------
Control Options Simulated
Year: 1993
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: $ 3.93
Application
Aerosol Propellent
Aerosol Propellant
Animal Labs
Bee Hives
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985$/kg) (1985S/kg) Application
Reduction in Compound Use
Carbon Dioxide
HCFC-22 Blends
FC-134a
FC-134B
Centrif Chillers (CFC-114) Recovery at Service and Disposal
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-500)
Centrif Chillers (CFC-500)
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Decreasing
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-S02)
Cold Storage (CFC-502)
Commercial R&D Labs
Commercial R&O Labs
Contract Sterilization
Contract Sterilization
Contract Sterilization
Market Mix
Recovery at Service and Disposal
HCFC-123
Recovery at Service and Disposal
Alt Leak Test Gas
Recovery at Service and Disposal
Market Mix
Aqueous Cleaning and Terpenes
Carbon Adsorption and Drying Tunnel
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
Petroleum Solvents
Methyl Chloroform
Cover; Drainage; ft Increased Freeboard
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
HCFC-22
Alt Leak Test Gas
CFC-502
HCFC-22
Alt Leak Test Gas
N2 Purge then Pure EO
Contract Out
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber ft Condensation/Reclamation
-0.74
2.21
3.24
3.24
0.47
-0.74
2.21
3.24
3.24
0.26
0.00
1.60
3.02
0.74
1.26
-0.47
0.00
-16.60
-0.72
-0.36
O.'OO
0.00
-2.36
-1.34
-0.61
-0.32
0.00
0.00
0.81
1.26
2.79
-7.19
-7.13
-0.27
0.00
-2.34
-0.36
-0.17
0.00
1.22
3.02
0.56
1.26
-0.68
0.00
-17.20
-1.51
-0.36
0.00
0.00
-2.36
-1.34
-0.64
-0.32
0.00
0.00
0.81
1.26
2.79
-7.19
-7.13
-0.41
0.00
-2.34
-0.48
-0.62
ration CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
25. OX
25. OX
23. 1X
24. 9X
16.8X
16. OX
5.3X
5.3X
5.2X
4.9X
14. IX
23. 8X
24. OX
10. 3X
2. OX
7. OX
7.7X
40. OX
21. OX
2.9X
1.1X
8. OX
5.3X
11. 8X
2.8X
15. 6X
14.3X
0.1X
22.5X
13.5X
7.5X
48.6X
11. OX
1.106X
1.106X
O.OOOX
O.OOOX
0.061X
0.410X
0.135X
0.135X
0.049X
0.046X
0.043X
0.073X
1.692X
0.729X
0.139X
0.495X
0.540X
0.690X
0.363X
0.050X
0.019X
0.139X
0.091X
0.143X
0.034X
0.189X
0.044X
O.OOOX
0.012X
0.007X
0.044X
0.286X
0.065X
1.43X 1.30X
1.43X 1.30X
O.OOX
O.OOX
1.32X
0.43X
0.43X
0.10X
0.09X
0.12X
0.19X
0.28X
0.07X
0.37X
0.02X
0.01X
0.09X
0.56X
0.13X
4.00X
10.92X
4.70X
0.90X
3.19X
3.48X
4.45X
2.34X
0.32X
0.12X
0.89X
0.58X
9.04X
0.09X
-------
Control Options Simulated
Year: 1993
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 3.93
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Reduction in Compound Use
Application
Dehumidif iers
Dry Cleaning
Dry Cleaning
Ext PS Bdstk
Ext PS Bdstk
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Flex PU Foam-Molded
Flex PU Foam-Molded
Flex PU Foam-Molded
Flex PU Foam-Slabstock
Flex PU Foam-Slabstock
Freezers
Hospitals
Hospitals
Hospitals
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Mobile Air Conditioners
Mobile Air Conditioners
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
PE Foam
f>E Foam
Control Option (198S$/kg) (198S$/kg) Application CFC Use CFC-11 CFC-1Z CFC-113 CFC-114 CFC-115
Recovery at Rework
Refrigerated Condenser
Aqueous Cleaning
HCFC-22
FC-134a
Product Substitutes for Stock Food Trays
Product Substitutes for Egg Cartons
Product Substitutes for Single Service Plates; Cups;
Product Substitutes for Hinged Containers
HCFC-22
CFC-HIb
HD I -TD I/Water-Blown Systems in HR Process
HCFC-123
CFC-141b
HCFC-123
Recovery at Rework
Contract Out
Disposables
C02 (10/90 EO/C02)
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Recovery at Service and Quality Engineering
Recovery at Service -- Large Shops
Refrigerated Freeboard Chiller
Aqueous Cleaning and Terpenes
Manual Cover; Drainage; Increased Freeboard; & Thermo
CFC-113 Automatic Cover
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
CFC-113 Automated Hoist
Alternate Packaging Materials
Rubber or Plastic Floatation Devices
0.73
-2.64
-0.64
0.88
3.93
0.00
0.00
0.00
0.00
0.39
1.90
1.95
3.52
1.90
3.52
0.07
0.00
0.00
1.55
-2.31
-0.20
-0.17
0.00
•11.59
1.84
-11.81
-11.65
-10.40
-1.55
-0.35
0.00
0.00
0.20
-9.87
-9.70
0.20
-3.01
-1.14
0.88
3.93
0.00
0.00
0.00
0.00
0.35
1.90
1.19
3.52
1.90
3.52
-0.50
0.00
0.00
1.17
-2.31
-0.37
-0.61
0.00
-12.09
0.73
-12.04
-12.40
-10.75
-1.80
-0.35
0.00
0.00
-0.81
-9.87
-9.90
1.8X
21. 8X
3.4X
90. IX
6.7X
3.9X
2. OX
2.7X
1.4X
89. 9X
6.7X
46. 7X
10.4X
6 7X
8.3X
1.3X
3. OX
15. 4X
8.2X
4. OX
41.9X
2.2X
18.2X
2.0X
6.5X
5.8X
23.6X
0.7X
13. 6X
1.7X
6.6X
12. OX
10.5X
5. OX
2.9X
0.003X
0.1 14X
0.018X
1.238X
0.092X
0.114X
0.058X
0.078X
0.041X
2.618X
0.103X
0.718X
0.159X
0 357X
0.444X
0.003X
0.096X
0.497X
0.263X
0.059X
0.611X
0.032X
0.265X
0.503X
1 .635X
0.344X
1.397X
0.042X
0.805X
0.100X
0.389X
0.713X
0.623X
0.072X
0.041X
O.OOX
2.43X
0.18X
0.22X
0.11X
0.15X
0.08X
5.14X
0.33X
2.31X
0.51X
1.15X
K43X
0.01X
0.19X
0.9BX
0.52X
0.12X
1.20X
0.06X
0.52X
0.99X
3.21X
0.07X
0.04X
0.73X
0.12X
2.22X
9.01X
0.27X
5.19X
0.65X
2. SIX
4.60X
4.02X
2.36X
1.35X
-------
Control Options Simulated
Year: 1993
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: S 3.93
Application
PE Foam
PE Foam
Pharmaceutical
Pharmaceutical
Phenolic Foam
Phenolic Foam
Phenolic Foam
Polypropylene Foam
Process Refrig
Process Refrig
Process Refrig
Process Refrig
Rec i procat i ng Chi11ers
Reciprocating Chillers
Refrigerated Transport
Refrigerated Transport
Refrigerators
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-502)
Retail Food (CFC-S02)
Retail Food (CFC-502)
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
Reduction in Compound Use
Rubber or Plastic Gaskets
HCFC-22
Contract Out
N2 Purge then Pure EO
Other Insulation Naterials-Equiv Insul Capacity
CFC-l4lb
HCFC-123
Alternate Packaging Materials
Hydrocarbons
Ammonia
HCFC-22
CFC-502
HCFC-22
Alt Leak Test Gas
HCFC-22
CFC-502
Recovery at Rework
HCFC-22
Alt Leak Test Gas-At Installation
CFC-502
Recovery at Service and Disposal
HCFC-22
Alt Leak Test Gas-At Installation
Recovery at Service and Disposal
Other Insulation Materials-Equiv Insul Capacity
Thick Fiberglass Batts
CFC-141b
HCFC-123
Other Insulation Materials-Equiv Insul Capacity
Thick Fiberglass Batts/Thick Walls/Wide Stud Spacing
CFC-141b
HCFC-123
Thick Fiberglass Batts/Thick Walls/Cony Stud Spacing
Other Insulation Materials-Equiv Insul Capacity
CFC-Ulb
0.00
0.38
0.00
0.28
0.50
1.76
2.68
0.00
0.38
0.00
-0.10
0.50
1.76
2.68
-7.80
-3.29
-2.61
0.81
2.79
0.63
0.89
0.63
2.77
-0.97
0.81
1.01
2.79
2.92
-7.19
-5.73
1.43
0.50
0.50
1.60
3.76
0.50
0.50
1.60
3.77
0.50
0.50
1.60
-7.80
-3.29
-2.61
0.81
2.79
0.63
0.89
0.63
2.77
-1.20
0.81
1.01
2.79
2.15
-7.19
-5.73
-0.03
0.50
0.50
1.60
3.77
0.50
0.50
1.60
3.77
0.50
0.50
1.60
Ml 1
cation I
1.8X
90. 3X
8.9X
17.9X
28. OX
35. 9X
24. 1X
42. OX
3.5X
7.4X
14. OX
11. 8X
17.5X
5.6X
6.6X
6.6X
1.9X
7.3X
2.7X
21. OX
7.9X
3.7X
0.4X
5.4X
16. OX
12. 6X
35. 8X
23. 8X
16.0X
1.7X
41. OX
27. 4X
2. OX
19.6X
39. IX
• v i gn i ea -
:FC use
0.027X
1.304X
0.024X
0.048X
0.164X
0.211X
0.141X
0.372X
0.01 IX
0.024X
0.046X
0.038X
0.035X
0.011X
0.017X
0.017X
0.016X
0.159X
0.059X
0.460X
0.174X
0.024X
0.003X
0.034X
0.014X
0.011X
0.032X
0.021X
0.201X
0.021X
0.516X
0.345X
0.119X
1.168X
2.333X
CFC-11
0.29X
0.38X
0.25X
0.60X
0.05X
0.04X
0.10X
0.07X
0.65X
0.07X
1.66X
1.11X
0.38X
3.76X
7.51X
CFC-12 CFC-113 1
0.03X
1.28X
0.05X
0.10X
0.47X
0.60X
0.41X
0.02X
0.05X
0.09X
0.08X
0.07X
0.02X
0.03X
0.03X
0.03X
0.31X
0.12X
0.90X
0.34X
:FC-114 CFC-115
0.87X
42.68X
12.17X
4.87X
0.53X
7.01X
-------
Control Options Simulated
Year: 1993
Cost Curve: Case 1
Use Scenario: Niddle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 3.93
Application
Rgd PU Foam-Lam-Cons-Bldg HCFC-123
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985S/kg) (1985$/kg) Application
Reduction in Compound Use
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Spd-Cns-Bldg
Rgd PU Foam-Spd-Cns-Bldg
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Trans
Spice fumigant
CFC-11/22
CFC-Ulb
HCFC-123
CFC-11/22
CFC-U1b
HCFC-123
Other Packaging Materials
EPS Bead Board
H20 only (C02)
CFC-Ulb
CFC-11/H20
CFC-11/22
CFC-Ulb
CFC-11/22
CFC-U1b
CFC-Ulb
HCFC-123
Thick Fiberglass Batts
CFC-Ulb
HCFC-123
CFC-Ulb
N2 Purge then Pure EO
3.77
• 0.30
1.54
3.70
0.30
1.54
3.50
-27.65
-17.06
-1.47
1.54
-0.48
0.30
1.54
0.30
1.54
1.59
3.55
0.50
1.59
3.55
1.59
-0.05
3.77
0.30
1.54
3.70
0.30
1.54
3.50
-27.65
-17.06
-1.47
1.54
-0.48
0.30
1.54
0.30
1.54
1.59
3.55
0.50
1.59
3.55
1.59
-0.27
Jl 1
:ation (
26.2%
10.0X
45. OX
30.0X
10. OX
45. OX
30.0X
30.0X
21. OX
16. 3X
16. 3X
10. OX
9.0X
40.6X
6.7X
46.8X
50.0X
33. 3X
20.0X
40. OX
26.7X
50.0X
22. 5X
•eigniea -
:FC use
1.563X
0.151X
0.682X
0.453X
0.024X
0.107X
0.071X
0.475X
0.333X
0.259X
0.259X
0.431X
0.388X
1.748X
0.105X
0.734X
1.851X
1.235X
0.278X
0.555X
0.370X
0.293X
0.019X
CFC- 11
5.03X
0.34X
1.55X
1.03X
0.05X
0.24X
0.16X
1.08X
0.76X
0.59X
0.59X
0.98X
0.88X
3.97X
0.24X
1.67X
S.SOX
3.67X
0.83X
1.6SX
1.10X
0.87X
CFC-12 CFC-113 CFC-114 CFC-115
0.09X
0.39X
0.26X
0.01X
0.06X
0.04X
0.27X
0.19X
0.15X
0.15X
0.25X
0.22X
1.01X
0.06X
0.42X
0.28X
0.19X
0.04X
0.08X
0.06X
0.04X
0.04X
-------
CASE 1 -- 1998
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 5.48
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Reduction in Compound Use
Application
Aerosol Propel I ant
Aerosol Propel lant
Animal Labs
Bee Hives
Centrif Chillers (CFC- 114)
Centrif Chillers (CFC-1U)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-SOO)
Centrif Chillers (CFC-SOO)
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degrees ing
Cnvyrzd Vapor Degrees ing
Cnvyrzd Vapor Degress ing
Cnvyrzd Vapor Degrees ing
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-S02)
Cold Storage (CFC-S02)
Commercial RAO Labs
Conmercial R&O Labs
Commercial R&D Labs
Control Option
Carbon Dioxide
HCFC-22 Blends
FC-1348
FC-134a
Recovery at Service and Disposal
FC-134a
Market Mix
Recovery at Service and Disposal
HCFC-123
Recovery at Service and Disposal
Alt Leak Test Gas
Market Mix
FC-134a
Recovery at Service and Disposal
Market Mix
Aqueous Cleaning and Terpenes
Carbon Adsorption and Drying Tunnel
Reclaim Waste Solvent
Housekeeping Controls
CFC- 113 Azeo tropes
Petroleum Solvents
Methyl Chloroform
Cover; Drainage; & Increased Freeboard
Reclaim Waste Solvent
Housekeeping Controls
CFC- 113 Azeo tropes
HCFC-22
Alt Leak Test Gas
CFC-502
FC-134a
HCFC-22
Alt Leak Test Gas
N2 Purge then Pure EO
Contract Out
FC-134a
(1985$/kg) (1985*/kg) Application CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
-0.74
2.21
3.24
3.24
0.47
4.35
0.00
1.60
3.02
0.74
1.26
4.50
4.97
-0.47
0.00
16.60
-0.72
-0.36
0.00
0.00
-2.36
-1.34
-0.61
-0.32
0.00
0.00
0.81
1.26
2.79
4.97
•7.19
-7.13
-0.27
0.00
5.00
-0.74
2.21
3.24
3.24
0.26
4.35
0.00
1.22
3.02
0.56
1.26
7.62
4.97
-0.68
0.00
-17.20
-1.51
-0.36
0.00
0.00
-2.36
-1.34
-0.64
-0.32
0.00
0.00
0.81
1.26
2.79
4.97
-7.19
-7.13
-0.41
0.00
5.00
25. OX
25. OX
80. 9X
87. 5X
24. OX
53. 2X
40. OX
7.5X
18.4X
7.5X
4.8X
40. OX
16.6X
20. 3X
53. 5X
24. OX
15. 5X
1.8X
6.5X
7.0X
40. OX
21. OX
2.9X
1.1X
5.3X
a. ox
20. 3X
2.5X
26. 8X
25. OX
24. 5X
0.1X
22. 5X
15. 5X
54. 2X
1.106%
1.106X
O.OOOX
O.OOOX
0.087X
0.193X
1.025X
0.192X
0.472X
0.070X
0.045X
0.372X
0.155X
0.062X
0.164X
1.692X
1.093X
0.128X
0.456X
0.496X
0.690X
0.363X
0.050X
0.019X
0.091X
0.139X
0.246X
0.031X
0.324X
0.303X
0.075X
O.OOOX
0.012X
0.009X
0.030X
1.43X 1.30X
1.43X 1.30X
O.OOX
O.OOX
3.30X
0.62X
1.52X
0.14X
0.09X
0.73X
0.30X
0.17X
0.44X
0.48X
0.06X
0.64X
0.60X
0.02X
0.02X
0.06X
5.71X
12.65X
10.92X
7.05X
0.83X
2.94X
3.20X
4.45X
2.34X
0.32X
0.12X
0.58X
0.89X
15. SOX
0.07X
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 1
Use Scenario: Hiddle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: * 5.48
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Reduction in Compound Use
Application
Contract Sterilization
Contract Sterilization
Contract Sterilization
Contract Sterilization
Dehuroidif iers
Dry Cleaning
Dry Cleaning
Ext PS Bdstk
Ext PS Bdstk
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Flex PU Foam-Molded
Flex PU Foam-Molded
Flex PU Foam-Molded
Flex PU Foam-Slabstock
Flex PU Foam-Slabstock
Freezers
Hospitals
Hospitals
Hospitals
Hospitals
Libraries
Liquid Food Freezing
Liquid Food Freezing
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Knee i-ost Tor weigniea
Control Option (1985$/kg) (1985$/kg) Application CFC Use CFC-11 CFC-12 CFC-113 CFC-1K CFC-115
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
FC-134a
Recovery at Rework
Refrigerated Condenser
Aqueous Cleaning
HCFC-22
FC-1348
Product Substitutes for Egg Cartons
Product Substitutes for Hinged Containers
Product Substitutes for Stock Food Trays
Product Substitutes for Single Service Plates; Cups;
HCFC-22
CFC-141b
MDI-TDI/Uater-Blown Systems in KR Process
HCFC-123
CFC-141b
HCFC-123
Recovery at Rework
Disposables
Contract Out
C02 (10/90 EO/C02)
FC-134a
FC-134a
FC-134a
Cryogenic
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
FC-134a
-2.34
-0.36
-0.17
5.00
0.73
-2.64
-0.64
0.88
3.93
0.00
0.00
0.00
0.00
0.39
1.90
1.95
3.52
1.90
3.52
0.07
0.00
0.00
1.55
5.00
5.00
4.97
5.32
-2.31
-0.20
-0.17
0.00
5.18
-2.34
-0.48
-0.62
5.00
0.20
-3.01
-1.14
0.88
3.93
0.00
0.00
0.00
0.00
0.35
1.90
1.19
3.52
1.90
3.52
-0.50
0.00
0.00
1.17
5.00
5.00
4.97
5.03
-2.31
-0.37
-0.61
0.00
5,18
7.5X
55. 5X
9.2X
24. 3X
1.8X
21 .8X
3.4X
90. IX
10. OX
2. OX
1.4X
3.9X
2.7X
89.9X
17.8X
41. 2X
31 .9X
17.8X
25. 6X
1.3X
21 .9X
3.9X
7.4X
58.4X
87.5X
35. OX
6.5X
4.0X
47.8X
1.9X
23. OX
20. 1X
0.044X
0.327X
0.055X
0.143X
0.003X
0.1 UX
0.018X
1.238X
0.138X
0.058X
0.041X
0.114X
0.078X
2.618X
0.273X
0.634X
0.491X
0.954X
1 .370X
0.003X
0.708X
0.126X
0.239X
1.885X
0.001X
0.490X
0.091X
0.059X
0.698X
0.028X
0.336X
0.294X
0.09X
0.64X
0.11X
0.28X
O.OOX
0.73X
0.12X
2.43X
0.27X
0.11X
0.08X
0.22X
0.15X
5.14X
0.88X
2.0U
1.58X
3.07X
4.41X
0.01X
1.39X
0.25X
0.47X
3.70X
O.OOX
0.96X
0.18X
0.12X
1.37X
0.06X
"0.66X
0.58X
Mobile Air Conditioners
Recovery at Service and Quality Engineering
-11.59
-12.09
7. OX 1.763X
3.46X
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: $ 5.48
Application
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for Weighted
<1985$/kg) (1985*/kg) Application CFC Use CFC-11 CFC-12 CFC-113 CFC-1U CFC-115
Reduction in Compound Use
Mobile Air Conditioners
Mobile Air Conditioners
Non-Commercial RSD Labs
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
PE Foam
PE Foam
PE Foam
PE Foam
Pharmaceutical
Pharmaceutical
Pharmaceutical
Phenolic Foam
Phenolic Foam
Phenolic Foam
Polypropylene Foam
Process Refrig
Process Refrig
Process Refrig
Process Refrig
Process Refrig
Reciprocating Chillers
Reciprocating Chillers
Reciprocating Chillers
Refrigerated Transport
Refrigerated Transport
Refrigerated Transport
Refrigerators
Retail Food (CFC-12)
Recovery at Service -- Large Shops 1.84 0.73
FC-134a 5.48 5.22
FC-134a 5.00 5.00
Refrigerated Freeboard Chiller
Aqueous Cleaning and Terpenes
Manual Cover; Drainage; Increased Freeboard; & Thermo
CFC-113 Automatic Cover
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
CFC-113 Automated Hoist
Alternate Packaging Materials
Rubber or Plastic Floatation Devices
Rubber or Plastic Gaskets
HCFC-22
Contract Out
N2 Purge then Pure EO
FC-134a
Other Insulation Materials-Equiv Insul Capacity
CFC-1416
HCFC-123
Alternate Packaging Materials -7.80 -7.80
Hydrocarbons
Ammonia
HCFC-22
CFC-502
FC-134a
HCFC-22
Alt Leak Test Gas
FC-134a
HCFC-22
CFC-502
FC-134a
Recovery at Rework -0.97 -1.20
HCFC-22 0.81 0.81
6.5X
48.7X
1.635X
12.3X
85.3X O.OOOX
3.21X
24. IX
O.OOX
11.81
11.65
10.40
-1.55
-0.35
0.00
0.00
0.20
-9.87
-9.70
0.00
0.38
0.00
0.28
5.00
0.50
1.76
2.68
-12.04
-12.40
-10.75
-1.80
-0.35
0.00
0.00
-0.81
-9.87
-9.90
0.00
0.38
0.00
-0.10
5.00
0.50
1.76
2.68
3.29
2.61
0.81
2.79
4.97
0.63
0.89
4.89
0.63
2.77
4.89
-3.29
-2.61
0.81
2.79
4.97
0.63
0.89
4.89
0.63
2.77
4.89
5.8X
23.6X
0.7X
13. 6X
1.7X
12. OX
6.6X
10.5X
5. OX
2.9X
1.8X
90.3X
8.9X
20.6X
61. 7X
40.0X
29. 9X
30. IX
42. OX
5. OX
10. 5X
19.0X
14. 7X
35. 6X
30. IX
4.8X
4.9X
11. 2X
11. 2X
33.8X
1.9X
12.5X
0.344X
1.397X
0.042X
0.805X
0.100X
0.713X
0.389X
0.623X
0.072X
0.041X
0.027X
1 .304X
0.024X
0.056X
0.167X
0.235X
0.176X
0.177X
0.372X
0.016X
0.034X
0.062X
0.048X
0.1 16X
0.060X
0.009X
0.010X
0.029X
0.029X
0.088X
0.016X
0.274X
0.07X
0.04X
0.03X
1.28X
0.05X
0.11X
0.33X
0.42X
0.31X
0.32X
0.60X
0.03X
0.07X
0.12X
0.09X
0.23X
0.12X
0.02X
0.02X
0.06X
0.06X
0.17X
0.03X
0.54X
2.22X
9.01X
0.27X
5.19X
0.65X
4.60X
2. SIX
4.02X
0.67X
O.SOX
0.51X
2.36X
1.35X
0.87X
42.68X
12.17X
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: $ 5.48
Application
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985$/kg) (1985$/kg) Application
Reduction in Compound Use
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-S02)
Retail Food (CFC-502)
Retail Food (CFC-502)
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foem-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Prd-Trans
Alt Leak Test Gas-At Installation
CFC-502
Recovery at Service and Disposal
FC-134a
HCFC-22
Alt Leak Test Gas-At Installation
Recovery at Service and Disposal
Other Insulation Naterials-Equiv Insul Capacity
Thick Fiberglass Batts
CFC-HIb
HCFC-123
Thick Fiberglass Batts/Thick Walls/Wide Stud Spacing
Other Insulation Materials-Equtv Insul Capacity
CFC-HIb
HCFC-123
Thick Fiberglass Batts/Thick Walls/Conv Stud Spacing
Other Insulation Naterials-Equiv Insul Capacity
CFC-HIb
HCFC-123
CFC-11/22
CFC-141b
HCFC-123
CFC-11/22
CFC-Ulb
HCFC-123
Other Packaging Materials
EPS Bead Board
H20 only (C02)
CFC-HIb
HCFC-123
CFC-11/H20
CFC-11/22
CFC-HIb
HCFC-123
CFC-11/22
CFC-H1b
HCFC-123
1.01
2.79
2.92
4.97
-7.19
-5.73
1.43
0.50
0.50
1.60
3.76
0.50
0.50
1.60
3.77
0.50
0.50
1.60
3.77
0.30
1.54
3.70
0.30
1.54
3.50
27.65
17.06
-1.47
1.54
3.70
-0.48
0.30
1.54
3.70
0.30
1.54
3.50
1.01
2.79
2.15
4.97
-7.19
-5.73
-0.03
0.50
0.50
1.60
3.77
0.50
0.50
1.60
3.77
0.50
0.50
1.60
3.77
0.30
1.54
3.70
0.30
1.54
3.50
-27.65
-17.06
-1.47
1.54
3.70
-0.48
0.30
1.54
3.70
0.30
1.54
3.50
kJI 1
cation 1
2.7X
21. OX
13. 2X
11. 6X
6.4X
0.4X
8.9X
20. OX
12.0X
34. OX
34. OX
2.9X
36. IX
30. 6X
30.6X
4.5X
23. 9X
35. 7X
35. 9X
10. OX
45. OX
45.0X
10.0X
45. OX
45.0X
30.0X
21 .OX
24. 5X
12.3X
8.2X
10. OX
9. OX
40. 6X
27. OX
10. OX
45. IX
30. OX
vciyuieu •
:FC use
0.059X
0.460X
0.289X
0.254X
0.040X
0.003X
0.057X
0.018X
0.011X
0.030X
0.030X
0.036X
0.454X
0.385X
0.385X
0.268X
1.423X
2.131X
2.140X
0.151X
0.682X
0.682X
0.024X
0.107X
0.107X
0.475X
0.333X
0.388X
0.194X
0.129X
0.431X
0.388X
1.748X
1.165X
0.157X
0.708X
0.471X
CFC- 11
0.06X
0.03X
0.10X
0.10X
0.12X
1.46X
1.24X
1.24X
0.86X
4.58X
6.86X
6.89X
0.34X
1.55X
1.55X
0.05X
0.24X
0.24X
1.08X
0.76X
0.88X
0.44X
0.29X
0.98X
0.88X
3.97X
2.65X
0.36X
1.61X
1.07X
CFC-12 CFC-113 (
0.12X
0.90X
0.57X
0.50X
0.09X
0.39X
0.39X
0.01X
0.06X
0.06X
0.27X
0.19X
0.22X
0.11X
0.07X
0.25X
0.22X
1.01X
0.67X
0.09X
0.41X
0.27X
:FC-114 CFC-115
8.34X
0.53X
11.68X
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 1
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/ttalon Freeze
Simulated CFC Price Increase: $ 5.48
Application
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for Weighted
(1985$/kg) (1985*/kg) Application CFC Use
Reduction in Compound Use
CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
Rgd PU Foam-Spd-Cns-Bldg
Rgd PU Foam-Spd-Cns-Bldg
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Trans
Rgd PU Foam-Spd-Trans
Spice fumigant
Spice fumigant
CFC-141b
HCFC-123
Thick Fiberglass Batts
CFC-Ulb
HCFC-123
CFC-HIb
HCFC-123
N2 Purge then Pure EO
FC-134a
1.59
3.55
0.50
1.59
3.55
1.59
3.55
-0.05
5.18
1.59
3.55
0.50
1.59
3.55
1.59
3.55
-0.27
5.18
50. OX
50. OX
20.0X
40. OX
40. OX
50. OX
33. 4X
22. 5X
36.0X
1.851X
1.851X
0.278X
0.555X
0.555X
0.293X
0.196X
0.019X
0.030X
5. SOX
5. SOX
0.83X
1.65X
1.65X
0.87X
0.58X
0.28X
0.28X
0.04%
0.08X
0.08X
0.04X
0.03X
0.04X
0.06X
-------
CASE 2 -- 1989
-------
Control Options Simulated
Year: 1989
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: t 0.00
Application
Aerosol Propellent
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-500)
Centrif Chillers (CFC-500)
Cnvyrzd Vapor Degrees ing
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degreasing
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleening
Cold Cleaning
Cold Storage (CFC-12)
Cold Storage (CFC-502)
Cold Storage (CFC-502)
Cold Storage (CFC-502)
Conmercial R&O Labs
Commercial R&D Labs
Commercial R&D Labs
Commercial R&D Labs
Contract Sterilization
Contract Sterilization
Contract Sterilization
Dry Cleaning
Dry Cleaning
Ext PS Bdstk
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985S/kg) (1985*/kg) Application
Reduction in Compound Use
Carbon Dioxide
Market Mix
Recovery at Service and Disposal
Market Mix
Aqueous Cleaning and Terpenes
Carbon Adsorption and Drying Tunnel
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
Petroleum Solvents
Methyl Chloroform
Cover; Drainage; & Increased Freeboard
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
Ammonia
Ammonia
HCFC-22
Alt Leak Test Gas
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Refrigerated Condenser
Aqueous Cleaning
HCFC-22
Product Substitutes for Egg Cartons
Product Substitutes for Single Service Plates; Cups;
Product Substitutes for Stock Food Trays
HCFC-22
Product Substitutes for Hinged Containers
-0.74
0.00
-2.61
-19.79
-7.19
-7.13
-3.25
-0.27
-0.24
0.00
-2.34
-0.36
-0..17
-2.64
-0.64
0.00
0.00
0.00
0.00
0.00
0.00
-0.74
0.00
-0.47
0.00
16.60
-0.72
-0.36
0.00
0.00
-2.36
-1.34
-0.61
-0.32
0.00
0.00
-0.68
0.00
-17.20
-1.51
-0.36
0.00
0.00
-2.36
-1.34
-0.64
-0.32
0.00
0.00
-2.61
-19.79
-7.19
-7.13
-3.25
-0.41
-0.86
0.00
-2.34
-0.48
-0.62
-3.01
-1.14
0.00
0.00
0.00
0.00
0.00
0.00
cation CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC- 115
30. OX
24. OX
6.1X
40.6X
20.0X
16.3X
1.9X
4.2X
14.4X
20.0X
28.0X
3.8X
1.4X
11. 7X
2.4X
3. OX
4.6X
13. 9X
0.1X
15. OX
23. OX
6.2X
4.2X
15.0X
19.1X
32. 9X
21. 8X
3.4X
44.9X
0.7X
0.9X
1.3X
89.9X
0.5X
1.326X
0.615X
0.019X
0.125X
1.411X
1.150X
0.135X
0.295X
1.016X
0.344X
0.482X
0.066X
0.025X
0.202X
0.041X
0.036X
0.014X
0.043X
O.OOOX
0.008X
0.013X
0.003X
0.002X
0.089X
0.1 13X
0.194X
0.1 HX
0.018X
0.616X
0.019X
0.026X
0.038X
2.618X
0.014X
1.71X 1.56X
1.98X
0.05X
0.33X
0.07X
0.02X
0.02X
0.01X
O.OOX
0.17X
0.22X
0.38X
1.21X
0.04X
0.05X
0.07X
5.14X
0.03X
9.10X
7.42X
0.87X
1.90X
6.55X
2.22X
3.11X
0.43X
0.16X
1.30X
0.26X
0.73X
0.12X
2.91X
8.82X
0.09X
-------
Control Options Simulated
rear: 1989
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: * 0.00
Application
Hospitals
Hospitals
Hospitals
Liquid Food Freezing
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Mobile Air Conditioners
Open Top Vpr Degreesing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
PE Foam
PE Foam
PE Foam
Pharmaceutical
Pharmaceutical
Polypropylene Foam
Polypropylene Foam
Process Refrig
Process Refrig
Refrigerators
Retail Food (CFC-502)
Retail Food (CFC-502)
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Refrig
Spice funigant
Spice filitigant
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985$/kg) (1985S/kg) Application
Reduction in Compound Use
Disposables 0 00
Steam Cleaning 0.00
Contract Out u!oO
Air Blast -LIB
Explosion Proof Condensation/Reclamation -2.31
N2 Purge then Pure EO -0.20
Acid-H20 Scrubber & Condensation/Reclamation -0.17
Contract Out 0.00
Proprietary Organic/75-85X CFC-12 0.00
Refrigerated Freeboard Chiller
Aqueous Cleaning and Terpenes
Manual Cover; Drainage; Increased Freeboard; & Thermo
CFC-113 Automatic Cover
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
Alternate Packaging Materials
Rubber or Plastic Floatation Devices
HCFC-22
Explosion Proof Condensation/Reclamation
Contract Out
Alternate Packaging Materials
Carbon Adsorption with Recovery
Hydrocarbons
Ammonia
Recovery at Rework -0.97
HCFC-22 -7.19
Alt Leak Test Gas-At Installation -5.73
Other Packaging Materials -27.65
EPS Bead Board -17.06
CFC-11/H20 -0.48
Explosion Proof Condensation/Reclamation -4.88
Acid-H20 Scrubber & Condensation/Reclamation -0.36
0.00
0.00
0.00
-1.57
-2.31
-0.37
-0.61
0.00
0.00
•11.81
-11.65
•10.40
-1.55
-0.35
0.00
0.00
-9.87
-9.70
0.00
-5.76
0.00
-7.80
-1.53
-3.29
-2.61
-12.04
-12.40
-10.75
-1.80
-0.35
0.00
0.00
-9.87
-9.90
0.00
-5.76
0.00
-7.80
-1.59
-3.29
-2.61
-1.20
-7.19
-5.73
-27.65
-17.06
-0.48
-4.88
-1.29
»r i
ration I
21. OX
10. OX
1.5X
12. OX
4. OX
18. OX
3.1X
22. 4X
6.7X
5.8X
18. 9X
0.8X
14. 5X
1.8X
12.6X
7.9X
5. OX
2.9X
92. 3X
5. OX
10. IX
85. OX
3.6X
3. OX
6.8X
1.9X
3.2X
0.4X
36. IX
23. OX
10. OX
10.0X
3.9X
•eigniea -
:FC use
0.678X
0.322X
0.048X
0.168X
0.059X
0.262X
0.045X
0.328X
1.676X
0.344X
1.118X
0.045X
0.859X
0.107X
0.747X
0.467X
0.072X
0.041X
1.333X
0.013X
0.027X
0.752X
0.032X
0.010X
0.022X
0.015X
0.020X
0.003X
0.571X
0.365X
0.431X
0.008X
0.003X
CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
1.33X
0.63X
0.10X
0.33X
0.12X
0.52X
0.09X
0.64X
3.29X
2.22X
7.21X
0.29X
5.54X
0.69X
4.82X
3.01X
0.07X 2.36X
0.04X 1.35X
1.31X 43.55X
0.03X
0.05X
1.21X 24.62X
0.05X 1.04X
0.02X
0.04X
0.03X
4.17X
0.53X
1.30X 0.33X
0.83X 0.21X
0.98X - 0.25X
0.02X
0.01X
-------
Control Options Simulated
Year: 1989
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: * 0.00
Application
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for Weighted
(1985$/kg) (1985$/kg) Application CFC Use
Reduction in Compound Use
CFC-11 CFC-12 CFC-113 CFC-1H CFC-115
Spice fumigant
HZ Purge then Pure EO
-0.05
-0.27
27.0X 0.022X
0.04X
-------
CASE 2 -- 1991
-------
Control Options Simulated
Year: 1991
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: S 0.00
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Reduction in Compound Use
Application
Aerosol Propel lant
Centrif Chillers (CFC-11)
Centrif chillers (CFC-SOO)
Centrif Chillers (CFC-SOO)
Cnvyrzd Vapor Degress ing
Cnvyrzd Vapor Degrees ing
Cnvyrzd Vapor Degrees ing
Cnvyrzd Vapor Degrees ing
Cnvyrzd Vapor Degrees ing
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Storage (CFC- 12)
Cold Storage (CFC-502)
Cold Storage (CFC-502)
Cold Storage (CFC-502)
Coomercial R&O Labs
Commercial R&D Labs
Commercial R&O Labs
Commercial R&D Labs
Contract Sterilization
Contract Sterilization
Contract Sterilization
Dry Cleaning
Dry Cleaning
Ext PS Bdstk
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Control Option (1985*/kg) (1985S/kg) Application CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
Carbon Dioxide
Market Nix
Recovery at Service and Disposal
Market Mix
Aqueous Cleaning and Terpenes
Carbon Adsorption end Drying Tunnel
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
Petroleum Solvents
Methyl Chloroform
Cover; Drainage; & Increased Freeboard
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
Ammonia
Ammonia
HCFC-22
Alt Leak Test Gas
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Refrigerated Condenser
Aqueous Cleaning
HCFC-22
Product Substitutes for Egg Cartons
Product Substitutes for Single Service Plates; Cups;
Product Substitutes for Stock Food Trays
HCFC-22
Product Substitutes for Hinged Containers
-0.74
0.00
-0.47
0.00
-16.60
-0.72
-0.36
0.00
0.00
-2.36
-1.34
-0.61
-0.32
0.00
0.00
-2.61
-19.79
-7.19
-7.13
-3.25
-0.27
-0.24
0.00
-2.34
-0.36
-0.17
-2.64
-0.64
0.00
0.00
0.00
0.00
0.00
0.00
-0.74
0.00
-0.68
0.00
-17.20
-1.51
-0.36
0.00
0.00
-2.36
-1.34
-0.64
-0.32
0.00
0.00
-2.61
-19.79
-7.19
-7.13
-3.25
-0.41
-0.86
0.00
-2.34
-0.48
-0.62
-3.01
-1.14
0.00
0.00
0.00
0.00
0.00
0.00
49.9X
40.0X
10. IX
63. 7X
40. OX
12. 2X
1.4X
9.4X
9.2X
40. OX
21. OX
2.9X
1.1X
8.8X
5.3X
5. OX
7.7X
21. 7X
0.1X
15.0X
38.3X
4.7X
5.3X
15. OX
31 .9X
26. 5X
21 .8X
3.4X
90. IX
2. OX
2.7X
3.9X
89. 9X
1.4X
2.210X
1.025X
0.031X
0.196X
2.820X
0.864X
0.101X
0.662X
0.651X
0.690X
0.363X
0.050X
0.019X
0.151X
0.092X
0.061X
0.024X
0.067X
O.OOOX
0.008X
0.021X
0.003X
0.003X
0.089X
0.188X
0.156X
0.1UX
0.018X
1.238X
0.058X
0.078X
0.114X
2.618X
0.041X
2.85X 2.60X
3.30X
0.08X
0.52X
0.12X
0.02X
0.04X
0.01X
0.01X
0.17X
0.37X
0.31X
2.43X
0.11X
0.15X
~0.22X
5.14X
0.08X
1B.19X
5.57X
0.65X
4.27X
4.20X
4.45X
2.34X
0.32X
0.12X
0.97X
0.59X
4.85X
13.73X
0.06X
0.73X
0.12X
-------
Control Options Simulated
Year: 1991
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: * 0.00
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Reduction in Compound Use
Application
Hospitals
Hospitals
Hospitals
Liquid Food Freezing
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Mobile Air Conditioners
Open Top Vpr Degress ing
Open Top Vpr Degrees ing
Open Top Vpr Degress ing
Open Top Vpr Degrees ing
Open Top Vpr Degrees ing
Open Top Vpr Degress ing
Open Top Vpr Degrees ing
PE Foam
PE Foam
PE Foam
Pharmaceutical
Pharmaceutical
Polypropylene Foam
Polypropylene Foam
Process Refrig
Process Refrig
Refrigerators
Retail Food (CFC-502)
Retail Food (CFC-502)
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Refrig
Spice funigant
Spice funigant
. •••*•«* wwoi iui we inn lea -
Control Option <1985t/kg> (1985$/kg) Application CFC Use
Disposables
Steam Cleaning
Contract Out
Air Blast
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Proprietary Organic/75-85% CFC- 12
Refrigerated Freeboard Chiller
Aqueous Cleaning and Terpenes
Manual Cover; Drainage; Increased Freeboard; & Thermo
CFC- 113 Automatic Cover
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeot ropes
Alternate Packaging Materials
Rubber or Plastic Floatation Devices
HCFC-22
Explosion Proof Condensation/Reclamation
Contract Out
Alternate Packaging Materials
Carbon Adsorption with Recovery
Hydrocarbons
Amnonia
Recovery at Rework
HCFC-22
Alt Leak Test Gas-At Installation
Other Packaging Materials
EPS Bead Board
CFC-11/H20
Explosion Proof Condensation/Reclamation
Acid-H20 Scrubber & Condensation/Reclamation
0.00
0.00
0.00
-1.18
-2.31
-0.20
-0.17
0.00
0.00
-11.81
-11.65
-10.40
-1.55
-0.35
0.00
0.00
-9.87
-9.70
0.00
-5.76
0.00
-7.80
-1.53
-3.29
-2.61
-0.97
-7.19
-5.73
-27.65
-17.06
-0.48
-4.88
-0.36
0.00
0.00
0.00
-1.57
-2.31
-0.37
-0.61
0.00
0.00
-12.04
-12.40
-10.75
-1.80
-0.35
0.00
0.00
-9.87
-9.90
0.00
-5.76
0.00
-7.80
-1.59
-3.29
-2.61
-1.20
-7.19
-5.73
-27.65
-17.06
-0.48
-4.88
-1.29
35. OX
10. OX
2.5X
20. OX
4. OX
30. OX
2.6X
31. 7X
t
20. OX
5.8X
37. 7X
0.6X
10.9X
1.4X
8. OX
11. 8X
5. OX
2.9X
92.3X
5. OX
16.9X
85. OX
6.0X
5. OX
11. 3X
1.9X
5.3X
0.4X
60.0X
24. OX
10.0X
10.0X
3.9X
1.131X
0.322X
0.080X
0.280X
0.059X
0.438X
0.039X
0.462X
5.033X
0.344X
2.234X
0.033X
0.643X
0.080X
0.473X
0.701X
0.072X
0.041X
1.333X
0.013X
0.046X
0.752X
0.053X
0.016X
0.037X
0.015X
0.034X
0.003X
0.950X
0.380X
0.431X
0.008X
0.003X
CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
2.22X
0.63X
0.16X
0.55X
0.12X
0.86X
0.08X
0.91X
9.88X
2.22X
14.41X
0.22X
4.15X
0.52X
3.05X
4.52X
0.07X 2.36X
0.04X 1.35X
1.31X 43.55X
0.03X
0.09X
1.21X 24.62X
0.09X 1.74X
0.03X
0.07X
0.03X
6.95X
0.53X
2.16X 0.55X
0.86X 0.22X
0.98X 0.25X
0.02X
0.01X
-------
Control Options Simulated
Year: 1991
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 0.00
Application
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price • Cost for Weighted
(1985S/kg) <1985*/kg) Application CFC Use
Reduction in Compound Use
CFC-11 CFC-12 CFC-113 CFC-1U CFC-115
Spice funigant
N2 Purge then Pure EO
-0.05
-0.27
45.OX 0.037X
0.07X
-------
CASE 2 -- 1993
-------
Control Options Simulated
Year: 1993
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: $ 1.55
Application
Aerosol Propellent
Centrif Chillers (CFC-1H)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-500)
Centrif Chillers (CFC-500)
Cnvyrzd Vapor Degressing
Cnvyrzd Vapor Degreesing
Cnvyrzd Vapor Degreasing
Cnvyrzd Vapor Degreasing
Cnvyrzd Vapor Degreasing
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-502)
Cold Storage (CFC-502)
Cold Storage (CFC-502)
Commercial RSD Labs
Commercial R&O Labs
Commercial R&O Labs
Commercial R&O Labs
Contract Sterilization
Contract Sterilization
Contract Sterilization
Dehumidifiers
Dry Cleaning
Dry Cleaning
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985$/kg) (1985S/kg) Application
Reduction in Compound Use
Carbon Dioxide
Recovery at Service and Disposal
Market Nix
Recovery at Service and Disposal
Alt Leak Test Gas
Recovery at Service and Disposal
Market Mix
Aqueous Cleaning and Terpenes
Carbon Adsorption and Drying Tunnel
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
Petroleum Solvents
Methyl Chloroform
Cover; Drainage; & Increased Freeboard
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
Ammonia
HCFC-22
Alt Leak Test Gas
Anmonia
HCFC-22
Alt Leak Test Gas
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Recovery at Rework
Refrigerated Condenser
Aqueous Cleaning
-0.74
-0.74
0.47
0,00
0.74
1.26
-0.47
0.00
-16.60
-0.72
-0.36
0.00
0.00
-2.36
-1.34
-0.61
-0.32
0.00
0.00
-2.61
0.81
1.26
-19.79
-7.19
-7.13
-3.25
-0.27
-0.24
0.00
-2.34
-0.36
-0.17
0.26
0.00
0.56
1.26
-0.68
0.00
-17.20
-1.51
-0.36
0.00
0.00
• -2.36
-1.34
-0.64
-0.32
0.00
0.00
-2.61
0.81
1.26
-19.79
-7.19
-7.13
-3.25
-0.41
-0.86
0.00
-2.34
-0.48
-0.62
0.73
-2.64
-0.64
0.20
-3.01
-1.14
:ation CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
49. 9X
16.8X
40. OX
5.2X
4.9X
14. IX
59. 7X
50. OX
10.2X
1.2X
10.4X
7. OX
40. OX
21. OX
2.9X
1.1X
8.8X
7.1X
7. OX
15. 6X
2.7X
10. 7X
28. 2X
0.1X
15. OX
38. 3X
4.7X
7.4X
15. OX
44. 6X
20.2X
1.8X
21 .8X
3.4X
2.210X
0.061X
1.025X
0.049X
0.046X
0.043X
0.183X
3.525X
0.719X
0.084X
0.735X
0.496X
0.690X
0.363X
0.050X
0.019X
0.151X
0.122X
0.085X
0.189X
0.033X
0.033X
0.087X
O.OOOX
0.008X
0.021X
0.003X
0.004X
0.089X
0.263X
0.1 19X
0.003X
0.1 14X
0.018X
2.85X 2.60X
3.30X
0.10X
0.09X
0.12X
0.49X
0.17X
0.37X
0.06X
0.02X
0.04X
0.01X
0.01X
0.17X
0.52X
0.23X
O.OOX
22.74X
4.64X
0.54X
4.74X
3.20X
4.45X
2.34X
0.32X
0.12X
0.97X
0.79X
0.73X
0.12X
4.00X
6.78X
17.86X
0.03X
-------
Control Options Simulated
Year: 1993
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 1.55
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Reduction in Compound Use
Application
Dry Cleaning
Ext PS Bdstk
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Freezers
Hospitals
Hospitals
Hospitals
Hospitals
Liquid Food Freezing
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Mobile Air Conditioners
Mobile Air Conditioners
Open Top Vpr Degress ing
Open Top Vpr Degrees ing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
Open Top Vpr Degreasing
PE Foam
PE Foam
PE Foam
Pharmaceutical
Pharmaceutical
Pharmaceutical
Pharmaceutical
Control Option (1985S/kg) (19B5S/kg) Application CFC Use CFC-11 CFC-12 CFC-113 CFC-1U CFC-115
Reclaim Wastes
HCFC-22
Product Substitutes for Hinged Containers
Product Substitutes for Stock Food Trays
HCFC-22
Product Substitutes for Single Service Plates; Cups;
Product Substitutes for Egg Cartons
Recovery at Rework
Disposables
Contract Out
Steam Cleaning
C02 (10/90 EO/C02)
Air Blast
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Recovery at Service and Quality Engineering
Proprietary Organic/75-85X CFC-12
Refrigerated Freeboard Chiller
Aqueous Cleaning and Terpenes
Manual Cover; Drainage; Increased Freeboard; & Thermo
CFC-113 Automatic Cover
Reclaim Waste Solvent
CFC-113 Azeot ropes
Housekeeping Controls
CFC-113 Automated Hoist
Alternate Packaging Materials
Rubber or Plastic Floatation Devices
HCFC-22
Explosion Proof Condensation/Reclamation
Contract Out
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
0.75
0.00
0.00
0.00
0.00
0.00
0.00
0.07
0.00
0.00
0.00
1.55
-1.18
-2.31
-0.20
-0.17
0.00
-11.59
0.00
-11.81
-11.65
-10.40
•1.55
-0.35
0.00
0.00
0.20
-9.87
-9.70
0.00
-5.76
0.00
0.28
0.97
0.75
0.00
0.00
0.00
0.00
0.00
0.00
-0.50
0.00
0.00
0.00
1.17
-1.57
-2.31
-0.37
-0.61
0.00
-12.09
0.00
-12.04
-12.40
-10.75
-1.80
-0.35
0.00
0.00
-0.81
-9.87
-9.90
0.00
-5.76
0.00
-0.10
-0.36
1.2X
90. IX
1.4X
3.9X
89.9%
2.7%
2. OX
1.3X
35. OX
3.5X
10. OX
35. OX
28.0X
4. OX
41. 9X
2.2X
25. 9X
2. OX
19.6X
5.8X
47. IX
0.5X
9. OX
1.1X
9.8X
6.6X
5.8X
5. OX
2.9X
92.3X
5. OX
16.9X
30. 7X
11. 4X
0.006X
1.238X
0.041X
0.1 14X
2.618X
0.078X
0.058X
0.003X
1.131X
0.1 13X
0.322X
1.131X
0.391X
0.059X
0.611X
0.032X
0.378X
0.503X
4.931X
0.344X
2.793X
0.028X
0.536X
0.067X
0.583X
0.394X
0.344X
0.072X
0.041X
1.333X
0.013X
0.046X
0.083X
0.031X
0.04X
2.43X
0.08X
0.22X
5.14X
oiisx
0.11X
0.01X
2.22X
0.22X
0.63X
2.22X
0.77X
0.12X
1.20X
0.06X
0.74X
0.99X
9.68X
2.22X
18.01X
0.18X
3.46X
0.43X
3.76X
2.54X
2.22X
0.07X
0.04X
1.31X
0.03X
0.09X
-0.16X
0.06X
2.36X
1.35X
43.55X
Phenolic Foam
Other Insulation Materials-Equiv Insul Capacity
0.50
0.50
80.IX 0.470X 0.84X
1.35X
-------
Control Options Simulated
Tear: 1993
Cost Curve: Case 2
Use Scenario: Kiddle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: S 1.55
Application
Control Option
Weighted Weighted Reduction Reduction
Tprr?c9eCr Sc°os?1 '"" 5" "" «!MS«!i **«i.n «" Co«pound Use
Polypropylene Foam
Polypropylene Foam
Process Refrig
Process Refrig
Process Refrig
Reciprocating Chillers
Reciprocating Chillers
Refrigerated Transport
Refrigerators
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-502)
Retail Food (CFC-502)
Retail Food (CFC-502)
Rgd PU Foan-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Cons-Ind
»gd PU Foam-Prd-Packaging
tgd PU Foam-Prd-Packaging
Igd PU Foam-Prd-Packaging
tgd PU Foam-Prd-Packaging
»gd PU Foam-Prd-Refrig
igd PU Foam-Prd-Refrig
tgd PU Foam-Prd-Refrig
Alternate Packaging Materials
Carbon Adsorption with Recovery
Hydrocarbons
Ammonia
HCFC-22
HCFC-22
Alt Leak Test Gas
HCFC-22
Recovery at Rework
HCFC-22
Alt Leak Test Gas-At Installation
HCFC-22
Alt Leak Test Gas-At Installation
Recovery at Service and Disposal
Other Insulation Materials-Equiv Insul Capacity
Thick Fiberglass Batts
Other Insulation Naterials-Equiv Insul Capacity
Thick Fiberglass Batts/Thick Walls/Wide Stud Spacing
Thick Fiberglass Batts/Thick Ualls/Conv Stud Spacing
Other Insulation Naterials-Equiv Insul Capacity
CFC-11/22
CFC-141b
CFC-11/22
CFC-141b
Other Packaging Materials
EPS Bead Board
H20 only (C02)
CFC-H1b
CFC-11/H20
CFC-11/22
CFC-Klb
-7.80
-1.53
-3.29
-2.61
0.81
0.63
0.89
0.63
-0.97
0.81
1.01
-7.19
-5.73
1.43
0.50
0.50
0.50
0.50
0.50
0.50
0.30
1.54
0.30
1.54
-27.65
-17.06
-1.47
1.54
-0.48
0.30
1.54
-7.80
-1.59
-3.29
-2.61
0.81
0.63
0.89
0.63
-1.20
0.81
1.01
-7.19
-5.73
-0.03
0.50
0.50
0.50
0.50
0.50
0.50
0.30
1.54
0.30
1.54
-27.65
-17.06
-1.47
1.54
-0.48
0.30
1.54
1 VI
i cat ion
85. OX
8.4X
7. OX
15. 7X
15. 7X
29.8X
4.8X
13. IX
1.9X
14. 6X
2.7X
7.4X
0.4X
6.2X
40. OX
18.0X
56. IX
3. IX
7. OX
46.5X
10. OX
45. OX
10. OX
45. OX
60. OX
24. OX
5.3X
5.3X
10. OX
9. OX
40. 6X
OTCiyillVU '
CFC Use
0.752X
0.074X
0.023X
0.051X
0.051X
0.059X
0.009X
0.034X
0.015X
0.319X
0.059X
0.047X
0.003X
0.040X
0.035X
0.016X
0.705X
0.039X
0.416X
2.774X
0.1S1X
0.682X
0.024X
0.107X
0.950X
0.380X
0.084X
0.084X
0.431X
0.388X
1.748X
CFC-11
1.21X
0.12X
0.11X
0.05X
2.27X
0.13X
1.34X
8.93X
0.34X
1.55X
0.05X
0.24X
2.16X
0.86X
0.19X
0.19X
0.98X
0.88X
3.97X
CFC- 12 CFC- 113 .CFC- 114 CFC- 115
0.04X
0.10X
0.10X
0.12X
0.02X
0.07X
0.03X
0.63X
0.12X
0.09X
0.39X
0.01X
0.06X
0.55X
0.22X
0.05X
0.05X
0.25X
0.22X
1.01X
24.62X
2.43X
9.73X
0.53X
8.18X
-------
Control Options Simulated
Year: 1993
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: $ 1.55
Application
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Prd-Trans
Control Option
Weighted weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985$/kg) (1985S/kg) Application
CFC-11/22
CFC-Ulb
Rgd PU Foam-Spd-Cns-Ind Thick Fiberglass Batts
Spice fumigant
Spice fumigant
Spice fumigant
Explosion Proof Condensation/Reclamation
Acid-H20 Scrubber ft Condensation/Reclamation
N2 Purge then Pure EO
0.30
1.54
0.50
-4.88
-0.36
-0.05
0.30
1.54
0.50
-4.88
-1.29
-0.27
i MCI nil lea .......... ..........
ation CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
10. OX
45. IX
20. OX
10.0X
3.9X
45.0X
0.157X
0.708X
0.278X
0.008X
0.003X
0.037X
0.36X
1.61X
0.83X
0.09X
0.41X
0.04X
0.02X
0.01X
0.07X
-------
CASE 2 -- 1998
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: $ 4.49
Application
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985S/kg> (1985S/kg) Application
Reduction in Compound Use
Aerosol Propellant
Aerosol Propellent
Animal Labs
Bee Hives
Centrif Chillers (CFC-114)
Centrif Chillers (CFC-114)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-11)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-12)
Centrif Chillers (CFC-500)
Centrif Chillers (CFC-SOO)
Cnvyrzd
Cnvyrzd
Cnvyrzd
Cnvyrzd
Cnvyrzd
Cnvyrzd
Vapor
Vapor
Vapor
Vapor
Vapor
Vapor
Degreesing
Degreesing
Degreesing
Degreesing
Degreesing
Degreesing
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Cleaning
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Cold Storage (CFC-12)
Commercial R&D Labs
Commercial RU> Labs
Commercial R&D Labs
Commercial R&D Labs
Carbon Dioxide
HCFC-22 Blends
FC-134a
FC-134a
Recovery at Service and Disposal
FC-134a
Market Mix
Recovery at Service and Disposal
HCFC-123
Recovery at Service and Disposal
Alt Leak Test Gas
Recovery at Service and Disposal
Market Mix
Aqueous Cleaning and Terpenes
Carbon Adsorption and Drying Tunnel
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
HCFC-123
Petroleum Solvents
Methyl Chloroform
Cover; Drainage; & Increased Freeboard
Reclaim Waste Solvent
Housekeeping Controls
CFC-113 Azeotropes
HCFC-123
Anrnonf a
HCFC-22
Alt Leak Test Gas
CFC-502
Explosion Proof Condensation/Reclamation
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
-0.74
2.21
3.24
3.24
0.47
4.35
0.00
1.60
3.02
0.74
1.26
-0.47
0.00
•16.60
-0.72
-0.36
0.00
0.00
2.73
-2.36
-1.34
-0.61
-0.32
0.00
0.00
2.73
-2.61
0.81
1.26
2.79
-3.25
-0.27
-0.24
0.00
-0.74
2.21
3.24
3.24
0.26
4.35
0.00
1.22
3.02
0.56
1.26
-0.68
0.00
-17.20
-1.51
-0.36
0.00
0.00
2.73
-2.36
-1.34
-0.64
-0.32
0.00
0.00
2.73
-2.61
0.81
1.26
2.79
-3.25
-0.41
-0.86
0.00
ii weigniea .--.--.. ................... .
:ation CFC Use CFC-11 CFC-12 CFC-113 CFC- 114 CFC-115
49. 9X
49.9X
80.9X
87. 5X
24. OX
53. 2X
40. OX
7.5X
18. 4X
7.5X
4.8X
20. 3X
S3.5X
SO. OX
10.2X
1.2X
10. 4X
7. OX
2.2X
40. OX
21. OX
2.9X
1.1X
8.8X
7. IX
0.7X
10. OX
26.8X
2.3X
26.8X
15. OX
38.3X
4.7X
8.4X
2.210X
2.210X
O.OOOX
O.OOOX
0.087X
0.193X
1.025X
0.192X
0.472X
0.070X
0.045X
0.062X
0.164X
3.525X
0.719X
0.084X
0.735X
0.496X
0.157X
0.690X
0.363X
0.050X
0.019X
0.151X
0.122X
0.012X
0.121X
0.324X
0.028X
0.324X
0.008X
0.021X
0.003X
0.005X
2.85X 2.60X
2.85X 2.60X
O.OOX
O.OOX
3.30X
0.62X
1.52X
0.14X
0.09X
0.17X
0.44X
0.24X
0.64X
0.06X
0.64X
0.02X
0.04X
0.01X
0.01X
5.71X
12.65X
22.74X
4.64X
O.S4X
4.74X
3.20X
1.01X
4.45X
2.34X
0.32X
0.12X
0.97X
0.79X
0.07X
Contract Sterilization
Explosion Proof Condensation/Reclamation
-2.34
-2.34
IS.OX 0.089X
0.17X
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: % 4.49
Application
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for Weighted
(198S$/kg) (1985S/kg) Application CFC Use CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
Reduction in Compound-Use
Contract Sterilization
Contract Sterilization
Dehumidifiers
Dry Cleaning
Dry Cleaning
Dry Cleaning
Dry Cleaning
Ext PS Bdstk
Ext PS Bdstk
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Ext PS Sht
Flex PU Foam-Molded
Flex PU Foam-Molded
Flex PU Foam-Molded
Flex PU Foam-Slabstock
Flex PU Foam-Slabstock
Freezers
Hospitals
Hospitals
Hospitals
Hospitals
Liquid Food Freezing
Medical Equipment
Medical Equipment
Medical Equipment
Medical Equipment
Mobile Air Conditioners
Mobile Air Conditioners
Mobile Air Conditioners
Mobile Air Conditioners
N2 Purge then Pure EO
Acid-HZO Scrubber & Condensation/Reclamation
Recovery at Rework
Refrigerated Condenser
Aqueous Cleaning
Reclaim Wastes
PerchIoroethyIene
HCFC-22
FC-134a
Product Substitutes for Single Service Plates; Cups;
Product Substitutes for Egg Cartons
HCFC-22
Product Substitutes for Stock Food Trays
Product Substitutes for Hinged Containers
CFC-141b
HDI-TDI/Water-Blown Systems in HR Process
HCFC-123
CFC-U1b
HCFC-123
Recovery at Rework
Contract Out
Steam Cleaning
Disposables
C02 (10/90 EO/C02)
Air Blast
at ion
Explosion Proof Condensetion/RecIt
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Contract Out
Recovery at Service and Quality Engineering
Proprietary Organic/75-85X CFC-12
Recovery at Service -- Large Shops
Recovery at Service -- Medium Shops
-0.36
-0.17
0.73
0.07
0.00
0.00
0.00
1.55
-1.18
-2.31
-0.20
-O.t7
0.00
-11.59
0.00
1.84
4.49
-0.48
-0.62
0.20
-2.64
-0.64
0.75
2.44
0.00
3.93
0.00
0.00
0.00
0.00
0.00
1.90
1.95
3.52
1.90
3.52
-3.01
-1.14
0.75
0.79
0.00
3.93
0.00
0.00
0.00
0.00
0.00
1.90
1.19
3.52
1.90
3.52
-0.50
0.00
0.00
0.00
1.17
-1.57
-2.31
-0.37
-0.61
0.00
-12.09
0.00
0.73
2.53
51.OX
17. OX
0.301X
0.100X
1.8X 0.003X
21 .8X
3.4X
1.2X
73. 7X
90. IX
10. OX
2.7X
2. OX
89.9X
3.9X
1.4X
35. 6X
63. 3X
1.0X
35. 6X
20. IX
1.3X
5. OX
10.0X
35.0X
35. OX
40. IX
4. OX
47.8X
1.9X
23. OX
7. OX
18.6X
6.5X
19.2X
0.114X
0.018X
0.006X
0.385X
1.238X
0.138X
0.078X
0.058X
2.618X
0.1 14X
0.041X
0.547X
0.972X
0.015X
1 .904X
1.075X
0.003X
0.161X
0.322X
1.131X
1.131X
0.560X
0.059X
0.698X
0.028X
0.336X
1.763X
4.682X
1 .635X
4.834X
1.76X
3.13X
0.05X
6.13X
3.46X
0.59X
0.20X
O.OOX
0.73X
0.12X
0.04X
2.48X
2.43X
0.27X
0.15X
0.11X
5.14X
0.22X
0.08X
0.01X
0.32X
0.63X
2.22X
2.22X
1.10X
0.12X
1.37X
0.06X
0.66X
3.46X
9.19X
-3.21X
9.49X
Open Top Vpr Degreesing
Refrigerated Freeboard Chiller
-11.81
-12.04
5.8X 0.344X
2.22X
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: $ 4.49
Application
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Vpr Degreesing
Open Top
Open Top
Open Top
Open Top
Open Top
Open Top
Open Top
Open Top
PE Foam
PE Foam
PE Foam
Pharmaceutical
Pharmaceutical
Pharmaceutical
Pharmaceutical
Phenolic Foam
Phenolic Foam
Phenolic Foam
Polypropylene Foam
Polypropylene Foam
Process Refrig
Process Refrig
Process Refrig
Process Refrig
Reciprocating Chillers
Reciprocating Chillers
Refrigerated Transport
Refrigerated Transport
Refrigerators
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-12)
Retail Food (CFC-12)
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Rgd PU Foam-BStk-Cns-Ind
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for
(1985S/kg) (1985$/kg) Application
Reduction in Compound Use
Aqueous Cleaning end Terpenes
Manual Cover; Drainage; Increased Freeboard; & Thermo
CFC-113 Automatic Cover
Reclaim Waste Solvent
CFC-113 Azeotropes
Housekeeping Controls
CFC-113 Automated Hoist
HCFC-123
Alternate Packaging Materials
Rubber or Plastic Floatation Devices
HCFC-22
Explosion Proof Condensation/Reclamation
Contract Out
N2 Purge then Pure EO
Acid-H20 Scrubber & Condensation/Reclamation
Other Insulation Materials-Equiv Insul Capacity
CFC-Ulb
HCFC-123
Alternate Packaging Materials
Carbon Adsorption with Recovery
Hydrocarbons
Ammonia
HCFC-22
CFC-502
HCFC-22
Alt Leak Test Gas
HCFC-22
CFC-502
Recovery at Rework
HCFC-22
Alt Leak Test Gas-At Installation
CFC-S02
Recovery at Service and Disposal
Other Insulation Materials-Equiv Insul Capacity
Thick Fiberglass Belts
CFC-HIb
-11.65
-10.40
-1.55
-0.35
0.00
0.00
0,20
2.73
-9.87
-9.70
0.00
-5.76
0.00
0.28
0.97
0.50
1.76
2.68
-7.80
-1.53
-3.29
-2.61
0.81
2.79
0.63
0.89
0.63
2.77
-12.40
-10.75
-1.80
-0.35
0.00
0.00
-0.81
2.73
-9.87
-9.90
0.00
-5.76
0.00
-0.10
-0.36
0.50
1.76
2.68
-7.80
-1.59
-3.29
-2.61
0.81
2.79
0.63
0.89
0.63
2.77
-0.97
0.81
01
79
92
-1.20
0.81
01
79
15
0.50
0.50
1.60
0.50
0.50
1.60
/I I
ration (
47.1X
0.5X
9.0X
1.1X
9.8X
6.6X
S.8X
1.0X
5. OX
2.9X
92. 3X
5. OX
16.9X
35. IX
10. 3X
80. IX
10. OX
10.0X
85. OX
12. OX
10.0X
22. 6X
22.6X
22. 6X
50.9X
3.3X
22. 5X
22. 5X
1.9X
24. 9X
2.7X
42.6X
13.2X
40. OX
18. OX
21 .OX
•eiynieu ---
:FC use CFC- 11
2.793X
0.028X
0.536X
0.067X
0.583X
0.394X
0.344X
0.059X
0.072X
0.041X
1 .333X
0.013X
0.046X
0.095X
0.028X
0.470X 0.84X
0.059X 0.11X
0.059X 0.1 IX
0.752X 1.21X
0.106X 0.17X
0.033X
0.073X
0.073X
0.073X
0.101X
0.007X
0.059X
0.059X
0.015X
0.545X
0.059X
0.932X
0.289X
0.035X 0.11X
0.016X 0.05X
0.019X 0.06X
CFC-12 CFC-113 1
18.01X
0.18X
3.46X
0.43X
3.76X
2.54X
2.22X
0.38X
0.07X
0.04X
1.31X
0.03X
0.09X
0.19X
0.05X
1.35X
0.17X
0.17X
0.06X
0.14X
0.14X
0.14X
0.20X
0.01X
0.12X
0.12X
0.03X
1.07X
0.12X
1.83X
0.57X
CFC- 114 CFC-115
2.36X
1.35X
43.55X
24.62X
3.48X
-------
Control Options Simulated
Year: 1998
Cost Curve: Case 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze
Simulated CFC Price Increase: $ 4.49
Application
Rgd PU Foam-BStk-Cns-Ind HCFC-123
Control Option
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost
Reduction in Compound Use
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foaro-Bstk-Cons-Bldg
Rgd PU Foam-Bstk-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Lam-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Bldg
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Cons-Ind
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Packaging
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Refrig
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Prd-Trans
Rgd PU Foam-Spd-Cns-Bldg
Rgd PU Foam-Spd-Cns-Bldg
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Cns-Ind
Rgd PU Foam-Spd-Trans
Rgd PU Foam-Spd-Trans
Spice fumigant
Other Insulation Naterials-Equiv Insul Capacity
Thick Fiberglass Batts/Thick Walls/Wide Stud Spacing
CFC-141D
HCFC-123
Thick Fiberglass Batts/Thick Ualls/Conv Stud Spacing
Other Insulation Naterials-Equiv Insul Capacity
CFC-141b
HCFC-123
CFC-11/22
CFC-141b
HCFC-123
CFC-11/22
CFC-141b
HCFC-123
Other Packaging Materials
EPS Bead Board
H20 only (C02)
CFC-141b
HCFC-123
CFC-11/H20
CFC-11/22
CFC-141b
HCFC-123
CFC-11/22
CFC-H16
HCFC-123
CFC-1416
HCFC-123
Thick Fiberglass Batts
CFC-1416
HCFC-123
CFC-1416
HCFC-123
Explosion Proof Condensation/Reclamation
3.76
3.77
0.50
0.50
1.60
3.77
0.50
0.50
1.60
3.77
0.30
1.54
3.70
0.30
1.54
3.50
27.65
17.06
-1.47
1.54
3.70
-0.48
0.30
1.54
3.70
0.30
1.54
3.50
1.59
3.55
0.50
1.59
3.55
1.59
3.55
0.50
0.50
1.60
3.77
0.50
0.50
1.60
3.77
0.30
1.54
3.70
0.30
1.54
3.50
-27.65
-17.06
-1.47
1.54
3.70
-0.48
0.30
1.54
3.70
0.30
1.54
3.50
1.59
3.55
0.50
1.59
3.55
1.59
3.55
VI 1
cation I
21. OX
80. OX
2. OX
9.0X
9. OX
10. OX
45. OX
22. 5X
22.6X
10.0X
45. OX
45. OX
10.0X
45. OX
45. OX
60.0X
24. OX
8.0X
4. OX
2.7X
10. OX
9. OX
40. 6X
27.0X
10. OX
45. IX
30.0X
50. OX
50.0X
20. OX
40.0X
40.0X
50. OX
33.4X
•ciymeu -
CFC Use
0.019X
1.007X
0.025X
0.113X
0.1 13X
0.596X
2.684X
1.339X
1 .345X
0.151X
0.682X
0.682X
0.024X
0.107X
0.107X
0.950X
0.380X
0.127X
0.063X
0.042X
0.431X
0.388X
1.748X
1.165X
0.157X
0.708X
0.471X
1.851X
1.851X
0.278X
0.555X
0.555X
0.293X
0.196X
CFC-11
0.06X
3.24X
0.08X
0.36X
0.37X
1.92X
8.64X
4.31X
4.33X
0.34X
1.55X
1.55X
0.05X
0.24X
0.24X
2.16X
0.86X
0.29X
0.14X
0.10X
0.98X
0.88X
3.97X
2.65X
0.36X
1.61X
1.07X
5. SOX
5. SOX
0.83X
1.6SX
1.65X
0.87X
0.58X
CFC-12 CFC-113 CFC-114 CFC-115
0.09X
0.39X
0.39X
0.01X
0.06X
0.06X
0.5SX
0.22X
0.07X
0.04X
0.02X
0.25X
0.22X
1.01X
0.67X
0.09X
0.41X
0.27X
0.28X
0.28X
0.04X
0.08X
0.08X
0.04X
0.03X
-4.88
-4.88
10.OX 0.008X
0.02X
-------
Control Options Simulated
Year: 1993
Cost Curve: Case 2
Use Scenario: Niddle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated CFC Price Increase: S 4.49
Application
Control Option
Spice fumigant
Spice fumigant
Acid-H20 Scrubber & Condensation/Reclamation
N2 Purge then Pure EO
Weighted Weighted Reduction Reduction
Trigger Social in CFC Use in Total
Price Cost for Weighted
(1985S/kg) (1985S/kg) Application CFC Use
-0.36
-0.05
•1.29
-0.27
3.9X
45.OX
0.003X
0.037X
Reduction in Compound Use
CFC-11 CFC-12 CFC-113 CFC-114 CFC-115
0.01X
0.07X
-------
HALONS -- 1989
-------
Control Options Simulated
Year: 1989
Cost Curve: Cases 1 & 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated Hal on Price Increase: S 0.00
Application Control Option
Local App Syst (Halon 1211)
Local App Syst (Halon 1211)
Local App Syst (Halon 1211)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
PrtCiv Elect
PrtCiv Elect
PrtCiv Elect
PrtCiv Elect
PrtCiv FlamLqd
PrtCiv FlamLqd
PrtCiv FlamLqd
PrtCiv General
PrtCiv General
PrtCiv General
PrtCiv General
PrtCiv Res id
PrtCiv Resld
PrtCiv Res id
PrtCiv Resid
TF Military (Halon 1211)
TF Military (Halon 1211)
TF Military (Halon 1211)
TF Military (Halon 1301)
TF Military (Halon 1301)
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Reduce Test Scale
Reduce Test Frequency
Decrease Frequency of Tear-Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery at Service
Increase Recovery
Contained Discharge
Reduce Test Frequency
Reduce Test Scale
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Use VCRs and Films for Training
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Weighted Weighted Reduction R
Trigger Social in Halon Use i
Price Cost for W
(19B5*/kg) (1985*/kg) Application H
-4.38
-1.26
-1.04
-0.49
-0.33
-0.24
-0.01
-4.41
-4.39
-4.39
-4.35
-3.79
-0.01
-17.73
-0.99
-0.01
-0.01
-4.39
-3.06
-2.99
-1.16
-4.38
-2.99
-2.97
-4.39
-3.06
-2.99
-1.16
-4.40
-3.06
•2.99
-1.16
-4.29
-1.25
-1.04
-0.99
-0.93
-4.39
-1.56
-1.04
-0.49
-0.39
-0.24
-0.02
-4.41
-4.39
-4.39
-4.37
-3.96
-0.12
-18.45
-0.99
-0.01
-0.01
-4.40
-3.42
-3.51
-1.16
-4.39
-3.51
-3.32
-4.40
-3.42
-3.51
-1.16
-4.40
-3.42
-3.51
-1.16
-4.30
-1.55
-1.04
-0.99
-0.94
2.3X
1.1X
1.1X
2.5X
0.9X
0.9X
0.6X
1.3X
1.0X
0.1X
0.4X
1.0X
1.9X
0.1X
2.6X
0.7X
0.9X
3.3X
0.2X
0.4X
1.8X
2.7X
1.5X
0.7X
3.3X
0.2X
0.4X
1.6X
3.4X
0.1X
0.3X
1.1X
0.8X
1.7X
1.7X
0.9X
1.4X
eduction
n Total
einhted
Reduction
in Compound Use
alon Use Halon 1211 Halon 1301
0.007X
0.004X
0.004X
0.018X
0.006X
0.006X
0.004X
0.073X
0.059X
0.009X
0.023X
0.059X
0.107X
0.004X
0.102X
0.029X
0.035X
0.291X
0.019X
0.038X
0.162X
0.026X
0.014X
0.007X
0.052X
0.003X
0.006X
0.026X
0.047X
0.002X
0.004X
0.016X
O.OOOX
0.001X
0.001X
0.099X
0.160X
0.04X
0.02X
0.02X
0.39X
0.31X
0.04X
0.12X
0.31X
0.57X
1.53X
0.10X
0.20X
0.85X
0.14X
0.08X
0.04X
0.27X
0.02X
0.03X
0.14X
0.25X
0.01X
0.02X
o.oax
o.oox
o.oox
o.oox
0.02X
0.01X
0.01X
0.01X
o.oox
0.13X
0.04X
0.04X
0.12X
0.20X
-------
Control Options Simulated
Year: 1989
Cost Curve: Cases 1 S 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated Ha 1 on Price Increase: $ 0.00
Application Control Option
TF Military (Halon 1301)
TF Military (Halon 1301)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1211}
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
Decrease Frequency of Tear-Down
Increase Personnel Training
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Weighted Weighted Reduction R
Trigger Social in Halon Use ii
Price Cost for Ui
(198SS/kg) (1985S/kg) Application H,
-0.48
-0.03
-4.37
-1.26
-1.04
-0.99
-0.66
-0.48
-0.03
-4.42
-1.26
-1.04
-0.98
-0.66
-0.48
-0.03
-4.73
-1.27
-1.05
-0.99
-0.66
-0.48
-0.03
-0.48
-0.04
-4.38
-1.56
-1.04
-0.99
-0.77
-0.48
-0.04
-4.44
-1.56
-1,04
-0.98
-0.77
-0.48
-0.04
-4.74
-1.58
-1.05
-0.99
-0.77
-0.48
-0.04
1.4X
0.9X
2.3X
1.0X
1.0X
2.6X
0.8X
2.1X
0.5X
1.7X
2.6X
2.6X
2.0X
2. IX
2. IX
1.4X
2. IX
1.0X
1.0X
2.6X
0.9X
0.8X
0.6X
eduction
n Total
Reduction
in Compound
Use
alon Use Halon 1211 Halon 1301
0.159X
0.108X
0.003X
0.002X
0.002X
1.288X
0.397X
1 .045X
0.261X
O.OOOX
0.001X
0.001X
0.183X
0.188X
0.189X
0.127X
O.OOOX
O.OOOX
O.OOOX
0.159X
0.052X
0.050X
0.034X
0.02X
0.01X
0.01X
O.OOX
O.OOX
O.OOX
O.OOX
O.OOX
O.OOX
0.20X
0.13X
1.59X
0.49X
1.29X
0.32X
0.23X
0.23X
0.23X
0.16X
0.20X
0.06X
0.06X
0.04X
-------
HALONS -- 1991
-------
Control Options Simulated
Year: 1991
Cost Curve: Cases 1 & 2
Use Scenario: Niddle Growth
Regulatory Option: CFC 50X/Halon Freeze
Sinulated Halon Price Increase: t 0.00
Application
Local App Syst (Halon 1211)
Local App Syst (Halon 1211)
Local App Syst (Halon 1211)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Control Option
Prt Military
Prt Military
Prt Military
Prt Military
Prt Military
Prt Military
(Halon
(Halon
(Halon
(Halon
(Halon
(Halon
1211)
1211)
1211)
1211)
1211)
1211)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
PrtCiv Elect
PrtCiv Elect
PrtCiv Elect
PrtCiv Elect
PrtCiv Flantqd
PrtCiv FlamLqd
PrtCiv FlamLqd
PrtCiv General
PrtCiv General
PrtCiv General
PrtCiv General
PrtCiv Resid
PrtCiv Resid
PrtCiv Resid
PrtCiv Resid
TF Military (Halon 1211)
TF Military (Halon 1211)
TF Military (Halon 1211)
TF Military (Halon 1301)
TF Military (Halon 1301)
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Reduce Test Scale
Reduce Test Frequency
Decrease Frequency of Tear-Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery at Service
Increase Recovery
Contained Discharge
Reduce Test Scale
Reduce Test Frequency
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Use VCRs and Films for Training
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Weighted Weighted R
Trigger Social in
Price Cost
(1985S/kg) (1985$/kg) Application
-4.38
-1.26
-1.04
-0.49
-0.33
-0.24
-0.01
-4.41
-4.39
-4.39
-4.35
-3.79
-0.01
-17.73
-0.99
-0.01
-0.01
-4.39
-3.06
-2.99
-1.16
-4.38
-2.99
-2.97
-4.39
-3.06
-2.99
-1.16
-4.40
-3.06
-2.99
-1.16
-4.29
-1.25
-1.04
•0.99
-0.93
-4.39
-1.56
-1.04
-0.49
-0.39
-0.24
-0.02
-4.41
-4.39
-4.39
-4.37
-3.96
-0.12
-18.45
-0.99
-0.01
-0.01
-4.40
-3.42
-3.51
-1.16
-4.39
-3.51
-3.32
-4.40
-3.42
-3.51
-1.16
-4.40
-3.42
-3.51
-1.16
-4.30
-1.55
-1.04
-0.99
-0.94
tion f
on Use i
r V
at ion H
2.3X
1.9X
1.9X
2.5X
1.5X
1.5X
1.0X
2. IX
1.7X
0.2X
0.4X
1.7X
3. IX
0.2X
2.6X
1.SX
1.2X
3.3X
0.4X
0.7X
2.4X
2.7X
2.4X
1.2X
3.3X
0.4X
0.6X
2.2X
3.4X
0.2X
0.4X
1.5X
1.3X
2.8X
2.8X
1.4X
2.3X
[eduction
in Total
leighted
Reduction
in Compound Use
lalon Use Halon 1211 Halon 1301
0.007X
0.006X
0.006X
0.018X
0.011X
0.011X
0.007X
0.122X
0.098X
0.011X
0.023X
0.098X
0.179X
0.007X
0.102X
0.059X
0.048X
0.291X
0.032X
0.063X
0.215X
0.026X
0.024X
0.012X
0.052X
0.006X
0.010X
0.035X
0.047X
0.003X
0.006X
0.021X
O.OOOX
0.001X
0.001X
0.164X
0.267X
0.04X
0.03X
0.03X
0.64X
0.51X
0.06X
0.12X
0.51X
0.94X
1.53X
0.17X
0.33X
1.13X
0.14X
0.13X
0.06X
0.27X
0.03X
0.05X
0.18X
0.25X
0.02X
0.03X
0.11X
O.OOX
0.01X
0.01X
0.02X
0.01X
0.01X
0.01X
0.01X
0.13X
0.07X
0.06X
0.20X
0.33X
-------
Control Options Simulated
YeBr: 1991
Cost Curve: Cases 1 ft 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOX/Halon Freeze
Simulated Halon Price Increase: * 0.00
Application
TF Military (Halon 1301)
TF Military (Halon 1301)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
Control Option
Weighted Weighted Re
Trigger Social in
Price Cost for
<1985*/kg) (1985S/kg) Application
Decrease Frequency of Tear-Down
Increase Personnel Training
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel.Training
-0.48
-0.03
-4.37
-1.26
-1.04
-0.99
-0.66
-0.48
-0.03
-4.42
-1.26
-1.04
-0.98
-0.66
-0.48
-0.03
-4.73
-1.27
-1.05
-0.99
-0.66
-0.48
-0.03
-0.48
-0.04
-4.38
-1.56
-1.04
-0.99
-0.77
-0.48
-0.04
-4.44
-1.56
-1.04
-0.98
-0.77
-0.48
-0.04
-4.74
-1.58
-1.05
-0.99
-0.77
-0.48
-0.04
:ion R
>n Use i
W
it ion H
2.3X
1.6X
2.3X
1.7X
1.7X
2.6X
1.3X
2.1X
0.9X
1.7X
4.3X
4.3X
2. OX
3.4X
3.4X
2.3X
2. IX
1.7X
1.7X
2.6X
1.4X
1.4X
0.9X
eduction
n Total
oiahtAH ...
Reduction
in Compound Use
alon Use Halon 1211 Halon 1301
0.265X
0.1 79*
0.003X
0.003X
0.003X
1.288X
0.662X
1 .045X
0.434X
O.OOOX
0.001X
0.001X
0.183X
0.313X
0.315X
0.212X
O.OOOX
O.OOOX
O.OOOX
0.1S9X
0.087X
0.084X
0.057X
0.02X
0.01X
0.01X
O.OOX
0.01X
0.01X
O.OOX
O.OOX
O.OOX
0.33X
0.22X
1.59X
0.82X
1.29X
0.54X
0.23X
0.39X
0.39X
0.26X
0.20X
0.11X
0.10X
0.07X
-------
HALONS -- 1993
-------
Control Options Simulated
Tear: 1993
Cost Curve: Cases 1 & 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Halon Freeze Weighted Weighted Reduction R
Simulated Halon Price Increase: $ 0.49 Trigger Social in Halon Use i
Price Cost - for W
Application Control Option (1985»/kg) (1985*/kg) Application H
Local App Syst (Halon 1211)
Local App Syst (Halon 1211)
Local App Syst (Halon 1211)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
PrtCiv Elect
PrtCiv Elect
PrtCiv Elect
PrtCiv Elect
PrtCiv FlamLqd
PrtCiv FlamLqd
PrtCiv FlamLqd
PrtCiv FlamLqd
PrtCiv General
PrtCiv General
PrtCiv General
PrtCiv General
PrtCiv Resid
PrtCiv Resid
PrtCiv Resid
PrtCiv Resid
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Alternative Test to Replace Discharg
Use Alternative Agent for Discharge Test
Use Non-Destructive Test Methods
Reduce Test Scale
Reduce Test Frequency
Decrease Frequency of Tear-Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery at Service
Decrease Frequency of Tear-Down
Increase Recovery
Contained Discharge
Reduce Test Scale
Reduce Test Frequency
Use VCRs and Films for Training
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Use VCRs and Films for Training
Decrease Frequency of Tear-Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear -Down
-4.38
-1.26
-1.04
-0.49
-0.33
-0.24
-0.01
O.OS
0.22
0.25
-4.41
-4.39
-4.39
-4.35
-3.79
-0.01
-19.24
-17.73
-0.99
-0.01
-0.01
0.27
-4.39
-3.06
-2.99
-1.16
-4.38
-2.99
-2.97
-1.16
-4.39
-3.06
-2.99
-1.16
-4.40
-3.06
-2.99
-1.16
-4.39
-1.56
-1.04
-0.49
-0.39
-0.24
-0.02
-0.27
0.09
0.25
-4.41
-4.39
. -4.39
-4.37
-3.96
-0.12
-19.24
-18.45
-0.99
-0.01
-0.01
0.19
-4.40
-3.42
-3.51
-1.16
-4.39
-3.51
-3.32
-1.16
-4.40
-3.42
-3.51
-1.16
-4.40
-3.42
-3.51
-1.16
2.3X
2.3X
2.6X
2.5X
1.8X
2. IX
1.4X
1.3X
9.7X
5. IX
3. OX
2.4X
0.2X
0.4X
2.4X
4.4X
O.OX
0.2X
2.6X
2. IX
1.7X
1.7X
3.3X
0.5X
1.0X
2.4X
2.7X
3.4X
1.7X
4.3X
3.3X
0.5X
0.9X
2.2X
3.4X
0.3X
0.6X
1.5X
eduction
n Total
aS nKfr^*4
Reduction
in Compound
Use
alon Use Halon 1211 Halon 1301
0.007X
0.007X
0.008X
0.018X
0.013X
0.015X
0.010X
0.009X
0.070X
0.037X
0.171X
0.137X
0.011X
0.023X
0.137X
0.251X
0.002X
0.008X
0.102X
0.083X
0.067X
0.067X
0.291X
0.044X
0.08BX
0.215X
0.026X
0.033X
0.016X
0.043X
0.052X
0.008X
0.014X
0.035X
0.047X
0.004X
0.008X
0.021X
0.04X
0.04X
0.04X
0.90X
0.72X
0.06X
0.12X
0.72X
1.32X
1.53X
0.23X
0.46X
1.13X
0.14X
0.18X
0.09X
0.22X
0.27X
0.04X
0.07X
0.18X
0.25X
0.02X
0.04X
0.11X
0.02X
0.02X
0.02X
0.01X
0.01X
0.09X
0.05X
O.OOX
0.01X
0.13X
0.10X
0.08X
0.08X
-------
Control Options Simulated
Tear: 1993
Cost Curve: Cases 1 & 2
Use Scenario: Middle Growth
Regulatory Option: CFC SOVHalon Freeze Weighted Weighted Reduction R
Simulated Ha I on Price Increase: * 0.49 Trigger Social in Ha I on Use ii
... Price Cost for U
Application Control Option (1985$/kg) (1985*/kg> Application H
TF Military (Halon 1211)
TF Military (Halon 1211)
TF Military (Halon 1211)
TF Military (Halon 1301)
TF Military (Halon 1301)
TF Military (Halon 1301)
TF Military (Halon 1301)
TF Military (Halon 1301)
TF Military (Halon 1301)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Alternative Test to Replace Dtscharg
Use Non-Destructive Test Methods
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Alternative Test to Replace Discharg
Use Non-Destructive Test Methods
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Use Alternative Test to Replace Discharg
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Non-Destructive Test Methods
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Alternative Test to Replace Discharg
Use Non-Destructive Test Methods
-4.29
-1.25
-1.04
-0.99
-0.93
-0.48
-0.03
0.11
0.49
-4.37
-1.26
-1.04
-0.99
-0.66
-0.48
-0.03
0.11
0.49
-4.42
-1.26
-1.04
-0.98
-0.92
-0.66
-0.48
-0.03
0.49
-4.73
•1.27
-1.05
-0.99
-0.66
-0.48
-0.03
0.11
0.49
-4.30
-1.55
-1.04
-0.99
-0.94
-0.48
-0.04
-0.54
0.49
-4.38
. -1.56
-1.04
-0.99
-0.77
-0.48
-0.04
-0.53
0.49
-4.44
-1.56
-1.04
-0.98
-1.19
-0.77
-0.48
-0.04
0.49
-4.74
-1.58
-1.05
-0.99
-0.77
-0.48
-0.04
-0.54
0.49
1.8X
3.4X
4. OX
2. OX
2.8X
3.2X
2.2X
1.2X
4.7X
2.3X
2. IX
2.4X
2.6X
1.6X
2.1X
1.2X
1.3X
5.2X
1.7X
5.2X
6.1X
2.0X
1.0X
4.1X
4.8X
3.2X
4. IX
2. IX
2. IX
2.4X
2.6X
1.7X
1.9X
1.3X
1.3X
5.2X
eduction
n Total
pi ah ted - • •
Reduction
in Compound
Use
alon Use Halon 1211 Halon 1301
0.001X
0.001X
0.001X
0.231X
0.321X
0.371X
0.250X
0.134X
0.539X
0.003X
0.003X
0.004X
1.288X
0.794X
1.045X
0.608X
0.638X
2.584X
O.OOOX
0.001X
0.002X
0.183X
0.094X
0.376X
0.441X
0.296X
0.376X
O.OOOX
O.OOOX
O.OOOX
0.159X
0.104X
0.117X
0.080X
0.079X
0.317X
O.OOX
0.01X
0.01X
0.02X
0.02X
0.02X
O.OOX
0.01X
0.01X
O.OOX
O.OOX
O.OOX
0.29X
0.40X
0.46X
0.31X
0.17X
0.67X
1.59X
0.98X
1.29X
0.75X
0.79X
3.19X
0.23X
0.12X
0.46X
0.54X
0.37X
0.46X
0.20X
0.13X
0.15X
0.10X
0.10X
D.39X
-------
HALONS -- 1998
-------
Control Options Simulated
rear: 1998
Cost Curve: Cases 1 & 2
Use Scenario: Middle Growth
Regulatory Option: CFC 50X/Haton Freeze Weighted Weighted Reduction Re
Simulated Ha I on Price Increase: * 0.49 Trigger Social in Ha I on Use ir
Price Cost for We
Application Control Option (1985*/kg) <1985S/kg) Application Hi
Local App Syst (Ha Ion 1211)
Local App Syst (Halon 1211)
Local App Syst (Halon 1211)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Local App Syst (Halon 1301)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1211)
Prt Military (Halon 1301)
Prt Military (Halon 130t)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
Prt Military (Halon 1301)
PrtCiv Elect
PrtCiv Elect
PrtCiv Elect
PrtCiv Elect
PrtCiv FlaraLqd
PrtCiv FlamLqd
PrtCiv FlamLqd
PrtCiv FlamLqd
PrtCiv General
PrtCiv General
PrtCiv General
PrtCiv General
PrtCiv Resid
PrtCiv Resid
PrtCiv Resid
PrtCiv Resid
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Alternative Test to Replace Discharg
Use Alternative Agent for Discharge Test
Use Non-Destructive Test Methods
Reduce Test Scale
Decrease Frequency of Tear-Down
Reduce Test Frequency
Contained Discharge
Use VCRs and Films for Training
Increase Recovery at Service
Decrease Frequency of Tear-Down
Increase Recovery
Contained Discharge
Reduce Test Scale
Reduce Test Frequency
Use VCRs and Films for Training
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Use VCRs and Films for Training
Decrease Frequency of Tear-Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear -Down
Contained Discharge
Use VCRs and Films for Training
Increase Recovery
Decrease Frequency of Tear-Down
-4.38
-1.26
-1.04
-0.49
-0.33
-0.24
-0.01
0.05
0.22
0.2S
-4.41
-4.39
-4.39
-4.35
-3.79
-0.01
-19.24
-17.73
-0.99
-0.01
-0.01
0.27
-4.39
-3.06
-2.99
-1.16
-4.38
-2.99
-2.97
-1.16
-4.39
-3.06
-2.99
-1.16
-4.40
-3.06
-2,99
-1.16
-4.39
-1.56
-1.04
-0.49
-0.39
-0.24
-0.02
-0.27
0.09
0.25
-4.41
-4.39
-4.39
-4.37
-3.96
-0.12
-19.24
-18.45
-0.99
-0.01
-0.01
0.19
-4.40
-3.42
-3.51
-1.16
-4.39
-3.51
-3.32
-1.16
-4.40
-3.42
-3.51
-1.16
-4.40
-3.42
-3.51
•1.16
2.3X
2.3%
3. OX
2.5X
1.8X
2.4X
1.6X
4.5X
9.7X
5. IX
3.0X
0.2X
2.4X
0.4X
2.4X
4.4X
0.1X
0.2X
2.6X
2. IX
1.7X
1.7X
3.3X
0.5X
1.0X
2.4X
2.7X
3.4X
1.9X
8.7X
3.3X
0.5X
0.9X
2.2X
3.4X
0.3X
0.6X
1.5X
Auction
i Total
• -.tk^juj
Reduction
in Compound
Use
rigntea
ilon Use Halon 1211 Halon 1301
0.007X
0.007X
0.010X
0.018X
0.013X
0.017X
0.012X
0.032X
0.070X
0.037X
0.171X
0.011X
0.137X
0.023X
0.137X
0.251X
0.004%
0.008X
0.102X
0.083X
0.067X
0.067X
0.291X
0.044X
0.088X
0.215X
0.026X
0.033X
0.019X
0.085X
0.052X
0.008X
0.014X
0.035X
0.047X
0.004X
0.008X
0.021X
0.04X
0.04X
0.05X
0.90X
0.06X
0.72X
0.1 2X
0.72X
1.32X
1.53X
0.23X
0.46X
1.13X
0.14X
0.18X
0.10X
0.45X
0.27X
0.04X
0.07X
04 BV
.iBX
0.25X
0.02X
0.04X
0.11X
0.02X
0.02X
0.02X
0.01X
0.04X
0.09X
0.05X
O.OOX
Q.01X
0.13X
0.10X
0.08X
0.08X
-------
Control Options Simulated
Year: 1998
Cost Curve: Cases 1 & 2
Use Scenario: Middle Growth
s?^!!^yH0i>tl02:-CFC,50X/Mal0n«Fne^e Weighted Weighted Reduction R
Simulated Ha 1 on Price Increase: $ 0.49 Trigger Social in Halon Use i
.... Price Cost for U
Application Control Option (1985S/kg) (1985$/kg) Application H
TF Military (Halon 1211)
TF Military (Halon 1211)
TF Military (Halon 1211)
TF Military (Halon 1301)
TF Military (Halon 1301)
TF Military (Halon 1301)
TF Military (Halon 1301)
TF Military (Halon 1301)
TF Military (Halon 1301)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1211)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv Elect (Halon 1301)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1211)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv FlamLqd (Halon 1301)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1211)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
TFCiv Other (Halon 1301)
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Alternative Test to Replace Discharg
Use Non-Destructive Test Methods
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Alternative Test to Replace Discharg
Use Non-Destructive Test Methods
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Use Alternative Test to Replace Discharg
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Non-Destructive Test Methods
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Contained Discharge
Increase Recovery
Decrease Frequency of Tear-Down
Increase Personnel Training
Use Alternative Test to Replace Discharg
Use Non-Destructive Test Methods
-4.29
-1.25
-1.04
-0.99
-0.93
-0.48
-0.03
0.11
0.49
-4.37
-1.26
-1.04
-0.99
-0.66
-0.48
-0.03
0.11
0.49
-4.42
-1.26
-1.04
-0.98
-0.92
-0.66
-0.48
-0.03
0.49
-4.73
-1.27
-1.05
-0.99
-0.66
-0.48
-0.03
0.11
0.49
-4.30
-1.55
-1.04
-0.99
-0.94
-0.48
-0.04
-0.54
0.49
-4.38
-1.56
-1.04
-0.99
-0.77
-0.48
-0.04
-0.53
0.49
-4.44
-1.56
-1.04
-0.98
-1.19
-0.77
-0.48
-0.04
0.49
-4.74
-1.58
-1.05
-0.99
-0.77
-0.48
-0.04
-0.54
0.49
2. IX
3.4X
4.5X
2.3X
2.8X
3.7X
2.5X
4. IX
4.7X
2.3X
2. IX
2.8X
2.6X
1.6X
2. IX
1.4X
4.5X
5.2X
1.7X
5.2X
6.9X
2. OX
3.6X
4. IX
5.5X
3.7X
4. IX
2. IX
2. IX
2.8X
2.6X
1.7X
2.2X
1.5X
4.5X
5.2X
eduction
n Total
Reduction
in Compound Use
alon Use Halon 1211 Halon 1301
0.001X
0.001X
0.002X
0.263X
0.321X
0.424X
0.286X
0.470X
0.539X
0.003X
0.003X
0.004X
1.288X
0.794X
1.045X
0.695X
2.235X
2.584X
O.OOOX
0.001X
0.002X
0.183X
0.330X
0.376X
0.504X
0.339X
0.376X
O.OOOX
O.OOOX
0.001X
0.159X
0.104X
0.134X
0.092X
0.275X
0.317X
O.OOX
0.01X
0.01X
0.02X
0.02X
0.02X
O.OOX
0.01X
0.01X
O.OOX
O.OOX
O.OOX
0.33X
0.40X
0.52X
0.35X
0.58X
0.67X
1.59X
0.98X
1.29X
0.86X
2.76X
3.19X
0.23X
0.41X
0.46X
0.62X
0.42X
0.46X
0.20X
0.13X
0.17X
0.11X
0.34X
0.39X
-------
•V.
-------
APPENDIX K
INTERNATIONAL TRADE ISSUES AND THE UNEP PROTOCOL
TO REDUCE GLOBAL EMISSIONS OF CFCs AND HALONS
1. INTRODUCTION
The U.S. government has negotiated an agreement under the auspices of the
United Nations Environment Programme (UNEP) to reduce the use and emissions of
chlorofluorocarbons (CFCs) and halons in order to protect stratospheric ozone.
The Montreal Protocol on Substances That Deplete the Ozone Layer'- calls for a
near-term freeze and a long-term scheduled reduction of CFC emissions. Under
the protocol halon production is to be frozen but not scheduled for reduction.
One component of the agreement's approach to limiting global emissions of
CFCs and halons is to restrict trade by countries which are not parties to the
treaty. The protocol trade restrictions apply to bulk CFCs/halons, products
containing CFCs/halons, and possibly products manufactured with but not
containing CFCs (such as electronic components cleaned with CFC solvents).
These trade controls are addressed in this paper.
Section 2 analyzes the potential impacts of protocol trade controls. It is
concluded that the protocol poses little risk to U.S. competitiveness and that
trade provisions provide strong incentives for countries to join, jAn overview
of the current situation regarding CFC and halon trade and protocol
implications for the competitiveness of U.S. industries is presented. The
section next describes the potential impacts of the protocol's trade controls
for four affected groups: countries party to the protocol (signatories);
countries not party to the protocol (non-signatories); U.S. CFC producers; and
U.S. producers of CFC end-user products. The section next evaluates how the
trade control-related impacts may influence the decisions of various types of
countries to join the protocol, including: industrial countries; newly
industrialized countries (NICs); least developed countries; and large developing
countries.
Section 3 analyzes the enforceability of protocol trade provisions, focusing
on the ability to monitor CFC and halon production and trade, and related
products in order to verify compliance. It is concluded that the protocol can
be enforced with existing customs and agency authority.
Section 4 evaluates the suitability of selected trade control mechanisms for
use in relation to CFCs, halons, and related products.
See Attachment K-l, Montreal Protocol on Substances That Deplete the
Ozone Layer. United Nations Environment Programme, 1987.
-------
K-2
2. POTENTIAL IMPACTS OF CFG AND HALON TRADE CONTROLS
2.1 CFC and Halon Trade and the Protocol: Implications for the Competitiveness
of U.S. Industries
CFCs and halons can be traded in three general forms: as bulk chemicals; as
CFCs and halons contained in products; and as products made with but not
containing CFCs.
Accurate data have not been compiled on trade of CFC and halon bulk
chemicals. Tariff schedules of most countries, including the United States, do
not include specific breakouts for the various CFCs and halons. It appears,
however, that the U.S. is a net importer of CFC bulk chemicals, with imports
accounting for between 5 percent and 10 percent of domestic U.S. CFC and halon
use.
Accurate data on trade of CFC and halon end-user products are readily
available. U.S. trade in CFC end-user products is more economically important
than trade in CFC bulk chemicals. U.S. imports of products that contain CFCs
include automobiles, refrigerators, air conditioners and other products.
Electronics components and consumer goods are examples of U.S. imported products
made with but not containing CFCs. The value of CFCs contained in, or used to
manufacturer these imported products is very small compared with the large
dollar value of the traded products.
The U.S. Department of Commerce has conducted preliminary investigations of
CFCs contained in selected products imported to the United States. These
indicate that only about 4.1 million pounds of CFCs are imported in automobile
and light truck air conditioners; 2.5 million pounds of CFCs are in the
refrigerant and insulation of imported refrigerators; and about 6,000 pounds of
CFCs are in imported room air conditioners. The total amount of CFCs in these
products is about 6.6 million pounds, or roughly 3 million kilograms. This is
less than 2 percent of the total U.S. domestic production/use of about 200
million kilograms.
2.1.1 U.S. COMPETITIVENESS
Prices of CFCs and halons in the United States (and other protocol
countries) can be expected to Increase under the UNEP protocol. This will
occur, largely, because of the restricted supply from protocol limits on CFC and
halon production and trade. However, CFC and halon prices should not increase
in countries which do not join the protocol.
To the extent that a disparity in CFC and halon prices between the U.S. and
non-signatory countries results in higher costs of U.S. made, CFC-related and
halon-related products, U.S. industries could become less competitive in the
2 See Attachment K-2, "CFC Production/Use Data for Selected Industrial and
Developing Countries."
* See Attachment K-l, "Article 2: Control Measures," Montreal Protocol on
Substances That Deplete the Ozone Layer. United Nations Environment Programme,
1987.
-------
K-3
U.S. and international markets for products dependent on significant quantities
of CFCs and halons. Theoretically, U.S. exports of CFG and halon end-user
products could decline while like-product imports could increase from
non-signatory countries until imports are restricted under the protocol and/or
domestic regulation. Transnational corporate producers of CFG-related products
might consider increasing production in non-protocol countries for export to the
United States.
The competitiveness of U.S. CFG and halon producers and end-user industries
depends on four factors:
• protocol membership of the major CFG and halon producer
countries;
• the existence of CFG and halon price differences between
protocol signatory and non-signatory countries;
• the degree of CFG and halon dependence of individual
end-user products; and,
• the existence of trade restrictions on CFG and halon
bulk chemicals and end-user products between protocol
signatory and non-signatory countries.
The current and anticipated situation regarding each of these four factors
is such that the competitiveness of relevant U.S. industries should not be
greatly impaired.
First, most major producers of CFCs, halons, and related products
participated in the UNEP negotiations to protect stratospheric ozone and have
either signed the Montreal Protocol or are expected to sign.-'
Second, CFG and halon price differences are not expected prior to the
implementation of trade restrictions. These should have little detrimental
effect on U.S. industries. Because of the participation in the protocol of the
other major CFG and halon producing countries, they will be subject to similar
price increases as in the U.S., and thus not afford other countries' companies a
competitive advantage vis-a-vis U.S. industries.
Third, an increase in the price of CFCs is not expected to substantially
increase the price of any CFC-related product, with the possible exception of
foam, due to both the limited cost share of CFC/halon per product and limited
product dependence on use of these chemicals. Because foam is too bulky to ship
long distances, there is little risk of foreign competition. For the vast
majority of air conditioners, refrigerators, automobiles, and electronics
products, the cost of CFCs is minor compared with the overall cost of the
4 See section 2.2 below for more detailed analysis of potential protocol
impacts on U.S. industries and those of other signatory and non-signatory
countries.
5 See section 2.3 below for a detailed discussion of trade factors
affecting country decisions to join the UNEP protocol.
-------
K-4
product. In most cases, CFC emissions can be reduced without significantly
increasing the price of final products. For many of these products, close
substitutes for CFCs and halons. are available or in development. For example,
in the case of electronics goods where CFCs are used as cleaning agents, aqueous
solutions, other solvents, and low-solids flux can often be used as a substitute
at about the same cost.
Fourth, with regard to the ability of non-protocol countries to export less
costly CFCs and CFC-related products to the U.S. and other signatory countries,
the protocol will restrict trade in CFCs and halons, products containing CFCs
and halons, and possibly products made with but not containing CFCs.° This will
effectively reduce the incentive for production of CFCs and halons, and products
containing CFCs and halons, to be initiated or increased in non-signatory
countries.
2.2 Implications of Protocol Trade Controls
The Montreal protocol includes provisions to control trade in CFC and halon
bulk chemicals and CFC and halon end-user products. The trade controls:
• ban imports of CFC and halon bulk chemicals from any
country not party to the protocol;^
• ban the export by developing country signatories of CFC
or halon bulk chemicals to non-signatory countries,
• ban imports of products containing CFCs and halons from
non-signatory countries,
• will determine the feasibility of banning or restricting
imports of products manufactured with, but not
containing, CFCs from non-signatory countries, ® and
• may ban, restrict, or discourage exports to
non-signatory countries technologies which produce or
use CFCs and halons.11
" The feasibility of restricting trade in products made with but not
containing CFCs will be determined at a later date.
7 See Attachment K-l, "Article 4: Control of Trade with Non-Parties,
Paragraph 1," Montreal Protocol on Substances That Deplete the Ozone Layer.
UNEP, 1987.
8 See Attachment K-l, "Article 4: Paragraph 2."
9 See Attachment K-l, "Article 4: Paragraph 3."
10 See Attachment K-l, "Article 4: Paragraph 4."
11 See Attachment K-l, "Article 4: Paragraph 5."
-------
K-5
We discuss, in turn, the potential impacts from the implementation of the
protocol's trade control provisions for four affected groups: signatory
countries; non-signatory countries; U.S. CFG and halon producers; and U.S.
producers of CFG end-user products. The discussion is predicated on the
stringent trade control measures of the protocol. Potential qualitative effects
are examined with regard to the following key variables: product prices; trade
(export/import) effects; industry employment effects; consumer welfare effects;
and the incentive to develop/adopt alternative technologies. A summary of
potential impacts of the Montreal Protocol's import ban provisions is presented
in Exhibit K-l.
2.2.1 SIGNATORY COUNTRIES
The potential impacts of the protocol's trade control provisions will vary
among signatory countries. Many countries are CFG producers, but some do not
have CFG production capacity and import CFCs for their domestic applications.
Signatory countries will experience the following general impacts of the
protocol trade control provisions to ban imports of CFCs and halons, and CFC and
halon end-user products from non-signatory countries.
0 Import ban on CFC and halon bulk chemicals from
non-signatories. Most signatory countries are self
sufficient CFC/halon producers, net exporters of CFCs and
halons, or are currently supplied by countries that have
joined or are likely to join the protocol. Import
restrictions may contribute to slightly higher prices by
limiting potential sources of supply. * Imports of CFCs and
halons from those countries not expected to join the
protocol make up a very small share of the signatories'
total supply. The elimination of imports, therefore, will
cause only a negligible reduction in CFC and halon supply in
the signatory countries. Regulation-induced constraints on
CFC and halon production will provide an incentive to
develop new chemical substitutes.
0 Import ban on products containing CFCs and halons from
non-signatory countries. Signatory countries could
experience slightly greater impacts from a ban on imported
products containing CFCs from non-signatory countries than
that on CFC bulk chemical imports alone. Countries not
initially joining the protocol, such as some newly
industrialized countries (NICs), are more significant
producers and exporters of CFC end-user products (e.g.,
automobiles and refrigerators) to signatory countries than
of CFC bulk chemicals.
" The main source of increases in CFC and Halon prices will be
attributable to the control costs of freezing and reducing CFC emissions, as
stipulated in Article 2 of the Montreal Protocol.
-------
EXHIBIT K-l
POIENIIAL IMPACTS OF THE UMEP PROTOCOL'S TRADE CONTHOU PROVISIONS
AFFECTED
PRODUCTS
OF PROTOCOL
IMPORT BAN
IMPACTED CROUPS
SIGNATORY
COUNTRIES
NON-SIGNATORV
COUNTRIES
U.S. CFC
PRODUCERS
U.S. END-USER
PRODUCERS/IMPORTERS
CFC Bulk CFC prices may Incroaaa
Chemicals ilightly. CFC Import*
decline slightly. CFC
end-user product prices
Increase marginally (e.g..
foam products). Domestic
CFC producers Increase
profits If higher
revenues ara real lied.
Products Prices Increase for
Containing products containing CFCs.
CFCs Snail -a Ifare loss for
consumers. Imports decline.
Domestic Industry profits.
output, and employment
increase to substitute for
Imports In these products.
Exports to non-signatories
dec Una as prices Incraasa.
but My Increase among
signatories
Products Prices Increase for
Manufactured products eiada nlth CFCa.
Mllh CFCs welfare loss for consumer*.
Imports decline Industry
profits. Output and employ-
ment Increase to substitute
for Imports. Eiports to
non-slgnatorlas decline.
but may Increase among
sIgnatorlas
CFC eiport earnings doc I In*
for producers. Little
impact for non-producers
(most) Higher CFC Import
costs tor non-producers.
Possible Incentive to
produce CFCs for domestic
use and e»porl to other
non-signatories. Mild
incentive to Join protocol.
E«port earnings for
automobiles, refrigeration
and 11he products decline.
Industry loses profits.
employment. Incentive to
adopt Substitute chemicals
and applications to retain
market access In signatory
countries Strong
Incentive to Join protocol.
Small effect due to limited
CFC Imports/eiports. CFC
prlcas and producer
profits Incraasa slightly
In near-tarn, dports
may doc Una to non-
slgnetorles due to higher
relative CFC prlcas vls-a-
vls non-signatory CFC
producers. Employment
effects unclear.
Possible small CFC eiport
decline la non-signatory
producers of product* made
•Ith CFCs. Incentive la
davalap substitute chemt-
cala for non-signatories
soaking to rataln market
access ta signatory markets.
Eiport earnings doc Una for
most electronics, furniture.*
and consumer products.
Industry loses profits.
employment. Incentive to
adopt Substitute chemicals
and applications to rataln
market access In signatory
countries Strangest
Incentive to Join protocol.
Possible small CFC aiport
decline to non-signatory
producers of products
made ulth CFCa.
Incentive to develop
substitute chemical a for
non-slgnatorlos seeking
to rataln market access
to signatory markets.
Higher CFC prlcas have
greatest Impact on foam
Industry. Other end-users
only marginally affected.
Incentive to develop non-
CFC products applleallona.
End-user product prices
Incraasa. Possible small
doc I In* In aiports. but
Incroasa In domestic
output, employment and
profits. U.S. Importers
of product* containing
CFC* los* Inaipanslva
foreign aourcee of supply
profit* and employment.
Product prlcas Incraasa.
Dome*tic output, employ-
ment and profit* Incresse.
Importe decline sharply.
U.S. Importer* los*
sources of supply.
profit* and employment.
Impact could ba significant
for U.S. Importers of
electronic* If current
suppliers do not Join
protocol.
-------
K-7
The protocol's import ban on products containing
CFCs and halons would have a'direct effect on
end-user industries in signatory countries.
Domestic producers could increase their production
to offset the decline in imports, thus increasing
domestic output and employment. This would depend
on the amount of imported products affected and will
differ among individual signatory countries.
• Import ban on products manufactured with CFCs from
non-signatory countries. Restrictions of trade in
products made with, but not containing CFCs, could cause
the greatest impact of all protocol trade controls. This
category of products includes electronics, which are more
important to exporting countries than bulk CFCs, and
which account for a larger share of the product market in
signatory countries than other CFC end-user product
imports.
The impact of an import ban on products made with but not
containing CFCs could be significant on electronics
prices, trade effects, domestic industry competitiveness,
industry employment and consumer welfare. For example,
NICs have expanded their electronics industries in large
part due to their competitive advantage in labor costs.
If these electronics producing countries did not join the
protocol there could be a price increase for electronics
products imported to protocol signatories causing a
reduction in consumer welfare. Concurrently, domestic
electronics industries in the signatory countries could
experience increased production and employment. However,
in light of the far greater effects on the economies of
electronics producing and exporting countries, it is
likely that they will eventually join the protocol.
2.2.2 NON-SIGNATORY COUNTRIES
Non-signatories may be either developed or less developed countries (LDCs).
Differences among non-signatory countries exist which will influence how they
are affected by the implementation of the protocol's trade provisions. Of
particular importance is the degree to which they produce and export CFCs and
CFC end-user products.
The exports of all non-signatory countries to signatories may be banned for
the following products:
• CFC and halon bulk chemicals;
• Products containing CFCs and halons; and
• Products manufactured with, but not containing CFCs.
-------
K-8
Non-signatory countries may experience some of the following impacts if
signatory countries ban imports of CFCs and halons and CFG and halon end-user
products from non-signatories.
• Import ban on CFG and halon bulk chemicals from
non-signatories. Non-signatories that produce CFCs and
halons for export to other non-signatory countries will
experience a decline in demand for their chemical
products due to trade restrictions in signatory countries'
for CFC and halons plus end-user products. The price,
quantity sold, and related export earnings of CFC and
halon producers in these non-signatory countries would be
reduced. If CFC and halon production have declining
average costs, a reduction in quantity sold could cause
an increase in per unit cost. This could be the case for
small volume CFC producers in developing countries. Both
the decline in accessible export markets and an increase
in costs could reduce producer profits in non-signatory
countries.
For non-signatory countries, which import CFCs and halons
from signatory countries, CFC import prices may increase.
CFC and halon end-user product producers would then face
higher costs of production. Non-signatory importers of
CFCs and halons could turn to the few non-signatory CFC
chemical producers, offsetting part of the potential
price and cost effects noted above.
• Import ban on products containing and/or manufactured
with CFCs from non-signatory countries. Non-signatory
producers and exporters of products containing CFCs and
halons or manufactured with but not containing CFCs would
experience a decline in product demand in signatory
country markets. In these circumstances, prices,
products sold, and export revenues would decline. These
trade control provisions would have a greater effect on
the non-signatory countries than would the ban on CFC and
halon bulk chemical exports because the potential
non-signatory countries are more significant producers
and exporters of CFC end-user products, such as
automobiles and electronics, than CFC and halon bulk
chemicals.
In addition, it is the signatory, industrial country
markets that are the main export markets for the CFC
end-user products whether of developing or industrial
countries. The desire to retain export markets would
provide a strong incentive to join the protocol or to
adopt non-CFC substitute chemicals and alternative
industrial applications.
-------
K-9
2.2.3 U.S. CFG AND HALON PRODUCERS
There are five major producers of CFCs in the United States: Dupont; Allied
Corporation; Racon; Kaiser; and Pennwalt Corporation. There are three producers
of halons in the U.S.: DuPont; Imperial Chemical/Id Americas; and Great Lakes
Chemical. The impact on U.S. producers of a ban on imports of CFCs and halons
and CFC and halon end-user products from countries would be similar to that on
CFC and halon producers in other signatory countries.
• Import ban on CFC and halon bulk chemicals from
non-signatories. The protocol ban on imports of CFC and
halon bulk chemicals from non-signatory countries should
have a minimal effect on U.S. producers for two reasons:
(1) the United States imports only a small amount of its
domestic CFC and halon consumption; and, (2) these
imports come from other industrial countries expected to
sign the protocol, and therefore would not be subject to
the trade control provisions."
CFC and halon prices in signatory countries could be
higher than in non-signatory countries. In this case,
CFC and halon exports by U.S. producers to non-signatory
countries could decline as demand in these countries
shifts to less expensive sources of CFCs in the few
non-signatory CFC producing countries. However, it is
unlikely that this would have much effect on U.S. CFC
producers' profits, given the very low level of absolute
U.S. exports and the likelihood that most countries which
produce bulk chemicals will join the protocol.
• Import ban on products containing and/or manufactured
with CFCs from non-signatory countries. The small amount
of bulk CFC and halon exports from U.S. producers may
decline under an import ban on products containing and/or
manufactured with CFCs from non-signatory countries.
Industrial demand for CFCs in the non-signatory countries
could decline as they lose market access for CFC and
halon end-user products in the industrial signatory
countries. This should have a minimal effect on the
profits of U.S. CFC and halon producers due to their
small level of CFC and halon exports to countries that
will not join the protocol.
2.2.4 U.S. PRODUCERS/IMPORTERS OF CFC END-USER PRODUCTS
The United States has numerous companies producing and/or importing CFC and
halon end-user products, such as: automobiles, air conditioners, refrigerators,
electronics, fire extinguishers, and foam products. These companies constitute
the source of industrial demand for CFCs and halons. The impact on these
respective U.S. industries and companies of a ban on imports of CFCs and halons
and CFC and halon end-user products from non-signatory countries will differ
13 See Attachment K-3, Exhibits 1 and 2.
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K-10
depending on several factors, including: competitive industry-specific
characteristics; the CFC intensity of individual end-user products; and the
level of imports and exports of these products.
• Import ban on CFC and halon bulk chemicals from
non-signatories. The potential impact on U.S. producers
of CFC and halon end-user products of an import ban on
bulk chemicals from non-signatory countries will be
minimal. This is due to the very small amount of total
CFC imports, and the fact that current U.S. suppliers of
CFCs and halons will join or have joined the protocol.
• Import ban on products containing CFC and halons and/or
manufactured with CFCs from non-signatory countries.
U.S. producers and/or importers of CFC and halon end-user
products will be more affected by a ban on imports of
end-user products from non-signatory countries than a ban
on bulk chemical imports. The decline in supply of CFC
and halon end-user products could cause an increase in
the price of these products. The extent of the price
increase depends on the share of the U.S. market
accounted for by end-user imports from non-signatory
countries and the competitiveness of the market.
Increased prices should stimulate U.S. domestic
production and imports from protocol countries. Domestic
demand for labor will increase and, at least in the
short-term, profits may increase as well. Exports to
non-signatory countries by U.S. producers of CFC end-user
products will not decline significantly because CFCs are
a small part of product cost. Selected U.S. importers of
CFC end-user products may experience significant losses
if product sources of supply are eliminated by an import
ban. For example, automobile importers may lose these
sources of supply if producer countries choose not to
join in stratospheric ozone protection.
2.3 Trade Factors Affecting Country Decisions to Join the UNEF Protocol
The above sections examined potential impacts of the protocol's trade
control provisions on signatory and non-signatory countries. But, which
countries will decide to join or abstain from joining and why? Many countries
will choose whether or not to join the protocol primarily on the basis of
environmental merit. Here, we examine the relative attractiveness of joining
the protocol in response to its trade provisions. Exhibit K-2 provides a list
of countries that participated in the Montreal Protocol negotiations. Exhibit
K-2 also provides a list of those countries that have already signed the
protocol. Many of the countries that participated were not authorized by their
governments to sign at Montreal but have indicated that they are likely to sign.
We discuss, in turn, the attractiveness of joining the protocol for: industrial
countries; newly industrialized countries; least developed countries; and large
developing countries.
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K-ll
EXHIBIT K-2
COUNTRY PARTICIPANTS IN THE DNEP NEGOTIATIONS IN MONTREAL
AND SIGNATORIES TO THE PROTOCOL TO PROTECT
STRATOSPHERIC OZONE
Industrial Co'*"tries:
Signed —
Australia Luxembourg
Belgium Netherlands
Byelorussian Soviet New Zealand
Socialist Republic Norway
Canada Portugal
Denmark Spain
EEC Countries Sweden
Finland Switzerland
France Ukrainian Soviet
Germany Socialist Republic
Greece Union of Soviet Socialist
Israel Republics •
Italy United Kingdom
Japan United States
Participating but not yet signed a --
Austria
Newly Industrialized Countries:
Signed --
Argentina Venezuela
Mexico
Participating, but not yet signed a --
Brazil Malaysia
Colombia Nigeria
Korea, Republic of
Many countries that have not yet signed the protocol were not authorized
to do so in Montreal and are currently considering participation in the
protocol.
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K-12
EXHIBIT K-2
(continued)
COUNTRY PARTICIPANTS IN THE UNEP NEGOTIATIONS IN MONTREAL
AND SIGNATORIES TO THE PROTOCOL TO PROTECT
STRATOSPHERIC OZONE
Large Developing Countries:
Signed --
Indonesia
Participating but not yet signed a --
China
India
Least Developed Countries:
Signed --
Chile Morocco
Egypt Panama
Ghana Senegal
Kenya Togo
Maldives
Participating but not yet signed
a __
Algeria Kuwait
Burkina Faso Mauritius
Congo Peru
Costa Rica Philippines
Dominican Republic Thailand
Democratic Yemen Tunisia
Ecuador Uganda
COMECON Countries:
Participating but not yet signed a --
Czechoslovakia
Hungary
Poland
Many countries that have not yet signed the protocol were not authorized
to do so in Montreal and are currently considering participation in the
protocol.
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K-13
2.3.1 INDUSTRIAL COUNTRIES
The industrial countries are the largest producers and consumers of CFC and
halon bulk chemicals and CFC and halon end-user products. Host of these
countries are self sufficient net exporters of these bulk chemicals. Those that
are not self-sufficient are supplied by other industrial countries.^ The
countries are responsible for the majority of world trade in CFC and halon
related products. As such, their participation in the UNEP protocol is
particularly important. Few industrial countries could afford to not join
because important CFC-related products would be banned by other industrial
countries, as stipulated by the protocol's trade control provisions.^ At the
same time, these countries can afford the transition costs of developing and
adopting alternative chemicals and industrial processes not reliant on CFCs or
halons. Companies in these countries are already conducting research and
development efforts, and many have patents on potential substitute chemicals and
technologies.
As shown in Exhibit K-2, twenty-five industrial countries were official
participants in the Montreal negotiations. Of these, twenty-four countries
either individually signed the protocol or became party -to the agreement due to
their membership in the European Economic Community (EEC), which signed the
protocol as regional representative of its twelve member states. Austria, which
has not yet signed the protocol, is expected to join the agreement.
Czechoslovakia, Hungary, and Poland also participated and are expected to sign
the protocol.
2.3.2 NEWLY INDUSTRIALIZED COUNTRIES (NIGS)
The newly industrialized countries (NICs) are designated as such due to the
significant and growing role of manufactured goods produced in their economies,
especially industrial products. They are also the largest producers and users
of CFCs and CFC end-user products among the developing countries. CFC end-user
products manufactured in the NICs include: automobiles, electronics,
refrigeration, and air conditioning equipment. NICs that currently produce bulk
CFCs include: Brazil, Korea, Taiwan, Mexico, Venezuela and Argentina.^
Although complete CFC export data are unavailable, it appears that
production of bulk CFCs in the NICs is mainly for domestic consumption rather
than for export.17 Therefore, the impact of an import ban by signatories of
bulk CFCs produced in non-signatory NICs would have a limited negative impact on
^ See Attachment K-3 which illustrates the import level and country-origin
of CFC-11, CFC-12 and CFC-22 of selected industrial countries.
" See Attachment K-4 on the importance of the U.S. market for CFC-related
exports by other industrial countries.
CFC production in most of these countries is conducted by subsidiaries
of transnational corporations from the United States and other industrial countries.
17 Attachment K-2 illustrates the various levels of production/use of CFC-
11 and CFC-12 in selected developing and industrial countries.
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K-14
the export earnings of these countries or on their respective chemical
industries.
The NICs, however, have become significant producers and exporters of
manufactured goods containing CFCs, including: motor vehicles, air
conditioners, and refrigerators.^ Although production of these goods is partly
for domestic markets, these countries are increasing their exports to
industrialized country markets. The possibility of restrictions on the export
of these products by the NICs creates a strong incentive for them to join the
protocol in order to maintain exports and export earnings. For many of the
NICs, potential restrictions on auto exports offer the strongest incentive to
join. For example, Brazil and Korea would be immediately and strongly affected.
Taiwan, which currently plans to expand auto exports to the United States and
other industrialized countries, would be increasingly affected if it chooses not
to comply with the protocol.^
The NICs are also -the largest producers among developing countries of
products manufactured with but not containing CFCs, notably electronics. Should
the protocol's trade control provisions be extended to such products, their
domestic electronics industries and export earnings would be severely affected.
NICs that would have the most to gain by joining the protocol include: Korea,
Taiwan, Singapore, and Malaysia. For example, electronics exports by these
countries to the U.S. account for between 12 percent and 20 percent of all
exports to the U.S.20
The threat of losing access to important overseas markets for major export
products provides the greatest incentive for the NICs to join the UNEP protocol.
Membership in the protocol would allow signatory NICs continued access to
industrial country markets for their CFC end-user products. Provision of an LDC
Grace Period from control measures to freeze and reduce CFC use for those LDCs
that join the protocol under article 5 ("Special Situation of Developing
Countries") would increase the relative attractiveness of joining for the NICs
by reducing the near-term adjustment costs. Most significantly, such a Grace
Period would allow growth in CFC use for ten years, provided per capita
consumption of CFCs and halons does not rise above 0.3 kilograms. During this
period, efforts to develop new technologies that do not require the use of CFCs
will proceed in the industrial countries. There are provisions in the protocol
1 R
i0 Attachment K-4 illustrates the importance of the U.S. market for
particular exports of CFC end-user products from selected developing and
industrial countries.
*-* Because Taiwan is no longer a member of the United Nations, it cannot
become party to the protocol. It is likely, however, that Taiwan will abide by
the protocol's control measures under article 2 and data reporting provisions in
article 7. Full compliance with these provisions would enable Taiwan to avoid
the protocol's trade controls, as stipulated in article 4, paragraph 8.
20 See Attachment K-4, Exhibit 4.
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K-15
to facilitate transfers of these technologies to the developing countries and
provide technical assistance.
It is important to note that the Grace Period from protocol control measures
afforded developing countries that join would not enable them to become a new
source of supply for non-signatories of controlled substances. The protocol
explicitly prohibits developing country signatories from using their expanded
use allowance for these purposes under paragraph 2, article 4 on trade control
measures.
Although eight NICs participated in the Montreal negotiations, only three
have thus far joined; Argentina, Mexico, and Venezuela. This is partly because
many of these representatives were not authorized by their governments to sign
at Montreal. (See Exhibit K-2).
How may other NICs will respond to the threat of losing market access to the
industrial signatory countries for their exports of CFC end-user products?
Recent experiences of Korea and Taiwan, for example, suggest that these
countries will join or comply with the protocol, though perhaps not immediately.
These two countries have made continued efforts to retain market access to the
United States by addressing American trade-related concerns. For example, in
response to Congressional criticism of their respective trade surpluses with the
.U.S., both Korea and Taiwan took steps to reduce or freeze exports to the U.S.
and expand their purchases of U.S. products. The U.S. represents the major
export market for these countries, and'continued market access, even at frozen
or reduced levels, is an important priority. The potential impact of a protocol
ban on imports of CFC-related products from non-signatory countries should
elicit a decision by these countries to join or comply with the protocol.
Brazil's economic incentive to join the protocol in response to trade
restrictions is not as strong as that of Korea and Taiwan. Most significantly,
Brazil has options the other two countries do not have. Brazil has a large
domestic market which is capable of generating economic growth.22 Qn the other
hand, recent political developments in Brazil have intensified the country's
economic focus on the international arena, which requires continued access to
industrial country markets for such products as the Volkswagen Fox, currently
being marketed in the U.S. Of course, Brazil may join primarily on a basis of
environmental protection.
In summary, the Montreal protocol's trade provisions provide very strong
incentives for the NICs to join the protocol if they are to continue exports
which they have successfully increased in recent years. The value to these
countries of potentially lost export earnings is high. Of all the developing
countries, the NICs have the greatest interest in retaining access to the
markets of the industrialized countries. As a result, it is likely that they
21 See Attachment K-l, Article 5, paragraphs 2 and 3, and Article 10,
Montreal Protocol on Substances That Deplete the Ozone Layer. UNEP, 1987.
22 Brazil's domestic market has exhibited the ability to absorb production
slated for export. Built-up consumer demand has shown itself capable of
effectively capturing sales of motor vehicles and other products originally made
for export.
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K-16
will join the protocol to avoid strong trade restrictions. The protocol's
technology transfer, and technical and financial assistance provisions provide
important additional incentives for these countries to join, or at least comply
with the protocol.
2.3.3 LEAST DEVELOPED COUNTRIES
The least developed countries are the smallest users of CFCs among the
developing countries. In general, these countries do not have domestic
production capacity for CFC chemicals and do not produce CFC-related products.
For these countries, CFC use is limited to imports of CFCs contained in consumer
products or used to manufacture products.
The potential effects of the UNEP protocol's trade control provisions are
less important to the least developed-countries than other developing countries.
Because they have few exports of CFC-related products, the protocol's trade
restrictions are of little concern to these countries. They also should
experience very limited balance of payments effects due to potential CFC price
increases (induced by global reductions in CFC production) that might occur.
For most least developed countries there is little immediate economic
incentive as a result of trade provisions to become protocol signatories. For
most of the least developed countries, the greater incentive to join the UNEP
protocol may be largely environmental and political. For example, their
participation in the protocol may contribute to a favorable international image.
Support for the agreement may result in strengthened relations between
individual developing and industrial countries. The costs of membership appear
to be minimal. Reflective of these factors, twenty-three least developed
countries were official participants in the Montreal negotiations, of which nine
signed the final protocol. (See Exhibit K-2). As mentioned previously, some of
these representatives were not authorized to sign at Montreal.
A few of the least developed countries, such as Egypt, have relatively high
per capita CFC consumption levels. (See Attachment K-2). Others have small but
growing'CFC end-user industries, primarily assembly of air conditioners,
refrigerators, and electronics products. Thailand, for example, is a net
exporter of air conditioners, while several least developed countries, such as
those in the Caribbean Basin, are establishing electronics assembly industries
for export. For these countries, membership in the protocol may be important to
continued export expansion.
2.3.4 LARGE DEVELOPING COUNTRIES
The developing countries with large populations are significant users of
CFCs. India, Indonesia, and the Peoples Republic of China all use large amounts
of CFC-11 and CFC-12. China and India are also producers of CFCs. Total use of
CFCs in these countries is large, but per capita use is much smaller than in the
industrial countries and slightly smaller than in the NICs. (See Attachment
K-2.)
CFC use for industrial applications in the large developing countries is
similar to that in the NICs. This is particularly true for India which has an
impressive domestic electronics industry. China is also attempting to expand
its electronics industry. Both countries also produce other CFC-related
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K-17
products such as automobiles, refrigerators and air conditioners. Production of
most industrial goods by these countries, including CFC end-user products, is
for the domestic market. However, in recent years, the large developing
countries have attempted to increase their respective manufactured exports.
Protocol trade controls banning imports of CFC-related products from
non-signatories could impair the continued near-term growth of CFC end-user
industries in the large developing countries. Although currently earned foreign
exchange could be lost, restricting CFC end-user product exports would have its
greatest effect on future industry growth, assuming current trends continue.
The importance of CFC products 4-s particularly strong for the electronics and
automobile industries, which develop faster under export-led growth.
The attractiveness of joining the protocol for the large developing
countries such as the Peoples Republic of China and India is greatly dependent
on whether these countries continue to implement development strategies based on
export-led growth of manufactured goods. Both countries are attempting to
further develop domestic production capabilities in CFC end-user industries such
as motor vehicles and electronics. Expansion of these industries would require
continued access to the markets of industrial countries. As in the case of the
NICs, participation in the UNEP protocol may be a key to the continued export
growth of such industries. The developing nation provision of the protocol that
allows continued growth of CFC use could benefit the current development
strategies of these countries, thus increasing their incentive to join.
2.4 Conclusion
This paper presents qualitative estimates of the protocol's effects with
respect to prices of CFCs and CFC end-user products, trade, employment, consumer
welfare, and the incentive to develop and adopt non-CFC based technologies.
The trade-related incentive for countries to join the UNEP protocol to
reduce global emissions of CFCs mostly depends on their level of industrial
development and the relative importance of manufactured exports of CFC end-user
products, in addition to their desire to protect the global environment. Those
countries with export-led development strategies and large existing or potential
levels of CFC product exports will probably join the protocol. Countries in
which CFCs and CFC-related products play a small or insignificant economic role,
will not have substantial incentive to join as a result of the trade control
provisions, but may join for environmental or political reasons.
The major industrial countries are all expected to join the protocol. Most
have already signed and have the most at stake in the protocol's final
configuration, as the world's largest producers and consumers of CFCs and
CFC-related products. .For signatory countries, the effect of an import ban on
CFC bulk chemicals from non-signatories is expected to be small. This is
because imports from non-signatories account for only a minor share of CFC
consumption in those countries which have joined or are expected to join the
protocol. An import ban of products containing CFCs from non-signatories would
have minor effects on prices in signatory countries, but employment and profits
of CFC industries in the signatory countries could benefit. An import ban of
products manufactured with but not containing CFCs from non-signatories would be
expected to have the greatest effects of all, because potential non-signatories
are major suppliers of electronics products. However, it has not yet been
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K-18
determined that such products made with but not containing controlled chemicals
will be subject to trade controls.
The principal economic incentive for the NICs to join the protocol is the
trade control provisions which may ban imports of CFC-related products from
non-signatory countries. The threat of losing market access for important
products should increase the probability that most of these countries will join,
or at least comply with the protocol. The decision to join by the large
developing countries will be influenced by the same consideration, alth'ough
these countries do have the option of inward-looking development policies based
on their large internal markets.
An import ban on non-signatory products containing CFC and halons or
manufactured with CFCs would have a far more substantial effect than
restrictions on bulk chemical trade. The prospective loss of their major export
markets for products such as automobiles and electronics would provide a strong
incentive for producing countries to join the protocol and/or adopt alternative
technologies.
The least developed countries are neither producers nor consumers of CFC
chemicals and also are not major producers of CFC end-user products. These
countries may have the least economic incentive to join as a result of protocol
trade provisions and may be the largest bloc of non-signatory countries.
Without an economic incentive to join the protocol, their decisions will be
largely based on their general desires to contribute to environmental protection
or improve their international image.
For U.S. CFC and halon producers, an import ban on bulk chemicals should
have an insignificant effect, given the low level of U.S. imports. An import
ban on products containing or manufactured with CFCs may decrease the already
small level of U.S. CFC producers' exports to non-signatories. However, this
should have little effect on U.S. industry profits.
U.S. producers of CFC-related products buy CFCs from U.S. producers.
Therefore, an import ban on bulk chemicals should have minimal impact. An
import ban on products containing or manufactured with CFCs might slightly
increase prices for the comparable goods from domestic and signatory suppliers.
U.S. production and employment in the relevant industries should be stimulated.
On the other hand, U.S. importers of CFC end-user products from non-signatories
may experience significant losses if many of their key sources of supply are
eliminated. These are expected, however, to be limited.
3. ENFORCEMENT AND MONITORING OF PROTOCOL
This section explains how parties' compliance with the protocol can be
monitored and enforced. The protocol limits are based on a formula requiring
the calculation of CFC production, imports, exports, and the quantity destroyed.
Restrictions will be placed on trade in CFCs and CFC-related products with
non-parties, as well as halons and halons contained in products.
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K-19
3.1 Monitoring of Compliance With Protocol Limits On Bulk CFCs and Halons
The monitoring of compliance with protocol limits requires the means to
verify levels of production, imports, and exports of bulk CFCs and halons.
Production of bulk CFCs and halons can be monitored through a variety of
mechanisms. To verify how much a company is producing, a number of steps could
be taken, such as:
• Requiring that companies report production and verify
these reports through audits of the plant's records.
This approach does not directly guard against clandestine
production and shipments. Presumably, however, such
shipments could not occur at frequent or high levels
without creating inconsistencies that would be uncovered
in an audit;
• Requiring that an official inspector be in the plant
during all hours of operation; and
• Requiring that all shipments be officially inspected
before leaving the plant.
Monitoring imports and exports of bulk CFCs and halons would be relatively
easy, provided all parties make some minor modifications to their tariff
schedules under the Harmonized System (HS). The HS is an international trade
reporting schedule to which most major trading nations are converting effective
January 1, 1988. Under the HS, every participant country will classify its
imports and exports under the same basic nomenclature.^
EPA has requested that the U.S. International Trade Commission make the
necessary changes in the U.S. tariff schedule under the HS to provide accurate
" It would be a relatively easy task for each negotiating country to take
the necessary steps during the next few months to ensure that its version of the
HS will include separate classifications for CFC-11, -12, -113, -114 and -115,
as well as for Halons 1211, 1301 and 2402. Under the HS, a country may use an
unlimited number of digits to designate import/export categories. However, for
developed countries, the first six digits of any classification must be
standardized (i.e., the same for all countries). For developing countries, the
first four digits must conform to the international standard. Each country may
use additional digits to create sub-classifications based on its trade patterns
and interests.
The four digit HS classification under which imports and exports of both
CDFs and halons would be reported is HS 2903. The standardized description of
products recorded under HS 2903 is "halogenated derivatives of hydrocarbons."
The six-digit HS classification for such trade is HS 2903.40, "halogenated
derivatives of acyclic hydrocarbons containing two or more different halogens."
In order to ensure that all trade in CFCs and halons is reported accurately, all
signatory countries would need to create additional classifications at the eight
(or more) digit level to cover CFG- and halon-specific trade. (In the parlance
of tariff nomenclature, such sub-classifications are called "breakouts.")
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K-20
data on trade in CFCs and halons. The U.S. delegation has also suggested that
the.other countries negotiating the protocol make similar modifications to their
tariff schedules.24
A separate arrangement could be made with those countries participating in
the protocol negotiations which are neither members of the GATT or converting to
the HS. These countries would be required to agree to report on their trade in
CFCs and halons at the same level of specificity as the other signatories to the
protocol.
3.2 Establishing Protocol Limits Based on 1986 Trade
Once all parties make the necessary tariff schedule changes, statistics on
imports and exports of bulk CFCs and halons should be readily available (both in
terms of shipments and either foreign supplier or market). Although accurate,
internationally credible production and trade data are not yet available for
1986, the 1986 data can be collected and totals estimated by each party with a
relatively high degree of certainty. The estimates can be effectively audited
by a comparison of each country's trade data and by reference to other published
sources.
Each country has the ability to collect accurate data to establish 1986 base
levels. In the United States the Environmental Protection Agency can require
that producers and traders provide production and trade data. Such information
would be handled in strict confidence to protect the proprietary rights of the
firms. Other nations can similarly obtain production and trade data.
The agency to which the national data are submitted can establish credible
values of each country's production and consumption by investigating and
reconciling differences in imports, exports, and production. These values can
then be audited against published data. Published sources include each
country's official trade statistics, plus commercial statistics such as the SRI
Chemical Economics Handbook, and the Chemical Manufacturers Association annual
report. This will further eliminate discrepancies.
If necessary, an additional audit can be performed when trade data become
available under the Harmonized System. It will be possible to "backcast" 1988
data to 1986 levels. This can be done through regression analysis, where 1988
adjusted production data would be defined as the dependent variable; independent
variables for each country would be identified that reflect the country's
economic activity. The independent variables must meet two criteria: first,
data for their 1986 values must be available, and second, they should reflect
not only general economic trends in each country but should be related to CFC
production and use as well. As an example, GNP per capita, disposable income,
and industrial growth would appear to meet both criteria. This regression would
yield parameter estimates that could be used in conjunction with 1986 data to
establish 1986 estimates of CFC adjusted production.
See Attachment K-5 for a copy of the letter from EPA Administrator Lee
Thomas requesting that U.S. International Trade Commission revise the U.S.
tariff schedule.
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K-21
Based on the official data and various audits, parties could establish the
final calculated consumption levels for 1986.
3.3 Monitoring Restrictions on Trade in CFC-Related and Halon-Related Products
with Non-Parties
The international agreement will impose restrictions on trade in CFC-related
and halon-related products with non-parties. Standard Customs country-of-origin
reporting requirements (and penalties for false reporting) should ensure that
the United States can accurately identify the source of controlled
substance-related shipments. Should the United States, in conjunction with
protocol countries or unilaterally, establish any regulations prohibiting
imports of certain CFC-related and halon-related products from specified
countries, Customs would refuse entry to such goods.
In the case of products containing CFCs and halons, any restricted products
could appear on a list sent to Customs agents at U.S. ports of entry. Customs
could then refuse entry to such products. In the case of products made with but
not containing CFCs, tests would need to be conducted to determine whether CFCs
had been used during manufacture.
It is possible to detect CFC usage to the degree necessary to
ensure compliance with any regulations.- Some products such as foams or other
materials where the CFCs may be physically or chemically bound may require a
special procedure to release the CFC so it can be collected for analysis. For
example, samples of a foam material might be heated, cut and/or vacuum treated
to free the chemical content for analysis.
Although further research and development is required to perfect and
simplify the detection of CFCs, a range of suitable analytical techniques and
instruments already exists. The most accurate, though correspondingly most
sophisticated and expensive, is the gas chromatograph (GC) using an electron
capture detector. Such a device requires a stable laboratory environment and
support of dedicated analytical chemists if it is to provide reliable results.
Results are available very rapidly, and quick adaptation or extraction
procedures can be readily developed. At very busy ports of entry, a GC could be
maintained on-site.
Another method is to draw the gaseous sample containing CFCs across a
sorbent in a collection tube (e.g., charcoal or tenax in a glass tube) and then
send the collection tube back to a laboratory for analysis on a GC.
Until the results of the test were available, the shipment would not be allowed
to enter the U.S. More rapid results and less expensive measurement may be
possible by adapting other specific field techniques, such as colormetric,
thermal or ionization type systems.
Protocol enforceability through monitoring CFCs and halons contained in, or
CFCs used to manufacture products is dependent on several variables, including:
the desired threshold of detectability (at the percent level versus parts per
billion); the speed required to derive results (instantaneous "read out" from an
instrument versus data from a laboratory); and the technical training and
background of the person collecting and/or analyzing the sample. Protocol
regulations may provide the market incentives for development of the necessary
instruments.
-------
K-22
3.4. Possibility of Customs Fraud
Monitoring of compliance with the protocol limits would be more difficult in
the case of Customs fraud, where traders deliberately disguise either the
contents of the shipment or its origin/destination. However, the same penalties
that countries currently impose on fraudulent traders could be applied in the
case of CFCs, halons, and related products and would presumably constrain most
illegal trade.
3.5 Should the Protocol Include Verification/Inspection Measures?
It might be possible to employ a verification/inspection system as an
additional check on the compliance of the parties to the protocol. This section
analyzes the compliance procedures of other international environmental
agreements and assesses the major issues relating to the inclusion of a
verification/inspection system in the stratospheric ozone protocol.
International environmental agreements are typically characterized by an
element of trust and the presumption of the parties' good faith implementation
of their obligations. In most cases, parties regulate and monitor activities
within their jurisdictions to ensure domestic observance of the agreement's
provisions.
The majority of international environmental agreements determine party
compliance through recordkeeping, reporting, and information-exchange
requirements, rather than independent inspection and verification procedures.
Even many "regulatory" environmental agreements, which mandate specific control
actions, rely upon such requirements to corroborate implementation.
For example, the Convention on International Trade in Endangered Species of
Wild Fauna and Flora (CITES) protects certain species from commercial
exploitation and extinction through international regulation of trade: it
monitors compliance through requirements that parties maintain and submit annual
reports on trade in species covered by the Convention.
The following agreements also include reporting and/or recordkeeping
procedures to verify compliance: the Convention for the Conservation of
Antarctic Seals; the Convention for the Protection and Development of the Marine
Environment of the Wider Caribbean Region; the S0_ Protocol to the 1979
Convention on Long-Range Transboundary Air Pollution; the Convention on the
Prevention of Marine Pollution by Dumping of Wastes and Other Matter; and the
International Convention for the Regulation of Whaling (this Convention also
requires that inspectors be maintained on certain whaling ships by. the party
having jurisdiction over the vessel).
In general, reporting procedures have been an effective check on compliance.
Some multilateral environmental agreements provide for independent
inspections as a means of confirming compliance. For example, under the
Antarctic Treaty --an agreement restricting the use of Antarctica to peaceful
purposes --a party has the right to designate an observer to inspect any area
of Antarctica, including any ship, aircraft or stations, installations, or
-------
K-23
equipment of another party. The Convention on the Conservation of Antarctic
Marine Living Resources ensures compliance with the agreement's harvesting
standards through a system of observation and inspection of vessels in the area
to which the Convention applies.
The advisability of a verification/inspection system depends on the
institutional arrangements required, the costs of operating such a system, and
the degree to which the system would be a reliable indicator of compliance.
There is the possibility for some non-compliance even under a system of
protocol-sanctioned verification/inspection.
It may be preferable to use in the stratospheric ozone protocol a provision
similar to that of the South Pacific Nuclear Free Zone Treaty, whereby the
parties may appoint a panel of experts to investigate any party suspected of
noncompliance or of falsifying records. Such investigations could be initiated
by the determination of a Consultative Committee (comprised of representatives
of the parties) that there is sufficient evidence in a complaint that a party is
in violation of its obligations. The panel of experts would be given full and
free access to all information and places which may be relevant to their
investigation.
3.6 Conclusions
1. Official trade statistics should be an accurate monitor
of trade in CFCs and halons and related products,
assuming that necessary modifications to party tariff
schedules are made.
2. Products containing CFCs and halons and products made
with but not containing CFCs can be identified using
existing technology. The cost and difficulty of
detecting CFCs will vary by product.
3. As in the case of all other trade, the possibility of
Customs fraud in CFC and halon trade exists. The United
States could impose its most stringent penalties for
Customs fraud in CFC and halon trade as a further
disincentive to cheating.
4. It may be advisable to employ a system whereby
substantiated complaints against a party for suspected
non-compliance would be investigated by a panel of
experts with full access to all relevant documents and
facilities.
4. SUITABILITY OF TRADE MECHANISMS FOR CONTROLLING TRADE IN CFCs, HALONS AND
RELATED PRODUCTS
This section identifies trade control mechanisms that are most suitable for
controlling trade in CFCs, halons, and related products.
-------
K-24
The United States currently employs a variety of mechanisms to control trade
in certain products. Those most commonly used include:
1. Bans on the importation of certain goods.
2. Certification/inspection/testing programs, which set
standards that a product must meet and require that the
product be certified as meeting those standards. The U.S.
government or a government-approved entity inspects and
tests the product to confirm that the certification is
correct.
3. Labeling requirements, which also set standards that a
product must meet. Products are only tested if there is
strong evidence that they are not in compliance with the
standards. •*
4. Quotas. which set specific limits on the amount of a good
from a particular country that can enter the United States.
5. Import fees, which raise the tariffs assessed against a
product.
Any of these existing trade mechanisms could be used to control trade in
CFCs, halons, and related products. It is not necessary to design'entirely new
mechanisms for the control of such trade but rather to select and perfect those
mechanisms that are most appropriate for doing so.
The following sections analyze the strengths and weaknesses of each of these
mechanisms for controlling trade in CFCs, halons, and related products. Each
mechanism is evaluated with respect to its:
• effectiveness in controlling the level of imports;
• enforceability;
• cost of implementation for the federal government, U.S.
consumers, and U.S. businesses (whether it puts the latter
two at a significant disadvantage vis-a-vis their
international counterparts); and
• ability to influence the development of alternative, non-CFC
based technologies.
25 There is no set definition for labeling requirements or for certifica-
tion/inspection/testing programs. As the terms are used in this paper, the
critical distinction between labeling requirements and a certification/inspec-
ction/testing program is that the former require self-certification by
manufacturers or importers and products are only tested under certain
conditions. The latter require certification by the manufacturer, the
government or a government-approved entity; products are tested regularly for
compliance.
-------
K-25
U.S. experience with the trade mechanisms is used to evaluate the measures
with respect to effectiveness, enforceability, and cost. For the criteria of
technical innovation, where experience provides little guidance, the evaluations
are more speculative.
4.1 Bans26
Bans are prohibitions on the importation of certain goods. When trade in an
item is banned, Customs officials do not allow it to enter the United States.
The ban is enforced by Customs officials who make inspections at ports of entry
to the United States. The effectiveness of the ban depends largely on the ease
of identification.
Bans have only occasionally been employed by the United States. One
successful ban currently maintained by the United States is that against imports
of most aerosols containing CFCs. This measure is a "blanket" ban since it
covers goods from all foreign suppliers. Together with regulations against U.S.
production of similar products, it has eliminated aerosols containing CFCs in
the United States.
The U.S. also employs "partial" bans which are directed against imports from
specific countries. For example, under the Cuban Assets Control Regulation, the
United States bans imports from Cuba, and also bans imports of products derived
in whole or in part from Cuban products.
Bans have been very effective in instances in which the United States wished
to eliminate completely certain products from U.S. commerce. Blanket bans are
usually well enforced. Partial bans are more difficult to enforce because
Customs must determine the country of origin.
The cost of implementing a CFC-related and/or halon-related ban would be
relatively low for the federal government. Customs officials would add the
relevant CFC-related and halon-related products to the list of items that are
not permitted entry. In the case of a partial ban, Customs agents would be
required to determine which shipments could and could not enter the country.
The costs of CFC and halon product bans to customers would tend to be low
provided the goods were sold in competitive markets with close substitutes.
Most CFC-related and halon-related goods have close substitutes with supply from
U.S. manufacturers and other countries likely to join the protocol. However, in
the case of electronics and, to a lesser extent, automobiles, a ban could cause
price increases or limited product availability. (In the case of automobiles,
this would apply only to selected model imports.) For these products where
labor can be a large part of the cost of the good, a ban in effect against
countries that were low cost suppliers to the U.S. market could cause price
increases.
The influence of a ban on the development of alternative technology will
depend on the importance of the U.S. market to the foreign manufacturers'
nr
i0 The discussion in this section is limited to bans on products that would
enter the mainstream of U.S. commerce. This section does not discuss bans on
illicit goods such as narcotics that are traded in the black market.
-------
K-26
overall business. If the U.S. market is important to foreign manufacturers, it
is likely that alternative technologies would be developed or adopted to regain
market access for companies in countries that do not initially joint the
protocol.
4.2 Certification/Inspection/Testing
Under an import certification system, documents confirming that the product
meets specified standards must be presented to Customs before the good is
allowed to enter U.S. commerce. Most certification programs require both
foreign and domestic manufacturers to comply with the same,standards.
A variety of certification systems may be used. The three most common are:
• Self-certification. The manufacturer or importer
certifies that the product meets specified standards.
• Laboratory certification. A testing laboratory designs
and conducts tests to establish whether products meet
specified standards. The manufacturer or importer must
supply documentation from the laboratory that certifies
that the products met all relevant tests.
• Government certification. A U.S. or foreign government
agency certifies that products meet established
standards.
Laboratory and government certification is generally achieved through
inspection and/or testing which may be done at the point of manufacture, at the
port of entry, or at an accredited laboratory. Laboratory and government
certification generally have combined three elements into a single program:
certification, inspection, and testing.
The United States maintains large-scale certification/inspection/testing
programs, primarily to ensure compliance with health and safety standards on
such imports as foods and drugs. Examples include the meat and poultry
inspection programs conducted by the U.S. Department of Agriculture (USDA) and
the Food and Drug Administration's (FDA) program for testing foods for levels of
pesticide residues. Under the USDA programs, all imports are tested; under the
FDA program, only about one percent of imports are tested. Foreign and domestic
manufacturers must comply with the same standards.
Certification/inspection/testing measures have been highly effective at
ensuring specific product standards. The enforceability of certification/
inspection/testing programs appears to be high when the following conditions are
met:
• compliance with the relevant standards can be tested;
• the penalties for non-compliance are stringent; and
• inspection is fully staffed.
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K-27
These conditions can be met in the case of CFC-related and halon-related
products. Identification of prohibited goods is possible, as is discussed in
Section 3. Testing procedures may be conducted on either a comprehensive or
random sampling basis/ Stringent penalties for violations can be incorporated
into the CFC-related and halon-related regulations. Funding for a U.S.
inspection effort could be accomplished through the budgetary process.
The effectiveness of a certification/inspection/testing mechanism for
promoting alternative technologies will depend in part on the attractiveness of
the U.S. market to the foreign manufacturer. . In tfiis respect, the USDA meat
inspection program is evidence of the substantial efforts foreign producers will
make to serve U.S. markets. For many foreign producers, access to the U.S.
market is important enough for them to comply with U.S. health and safety
regulations and to allow U.S. inspectors to conduct on-site reviews of their
plants. The importance of the U.S. market to many offshore producers of
CFC-related products such as electronic goods and automobiles may induce them to
both comply with the regulations and develop or adopt alternative technologies.
4.3 Labeling Requirements
Many of the U.S. certification programs have limited inspection/testing
components. In such instances, manufacturers are required to label their
products to indicate that they are in compliance with the requisite standards.
In general, neither imported nor domestically-produced goods are tested under
these programs unless consumer complaints or accidents indicate that products
might not be in compliance with the relevant standards.
The United States maintains numerous programs with labeling requirements.
Many are under the jurisdiction of the Consumer Product Safety Commission
(CPSC), including products regulated under the Consumer Product Safety Act, the
Flammable Fabrics Act, the Poison Prevention Act and the Federal Hazardous
Substances Act.
The effectiveness of labeling programs appears to be high despite limited
monitoring to ensure compliance. No data exist to compare levels of compliance
under a labeling system with that under a certification/inspection/ testing
program. It is therefore impossible to determine whether violations occur more
frequently under one system or the other. However, non-compliance is probably
higher under a certification/inspection/testing program.
A system of labeling requirements relies heavily on good-faith efforts on
the part of manufacturers, self-interest on the part of retailers (who do not
want to gain a reputation for selling unsafe products), and pressure by consumer
groups on companies to comply with the regulations. In the case of CFC-related
products, it is likely that citizen groups and competing businesses would serve
a key watchdog function in monitoring compliance.
The cost of a labeling program to the federal government is low. If
compliance with the standards is high, the cost to consumers and businesses
should be the same as under a certification/inspection/testing program with the
same standards, and the incentives to develop alternate technologies should also
be similar.
-------
K-28
4.4 Quotas
Under a quota system, the United States determines (either through
negotiation or through a unilateral decision) the amount of imports of a
particular product from a specific country that it will allow to enter the
country. At all ports of entry Customs officials monitor U.S. imports of that
product and, when the quota level has been reached, refuse to allow additional
shipments to enter the country.
The United States makes extensive use of quotas to limit imports to pre-set
levels, particularly in the area of textiles and apparel. Quotas have proven to
be a very effective and enforceable means of holding U.S. imports to a specified
level.
The cost of a system of quotas is high to the federal government and to
consumers. The U.S. government must devote considerable resources to monitoring
fill rates and checking regulated shipments at the ports of entry. In addition,
the determination of appropriate quota levels and the subsequent negotiation of
such levels with trading partners requires considerable administrative effort.
Consumers must pay higher prices as a result of the quotas.
On the other hand, quotas also benefit those U.S. businesses manufacturing
the same products that are being regulated. For example, the U.S. textile and
apparel industry has benefited greatly from the U.S. quota program.
A quota system's effect on the development of non-CFC-based technologies
will depend on the quota levels established and the availability of alternative
markets to the manufacturer. The incentive would be greater if the quota level
were low enough to cause the manufacturer difficulty. A key issue is whether
the quota that properly protects the ozone layer would act as an incentive to
technological innovation.
4.5 Import Fees (Higher Tariffs)
When goods enter the United States, Customs assesses a duty or tariff on the
product, which the importer must pay. Duties range from nothing to levels as
high as 50 percent of the value of the good. In general, U.S. tariffs are
between three and seven percent of the value of the good. Import fees are, in
effect, an increase in the tariffs assessed against certain products.
The United States occasionally uses higher tariffs as a policy tool.
Increased tariffs have been used primarily as a means of protecting a given U.S.
industry from import competition from subsidized products. For example, the
United States recently raised the duty on wood shingles to 35 percent ad valorem
in order to provide relief to the U.S. industry from subsidized Canadian
imports.
Higher tariffs are readily enforceable (Customs merely assesses higher
duties against imports at the port of entry). In general, the costs to the
federal government of imposing increased import fees are negligible. Only
minor administrative measures are required to establish the new tariff rate.
Import fees would result in higher costs for U.S. consumers and U.S. importers
that rely on the imports, if the products were essential and there were no
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K-29
cost-competitive alternative sources of supply. As indicated earlier, import
fees do provide some relief for the U.S. industry producing comparable goods.
In the case of CFG and halon regulation, the objective of import fees would
not be to protect the relevant U.S. industries but rather to achieve the
environmental goal of reduced usage of CFCs and halons. The import fees would
be imposed to act as an incentive for countries to join the protocol and also as
a method of discouraging use of imported CFC and halon products. In effect,
import fees would be used to induce behavioral changes on the part of consumers
and manufacturers, creating an incentive to shift away from products that use
CFCs or halons.
The price elasticity of restricted products and the level of the higher
tariff will determine the effectiveness of the import fee in promoting the
environmental objective and encouraging the development and adoption of
alternative technologies.
4.6 Conclusions
Exhibit K-3 summarizes the performance of each trade control mechanism with
respect to the key criteria of effectiveness, enforceability, expense, and
ability to induce alternative technological development. Each mechanism has
particular strengths and weaknesses and any could be used to control trade in
CFCs, halons, and related items. This evaluation suggests two measures --
certification/testing/inspection and import fees -- are best suited to the task.
Certification/inspection/testing offers the flexibility to set standards
appropriate to each product and to ensure compliance with those standards. It
would appear to be highly effective in promoting the environmental objectives of
CFC and halon controls. The major disadvantage of such a system is its
potential expense to the federal government.
Import fees could also be an effective tool if appropriate tariffs for each
product are calculated. While fees would not allow the flexibility of setting
standards for individual products, they would be a more market-oriented
mechanism. Fees would impose a set cost on imports of particular products,
causing importers and manufacturers to adapt their procedures to the new market
circumstances.
Of the other three mechanisms, labeling would appear to offer a potential
alternative to certification/inspection/testing. The same standards can be
imposed under both systems, but labeling would be far less expensive to
implement. The chief disadvantage is the possibility of cheating under a
labeling program. Because of this, the United States may want to consider
labeling only in instances where it feels the incentives to circumvent
regulations are low and where the opportunities for concerned groups to act as
watchdogs and monitor compliance are strong.
Quotas would be more difficult to implement for CFC-related goods than the
other mechanisms, given the" diversity of products and foreign suppliers. The
establishment of quotas would require calculation of appropriate import levels
for each CFC-related good from each potential supplier.
-------
EXHIBIT K-3
EVALUATION OF TRADE CONTROL MECHANISMS FOR CFC-RELATEO PRODUCTS
Cert If teat Ion/
Inspection/
Bans
Test Ing
LabelIna
Quotaa
Import Fees
Effect Ivenass
Enforceabl 1 1 ty
Eipense:
U.S. Government
High
1 •'
High Medium
£/ 1 1
Medium-High
High | Low
1
1
Lou . 1 High . I LOM
U.S. Consumers j Lou d/
U S Importers
Incent I ve to
Develop Alternative
Technology
High
High
Low d/ 1 LO- <"
Med 1 urn
High
1
1
1
Comments
Useful only in (Expensive to
special cases.
implement and
Particularly (maintain, but
effective If al 1 (provides most
protocol members (direct compll-
act together jance verifica-
Low
Medium
High
High
Low
Low «•'
High
Medium
1
Most effective
where likelihood
of cheating Is
low or watchdog
capacity Is high.
tion, j
1
In cases with
large numbers of
Importers and high
volume of Imports.
Quotas are dif-
ficult to estab-
l 1st .
fi'
High
High
Low
Low «"
High
High
Strong If suffi-
cient tariffs are
Imposed.
to
o
a/ This depends on the potential consumer response and assumes a low.level of successful evasion.
b/ This assume* that appropriate tariff levels are established.
c/ This depends on whether a ban Is partial or blanket.
d/ Costs to consumers would be high only if goods were sold In non-competitive markets without close.
cost-competitive substitutes available from protocol members. Most CFC products have close substitutes in
competitive markets, thus low consumer costs are eipected.
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K-31
•Finally, bans would appear to be best suited for use in isolated instances,
such as: 1) to continue and perhaps strengthen the existing restrictions on
aerosols with CFCs, where a blanket rather than partial ban can be imposed; or
2) to implement a program in concert with other protocol nations to eliminate
trade in certain CFC-related products with non-parties.
-------
United Nations Environment Progri
DNEP
MONTREAL PROTOCOL ON
SUBSTANCES THAT DEPLETE THE OZONE LAYER
PIRAL ACT
1987
-------
FINAL ACT
1. The Conference of Plenipotentiaries on the Protocol on Chlorofluorocarbons
to the Vienna Convention for the Protection of the Ozone Layer was convened by
the Executive Director of the United Nations Environment Programme (UNEP)
pursuant to decision 13/18 adopted by the Governing Council of UNEP on 23 May
1985.
2. The Conference met at the Headquarters of the International Civil Aviation
Organization, Montreal, with the kind support of the Government of Canada, from
14 to 16 September 1987.
3. All States were invited to participate in the Conference. The following
States accepted the invitation and participated in the Conference:
Algeria, Argentina, Australia, Austria, Belgium, Brazil, Burkina Faso,
Byelorussian Soviet Socialist Republic, Canada, Chile, China, Colombia,
Congo, Costa Rica, Czechoslovakia, Denmark, Democratic Yemen, Egypt,
Finland, France, Germany, Federal Republic of, Ghana, Greece, Indonesia,
Israel, Italy, Japan, Kenya, Korea, Republic of, Luxembourg, Malaysia,
Mauritius, Mexico, Morocco, Netherlands, New Zealand, Nigeria, Norway,
Panama, Peru, Philippines, Portugal, Senegal, Spain, Sweden, Switzerland,
Thailand, Togo, Tunisia, Uganda, Ukrainian Soviet Socialist Republic,
Union of Soviet Socialist Republics, United Kingdom of Great Britain and
Northern Ireland, United States of Ame'rica, Venezuela.
4. The European Economic Community also participated.
5. Observers from the following States attended the proceedings of the
Conference:
Dominican Republic, Ecuador, Hungary, India, Kuwait, Poland.
-------
.
Manufacturers Association, Natural Resources Defense Council
"
by "'' M°8tafa *' Tolb'' the
-EErS : "
.-General of the Conference and
Executive Secretary.
unanimously elected Ambassador W. Lang (Austria) as its
10. The Conference also elected the following officers:
Vice-Presidents: Ambassador E. Hawas (ERypt)
Dr. V. Zakharov (Union of Soviet Socialist Republics)
Rapporteur: Mr. C.R. Roque (Philippines)
11. The Conference adopted the following agenda:
1. Opening of the Conference.
2. Organizational matters:
(a) Adoption of the rules of procedures;
(b) Election of the President;
(c) Election of Vice-Presidents and Rapporteur;
(d) Adoption of the agenda;
(e) Appointment of the members of the Credentials Committee;
ir) Appointment of the members of the Drafting Committee-
(g) Organization of the work of the Conference.
-------
- 3 -
3. Consideration of the draft Protocol to the Vienna Convention for the
Protection of the Ozone Layer.
4. Report of the Credentials Committee.
5. Adoption of the Protocol to the Vienna Convention for the Protection
of the Ozone Layer.
6. Adoption of the Final Act of the Conference.
7. Signature of final instruments.
8. Closure of the Conference.
12. The Conference adopted as its rules of procedure document UNEP/IG.79/2
proposed by the secretariat.
13. In conformity with the rules of procedure, the Conference established the
following Committees:
Committee of the Whole:
Chairman: The President of the Conference
General Committee;
Chairman: The President of the Conference
Member8: The Vice-Presidents of the Conference, the
Rapporteur and the Chairman of the Drafting Committee
Drafting Committee;
Chairman: Mr. Jon J. Allen (Canada)
Members: Argentina
Australia
France
Japan
United Kingdom
United State*
Credentials Committee;
Chairoan: Aabassador Jose M. Buatani (Brazil)
Members: Finland
Germany, Federal Republic of
Indonesia
Kenya
Mexico
Norway
-------
" te baSi" f" the "'^rations of the
Seventh Revised Draft Protocol on [Chlorof luorocarbons ] [and Other
Ozone Depleting Substances], UNEP/IG.93/3 and Rev. 1;
Reports of the Ad Hoc Working Group of Legal and Technical Experts
for the Elaboration of a Protocol on Chlorof luorocarbons to the
Vienna Convention for the Protectipn of the Ozone Laver (Vienna
Group), UNEP/VG.151/L.4, UNEP/WG. 167/2 and UNEP/WG.l 72/2 .
15. In addition, the Conference had before it a number of other documents that
were uade available to it by the Secretariat of UNEP.
!L l^ Conf"en" approved the recommendation of its Credentials Committee
ha the credentials of the representatives of the participating States as
listed in paragraph 3 should be recognized as being in order.
17. On the basis of the deliberations of the Committee of the Whole, the
tha t °" ^ September 1987, adopted the Montreal Protocol on Substance.
that
the Ozone Layer. The Protocol, which is appended to this Final
Act will be open for signature at the Ministry for External Affairs of Canada
in uttawa irom
17 September 1987 to 16 January 1988 and at the United Nations Headquarters in
New York from 17 January 1988 to 15 September 1988.
18. The Conference also adopted the following resolutions which are appended
to this Final Act:
I. Resolution on the Montreal Protocol.
?. Resolution on the exchange of technical information.
3. Resolution on the reporting of data.
4. Tribute to the Government of Canada.
-------
- 5 -
IN WITNESS WHEREOF the representatives have signed this Final .Act.
and S,.ni.h l.ngu.,«, «ch l.ngu.,,
c n,
-------
1. RESOLUTION OH THE MONTREAL PROTOCOL
The Conference,
Having adopted the Montreal Protocol on Substances that Deplete the Ozone
Layer, «*UUB
protoc°l
5h« JieDM Convention for the Protection of the Ozone Uyer, adopted
on 22 March 1985,
Bearing in mind the Resolution of the Conference of Plenipotentiaries on the
Protection of the Ozone Layer adopted on the same day which urged in the sixth
operative paragraph "all States and regional economic integration organiza-
tions, pending entry into force of a protocol, to control their emissions of
CFCs, inter alia in aerosols, by any means at their disposal, including
controls on production or use, to the maximum extent practicable",
1. Calls upon all States and regional economic integration organizations that
have not yet done so to implement the sixth paragraph, bearing in mind the
special situation of • the developing countries;
2. Appeals to all States to become Parties to the Vienna Convention for the
Protection of the Ozone Layer;
3. Urges all States and regional economic integration organizations,
including those that have not participated in this Conference, to sign and
become Parties to the Montreal Protocol on Substances that Deplete the Ozone
Layer;
4. Requests the Executive Director of the United Nations Environment
Programme to forward this Resolution to the Secretary General of the United
Nations and to circulate it to oil States and regional economic integration
organizations.
-------
2. RESOLUTION OH THE EXCHANGE OP TECHNICAL INFORMATION
The Conference,
Having adopted the Montreal Protocol on Substances that Deplete the Ozone
Layer,
Realizing the importance of reducing as quickly as possible the emissions of
these substances,
Recognizing the need for an early exchange of information on technologies and
strategies to achieve this,
1. Requests the Executive Director of the United Nations Environment
Programme (UNEP), pending the first meeting of the Parties, to make appropriate
arrangements to facilitate the exchange of information on technology referred
to in Articles 9 and 10 of the Protocol;
2. Appeals to interested States and regional economic integration
organizations to sponsor, at the earliest opportunity, in cooperation with
UNEP, a workshop with the aim of:
(a) exchanging information on technologies and administrative strategies
for reducing emissions of the substances listed in Annex A to the
Protocol and for Developing alternative!, taking into account
paragraph 2 of Annex II to the Vienna Convention for the Protection
of the Ozone Layer; and
(b) identifying areas in which further research and technical
development are required,
3. Urges all interested parties to participate in and contribute to such a
workshop and to make expeditious use of the information so gained in order to
reduce the emissions of those substances and to develop alternatives.
-------
3. RESOLUTION OH REPORTING OP DATA
The Conference,
Having adopted the Hontreal Protocol on Substances that Deplete the Ozone
Layer,
Convinced chat the timely reporting of complete and accurate data on 'the
production and consumption of controlled substances is critical to the
effective and efficient implementation of this Protocol,
1. Calls upon all Signatories to take, expeditiously, all steps necessary to
acquire data and report on the production, import and export of controlled
substances in a complete and timely fashion in accordance with Article 7 of the
Protocol and taking into account paragraph 1 of Article 4 of the Vienna
Convention for the Protection of the Ozone Layer;
2. Invites Signatories to consult with other Signatories, and to seek advice
and assistance from the United Nations Environment Programme (UNEP) and other
relevant international organizations, as necessary, in designing and
implementing data reporting systems;
3. Calls upon the Executive Director of UNEP to convene, within six months of
the adoption of this Resolution, a meeting of governmental experts with the
assistance of experts from relevant international organizations to make
recommendations for the harmonization of data on production, imports and
exports to ensure consistency and comparability of data on controlled
substances.
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4. TRIBUTE TO THE COVERUHEMT OP CAHADA
The Conference,
Havi°S °et in Montreal from 14 to 16 September 1987 at the gracious invitation
of the Governmen-t of Canada,
Convinced that the efforts made by the Government of Canada and by the civic
authorities of Montreal in providing facilities, premises and other resources
contributed significantly to the smooth conduct of its proceedings,
Deeply appreciative of the courtesy and hospitality extended by the Government
of Canada and the City of Montreal to the members of the delegations, observers
and the secretariat attending the Conference,
E;P.*;e88eg jts »in«™ gratitude to the Government of Canada, to the authorities
of Montreal and, through them, to the Canadian people and in particular to the
population of Montreal for the cordial welcome which they accorded to the
Conference and to those associated with its work and for their contribution to
the success of the Conference.
-------
MONTREAL PROTOCOL ON SUBSTANCES THAT DEPLETE THE OZONE LAYER
The Parties to this Protocol,
C°nvention for the Protection of the Ozone
Mindful of their obligation under that Convention to take appropriate
measures to protect human health and the environment against advene ejects
resulting or likely to result from human activities which modify or are likely
to modify the ozone layer, n*eiy
Recognizing that world-wide emissions of certain substances can
significantly deplete and otherwise modify the ozone layer in a manner that is
likely to result in adverse effects on human health and the environment,
Conscious of the potential climatic effects of emissions of these
substances,
A-JLEl that measures taken to protect the ozone layer from depletion should
be based on relevant scientific knowledge, taking into account technical and
economic considerations,
Determined to protect the ozone layer by taking precautionary measures to
control equitably total global emissions of substances Chat deplete it, with
the ultimate objective of their elimination on the basis of developments in
scientific knowledge, taking into account technical and economic
considerations,
Acknowledging; that special provision is required to meet the needs of
developing countries for these substances,
Noting the precautionary measures for controlling emissions of certain
levels °Carb0n8 that h*Ve *lready been taken at nati°n«l and regional
Considering the importance of promoting international co-operation in the
research and development of science and technology relating to the control and
reduction of emissions of substances that deplete the ozone layer, bearing in
mind in particular the needs of developing countries,
RAVE AGREED AS FOLLOWS:
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ARTICLE 1: DEFINITIONS
For the pwposes of this Protocol:
1. "Convention" means the Vienna Convention for the Protection of the Ozone
Layer, adopted on 22 March 1985.
2. "Parties" means, unless the text otherwise indicates, Parties to this
Protocol.
3. "Secretariat" means the secretariat of the Convention.
4. "Controlled substance" means a substance listed in Annex A to this
Protocol, whether existing alone or in a mixture. It excludes, however, any
such substance or mixture which is in a manufactured product other than a
container used for the transportation or storage of the substance listed.
5. "Production" means the amount of controlled substances produced minus the
amount destroyed by technologies to be approved, by the Parties.
6. "Consumption" means production plus imports minus exports of controlled
substances.
7. "Calculated levels" of production, imports, exports and consumption means
levels determined in accordance with Article 3.
8. "Industrial rationalization" means the transfer of all or a portion of the
calculated level of production of one Party to another, for the purpose of
achieving economic efficiencies or responding to anticipated shortfalls in
supply as a result of plant closures.
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ARTICLE 2: CONTROL MEASURES
1. Each Party shall ensure that for the twelve-month period commencing on the
* first day of the seventh month following cne aate of the entry into force of
this Protocol, and in each twelve-month period thereafter, its calculated level
of consumption of the controlled substances in Group I of Annex A does not
exceed its calculated level of consumption in 1986. By the end of the same
period, each Party producing one or more of these substances shall ensure chat
its calculated level of production of the substances does not exceed its
calculated level of production in 1986, except that such level may have
increased by no more than ten per cent based on the 1986 level. Such increase
shall be permitted only so as to satisfy the basic domestic needs of the
Parties operating under Article 5 and for the purposes of industrial
rationalization between Parties.
2. Each Party shall ensure that for the twelve-month period commencing on the
first day of the thirty-seventh month following the date of the entry into
force of this Protocol, and in each twelve month period thereafter, its
calculated level of consumption of the controlled substances listed in Group II
of Annex A does not exceed its calculated level of consumption in 1986. Each
Party producing one or more of these substances shall ensure that its
calculated level of production of the substances does not exceed its calculated
level of production in 198b, except that such level may have increased by no
more than ten per cent based on the 1986 level. Such increase shall be
permitted only so as to satisfy the basic domestic needs of the Parties
operating under Article 5 and for the purposes of industrial rationalization
between Parties. The mechanisms for implementing these measures shall be
decided by the Parties at their first meeting following the first scientific
review.
3. Each Party shall ensure that for the period I July 1993 to 30 June 1994
and in each twelve-month period thereafter, its calculated level of consumption
of the controlled substances in Group I of Annex A does not exceed, annually,
eighty per cent of its calculated level of consumption in 1986. Each Party
producing one or more of these substances shall, for Che same periods, ensure
that its calculated level of production of the substances does not exceed,
annually, eighty per cent of its calculated level of production in 1986.
However, in order to satisfy the basic domestic needs of the Parties operating
under Article 5 and for the purposes of industrial rationalization between
Parties, its calculated level of production nay exceed that limit by up to ten
per cent of its calculated level of production in 1986.
4. Each Party shall ensure that for the period 1 July 1998 to 30 June 1999,
and in each twelve-month period thereafter, its calculated level of consumption
of the controlled substances in Group I of Annex A does not exceed, annually,
fifty per cent of its calculated level of consumption in 1986. Each Party
producing one or more of these substances shall, for the same periods, ensure
that its calculated level of production of the substances does not exceed,
annually, fifty per cent of its calculated level of production in 1986.
However, in order to satisfy the basic domestic needs of the Parties operating
under Article S and for the purposes of industrial rationalization between
Parties, its calculated level of production may exceed that limit by up to
fifteen per cent of its calculated level of production in 1986. This
-------
paragraph will apply unless the Parties decide otherwise at a meeting by a
two-thirds majority of Parties present and voting, representing at least
two-.thirds of the total calculated level of consumption of these substances of
the Parties. This decision shall be considered and made in the light of the
assessments referred to in Article 6.
5. Any Party whose calculated level of production in 1986 of the controlled
substances in Group I of Annex A was less ttian twenty-five kilotonnes may, for
the purposes of industrial rationalization, transfer to or receive from any
other Party, production in excess of the limits set out in paragraphs 1' 3 and
4 provided that the total combined calculated levels of production of the
Parties concerned does not exceed the production limits set out in this
Article. Any transfer of such production shall be notified to the secretariat
no later than the time of the transfer. '
6. Any Party not operating under Article 5, that has facilities for the
production of controlled substances under construction, or contracted for,
prior to 16 September 1987, and provided for in national legislation prior to
1 January 1987, may add the production from such facilities to its 1986
production of such substances for the purposes of determining its calculated
level of production for 1986, provided that such facilities are completed by
31 December 1990 and that such production does not raise that Party's annual
calculated level of consumption of the controlled substances above 0.5
kilograms per capita.
7. Any transfer of production pursuant to paragraph 5 or any addition of
production pursuant to paragraph 6 shall be notified to the secretariat, no
later than the time of the transfer or addition.
8. (a) Any Parties which are Member States of a regional economic
integration organization as defined in Article 1(6) of the
Convention may agree that they shall jointly fulfil their
obligations respecting consumption under this Article provided that
their total combined calculated level of consumption does not exceed
the levels required by this Article.
(b) The Parties to any such agreement shall inform the secretariat of
Che terms of the agreement before the date of the reduction in
consumption with which the agreement is concerned.
(c) Such agreement will become operative only if all Member States of
the regional economic integration organization and the organization
concerned are Parties to the Protocol and have notified the
secretariat of their manner of implementation.
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9. (a) Based on Che assessments made pursuant to Article 6, the Parties may
decide whether:
(i) adjustments to the ozone depleting potentials specified in
Annex A should be made and, if so, what the adjustments should
be; and
(ii) further adjustments and reductions of production or consumption
of the controlled substances from 1986 levels should be
undertaken and, if so, what the scope, amount and timing of any
such adjustments and reductions should be.
(b) Proposals for such adjustments shall be communicated to the Parties
by the secretariat at least six months before the meeting of the
Parties at which they are proposed for adoption.
(c) In taking such decisions, the Parties shall make every effort to
reach agreement by consensus. If all efforts at consensus have been
exhausted, and no agreement reached, such decisions shall, as a last
resort, be adopted by a two-thirds majority vote of the Parties
present and voting representing at least fifty per cent of the total
consumption of the controlled substances of the Parties.
(d) The decisions, which shall be binding on all Parties, shall forthwith
be communicated to the Parties by the Depositary. Unless otherwise
provided in the decisions, they shall enter into force on the expiry
of six months from the date of the circulation of the communication
by the Depositary.
10. (a) Based on the assessments made pursuant to Article 6 of this Protocol
and in accordance with Che procedure set out in Article 9 of the
Convention, the Parties may decide:
(i) whether any substances, and if so which, should be added to or
removed from any annex to this Protocol; and
(ii} the mechanism, scope and timing of the control measures that
should apply to those substances;
(b) Any such decision shall become effective, provided that it has been
accepted by a two-thirds majority vote of the Parties present and
voting.
11. Notwithitand ing the provisions contained in this Article, Parties may take
more stringent measures than those required by this Article.
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ARTICLE 3: CALCULATION OP CONTROL LEVELS
For the purposes of Articles 2 and 5, each Party shall, for each Group of
substances in Annex A, determine its calculated levels of:
(a) production by:
(i) multiplying its annual production of each controlled substance
by the ozone depleting potential specified in respect of it in
Annex A; and
(ii) adding together, for each such Group, the resulting figures;
(b) imports and exports, re8Pectively, by following, mutatis mutandis
the procedure set out in subparagraph (a); and
(c) consumption by adding together its calculated levels of production
and imports and subtracting its calculated level of exports as
determined in accordance with subparagraphs (a) and (b). However
beginning on 1 January 1993, any export of controlled substances to
non-Parties shall not be subtracted in calculating the consumption
level of the exporting Party.
ARTICLE 4: CONTROL OF TRADE WITH NON-PARTIES
1. Within one year of the entry into force of this Protocol, each Party shall
ban the import of controlled substances from any State not party to this
Protocol.
2. Beginning on 1 January 1993, no Party operating under paragraph 1 of
Article 5 may export any controlled substance to any State not party to this
rrotoco I. '
3. Within three years of the date of the entry into force of this Protocol,
the Parties shall, following the procedures in Article 10 of the Convention
elaborate in an annex a list of products containing controlled substances. '
Parties that have not objected to the annex in accordance with those procedures
shall ban within one year of the annex having become effective, the import of
those products from any State not party to this Protocol.
4. Within five years of the entry into force of this Protocol, the Parties
shall determine the feasibility of banning or restricting, from States not
party to this Protocol, the import of products produced with, but not
containing, controlled substances. If determined feasible, the Parties shall
following the procedures in Article 10 of the Convention, elaborate in an annex
a list of such products. Parties that have not objected to it in accordance
with those procedures shall ban or restrict, within one year of the annex
having become effective, the import of those products from any State not party
to this Protocol. 7
-------
5. Bach Party shall discourage che export, to any State not party to this
Protocol, of technology for producing and for utilizing controlled substances.
6. Each Party shall refrain from providing new subsidies, aid, credits
guarantee* or insurance programmes for the export to States not party to this
Protocol of products, equipment, plants or technology that would facilitate t
*««e t
, , ans or ecnoogy that would facilitate the
production of controlled substances. *««e tne
7. Paragraphs 5 and 6 shall not apply to products, equipment, plants or
techno ogy that improve the containment, recovery, recycling or destruction of
controlled substances, promote the development of alternative substances or
otherwise contribute to the reduction of emissions of controlled substances.
8. Notwithstanding the provisions of this Article, imports referred to in
paragraphs 1 , 3 and 4 may be permitted from any State not party to this
Protocol if that State is determined, by a meeting of the Parties, to be in
full compliance with Article 2 and this Article, and has submitted data to that
effect as specified in Article 7.
ARTICLE 5: SPECIAL SITUATION OF DEVELOPING COUNTRIES
1. Any Party that is a developing country and whose annual calculated level of
consumption of the controlled substances is'less than.0.3 kilograms per capita
on the date of the entry into force of the Protocol for it, or anytime' '
thereafter within ten years of the date of entry into force of the Protocol
shall, in order,to meet its basic domestic needs, be entitled to delay its
compliance with the control measures set out in paragraphs 1 to 4 of Article 2
by ten years after that specified in those paragraphs. However, such Party
shall not exceed an annual calculated level of consumption of 0.3 kilograms per
capita. Any such Party shall be entitled to use either the average of its
annual calculated level of consumption for the period 1995 to 1997 inclusive or
a calculated level of consumption of 0.3 kilograms per capita, whichever is the
lower, as the basis for its compliance with the control measures.
2. The Parties undertake to facilitate access to environmentally safe
alternative substances and technology for Parties that are developing countries
and assist then to make expeditious use of such alternatives.
3. The Parties undertake to facilitate bilaterally or multilaterally the
provision of subsidies, aid, credits, guarantees or insurance programmes to
Parties that .re developing countries for the use of alternative technology and
for subscitutt products.
-------
ARTICLE 6: ASSESSMENT AND REVIEW OF CONTROL MEASURES
Beginning in 1990, and at lease every four years thereafter, the Parties
shall assess tbe control measures provided for in Article 2 on the basia of
available scientific, environmental, technical and economic information. At
least one year before each assessment, the Parties shall convene appropriate
panels of experts qualified in the fields mentioned and determine the
composition and terns of reference of any such panels. Within one year of
being convened, the panels will report their conclusions, through the
secretariat, to the Parties.
ARTICLE 7: REPORTING OF DATA
1. Each Party shall provide to the secretariat, within three months of
becoming a Party, statistical data on its production, imports and exports of
each of the controlled substances for the year 1986, or the best possible
estimates of such data where actual data are not available.
2. Each Party shall provide statistical data to the secretariat on its
annual production (with separate data on amounts destroyed by technologies to
be approved by the Parties), imports, and exports to Parties and non-Parties
respectively, of such substances for the year during which it becomes a Parti
and for each year thereafter. It shall forward the data no later than nine
months after the end of the year to which the data relate.
ARTICLE 8: NON-COMPLIANCE
The Parties, at their first meeting, shall conaider and approve
procedures and institutional mechanisms for determining non-compliance with the
provisions of this Protocol and for treatment of Parties found to be in
non-compliance.
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ARTICLE 9: RESEARCH, DEVELOPMENT, PUBLIC AWARENESS
AND EXCHANGE OF INFORMATION
1. The Parties shall co-operate, consistent with their national laws,
regulations and practices and taking into account in particular the needs of
developing countries, in promoting, directly or through competent international
bodies, research, development and exchange of information on:
(a) best technologies for improving the containment, recovery, recycling
or destruction of controlled substances or otherwise reducing their
emissions;
(b) possible alternatives to controlled substances, to products
containing such substances, and to products manufactured with them-
and '
(c) costs and benefits of relevant control strategies.
2. The Parties, individually, jointly or through competent international
bodies, shall co-operate in promoting public awareness of the environmental
effects of the emissions of controlled substances and other substances that
deplete the ozone layer.
3. Within two years of the entry into force of this Protocol and every two
years thereafter, each Party shall submit to the secretariat a summary of the
activities it has conducted pursuant to this Article.
ARTICLE 10: TECHNICAL ASSISTANCE
1. The Parties shall, in the context of the provisions of Article 4 of the
Convention, and taking into account in particular the needs of developing
countries, co-operate in promoting technical assistance to facilitate
participation in and imp lenient at ion of this Protocol.
2. Any Party or Signatory to this Protocol may submit a request to the
secretariat for technical assistance for the purposes of implementing or
participating in the Protocol.
3; /?!.??*ti"i| *C their first neetin8, shall begin deliberations on the means
of fulfilling the obligations set out in Article 9, and paragraphs 1 and 2 of
this Article, including the preparation of workplans. Such workplans shall pay
special attention to the needs and circumstances of the developing countries.
States and regional economic integration organizations not party to the
Protocol should be encouraged to participate in activities specified in such
workplans.
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ARTICLE 11: MEETINGS OP THE PARTIES
1. The Parties shall hold meetings at regular intervals. The secretariat
shall convene tbe first meeting of the Parties not later than one year after
Che date of the entry into force of this Protocol and in conjunction with a
meeting of the Conference of the Parties to the Convention, if a meeting of the
latter is scheduled within that period.
2. Subsequent ordinary meetings of the Parties shall be held, unless the
Parties otherwise decide, in conjunction with meetings of the Conference'of the
Parties to the Convention. Extraordinary meetings of the Parties shall be held
at such other times as may be deemed necessary by a meeting of the Parties, or
at the written request of any Party, provided that, within six months of such a
request being communicated to then by the secretariat, it is supported by at
least one third of the Parties.
3. The Parties, at their first meeting, shall:
(a) adopt by consensus rules of procedure for their meetings;
(b) adopt by consensus the financial rule* referred to in paragraph 2 of
Article 13;
(c) establish the panels and determine the terms of reference referred to
in Article 6;
(d) consider and approve the procedures and institutional mechanisms
specified in Article 8; and
(e) begin preparation of vorkplans pursuant to paragraph 3 of Article 10.
4. The functions of the meetings of the Parties shall be to:
(a) review the implementation of this Protocol;
(b) decide on any adjustments or reductions referred to in paragraph 9
of Article 2;
(c) decide on any addition to, insertion in or removal from any annex of
substances and on related control measures in accordance with
paragraph 10 of Article 2;
-------
(d)
Article 9;
establish, where necessary, guidelines or procedures for reporting of
information as provided for in Article 7 and paragraph 3 of
Article 9;
(e) review requests for technical assistance submitted pursuant to
paragraph 2 of Article 10;
(f) review reports prepared by the secretariat pursuant to sub-
paragraph (c) of Article 12;
(g) assess in accordance with Article 6, the control measures provided
for in Article 2;
(h) consider and adopt, as required, proposals for amendment of this
Protocol or any annex and for any new annex;
(i) consider and adopt the budget for implementing this Protocol; and
(j) consider and undertake any additional action that may be required for
the achievement of the purposes of this Protocol.
5. The United Nations, its specialized agencies and the International Atomic
Energy Agency, as well as any State not party to this Protocol, may be
represented at meetings of the Parties as observers. Any body or agency
whether national or international, governmental or.non-governmental, qualified
in fields relating to the protection of the ozone layer which has informed the
secretariat of its wish to be represented at a meeting of the Parties as an
observer may be admitted unless at least one third of the Parties present
object. The admission and participation of observers shall be subject to the
rules of procedure adopted by the Parties.
ARTICLE 12: SECRETARIAT
For the purposes of chia Protocol, the secretariat shall:
(a) arrange for and service meetings of the Parties as provided for in
Article 11;
(b) receive and make available, upon request by a Party, data provided
to Article 7;
(c) prepare an
-------
(d) notify the Parties of any request for technical assistance received
pursuant to Article 10 so as to facilitate the provision of such
assistance;
(e) encourage non-Parties to attend the meetings of the Parties as
observers and to act in accordance with the provisions of.this
Protocol;
(f) provide, as appropriate, the information and requests referred to in
subparagraphs (c) and (d) to such non-party observers; and
(g) perform such other functions for the achievement of the purposes of
this Protocol as may be assigned to it by the Parties.
ARTICLE 13: FINANCIAL PROVISIONS
1. The funds required for the operation of this Protocol, including those for
the functioning of the secretariat related to this Protocol, shall be charged
exclusively against contributions from the Parties.
2. The Parties, at their first meeting, shall adopt by consensus financial
rules for the operation of this Protocol.
ARTICLE 14: RELATIONSHIP OF THIS PROTOCOL TO THE CONVENTION
Except as otherwise provided in this Protocol, the provisions of the
Convention relating to its protocols shall apply to this Protocol.
ARTICLE 15: SIGNATURE
This Protocol shall be open for signature by States and by regional
economic integral ion organisations in Montreal on 16 September 1987, in Ottawa
from 17 September 1987 to 16 January 1988, and at United Nations Headquarters
in New York fro* 17 January 1988 to IS September 1988.
12
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ARTICLE 16: ENTRY INTO FORCE
l;..?l'ir°"^.e^:.f°<°.<°f" « ' J'°«'7 «»». P'.vu« ^ pr°vision8 of Article l9 of the
a? j • trtrft »xcCDt wxcn r68Dccw Co % flrt i^^s
rererred Co in Daraaraoh 1 of Arr{/-i> ^ «... _.._w »__^ . . .
Protoco .vin. ' "y m«y wt"w ro»
protocol by giving written notification to the Depositary at any time after
Articl"J' °. "§UBkin8.th« °«>li8«ion. specified in paragraph. 1 to" o
the date »t r" iuch.w"""«l «h-H t-ke effect upon expiry of one year after
- I ""^ y-' ' DeP°iic-ry. o' °n ««ch later date a. may be
in the notification of the withdrawal.
13
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ARTICLE 20: AUTHENTIC TEXTS
The original of this Protocol, of which the Arabic, Chinese, English
French, Russian and Spanish texts are equally authentic, shall be deposited
with the Secretary-General of the United Nations.
' BENG DULY ADTHORIzro T0
DONE AT MONTREAL THIS SIXTEENTH DAY OF SEPTEMBER, ONE THOUSAND NIHE
HUNDRED AND EIGHTY SEVEN
-------
ANNEX A
CONTROLLED SUBSTANCES
Group
Substance
Ozone Depleting
Potential *
Group I
CPC13 (CPC-11)
CP2C12 (CPC-12)
C2P3C13 (CPC-113)
C2?4C12 (CFC-114)
C2F5C1 (CFC-115)
1.0
1.0
0.8
1.0
0.6
Group II
CP2BrCl (halon-1211)
CF3Br (halon-1301)
C2P^Br2 (halon-2402)
3.0
10.0
(to be determined)
* These ozone depleting potentials are estimates based on existing
knowledge and will be reviewed and revised periodically.
-------
ATTACHMENT K-2
CFG PRODUCTION/DSE DATA FOR SELECTED INDUSTRIAL
AND DEVELOPING COUNTRIES
-------
K-2-2
ATTACHMENT K-2
EXHIBIT 1
CFC-11 AND CFG-12 PRODUCTION/DSE FOR VARIOUS COUNTRIES
240
210
180
150
Millions
of 120
Kilograms
90
60
30
Australia
Austria
Brazil
I
China
I I
Honduras Indonesia!
EEC
Hong Kong
Japan
Kuwait
Malaysia
I
Norway
Sweden
U.S.
Egypt
India
Korea
Mexico
Thailand
-------
K-2-3
ATTACHMENT K-2
EXHIBIT 2
CFC-11 AND CFG-12 PRODUCTION/USE
PER CAPITA FOR VARIOUS COUNTRIES
.90
.80 -
.70
.60
.50
Kilograms
per
Capita
.40
.30
.20
.10
Honduras Indonesia!
Australia
Austria
Brazil
Egypt
India
Korea
Mexico
Thailand
-------
K-2-4
ATTACHMENT K-2
EXHIBIT 3
ASSUMPTIONS, DATA AND REFERENCES
CFC-11 +
CFC-12
a/ a/ Use/
Population GNP Production
(Thousands) (Millions) (Mill k*)
Australia
Austria
Brazil
China
EEC
Egypt
Honduras
Hong Kong
India
Indonesia
Japan
Korea
Kuwait
Malaysia
Mexico
Norway
Sweden
Thailand
U.S.
15,369
7,549
132,600
1,019,102
269,017
45,169
4,093
5,400
749,200
158,900
119,259
40,100
1,72
14,863
75,011
4,133
8,331
49,169
234,496
169,557
67,045
228,072
294;572
2,396,766
30,144
2,656
34,182
194,729
85,806
1,159,124
84,611
26,064
26,679
157,372
55,650
99,750
38,864
3,176,670
c/
12.0
5.2~
m/
8.9
e/
18.0
f/
228.5
S/
^•*
2.9
0.2
n/
1.7
o/
0.4
21
*•*
5.4
h/
57.5
a/
•«•
3.1
i/
1.0
i/
«fc*
1.4
k/
5.2
I/
0.7
I/
3.6
&/
Sm*
2.0
197. 4~
FOR EXHIBITS 1 AND 2
CFC-11 + CFC-11 +
CFC-12 CFC-12
Use Per Use (kg)
Capita Per $
(kg) Bill GNP
0.78
0.69
0.07
0.02
0.85
0.06
0.04
0.32
0.001
0.03
0.48
0.08
0.60
0.09
0.07
0.18
0.43
0.04
0.84
0.07
0.08
0.04
0.06
0.10
0.10
0.08
0.05
0.002
0.06
0.05
0.04
0.04
0.05
0.03
0.01
0.04
0.05
0.06
Year
of Use/
Production
Data
1984
1985
1985
NA
1985
.
1985 •
1984
1985
1982
1984
1985
1985
NA
NA
1983
1984
1984
1984
1985
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K-2-5
ATTACHMENT K-2
EXHIBIT 3 (continued)
ASSUMPTIONS, DATA AND REFERENCES FOR EXHIBITS 1 AND 2
a/ The World Bank, (1986), "The World Bank Atlas, 1986," Washington, D.C
Numbers reflect 1983 estimates for GNP and Population. GNP is in real
U.S. 1982 dollars.
b/ United States International Trade Commission, (1986), "Preliminary Report
on U.S. Production of Selected Synthetic Organic Chemicals (Including
Synthetic Plastics and Resin Materials) July through September, October
thru December, and Cumulative Totals 1986," USITC, Washington, D.C.,
February 20, 1986. Imports and exports were not considered. 1985
production estimates.
c/ Department of Arts, Heritage and Environment, Australia, (1986),
Australian Submission to UNEP Workshop on Chlorofluorocarbons. submitted
for Topic 1 of the UNEP Chlorofluorocarbon Workshop, Rome, Italy, May 1986.
d/ Austria, (1986), Current Use of CFCs in Austria, prepared by the Austrian
Delegation for Topic 1 of the UNEP Chlorofluorocarbon Workshop, Rome,
Italy, May 1986. Estimate net use of all CFCs.
e/ Zhijia, W., (1986), Country Paper for Topic 1. prepared by the National
Environmental Protection Agency of the People's Republic of China for
Topic 1 of the UNEP Chlorofluorocarbon Workshop, Rome, Italy, May 1986.
Net use of all CFCs.
f/ EFCTC, UNEP Chlorofluorocarbon Workshop 1986, Phase I "CFC Production and
Use Statistics for the EEC 1976 to 1985" Rome, May 1986. Total Sales.
&/ United Nations Environment Programme, (1986), Background Factual Papers on
Current Production Capacity. Use. Emissions. Trade and Current Regulation
of CFCs Separately by Country and/or Region. Topic 1 — Overview.
prepared for UNEP Workshop on Chlorofluorocarbons, Rome, Italy, May 1986
Estimates net use of all CFCs.
h/ Kurosawa, K., and K. Imazeki, (1986), Paper for CFCs Workshop, submitted
by Japan for Topic 2 of the UNEP Chlorofluorocarbon Workshop, Rome, Italy
May 1986. "
i/ United National Environment Programme, (1986), Draft Report of the Second
Part of the Workshop on the Control of Chlorofluorocarbons. UNEP/WG.148/3/
L.l/Corr. 1, 11 September 1986. Estimate net use of all CFCs.
-------
K-2-6
ATTACHMENT K-2
EXHIBIT 3 (continued)
ASSUMPTIONS, DATA AMD REFERENCES FOR EXHIBITS 1 AND 2
j/ Department of Environment, Malaysia, (1986), Country Report. Chlorofluoro-
carbon Chemicals in Malaysia, submitted for Topic 1 of the UNEP
Chlorofluorocarbon Workshop, Rome, Italy, May 1986. Estimate use of
CFC-11, CFC-12 and CFC-22.
k/ Ostman, A., P. Bohm, and I. Kokeritz, (1986), Current Use of CFCs in
Sweden and Norway, prepared for the Swedish Environment Protection Board
and submitted for Topic 1 of the UNEP Chlorofluorocarbon Workshop, Rome,
Italy, May 1986. Estimates for 1984 use.
j./ Perez, A.R.A., (1986), National Panorama of Chlorofluorocarbons. prepared
by Secretaria de Desarrollo Urbano y Ecologia for the UNEP Chlorofluoro-
carbon Workshop Rome, Italy, May 1986. Estimates of total CFC consumption.
No production or export data reported. Country contains two producing
plants.
m/ Banco Do Brasil S.A. (1985), Carteira Do Comercio Exterior. Brasil, and
United Nations Environment Programme, (1986) Topic 1 - Overview prepared
for UNEP Workshop on Chlorofluorocarbons, Rome, Italy, May 1986.
Use/production calculated as Imports - Exports + Production.
n/ Census and Statistics Department (1985), Hong Kong Trade Statistics. Hong
Kong. Product coverage includes Dichlorofluormethane,
Trichlorofluoromethane and Dichlorodifluormethane mix Trichloro-
fluoromethane. Production/use calculated as Imports-Exports + Production.
o/ Directorate General of Commercial Intelligence and Statistics, (1982),
Monthly Statistics of the Foreign Trade of India. Calcutta, India.
Product coverage includes "other halogenated derivatives of hydrocarbons."
Use/Production calculated as Imports - Exports + Production.
E/ Biro Pusat Statistik (1984), Indonesia Foreign Trade Statistics. Jakarta
Indonesia. Product coverage includes "other halogenated derivatives of
hydrocarbons." Use/Production calculated as Imports - Exports +
Production.
3/ Office of Customs Administration (1985), Statistical Yearbook of Foreign
Trade, Seoul, Republic of Korea. Product Coverage includes
Chlorofluoromethanes. Use/Production calculated as Imports - Exports +
Production, production assumed to be zero.
-------
ATTACHMENT K-3
CFC IMPORT DATA FOR SELECTED INDUSTRIAL
AND DEVELOPING COUNTRIES
-------
K-3-2
ATTACHMENT K-3
EXHIBIT 1
UNITED STATES IMPOSTS OF CFCS 11 AND 12 (1)
QUANTITY: Metric Torn
Major Supplier*
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United State*
Japan
Other*
_
TOTAL
1982
•••••••••I
0
0
555
0
0
2,378
0
0
0
0
42
2,975
1983
•••• *HaU 81
0
0
1,343
0
0
4,246
0
320
0
0
249
6,158
1984
130
207
1,054
0
0
5,906
0
1.223
0
0
191
8,711
1985
89
0
567
0
92
1,484
125
8
0
0
222
2,587
1986
0
95
931
787
0
6,231
1,890
1,031
0
0
672
11.637
VALUE: Thousand* of U.S. Dollars
Major Supplier*
1982
1983
1984 1985 1986
•••••••••••••••••••••••••a
Belgiua |
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United State*
Japan
Other*
TOTAL
0
0
266
0
0
1,068
0
0
0
0
35
1,369
0
0
725
0
0
1,838
0
155
•0
0
148
2,866
141
101
679
0
0
2,990
0
555
0
0
116
4,582
111
0
655
0
111
1,460
261
10
0
5
65
2,678
0
98
967
964
10
4,942
1,134
1,041
0
47
898
10,101
Source: United States Department of Commerce, Bureau of the Census.
"U.S. Imports for Consumption and General Imports". Washington, O.C.
(1) Product description is "Trichlorofluoromtthane and Dichlorodifluoro-
methane.
-------
K-3-3
ATTACHMENT K-3
EXHIBIT 2
UNITED STATES IMPORTS OF CFCS 22 (1)
QUANTITY: Metric Tons
Major Suppliers 1982
1983
1984
1985
VALUE: Thousands of U.S. Dollars
Major Suppliers
1982
1983
1984
1985
1986
Belgium
Netherlands
France
U. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Others
TOTAL
0
0
0
0
0
6,997
0
0
0
0
75
7,072
0
0
336
0
0
7,955
0
0
0
0
105
8,396
228
0
508
0
0
10.149
0
889
0
0
0
11,774
188
0
142
82
0
755
0
0
0
0
52
1,219
43
2,670
1,167
341
0
4,516
369
943
0
0
0
10,049
1986
Belgium
Netherlands
France
U. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Others
TOTAL
0
0
0
0
0
5.496
0
0
0
0
62
5,558
0
0
301
0
6,344
0
0
0
0
0
87
6,732
179
0
476
0
0
7,625
0
443
0
0
2
8,725
351
0
246
124
0
1.128
0
0
0
0
70
1,919
57
606
1,909
625
0
6,626
1,183
104
0
0
0
11,110
Source: United States Department of Commerce. Bureau of the Census.
"U.S. Imports for Consumption and General Imports11. Washington, D.C.
(1) Product description is "Chlorodifluoromethane*.
-------
K-3-4
ATTACHMENT K-3
EXHIBIT 3
CANADIAN IMPORTS OF CFG 11 (1)
QUANTITY: Netrie Tons
Major Suppliers 1982
1983
1984
198S
VALUE: Thousands of U.S. Dollars
Major Suppliers
1982
1983
1984
1985
Source: OKI, 1987, and various country sources.
(1) Product description is "Triehlorofluoremethane1*.
1986
Belgium
Netherlands
France
U. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Others
TOTAL
3
0
0
0
0
0
0
0
7
0
0
10
0
0
0
0
0
0
0
0
4
0
0
4
0
0
20
0
0
35
0
0
11
0
0
66
0
0
0
0
14
0
0
0
20
31
0
65
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1986
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Others
TOTAL
!•••••*•••!
5
0
0
0
0
0
0
0
7
0
0
12
0
0
0
0
0
0
0
0
7
0
0
7
0
0
15
0
0
23
0
0
5
0
0
43
0
0
0
0
12
0
0
0
30
30
0
72
••••••I
N/A
N/A
N/A
N/A
N/A
M/A
N/A
N/A
N/A
N/A
N/A
N/A
-------
K-3-5
ATTACHMENT K-3
EXHIBIT 4
CANADIAN IMPORTS OF CFG 12 (1)
QUANTITY: Metric Ton*
Major Suppliers
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
VALUE: Thousands o1
Major Suppliers
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United statea
Japan
Other
TOTAL
1982
25
0
0
0
0
89
0
0
224
0
0
338
1 U.S. Ool
1982
47
0
0
0
0
109
0
0
469
0
1
626
1983
39
0
0
0
0
190
0
0
276
0
0
SOS
ars
1983
63
0
0
0
0
258
0
0
640
0
4
965
1984
•••••••••I
23
35
27
0
0
228
0
0
353
0
11
677
1984
36
0
42
0
0
313
0
0
797
0
69
1,257
1985
10
0
107
0
14
408
0
0
277
31
2
851
1985
(••••••••3!
11
0
175
0
0
464
0
0
563
0
1
1,214
1986
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1986
!•••••••••
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Source: OKI, 1987, and various country sources.
(1) Product description is "Oichlorodifluoromethane".
-------
K-3-6
ATTACHMENT K-3
EXHIBIT 5
FRENCH IMPORTS OF CFG 22 (1)
QUANTITY: Metric Tons
Major Suppliers
1982
1983
1984
198S
Source: ORI, 1987, and various country sources.
(1) Product description is "Chlorodifluoromethane".
1986
Belgium
Netherlands
Franc*
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
0
10
0
0
870
0
78
0
0
0
0
958
0
44
0
77
900
0
475
0
0
0
2
1,498
0
3
0
14
506
0
132
0
0
0
5
660
0
1
0
7
953
0
74
0
0
0
7
•1,042
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
I N/A
VALUE: Thousands of U.S. Dollars
Major Suppliers 1982 1983 1984 1985 1986
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
0
12
0
0
922
0
88
0
0
0
0
1,022
0
42
0
95
841
0
474
0
0
0
5
1,457
0
4
0
20
532
0
119
0
0
0
5
680
0
2
0
10
724
0
81
0
0
0
7
824
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-------
K-3-7
ATTACHMENT K-3
EXHIBIT 6
FRENCH IMPORTS OF CFG 12 (1)
QUANTITY: Mttric Tons
Major Suppliers 1982
1983
1984
198S
VALUE: Thousands of U.S. Dollars
Source: OR!, 1987, and various country sources.
(1) Product description is "Oichlorodifluoromthano*.
1986
Belgium
Netherlands
Franc*
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
4
328
0
756
857
2
942
0
13
0
1
2,903
IS
600
0
881
567
2
1,014
0
21
0
60
3,160
12
623
0
842
561
1
678
0
20
0
10
2,747
11
288
0
980
555
3
822
0
63
0
12
2,734
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Major Suppliers
Belgium
Netherlands
France
w. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
1982
5
312
0
880
674
21
693
0
98
0
1
2,684
1983
20
504
0
993
414
26
781
0
113
0
61
2,912
1984
17
524
0
777
407
13
418
0
115
0
13
2,284
1985
11
257
0
951
408
7
543
0
155
0
39
2,371
1986
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-------
K-3-8
ATTACHMENT K-3
EXHIBIT 7
WEST GERMAN IMPORTS OF MIXED DERIVATIVES
OF ACYCLIC HYDROCARBONS
QUANTITY: Metric Tons
Major Suppliers
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada .
United States
Japan
Other
TOTAL
1982
120
8,521
1.207
0
5,077
594
83
3
173
59
34
15,871
1983
171
8,296
1,321
0
4,679
841
355
2
173
0
138
15,976
1984
71
9,660
1,351
0
5,002
875
1,647
26
92
0
111
18.835
198S
57
9,965
2,872
0
6.240
976
1,378
0
61
0
177
21,726
Nov YTO
1986
157
9,954
3,353
0
5,081
946
1,469
0
35
61
840.
21,896
VALUE: Thousands of U.S. Dollars
Nov YTD
Major Suppliers 1982 1983 1984 1985 1986
Belgiun
Netherlands
France
U. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
104
8,609
1,810
0
4,342
1,384
114
69
400
208
38
17,078
165
8,761
2,210
0
4,080
1,660
500
39
492
0
121
18,028
120
10,428
2,813
0
4,045
1,562
1,668
0
349
43
79
21,107
101
9.805
4,200
0
4,926
1,706
1,421
0
214
64
182
22,619
233
14,099
7,432
0
7,201
1,933
2,298
0
221
180
162
33,759
Source: OR!, 1987, and various country sources.
Exchange Rate from Federal Republic of Germany, Frankfurt Exchange.
-------
K-3-9
ATTACHMENT K-3
EXHIBIT 8
ITALIAN IMPORTS OF CFG 22 (1)
QUANTITY: Metric Tons
Major Suppliers 1982
1983
1984
Nov YTO
198S 1986
Belgiun
Netherlands
France
w. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
0
0
0
7,763
0
0
0
0
0
0
3,864
11.627
0
0
2,730
6,905
0
0
0
0
0
0
3,349
12,984
0
0
534
362
0
0
0
0
0
0
798
1,694
0
0
48
0
0
0
0
0
0
0
267
315
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
VALUE: Thousands of U.S. Dollars
Nov YTD
Major Suppliers 1982 1983 1984 1985 1986
Belgiun
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
»»•••••••!
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
mmmmmmmmmmi
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
••••••••
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Source: ORI, 1987, and various country sources.
(1) Product description is "Chlorodifluoromethane".
-------
K-3-10
ATTACHMENT K-3
EXHIBIT 9
UNITED KINGDOM IMPORTS OF CFG 12 (1)
QUANTITY: Metric Tons
Major Suppliers 1982
1983
1984
1985
VALUE: Thousands of U.S. Dollars
Major Suppliers
1982
1983
1984
1985
1986
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3,631
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5,501
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5,660
!•••••••••!
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
6,822
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
6,671
1986
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Other
TOTAL
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
2,417
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
3,936
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
4.797
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
6,364
!••••••••!
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
5,167
Source: ORI, 1987, and various country sources.
Exchange Rate from International Monetary Fund, 1986.
"International Financial Statistics". Washington, O.C.
-------
K-3-11
ATTACHMENT K-3
EXHIBIT 10
NORWEGIAN IMPORTS OF -OTHER HALOGENATED
DERIVATIVES OF HYDROCARBONS"
QUANTITY: Metric Tons
Major Suppliers 1982
1983
1984
198S
VALUE: Thousands of U.S. Dollars
Major Suppliers
1982
1983
1984
1985
1986
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Others
TOTAL
0
55
0
231
0
91
0
0
0
0
50
427
87
S3
54
242
0
576
0
0
0
0
9
1,021
18
27
0
558
0
SS
9
0
0
0
s
672
N/A
N/A.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
•••••••
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1986
Belgium
Netherlands
France
W. Germany
Italy
United Kingdom
Other EEC
Canada
United States
Japan
Others
TOTAL
0
49
0
247
0
153
0
0
0
0
94
543
194
59
89
197
0
667
0
0
0
0
11
1,217
54
38
0
48S
0
91
0
0
0
0
45
713
•••••••*••
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
•••••••
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Source: Central Bureau of Statistics. "External Trade". Oslo. Norway.
Exchange rate from; International Monetary Fund, 1986. "International
Financial Statistics Yearbook11. Washington, O.C..
-------
K-3-12
ATTACHMENT K-3
EXHIBIT 11
NEWLY INDUSTRIALIZING COUNTRIES' IMPORTS OF CFCS (1)
QUANTITY: Metric Tone
Brazil
Egypt
Honduras
Hong Kong
India
Indonesia
Korea
Malaysia
Mexico
Thailand
TOTAL
1982
1983
1984
1985
1986
N/A
N/A
M/A
N/A
448
N/A
N/A
N/A
N/A
N/A
448
N/A
M/A
N/A
968
N/A
5.195
2,291
N/A
N/A
1.190
9.644
43
N/A
N/A
1087
N/A
5.679
3.776
N/A
N/A
1.303
11.888
12
N/A
N/A
1725
N/A
N/A
3.563
N/A
N/A
1,180
6.480
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
VALUE: Thousands of U.S. Dollars
1982
1983
1984
1985
1986
Major Suppliers
Brazil
Egypt
Honduras
Hong Kong
India
Indonesia
Korea
Malaysia
Mexico
Thailand
TOTAL
(1) The product description for each country's imports follows the source list
Sources:
Banco Do Brasil S.A., "Cartelre Do Comercio Exterior". CFC 11 & 12
Census * Statistics Department. "Hong Kong Trade Statistics". Hong Kong.
Dlchlorodifluoromethane. Trichlorofluoromethane and Dichlorodtfluoromethane
Nix Trichlorofluoromethane.
N/A
N/A
N/A
N/A
299
N/A
N/A
N/A
N/A
N/A
299
N/A
N/A
N/A
1009
N/A
N/A
N/A
N/A
N/A
1,936
2,945
N/A
N/A
N/A
1132
N/A
N/A
N/A
N/A
N/A
1,970
3,102
N/A
N/A
N/A
1859
N/A
N/A
N/A
N/A
N/A
1,815
3,674
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-------
K-3-13
ATTACHMENT K-3
EXHIBIT 11 (continued)
NEWLY INDUSTRIALIZING COUNTRIES' IMPORTS OF CFCS (1)
Directorate General of Coomerclal Intelligence and Statistics. "Monthly
Statistics of the Foreign Trade of India". Calcutta, India. Other
Halogenated Derivatives of Hydrocarbons.
Biro Pusat statistik. "Indonesia Foreign trade Statistics*. Jakarta. Indone
Other Halogenated Derivatives of Hydrocarbons.
Office of Custom Administration. "Statistical Yearbook of Foreign Trade".
Republic of Korea. Chlorofluoromethanes 1.
Department of Customs. "Foreign trade Statistics of Thailand". Bangkok,
Thailand. Freons.
-------
ATTACHMENT K-4
U.S. IMPORT DATA FOR CFC-RELATED PRODUCTS FROM
SELECTED INDUSTRIAL AND DEVELOPING COUNTRIES
-------
ATTACHMENT K-4
EXHIBIT 1
U.S. MARKET FOR SELECTED CFG-RELATED EXPORTS
COUNTRY
EEC
Belgiug-Luxenfeourg
Denmark
France
Germany
Greece
Ireland
Italy
Netherlands
Portugal
Spain
United Kingdom
Brazil
Canada
China
EWpt
Honduras
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Mexico
Norway
Phlllpines
liedT'
Taiwan
Thailand
Turkey
TOTAL WORLD EXPORTS
(S Millions)
310.660
16.464
16.660
45.668
108.094
1.764
3.136
40.572
17.738
1.960
9.016
49.588
N/A
87.145
N/A
N/A
N/A
N/A
N/A
N/A
209.200
34,700
13,800
N/A
N/A
N/A
22.800
N/A
44.272
N/A
N/A
TOTAL EXPORTS TO U.S.
($ Millions)
79,516
4 191
1 869
10.586
26,128
436
1 045
11.311
4,363
600
2.955
16,032
7,340
68.700
5.241
123
486
944
2.465
3,675
80.500
13,500
2,534
17,558
4,637
2,150
4,884
N/A
21.251
1,873
690
TOTAL VALUE OF SELECTED
U.S. SHARE OF COUNTRY'S PRODU^KPORTS
TOTAL EXPORT MARKET (S Hi 11 ions)
2S.60X
25.46X
11.22X
23.18X
24.17X
24.72X
33.32X
27.88X
24.60X
30.61X
32.7BX
32.33X
N/A
78.83X
N/A
N/A
H/A
N/A
N/A
N/A
38.48X
38.90X
18.36X
N/A
N/A
N/A
21.42X
N/A
48.00X
N/A
N/A
12787
126
3
276
10295
0
0
219
3
2
2
I860
257
2383
0
0
0
1
3
0
45838
3550
313
3524
0
3
2342
1873
3666
0
1
1) World Exports 1 Exports to U.S. Sources: EEC: (Data for Dec.- Nov, 1986} EEC Trade Statistics Book 2. 1986; and
Bureau of the Census. U.S. Department of Coimerce. 1987
Canada: U.S. Department of Comnerce
Japan: Japanese Embassy Cable
Korea: Bank of Korea
Malaysia & Sinagapore: U.S. Department of Comerce
Taiwan: U.S. Department of Comnerce, Bureau of the Census
Additional Notes: "" °f the Census- u-s- Department of Comnerce. 1987. -Highlights of U.S
TOTAL KSSllX?o"iV T°J8i f K'i11? °' f" froduet export8 for the "lected country.
IUIHL EXPORTS TO U.S. o Tntnl S Wnlm A« -i i —«_—*- *_ »•._ •. _ *__ .. . *
MARKET SHARE OF
EXPORTS TO U.S.
16.08X
3.01X
0.18X
2.61X
39.40X
0.05X
O.OOX
1.94X
0.07X
0.3ZX
0.06X
11.60X
3.49X
3.47X
O.OOX
O.OOX
O.OOX
0.12X
0.12X
O.OOX
56.94X
26.30X
12.3SX
20.07X
N/A
0.16X
47.95X
N/A
17.25X
O.OOX
0.08X
MARKET SHARE OF
WORLD EXPORTS
4.12X
0.77X
0.02X
0.60X
9.52X
0.01X
O.OOX
O.S4X
0.02X
0.10X
0.02X
3.75X
N/A
2.73X
N/A
N/A
N/A
N/A
N/A
N/A
21.91X
10.23X
2.27X
N/A
N/A
N/A
10.27X
N/A
8.28X
N/A
N/A
I
•p-
I
ro
Export and Import Trade". Washington. O.C.
!J!!fF*..??/i? 2' **°*^ curvnia - 9 VBIUC or product/ * Value Of TOTAL WORLD EXPORTS
lectronlcs * Refrigeration * Foan Products
-------
ATTACHMENT K-4
EXHIBIT 2
U.S. MARKET FOR SELECTED CFG-RELATED EXPORTS: AIR CONDITIONERS
COUNTRY
EEC
Belgian-Luxembourg
Denmark
France
Germany
Greece
Ireland
Italy
Netherlands
Portugal
Spain
United Kingdom
Brazil
Canada
China
Egypt
Honduras
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Mexico
Norway
Phil (pines
Singapore
Sweden
Taiwan
Thailand
Turkey
TOTAL UORLD EXPORTS
(S Millions)
310.660
16.464
16,660
45,668
108.094
1.764
3,136
40,572
17,738
1,960
9,016
49,588
N/A
87,145
N/A
N/A
N/A
N/A
N/A
N/A
209,200
34.700
13.800
N/A
N/A
N/A
22.800
N/A
44.272
N/A
N/A
TOTAL EXPORTS TO U.S.
(( Millions)
79,516
4,191
1,869
10.586
26, 128
436
1,045
11,311
4,363
600
2,955
16,032
7,340
68.700
5.241
123
486
944
2.465
3,675
80,500
13,500
2.534
17.558
4,637
2.150
4,884
N/A
21,251
1.873
690
U.S. SHARE OF COUNTRY'S
TOTAL EXPORT MARKET <
25.60X
25.46X
11.22X
23.18X
24.17X
24.72X
33.32X
27.88X
24.60X
30.61X
32.78X
32.33X
N/A
78.83X
N/A
N/A
N/A
N/A
N/A
N/A
38.48X
3B.90X
1B.36X
N/A
N/A
N/A
21.42X
N/A
4B.OOX
N/A
N/A
EXPORTS OF A/C
ONOIT10NERS MARKET SHARE OF
0 U.S. EXPORTS TO U.S.
OS)
0
0
0
3
0
0
1
0
0
o
1
33
1
0
0
0
1
1
0
214
4
2
31
0
0
7
0
1
0
0
(Units)
3. 284
H/A
0
N/A
1.742
0
0
881
531
0
N/A
130
174.062
2.184
0
0
0
3,323
0
0
502.518
22.903
9.697
11.073
0
0
34.390
13
2.471
0
0
0.01X
o.oox
o.oox
o.oox
0.01X
o.oox
o.oox
0.01X
o.oox
o.oox
o.oox
0.01X
0.45X
o.oox
o.oox
o.oox
o.oox
0.08X
0.06X
o.oox
0.27X
0.03X
0.08X
0.17X
O.OOX
o.oox
0.14X
N/A
O.OOX
O.OOX
O.OOX
A/C
MARKET SHARE OF
UORLD EXPORTS
O.OOX
O.OOX
O.OOX
O.OOX
O.OOX
O.OOX
o.oox
o.oox
o.oox
o.oox
o.oox
o.oox
N/A
o.oox
N/A
N/A
N/A
N/A
N/A
N/A
0.10X
0.01X
0.01X
N/A
N/A
N/A
0.03X
N/A
O.OOX
N/A
N/A
A/C
TOTAL PRODUCTION SHARE
PRODUCTION EXPORTED TO U.S.
S
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1986; and
1) World Exports ft Exports to U.S. Sources: EEC: {Data for Dec.- Nov. 1986J EEC Trade Statistica Book 2.
' "•"• "~ Bureau of the Census, U.S. Department of Comnerce, 1987
Canada: U.S. Department of Comnerce
Japan: Japanese Embassy Cable
Korea: Bank of Korea
Malaysia ft Sinagapore: U.S. Department of Commerce
Taiwan: U.S. Department of Comnerce, Bureau of the Census
Bureau of the Census, U.S. Department of Comnerce. 1987. "Highlights of U.
2) Source: Department of Commerce. 1986. "United States General Imports and Imports for Consumption". Washington D.C..
Additional Notes:
TOTAL UORLD EXPORTS = Total t Value of all product exports for the selected country.
TOTAL EXPORTS TO U.S. « Total * Value of alt exports to the U.S. for the selected country.
U.S. SHARE OF COUNTRY EXPORT MARKET = TOTAL EXPORTS TO U.S./TOTAL UORLD =><«*«
MARKET SHARE OF EXPORTS TO U.S. = * Value of Product/ * Value of TOTAL EXPORTSTO U.S.
MARKET SHARE OF UORLD EXPORTS ' t Value of Product/ » Value of TOTAL UORLD EXPORTS
TOTAL PRODUCTION • * Value of product manufactured in the selected country. ___._„_
PRODUCTION SHARE EXPORTED TO U.S. = ( Value of Product exported to U.S./ TOTAL PRODUCTION
S. Export and Import Trade". Hashington. D.C.
-------
ATTACHMENT K-4
EXHIBIT 3
U.S. MARKET TOR SELECTED CFC-RELATED EXPORTS: AUTOMOTIVE
TOTAL EXPORTS OF
AUTOMOBILES
COUNTRY
EEC
Betgiun-Luxembourg
Dernark
France
Germany
Greece
Ireland
Italy
Netherlands
Portugal
Spain
United Kingdom
Brazil
Canada
China
Egypt
Honduras
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Mexico
Norway
Phlllpfnes
Singapore
Sweden
Taiwan
Thailand
Turkey
16,660
45.668
108.094
1.764
3.136
40.572
17.738
1.960
9.016
49.588
N/A
87.145
N/A
N/A
N/A
N/A
N/A
N/A
209,200
34.700
13.800
N/A
N/A
N/A
22,800
N/A
44,272
N/A
N/A
1 (US
'
600
2,955
16,032
7,340
68,700
5,241
123
486
944
2,465
3,675
80,500
13,500
2,534
17,558
4.637
2. ISO
4.884
N/A
21.251
1.873
690
ii
33 32X
27 MX
S:SS
N/A
7B.83X
N/A
N/A
N/A
N/A
N/A
N/A
38.48X
38.90X
1B.36X
N/A
N/A
N/A
21.42X
N/A
48.00X
N/A
„ worn Export. . Export, to U.S. Sources,
i
0
186
2
0
12.295
105
217
57
0
0
0
0
1
0
23318
799
1
768
0
0
0
1831
0
0
0
616,955
9,391
0
0
0
4
2
1
3,671.601
173,191
3,620
1,051.654
4
3
0
149.147
0
3
0
AUTOMOBILE
MARKET SHARE OF
O.OOX
1.64X
0-04X
2.96X
0.08X
O.OOX
O.OOX
O.OOX
O.OOX
0.06X
O.OOX
2B.97X
5.92X
0.03X
4.S8X
0.01X
O.OOX
O.OOX
N/A
O.OOX
O.OOX
O.OOX
33 *'
Canada: U.S. Department of Conmerce
Japan: Japanese Enfcassy Cable
Korea: Bank of Korea
Malaysia S Sinagapore: U.S. Department of Connerce
Taiwan: U.S. Department of Conmerce, Bureau of the tf"iU9.ui-ui . v. < n
Bureau of the Census, U.S. Department of Conraeree, 1987. "Highlight, of U,
2) Source: Department of Conmerce. 1986. "United States General Imports and Imports for Consumption". Washington D.C.,
TOTAL WORLD EXPORTS = Total t Value of all product exports for the selected country.
TOTAL EXPORTS TO U?S. - Total S Value of all export, to the U.S. for the selected country.
iT SHARE OF COUNTRY EXPORT MARKET • TOTAL EXPORTS TO U.S./TOTAL UORLD EXPORTS
MARKET SHARE OF EXPORTS TO U.S. • S Value of Product/ $ Value of TOTAL EXPORTS TO U.S.
MARKET SHARE OF WORLD EXPORTS = S Value of Product/ S Value of TOTAL WORLD EXPORTS
TOTAL PRODUCTION ' » Value of product manufactured in the selected country.
PRODUCTION SHARE EXPORTED TO U.S. " S Value of Product exported to U.S./ TOTAL PRODUCTION
AUTOMOBILE
MARKET SHARE OF
WORLD EXPORTS
1.47X
0.76X
O.OOX
0.60X
7.99X
0.01X
O.OOX
0.46X
0.01X
O.OOX
O.OOX
1.51X
N/A
0.07X
N/A
N/A
N/A
N/A
N/A
N/A
11.15X
2.30X
0.01X
N/A
N/A
N/A
O.OOX
N/A
O.OOX
N/A
N/A
AUTOMOBILE
TOTAL
PRODUCTION
S
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
S. Export and Import Trade". Washington. D.C.
PRODUCTION SHARE
EXPORTED TO U.S.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-------
ATTACHMENT K-4
EXHIBIT 4
U.S. MARKET FOR SELECTED CFC-RELATED EXPORTS: ELECTRONICS
TOTAL EXPORTS OF
ELECTRONICS
U.S. SHARE OF COUNTRY'S TO U.S.
TOTAL EXPORT MARKET (S Millions) (Quantity (MT»
25.60X
25.46X
11.22X
23.18X
24.17X
24.72X
33.32X
27.B8X
24.60X
30.61X
32.78X
32.33X
N/A
78.83X
N/A
N/A
N/A
N/A
N/A
N/A
3B.4BX
3B.90X
18.36X
N/A
N/A
N/A
21.42X
N/A
48.00X
N/A
N/A
1) World Exports I Exports to U.S. Sources: EEC: {Data for Dec.- Nov. 1986} EEC Trade Statistics Book 2. 1986; and
Bureau of the Census, U.S. Department of Commerce, 1987
Canada: U.S. Department of Conmerce
Japan: Japanese Embassy Cable
Korea: Bank of Korea
Malaysia & Sinagapore: U.S. Department of Commerce
Taiwan: U.S. Department of Conmerce. Bureau of the Census
Bureau of the Census, U.S. Department of Conmerce, 1987. "Highlights of U.S. Export and Import Trade". Washington, D.C.
2) Source: "Tariff Schedule of the United States, Annotated, (TUSA), Department of Conmerce, 1986.
4) Source: "Electronics Foriegn Trade", Electronics Industry Association (EIA), Marketing Services Department, p. 20.
Additional Notes:
TOTAL WORLD EXPORTS = Total $ Value of all product exports for the selected country.
TOTAL EXPORTS TO U.S. « Total t Value of all exports to the U.S. for the selected country.
U.S. SHARE OF COUNTRY EXPORT MARKET • TOTAL EXPORTS TO U.S./TOTAL UORLD EXPORTS
MARKET SHARE OF EXPORTS TO U.S. = S Value of Product/ $ Value of TOTAL EXPORTS TO U.S.
MARKET SHARE OF WORLD EXPORTS = S Value of Product/ » Value of TOTAL UORLD EXPORTS
TOTAL PRODUCTION = t Value of product manufacture in the selected country.
PRODUCTION SHARE EXPORTED TO U.S. = f Value of Product exported to U.S./ TOTAL PRODUCTION
COUNTRY
EEC
Be 1 g i in- Luxembourg
Denmark
France
Germany
Greece
Ireland
Italy
Netherlands
Portugal
Spain
United Kingdom
Brazil
Canada
China
Egypt
Honduras
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Hex i co
Norway
Phlllpines
Singapore
Sweden
Taiwan
Thailand
Turkey
TOTAL UORLD EXPORTS
(S Millions)
310,660
16. 4M
16,660
45,668
108,094
1,764
3,136
40,572
17,738
1,960
9,016
49,588
N/A
87. 145
N/A
N/A
N/A
N/A
N/A
N/A
209,200
34,700
13.800
N/A
N/A
N/A
22,800
N/A
44,272
N/A
N/A
TOTAL EXPORTS TO U.S
(S Millions)
79,516
4.191
1,869
10.586
26, 128
436
1,045
11.311
4,363
600
2,955
16,032
7,340
68,700
5,241
123
486
944
2,465
3,675
80,500
13,500
2,534
17,558
4,637
2,150
4,684
1170
21,251
1,873
690
2740
N/A
N/A
N/A
1637
N/A
N/A
N/A
N/A
N/A
N/A
1103
N/A
2281
N/A
N/A
N/A
N/A
N/A
N/A
22197
2701
310
2563
N/A
N/A
2335
N/A
3649
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
ELECTRONICS
MARKET SHARE OF
EXPORTS TO U.S.
N/A
N/A
N/A
N/A
6.26X
N/A
N/A
N/A
N/A
N/A
N/A
6.B8X
N/A
3.32X
N/A
N/A
N/A
N/A
N/A
N/A
27.571
20.01X
12.24X
14.60X
N/A
N/A
47.B2X
N/A
17.17X
N/A
N/A
ELECTRONICS
MARKET SHARE OF
UORLD EXPORTS
N/A
N/A
N/A
N/A
1.51X
N/A
N/A
N/A
N/A
N/A
N/A
2.23X
N/A
2.62X
N/A
N/A
N/A
N/A
N/A
N/A
10.61X
7.78X
2.25X
N/A
N/A
N/A
10.24X
N/A
8.24X
N/A
N/A
ELECTRONICS
TOTAL
PRODUCTION
S
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
PRODUCTION SHARE
EXPORTED TO U.S.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
I
en
-------
ATTACHMENT K-4
EXHIBIT 5
U.S. MARKET FOR SELECTED CFC-RELATED EXPORTS: REFRIGERATION
COUNTRY
EEC
Bel g i uo- Luxembourg
Demark
France
Germany
Greece
Ireland
Italy
Netherlands
Portugal
Spain
United Kingdom
Brazil
Canada
China
Egypt
Honduras
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Mexico
NorMy
Phillpines
1
TOTAL UORLO EXPORTS
(S Millions)
310.660
14,464
16.660
45.668
108.094
1.764
3.136
40.572
17.738
1.960
9,016
49.588
1
TOTAL EXPORTS TO U.S.
{* Millions)
79.516
4.191
1.869
10.586
26,128
436
1.045
11.311
4,363
600
2,955
16,032
U.S. SHARE OF COUNTRY'S
TOTAL EXPORT MARKET (S
25.60X
25.46X
11.22X
23.18X
24.17X
24.72X
33.32X
27.88X
24.60X
30.61X
32.78X
32.33X
TOTAL EXPORTS OF
REFRIGERATION EQP.
TO U.S.
Millions) (Units)
53 252.894
1 3.844
3 4.220
1 7.720
8 19,966
0 1
0 16
31 175.580
1 1.454
2 16.132
2 8.176
5 15.785
Taiwan
Thailand
Turkey
N/A
87,145
N/A
N/A
N/A
N/A
N/A
N/A
209,200
34,700
13,800
N/A
N/A
N/A
22.800
N/A
44,272
N/A
N/A
7.340
68,700
5,241
123
486
944
2,465
3,675
80,500
13.500
2,534
17.558
4.637
2.150
4.884
N/A
21.251
1.873
690
N/A
78.83X
N/A
N/A
N/A
N/A
N/A
N/A
38.48X
38.90X
18.36X
N/A
N/A
N/A
21.42X
N/A
48.00X
N/A
N/A
6
40
0
0
0
0
0
0
40
46
0
15
0
3
0
39
2
0
1
38.075
155.352
90
0
0
596
0
0
214.699
57.161
0
193.030
0
12.200
155
82,662
20,664
0
1.051
REFRIGERATION
MARKET SHARE OF
EXPORTS TO U.S.
0.07X
0.02X
0.1BX
0.01X
0.03X
O.OOX
O.OOX
0.28X
0.02X
0.32X
0.05X
0.03X
O.OBX
0.06X
O.OOX
O.OOX
O.OOX
0.01X
O.OOX
O.OOX
0.05X
0.34X
O.OOX
0.08X
O.OOX
0.15X
O.OOX
N/A
0.01X
O.OOX
0.08X
REFRIGERATION
MARKET SHARE OF
UORLD EXPORTS
0.02X
O.OOX
0.02X
O.OOX
0.01X
O.OOX
O.OOX
0.08X
O.OOX
0.10X
0.02X
0.01X
N/A
0.05X
M/A
N/A
N/A
N/A
N/A
N/A
0.02X
0.13X
O.OOX
N/A
N/A
N/A
O.OOX
N/A
O.OOX
N/A
N/A
REFRIGERATION
TOTAL PRODUCTION SHARE
PRODUCTION EXPORTED TO U.S.
t
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
1) World Exports t Exports to U.S. Sources: EEC: (Data for Dec.- Nov. 1986) EEC Trade Statistics Book 2. 1986; and
Bureau of the Census. U.S. Department of Commerce, 1987
Canada: U.S. Department of Commerce
Japan: Japanese Embassy Cable
Korea: Bank of Korea
Malaysia I Sinagapore: U.S. Department of Coomeree
Taiwan: U.S. Department of Commerce. Bureau of the Census
Bureau of the Census. U.S. Department of Conroerce. 1987. "Highlights of U.S. Export and Import Trade". Washington, D.C.
2) Source: Department of Comerce. 1986. "United States General Imports and Imports for Consunptlon". Washington O.C..
Additional Notes:
TOTAL WORLD EXPORTS = To.tal % Value of all product exports for the selected country.
TOTAL EXPORTS TO U.S. = Total % Value of all exports to the U.S. for the selected country.
U.S. SHARE OF COUNTRY EXPORT MARKET » TOTAL EXPORTS TO U.S./TOTAL UORLD EXPORTS
MARKET SHARE OF EXPORTS TO U.S. = 9 Value of Product/ S Value of TOTAL EXPORTS TO U.S.
MARKET SHARE OF WORLD EXPORTS = f Value of Product/ % Value of TOTAL WORLD EXPORTS
TOTAL PRODUCTION - t Value of product manufactured in the selected country.
PRODUCTION SHARE EXPORTED TO U.S. • % Value of Product exported to U.S./ TOTAL PRODUCTION
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
-------
ATTACHMENT K-4
EXHIBIT 6
U.S. MARKET FOR SELECTED CFC-RELATED EXPORTS: FOAM PRODUCTS
COUNTRY
EEC
Belgium-Luxembourg
Denmark
France
Germany
Greece
Ireland
Italy
Netherlands
Portugal
Spain
United Kingdom
Brazil
Canada
China
Honduras
Hong Kong
India
Indonesia
Japan
Korea
Malaysia
Mexico
Norway
Phillpines
Singapore
Sweden
Taiwan
Thailand
Turkey
1
TOTAL WORLD EXPORTS
($ Millions)
310,660
16,464
16,660
45,668
108,094
1.764
3,136
40.572
17,738
1.960
9.016
49.588
N/A
87,145
N/A
N/A
N/A
N/A
N/A
N/A
209,200
34,700
13,800
N/A
N/A
N/A
22.800
N/A
44,272
N/A
N/A
TOTAL EXPORTS TO U.S.
($ Millions)
79.516
4.191
1.869
10.586
26.128
436
1.045
11,311
4.363
600
2,955
16.032
7.340
68,700
5,241
123
486
944
2,465
3,675
80,500
13,500
2,534
17,558
4,637
2,150
4,884
N/A
21,251
1,873
690
TOTAL EXPORTS OF FOAM PRODUCT
FOAM PRODUCTS MARKET SHARE OF
U.S. SHARE OF COUNTRY'S TO U.S. EXPORTS TO U.S.
TOTAL EXPORT MARKET It Millions) (Quantity
1) World Exports C Exports to U.S. Sources: EEC:
-------
APPENDIX L
REGULATORY FLEXIBILITY ANALYSIS
The Regulatory Flexibility Act requires all Federal Agencies to analyze the
effects of their regulations on small entities and to involve these entities in
the development of regulations. The Act's purpose is to encourage agencies to
minimize the effects of regulations on small entities to the extent possible
without compromising the intent of the statute for which the regulation is being
written.
The EPA is currently considering increased regulation of the use of
chlorofluorocarbons (CFCs) and halons due to their potentially damaging effects
on stratospheric ozone. A complete description of the reasons why EPA is
considering this action and the legal basis for it can be found in Chapters 2
and 3 of Volume I of this Regulatory Impact Analysis (RIA).
This appendix provides an initial assessment of the potential economic
impact on small entities of the proposed regulations. Its organization closely
follows the outline suggested by the Guidelines for Implementing the Regulatory
Flexibility Act published by EPA (henceforth the EPA Guidelines). Its major
sections are as follows:
• Identification of Alternatives. Each of the regulatory
alternatives discussed in Chapter 11 of Volume I of the RIA
is briefly summarized and its administrative costs are
estimated.
• Demographic Analysis. This section defines the relevant
universe and presents the criteria to determine whether
small businesses are disadvantaged by the regulatory action.
It describes the industries currently using CFCs intensively
and presents the reasons why the foam-blowing industries are
the most likely group affected.
• Cost Analysis. The methodology used to estimate production
and compliance costs is presented. Because only limited
information is available about the financial characteristics
of the industries most likely to be affected by CFC
regulation, this methodology uses a number of assumptions to
convert available data into estimates of the financial
characteristics of small foam-blowing businesses. These
estimates are constructed to conform as closely as possible
to existing EPA guidelines on performing regulatory
flexibility analyses.
• Competitive Effects Analysis. An assessment of the effect
of the proposed regulatory action on the foam-blowing
industry is presented. Included in the assessment are
estimates of a range of numbers of industrial facilities
that might go out of business because of the possible
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L-2
regulations and the size of cost increases faced by the
remaining facilities in the industries.
* Exemptions and Allowances. The advantages and disadvantages
of methods of providing special treatment for the foam
blowing industry are considered.
• Summary. A synopsis of major findings is presented.
1. IDENTIFICATION OF ALTERNATIVES
This section provides an overview of the five regulatory alternatives
examined in this RIA. These alternatives are designed to achieve the regulatory
goal of a freeze at 1986 production levels in 1989, reductions to 80 percent of
that level in 1993, and reductions to 50 percent of that level in 1999. The
analysis has not attempted to examine the impacts of alternative stringency and
coverage options (Chapter 5 of this RIA) on small businesses.
1.1 Description of Alternatives
The Regulatory Flexibility Act requires EPA to identify several regulatory
options which attempt to minimize the economic impacts, both market-related and
administrative, on small businesses. EPA has identified five possible
regulatory options. They are discussed in greater detail in Chapter 11 of the
RIA document. The following are brief descriptions of these five regulatory
options.
• Auctioned Rights: An auctioned rights system would control
CFCs by requiring permits for the production of these
chemicals. Companies seeking to use CFCs would have several
options. They could either purchase rights at a periodic
auction held by EPA, acquire them from other firms who had
purchased them at an auction, or buy CFCs through their
current supply channels that already have purchased rights.
Under the last option, CFC producers, wholesalers, or
processors would acquire rights, eliminating the need for
the majority of small firms using CFCs to obtain rights
themselves. Thus, CFC users could purchase rights and CFCs
separately or could avoid the need for rights altogether if
their supplier has previously purchased rights in sufficient
quantities to cover their sales. Over time, increasing
demand for CFCs in conjunction with a limit on the number of
CFC rights in order to meet regulatory targets will result
in an increase in the price of rights. Price increases will
provide an incentive for firms with relatively inexpensive
options to reduce their CFC consumption through low-cost
substitutes, CFC recycling or controls, and/or new
production technologies.
• Allocated Quotas: An allocated quota system would directly
control CFCs by setting limits on, and requiring permits
for, the production and importation of CFCs. The allowable
level of CFCs (set by the regulatory target) would be
allocated among current CFC producers and importers based on
-------
L-3
their historic market share. Allocation limits together with
growing demands for CFG products would result in higher prices,
providing an incentive for CFG users to reduce their consumption
through lower-cost substitutes, CFG recycling, and/or new production
technologies. Only the few CFC producers and importers would
require permits.
• Regulatory Fees; A regulatory fee system would control CFC
emissions by imposing a fee per unit of CFC production or
importation. Because CFC users would pay the cost of CFCs '
plus a set fee, this fee would increase the cost of products
containing or produced with CFCs and provide an incentive to
consumers to reduce their CFC use through lower-cost product
substitutions, CFC recycling, and/or new production
technologies. The fee would be modified over time, as
necessary, to ensure the regulatory target is met. Fees
would be collected directly from CFC producers.
• Engineering Controls/Bans: A more traditional regulatory
system for controlling CFCs would include the issuance of
process or engineering control restrictions, product bans,
or other forms of regulation aimed at directly reducing CFC
use in particular industrial categories. An initial list of
regulated uses would be issued to achieve a specified
control goal (e.g., a freeze or 20 percent reduction). This
list could be expanded over time if CFC use in non-regulated
areas continued to grow or if additional reductions were
required as part of a phase-down. In contrast to the three
economic incentive-based approaches discussed above, in
which firms would have a choice of preferred CFC reduction
strategies, EPA would select specific control targets under •
this approach to regulation.
• Hybrid Options: Direct regulatory and economic incentive
approaches each have their strengths and weaknesses.
Different combinations of the two approaches are possible
and potentially attractive. One such hybrid approach would
involve regulating specific uses of CFCs (i.e., through
engineering controls and CFC use bans and reductions) along
with setting a production cap. The specific targeted
requirements would ensure reductions occurred in those uses
where low cost options are clearly available. The allocated
quota system would provide a ceiling to ensure that the
regulatory goal is achieved (e.g., a freeze or 20%
reduction) and would rely on price incentives to guard
against increased CFC use in areas not subject to specific
restrictions. Another hybrid would combine allocated quotas
with regulatory fees. The use of quota restrictions ensure
the regulatory goal is met. The use of regulatory fees
would reduce the level of transfer payments received by
producers and increase incentives for the development of
alternative chemicals to substitute for CFCs.
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L-4
1.2 Discussion of Market and Administrative Costs of Alternatives
- The first three options -- Auctioned Rights, Allocated Quotas, and
Regulatory Fees -- are based on similar economic approaches, and achieve a
regulatory goal by providing price incentives for firms to reduce CFC
consumption. Since all three options produce similar CFC price increases for
equal levels of CFC reductions, the market effects on an .industry or user group
are equal across these three options.
For the Engineering Control/Bans option, the market effects may not' be
comparable to the other options. If a specific industry group is not targeted
for direct regulation, the industry will not be affected. If direct regulation
does apply, it is likely that market effects caused by increases in production
cost from controls will be equal to or greater than market effects caused by
other options.
Under the Hybrid options, the imposition of allocated quotas will increase
CFC prices to user groups. Market effects would be similar to those produced by
the other economic incentive approaches (Auctioned Rights, Allocated Quotas, and
Regulatory Fees) if all users with low cost CFC reduction measures implement
them. If some industries with low cost control options available do not
implement them, selected controls directed at specific CFC using industries
would limit the demand for CFCs from these industries. Limiting CFC consumption
among selected user groups reduces the CFC price rise to all user groups, and
will mitigate market effects for industries sensitive to price increases.
The administrative costs to CFC user groups are different across the five
options. A detailed analysis of the administrative burden for these five
options is presented in Appendix M. In general,'the three economic incentive
options -- Auctioned Rights, Allocated Quotas, and Regulatory Fees -- result in
lower administrative costs for user groups. Administrative costs, however, fall
primarily on the user groups whenever Engineering Controls/Bans, either by
themselves or in association with other regulatory options, are used.
Two options -- Allocated Quotas and Regulatory Fees -- impose insignificant
administrative costs to the user groups. Because these options place the entire
administrative burden on the 7 CFC and halon producers and 14 importers, user
groups are not affected by reporting or compliance costs. Thus administrative
costs for user groups, and therefore small businesses, would be negligible.
Auctioned Rights may entail limited administrative costs for user groups.
The Auctioned Rights option allows users to participate in the auction for
rights. Preparation for the auction will entail costs as firms decide on
bidding price and perform market analysis. If user firms win the auction,
additional functions such as the trading of rights will also entail
administrative costs.
The Engineering Controls/Bans option presents the largest administrative
costs, requiring controls or bans and product substitutes for various user
groups. EPA will require these firms to develop compliance plans (where
appropriate), submit compliance reports and monitor results. An analysis of
these administrative costs is described in Appendix M of Volume II. The
administrative burdens for small businesses would be greater under this option
than under the economic incentive approach.
-------
L-5
In summary, EPA expects similar market effects through Auctioned Rights,
Allocated Quotas, and Regulatory Fees. The CFC price rise due to these options
is likely to affect a user group similarly. Engineering Controls or Bans will
more significantly affect those groups targeted for regulation. For
administrative costs, EPA expects these costs for user groups to be negligible
for Allocated Quotas and Regulatory Fees, minor for Auctioned Rights and
substantial for. the Engineering Controls/Ban option. The cost of any hybrid
option, including the use of engineering controls and bans, would also entail
substantial administrative costs.
2. DEMOGRAPHIC ANALYSIS
This section explains how the analysis established criteria for the
industries affected by the regulations, for what constitutes a small business
within these industries.
2.1 Industry Definition
The number of commercial and industrial facilities potentially affected by
CFC regulations is extremely large.*• These regulations could impact every
hospital, every service station repairing mobile air conditioners and every
grocery store in the United States. Due to the large number, not all of these
establishments could be examined in depth. Instead, this analysis selected
those CFC-using industries for which regulation was most likely to present
serious economic problems.
The major CFC and halon consuming industries are: the refrigeration/air
conditioning industries, the fire extinguishing industry, the hospital industry,
the electronics industry, and the foam blowing industries. A major criterion in
examining the potential impact of CFC regulation on an industry was the share
which CFCs represented of total production costs of the industry. We assumed
that if the industry as a whole had CFC costs that were less than five percent
of the costs of the product or service provided by the industry, then the
economic impact of the proposed regulations was not likely to be significant and
the industry did not need to be studied in depth. The refrigeration industry
was eliminated on this basis.
The fire extinguishing industry was eliminated after discussions with the
engineering contractors. Because fire extinguisher sales are driven by local
zoning ordinances and other legal requirements and because the sales are a
function of the purchaser's desire to have a fire safe residence or workplace,
we concluded that sales would change insignificantly even if halon prices rose
substantially. Furthermore, the costs of fire extinguishers in most uses are an
insignificant component of the total cost of providing the service of which the
1 See Appendix M for a more complete discussion of these costs.
2 Although the Regulatory Flexibility Act refers to effects on small
entities, in general, this analysis will examine the effects on small businesses
only. Effects of CFC regulations on small governments and small non-profit
institutions are expected to be minimal.
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L-6
fire extinguisher was a part. Examples here include fire extinguishing systems
in commercial buildings or fire protection systems built into military aircraft.
Data estimating CFC costs as a percent of total production cost^s are
difficult to obtain for both the solvent and sterilization industries. Solvent
applications are ubiquitous in the American workplace. A review of solvent
applications identified over 200 industries (identified at the 4-digit SIC
level) using some type of CFC solvent cleaning processes. Given the range of
products covered, no meaningful estimate of CFC cost shares could be derived.
Furthermore, the range of applications makes it difficult to define a repre-
sentative industry which'would be analyzed as part of a regulatory flexibility
analysis. Moreover, given the relatively high cost of electronic components, it
is likely that CFC based solvents are a small percentage of total cost within
the electronics industry.
The use of CFCs as sterilants is more clearly defined but no less difficult
to analyze than the use of CFCs as solvents. The capital equipment required for
sterilization is relatively inexpensive and its use has spread widely through
museums, libraries, and hospitals. For both sterilants and solvents, price
increases are not likely to have substantial impacts on these industries,
because of the high value of their services. Therefore, the sterilant and
solvent industries were eliminated from consideration.
The final category is the foam-blowing industry. CFCs comprise about eight
percent of the total cost of foam production. CFCs are an important part of the
costs of most foams, and costs incurred by these producers could significantly
affect smaller participants in these industries. Thus, this industry was
selected for more intensive study in the remainder of this analysis.
2.2 Analysis of the Foam Industry
It is difficult to characterize the businesses involved in foam-blowing.
Foam-blowing facilities are distributed across several Standard Industrial Codes
(SICs) and those SICs including foam-blowing facilities also contain several
other types of industries. For example, flexible polyurethane companies have
different SIC codes such as 3069 (fabricated rubber), 2821 (plastic materials
and resins), or 3079 (miscellaneous plastics). The miscellaneous plastics SIC
classification includes facilities that produce plastic molding, plastic film
and sheet, plastic piping, and plastic bottles, as well as facilities that
produce foam products.
Without comprehensive information on foam-blowing facilities, we used
several sources to characterize the foam blowing industry, including lists of
foam-blowing facilities compiled by engineering contractors, information
submitted by trade associations, and lists of facilities submitted by industry
officials. We reviewed available sources of financial data (most frequently the
Trinet business data base) to obtain information about sales, employment and
principal manufacturing for identified facilities.
We were unable to obtain useful financial data for some of the businesses
on the engineering contractors' lists. Although some of these failures may be
attributable to discrepancies in company name or location between the
contractor's list and the Trinet data base, or mergers into other companies, it
is more likely that many of the businesses on the list have less than twenty
employees and are not captured by the Trinet data base. We were able to obtain
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L-7
financial information for a total of 196 foam blowing facilities. Despite its
limitations, this sample provided the best available means of assessing the
number of small facilities operating in the foam-bloving industry. Information
received through public comment was also incorporated in the analyses.
With this information, we were able to make general assessments of the
number of small facilities (i.e., those with less than 500 employees-*) in
different foam-blowing sectors. Most of the information gathered about the foam
industry pertained to foam-blowing facilities, not businesses. Where possible,
we indicate how many of these facilities are components of large firms and thus
not small businesses under the EPA and SBA criteria.
We divided the foam blowing industry into three general sectors based on the
type of foam produced and its use. These three sectors include flexible foam,
rigid packaging foam, and rigid insulating foam. Because rigid insulating foam
is produced in different forms, by different types of producers, it was further
divided into three categories: rigid insulating foam--poured, rigid insulating
foam--boardstock, rigid insulating foam--sprayed. Descriptions of these sectors
follow:
(1) Flexible Foam: Includes molded flexible polyurethane foam
used in automobile seat cushions and backs, and other
products; and slabstock flexible polyurethane foam used for
furniture cushions, carpet underlay, and'bedding. The
flexible foam industry is made up of approximately 90
percent small facilities and 10 percent large. The large
facilities often do not produce foam products exclusively,
but are producers of products that use foam, such as
furniture or car companies.
(2) Rigid Packaging Foam: Includes extruded polystyrene sheet foam,
polyproplene foam, rigid polyurethane foam, and polyethylene foam.
These foams are used in everyday disposable products such as carry-
out containers, egg cartons; disposable plates, cups, bowls; and
packaging materials. Small facilities comprise almost all of the
rigid packaging foam industry.
(3) Rigid Insulating Foam--Poured: Includes poured polyurethane foam,
a common insulation used to fill walls of refrigerators, freezers,
refrigerated tanks, railcars, and the walls of buildings and door
cavities. Small facilities comprise almost all of the rigid
insulating foam--poured industry.
•* The EPA Guidelines recommend that, in general, the Small Business
Administration (SBA) definitions of a small business be used in determining the
number of small and large businesses (unless very good reasons exist to use
other definitions). The SBA definitions as published in 13 CFR 121 are based on
SIC classifications. Because foam-blowing businesses are spread across several
SIC classifications, the size criteria varies. The criteria range from 500 to
1,000 employees, with 500 employees the most frequently used criteria and the
one used to define small businesses in this analysis.
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L-8
(4) Rigid Insulating Foam- -Boaxdstock: Includes rigid polyurethane --
both boardstock and laminated, extruded polystyrene boardstock, and
phenolic foam. These foams are all used as building insulation.
While most facilities in this sector are small, they are often part
of a larger business.
(5) Rigid Insulating Foam--Sprayed: Includes rigid sprayed
polyurethane foam typically used as rigid thermal insulation after
construction has been completed. The rigid insulating foam-sprayed
industry is comprised of two types of businesses. Based oh
estimates from trade associations, there are approximately 14 spray
foam system supplier companies that are predominantly medium sized
businesses (i.e., 50-500 employees). These businesses supply
several hundred small (usually having less than 10 employees) spray
foam applicator companies.
3. COST ANALYSIS
This section presents the EPA definitions of a significant economic impact
and the methodology used to apply these criteria. The core of this methodology
is the integration of quantitative financial profiles of affected facilities
with the results of the cost analyses presented in Chapter 9 of this final RIA.
3.1 Definition of Significant Impact
The EPA Guidelines are clear as to what constitutes a significant economic
impact. The criteria, any one of which results in a significant economic impact
and therefore the need for a full regulatory flexibility analysis, are:
1. annual compliance costs increase total costs of production
for small entities by more than 5 percent;
2. compliance costs as a percent of sales for small entities
are at least 10 percent higher than compliance costs as a
percent of sales for large entities;
3. capital costs of compliance represent a significant portion
of capital available to small entities, considering internal
cash flow plus external financing capabilities; or
4. closures of small entities are likely.
The implementation of the first three criteria was conducted by comparing
compliance costs to the financial data of a model facility. For each facility
in our sample of facilities provided by contractors we used the Trinet data base
to determine the facility's SIC code, employment, and sales. Based on these
figures a "model" facility was chosen to represent each foam-blowing sector
identified above.4 When choosing this model facility, we took into
consideration that our lists of facilities overrepresented the larger facilities
4 Both a large and small model facility was chosen for the flexible foam
segment.
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L-9
in the industry, and therefore selected a smaller than average facility on our
list. This model facility was then used to examine the likely impacts of the
regulations. For the fourth criteria, we estimated the probable extent of
facility closures by examining the probable loss in the size of each foam market
due to the switch to product substitutes.
3.2 Production Costs and Internal Cash Flow
Some of the financial data on each model facility necessary to apply the
criteria was gathered directly from the Trinet data base. However, data on
production costs and internal cash flow for facilities in the foam-blowing
industry are not directly obtainable. As proxies for these data, we estimated
the production costs of the model facility as sales minus profits before taxes
and internal cash flow as profits after taxes plus depreciation. To estimate
profits and depreciation, Robert Morris Associates^ (RMA) financial data on
representative industry ratios for Return-on-Sales and Depreciation-to-Sales
were used. These data are organized by SIC codes and by size measured as sales
for industrial facilities and industry participants.
As an example of how the financial characteristics of a model facility were
estimated, consider a hypothetical polyurethane foam producer, the ABC
Corporation. By matching this corporation's name and location (as determined by
the engineering contractors in their survey of foam producing facilities) to the
Trinet database, we determined the SIC code of the ABC Corporation, in this
case, it is likely to be Code 3079 for "miscellaneous plastic products." The
ABC Corporation's employment and the sales volume, are 150 employees and $15
million. The RMA data provided information on the return on sales rate for
other plastics manufacturers with sales between $10 and $50 million. This
enabled us to convert sales data to an estimated profit of say $600,000. A
depreciation estimate was obtained using RMA data in a similar fashion.
3.3 Estimating Compliance Costs
To compute the annual compliance costs, necessary for the application of the
first three criteria, we estimated three types of costs that industrial
facilities will incur and then combined them in a consistent annualized manner.
All compliance costs included in this analysis are increases in production
costs. Administrative costs were not included because they would be imposed on
user industries only under one of the market-based regulatory options discussed
in Appendix M -- auctioned rights-- and even in that option, would be relatively
small. However, the use of any engineering controls or bans as regulatory
5 RMA 1986 Annual Statement Studies. Robert Morris Associates, 1986.
Because companies' fiscal years end at different times and because there is
often a long lead time between the reporting of results and their entry into
these two information systems, we feel it reasonable to compare these numbers to
compliance cost estimates measured in 1985 dollars.
" In cases where a particular SIC code was not included in the RMA data,
return on sales and depreciation to sales ratios were extracted for the four
digit SIC code which most nearly corresponded to the primary activity of the
facility in question.
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L-10
options would entail significant administrative costs and necessitate a revision
to the analysis presented below.
The three types of compliance costs estimated here include^:
1. the higher prices for CFCs which occur due to regulations;
2. the cost of switching to an alternative input to the production
process; and
3. the cost of installing new production equipment or undertaking
additional maintenance in a production facility to reduce CFG use.
To estimate the compliance cost of higher CFC prices, annual CFG use was
multiplied by the estimated change in CFC prices to obtain an annual incremental
cost of CFC use. The cost of switching to an alternative input to the
production process will be incurred by industries that pay a higher price for a
substitute blowing agent. This cost was estimated as the dollar costs of the
new input per pound of output less the cost of the CFC per pound of output and
multiplying this difference by the amount of output per year. As presented in
Appendix I, standard amortizing techniques were used to estimate the annual
compliance costs associated with installing new production equipment or
undertaking additional maintenance in a production facility.
Because the capital costs, operating and maintenance costs, and increased
CFC prices are estimated as totals for the industry, they must be allocated to
each segment's model facility for the regulatory flexibility analysis to be
completed.8 Based on current prices of CFCs, and an estimate of the percentage
cost of CFCs in each foam-blowing segment's production, each model facility's
sales were used to determine the amount of CFCs used by the facility. This
amount was divided by the total amount of CFCs used by the model facility's
segment to determine the facility's percentage of CFC use for the segment.9
This percentage was multiplied by the segment's total compliance costs to
determine the facility's share of compliance costs.^
' These costs are generated by the Integrated Assessment Model (IAM) and
provided as input in the form of aggregate (1) capital costs, (2) operating and
maintenance costs, and (3) costs due to CFC price increases for the industry
overall (see Appendix I). These cost estimates generated by the IAM are
directly derived from extensive cost research by engineering firms (see Volume
III of the RIA document).
p
0 The most important assumption implicit in this portion of the analysis is
that the production processes used by all facilities in an industry will be the
same.
* The cost per metric ton of foam for each "industry" is a weighted average
of the cost per metric ton estimated for each use-application category of the IAM.
*•" This method has the added virtue of normalizing our total "industry"
cost on the same basis as that of the IAM. As discussed previously, we were
unable to obtain data on all of the facilities included in the engineering
contractors' analyses.
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L-ll
3.4- Estimating Facility Shutdowns
To estimate the percentage of facilities shutting down due to the increase
in CFC prices, the percentage reduction in CFC use in a foam-blowing segment due
to end-product substitution was estimated. (Other reductions in CFC use will
occur because of changes in manufacturing processes and chemical input
substitutions.) End-product substitution refers to the substitution of other
products for CFC-blown products. For example, end-product substitution'occurs
when, in response to higher CFC-blown product prices, fiberglass insulation is
used instead of foam insulation, or paper packaging is used instead of foam
packaging. The amount of end-product substitution is assumed to be directly
related to the number of facilities shutting down.
The analysis assumes that end-product substitution necessarily forces
current foam-blowing facilities out of business while producers of alternative
products expand their markets. This analysis does not allow producers to use
alternative blowing agents while accepting a lower profit to preserve market
share. Furthermore, the analysis assumes that these facilities produce only
foam and are unable to discontinue production lines without going out of
business. Many facilities produce multiple products, however, and can
discontinue foam production without shutting down. Thus the assumption that
potential market penetration by product substitutes necessarily results in firm
shutdowns provides a "worst case" estimate of the effect that CFC regulations
could have on the foam-blowing industry.
4. COMPETITIVE EFFECTS ANALYSIS
This section presents the results of the analysis for the five foam-blowing
industries identified above. Although the analysis below could be applied to
any of the five regulatory alternatives identified in Section 2, we focus
primarily on the analysis of the market based allocated quota alternative.
Because the market based approaches reduce CFC consumption by increasing CFC
prices, the traditional compliance costs analyzed in most regulatory impact
analyses (i.e., administrative burdens or costs of installing new equipment) are
likely to be less significant than the effect of increased prices on CFC users.
Therefore, of the EPA criteria for significant impacts, the fourth criteria--
closures of small entities — is the most important in this analysis.
If the analysis were redone for auctioned rights, compliance costs would be
somewhat greater due to the existence of some administrative costs for this
alternative. The engineering controls/bans alternative was deemed unsuitable
for analysis because EPA has yet to identify controls for the analysis.
As discussed in Chapter 9, even though cost effective CFC reduction
measures may exist, CFC using industries may choose not to utilize them or may
choose to adopt them at a far slower pace than would be efficient for society as
a whole. In order to capture the possible technology shifts in CFC using
sectors, this analysis examines the impacts of CFC regulation on foam blowing
industries for two different scenarios. These scenarios, Case 1 and Case 2, are
described in chapter 9 of the RIA. Case 1 assumes, among other things, that
low-cost alternative insulating and packaging materials are not available as
substitutes for many foam products and other events occur that make it more
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L-12
difficult to reduce CFC use. Case 2 assumes that CFC reductions will be aided
by the introduction of low-cost alternative insulating and packaging materials
and other events occur that result in overall reduced CFC use.^
4.1 Results
Exhibit L-l shows the potential reduction in the size of markets served by
foam-blowing industries which could result from CFC regulation for the years
1989, 1993 and 1998. The potential reduction is shown for both Case 1 and Case
2 described above. The results show that for three of the sectors, flexible
foam, rigid insulating foam--poured, and rigid insulating foam--sprayed, the
market share reduction due to product substitution is insignificant. For two
other sectors, rigid packaging foam and rigid insulating foam--boardstock, the
potential market share reduction is larger, reflecting the greater availability
of product substitutes for those two segments.
These estimated reductions in market share do not necessarily correspond to
closures of facilities which are currently in operation. The reductions are
based on the projected size of each market in each of the three years based on
estimates of market growth. Some of this projected growth offsets the estimated
reduction, and the percentage of existing facilities which will shut down is
likely to be less. The percentages in parentheses below each market reduction
in Exhibit L-2 show the percent of facilities operating in 1986 that may leave
the foam-blowing industry, assuming that any reduction in market share first
prevents new businesses from entering the market before forcing closures of
existing facilities. For example, although our analysis shows that the rigid
insulating foam--boardstock sector will incur a 48 percent reduction in market
share under the Case 2 scenario in 1993, the percentage of 1986 facilities
shutting down is estimated to be 22 percent.
The actual number of facility closures may be less than predicted above.
Facilities may have several options besides closing that are not considered in
these estimates and could substantially reduce the number of closures. Some
facilities may use alternative chemicals as blowing agents, e.g., pentane, HCFC-
22, HCFC-141b, or HCFC-123.12 Other facilities may shift to the production of
other products. Facilities could temporarily incur a reduction in profits and a
lower return on capital while waiting for alternative blowing agents to become
available. Finally, even if in the long run some facilities are unable to
switch production processes and alternative blowing agents do not become readily
available, this does not imply they will shutdown immediately. If in the short
run they can cover their variable costs of production, they may choose to
11 See exhibit 9-2 for a complete list of assumptions used in the best and
worst case scenarios.
12 Although the analysis utilizes estimates of the cost of the use of these
alternative blowing agents, these estimates are still uncertain. If the
estimates are too high, more chemical substitution will occur than estimated
here. As an example of the potential for the use of these blowing agents, many
rigid foam packaging producers have recently decided to switch to the use of
HCFC-22 in their production processes.
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EXHIBIT L-l
ESTIMATED REDUCTION OF MARKET SHARE
IN THE FOAM-BLOWING INDUSTRIES^/
Reduction In CFG-Blown Market Share
Case 1 Case 2
1989 1993 1998 1989 1993 1998
Flexible Foam 0% 0% 0% 0%S/ 0% 0%
(0%) (0%) (0%) (0%)£/ (0%) (0%)
Rigid Packaging 11% 24% 24% 28% 36% 36%
Foam (0%) (0%) (0%) (1%) (16%) (0%)
Rigid Insulating 0% 0% 0% 0% 0% 0%
Foam--Poured (0%) (0%) (0%) (0%) (0%) (0%)
Rigid Insulating 1% 18% 26% 0% 48% 52%
Foam--Boardstock (0%) (0%) (0%) (0%) (22%) (4%)
Rigid Insulating 0% 5% 5% 5% 5% 5%
Foam--Sprayed (0%) (0%) (0%) (0%) (0%) (0%)
a/ The assumed stringency and coverage assumptions used are those of the CFC
50%/Halon Freeze case described in chapter 5. CFCs are regulated with an
initial freeze in 1989 at 1986 levels, 20 percent reduction in 1993, and 50
percent reduction in 1998, and halons are frozen at 1986 levels in 1992.
The assumed rate of growth in baseline use is the Kiddle Growth Scenario
described in Chapter 4.
b/ Estimated reduction in market share based on predicted market size.
c/ Estimated percentage of facilities operating in 1986 which shut down.
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EXHIBIT L-2
ESTIMATED REDUCTION OF MARKET SHARE
IN THE RIGID INSULATING -- BOARDSTOCK SECTOR WITH
REDUCED MARKET PENETRATION FOR PRODUCT SUBSTITUTES
Reduction in CFC- Blown Market Share
_ Case 1 _ _ Case 2 _
1989 1993 1998 1989 1993 1998
Base Case
1%
(0%)
18%
(0%)
26%
(0%)
0%^ 48%
(0%)£/ (22%)
52%
(4%)
Reduced Penetration 1% 13% 16% 0% 0% 0%
Assumption (0%) (0%) (0%) (0%) (0%) (0%)
a/ The assumed stringency and coverage assumptions used are those of the CFC
50%/Halon Freeze case described in chapter 5. CFCs are regulated with an
initial freeze in 1989 at 1986 levels, 20 percent reduction in 1993, and 50
percent reduction in 1998, and halons are frozen at 1986 levels in 1992.
The assumed rate of growth in baseline use is the Middle Growth Scenario
described in Chapter 4.
b/ Estimated reduction in market share based on predicted market size.
c/ Estimated percentage of facilities operating in 1986 which shut down.
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L-15
continue operation while depreciating their capital stock. These actions could
significantly reduce the number of closures predicted.
Also these estimate of facility closures depend on assumptions about the
degree to which alternative products penetrate existing markets for CFC-based
foam products. The estimates used here could be higher than the penetration
which will eventually occur. For example, the rigid foam packaging segment will
require additional capital equipment to switch to the use of HCFC-22 as a
blowing agent. Using the analysis of Exhibit L-l which shows significant losses
in market share even with the use of HCFC-22, the wisdom of an investment in
this equipment by the rigid foam packaging industry might be questioned.
However, industry sources indicate that foam products will remain competitive by
switching to the use of HCFC-22 and that the required investment is warranted.
Thus, it is reasonable to project continued growth in this market segment and to
regard these results as a "worst case" scenario.
The rigid foam insulation--boardstock segment is another example of the
importance of assumptions about market penetration of alternative products. The
estimated reduction in market share cited in Exhibit L-l assumed that small
increases in the price of CFG-blown products would result in losses of market
shares to alternative products. Even if other insulation materials offer
equivalent insulating capacity on a per dollar basis, current users of CFC-blown
foam insulation may choose not to switch products due to their familiarity with
CFC foam or because of other characteristics of CFC foam, besides insulating
capacity, that make it more desirable than alternatives (for example, ease in
shipping and handling).
Therefore, product substitution for foam insulation may not necessarily
occur with relatively small increases in prices. We estimated the market share
reductions for the rigid insulating--boardstock sector if a twenty percent price
increase in CFC-blown products is required before these alternate insulating
materials become competitive with foam insulation. Exhibit L-2 shows the result
of this analysis. As expected, the reduced competition from alternative
insulating materials would eliminate all loss of markets in Case 2 and virtually
eliminate all losses in Case 1. If these alternative assumptions about the
competitiveness of foam insulation were correct, no currently operating rigid
foam facilities would be forced to close in either cost scenario.
Exhibit L-3 shows the estimated impacts of CFC regulations on foam-blowing
industries according to the other three SBA criteria:-"
(1) more than a 5 percent increase in total costs,
(2) higher cost increases on small firms than large firms, and
(3) substantial increases in capital costs.
13 For this analysis, three segments, rigid insulating foam--poured, rigid
insulating foam--boardstock, and rigid insulating foam--sprayed, were combined
into one segment: rigid foam--insulation. These three were combined because of
the difficulty in separating the three segments according to SIC codes.
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EXHIBIT L-3
IMPACTS OF CFG REGULATION ON FOAM-BLOVING BUSINESSES
ACCORDING TO FIRST THREE SBA CRITERIA^/
Case 1
1989 1993 1998
Case 2
1989 1993 1998
Criteria 1. Compliance Costs as a Percent of Production Costs
Flexible Foam 7.88% 5.04% 4.33%
Rigid Foam- -Packaging 9.33% 2.18% 2.43%
Rigid Foam- -Insulation 46.95% 17.21% 16.66%
0.00% 1.74% 4.86%
0.80% 0.12% 0.23%
0.00% 8.85% 14.34%
Criteria 2. Percentage Difference Between Compliance Costs
Divided by Sales for Small Versus Large Firms ^-/
Flexible Foam -0.11% -0.07% 0.00% -0.02% -0.07%
Criteria 3. Compliance -Related Capital Costs as a Percent
of Capital Funding Available
Flexible Foam 12.51% 16.28%
Rigid Foam --Packaging 10.28% 0.00%
Rigid Foam- -Insulation 0.00% 0.00%
0.00% 0.00% 0.00% 22.06%
0.00% 10.54% 0.08% 0.00%
0.00% 0.00% 0.00% 0.00%
a/ The assumed stringency and coverage assumptions used are those of the CFC
50%/Halon Freeze case described in Chapter 5. CFCs are regulated with an
initial freeze in 1989 at 1986 levels, 20 percent reduction in 1993, and 50
percent reduction in 1998, and halons are frozen at 1986 levels in 1992.
The assumed rate of growth in baseline use is the Middle Growth Scenario
described in Chapter 4.
b/ This criterion was applied only to the flexible foam segment. The number of
large facilities in the rigid foam industry is insignificant.
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We test whether the first criteria for significant impact is exceeded by
dividing the model firm's total annual compliance costs by the difference
between sales and pretax profits (production costs.) If the ratio for the model
small facility in the industry is five percent or greater, then the condition
has been met.
The second criteria for significant impact depends on the ratio of total
annual compliance costs divided by production costs for large facilities
compared to .the same ratio for the average small facility. Because our'analysis
shows that large facilities comprise a significant fraction of only the flexible
foam industry, this criteria is only applied to that segment. For this analysis
we chose both a model small facility and a model large facility from the
flexible foam industry. If the ratio for the model small facility is ten
percent greater than the ratio for the model large facility, this condition has
been met.
The third criteria for finding a significant impact is that the capital
costs of compliance represent a significant portion of available financing where
available financing includes internal cash flow plus external financing.
Because no good measures of external financing availability exist, we have
compared the capital costs to internal cash flow measured as after-tax profits
plus depreciation.*•** If the one-time capital cost of the regulation for the
model facility exceeds fifty percent of one year's internal cash flow, we have
assumed that the capital cost is significant.-
The results of this analysis show that the compliance costs as a percent of
production costs--SBA's first criterion--are insignificant for the flexible foam
and rigid foam--packaging sectors under the Case 2 scenario. These sectors
realize significant impacts in 1989 under the Case 1 scenario. The rigid foam-
insulation sector realizes insignificant impacts under both the Case 1 and Case
2 scenarios in all years except 1989. The high compliance costs in 1989 under
the Case 1 scenario are due to that scenario's simulated large increase in CFC
prices ($6.69/kg) in that year. Despite the seemingly high magnitude of these
estimates, the higher costs incurred cannot be assumed to force many of these
firms to shutdown. The analysis above has already estimated the extent to which
these facilities would lose market share due to product substitutes. Thus, much
of the increased compliance costs presented in Exhibit L-3 could be passed on to
foam consumers. Furthermore, this analysis is based upon the most likely
regulatory program considered by EPA, that of allocated quotas, which minimizes
compliance costs. A more traditional regulatory program, command and control,
would increase compliance costs greatly across all user groups including the
rigid foam insulation segment.
Applying the second criteria--the percent difference between compliance
costs divided by sales for small versus large facilities-- we found there to be
little difference in compliance costs for small and larger facilities in the
flexible foam segment (this is the only segment with a significant number of
large facilities). However applying this criteria within the framework of our
analysis is somewhat problematic. Our analysis of compliance costs is largely
based on increased prices for CFCs and does not capture any savings in CFC
1* This construction is quite conservative since some external financing is
likely to be available to some firms.
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L-18
expenses that may be available to large facilities (e.g., reduced prices due to
larger purchases). Nor are any economies in scale in use reduction options
captured. For example, some capital expenditures to reduce CFC use may be as
expensive for small facilities as large. In addition, we assume that all firms
are totally involved in foam production, while many larger firms may in fact
produce several types of products and would be less affected by increases in CFC
prices. Although the analysis may be limited by these assumptions, there does
not appear to be anything in the market-based approach of an allocated quota
system that would suggest a differential impact on small facilities versus large
facilities.
Under the third criteria, we found compliance-related capital costs15 as a
percent of capital funding available to be small (i.e., under 50 percent) in all
three years under both scenarios. The flexible foam segment does incur a higher
percentage than the other segments particularly under the best case scenario in
1998. These results indicate that few of the projected responses of the foam-
blowing industry involve large capital expenditures.
5. EXEMPTIONS AND ALLOWANCES
Another component of the Regulatory Flexibility Analysis requires EPA to
consider exemptions and allowances for industries most severely affected by the
proposed regulation.
The foam-blowing industry consumed approximately 30 percent of the total
volume of CFCs used in the United States in 1985. To exempt the foam-blowing
industry from this regulation, and continue to meet the United States'
commitment to the International Protocol, the EPA could place undue burdens upon
the other industry groups and consumers which could face more significant price
increases than expected for CFCs. For example, if 30 percent of the domestic
CFCs were set aside or exempted for the foam industries, and a 20 percent
reduction of CFC production were required by 1993 according to the Montreal
Protocol, the remaining nonexempt industries such as the electronics,
refrigeration and air conditioning industries could face nearly a 30 percent
reduction in their use, rather than 20 percent. Thus, an exemption for the
foam-blowing industries could require the remaining non-exempt industries to
face larger than expected price increases to CFCs to subsidize the foam-blowing
industries. EPA believes that such an approach is inconsistent with the
objective of its market-based regulation and induces overall economic
inefficiencies.
Furthermore set asides or exemptions present considerable administrative
difficulties. First, the EPA must allocate the temporarily exempted CFCs to the
specific foam-blowing firms, or conduct an auction of the exempted CFCs within
this specific market. With large number of foam-blowing firms, EPA would need
to track these firms to guarantee each firm's allocation. Furthermore, two
different CFC prices would develop. The foam-blowing industry would be faced
with one price for the same CFC unit; the non-exempt industries would face a
15 Capital costs were allocated to the model facility in the same manner as
operating costs, i.e, each model facility was assumed to bear a share of total
industry capital expenditures equal to its a share of industry use of CFCs.
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L-19
higher price for the same CFC unit. This price differential would have
repercussions on any CFC trading procedures implemented under this regulation
and would require significant policing to guarantee that trading occurred only
within the two segmented CFC markets not between the two markets. In addition
to more detailed involvement in trading transactions, EPA enforcement actions
would certainly increase to prevent firms within the foam-blowing industries
from reselling their lower cost CFCs to non-exempt industries.
Even with the implementation of a system of set asides which allocate
amounts of CFCs for the foam-blowing industry, foam-blowing industries would not
necessarily realize a lower reduction in market share. Exhibit L-4 estimates
the market reductions for a system of set-asides in which 100% of the foam-
blowing industry's 1986 use of CFCs would be set aside for 1989; 80% of its 1986
use would be set aside for 1993; and 50% of its 1993 use would be set aside in
1998. The results, presented for Case 2 only, show the same market reductions
as the market-based regulatory approach without set-asides, except for a slight
decrease in 1989 for the rigid packaging foam industry, and in 1993 in the rigid
insulating foam--boardstock industry (indicated in bold face type.) Both
decreases are transitory since both industries do not need set asides to protect
their market shares in other years. Also, the effect of set asides on the rigid
insulation segment is small -- the number of existing facilities which are
estimated to remain in business due to their receipt of additional CFCs is only
two percent. Analysis of a system of set asides for the Case 1 scenario (in
which lower penetration of alternate products is assumed) shows they have no
effect whatsoever.
In other words, this analysis shows that a system of set asides will not
help the foam blowing industries. Foam products are estimated to experience
declines in their market shares as a result of CFC price increases. However,
they will be able to substantially reduce- their CFC use by switching to
alternative blowing agents. Also increases in the general size of the market
for foam products will enable existing firms to continue to operate at nearly
the same level of business they received in 1986. A system of set asides over
the longer term would guarantee only one-half of this existing business base.
6. SUMMARY
This regulatory flexibility analysis examines the effect CFC regulations on
small businesses. Of the many industries using CFCs, the analysis concentrates
on the foam blowing industries exclusively because they most likely to be
significantly effected by increases in CFC prices.
The foam-blowing industry was divided into five sectors. The analysis
predicts that three of these sectors-- flexible foam, rigid foam-poured, and
rigid foam-sprayed-- will not suffer a severe loss of market share. The
flexible foam industry is not severely affected because of its ability to switch
to alternative techniques such as water-blown foam and suffers little loss in
market share. The analysis predicts that substantial shares of CFC-blown foam
markets may be lost in the rigid foam insulation--boardstock and rigid foam
packaging industries during the 1990's. However, the number of 1986 businesses
in these industries expected to shut down is considerably less than the
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EXHIBIT L-4
ESTIMATED REDUCTION OF MARKET SHARE
IN THE FOAM-BLOWING INDUSTRIES WITH SET ASIDES: CASE
Reduction in CFG-Blown Market Share
No Set-Asides Granted Set Asides Granted
1989 1993 1998 1989 1993 1998
Flexible Foam °* „/ °* °% °* 0% 0%
"' (0%) (0%) (0%) (0%) (0%)
Rigid Packaging 28% 36% 36% 28% 36% 36%
Foam (19%) (16%) (0%) (0%) (16%) (0%)
Rigid Insulating 0% 0% 0% 0% 0% 0%
Foam-Poured (0%) (0%) (0%) (0%) (0%) (0%)
Rigid Insulating 0% 48% 52% 0% 48% 52%
Foam--Boardstock (0%) (22%) (4%) (0%) (20%) (4%)
Rigid Insulating 5% 5% 5% 5% 5% 5%
Foam—Sprayed (0%) (0%) (0%) (0%) (0%) (0%)
a/ The assumed stringency and coverage assumptions used are those of the CFC
50%/Halon Freeze case described in Chapter 5. CFCs are regulated with an
initial freeze in 1989 at 1986 levels, 20 percent reduction in 1993, and 50
percent reduction in 1998, and halons are frozen at 1986 levels in 1992.
The assumed rate of growth in baseline use is the Middle Growth Scenario
described in Chapter 4. Analysis of set asides using Case 1 assumptions
showed no changes whatsoever in reductions in market share.
b/ Estimated reduction in market share based on predicted market size.
c/ Estimated percentage of facilities operating in 1986 which shut down.
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estimates of market reduction, because of the estimated increase in the size of
the-overall market for foam products. Furthermore, for such industries as rigid
foam packaging, increased costs may not result in the loss of market share
estimated here. Such factors as consumer preferences or established
distribution chains will most likely provide a continued market for foam
products. Rigid foam insulation may be similarly affected, especially if
consumers consider the energy costs related to the lower insulating values of
the alternative insulation, a cost which is not easily captured within these
analyses.
Small changes in our assumptions could have significant changes in our
results. For example, the estimated losses in market share for rigid insulating
foams are predicated on assumptions of the availability of low cost materials
of equivalent insulating capacity to CFG-blown foams. Increases in the costs of
these materials significantly reduce their market penetration, and would benefit
the foam insulation industries. In addition, current foam insulation users may
have other reasons, besides insulating capacity, for not switching to
alternative products. Also, the analysis has not been able to fully assess the
ability of CFC blowing facilities to switch to the use of alternative blowing
agents. Finally, the analysis assumes that any reduction in the sale of CFC-
blown products causes facilities to shut down. In reality, facilities may not
shut down, but choose to operate at reduced levels of profit or may simply
switch to the production of alternative products.
An analysis of set asides for the foam industry shows that they would have
little impact. Because this analysis projects substantial growth in the demands
for foam products and estimates that many foam blowers can switch to alternative
blowing agents and remain competitive in their industries, a system of set
asides of CFCs for foam manufacturers would not increase the number of existing
foam blowing firms estimated to continue in operation.
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APPENDIX M
CHLOROFLUOROCARBON USE CONTROL OPTIONS
Analysis of Administrative Burdens
EXECUTIVE SUMMARY
This appendix presents the results of an analysis of the administrative
burdens, for both EPA and affected firms, associated with the implementation of
each of six alternative means for controlling the use and emissions of
chlorofluorocarbons (controlled substances). Administrative steps, subdivided
into start-up and operations phases, are identified and the costs of each step
estimated using available information (from similar previous EPA efforts) and
best professional judgment. Industry steps include some actions which are
voluntary (not required by regulation), but which are included for cost
estimation purposes because they seem basic to an effective compliance strategy.
The costs estimated here relate only to implementation of regulations once they
have been promulgated.
The six controlled substance control options analyzed in this appendix
include three based upon economic incentives (auctioned rights, allocated
quotas, and regulatory fees), one employing a more traditional regulatory
approach (direct regulations), and two combining economic incentives and
traditional regulation (allocated quotas/regulatory fees and allocated
quotas/direct regulation). A summary of cost estimates for each option is
provided in Exhibit ES-1. Detailed cost breakdowns for each option are provided
in Exhibits 5 through 10.
For EPA, the most resource-intensive options are direct regulations and the
allocated quotas/direct regulations hybrid. This is due to the increased
compliance monitoring activity associated with the specific regulations included
in those two options. The four alternatives which rely solely or predominantly
on economic incentives -- auctioned rights, allocated quotas, regulatory fees,
and the allocated quotas/regulatory fees hybrid -- are all considerably less
resource-intensive.
For industry, the same result occurs. This is due largely to the costs
voluntarily incurred by firms in planning operational responses to the direct
regulations and (in parallel to EPA steps) the costs associated with
non-voluntary compliance activities. The auctioned rights option is relatively
resource-intensive for industry, compared to the allocated quotas and regulatory
fee alternatives, due to the costs undertaken voluntarily by firms participating
in EPA's rights auction, planning operational responses to the auction system,
and engaging in transferring rights to other parties. These costs of conducting
transfers are not strictly comparable to the involuntary costs. They confer
benefits and will occur only if they are in the firms' best interest. Although
the hybrid options combine various approaches, the cost estimates are not
strictly additive. In the allocated quotas/direct regulations hybrid, this is
due largely to the fact that the hybrid includes only two of the specific
regulations from the direct regulation option. In the allocated
quotas/regulatory fees hybrid, this is due to nearly identical recordkeeping and
compliance steps, contained in both options.
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EXHIBIT ES-1
CONTROLLED SUBSTANCE CONTROL OPTIONS
COMPARISON OF ADMINISTRATIVE BURDEN ESTIMATES
Start-Up
Operations
Total Cost
Through
The First
Year Of
Operations
EPA
$1.9 million
1.9 FTE
Undustry
$37.9 million
EPA
$4.8 million
25.2 FTE
Industry
$45.7 million
ERA
$6.7 million
27.1 FTE
Industry.
$83.6 million
Allocated Quotas
EPA
$1.0 million
1.1 FTE
Industry
$0.5 million
EPA
$2.1 million
13.8 FTE
Industry.
$1.9 million
EPA
3.1 million
14.9 FTE
Industry
$2.4 million
Regulatory Fees
EPA
$1.1 million
1.7 FTE
Industry
$0.4 million
EPA
$1.2 million
7.6 FTE
Industry
$0.5 million
EPA
$2.3 million
9.3 FTE
Industry.
$0.9 million
Direct Regulations
EPA
$0.6 million
0.2 FTE
Industry
$226.8 million
EPA
$23.0 million
32.6 FTE
Industry
$122.4 million
EPA
$23.6 million
32.8 FTE
Industry
$349.2 million
Allocated Quotas
Regulatory Fees
EPA
$1.6 million
2.2 FTE
Industry.
$0.9 million
EPA
$2.6 million
14.8 FTE
Industry.
$2.1 million
EPA
$4.4 million
17.0 FTE
Industry.
$3.0 million
Allocated Quotas
Direct Regulation
EPA
$1.4 million
1.2 FTE
Industry
$225.6 million
EPA
$24.9 million
45.9 FTE
Industry.
$123.7 million
EPA
$26.3 million
47.1 FTE
Industry
$349.3 million
s
I
to
* Does not include the expense of engineering and cost studies to develop regulations.
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Evaluation and use of the results of this analysis should be based on an
understanding of its limitations. The focus of this appendix is narrowly on the
cost of administrative actions taken to implement each controlled substance
control option. The assumptions used here have been based, where possible, on
prior EPA efforts to determine costs associated with other regulations and on
best professional judgment. An effort was made to obtain industry cost
estimates from controlled substance production industry representatives;
however, discussions with industry officials underlined the difficulty of
precisely costing the steps involved in administering any of the control options
analyzed here. Although time did not permit undertaking sensitivity analyses,
the assumptions and methodologies underlying this appendix are clearly itemized,
facilitating such analysis for any or all implementation steps.
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I. INTRODUCTION
A. Scope and Structure of Paper
The objective of this report is to analyze the principal administrative
burdens, for- both EPA and affected firms, associated with the implementation of
each of six alternative means for controlling chlorofluorocarbon (controlled
substance) use and emissions. The analysis presented here is but a component of
a larger regulatory impact analysis. The term "administrative burden" includes
only the direct administrative costs of planning and implementing each
alternative.
For EPA, these burdens include the staff and contractor costs incurred
subsequent to development and approval of necessary regulations. Costs are
subdivided into two phases -- "start-up" and "operations." Start-up or planning
costs are assumed to be incurred in the first year after regulations are
promulgated; implementation costs are annual estimates assuming full operation
of each control option. EPA costs do not include the costs of promulgating
regulations for any of the six options. Costs estimated here relate to
implementation of regulations once they have been promulgated.
For firms affected by the control options, costs (also subdivided into
start-up and operations phases) include only the burdens directly associated
with responding to EPA regulatory and program implementation actions. Some
industry administrative costs are mandated by the regulations (e.g., reporting)
while others may be voluntarily assumed by industry (e.g., transferring
auctioned permits) if it is in the firms' economic self-interest. Excluded from
the definition of "administrative burden" are such macroeconomic impacts as
changes in employment and income and such microeconomic impacts as changes in
the relative competitive status of individual firms.
With these objectives and limitations in mind, this paper is structured to
include:
• A description of each of the six alternative means of controlling
controlled substance use and emissions;
• A discussion of the methodology used to estimate EPA and industry
administrative burdens;
• A discussion of the caveats and limitations that affect the results of
this analysis; and
• An estimate of the administrative burdens associated with the six
control options based upon a detailed analysis of the steps required to
implement each. Each step has been costed based upon clearly
identified assumptions, readily available data, and best professional
j udgment. *•
Due to the uncertain nature of administrative action by industry to these
regulations, limited data collection has been undertaken for purposes of this
analysis. A meeting with industry representatives to discuss cost estimates was
held but yielded limited information on the administrative burden of the
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B. Summary Description of Control Options
As previously noted, this report analyzes the administrative burdens
associated with six alternative means of controlling the use and emission of
chlorofluorocarbons and halons (controlled substances). These include three
options based upon economic incentive approaches -- auctioned rights, allocated
quotas or allowances, and regulatory fees. The fourth option is a direct
regulatory approach requiring engineering controls and bans and reductions. The
fifth option is a hybrid combining allocated quotas and regulatory fees'. The
final option is another hybrid combining allocated quotas and direct
regulations.
In order to provide background for the detailed analysis below, the
following is a brief description of each of the six control mechanisms under
consideration. While many different design options are possible for each
alternative, the following descriptions present prototypical designs for each:
Auctioned Rights: An auctioned rights system would control controlled
substances by requiring a company to purchase the rights for the production and
consumption of these chemicals. Companies seeking to use controlled substances
would have several options. They could either purchase rights at a periodic
auction held by EPA, acquire them from other firms who had purchased rights at
auction, or buy controlled substances through their current supply channels that
already had purchased rights. Under the last option, controlled substance
producers, or wholesalers would acquire rights, eliminating the need for their
customers to directly obtain rights themselves. Controlled substance users
could purchase rights and controlled substances separately or could avoid the
need for rights altogether if their supplier has previously purchased rights in
sufficient quantities to cover their sales. Over time, increasing demand for
controlled substances (for use in products produced with or containing
controlled substances), and a limit on the number of controlled substance rights
in order to meet regulatory targets, will result in an increase in the price of
rights. Price increases will provide an incentive for firms with relatively
inexpensive options to reduce their controlled substance consumption through
low-cost substitutes, controlled substance recycling or controls, and/or new
production technologies. Exhibit 1 graphically illustrates how an auctioned
rights system might work.
Allocated Quotas: An allocated quotas system would directly control
controlled substances by setting limits on, and requiring quotas for, the
production and consumption of controlled substances. The allowable level of
controlled substances (set by the regulatory target) would be allocated among
current controlled substance producers and importers based on their historic
market share. Production limits together with growing demand for controlled
substance products would result in higher prices, providing an incentive for
controlled substance users to reduce their consumption through lower-cost
substitutes, controlled substance recycling, and/or new production technologies.
Transfer of production rights and consumption rights among producers and
proposed regulations. However, many of the costs assumed for individual
administrative steps (e.g., site visits, reporting) were based on trips to
chemical plants to review recordkeeping, the producer meeting, and EPA's
experience reviewing data for the 1986 baseline.
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EXHIBIT 1
HOW AUCTIONED PERMITS IMPLEMENT REGULATORY GOAL
Regulatory Goal
established by EPA rulemaking
Permits limited to restrict
supply of CFCs to level
set in regulatory goal
Price rises as demand for goods
using the CFCs increases and availability
of CFCs is limited
Firms
using CFCs
evaluate
options
Continue same
level of CFC use,
buy permits
Reduce use of CFCs,
buy permits
Eliminate
use of CFCs
Buy from EPA
at auction
Buy already permitted
CFCs or buy permits
from another auction
participant
Use
substitute
chemicals
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importers would be allowed. Exhibit 2 graphically illustrates how an allocated
quotas system would work.
Regulatory Fees: A regulatory fee system would control controlled substance
emissions by imposing a fee per unit of controlled substance production or
importation. This fee would increase the cost of products containing or
produced with controlled substances (since controlled substance users would pay
the cost of controlled substances plus a set fee), providing an incentive to
consumers to reduce their controlled substance use through lower-cost product
substitutions, controlled substance recycling, and/or new production
technologies. The fee would be modified over time, as necessary, to ensure the
regulatory target is met. Exhibit 3 graphically illustrates how a regulatory
fee system would work.
Direct Regulations; A more traditional regulatory system for controlling
controlled substances would include the issuance of process or engineering
control restrictions, product bans, or other forms of regulation aimed at
directly reducing controlled substance use in particular industrial categories.
An initial list of regulated uses would be issued to achieve a specified control
goal (e.g., a freeze or 20 percent reduction); that list could be expanded over
time if controlled substance use in non-regulated areas continued to grow or if
additional reductions were required as part of a phase-down. In contrast to the
three economic incentive-based approaches discussed above, in which firms would
have a choice of preferred controlled substance reduction strategies, EPA would
select specific control targets under a command-and- control regulation.
Exhibit 4 graphically illustrates how a direct regulatory approach would work.
Allocated Quotas/Regulatory Fees Hybrid: Direct regulatory and economic
incentive approaches each have their strengths and weaknesses. Different
combinations of the two approaches are possible and potentially attractive. One
such hybrid approach combines the allocation of production quotas among current
producers/importers with the imposition of a fee per unit of controlled
substance production/importation. Allocation of quotas is tied to a cap and
would be made on the basis of historic market share. The regulatory fee would
in effect tap increased profits realized by the firms holding allocations due to
the increased price of controlled substances caused by the production and
consumption cap.
Allocated Quotas/Direct Regulations Hybrid: A second hybrid approach would
involve regulating specific uses of controlled substances (i.e., through
engineering controls and controlled substance use bans and reductions) along
with setting a production cap. The specific targeted requirements would ensure
reductions occurred in those uses where low cost options are clearly available.
The allocated quotas system would provide a ceiling to ensure that the
regulatory goal is achieved (e.g., a freeze or 20% reduction) and would rely on
price incentives to guard against increased controlled substance use in areas
not subject to specific restrictions.
C. Description of Analytical Methodology
The methodology used to perform this analysis of the EPA and industry
administrative burdens associated with the six alternative controlled substance
control approaches is straightforward. The basis of the analysis is the
identification of the principal steps involved in the implementation of each
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EXHIBIT 2
HOW ALLOCATED QUOTAS IMPLEMENT REGULATORY GOAL
Regulatory Goal
Regulatory uoal
established by EPA rulemaking
Total production quota set to
meet regulatory goal
Quota allocated among
producers/importers
Price rises for CFCs
Firms
'using CFCs'
evaluate
.options/
Continue same
level of CFC use,
pay higher price
Reduce use of CFCs,
pay higher price
Eliminate
use of CFCs
Recycle
CFCs
Use
substitute
processes
Use
substitute
chemicals
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EXHIBIT 3
HOW REGULATORY FEES IMPLEMENT REGULATORY GOAL
Regulatory Goal
established by EPA rulemaking
Fee set/modified to reach
regulatory goal
Price rises for CFCs
Firms
using CFCs
evaluate
options
Reduce use of CFCs,
pay fee
Eliminate
use of CFCs
Continue same
level of CFC use,
pay fee
Use
substitute
processes
Use
substitute
chemicals
Recycle
CFCs
EPA
evaluates
production
levels
Under-
or
over-
control
Goal
achieved
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EXHIBIT 4
HOW DIRECT REGULATIONS IMPLEMENT REGULATORY GOAL
Regulatory goal
established by EPA rulemaking
evaluates
control
options
EPA issues initial/future engineering
control, CFC use ban regulations, etc.
for specific industrial categories
Firms using CFCs
comply with regulations
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control mechanism and the estimated costs associated with each step. For both
EPA- and industry these steps are divided into a start-up phase, involving the
planning and design of control program elements, and an operations phase
assuming that implementation has been fully phased-in. In many cases, these
major steps have been subdivided into more detailed activities. The costs
associated with each major step have been estimated by identifying the number of
times the step will be undertaken, the number of hours required to complete each
step, and the total dollar cost. For EPA, costs are subdivided into Agency and
contractor costs; for industry, costs are subdivided into separate estimates for
producers, importers, first-line users (for auctioned rights), and other
affected controlled substance users (for direct regulations).
Evaluation of the cost estimates is facilitated by the clear identification
of key program design assumptions (provided in the text below) and analytical
assumptions (provided in footnotes to the spreadsheets in the appendices), as
well as a complete description of each implementation step. The most important
assumptions (i.e., those which have the greatest impact on the estimated costs)
are highlighted. The effect of specific alternative assumptions are summarized
separately. In preparing this analysis, emphasis has been placed upon
consistency. Similar activities have been treated similarly across different
control options. Any differences in the treatment of similar steps is based
upon projected differences in actual implementation. To illustrate: Several
steps (development of controlled substance transfer systems, for example) are
common to several different control options. In some cases these steps have
been costed identically; in other cases, they have been assigned different cost
estimates based upon different levels of implementation complexity or a
difference in the number of affected firms.
D. Caveats/Limitations
Full appreciation of the results and importance of this analysis depends in
part on an understanding of its limitations. The most important consideration,
previously noted, is that this analysis is not intended as a comprehensive
assessment of regulatory impacts. Its focus is narrowly on the cost of
administrative actions taken to implement each control option. Other studies
that are part of this Regulatory Impact Analysis examine other components of the
costs of complying with controlled substance regulations. Secondly, some
administrative actions cannot be assessed. For example, EPA and industry at
this time do not know the frequency of certain administrative actions such as
transfers. In these areas, EPA cannot accurately project administrative burden.
On the other hand, the Agency believes that the projected administrative cost,
if action is undertaken, is reliable. Moreover, because significant attention
has been paid to consistency in assumptions and methodology, this analysis
should provide a reliable ordering of the relative implementation costs
associated with the six options.
A second limitation concerns the nature of the analytical assumptions upon
which this analysis is based. Due to time constraints, comprehensive surveys
were not undertaken regarding the behavior of controlled substance producers,
importers, and users in response to these specific control options. However,
information was obtained from industry representatives at a meeting convened to
discuss implementation cost estimates as well as plant visits undertaken by EPA
staff. EPA believes that these are the best possible estimates of
administrative burden for industry given the acknowledged uncertainty by
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industry of their future actions to develop recordkeeping and reporting in
accordance with the regulation.
Clearly the results of this analysis are highly dependent on the quality of
the assumptions. To address this concern, these assumptions, as well as the
mathematical methodology for calculating costs, have been clearly identified,
permitting the reader to substitute alternative assumptions (e.g., a higher or
lower estimate of the number of hours required to complete an implementation
task), yielding different cost estimates.
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II. ANALYSIS OF OPTIONS
A. AUCTIONED RIGHTS
1. Summary of Cost Estimates
The estimated costs associated with the administrative burdens imposed by
the auctioned rights option are detailed in Exhibit 5. In summary form', these
costs are as follows:
Start-Up Annual Operations Total 1 Year Cost
EPA $1.9 million $4.8 million* $6.7 million
(1.8 - contractor) (3.2 - contractor) (5.0 - contractor)
1.9 FTE 25.2 FTE 27.1 FTE
Industry $37.9 million $45.7 million* $83.6 million
* Includes voluntary costs of transfers. These costs are dependent on the
number of transfers which occur. EPA annual operating costs will-increase $1
million for every additional 2,000 transfers that occur.
2. Assumptions
The analytical assumptions for the marketable rights option are as follows:
*(1) Production and consumption rights will be distributed to winning
parties (e.g., controlled substance producers, users, importers or
other parties) based on a sealed bid auction.
(2) The number of rights to be auctioned will be based on the
regulatory goal (e.g., a freeze at 1986 levels, 20 percent
reduction, etc.) and any changes in that goal over time. Rights
will be defined using a standard controlled substance depletion
unit.
(3) Transfer of rights will be allowed. Transfers among different
controlled substances will be based upon their relative ozone
depletion potential.
(4) Parties will request EPA approval of any transfer transactions, and
EPA will track and monitor balances. Improper transactions may
involve EPA review of past records, and require EPA to investigate
possible fraudulent auctions.
* Asterisks designate key assumptions which will have a significant impact
on cost estimate results.
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*(5) Producers and importers will keep records of production/import
levels and maintain accounts reflecting all transfer activities.
They will submit production/import reports to EPA quarterly.
Exporters will report exports when requesting additional
consumption rights. Users and other parties will not 'be required
to submit controlled substance use level reports because rights are
tied to production/import/export levels only. Users and other
parties will, however, report transfer activities.
*(6) EPA will evaluate compliance monitoring records quarterly to ensure
producers/importers have complied with the specifications and
balances of their rights. EPA will also monitor activities through
site visits to producers/importers. A detailed EPA penalty policy
will be developed in conjunction with the regulations.
*(7) EPA will not require reporting of recycled controlled substances by
non-producers. Furthermore, it is assumed that labeling of
recycled controlled substances will not be required.
*(8) For industry, a full range of activities have been costed. Some of
these activities, however, are voluntary in nature (i.e., not
explicitly required by the assumed control system) and will not,
presumably, be undertaken by all firms.
(9) No accepted technologies or facilities currently exist for
destruction or permanent encapsulation. EPA will develop
guidelines and permitting procedures, however, to allow for the
future development of these technologies.
The assumptions for allocation of EPA/contractor hours are as follows:
(1) Contractors will provide technical support to EPA, particularly in
the start-up phase.
(2) EPA will direct the contractors in their support activities, and
contractors will operate the permit system once it is developed.
3. EPA Administrative Burdens
Start-Up Phase
Step 1: Determine the number of rights to be auctioned
A. Obtain historic levels from first-line buyers
Because direct or first-line controlled substance buyers will have the
option to participate in a controlled substance auction, EPA will want to
obtain information to assess the likely extent to which users will
participate versus obtaining controlled substance rights from the secondary
market or from producers/importers at the time they purchase controlled
substances. To obtain a profile of controlled substance use at this level,
EPA will send out Section 114 letters to a statistical sample of two percent
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(140 buyers) of the approximately 7,000 direct controlled substance buyers.
Their responses will be reviewed and used in establishing auction procedures
and other needed information. EPA will handle any Confidential Business
Information (CBI) requests made in conjunction with the Section 114 letters.
B. Analyze historic production/import/use data from publicly available
records, producer/importer Federal Register Notice responses, and
first-line buyer responses
Having compiled all information submitted by producers/importers
previously, and subsequently by direct users, and all publicly available
information, EPA will compare and analyze the data to identify discrepancies
or discontinuities. Such data consistency problems will be reconciled.
C. Calculate the number of base year rights to be auctioned
Based upon the 1986 base year levels calculated previously, and the
denomination of a common controlled substance right taking relative
depletion weights into account, EPA will calculate the number of rights to
be auctioned in the first year.
Step 2: Design and plan sealed bid auction
A. Establish procedures for bidding
EPA will develop the basic procedural rules governing the permit
auction process. These rules, which are necessary to ensure an efficient
and workable process, will cover the information bidders must provide to
participate; the level of deposit (if any) they must provide; the process,
media, and format for announcing and publicizing the auction; and the
procedures for receiving, verifying, evaluating, and awarding bids. EPA
will attempt to model the auction process after existing government auctions
where possible. EPA will also conduct a pre-bid market analysis to provide
additional information to potential bidders.
B. Design bid solicitation form
Based upon the foregoing procedural decisions, EPA will design a form
and accompanying information and guidance to be used in notifying
prospective bidders of upcoming auctions and the means by which bids must be
submitted. The form will be pretested with industry representatives.
C. Design bid response form
Based upon the foregoing procedural decisions, EPA will design a form
for use by industry in submitting sealed bids to EPA. A uniform format will
ensure that EPA has all the information it needs from all auction
participants and will facilitate objective and efficient evaluation of
submitted bids. The form will be pretested with industry representatives.
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Step 3: Design tracking and transfer systen
A. Design computer system
EPA will design the computer system that will track all balances and
transfers of rights.
B. Design process for establishing accounts of rights for auction winners
EPA will design the process for establishing an account for each party
that receives rights from an auction. The account will represent the
party's total allocation of rights. EPA will identify the information that
will be included in each account. The tracking system will be used for
monitoring balances and tracking transfer transactions.
C. Design process for adding new accounts
EPA will design the process for adding new accounts to the system as
parties obtain rights through trading.
D. Develop procedures for reviewing and approving requests for
consumption, production, and conversion riehts. and for transfers
EPA will design a system that allows one party to transfer rights to or
from another party. EPA will first develop procedures for conducting
transfer activities. This will involve defining the information and format
that parties must provide to EPA requesting approval for such transactions.
E. Develop tracking routine
EPA will develop a computer routine as part of its tracking system to
account for transfers and approval of additional rights in order to keep an
accurate record of total rights. The computer routine will check
transactions against available allocations, and modify accounts to reflect
changes. If balances of rights are not sufficient to cover the request, the
system will not approve the requested transaction. EPA will then notify
firms of completed transactions or problems with transactions.
Step 4: Design recordkeeping and compliance monitoring system
A. Develop detailed design of system
EPA will require producers/importers to maintain daily records and
submit quarterly reports on production/consumption levels to monitor
compliance with production/consumption rights. EPA will first define the
type and scope of information needed to ensure effective monitoring. EPA
will then set up a computer data base for entering information collected
from producers/importers based on reports, site visits, and in-house
tracking systems. EPA will design a method for evaluating all monitoring
data to identify potential violations.
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B. Develop instructions for obtaining information on production, sales.
shipments. use of raw materials. total consumption rights. potential
production rights, production rights, conversion rights, and data on
recoverable and recyclable materials
Once EPA has defined the data required for monitoring purposes, it will
develop instructions for producers/importers to ensure that they understand
which of the daily records that they maintain should he submitted to EPA
quarterly.
C. Develop instructions for obtaining information on import and export
activities
EPA will develop instructions, and will require importers to submit
data quarterly on the type and quantity of substances imported, date and
port of entry, source country, importer of record, commodity code, total for
that quarter and control-period-to-date of calculated levels of consumption
rights. Exporters who are claiming consumption rights will be required to
submit their EIN numbers, commodity code, the date and port of exit, the
country to which exported, the quantities exported, and supporting
documentation.
D. Determine site visit policies (for monitoring compliance)
In order to ensure effective monitoring of producer/importer
compliance, EPA will establish site visit policies. These policies will
address the purpose of the visit, the records to be inspected, and the
duration and timing of the visit. Site visit schedules will be developed
and notices prepared which will be issued to producers/importers in advance
of the visit.
E. Design operational guidelines for the violation and penalty system
EPA will design operational guidelines for the violation and penalty
system prepared in conjunction with the regulation. The guidelines will
define the procedures in evaluating the likelihood of a possible violation
and will outline litigation policies. In addition, the necessary forms and
procedures to be used by EPA will be prepared.
Step 5: Develop guidelines and permitting procedures for destruction and
permanent encapsulation of controlled substances
Although no accepted technologies exist for destruction or permanent
encapsulation of controlled substances, EPA will develop guidelines and an
appropriate permitting process to allow for the development of these
technologies.
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Operations Phase
Step 1: Conduct sealed bid auction
A. Announce the auction in appropriate media
EPA will implement the policy established for the conduct of the sealed
bid auction. The first step in this process will be the use of the bid
solicitation form previously designed employing the media previously
selected.
B. Respond to questions
EPA will respond to any questions that interested bidders may have on
procedures or general information about the auction.
C. Evaluate bids
EPA will receive and evaluate sealed bids from interested parties. The
first step in this process will be to verify and record bids submitted.
Evaluation will be based upon policies and procedures developed in the
start-up phase.
D. Notify all bidders of results and provide instructions for obtaining
rights
Using the selected auction price and the volume of controlled
substances requested by each winning bidder, EPA will calculate the amount
owed by each party. Letters notifying successful bidders of rights awarded
and the amount they owe will be prepared and mailed. EPA staff will be
available to answer any subsequent inquiries.
Step 2: Set up tracking system
A. Establish accounts for all successful bidders
EPA will establish an account for each successful bidder representing
its allocation or rights.
B. Establish accounts for new entrants
As firms obtain rights through transfer transactions, EPA will
establish new accounts for these firms.
Step 3: Track requests for consumption, production, and conversion rights, and
for transfers
A. Receive requests for transfers and additional rights
EPA will receive and enter into the tracking system requests to obtain
additional consumption rights, to convert potential production rights into
production rights, and to transfer rights to other firms.
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B. Evaluate requests and required documentation
The computer routine will evaluate each request against the party's
records to ensure that sufficient controlled substance rights are available.
If account balances are insufficient, the routine will "reject" and "flag"
the transaction.
C. Examine "problem" requests and notify firms
A small number of these transactions will be "rejected" by the system.
EPA will examine these problems and,contact the firms involved. EPA may
become involved in re-examining past transactions and investigating possible
fraudulent activities to determine if enforcement actions are required.
D. Modify records
The computer routine will modify controlled substance records
(accounts) for each firm involved to ensure accurate tracking of rights over
time.
E. Notify producers/importers/exporters of approval
EPA will notify firms via a formal notice that requests have or have
not been approved and will report the "balance" of their rights.
Step 4: Conduct compliance monitoring activities
A. Receive and review reports on production and shipments from plants, use
of raw materials. total consumption rights. potential production
rights, production rights, conversion rights, and data on recoverable
and recyclable material
EPA will receive and review quarterly reports, based on daily records,
of production activity and balances of approved rights.
B. Receive and review reports on import and export activities
EPA will receive and review quarterly import activity reports submitted
by firms. EPA will review export activity reports submitted at the end of
the year by exporters who are not claiming consumption rights.
C. Obtain additional information from producers/importers/exporters as
needed
EPA may request additional information from firms during the year on
production/import/export activities to complete its records.
D. Conduct site visits to ensure production/import/export activities are
consistent with records
EPA will conduct periodic site visits to monitor firms' activities and
reporting procedures. Visits will be scheduled and planned in advance, and
a follow-up report will be sent to the firm.
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E. Evaluate data on production/import/export levels (from reports, in-
house tracking systems, and site visits) to ensure that
firms have complied with their limits
EPA will review all data collected from production/import/export level
reports, in-house tracking systems, and site visits to ensure that
producers/importers have not exceeded their approved rights.
Step 5: Take enforcement action as needed
A. Lew penalties
EPA will review all data which indicates that a violation may have
occurred and will take appropriate action. Action may involve levying
penalties. Steps will include notifying firms of potential violations,
preparing documentation, and calculating and negotiating penalties. If all
firms comply with the regulations, penalties will not be levied.
B. Conduct litigation
In some cases where compliance monitoring activities indicate a
violation, enforcement action may involve litigation. Steps will include
notifying firms of potential violations, preparing documentation,
negotiations, and preparing for and conducting litigation. If all firms
comply with the regulations, litigation will not be conducted.
4. Industry Administrative Burdens
Start-Dp Phase
1. Provide EPA with five year historic use levels in response to Section 114
letters
A. Research and compile information
In order to adequately respond to EPA's request for use information,
first-line controlled substance buyers will research and compile data on use
levels.
B. Prepare response to Section 114 letter
Firms will prepare a response to EPA's request for use levels using the
format specified by EPA.
C. Send information to EPA
Firms will send the prepared response to EPA.
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Step 2: Evaluate expected impact of production/consumption rights on operations
A. Analyze impact of limits
Upon notification from EPA of official production/consumption
allocations, firms will conduct an analysis of the impact of limits on
operations, prices, and production options.
B. Plan operational response to limits
Operational changes will be designed based on firms' analysis of the
impact of limits. Operational changes may include alterations in
production/import/export levels, use of substitutes, recycling, changes in
personnel, research and development, and financial plans.
C. Plan transfer and export activities
Firms will plan anticipated trading activities based on their analysis
of the expected impact of production/consumption quotas.
Operations Phase
Step 1: Implement operational changes necessary to comply with regulations
Step 2: Respond to bid solicitation
A. Conduct market analysis to determine bidding price and rights for which
to bid
Parties will conduct an analysis of trends in their respective markets
in order to determine whether they should submit a bid and, if so, at what
price and for what volume of rights the bid should be prepared.
B. Prepare bid
Utilizing the bid response form designed by EPA, and based upon the
market analysis, parties will prepare their bids.
C. Send bid to EPA
Parties will submit sealed bids to EPA.
Step 3: Obtain rights
A. Review bid results
Parties will receive and review EPA notification of auction results.
Questions, if any, will be submitted by telephone to EPA.
B. Send payment for awarded rights
Successful bidders will transmit payment to U.S. Treasury for requested
rights.
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Step 4: Evaluate expected impact of system
A. Analyze impact of rights obtained
Parties will conduct an analysis of the impact of the rights purchased
on operations and product prices.
B. Decide whether to transfer rights obtained
Parties will plan anticipated transfer activities based on their
analysis of the expected impact of the level of rights obtained on their
operations.
Step 5: Evaluate operations plan
A. Determine impact of rights obtained on operations
Parties will evaluate whether previously implemented operational
changes remain adequate and appropriate given the results of the auction.
B. Implement changes in operations
Based upon the foregoing analysis, parties will implement the
management and technical changes needed to meet any additional operational
changes in response to the system.
Step 6: Conduct transfer transactions
A. Prepare and submit transfer request to EPA
Parties will contact potential trading partners and negotiate transfers
of portions of their allocation of rights. They will then request EPA
approval of the transaction according to guidelines developed by EPA.
B. Obtain EPA approval of transfer
Parties will obtain a notice from EPA approving a transfer transaction.
Parties will provide additional information to EPA, if required, to complete
a transaction.
C. Modify records regarding inventory of production and consumption rights
Firms will modify their records to reflect the transfer.
Step 7: Obtain additional consumption rights through exports
A. Prepare and submit request and proof of exports of controlled
substances
A request for additional consumption rights along with the required
export documentation must be submitted to EPA before additional rights will
be granted.
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B. Obtain additional consumption rights from EPA
If the request is approved, EPA will issue a notice advising the party
of its additional rights.
Step 8: Convert potential production rights into production rights through
exports to parties (additional production rights are granted through
transactions with 25 Kilotonne Parties)
A. Obtain production reduction documentation from embassy
The embassy of the nation agreeing to reduce its allowable calculated
level of production must provide documentation to the recipient of the
amount transferred and the control period covered.
B. Prepare and submit request and proof of exports of controlled
substances
A request for conversion of rights must be prepared and submitted with
the required documentation to EPA.
C. Obtain notice of production rights from EPA
If the request is approved, EPA will issue a notice advising the party
of its additional rights.
Step 9: Comply with EPA reporting and compliance monitoring requirements
A. Maintain records of production, raw materials used, sales, shipments.
controlled substances recovered and recycled, and import and export
activities
All producers/importers will maintain copies of daily production
records, and import and export activities.
B. Prepare and submit reports on production, feedstock consumption.
shipments. total consumption rights. potential production rights.
production rights, conversion rights, and data on recoverable and
recyclable materials
Firms will provide quarterly information for production collected daily
during the normal course of production. The information will be provided in
the firms' standard format.
C. Prepare and submit reports on import and export activities
Firms conducting import activities will provide information in an EPA-
specified format quarterly. Firms will report export activities when
requesting additional consumption rights.
D. Provide any additional information requested by EPA.
Additional requests for production/import/export data may be made
quarterly by EPA. Responses will be prepared and provided as needed.
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E. Prepare for EPA site visits
Firms will prepare for EPA site visits to ensure that all back-up data
are available which document compliance with EPA requirements. '
F. Accommodate EPA site visits
Appropriate corporate staff will be available to EPA staff to answer
questions during the visit. A corporate official will meet with the EPA
site visit team, supply requested files, and make other individuals such as
the production manager available as needed. The official would interact
with EPA on subsequent issues related to the visit.
Step 10: Respond to any enforcement activity
A. Pay penalties
Firms will respond to any enforcement activity initiated by EPA.
Enforcement activity could include penalties for exceeding approved rights.
Steps include negotiations, documentation, and payment of penalties. If all
firms comply with the regulation, no penalties will be levied.
B. Conduct litigation
In some cases, enforcement activity may involve litigation. Steps
include negotiations, documentation, and preparation for litigation. If all
firms comply with the regulation, no penalties will be levied.
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B. ALLOCATED QUOTAS
1. Sunmaxy of Cost Estimates
The estimated costs associated with the administrative burdens imposed by
the production quota option are detailed in Exhibit 6. In summary form, these
costs are as follows:
Start-Up Annual Operations Total 1 Year 'Cost
EPA $1.0 million $2.1 million $3.1 million
(0.9 - contractor) (1.2 - contractor) (2.1 - contractor)
1.1 FTE 13.8 FTE 14.9 FTE
Industry $0.5 million $1.9 million $2.4 million
2. Assumptions
The analytical assumptions for the allocated quotas option are as follows:
(1) The total of production/import quota will be allocated among 7
producers and approximately 14 importers based upon historic
market share.
(2) Transfer of production rights among producers/importers
will be allowed. Transfers among different controlled
substances will be based upon their relative ozone
depletion potential.
*(3) Producers and importers will keep records on production/import
activities and submit these records to EPA quarterly. Transfer
activities shall be reported when they occur. Exporters shall
report exports when requesting additional consumption rights.
Users will not be required to report activities.
*(4) EPA will evaluate the compliance monitoring records quarterly
to determine whether producers or importers have exceeded
their production/import quotas. EPA will also monitor
activities through site visits. A detailed EPA penalty policy
will be developed in conjunction with the regulations.
*(5) EPA will not require permitting or reporting of recycled controlled
substances by non-producers. Furthermore, it is assumed that
labeling of recycled controlled substances will not be required.
* Asterisks designate key assumptions which will have a significant impact
on cost estimate results.
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(6) No accepted technologies or facilities currently exist for
destruction or permanent encapsulation. EPA will develop
guidelines and permitting procedures, however, to allow
for the development of these technologies.
*(7) For industry, a full range of activities have been costed. Some of
these activities, however, are voluntary in nature (i.e., not
explicitly required by the assumed control system) and will not,
presumably, be undertaken by all firms.
The assumptions for allocation of EPA/contractor hours are as follows:
(1) Contractors will provide technical support to EPA
particularly in the start-up phase.
(2) EPA will direct the contractors in their support
activities during operations of the allocation quota
system once it is developed. All compliance monitoring
and enforcement activities will remain EPA functions.
3. EPA Administrative Burdens
Start-Up Phase
Step 1: Establish production quotas
A. Calculate base year allocations based on relative shares of
historic market
EPA will calculate base year allocations of production and consumption
rights for each affected firm based upon their production, import, and
export levels and ozone depletion weights. EPA will record in detail the
procedures and data used to calculate each firm-specific allocation.
B. Notify producers/importers of final allocations of production quotas
EPA will formally notify each producer/imported of its allocated
production/consumption quota for a given year. The notification will
include an attachment describing the procedures and data used to calculate
the rights allocated. EPA will also answer any inquiries from
producers/importers about allocations or procedures used to calculate
allocations.
Step 2: Design tracking and transfer system
A. Design computer system
EPA will design the computer system that will track account balances
and transfer activities.
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B. Design process for establishing quota accounts
EPA will design the process for establishing an account for each firm
representing its total allocation of rights. EPA also will identify the
information that must be included in each account. The tracking system will
be used for monitoring balances and tracking transfer transactions.
C. Develop procedures for reviewing and approving requests for
consumption, production, and conversion rights, and for transfers
EPA will design a system that allows producers and importers to trade a
portion of their annual rights to another producer or importer or obtain a
portion of another firm's rights. EPA will first develop procedures for
conducting transfer activities. This will involve defining the information
and format that producers/importers must provide to EPA when requesting
approval for such transactions.
D. Develop tracking routine
EPA will develop a computer routine as part of its tracking system to
account for transfers and approval of additional rights in order to keep an
accurate record of total rights. The computer routine will check requests
against available allocations, and modify accounts to reflect changes. If
balances of rights are not sufficient to cover the request, the system will
not approve the requested transaction. EPA will then notify firms of
approved transactions or problems with such transactions.
Step 3: Design recordkeeping and compliance monitoring system
A. Develop detailed design of system
EPA will require producers/importers to maintain daily records and
submit quarterly reports on production/consumption levels to monitor
compliance with production/consumption rights. EPA will first define the
type and scope of information needed to ensure effective monitoring. EPA
will then set up a computer data base for entering information collected
from site visits, reports, and in-house tracking systems. EPA will design a
method for evaluating all monitoring data to identify potential violations.
B. Develop instructions for obtaining information on-production, sales.
shipments, use of raw materials, total consumption rights, potential
production rights, production rights, conversion rights, and data on
recoverable and recyclable materials
Once EPA has defined the data required for monitoring purposes, it will
develop instructions for producers/importers to ensure that they understand
which of the daily records that they maintain should be submitted to EPA
quarterly.
C. Develop instructions for obtaining information on import and export
activities
EPA will develop instructions, and will require importers to submit
data quarterly on the type and quantity of substances imported, date and
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port of entry, source country, importer of record, commodity code, total for
that quarter and control-period-to-date of calculated levels of consumption
rights. Exporters who are claiming consumption rights will be required to
submit their EIN numbers, commodity code, the date and port of exit, the
country to which exported, the quantities exported, and supporting.
documentation.
D. Determine site visit policies (for monitoring compliance)
In order to ensure effective monitoring of producer/importer
compliance, EPA will establish site visit policies. These policies will
address the purpose of the visit, the records to be inspected, and the
duration and timing of the visit. Site visit schedules will be developed
and notices prepared which will be issued to producers/importers in advance
of the visit.
E. Design operational guidelines for the violation and penalty system
EPA will design operational guidelines for the violation and penalty
system prepared in conjunction with the regulation. The guidelines will
define the procedures in evaluating the likelihood of a possible violation
and will outline litigation policies. In addition, the necessary forms and
procedures to be used by EPA will be prepared.
Step 4: Develop guidelines and permitting procedures for
destruction and permanent encapsulation of controlled substances
Although no accepted technologies exist for destruction or permanent
encapsulation of controlled substances, EPA will develop guidelines and an
appropriate permitting process to allow for the development of these
technologies.
Operations Phase
Step 1: Set up tracking system and establish accounts for all
producers/importers
EPA will establish an account for each producer/importer representing
its allocation of rights.
Step 2: Track requests for consumption, production, and conversion rights, and
for transfers
A. Receive requests for transfers and additional rights
EPA will receive and enter into the tracking system requests to obtain
additional consumption rights, to convert potential production rights into
production rights, and to transfer rights to other firms.
B. Evaluate requests and required documentation
The computer routine will evaluate each request against the firm's
balance to ensure that sufficient production/import rights are available.
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If the balance is insufficient, the routine will "reject" and "flag" the
transaction.
C. Examine "problem" requests and notify firms
A small number of these transactions will be "rejected" by the system.
EPA will examine these problems and contact the firms involved. EPA may
become involved in re-examining past transactions and investigating possible
fraudulent activities to determine if enforcement actions are required.
D. Modify records
The computer routine will modify controlled substance allocation
records (accounts) for each firm involved to ensure accurate tracking of
rights over time.
E. Notify producers/importers of approval
EPA will notify firms via a formal notice that the requests have or
have not been approved and will report the "balance" of their rights.
Step 3: Conduct compliance monitoring activities
A. Receive and review reports on production and shipments from plants. use
of raw materials, total consumption rights, potential production
rights, production rights, conversion rights, and data on recoverable
and recyclable material
EPA will receive and review quarterly reports based on daily records of
production activity and balances of approved rights.
B. Receive and review reports on import and export activities
EPA will receive and review quarterly import activity reports submitted
by firms. EPA will review export activity reports submitted at the end of
the year by exporters who are not claiming consumption rights.
C. Obtain additional information from producers/importers/exporters as
needed
EPA may request additional information from firms during the year on
production/import/export activities to complete its records.
D. Conduct site visits to ensure production/import/export activities are
consistent with records
EPA will conduct periodic site visits to monitor firms' activities and
reporting procedures. Visits will be scheduled and planned in advance, and
a follow-up report will be sent to the firm.
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E. Evaluate data on production/import/export levels (from reports.
in-house tracking systems and site visits) to ensure that firms have
complied with their limits
EPA will review all data collected from production/import/export level
reports, in-house tracking systems, and site visits to ensure that
producers/importers have not exceeded their approved rights.
Step 4: Take enforcement action as needed
A. Levy penalties
EPA will review all data which indicates that a violation has occurred
and will take appropriate action. Action may involve levying penalties.
Steps will include notifying firms of potential violations, preparing
documentation, and calculating and negotiating penalties. If all firms
comply with the regulations, penalties will not be levied.
B. Conduct litigation
In some cases where compliance monitoring activities indicate a
violation, enforcement action may involve litigation. Steps will include
notifying firms of potential violations, preparing documentation,
negotiations, and preparing for and conducting litigation. If all firms
comply with the regulations, litigation will not be conducted.
4. Industry Administrative Burdens
Start-Dp Phase
Step 1: Evaluate expected impact of production/consumption rights on operations
A. Analyze impact of limits
Upon notification from EPA of official production/consumption
allocations, firms will conduct an analysis of the impact of limits on
operations, prices, and production options.
B. Plan operational response to limits
Operational changes will be designed based on firms' analysis of the
impact of limits. Operational changes may include alterations in
production/import/export levels, use of substitutes, recycling, changes in
personnel, research and development, and financial plans.
C. Plan transfer and export activities
Firms will plan anticipated transfer and export activities based on
their analysis of the expected impact of production/consumption quotas.
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Operations Phase
Step 1: Implement operational changes to comply with regulations
Firms will implement the management and technical changes'needed to
meet operational changes in response to the regulations.
Step 2: Conduct transfer transactions
A. Prepare and submit transfer request to EPA
Firms will contact potential trading partners and negotiate transfer
of portions of their allocation of rights. They will then request EPA
approval of the transaction according to guidelines developed by EPA.
B. Obtain EPA approval of transfer
Firms will obtain a notice from EPA approving a transfer transaction.
Firms will provide additional information to EPA, if required, to complete
a transaction.
C. Modify records regarding inventory of production and consumption
rights
Firms will modify their records to reflect the transfer.
Step 3: Obtain additional consumption rights through exports
A. Prepare and submit request and proof of exports of controlled
substances
A request for additional consumption rights along with the required
export documentation must be submitted to EPA before additional rights will
be granted.
B. Obtain additional consumption rights from EPA
If the request is approved, EPA will issue a notice advising the party
of its additional rights.
Step 4: Convert potential production rights into production rights through
exports to parties (additional production rights are granted through
transactions with 25 Kilotonne Parties)
A. Obtain production reduction documentation from embassy
The embassy of the nation agreeing to reduce its allowable calculated
level of production must provide documentation to the recipient of the
amount transferred and the control period covered.
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B. Prepare and submit request and proof of exports of controlled
substances
A request for conversion of rights must be prepared and submitted with
the required documentation to EPA.
C. Obtain notice of production rights from EPA
If the request is approved, EPA will issue a notice advising the party
of its additional rights.
Step 5: Comply with EPA reporting and compliance monitoring requirements
A. Maintain records of production, raw materials used, sales, shipments.
controlled substances recovered and recycled, and import and export
activities
All producers/importers will maintain copies of daily production
records, and import and export activities.
B. Prepare and submit reports on production, feedstock consumption.
shipments, total consumption rights, potential production rights.
production rights, conversion rights, and data on recoverable and
recyclable materials
Firms will provide quarterly information for production collected
daily during the normal course of production. The information will be
provided in the firm's standard format.
C. Prepare and submit reports on import and export activities
Firms conducting import activities will provide information in an EPA-
specified format quarterly. Firms will report export activities when
requesting additional consumption rights.
D. Provide anv additional information requested by EPA.
Additional requests for production/import/export data may be made
quarterly by EPA. Responses will be prepared and provided as needed.
E. Prepare for EPA site visits
Firms will prepare for EPA site visits to ensure that all back-up
production/import data are available which document compliance with EPA
requirements.
F. Accommodate EPA site visits
Appropriate corporate staff will be available to EPA staff to answer
questions during the visit. A corporate official will meet with the EPA
site visit team, supply requested files, and make other individuals such as
the production manager available as needed. The official would interact
with EPA on subsequent issues related to the visit.
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Step 6: Respond to any enforcement activity
A. Pay penalties
Firms will respond to any enforcement activity initiated b'y EPA.
Enforcement activity could include penalties for exceeding approved rights.
Steps include negotiations, documentation, and payment of penalties. If
all firms comply with the regulation, no penalties will be levied.
B. Conduct litigation
In some cases, enforcement activity may involve litigation. Steps
include negotiations, documentation, and preparation for litigation. If
all firms comply with the regulation, no litigation will be conducted.
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C. REGULATORY FEES
1. Summary of Cost Estimates
The estimated costs associated with the administrative burdens imposed by
the regulatory fees option are detailed in Exhibit 7. In summary form, these
costs are as follows:
Start-Up Annual Operations Total 1 Year Cost
EPA $1.1 million $1.3 million $2.3 million
(1.9 - contractor) (0.8 - contractor) (1.7 - contractor)
1.7 FTE 7.6 FTE 9.3 FTE
Industry $0.4 million $0.5 million $0.9 million
2. Assumptions
The analytical assumptions for the regulatory fees option are as follows:
(1) Fees will be collected from producers and importers only. The
amount of fees paid will be based on the fee level for each
controlled substance type and the quantity of regulated
controlled substance chemicals produced or imported.
(2) EPA will determine the initial fee level for each controlled
substance type, based on its relative ozone-depleting
potential and the initial regulatory goal, and develop a
self-adjusting fee formula that will revise the fee level,
as necessary, to compensate for missing the regulatory
target or to meet changes in the regulatory goal.
*(3) Producers and importers will calculate the amount of fees they
owe and send payment to the U.S. Treasury and supporting data to
EPA quarterly.
(4) Producers and importers will keep records on production/
consumption levels, fees paid, and other required information and
submit these records to EPA quarterly.
*(5) EPA will evaluate the compliance monitoring records quarterly
(including production/consumption levels, fee payment reports,
and other records) to ensure that the correct fee amount was
submitted. EPA will also monitor activities through site visits.
A detailed EPA penalty policy will be developed in conjunction
with the regulations.
* Asterisks designate key assumptions which will have a significant impact
on cost estimate results.
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*(6) EPA will not require permitting or reporting of recycled
controlled substances by non-producers. Furthermore, it is
assumed that labeling of recycled controlled substances will not
be required.
(7) No accepted technologies or facilities currently exist for
destruction of controlled substances or their permanent
encapsulation. EPA will develop guidelines and permitting
procedures, however, to allow for the future development of these
technologies.
*(8) For industry, a full range of activities have been costed. Some
of these activities, however, are voluntary in nature (i.e., not
explicitly required by the assumed control system) and will not,
presumably, be undertaken by all firms.
The assumptions for allocation of EPA/contractor hours are as follows:
(1) Contractors will provide technical support to EPA particularly in
the start-up phase.
(2) EPA will direct the contractors in their support activities, and
EPA will operate the regulatory fee system once it is developed.
3. EPA Administrative Burdens
Start-Up Phase
Step 1: Set initial fee level and refine formula for adjusting fee level to
yield regulatory goals
A. Review available data regarding the economics of the controlled
substance industry and historical impacts of changing controlled
substance prices
EPA will review available data on the economics of the controlled
substance industry, including the historical impacts of changing controlled
substance prices on demand and controlled substance production/import
levels.
B. Review existing controlled substance model and revise as necessary to
use in estimating appropriate fee levels
EPA will review the existing controlled substance model to determine
its adequacy in estimating fee levels that will yield EPA's regulatory
production/import targets. EPA will then make revisions to the controlled
substance model, as necessary, so the model can be used in estimating
appropriate fee levels.
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C. Run model to estimate fee levels necessary to yield regulatory
production/import targets
EPA will run the controlled substance model to estimate the
appropriate fee levels necessary to yield regulatory production/import
targets.
D. Finalize initial fee and self-adiusting formula contained in final
rule
EPA will finalize the initial fee and self-adjusting formula that will
be outlined in the regulations. The formula will be used to adjust the fee
levels if they do not yield the regulatory targets or if EPA changes the
targets.
E. Determine schedule and procedures for periodic reassessment of the
self-adjusting formula
EPA will develop a schedule and procedures for reassessing the
self-adjusting formula to ensure it adjusts the fees appropriately to meet
the regulatory target.
F. Notify producers/importers of initial fee level
EPA will notify producers/importers of the initial fee levels set for
each regulated controlled substance.
Step 2: Design recordkeeping and compliance monitoring system
A. Develop detailed design of system
EPA will require producers/importers to maintain daily records and
submit quarterly reports on production/consumption levels and fee amounts
that were submitted to the U.S. Treasury. Fee amounts submitted will be
based on the total controlled substances produced or imported by firms, and
the fee levels for each controlled substance. EPA will establish a system
for verifying that fee amounts submitted to the U.S. Treasury are
consistent with fee reports and with production and consumption levels.
B- Design and test forms and instructions for obtaining production/
import and fee payment information
Following design of the reporting and fee verification system, EPA
will design and test the reporting forms and prepare instructions for the
firms that must use the forms.
C. Determine site visit policies (for monitoring compliance)
In order to ensure effective monitoring of producer/importer
compliance, EPA will establish site visit policies. These policies will
address the records to be inspected, and the duration and timing of the
visit. Site visit schedules will be developed and notices prepared which
will be issued to producers/importers in advance of the visit.
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D. Design operational guidelines for the violation and penalty system
EPA will design operational guidelines for the violation and penalty
system prepared in conjunction with the regulation. The guidelines will •
define the procedures in evaluating the likelihood of a possible violation
and will outline litigation policies. In addition, the necessary forms and
procedures to be used by EPA will be prepared.
Step 3: Develop guidelines and permitting procedures for destruction and
permanent encapsulation of controlled substances
Although no accepted technologies exist for destruction or permanent
encapsulation of controlled substances, EPA will develop guidelines and an
appropriate permitting process to allow for the future development of these
technologies.
Operations Phase
1. Conduct compliance monitoring activities
A. Receive and review reports on production/consumption levels and fee
payments.
EPA will receive and review quarterly production/import and fee
payment reports. Reports will be reviewed for completeness and accuracy.
B. Verify fee payment reports with U.S. Treasury records
EPA will verify that fee payment reports are consistent with U.S.
Treasury records.
C. Obtain additional information from producers/importers/exporters as
needed
EPA may request additional information from firms during the year on
production/import/export activities to complete its records.
D. Evaluate data on production/import levels and fees paid
to ensure that fees submitted reflect actual production/consumption
levels
EPA will review reports on production/consumption levels, and fee
paid, to ensure that fees submitted reflect actual production/import
levels. This activity includes checking calculations made by firms on fee
amounts owed.
E. Notify firms of delinquent or incorrect fee payments
Based on the evaluation of production/consumption data and fee amounts
submitted, EPA will issue follow-up notices to firms (where applicable)
advising them to remit required fees.
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F. Conduct site visits to ensure production/import levels and fee
payments are consistent with records
Site visits will be scheduled to monitor producer/importer record-
keeping and controlled substance activities. During the visit, on-site
records will be examined and staff interviewed to ensure production/import
levels and fee payments are consistent with records.
Step 2: Revise self-adjusting formula as necessary
A. Determine if fee levels fas determined bv self-adjusting formula^
are yielding regulatory production goals, and if formula needs to be
revised
EPA will -review and compare the levels of CFG production and import
levels, and the regulatory production goals annually. If the
production/import goals are not being met, EPA will revise the formula so
it will adequately adjust the fees.
B. Prepare formula revisions as necessary, based on results of
analysis, or based on changes in regulations
EPA will revise the self-adjusting formula if fees are not yielding
regulatory goals or if EPA changes its goals.
Step 3: Take enforcement action as needed
A. Levy penalties
EPA will review all data which indicates that a violation has occurred
and will take appropriate action. Action may include levying penalties.
Steps include notifying firms of potential violations, preparing
documentation, and calculating and negotiating penalties. If all firms
comply with the regulations, no penalties will be levied.
B. Conduct litigation
In some cases where compliance monitoring activities indicate a
violation, enforcement action may involve litigation. Steps include
notifying firms of potential violations, preparing documentation,
negotiations, and preparing for and conducting litigation. If all firms
comply with the regulations, no litigation will be conducted.
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4. Industry Administrative Burdens
Start-Up Phase
Step 1: Obtain final fee level and formula from EPA and evaluate expected
impact of fee
A. Analyze impact of fee levels
Upon receipt and review of EPA's fee levels for controlled substances,
firms will conduct an analysis of the impact of fees on operations. This
analysis will be done on a voluntary basis by firms as part of their
on-going operating practices.
B. Plan operational response to fee levels
As part of their business planning practices, operational changes will
be designed based on firms' analyses of the impact of fees. Operational
changes may include alterations in production/import levels, use of
substitutes, recycling, changes in personnel, research and development, and
financial plans.
Step 2: Design internal fee payment system
A. Set up system for determining fee amount owed
Producers and importers will develop systems for determining the fee
amount owed based on controlled substance production or import levels.
B. Set up accounting system to pay correct fee amounts to U.S Treasury
Producers and importers will establish internal accounting systems to
ensure timely and accurate payment of fees.
Step 3: Design system to meet EPA reporting and compliance monitoring
requirements
A. Design in-house system to track production/consumption levels and fees
paid
Producers and importers will develop in-house systems to track
production/import levels against fees paid-to meet EPA compliance
monitoring requirements.
B. Design reporting system to meet EPA requirements
Producers and importers will develop procedures for generating
required reports on controlled substance production/consumption levels and
fees paid.
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Operations Phase
Step 1: Implement operational changes based on analysis of impact of fee
Producers and importers will implement management and technical
changes needed to meet operational changes in response to the fee system.
Step 2: Pay fees based on production/import levels
A. Determine fee amounts owed
Firms will determine the fee amount owed based on the level of
controlled substance activity during the month covered.
B. Disburse fee amounts to U.S. Treasury with appropriate paperwork
Fees will be remitted to the U.S. Treasury. Firms will submit the
required paperwork with the fee payment.
C. Notify EPA of payment
A copy of the documentation will be sent to EPA.
Step 3: Comply with EPA reporting and compliance monitoring requirements
A. Maintain records on production/consumption activities and fee payments
Firms will maintain production/consumption and fee data needed by EPA
to make judgments concerning compliance with the regulatory fee system.
B. Prepare and submit reports
Firms will prepare and submit quarterly reports on production/
consumption levels and fees paid. The reports will be formatted to meet
EPA guidelines.
C. Provide any additional information requested by EPA
EPA may request additional information on production/consumption
levels and fees paid. Responses will be prepared and provided as needed.
D. Prepare for EPA site visits
Firms will prepare for EPA site visits to ensure that all back-up
production/consumption and fee data are available which document compliance
with EPA requirements.
E. Accommodate EPA site visits
Appropriate corporate staff will be available to EPA staff to answer
questions during the visit. A corporate official will meet with the EPA
site visit team, supply requested files, and make other individuals such as
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the production manager available as needed. The official would interact
with EPA on subsequent issues related to the visit.
F. Disburse' additional or corrected fee amounts to U.S. Treasury
Based on EFA's evaluation of production/consumption levels and fee
submittal reports, EPA may request additional or corrected fee amounts from
firms. Firms will disburse any requested fee amounts to the U.S. Treasury
along with required paper work. A copy of the documentation will be sent
to EPA.
Step 4: Respond to any enforcement activity
A. Pay penalties
Firms will respond to any enforcement activity initiated by EPA.
Enforcement activity could include penalties for underpayment of fees.
Steps include negotiations, preparing documentation, and payment of
penalties. If all firms comply with the regulation, no penalties will be
levied.
B. Conduct litigation
In some cases, enforcement activity may involve litigation. Steps
include negotiations, preparing documentation, and preparing for and
conducting litigation. If all firms comply with the regulation, no
litigation will be conducted.
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D. DIRECT REGULATIONS
1. Summary of Cost Estimates
The estimated costs associated with the direct regulations option are
detailed in Exhibit 8. In summary form, these costs are as follows:
Start-Up Annual Operations Total 1 Year Cost
EPA $0.6 million $23.0 million $23.6 million
(0.6 - contractor) (20.9 - contractor) (21.5 - contractor)
0.2 FTE 32.6 FTE 32.8 FTE
Industry $226.8 million $122.4 million $349.2 million
2. Assumptions
The analytical assumptions for the direct regulations option are as
follows:
*(1) The initial direct regulatory rulemaking will occur prior to
the administrative steps analyzed here. However, depending
upon the results of the initial rulemaking (i.e., whether the
targeted level of total controlled substance use is
achieved), EPA may have to undertake further regulations to
impose additional controls effecting additional reductions in
controlled substance use. It is assumed that EPA will
undertake formal monitoring of total controlled substance
usage to determine whether such further regulations are
necessary.
(2) The direct regulations assumed here are imposed on the uses, not
the production or import, of controlled substances.
*(3) The specific direct regulations assumed are as follows:
• a ban on the use of regulated controlled
substances in blown packaging
• recovery and recycling of CFC-12 in
automobiles in large automotive shops
• a substantial reduction in the use of
controlled substances for medical
sterilization purposes
(4) The number of firms estimated to be affected by these
regulations are:
* Asterisks designate key assumptions which will have a significant impact
on cost estimate results.
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• blown packaging ban: 100 (Source: EPA)
• recovery and recycling
of refrigerant in auto-
mobile air conditioning: 20.000 (Source: EPA)
• medical sterilization
reduction: 154 (Source: EPA)
(5) Firms will have two generic types of responses to these
regulations:
• substitute (in whole or in part) other chemicals
or unregulated controlled substances for
controlled substances used as an input in their
product or its manufacture
• employ control equipment to recapture and recycle
controlled substances used in manufacturing an
existing product or providing an existing service
*(6) Compliance reporting and monitoring is presented as a quarterly
activity for industry and EPA.
*(7) Based upon past EPA experience with direct regulation, it is.
assumed that EPA enforcement activity will be greater for this
option than for the previous economic incentive-based options.
Consequently, cost estimates for these activities are
significantly higher than in the other cases.
*(8) For industry, a full range of activities have been costed. Some
of these activities, however, are voluntary in nature (i.e., not
explicitly required by the assumed control system) and will not,
presumably, be undertaken by all firms.
The assumptions for allocation of EPA/contractor hours are as follows:
(1) Contractors will provide technical support to EPA, particularly
in the start-up phase.
(2) EPA will direct the contractors in their support activities, and
EPA will operate the direct regulations once they are initiated.
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3. EPA Administrative Burdens
Start-Dp Phase
Step 1: Design reporting and compliance monitoring system for targeted
industry applications
A. Design compliance plan format
The foundation of EPA's compliance monitoring effort will be a
standard format compliance plan. Industry firms will use this to indicate
to EPA what steps they plan to take to respond to the regulations. EPA
will design a standard format for these plans, including all information
necessary in judging the adequacy of firms' intentions, in order to ensure
completeness and consistency of information across all affected firms.
B. Develop criteria for evaluating adequacy of compliance plans
In order to maximize objectivity and ensure consistency in the review
of compliance plans, EPA will develop formal criteria for use in reviewing
and commenting on the adequacy of plans submitted by firms.
C. Design compliance report format
In order to allow EPA to track firms' actual compliance activities
relative to their initial plans, firms will need to submit quarterly
compliance reports. EPA will design a standard format for these reports in
order to ensure completeness and consistency of compliance information.
D. Develop criteria for determining the adequacy of compliance reports
EPA will develop criteria for use in facilitating the objective and
consistent evaluation of firms' compliance reports.
E. Develop policy and protocol for site visits
In order to ensure effective monitoring of firms' compliance with
bans/reductions, EPA will establish site visit policies and protocols.
These policies will address the purpose of the visit, the records to be
inspected, and the duration and timing of the visit. Site visit schedules
will be developed and notices prepared which will be issued to firms in
advance of visits.
Step 2: Design system for monitoring total use of regulated controlled
substances
A. Design Section 114 letter and Federal Register Notice for obtaining
total controlled substance use data from producers/importers
In order to evaluate whether the selected direct regulations are
sufficient to achieve the regulatory goal, EPA needs current information on
total controlled substance use. A convenient and serviceable proxy for
this information would be information from controlled substance producers
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and importers on their sales of regulated controlled substances. EPA would
obtain this information through Section 114 letters and Federal Register
Notice. EPA will design a format for such letters to ensure adequate
receipt of information.
B. Develop means of determining if additional regulations are needed
EPA will develop criteria for use in evaluating Section 114 letters
responses from producers and importers to determine if additional
regulations are needed to meet the regulatory target.
C. Develop criteria for selecting additional control regulations
In the event that the initial mix of direct regulations proves
insufficient, EPA will have to identify additional regulatory steps. In
order to facilitate this process, EPA will develop criteria for making this
selection in a logical and consistent manner.
Step 3: Develop enforcement and litigation policies
It is anticipated that enforcement and litigation will require a
significant percentage of the resources devoted to the direct regulation
option. Thus, EPA will need to devote significant attention to developing
an adequate, consistent, and fair set of enforcement and litigation
policies.
Step 4: Design guidelines and permitting procedures for destruction and
permanent encapsulation of controlled substances
Although no accepted technologies exist for destruction or permanent
encapsulation of controlled substances, EPA will develop guidelines and
procedures to allow for the development of these technologies.
Operations Phase
Step 1: Receive and log compliance plans
EPA will receive and log in firms' compliance plans.
Step 2: Evaluate the adequacy of compliance plans
EPA will apply the previously-developed criteria in evaluating the
adequacy of the compliance plans submitted by affected firms. Care will be
taken to ensure objectivity and consistency in this process.
Step 3: Notify firms of results of compliance plan review
EPA will notify firms via a formal letter regarding the results of the
review of their compliance plans. In cases where plans are deemed
insufficient, firms will be provided with an indication of necessary
additional information.
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Step 4: Conduct compliance monitoring activities
A. Receive and log quarterly compliance reports
EPA will receive and log in firms' quarterly compliance reports.
B. Evaluate adequacy of quarterly compliance reports
Using criteria previously developed, EPA will evaluate firms'
quarterly compliance reports. Care will be taken to ensure objectivity and
consistency in this process.
C. Notify firms of results of compliance report review
EPA will notify firms via a formal letter regarding the results of the
review of their quarterly compliance reports. In cases where reports are
deemed insufficient, firms will be provided an indication of necessary
additional information.
D. Conduct site visits
In compliance with Agency policies and protocol, EPA will conduct
periodic site visits to monitor firms' compliance with bans/reductions.
Visits will be scheduled and planned in advance, additional information (if
needed) will be. requested and received, and all data will be compiled and
evaluated. A follow-up report will be sent to each firm.
Step 5: Take enforcement action as needed
A. Lew penalties
In accordance with previously developed enforcement policy, EPA will
review all data which indicates a violation has occurred and will take
appropriate action, including levying penalties. This will involve
notifying firms of potential violations preparing documentation, and
calculating and negotiating penalties.
B. Conduct litigation
i
In some cases where compliance monitoring activities indicate 'a
violation, enforcement action may involve litigation. This will involve
notifying firms of potential violations, preparing documentation,
negotiations, and preparing for and conducting litigation.
Step 6: Evaluate need for further reductions
A. Prepare and send Section 114 letters
EPA will prepare and send the pre-designed Section 114 letter to
controlled substance producers and importers to obtain information on total
controlled substance use.
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B. Receive Section 114 letters and evaluate results
EPA will receive and evaluate the results of the Section 114 letters
to determine whether controlled substance use targets are being met. All
information submitted will be handled consistent with existing 'Agency
policy for treatment of confidential business information (CBI).
4. Industry Administrative Burdens
Start-Dp Phase
Step 1: Evaluate expected impact of regulations
A. Analyze impact of regulations
Affected firms will conduct an analysis of the impact of the
regulations on their operations.
B. Plan operational response to regulations
Operational changes will be designed based upon firms' analysis of the
impact of regulations. Operational changes will vary depending upon the
nature of regulation as well as firm-specific factors, but may include
additional controls and input substitutions.
Step 2: Prepare and submit compliance plan
A. Prepare and submit compliance plan
Firms will prepare and submit compliance plans to EPA.
B. Respond to EPA requests for further information
As needed, firms will respond to EPA requests for more information
concerning compliance plans.
Step 3: Design system to meet EPA reporting and compliance monitoring
requirements
Firms affected by both chemical substitutes and control regulations
will develop in-house systems to track their use of controlled substances
(regulated and non-regulated) in order to meet EPA compliance reporting
requirements. Internal procedures for preparing and submitting compliance
reports will be developed.
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Operations Phase
Step 1: Comply with EPA reporting and compliance monitoring requirements
A. Research and compile information
Firms will compile information on operations required by EPA as part
of quarterly compliance reports.
B. Prepare and submit reports
Firms will prepare and submit quarterly reports summarizing
information required by EPA. The reports will be formatted to meet EPA
• guidelines.
C. Respond to requests for additional information
As needed, firms will respond to EPA requests for more information
concerning compliance status.
D. Accommodate EPA site visits
Appropriate corporate staff will be available to EPA staff to answer
questions during the visit and to provide necessary assistance. A
corporate official will meet with the EPA site visit team, supply requested
information, and make other individuals such as the plant manager available
as needed.
Step 2: Respond to any enforcement activity
A. Pay penalties
Firms will respond to any enforcement activity initiated by EPA.
Enforcement activity could include penalties for exceeding permit levels.
Specific steps include negotiations, documentation, and payment of
penalties.
B. Conduct Litigation
In some cases, enforcement activity may involve litigation. Specific
steps include negotiations, documentation, and preparation for litigation.
Step 3: Respond to EPA monitoring of total controlled substance use
(producers/importers)
A. Research and compile information
In order to adequately respond to EPA's request for total controlled
substance use information, producers/importers will research and compile
current data on controlled substance sales levels.
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B. Prepare response to Section 114 letter
Producers/importers will prepare a response to EPA's request for
current sales levels following EPA guidelines.
C. Send information to EPA
Producers/importers will send the prepared response to EPA.
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E. ALLOCATED QUOTAS/REGULATORY FEES HYBRID
1. Summary of Cost Estimates
The estimated costs associated with the allocated quotas/regulatory fees
hybrid option are detailed in Exhibit 9.
In summary form, these costs are as follows:
Start-Up Annual Operations Total 1 Year Cost
EPA $1.6 million $2.8 million $4.4 million
(1.5 - contractor) (1.8 - contractor) (3.3 - contractor)
2.2 FTE 14.8 FTE 17 FTE
Industry $0.9 million $2.1 million $3.0 million
2. Assumptions
The analytical assumptions for the allocated quotas component of the
hybrid option are as follows:
(1) The total of production quotas will be allocated
among 7 producers and approximately 14 importers
based upon historic market share.
(2) Transfer of production rights among producers/
importers will be allowed. Transfers among different
controlled substances will be based upon their
relative ozone depletion potential.
(3) Producers and importers will keep records on
production/import activities and submit these records
to EPA quarterly. Transfer activities shall be
reported when they occur. Exporters shall report
exports when requesting additional consumption rights.
Users will not be required to report activities.
*(4) EPA will evaluate the compliance monitoring records
quarterly (including production/import levels and transfer
activities) to determine whether producers or importers
have exceeded their production/import rights. EPA will
also monitor activities through site visits. A detailed
EPA penalty policy will be developed in conjunction with
regulations.
*(5) EPA will not require permitting or reporting of recycled
controlled substances by non-producers. Furthermore, it is
assumed that labeling of recycled controlled substances will not
be required.
* Asterisks designate key assumptions which will have a significant impact
on cost estimate results.
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(6) No accepted technologies or facilities currently exist for
destruction or permanent encapsulation. EPA will develop
guidelines and permitting procedures, however, to allow for the
development of these technologies.
The analytical assumptions for the regulatory fees component of this
hybrid option are as follow:
(1) Fees will be collected from producers and importers
only. The amount of fees paid will be based on the
fee level for each controlled substance type and the
quantity of regulated controlled substance chemicals
produced or imported.
(2) EPA will determine the initial fee level for each
controlled substance type, based on its relative
ozone-depleting potential and the initial
regulatory goal, and develop a self-adjusting fee
formula that will revise the fee level, as
necessary, to recover windfall profits.
*(3) Producers and importers will calculate the amount of fees
they owe and send payment to the U.S. Treasury and
supporting data to EPA quarterly.
(4) Producers and importers will keep records on
production/consumption levels, fees paid, and other
required information and submit these records to EPA
quarterly.
*(5) EPA will evaluate the compliance monitoring records quarterly
(including production/import levels, fee payment reports, and
other records) to ensure that the correct fee amount was
submitted. EPA will also monitor activities through site
visits. An EPA penalty policy will be developed in conjunction
with the regulations.
*(8) For industry, a full range of activities have been costed. Some
of these activities, however, are voluntary in nature (i.e., not
explicitly required by the assumed control system) and will not,
presumably, be undertaken by all firms.
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3. EPA Administrative Burdens
Start-up Phase
Step 1: Establish production quotas and initial fee level, and refine formula
for adjusting fee level
A. Calculate base year allocations based on relative shares of historic
market
EPA will calculate base year allocations of production and
consumption rights for each affected firm based upon their production,
export, and import levels, and ozone depletion weights. EPA will record
in detail the procedures and data used to calculate each firm-specific
allocation.
B. Review available data regarding the economics of the controlled
substance industry and historical impacts of changing controlled
substance prices
EPA will review available data on the economics of the controlled
substance industry, including the historical impacts of changing
controlled substance prices on demand and controlled substance
production/import levels.
C. Review existing controlled substance model and revise as necessary to
use in estimating appropriate fee levels
EPA will review the existing controlled substance model to determine
its adequacy in estimating fee levels that will capture likely windfall
profits of producers and importers. EPA will then make revisions to the
controlled substance model, as necessary, so the model can be used in
estimating appropriate fee levels.
D. Run model to estimate fee levels
EPA will run the controlled substance model to estimate the
appropriate fee levels necessary to capture windfall profits.
E. Finalize initial fee and self-adjusting formula contained in final
rule
EPA will finalize the initial fee and self-adjusting formula that
will be outlined in the regulations. The formula will be used to adjust
the fee levels.
F. Determine schedule and procedures for periodic reassessment of the
self-adiusting formula
EPA will develop a schedule and procedures for reassessing the self-
adjusting formula to ensure it adjusts the fees appropriately to capture
windfall profits.
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G. Notify producers/importers of final allocations of production and
consumption Quotas. and fee levels
EPA will formally notify each producer/importer of its allocated
production/consumption quotas for a given year and the applicable fee
schedule for each regulated controlled substance. The notification will
include an attachment describing the procedures and data used to calculate
the allocation. EPA will also answer any inquiries from
producers/importers about allocations or procedures used to calculate
allocations.
Step 2: Design tracking and transfer systen
A. Design computer system
EPA will design the computer system that will track account balances
and transfer activities.
B. Design process for establishing quota accounts
EPA will design the process for establishing an account for each firm
representing its total allocation of rights. EPA also will identify the
information that must be included in each account. The tracking system
will be used for monitoring balances and tracking transfer transactions.
C. Develop procedures for reviewing and approving requests for
consumption, production, and conversion rights, and for transfers
EPA will design a transfer system that allows producers and importers
to trade a portion of their annual rights to another producer or importer
or obtain a portion of another firm's rights or from exporters. EPA will
first develop procedures for conducting transfer activities. This will
involve defining information and format that producers/importers must
provide to EPA.
D. Develop tracking routine
EPA will develop a computer routine as part of its tracking system to
account for transfers and approval of additional rights in order to keep
an accurate record of total rights. The computer routine will check
requests against available allocations and modify accounts to reflect
changes. If balances of rights are not sufficient to cover the request,
the system will not approve the transaction. EPA will then notify firms
of approved transactions or problems with such transactions.
Step 3: Design recordkeeping and compliance monitoring system
A. Develop detailed design of system
EPA will require producers/importers to maintain daily records and
submit quarterly reports on production/consumption levels and fees paid to
the U.S. Treasury to monitor compliance with production/consumption
quotas. Fee amounts submitted will be based on the total controlled
substances produced or imported by firms, and the fee levels for each
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controlled substance. EPA will establish a system for verifying that fee
amounts submitted to the U.S. Treasury are consistent with fee reports and
with production and import levels. EPA will first define the type and
scope of information needed to ensure effective monitoring. EPA will then
set up a computer data base for entering information collected from site
visits, reports, and in-house tracking systems. EPA will design a method
for evaluating all monitoring data to identify potential violations.
B. Develop instructions for obtaining information on fees paid.
production, sales, shipments, use of raw materials, total consumption
rights, potential production rights, production rights, conversion
rights. and data on recoverable and recyclable materials
Once EPA has defined the data required for monitoring purposes, it
will develop instructions for producers/importers to ensure that they
understand which of the daily records that they maintain should be
submitted to EPA quarterly.
C. Develop instructions for obtaining information on import and export
activities
EPA will develop instructions, and will require importers to submit
data quarterly on the type and quantity of substances imported, date and
port of entry, source country, importer.of record, commodity code, total
for that quarter and control-period-to-date of calculated levels of
consumption rights. Exporters who are claiming consumption rights will be
required to submit their EIN numbers, commodity code, the date and port of
exit, the country to which exported, the quantities exported, and
supporting documentation.
D. Determine site visit policies (for monitoring compliance)
In order to ensure effective monitoring of producer/importer
compliance, EPA will establish site visit policies. These policies will
address the purpose of the visit, the records to be inspected, and the
duration and timing of the visit. Site visit schedules will be developed
and notices prepared which will be issued to producers/importers in
advance of the visit.
E. Design operational guidelines for the violation and penalty system
EPA will design operational guidelines for the violation and penalty
system prepared in conjunction with the regulation. The guidelines will
define the procedures in evaluating the likelihood of a possible violation
and will outline litigation policies. In addition, the necessary forms
and procedures to be used by EPA will be prepared.
Step 4: Develop guidelines and permitting procedures for destruction and
permanent encapsulation of controlled substances
Although no accepted technologies exist for destruction or permanent
encapsulation of controlled substances, EPA will develop guidelines and an
appropriate permitting process to allow for the future development of
these technologies.
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Operations Phase
Step 1: Set up tracking system and establish accounts for all
producers/importers
EPA will establish an account for each producer/importer representing
its allocation of rights.
Step 2: Track requests for consumption, production, and conversion rights,
and for transfers
A. Receive requests for transfers and additional rights
EPA will receive and enter into the tracking system requests to
obtain additional consumption rights, to convert potential production
rights into production rights, and to transfer rights to other firms.
B. Evaluate requests and required documentation
The computer routine will evaluate each request against the firm's
balance to ensure that sufficient production/import rights are available,
If the balance is insufficient, the routine will "reject" and "flag" the
transaction.
C. Examine "problem" requests and notify firms
A small number of these transactions will be "rejected" by the
system. EPA will examine these problems and contact the firms involved.
EPA may become involved in re-examining past transactions and
investigating possible fraudulent activities to determine if enforcement
actions are required.
D. Modify records
The computer routine will modify controlled substance allocation
records (accounts) for each firm involved to ensure accurate tracking of
rights over time.
E. Notify producers/importers of approval
EPA will notify firms via a formal letter that the requests have or
have not been approved and will report the "balance" of their rights.
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Step 3: Conduct compliance monitoring activities
A. Receive and review reports on fee payments. production and shipments
from plants. use of raw materials. total consumption rights.
potential production rights, production rights, conversion rights.
and data on recoverable and recyclable material
EPA will receive and review quarterly reports, based on daily records
of production activity and balances of approved rights.
B. Receive and review reports on import and export activities
EPA will receive and review quarterly import activity reports
submitted by firms. EPA will review export activity reports submitted at
the end of the year by exporters who are not claiming consumption rights.
C. Verify fee payment reports with U.S. Treasury records
EPA will verify that fee payment reports are consistent with U.S.
Treasury records.
D. Obtain additional information from producers/importers/exporters as
needed
EPA may request additional information from firms during the year on
production/import activities and fee amount said to complete its records.
E. Evaluate data on production/consumption levels and fees paid to
ensure that fees submitted reflect actual production/consumption
levels
EPA will review reports on production/consumption levels, and fee
paid, to ensure that fees submitted reflect actual production/import
levels. This activity includes checking calculations made by firms on fee
amounts owed.
F. Notify firms of delinquent or incorrect fee payments
Based on the evaluation of production/consumption data and fee
amounts submitted, EPA will issue follow-up notices -to firms (where
applicable) advising them to remit required fees.
G. Conduct site visits to ensure production/import/export levels and fee
payments are consistent with records
Site visits will be scheduled to monitor producer/importer
recordkeeping and controlled substance activities. During the visit, on-
site records will be examined and staff interviewed to ensure
production/consumption levels and fee payments are consistent with
records.
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H. Evaluate data on production/import/export levels (from reports, in-
house tracking systems and site visits) to ensure that firms have
complied with their quotas
EPA will review all data collected from production/consumption level
reports, in-house tracking systems, and site, visits to ensure that
producers/importers have not exceeded their approved quotas.
Step 4: Revise self-adjusting formula as necessary
A. Determine if fee levels (as determined by self-adjusting formula) are
yielding revenue to capture windfall profits and if formula needs to
be revised
EPA will review the levels of controlled substance revenues received
by firms. If revenues are excessive, EPA will revise the formula to
capture profits.
B. Prepare formula revisions as necessary, based on results of analysis.
or based on changes in regulations
EPA will revise the self-adjusting formula if fees are not capturing
windfall profits.
Step 5: Take enforcement action as needed
A. Levy penalties
EPA will review all data which indicates that a violation has
occurred and will take appropriate action. Action may include levying
penalties. Steps include notifying firms of potential violations,
preparing documentation, and calculating and negotiating penalties. If
all firms comply with the regulations, no penalties will be levied.
B. Conduct litigation
In some cases where compliance monitoring activities indicate a
violation, enforcement action may involve litigation. Steps include
notifying firms of potential violations, preparing documentation,
negotiations, and preparing for and conducting litigation. If all firms
comply with the regulations, no litigation will be conducted.
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4. Industry Administrative Burdens
Start-Dp Phase
Step 1: Evaluate expected impact of production quotas and fees on operations
A. Analyze impact of limits and fees
Upon notification from EPA of official production/consumption
allocations and fee levels, firms will conduct an analysis of the impact
of limits and fees on operations, prices, and production options.
B. Plan operational response to limits and fees
Operational changes will be designed based on firms' analysis of the
impact of limits and fees. Operational changes may include alterations in
production/import levels, use of substitutes, recycling, changes in
personnel, research and development, and financial plans.
C. Plan transfer and export activities
Firms will plan anticipated transfer and export activities based on
their analysis of the expected impact of production/import quotas.
Step 2: Design internal fee payment system
A. Set up system for determining fee amount owed
Producers and importers will develop systems for determining the fee
amount owed based on controlled substance production or import levels.
B. Set up accounting system to pay correct fee amounts to U.S. Treasury
Producers and importers will establish internal accounting systems to
ensure timely and accurate payment of fees.
Step 3: Design system to meet EPA reporting and compliance monitoring
requirements
A. Develop in-house system to track production/consumption levels and
fees paid
Producers and importers will develop in-house systems to track
production/import levels against fees paid to meet EPA compliance
monitoring requirements.
B. Design reporting system to meet EPA requirements
Producers and importers will develop procedures for generating
required reports on controlled substance production/consumption levels and
fees paid.
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Operations Phase
Step 1: Implement operational changes necessary to comply with regulations
and fee system
Producers and importers will implement management and technical
changes needed to meet operational changes in response to the regulations
and fee system.
Step 2: Fay fees based on production/import levels
A. Determine fee amounts owed
Firms will determine the fee amount owed based on the level of
controlled substance activity during the quarter covered.
B. Disburse fee amounts to U.S. Treasury with appropriate paperwork
Fees will be remitted to the U.S. Treasury. Firms will submit the
required paperwork with the fee payment.
C. Notify EPA of payment
A copy of the documentation will be sent to EPA.
Step 3: Conduct transfer transactions
A. Prepare and submit transfer request to EPA
Firms will contact potential trading partners and negotiate transfers
of portions of their allocation of rights. They will then request EPA
approval of the transaction according to guidelines developed by EPA.
B. Obtain EPA approval of transfer
Firms will obtain a notice from EPA approving a transfer transaction.
Firms will provide additional information to EPA, if required, to complete
a transaction.
C. Modify records regarding inventory of production and consumption
rights
Firms will modify their records to reflect the transfer.
Step 4: Obtain additional consumption rights through exports
A. Prepare and submit request and proof of exports of controlled
substances
A request for additional consumption rights along with the required
export documentation must be submitted to EPA before additional rights
will be granted.
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M-60
B. Obtain additional consumption rights from EPA
If the request is approved, EPA will issue a notice advising the
party of its additional rights.
Step 5: Convert potential production rights into production rights through
exports to parties (additional production rights are granted through
transactions with 25 Kilo tonne Parties)
A. Obtain production reduction documentation from embassy
The embassy of the nation agreeing to reduce its allowable calculated
level of production must provide a documentation to the recipient of the
amount transferred and the control period covered.
B. Prepare and submit request and proof of exports of controlled
substances
A request for conversion of rights must be prepared and submitted
with the required documentation to EPA.
C. Obtain notice of production rights from EPA
If the request is approved, EPA will issue a notice advising the
party of its additional rights.
Step 6: Comply with EPA reporting and compliance monitoring requirements
A. Maintain records of fees paid, production, raw materials used, sales.
shipments, controlled substances recovered and recycled, and import
and export activities
All producers/importers will maintain copies of daily production
records, and import and export activities.
B. Prepare and submit reports on fees paid, production, feedstock
consumption, shipments, total consumption rights, potential
production rights, production rights, conversion rights and data on
recoverable and recyclable materials
Firms will provide quarterly production information collected daily
during the normal course of production. The information will be provided
in the firm's standard format. In addition, fee data will be submitted in
a format specified by EPA.
C. Prepare and submit reports on import and export activities
Firms conducting import activities will provide information in an
EPA-specified format quarterly. Firms will report export activities when
requesting additional consumption rights.
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M-61
D. Provide any additional information requested by EPA
Additional requests for production/import/export and fee data may be
made quarterly by EPA. Responses will be prepared and provided as needed.
E. Prepare for EPA site visits
Firms will prepare for EPA site visits to ensure that all back-up
production/import and fee data are available which document compliance
with EPA requirements.
F. Accommodate EPA site visits
Appropriate corporate staff will be available to EPA staff to answer
questions during the visit. A corporate official will meet with the EPA
site visit team, supply requested files, and make other individuals such
as the production manager available as needed. The office would interact
with EPA on subsequent issues related to the visit.
G. Disburse additional or corrected fee amounts to U.S. Treasury
Based on EPA's evaluation of production/import levels and fee
submittal reports, EPA may request additional or corrected fee amounts
from firms. Firms will disburse any requested fee amounts to the U.S.
Treasury along with required paper work. A copy of the documentation will
be sent to EPA.
Step 7: Respond to any enforcement activity
A. Pay penalties
Firms will respond to any enforcement activity initiated by EPA.
Enforcement activity could include penalties for underpayment of fees.
Steps include negotiations, preparing documentation, and preparing for and
conducting litigation. If all firms comply with the regulation, no
litigation will be conducted.
B. Conduct litigation
In some cases, enforcement activity may Involve litigation. Steps
include negotiations, preparing documentation, and preparing for and
conducting litigation. If all firms comply with the regulation, no
litigation will be conducted.
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M-62
F. ALLOCATED QUOTAS/DIRECT REGULATIONS HYBRID
1. Summary of Cost Estimates
The estimated costs associated with the allocated quotas/direct regulations
fees hybrid option are detailed in Exhibit 10.
In summary form, these costs are as follows:
Start-Up Annual Operations Total 1 Year Cost
EPA $1.4 million $24.9 million $26.3 million
(1.3 - contractor) (21.8 - contractor) (23.1 - contractor)
1.2 FTE 45.9 FTE 47.1 FTE
Industry $225.6 million $123.7 million $349.3 million
2. Assumptions
The analytical assumptions for the allocated quotas component of this
hybrid option are as follows:
(1) The total of the production quotas will be allocated among 7
producers and approximately 14 importers based upon historic
market share.
(2) Transfer of production rights among producers/ importers will be
allowed. Transfers among different controlled substances will
be based upon their relative ozone depletion potential.
(3) Producers and importers will keep records on production/import
activities and submit these records to EPA quarterly. Transfer
activities shall be reported when they occur. Exporters shall
report exports when requesting additional consumption rights.
Users will not be required to report activities.
*(4) EPA will evaluate the compliance monitoring records quarterly
(including production/import levels and transfer activities) to
determine whether producers or importers have exceeded their
allocation of production/import rights. EPA will also monitor
activities through site visits. A detailed EPA penalty policy
will be developed in conjunction with the regulations.
*(5) EPA will not require permitting or reporting of recycled
controlled substances by non-producers. Furthermore, it is
assumed that labeling of recycled controlled substances will not
be required.
* Asterisks designate key assumptions which will have a significant impact
on cost estimate results.
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M-63
(6) No accepted technologies or facilities currently exist for
destruction or permanent encapsulation. EPA will develop
guidelines and permitting procedures, however, to allow for the
development of these technologies.
The analytical assumptions for the direct regulations component or this hybrid
option are as follows:
*(1) The direct regulations assumed here are imposed on the uses, not
the production or import, of controlled substances.
*(2) The specific direct regulations assumed are as follows:
• a ban on the use of regulated controlled substances in
blown packaging
• recovery and recycling of CFC-12 in automobiles in
large automotive shops
*(3) The number of firms estimated to be affected by these regulations
is:
• blown packaging ban: 100 (Source: EPA)
• recovery and recycling of
refrigerant in automobile
air conditioning: 20.OOP (Source: EPA)
(4) Firms will have two generic types of responses to these
regulations:
• substitute (in whole or in part) other chemicals or
unregulated controlled substances for controlled
substances used as an input in their product or its
manufacture
• employ control equipment to recapture and recycle
controlled substances used in manufacturing an
existing product or providing an existing service
*(5) Compliance reporting and monitoring is presented as a quarterly
activity for industry and EPA.
i
*(6) Based upon past EPA experience, it is assumed that EPA
enforcement costs associated with direct regulation will be
significantly higher than for allocated quotas and that the
total enforcement effort associated with this option will be
greater than for the three economic incentives-based options.
*(7) For industry, a full range of activities have been costed. Some
of these activities, however, are voluntary in nature (i.e., not
explicitly required by the assumed control system) and will not,
presumably, be undertaken by all firms.
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M-64
The assumptions for allocation of EPA/contractor hours are as follows:
(1) Contractors will provide technical support to EPA, particularly
in the start-up phase.
(2) EPA will direct the contractors in their support activities and
in operating the hybrid system once it is developed.
3. EPA Administrative Burdens
Start-Up Phase
Step 1: Establish production quotas
A. Calculate base year allocations based on relative shares of historic
market
EPA will calculate base year allocations of production and consumption
rights for each affected firm based upon their production, import, and
export levels, and ozone depletion weights. EPA will record in detail the
procedures and data used to calculate each firm-specific allocation.
B. Notify producers/importers of final allocations of production quotas
EPA will formally notify each producer/importer of its allocated
production/consumption quotas for a given year. The notification will
include an attachment describing the procedures and data used to calculate
the allocation. EPA will also answer any inquiries from
producers/importers about allocations or procedures used to calculate
allocations.
Step 2: Design tracking and transfer system
A. Design computer system
EPA will design the computer system that will track account balances
and transfer activities.
B. Design process for establishing quota accounts
EPA will design the process for establishing an account for each firm
representing its total allocation of rights. EPA also will identify the
information that must be included in each account. The tracking system
will be used for monitoring balances and tracking transfer transactions.
C. Develop procedures for reviewing and approving requests for
consumption, production, and conversion rights, and for transfers
EPA will design a transfer system that allows producers and importers
to trade a portion of their annual rights to another producer or importer
or obtain a portion of another firm's rights. EPA will first develop
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M-65
procedures for conducting transfer activities. This will involve defining
information and format that producers/importers must provide to EPA.
D. Develop tracking routine
EPA will develop a computer routine as part of its tracking system to
account for transfers and approval of additional rights in order to keep an
accurate record of total rights. The computer routine will check requests
against .available allocations and modify accounts to reflect changes. If
balances of rights are not sufficient to cover the request, the system will
not approve the transaction. EPA will then notify firms of approved
transactions or problems with such transactions.
Step 3: Design recordkeeping and compliance monitoring system
A. Develop detailed design of system
EPA will require producers/importers to maintain daily records and
submit quarterly reports on production/consumption levels to monitor
compliance with production/consumption rights. EPA will first define the
type and scope of information needed to ensure effective monitoring. EPA
will then set up a computer data base for entering information collected
from site visits, reports, and in-house tracking systems. EPA will design
a method for evaluating all monitoring data to identify potential
violations.
B. Develop instructions for preparation of information on production.
sales, shipments, use of raw materials, total consumption rights.
potential production rights, production rights, conversion rights, and
data on recoverable and recyclable materials
Once EPA has defined the data required for monitoring purposes, it
will develop instructions for producers/importers to ensure that they
understand which of the daily records that they maintain should be
submitted to EPA quarterly.
C. Develop instructions for obtaining information on import and export
activities
EPA will develop instructions, and will require importers to submit
data quarterly on the type and quantity of substances imported, date and
port of entry, source country, importer of record, total for that quarter
and control-period-to-date of calculated levels of consumption rights.
Exporters who are claiming consumption rights will be required to submit
their EIN numbers, commodity code, the date and port of exit, the country
to which exported, the quantities exported, and supporting documentation.
D. Determine site visit policies (for monitoring compliance)
In order to ensure effective monitoring of producer/importer
compliance, EPA will establish site visit policies. These policies will
address the purpose of the visit, the records to be inspected, and the
duration and timing of the visit. Site visit schedules will be developed
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M-66
and notices prepared which will be issued to producers/importers in advance
of the visit.
E. Design operational guidelines for the violation and penalty system
EPA will design operational guidelines for the violation and penalty
system prepared in conjunction with the regulation. The guidelines will
define a violation and potential penalty levels and will outline litigation
policies. In addition, the necessary forms and procedures to be used by
EPA will be prepared.
F. Design compliance plan format
The foundation of EPA's compliance monitoring effort will be a
standard format compliance plan. Industry firms will use this to indicate
to EPA what steps they plan to take to respond to the regulations. EPA
will design a standard format for these plans, including all information
necessary in judging the adequacy of firms' intentions, in order to ensure
completeness and consistency of information across all affected firms.
G. Develop criteria for evaluating adequacy of compliance plans
In order to maximize objectivity and ensure consistency in the review
of compliance plans, EPA will develop formal criteria for use in reviewing
and commenting on the adequacy of plans submitted by firms.
H. Design compliance report format
In order to allow EPA to track firms' actual compliance activities
relative to their initial plans, firms will need to submit quarterly
compliance reports. EPA will design a standard format for these reports in
order to ensure completeness and consistency of compliance information.
I. Develop criteria for determining adequacy of compliance reports
EPA will develop criteria for use in facilitating the objective and
consistent evaluation of firms' compliance reports.
J. Develop policy and protocol for site visits
In order to ensure effective monitoring of firms' compliance with
bans/reductions, EPA will establish site visit policies and protocols.
These policies will address the purpose of the visit, the records to be
inspected, and the duration and timing of the visit. Site visit schedules
will be developed and notices prepared which will be issued to firms in
advance of visits.
Step 4: Develop enforcement and litigation policies
It is anticipated that enforcement and litigation will require a
significant percentage of the resources devoted to the direct regulation
option. Thus, EPA will need to devote significant attention to developing
an adequate, consistent, and fair set of enforcement and litigation
policies.
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M-67
Step 5: Design guidelines and permitting procedures for destruction and
permanent encapsulation of controlled substances
Although no accepted technologies exist for destruction or permanent
encapsulation of controlled substances, EPA will develop guidelines and
procedures to allow for the development of these technologies.
Operations Phase
Step 1: Receive and log compliance plans
EPA will receive and log in firms' compliance plans.
Step 2: Evaluate the adequacy of compliance plans
EPA will apply the previously-developed criteria in evaluating the
adequacy of the compliance plans submitted by affected firms. Care will be
taken to ensure objectivity and consistency in this process.
Step 3: Notify firms of results of compliance plan review
EPA will notify firms via a formal letter regarding the results of the
review of their compliance plans. In cases where plans are deemed
insufficient, firms will be provided an indication of necessary additional
information.
Step 4: Set up tracking system and establish accounts for all
producers/importers
A. Establish accounts for all producers/importers
EPA will establish an account for each producer/importer representing
its allocation of rights.
Step 5: Track requests for consumption, production, and conversion rights, and
for transfers
A. Receive requests for transfers and additional rights
EPA will receive and enter into the tracking system requests to obtain
additional consumption rights, to convert potential production rights into
production rights, and to transfer rights to other firms.
B. Evaluate requests and required documentation
The computer routine will evaluate each transfer request against the
firm's records to ensure that sufficient controlled substance rights are
available. If account balances are insufficient, the routine will "reject"
and "flag" the transaction.
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M-68
C. Examine "problem" requests and notify
A small number of these transactions will be "rejected" by the system.
EPA will examine these problems and notify firms involved. EPA may become
involved in re-examining past transactions and investigating possible
fraudulent activities to determine if enforcement actions are required.
D. Modify records
The computer routine will modify controlled substance allocation
records (accounts) for each firm involved to ensure accurate tracking of
rights over time.
E. Notify producers/importers of approval
EPA will notify firms via a formal letter that the requests have or
have not been approved and will report the "balance" of their rights.
Step 6: Conduct compliance monitoring activities
A. Receive and review reports on production and shipments from plants.
use of raw materials, total consumption rights, potential production
rights, production rights, conversion rights, and data on recoverable
and recyclable material
EPA will receive and review quarterly reports based on daily records
of production activity and balances of approved rights.
B. Receive and review reports on import and export activities
EPA will receive and review quarterly import activity reports
submitted by firms. EPA will review export activity reports submitted at
the end of the year by exporters who are not claiming consumption rights.
C. Obtain additional information from producers/importers as needed
EPA may request additional information from firms during the year on
production/import/export activities to complete its records.
D. Conduct site visits to ensure production/import/export activities are
consistent with records
EPA will conduct periodic site visits to monitor reporting procedures.
Visits will be scheduled and planned in advance, and a follow-up report
will be sent to the firm.
E. Evaluate data on production/lmport/export levels (from reports.
in-house tracking systems, and site visits) to ensure that firms have
complied with their limits
EPA will review all data collected from production/import level
reports, in-house tracking systems, and site visits to ensure that
producers/importers have not exceeded their approved rights.
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M-69
F. Receive and log quarterly compliance reports from users
EPA will receive and log in firms' quarterly compliance reports.
G. Evaluate adequacy of compliance reports
Using criteria previously developed, EPA will evaluate firms'
quarterly compliance reports. Care will be taken to ensure objectivity and
consistency in this process.
H. Notify firms of results of compliance report review
EPA will notify firms via a formal letter regarding the results of the
review of their quarterly compliance reports. In cases where reports are
deemed insufficient firms will be provided with and indication of necessary
additional information.
I. Conduct site visits
In compliance with Agency policies and protocol, EPA will conduct
periodic site visits to monitor firms' compliance with bans/reductions.
Visits will be scheduled and planned in advance, additional information (if
needed) will be requested and received, and all data will be compiled and
evaluated. A follow-up report will be sent to each firm.
Step 7: Take enforcement action as needed
A. Levy penalties
In accordance with previously-developed enforcement policy, EPA will
review all data which indicates a violation has occurred and will take
appropriate action, including levying penalties. This will involve
notifying firms of potential violations, preparing documentation, and
calculating and negotiating penalties. If all firms comply with the
regulations, penalties will not be levied.
B. Conduct litigation
In some cases where compliance monitoring activities indicate a
violation, enforcement action may involve litigation. This will involve
notifying firms of potential violations, preparing documentation,
negotiations, and preparing for and conducting litigation. If all firms
comply with the regulations, litigation will not be conducted.
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M-70
4. Industry Administrative Burdens
Start-Up Phase
Step 1: Evaluate expected impact of production quotas and regulations
A. Analyze impact of limits
Upon notification from EPA of official production/consumption
allocations, firms will conduct an analysis of the impact of limits on
operations, prices, and production options.
B. Plan operational response to limits
Operational changes will be designed based on firms' analysis of the
impact of limits. Operational changes may include alterations in
production/consumption levels, use of substitutes, recycling, changes in
personnel, research and development, and financial plans.
C. Plan transfer and export activities
Firms will plan anticipated trading activities based on their analysis
of the expected impact of allocated rights.
D. Analyze impact of regulations
Affected firms will conduct an analysis of the impact of the
regulations on their operations.
E. Plan operational response to regulations
Operational changes will be designed based upon firms' analysis of the
impact of regulations. Operational changes will vary depending upon nature
of regulation as well as firm-specific factors, but may include additional
controls, input substitutions, and product changes.
Step 2: Prepare and submit compliance plan
A. Prepare and submit compliance plan
Firms will prepare and submit compliance plans to EPA.
B. Respond to EPA requests for further information
As needed, firms will respond to EPA requests for more information
concerning compliance plans.
Step 3: Design system to meet EPA reporting and compliance monitoring
requirements
Firms affected by both ban/reduction and control regulations will
develop in-house systems to track their use of controlled substances
(regulated and non-regulated) in order to meet EPA compliance reporting
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M-71
i
requirements. Internal procedures for preparing and submitting compliance
reports will be developed.
Operations Phase
Step 1: Implement operational changes necessary to comply with regulations
Step 2: Conduct transfer transactions
A. Prepare and submit transfer requests to EPA
Firms will contact potential trading partners and negotiate portions
of their allocations of rights. They will then request EPA approval of the
transaction according to guidelines developed by EPA.
B. Obtain EPA approval of transfer
Firms will obtain a notice from EPA approving a transfer transaction.
Firms will provide additional information to EPA, if required, to complete
a transaction.
C. Modify records
Firms will modify their records to reflect the transfer.
Step 3: Obtain additional consumption rights through exports
A. Prepare and submit request and proof of exports of controlled
substances
A request for additional consumption rights along with the required
export documentation must be submitted to EPA before additional rights will
be granted.
B. Obtain additional consumption rights from EPA
If the request is approved, EPA will issue a notice advising the party
of its additional rights.
Step 4: Convert potential production rights into production rights through
exports to parties (additional production rights are granted through
transactions with 25 Kilotonne Parties)
A. Obtain production reduction documentation from embassy
The embassy of the nation agreeing to reduce its allowable calculated
level of production must provide documentation to the recipient of the
amount transferred and the control period covered.
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M-72
B. Prepare and submit request and proof of exports of controlled
substances
A request for conversion of rights must be prepared and submitted with
the required documentatibn to EPA.
C. Obtain notice of production rights from EPA
If .the request is approved, EPA will issue a notice advising the party
of its additional rights.
Step 5: Comply with EPA reporting and compliance monitoring requirements
A. Maintain records of production, raw materials purchased, sales.
process parameters, and import and export activities
All producers/importers will maintain copies of daily production
records, and import and export activities.
B. Prepare and submit reports on production, feedstock consumption.
shipments, total consumption rights, potential production rights.
production rights, conversion rights, and data on recoverable and
recyclable materials
Firms will provide quarterly information collected daily during the
normal course of production. The information will be provided in the
firms' standard format.
C. Prepare and submit reports on import and export activities
Firms conducting import activities will provide information in an EPA-
specified format quarterly. Firms will report export activities when
requesting additional consumption rights.
D. Provide any additional information requested by EPA
Additional requests for production/import/export data may be made
quarterly by EPA. Responses will be prepared and provided as needed.
E. Users research and compile information on controlled substance use
Firms affected by direct regulations will compile information on
operations required by EPA as part of quarterly compliance reports.
F. Users prepare .and submit reports
Firms affected by direct regulations will prepare and submit reports
summarizing information required by EPA. The reports will be formatted to
meet EPA guidelines.
G. Users provide additional information requested bv EPA
Additional requests for controlled substance use information may be
made quarterly by EPA. Responses will be prepared and provided as needed.
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M-73
-H. Prepare for EPA site visits
Firms will prepare for EPA site visits to ensure that all back-up
production/import data are available which document compliance with EPA
requirements.
I. Accommodate EPA site visits
Appropriate corporate staff will be available to EPA staff to answer
questions during the visit. A corporate official will meet with the EPA
site visit team, supply requested files, and make other individuals such as
the production manager available as needed. The official would interact
with EPA on subsequent issues related to the visit.
Step 6: Respond to any enforcement activity
A. Pay penalties
Firms will respond to any enforcement activity initiated by EPA.
Enforcement activity could include penalties for exceeding approved rights.
Specific steps include negotiations, documentation, and payment of
penalties. If all firms comply with the regulation, no penalties will be
levied.
B. Conduct litigation
In some cases, enforcement activity may involve litigation. Specific
steps include negotiations, documentation, and preparation for litigation.
If all firms comply with the regulation, no litigation will be conducted.
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EXHIBIT 5
CFC CONTROL OPTIONS
Auctioned Rights
EPA Administrative Burdens
ACTIVITIES
B
EPA
C
NUMBER OF EPA TOTAL TOTAL
OCCURRENCES HOURS PER EPA EPA
PER YEAR OCCURRENCE HOURS DOLLARS
(C=A*B)[al (DsC*$30.4S)[bl
CONTRACTOR
E F G
CONTRACTOR TOTAL TOTAL
HOURS PER CONTRACTOR CONTRACTOR
OCCURRENCE HOURS DOLLARS
(F=A*E)tc)
-------
EXHIBIT 5 (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
EPA Administrative Burdens
ACTIVITIES
Track Requests for Consumption, Production, and Conversion Rights,
and for Transfers
A. Receive requests for transfers and additional rights
B. Evaluate requests and required documentation
C. Examine "problem" requests and notify firms
D. Modify records
E. Notify producers/importers/exporters of approval
3.SUBTOTAL
4. Conduct Compliance Monitoring Activities
A. Receive end review reports on production and shipments, use of
raw materials, total consumption rights, potential production rights,
production rights, conversion rights, and data on recoverable and
recyclable material
B. Receive and review reports on import and export activities
C. Obtain additional information from producers/importers/exporters as
___j_-j
D. Conduct site visits to ensure production/import/export activities are
consistent with records
Schedule site visits
Plan site visit activities
Conduct site visits
E. Evaluate data on production/inport/export levels (from reports,
in-house tracking systems, and site visits) to ensure that firms have
complied with their limits. Examine import/export records; reconcile
differences; account for destruction
A
NUMBER OF
OCCURRENCES
PER YEAR
3123.00
3123.00
625.00
3123.00
3123.00
84.00
84.00
42.00
28.00
84.00
B
EPA
HOURS PER
OCCURRENCE
[k] 0.5
[I] 8
0.1
1
[ml 8
[ml 4
[n] 20
Co] 60
12
16
32
[pi 32
EPA
C
TOTAL
EPA
HOURS
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EXHIBIT 5 (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
EPA Administrative Burdens
ACTIVITIES
5. Take Enforcement Action as Needed
A. Levy penalties (includes notification, documentation, calculations,
and negotiations)
B. Conduct litigation (includes notification, documentation, calculations,
end preparation for litigation)
5.SUBTOTAL
TOTAL EPA OPERATIONS
TECHNICAL AND ADMINISTRATIVE SUPPORT [s]
TRAVEL COSTS
TOTAL EPA OPERATIONS (including travel and support costs)
TOTAL EPA START-UP AND OPERATIONS
TOTAL EPA FTE (HOURS/2080)
A B
NUMBER OF EPA
OCCURRENCES HOURS PER
PER YEAR OCCURRENCE
2.00 [q] 160
1.00 [r] 2,080
support costs)
EPA
C
TOTAL
EPA
HOURS
(C=A*B)[a]
320
2,080
2.400
41,252
11,103
52,355
56,331
27.08
D
TOTAL
EPA
DOLLARS
(DsC*S30.45)lbl
9,744
63,336
(73,080
SI, 256, 117
1338,086
S14.840 [t]
SI, 609,043
SI, 730,113
CONTRACTOR
E F, G
CONTRACTOR TOTAL TOTAL
HOURS PER CONTRACTOR CONTRACTOR
OCCURRENCE HOURS DOLLARS
-------
EXHIBIT S (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
Industry Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Provide EPA with Five Year Historic Use Levels in Response to Section 1U
Letters
A. Research and compile information
B. Prepare response to Section 114 letter
C. Send information to EPA
2. Evaluate Expected Impact of Production/Consumption Rights on Operations
A. Analyze impact of limits
B. Plan operational response to Units
C. Plan transfer and export activities
TOTAL INDUSTRY START-UP
OPERATIONS PHASE
1. Inplement Operational Changes Necessary to Comply with Regulations
2. Respond to Bid Solicitation
A. Conduct market analysis to determine bidding price and rights for
which to bid
B. Prepare bid
C. Send bid to EPA
3. Obtain Rights
A. Review bid results
B. Send payment for awarded rights
4. Evaluate Expected Impact of System
A. Analyze impact of rights obtained
B. Decide whether to transfer rights obtained
1.SUBTOTAL
2. SUBTOTAL
1.SUBTOTAL
3.SUBTOTAL
3.SUBTOTAL
4. SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
B
PRODUCER
HOURS PER
OCCURRENCE
[1] 0
0
0
160
400
160
320
[jl 120
24
2
Ik] 2
8
[11 120
80
PRODUCER
C
TOTAL
PRODUCER
HOURS
(C=A*B*7)[al
0
0
0
0
1.120
2,800
1.120
5.040
5,040
2,240
2,240
840
168
14
1,022
14
56
70
840
560
D
TOTAL
PRODUCER
DOLLARS
(0=C«$50) [b]
0
0
0
SO
56.000
140.000
56.000
S252.000
S252.000
112.000
$112,000
42.000
8.400
700
$51.100
700
2.800
S3.500
42.000
28.000
E
IMPORTER
HOURS PER
OCCURRENCE
0
0
0
80
200
80
200
80
24
2
2
8
2
2
IMPORTER
F
TOTAL
IMPORTER
HOURS
(F=A*E*14)(Cl
0
0
0
0
1,120
2,800
1,120
5,040
5.040
2,800
2,800
1,120
336
28
1,484
28
112
140
28
28
G
TOTAL
IMPORTER
DOLLARS
(G=F*J50) [dl
0
0
0
SO
56,000
140,000
56,000
$252,000
(252,000
140,000
(140,000
56.000
16.800
1,400
(74,200
1,400
5,600
(7,000
1,400
1.400
t.400
(70.000
56
(2,800
-------
EXHIBIT S (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
Industry Administrative Burdens
ACTIVITIES
5. Evaluate Operations Plan
A. Determine impact of rights obtained on operations
B. Implement changes in operations
6. Conduct Transfer Transactions
A. Prepare and submit transfer request to EPA
B. Obtain EPA approval for transfer
C. Modify records regarding inventory of production and consumption
rights
7. Obtain Additional Consumption Rights through Exports
A. Prepare and submit request and proof of exports of controlled
substances
B. Obtain additional consumption rights from EPA
B. Convert Potential Production Rights into Production Rights through Exports
to Parties (Additional Production Rights are Granted through Transactions
with 25 Kilotome Parties)
A. Obtain production reduction documentation from embassy
B. Prepare and submit request and proof of exports of controlled
substances
C. Obtain notice of production rights from EPA
5. SUBTOTAL
6.SUBTOTAL
7.SUBTOTAL
8. SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
B
PRODUCER
HOURS PER
OCCURRENCE
80
160
Cm] 5
1
In] 5
2
[o] 40
40
2
PRODUCER
C
TOTAL
PRODUCER
HOURS
(C=A*B*7) [a]
560
1.120
1.680
35
14
7
56
35
14
49
280
280
14
574
D
TOTAL
PRODUCER
DOLLARS
(D=C*$50)[b]
28.000
56.000
184.000
1,750
700
350
S2.800
1.750
700
S2.450
14.000
14.000
700
428,700
E
IMPORTER
HOURS PER
OCCURRENCE
40
80
5
2
1
5
2
40
40
2
IMPORTER
F
TOTAL
IMPORTER
HOURS
(F=A*E*14)lcl
560
1.120
1.680
70
28
14
112
70
28
98
560
560
28
1,148
G
TOTAL
IMPORTER
DOLLARS
-------
EXHIBIT 5 (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
Industry Administrative Burdens
ACTIVITIES
5. Evaluate Operations Plan
A. Determine Impact of rights obtained on operations
B. Implement changes in operations
6. Conduct Transfer Transactions
A. Prepare and submit transfer request to EPA
B. Obtain EPA approval for transfer
C. Kodify records regarding inventory of production and consumption
rights
7. Obtain Additional Consumption Rights through Exports
A. Prepare and submit request and proof of exports of controlled
substances
B. Obtain additional consumption rights from EPA
8. Convert Potential Production Rights into Production Rights through Exports
to Parties (Additional Production Rights are Granted through Transactions
with 25 Kilotome Parties)
A. Obtain production reduction documentation from embassy
B. Prepare and submit request and proof of exports of controlled
substances
C. Obtain notice of production rights from EPA
5.SUBTOTAL
6.SUBTOTAL
/.SUBTOTAL
8.SUBTOTAL
H
OTHER
PARTIES
HOURS PER
OCCURRENCE
40
80
5
2
1
5
2
40
40
2
OTHER
1
TOTAL
OTHER
PARTIES[e]
2.060
2.060
2,060
2,060
2,060
2,060
2,060
500
500
500
PARTIES
J
TOTAL OTHER
PARTIES
HOURS
(J=A«H*l)tfJ
82,400
164,800
247,200
bid 10,300
4.120
2.060
16.480
In] 10.300
4,120
14.420
[ol 20.000
20.000
1,000
41.000
K
TOTAL OTHER
PARTIES
DOLLARS
(K=J"»SO)[gl
4,120.000
8,240.000
$12. 360,000
515,000
206,000
103,000
$824,000
515,000
206,000
1721,000
1.000,000
1.000,000
50.000
$2,050,000
TOTAL
L
TOTAL
INDUSTRY
COST
UO+G+KMh]
4,176.000
8,352,000
$12,528,000
520.250
208.100
104.050
$832.400
520,250
208,100
S728.350
1,042,000
1,042,000
52,100
$2,136,100
-------
ACTIVITIES
EXHIBIT 5 (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
Industry Administrative Burdens
OTHER PARTIES
I J
H
OTHER TOTAL
PARTIES OTHER
HOURS PER PARTIES [el
OCCURRENCE
TOTAL OTHER TOTAL OTHER
PARTIES PARTIES
HOURS DOLLARS
-------
EXHIBIT 5 (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
Industry Administrative Burdens
ACTIVITIES
NUMBER OF PRODUCER
OCCURRENCES HOURS PER
PER YEAR OCCURRENCE
PRODUCER
C
TOTAL
PRODUCER
HOURS
CC=A«B*7)[a]
TOTAL
PRODUCER
DOLLARS
(D=C**50)tb)
IMPORTER
E F G
IMPORTER TOTAL TOTAL
HOURS PER IMPORTER IMPORTER
OCCURRENCE HOURS DOLLARS
-------
EXHIBIT S (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
Industry Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Provide EPA with Five Tear Historic Use Levels in Response to Section 114
Letters
A. Research and compile information
B. Prepare response to Section t14 letter
C. Send information to EPA
2. Evaluate Expected Impact of Production/Consumption Rights on Operations
A. Analyze impact of limits
B. Plan operational response to limits
C. Plan transfer and export activities
TOTAL INDUSTRY START-UP
OPERATIONS PHASE
1. Implement Operational Changes Necessary to Comply with Regulations
2. Respond to Bid Solicitation
A. Conduct market analysis to determine bidding price and rights for
which to bid
B. Prepare bid
C. Send bid to EPA
3. Obtain Rights
A. Review bid results
B. Send payment for awarded rights
4. Evaluate Expected Impact of System
A. Analyze impact of rights obtained
B. Decide whether to transfer rights obtained
1.SUBTOTAL
2.SUBTOTAL
1.SUBTOTAL
2.SUBTOTAL
3.SUBTOTAL
4.SUBTOTAL
H
OTHER
PARTIES
HOURS PER
OCCURRENCE
20
20
2
80
200
BO
200
40
24
i
2
a
5
5
OTHER
1
TOTAL
OTHER
PARTIESIe]
140
140
140
2,060
2,060
2,060
2.060
2,060
2,060
2,060
500
500
2,060
2,060
PARTIES
J
TOTAL OTHER
PARTIES
HOURS
(J=A«HM)[fl
2.800
2.800
280
5.680
164.800
412.000
164.800
741.600
747.480
412.000
412.000
[jl 82.400
49.440
4.120
135.960
[k] 1,000
4.000
5.000
[11 10.300
10.300
K
TOTAL OTHER
PARTIES
DOLLARS
(K=J*$50) [g]
140,000
140,000
14.000
$294,000
8,240.000
20,600.000
8,240.000
$37,080.000
=s=s====== ===========
S37.374.000
20.600.000
S20.600.000
4.120.000
2,472.000
206.000
S6, 798. 000
50.000
200,000
S250.000
515,000
515,000
TOTAL
L
TOTAL
INDUSTRY
COST
-------
EXHIBIT 5
AUCTIONED RIGHTS
EPA ADMINISTRATIVE BURDENS
FOOTNOTES
a/
Total EPA Hours represents the Number of Occurrences per year x EPA Hours per
Occurrence. (C — AxB)
b/
Total EPA Dollars represents Total EPA hours x $30.45. $30.45 represents the
hourly rate of pay of a government employee at Grade 10, step 7, which is
$14.50 per hour, and an overhead rate of 110 percent. Source: EPA Appendix
D.28.1: Preparing Information Collection Requests. (D - Cx$30.45)
£/
Total Contractor Hours represents the Number of Occurrences per year x
Contractor Hours per Occurrence. (F => AxE)
d/
Total Contractor Dollars represents Total EPA Hours x $50.00. $50.00
represents an average hourly rate of pay for a contractor. (G = Fx$50.00)
&
Total Agency Costs represents the sum of Total EPA Dollars and Total
Contractor Dollars. (H = D+G)
£/
A sample of two percent (140) of the first line buyers will be surveyed in
addition to the 21 producers/importers.
£/
Hours for evaluating bids assumes EPA will receive 2,080 bids. This assumes
20 percent of the 7,000 first line buyers will bid, 2 percent of the
approximately 33,000 other parties will bid, and all 21 producers and
importers will bid. Hence, (.2 x 7,000) + (.02 x 33,000) +21-2,081. It
will take EPA slightly more than one hour to receive and evaluate each bid.
It will take a contractor approximately between 1.5 and 2.0 hours to receive
and evaluate each bid (assuming that some bids may not follow established
procedures).
h/
Hours for notifying bidders of results assumes all bidders (successful and
unsuccessful) will be notified; all producers and importers (21) and 50
percent of all other bidders (or approximately 500) will be successful for a
total of 521.
I/
Establishing accounts for successful bidders assumes there will be 521
successful bidders (producers, importers, and other parties).
I/
Establishing accounts for new entrants assume there will be 500 new entrants.
-------
-2-
The number of requests for transfers and additional rights assumes that the
producers and importers (21) and an additional 500 parties will choose to
conduct such transactions three times per year, and that 30 exporters will
request, receive, and subsequently trade, consumption rights weekly to
producers/importers for a total of 3,123 requests. Hence, (3 x 21) + (3 x
500) + (30 x 52) = 3,123 requests to be processed.
I/
The number of problem requests assumes 20 percent of the requests will be
flagged as problems.
ffl/
Number of reports on production/import/export activities assumes that the 21
producers and importers will submit reports quarterly. Hence, (21 x 4) = 84.
J2/
Number of times EPA will require additional information assumes there is a 50
percent probability that any one firm will need to provide additional
information to meet EPA requirements. Hence, (.50 x 7 producers) + (.50 x 14
importers) x 4 = 42 additional information requests per year.
o/
Number of site visits assumes one visit per year to each of the seven
producers and 14 importers. Each producer is assumed to have two facilities.
Hence, (1x7 producers x 2) + (1 x 14 importers) = 28 site visits per year.
E/
Number of reports on production/import levels assumes that the 21 producers
and importers will submit reports quarterly. Hence, (21 x 4) = 84.
a/
Number of enforcement actions involving penalties assumes there is a 10
percent probability that any one producer or importer will be required to pay
a penalty for a violation. On average, therefore, EPA is expected to levy
two penalty actions per year. Hence, (.10 x 7 producers) + (.1 x 14
importers) = 2 penalty actions per year.
£/
Number of enforcement actions involving litigation assumes there is a five
percent probability that EPA will conduct litigation against any one producer
or importer regarding a violation. On average, therefore, EPA is expected to
conduct .20 litigation actions per year. Hence, (.05 x 7 producers) + (.05 x
14 importers) = 1 litigation action.
s/
EPA will maintain adequate technical and administrative support to implement
this program. Such support shall include timely responses to requests for
information, procedural inquiries, and program implementation workshops,
technical support to address data management concerns as the program
develops. FTE levels equal 50 percent of operational FTE levels.
-------
•3-
t/
Travel costs include $310 for airfare, $50 for car rental, and $85 for per
diem for two days for a total of $530 each trip, or $14,840 for 28 trips.
-------
-4-
AUCTIONED RIGHTS
INDUSTRY ADMINISTRATIVE BURDENS
FOOTNOTES
a/
Total Producer Hours represents the Number of Occurrences per year x Producer
Hours per Occurrence x seven producers. (C = AxBx7)
b/
Total Producer Dollars represents Total Producer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (D = C x
$50.00)
Total Importer Hours represents the Number of Occurrences per year x Importer
Hours per Occurrence x 14 importers. (F = AxExl4)
Total Importer Dollars represents Total Importer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (G = Fx$50.00)
Total Other Parties represents the number of exporters, first line buyers,
and other parties estimated to participate in each of the activities.
Total Other Parties Hours represents the number of Occurrences per year x
Other Parties Hours per Occurrence.
£/
Total Other Parties Dollars represents the Total Other Parties Hours x
$50.00. $50.00 represents an average hourly rate of pay for a private firm.
(K - J x $50.00).
V
Total Industry Costs represents the sum of Total Producer Dollars, Total
Importer Dollars and Total Other Parties Dollars. (L - D+G+K).
i/
A sample of two percent (140) first line buyers will be surveyed in addition
to the producers/importers who have already provided historic data.
The number of parties conducting market analyses and responding to the bid
solicitation assumes 2,081 parties will submit bids. This assumes 20 percent
of the 7,000 first line buyers will bid, 2 percent of the approximately
33,000 other parties will bid, and all 21 producers and importers will bid.
Hence, (.2 x 7,000) + (.02 x 33,000) + 21 - 2,081.
This assumes that all producers and importers (21) and 50 percent of all
other bidders (or approximately 500) will be successful.
-------
-5-
l/
The number of parties evaluating the expected impact of the system and
planning transfer activities assumes that approximately 2,081 parties will
conduct this activity.
m/
The number of transfer requests assumes that producers and importers (21) and
an additional 500 parties will choose to conduct transactions once per year,
and 30 exporters will transfer consumption rights weekly. Hence, (!' x 500) +
(52 x 30) = 2,060 transfer requests by other parties.
D/
Number of requests to obtain additional consumption rights through exports
assumes that producers and importers (21) and an additional 500 parties will
choose to conduct such activities once each year, and 30 exporters will
request additional rights weekly. Hence, (1 x 500) + (52 x 30) - 2,060
requests by other parties.
o/
Number of requests to convert potential production rights into production
rights through exports assumes that producers and importers (21) and an
additional 500 parties will choose to conduct such activities once each year.
B/
Firms will maintain data for EPA in the same format as collected fo.r their
internal use. Hence, this activity will require no additional time.
a/
Firms will submit report data quarterly in the same format as collected for
internal use. EPA will not require a specific form. This number assumes 8
hours per quarter per firm to package and mail the information to EPA.
£/
Number of additional information requests assumes that there is a 50 percent
probability each quarter that firms will need to provide additional
information to meet EPA requirements. Hence, (.5 x 4) ~ 2.
s/
Hours for site visits assumes one visit per year to each of the seven
producers and the 14 importers. Each producer is assumed to have two
facilities. Total producer hours, therefore, are multiplied by two to
represent 14 visits.
£/
Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one producer or importer will be required to pay
a penalty for a violation. On average, EPA is expected to levy two penalty
actions per year.
u/
Number of enforcement actions involving litigation assumes there is a five
percent probability that any one producer or importer will be involved in
litigation regarding a violation. On average, EPA is expected to conduct one
litigation action per year.
-------
EXHIBIT 6
CFC CONTROL OPTIONS
Allocated Quotas
EPA Administrative Burdens
ACTIVITIES
B
EPA
C
NUMBER OF EPA TOTAL TOTAL
OCCURRENCES HOURS PER EPA EPA
PER TEAR OCCURRENCE HOURS DOLLARS
(C-A*B)[al
-------
EXHIBIT 6 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas
EPA Administrative Burdens
ACTIVITIES
Develop instructions for obtaining information on import and export
activities
Determine site visit policies (for monitoring compliance)
Define purpose, items to be inspected, duration of visit, develop
schedules, design notices to producers/importers
Design operational guidelines for violation and penalty system,
including definitions, forms, penalty levels, notification procedures,
and litigation policies
4. Develop Guidelines and Permitting Procedures for Destruction and
Permanent Encapsulation of Controlled Substances
3.SUBTOTAL
4. SUBTOTAL
TOTAL EPA START-UP
OPERATIONS PHASE
1. Set up Tracking System and Establish Accounts for All Producers/Importers
2. Track Requests for Consumption, Production, and Conversion Rights, and
for Transfers
A. Receive requests for transfers and additional rights
B. Evaluate requests and required documentation
C. Examine "problem" requests and notify firms
D. Modify records
E. Notify producers/importers of approval
1. SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
1.00
1.00
1.00
1623.00
1623.00
325.00
1623.00
1623.00
B
EPA
HOURS PER
OCCURRENCE
80
64
64
224
192
[f] 20
Igl 0.5
[h] 8
0.1
1
EPA
C
TOTAL
•EPA
HOURS
(C=A*B)[aJ
80
64
224
1,056
192
192
2,392
20
20
812
8,115
2,600
162
1,623
D
TOTAL
EPA
DOLLARS
-------
EXHIBIT 6 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas
EPA Administrative Burdens
ACTIVITIES
3. Conduct Compliance Monitoring Activities
A. Receive and review reports on production and shipments, use of
raw materials, total consumption rights, potential production rights,
production rights, conversion rights, and data on recoverable and
recyclable material
B. Receive and review reports on import and export activities
C. Obtain additional information from producers/importers/exporters as
needed
D. Conduct site visits to ensure productlon/lmport/export activities are
consistent with records
Schedule site visits
Plan site visit activities
Conduct site visits
E. Evaluate data on production/import/export levels (from reports.
In-house tracking systems, and site visits) to ensure that firms have
complied with their Units. Examine import/export records; reconcile
differences; account for destruction
3.SUBTOTAL
4. Take Enforcement Action as Needed
A. Levy penalties (includes notification, documentation, calculations,
and negotiations)
B. Conduct litigation (includes notification, documentation, negotiation,
and preperation for litigation)
(.SUBTOTAL
TOTAL EPA OPERATIONS
TECHNICAL AND ADMINISTRATIVE SUPPORT Co]
TRAVEL COSTS
TOTAL EPA OPERATIONS (including travel and support costs)
TOTAL EPA START-UP AND OPERATIONS
TOTAL EPA FTE (HOURS/2080)
A B
NUMBER OF EPA
OCCURRENCES HOURS PER
PER YEAR OCCURRENCE
84.00 [i] 8
84.00 4
42.00 [j] 20
28.00 [kl 60
12
16
32
84.00 [1] 32
2.00 [ml 160
1.00 [n] 2,080
upport costs)
EPA
C
TOTAL
EPA
HOURS
(C=A*B)[aJ
672
336
840
1,680
2,688
6,216
320
2,080
2,400
21,948
6,689
28.637
31*029"
14.92
D
TOTAL
EPA
DOLLARS
(D=C*S30.45)(bl
20,462
10,231
25,578
51.156
81,850
$189,277
9,744
63,336
$73,080
$668,311
$203,680
$14,840 (pi
$886,831
$959,667
E
CONTRACTOR
HOURS PER
OCCURRENCE
36
24
40
0
0
0
0
50
0
0
CONTRACTOR
F
TOTAL
CONTRACTOR
HOURS
(F=A*E)lc)
3,024
2,016
1,680
0
4,200
10.920
0
0
0
24,726
24,726
=====ssssa=:
43.986
G
TOTAL
CONTRACTOR
DOLLARS
(G-F*S50.00)
151.200
100,800
84,000
0
210,000
$546,000
0
0
$0
SI, 236,300
SI, 236, 300
$2,199*300
TOTAL
TOTAL
AGENCY
COST
(H=D+G)[eJ
171,662
111,031
109,578
51,156
291,850
$735,277
9,744
63,336
$73,080
SI.904.611
$203.680
$14.840
$2,123,131
$3,158,967
-------
EXHIBIT 5 (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
EPA Administrative Burdens
ACTIVITIES
B
EPA
C
NUMBER OF EPA TOTAL TOTAL
OCCURRENCES HOURS PER EPA EPA
PER YEAR OCCURRENCE HOURS DOLLARS
-------
EXHIBIT 5 (CONTINUED)
CFC CONTROL OPTIONS
Auctioned Rights
EPA Adninistrative Burdens
ACTIVITIES
5.
D. Determine site visit policies (for monitoring compliance)
Define purpose, items to be inspected, duration of visit,
develop schedules, design notices to producers/importers
E. Design operational guidelines for the violation and penalty system
including definitions, forms, penalty levels, notification procedures,
and litigation policies
Develop Guidelines and Permitting Procedures for Destruction and Permanent
Encapsulation of Controlled Substances
4.SUBTOTAL
5. SUBTOTAL
TOTAL EPA START-UP
OPERATIONS PHASE
1. Conduct Sealed Bid Auction
A. Announce the auction in appropriate media
B.
C.
D.
Respond to questions
Evaluate Bids
Receive, verify, and record bids
Evaluate and accept or reject bids based on procedures developed
in start-up phase
Identify uniform auction price based on highest rejected bid
Notify all bidders of results and provide instructions for obtaining
rights
Calculate amount owed by each successful bidder
Prepare letters
Send letters
Answer inquiries
Issue rights
2.
Set Up Tracking System
A. Establish accounts for all successful bidders
B. Establish accounts for new entrants
1.SUBTOTAL
2.SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER TEAR
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
B
EPA
HOURS PER
OCCURRENCE
64
64
224
192
130
320
[g] 2.200
550
1,600
50
[hi 4,246
1,414
435
435
1,086
876
[i] 64
[Jl 64
EPA
C
TOTAL
EPA
HOURS
CC=A*B>[a]
64
224
952
192
192
3,976
130
320
2,200
4,246
6,896
64
64
D
TOTAL
EPA
DOLLARS
(D*C*$30.45)lbl
1,949
6,821
S28.988
5,846
15,846
(121,069
3,959
9,744
66,990
129,291
S209.983
1.949
1,949
E
CONTRACTOR
HOURS PER
OCCURRENCE
600
600
2,100
1,800
20
0
4,100
875
2,625
600
18,750
9,750
3.000
0
0
6.000
650
650
CONTRACTOR
F
TOTAL
CONTRACTOR
HOURS
(F=A*EMcl
600
2,100
8,925
1,800
1.800
36,105
20
0
4,100
18,750
22,870
650
650
G
TOTAL
CONTRACTOR
DOLLARS
-------
EXHIBIT 6 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas
Industry Administrative Burden
ACTIVITIES
START-UP PHASE
1. Evaluate Expected Impact of Production/Consumption Rights on Operations
A. Analyze impact of limits
B. Plan operational response to limits
C. Plan transfer and export activities
TOTAL INDUSTRY START-UP
OPERATIONS PHASE
1. Implement Operational Changes to Comply with Regulations
2. Conduct Transfer Transactions
A. Prepare and submit transfer request to EPA
B. Obtain EPA approval for transfer
C. Modify records regarding inventory of production and consumption
rights
3. obtain Additional Consumption Rights through Exports
A. Prepare and submit request and proof of exports of controlled
substances
8. Obtain additional consumption rights from EPA
1.SUBTOTAL
1.SUBTOTAL
2.SUBTOTAL
3.SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER TEAR
1.00
1.00
1.00
1.00
75.29
75.29
75.29
75.29
75.29
B
PRODUCER
HOURS PER
OCCURRENCE
160
400
160
400
[f] "5
1
[gl 5
2
PRODUCER
C
TOTAL
PRODUCER
HOURS
(C=A"B*7)lal
1.120
2.800
1,120
5,040
5,040
2,800
2,800
2,635
1,054
527
4,216
2,635
1,054
3,689
D
TOTAL
PRODUCER
DOLLARS
(D=C*»50)[bJ
56,000
140,000
56,000
$252,000
$252,000
140.000
S140.000
131.758
52,703
26,352
1210,812
131,758
52.703
$184,461
E
IMPORTER
HOURS PER
OCCURRENCE
80
200
80
200
5
2
1
5
2
IMPORTER
F
TOTAL
IMPORTER
HOURS
-------
EXHIBIT 6 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas
Industry Administrative Burden
ACTIVITIES
6.
Convert Potential Production Rights into Production Rights through Exports
to Parties (Additional Production Rights are Granted Through Transactions
with 25 Kilotoime Parties)
A. Obtain production reduction documentation from embassy
B. Prepare and submit request and proof of exports of controlled
substances
C. Obtain notice of production rights from EPA
Comply with EPA Reporting and Compliance Monitoring Requirements
A. Maintain records of production, raw materials used, sales, shipments,
controlled substances recovered and recycled, and import and export
activities
B. Prepare and submit reports on production, feedstock consumption,
shipments, total consumption rights, potential production rights,
production rights, conversion rights, and data on recoverable and
recyclable materials
C. Prepare and submit reports on import and export activities
D. Provide additional information requested by EPA
E. Prepare for EPA site visits
F. Accommodate EPA site visits
4.SUBTOTAL
Respond to any Enforcement Activity
nail
5. SUBTOTAL
A.
Pay penalties (includes negotiation)
Conduct litigation (includes negotiation, preparation for litigation)
6. SUBTOTAL
TOTAL INDUSTRY OPERATIONS
TOTAL INDUSTRY START-UP AND OPERATIONS
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
1.00
4.00
4.00
4.00
2.00
1.00
1.00
0.10
0.05
B
PRODUCER
HOURS PER
OCCURRENCE
Ih) 40
40
2
0
8
40
[k] 24
32
16
(ml 160
In] 2,080
PRODUCER
C
TOTAL
PRODUCER
(C=A*B*7) [a]
280
280
14
574
(i) 0
(jl 224
1,120
336
448
224
2,352
112
728
840
14,471
19,511
D
TOTAL
PRODUCER
DOLLARS
(D=C*S50) [b]
14,000
14,000
700
S28.700
0
11,200
56,000
16,800
[I] 22,400
[I] 11,200
SI 17,600
5,600
36,400
$42,000
$723,573
$975,573
E
IMPORTER
HOURS PER
OCCURRENCE
40
40
2
0
8
40
8
8
16
40
1,040
IMPORTER
F
TOTAL
IMPORTER
HOURS
-------
EXHIBIT 6
ALLOCATED QUOTAS
EPA ADMINISTRATIVE BURDENS
FOOTNOTES
a/
Total EPA Hours represents the Number of Occurrences per year x EPA Hours
per Occurrence. (C - AxB)
b/
Total EPA Dollars represents Total EPA hours x $30.45. $30.45 represents
the hourly rate of pay of a government employee at Grade 10, step 7, which
is $14.50 per hour, and an overhead rate of 110 percent. Source: EPA
Appendix D.28.1: Preparing Information Collection Requests. (D = Cx$30.45)
c/
Total Contractor Hours represents the Number of Occurrences per year x
Contractor Hours per Occurrence. (F = AxE)
d/
Total Contractor Dollars represents Total EPA Hours x $50.00. $50.00
represents an average hourly rate of pay for a contractor. (G = Fx$50.00)
e/
Total Agency Costs represents the sum of Total EPA Dollars and Total
Contractor Dollars. (H = D+G)
£/
Establishing accounts for 21 producers/importers assumes it will take one
hour of EPA time plus contractor support to set up each account.
£/
Number of requests for transfers and additional rights is based on the
assumption that producers and importers choose to conduct transactions three
times per year, and that 30 exporters will request, receive, and
subsequently trade, consumption rights weekly to producers/importers.
Hence, (7 producers x 3) + (14 importers x 3) + (30 exporters x 52) = 1,623
transactions per year.
h/
Number of problem transactions assumes 20 percent of the requests will be
flagged as problems. Hence, (1,623 transactions x .2) = 325 problems per
year.
i/
Number of reports received per year is based on the assumption that
producers/importers will be required to submit reports quarterly.
i/
Number of times EPA will require additional information assumes there is a
50 percent probability that any one firm will need to provide additional
information to meet EPA requirements. Hence, (.50 x 7 producers) + (.50 x
14 importers) x 4 = 42 additional information requests per year.
-------
-2-
k/
•Number of site visits assumes one visit per year to each of the seven
producers, and one visit per year to the 14 importers. Each producer is
assumed to have two facilities. Hence, (1x7 producers x 2) + (1 x 14
importers) = 28 site visits per year.
It
Number of times EPA will evaluate data on production/import levels assumes
evaluations will occur quarterly for 21 producers/importers. Hence', (21
producers/importers) x 4 = 84.
E/
Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one producer or importer will be required to
pay a penalty for a violation. On average, therefore, EPA is expected to
levy two penalty actions per year. Hence, (.10 x 7 producers) + (.10 x 14
importers) = 2 penalty actions per year.
D/
Number of enforcement actions involving litigation assumes there is a five
percent probability that EPA will conduct litigation against any one
producer or importer regarding a violation. On average, therefore, EPA is
expected to conduct 1 litigation action per year. Hence, (.05 x 7
producers) + (.05 x 14 importers) = 1 litigation action.
o/
EPA will maintain adequate technical and administrative support to implement
this program. Such support shall include timely responses to requests for
information, procedural inquiries and program implementation workshops, and
technical support to address data management concerns. FTE level equal 50
percent of operational FTE levels.
B/
Travel costs include $310 for airfare, $50 for car rental, and $85 for per
diem for two days for a total of $530 each trip, or $14,840 for 28 trips.
-------
-3-
ALLOCATED QUOTAS
INDUSTRY ADMINISTRATIVE BURDENS
FOOTNOTES
a/
Total Producer Hours represents the Number of Occurrences per year x
Producer Hours per Occurrence x seven producers. (C - AxBx?)
b/
Total Producer Dollars represents Total Producer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (D - C x
$50.00)
£/
Total Importer Hours represents the Number of Occurrences per year x
Importer Hours per Occurrence x 14 importers. (F = AxExl4)
d/
Total Importer Dollars represents Total Importer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (G = Fx$50.00)
e/
Total Industry Costs represents the sum of Total Producer Dollars and Total
Importer Dollars. (H = D+G)
£/
Number of transfer transactions is based on the assumption that
producers/importers choose to conduct transactions one time per year, and
that 30 exporters will transfer consumption rights weekly. Hence, (7
producers x 1) + (14 importers x 1) + (30 exporters x 52) * 21
producers/importers =• 75.29 transactions per year.
«/
Number of requests to obtain additional consumption rights through exports
assumes that firms will conduct such activities one time per year, and that
30 exporters will request, receive, and subsequently trade, consumption
rights weekly to producers/importers. Hence, (7 producers x 1) + (14
importers x 1) + (30 exporters x 52) * 21 producers/importers = 75.29
requests per year.
h/
Number of requests to convert potential production rights into production
rights through exports assumes that producers/importers will choose to
conduct such activities one time per year.
i/
Firms will maintain data for EPA in the same format as collected for their
internal use. Hence, this activity will require no additional time.
I/
Firms will submit report data quarterly in the same format as collected for
internal use. EPA will not require a specific form. This number assumes 4
hours per quarter per firm to package and mail the information to EPA.
-------
-4-
.
Number of additional information requests assumes there is a 50 percent
probability each quarter that firms will need to provide additional
information to meet EPA requirements. Hence, (.50 x 4) = 2.
I/
Hours for site visits assumes one visit per year to each of the seven
producers and 14 importers. Each producer is assumed to have two
facilities. Total producer hours, therefore, are multiplied by two to
represent 14 visits.
m/
Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one producer or importer will be required to
pay a penalty for a violation.
D/
Number of enforcement actions involving litigation assumes there is a five
percent probability that any one producer or importer will be involved in
litigation regarding a violation.
-------
EXHIBIT 7
CFC CONTROL OPTIONS
Regulatory Fees
EPA Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Set Initial Fee Level and Refine Formula for Adjusting Fee Level to
Yield Regulatory Goals
A. Review available data regarding the economies of the controlled
substance Industry and historical impacts of changing controlled
substance prices
B. Review existing controlled substance model and revise as necessary to
use in estimating appropriate fee levels
C. Run model to estimate fee levels necessary to yield regulatory
production/import targets
D. Finalize initial fee and self-adjusting formula contained in final
rule
E. Determine schedule and procedures for periodic reassessment of the
self-adjusting formula
F. Notify producers/importers of initial fee level
Prepare Information
Send information
Answer inquiries
1.SUBTOTAL
Design Recordkeeping and Compliance Monitoring System
A. Develop detailed design of system
Define information that producers/importers must provide on
production/consinptlon levels and fees submitted, and establish
format for entering data ~
Establish system to verify that fee reports submitted to EPA are
consistent with U.S. Treasury records
Define requirements for determining whether fees paid are
consistent with product ion/consumption levels
B. Design and test forms and instructions for obtaining production/import
and fee payment information
C. Determine site visit policies (for monitoring compliance)
Define purpose, items to be inspected, duration of visit, develop
schedules, design notices to producers/importers
D. Design operational guidelines for the violation and penalty system
2.SUBTOTAL
EPA
A B . C D
NUMBER OF EPA TOTAL TOTAL
OCCURRENCES HOURS PER EPA EPA
PER YEAR OCCURRENCE HOURS DOLLARS
-------
EXHIBIT 7 (CONTINUED)
CFC CONTROL OPTIONS
Regulatory Fees
EPA Administrative Burdens
ACTIVITIES
3.
Develop Guidelines and Permitting Procedures for Destruction and Permanent
Encapsulation of Controlled Substances
3.SUBTOTAL
TOTAL EPA START-UP
OPERATIONS PHASE
1. Conduct Compliance Monitoring Activities
A. Receive and review reports on production/consumption levels and fee
payments
B. Verify fee payment reports with U.S. Treasury records
C. Obtain additional information from producers/importers/exporters as
needed
0. Evaluate data on production/import levels and fees paid to ensure that
fees submitted reflect actual production/consumption levels (includes
checking calculations of fee payments)
E. Notify firms of delinquent or incorrect fee payments
F. Conduct site visits to ensure production/import levels and fee
payments are consistent with records
Schedule site visits
Plan site visit activities
Conduct site visits
2. Revise Self-Adjusting formula as Necessary
A. Determine if fee levels (as determined by self-adjusting formula)
are yielding regulatory production goals, and if formula needs
to be revised
B. Prepare formula revisions as necessary, based on results of analysis.
or based on changes in regulations
1. SUBTOTAL
2.SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
64.00
84.00
42.00
84.00
17.00
28.00
1.00
1.00
B
EPA
HOURS PER
OCCURRENCE
192
[fl 4
[g] 4
Ih] 20
[i] 24
[J] 24
Ik] 60
12
16
32
6
160
EPA
C
TOTAL
EPA
HOURS
(C=A*B)fa)
192
192
3,600
336
336
840
2,016
408
1.680
5,616
6
160
166
D
TOTAL
EPA
DOLLARS
(D°C*(30.45)[b)
5.846
S5.846
1 109, 620
10,231
10,231
25,578
61,387
12.424
51.156
$171,007
183
4.872
(5,055
E
CONTRACTOR
HOURS PER
OCCURRENCE
1.800
20
20
60
32
120
0
0
0
0
20
4.800
CONTRACTOR
F
TOTAL
CONTRACTOR
HOURS
-------
EXHIBIT 7 (CONTINUED)
CFC CONTROL OPTIONS
Regulatory Fees
EPA Administrative Burdens
ACTIVITIES
3. Take Enforcement Action as Needed
A. Levy penalties (includes notification, documentation, calculations,
and negotiations)
B. Conduct litigation (includes notification, documentation, negotiation,
and preparation for litigation)
3. SUBTOTAL
TOTAL EPA OPERATIONS
TECHNICAL AND ADMINISTRATIVE SUPPORT [n]
TRAVEL COSTS
TOTAL EPA OPERATIONS (including travel and travel costs)
TOTAL EPA START-UP AND OPERATIONS
TOTAL EPA FTE (HOURS/2080)
B
EPA
C
NUMBER OF EPA TOTAL TOTAL
OCCURRENCES HOURS PER EPA EPA
PER YEAR OCCURRENCE HOURS DOLLARS
(C-A*B)(a] (D=C*$30.4S)[bl
2.00 [I)
1.00 [m]
160
2,080
320
2,080
9,744
63,336
2,400 $73,080
8,182 S249.142
7,649 $232,912
$14,840 [o]
15,831 $496.894
19,431
9.34
$606,514
E
CONTRACTOR
HOURS PER
OCCURRENCE
0
0
CONTRACTOR
F
TOTAL
CONTRACTOR
HOURS
(F=A*E)[cl
0
0
0
15,428
15,428
34,808
G
TOTAL
CONTRACTOR
DOLLARS
(G=F**50.00)[dJ
0
0
$0
$771,400
$771,400
$1,740,400
TOTAL
H
TOTAL
AGENCY
COST
-------
EXHIBIT 7 (CONTINUED)
CFC CONTROL OPTIONS
Regulatory Fees
Industry Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Obtain Final Fee Level and Formula from EPA and Evaluate Expected Impact
of Fee
A. Analyze impact of fee levels
B. Plan operational response to fee levels
1.SUBTOTAL
2. Design Internal Fee Payment System
A. Set up system for determining fee amount owed
B. Set up accounting system to pay correct fee amounts to U.S. Treasury
3. Design System to Meet EPA Reporting and Compliance Monitoring Requirements
A. Design in-house system to track production/consumption levels and
fees paid
B. Design reporting system to meet EPA requirements
2.SUBTOTAL
J.SUBTOTAL
TOTAL INDUSTRY START-UP
OPERATIONS PHASE
1.
2.
Implement Operational Changes Based on Analysis of Impact of Fee System
Pay Fees Based on Product ion/Import Levels
A. Determine fee amounts owed
B. Disburse fee amounts to the U.S. Treasury with appropriate paperwork
C. Notify EPA of payment
1.SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
1.00
1.00
1.00
1.00
1.00
4.00
4.00
4.00
B '
PRODUCER
HOURS PER
OCCURRENCES
120
80
120
80
160
40
160
If] 16
2
2
PRODUCER
C
TOTAL
PRODUCER
HOURS
-------
EXHIBIT 7 (CONTINUED)
CFC CONTROL OPTIONS
Regulatory Fees
Industry Administrative Burdens
ACTIVITIES
3. Comply with EPA Reporting and Compliance Monitoring Requirements
A. Maintain records on production/consumption activities and fee
payments
B. Prepare and submit reports
C. Provide additional information requested by EPA
0. Prepare for EPA site visits
E. Accomodate EPA site visits
F. Disburse additional or corrected fee amounts to U.S. Treasury
4. Respond to Any Enforcement Activity
A. Pay penalties (includes negotiation)
8. Conduct litigation (includes negatiation, preparation for litigation)
3. SUBTOTAL
4. SUBTOTAL
TOTAL INDUSTRY OPERATIONS
TOTAL INDUSTRY START-UP AND OPERATIONS
A
NUMBER OF
OCCURRENCES
PER YEAR
4.00
4.00
2.00
1.00
1.00
0.40
0.10
O.OS
B
PRODUCER
HOURS PER
OCCURRENCES
0 [gl
[h] 40
(II 24
32
16
lit 24
[I] 160
[ml 2,080
PRODUCER
C
TOTAL
PRODUCER
HOURS
(C=A*B*7)[8j
0
1,120
336
448 [k]
224 [k]
67
2,195
112
728
840
4,715
ss==n=rs=sssa=
8,915
D
TOTAL
PRODUCER
DOLLARS
(D*C*$50)(bl
0
56,000
16,800
22,400
11,200
3,360
$109,760
5,600
36,400
$42,000
$235,760
=================
$445,760
E
IMPORTER
HOURS PER
OCCURRENCE
0
40
8
8
16
8
40
1,040
:=====3=sc====
IMPORTER
F
TOTAL
IMPORTER
HOURS
(F=A*E*14)[C)
[h! 0
2,240
224
112
224
45
2,845
56
728
784
5,029
:======s===s===ss
8,529
G
TOTAL
IMPORTER
DOLLARS
(G-F*$50)[dl
0
112,000
11,200
5,600
11,200
2,240
$142,240
2,800
36,400
$39,200
$251,440
— — — — — — — saSSBS
$426,440
TOTAL
TOTAL
INDUSTRY
COST
-------
EXHIBIT 7
REGDIATORY FEES
EPA ADMINISTRATIVE BURDENS
FOOTNOTES
a/
Total EPA Hours represents the Number of Occurrences per year x EPA Hours
per Occurrence. (C = AxB)
V
Total EPA Dollars represents Total EPA hours x $30.45. $30.45 represents
the hourly rate of pay of a government employee at Grade 10, step 7, which
is $14.50 per hour, and an overhead rate of 110 percent. Source: EPA
Appendix D.28.1: Preparing Information Collection Requests. (D = Cx$30.45)
c/
Total Contractor Hours represents the Number of Occurrences per year x
Contractor Hours per Occurrence. (F = AxE)
Total Contractor Dollars represents Total EPA Hours x $50.00. $50.00
represents an average hourly rate of pay for a contractor. (G = Fx$50.00)
e/
Total Agency Costs represents the sum of Total EPA Dollars and Total
Contractor Dollars. (H = D+G)
£/
Number of reports received per year is based on the assumption that
producers/importers will be required to submit reports quarterly on fee
payments, production, feedstock consumption, shipments, total consumption
rights, potential production rights, production rights, conversion rights,
and data on recoverable and recyclable materials. Hence, (21
producers/importers x 4) = 84.
&/
Verification of fee payment reports will be conducted quarterly when reports
are submitted on fee payments, production, feedstock consumption, shipments,
total consumption rights, potential production rights, production rights,
conversion rights, and data on recoverable and recyclable materials. Hence,
(21 producers/ importers x 4) =84.
h/
Number of times EPA will require additional information assumes there is a
50 percent probability each month that any one firm will need to provide
additional information to meet EPA reporting requirements. Hence, [(.50 x 7
producers) + (.50 x 14 importers) x 4] =42 additional information requests
per year.
i/
Number of times EPA will evaluate data on production/import levels assumes
evaluations will occur quarterly. Hence, (21 producers/importers x 4) =84.
-------
-2-
i/
Number of notices assumes that there is a 20 percent probability each
quarter that any one producer or importer will make a delinquent or
incorrect fee payment. Hence, [(.2 x 7 producers) + (.2 x 14 importers) x
4] = 17 notices will be issued per year.
k/
Number of site visits assumes one visit per year to each of the seven
producers, and one visit to the 14 importers. Estimate assumes site visits
are made to two facilities per producer. Hence, (2x7 producers) + (1 x 14
importers) - 28 site visits per year.
I/
Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one producer or importer will be required to
pay a penalty for a fee violation. On average, therefore, EPA is expected
to levy two penalty actions per year. Hence, (.10 x 7 producers) + (.10 x
14 importers) - 2 penalty actions per year.
as/
Number of enforcement actions involving litigation assumes there is a five
percent probability that EPA will conduct litigation against any one
producer or importer regarding a fee violation. On average, therefore, EPA
is expected to conduct 1 litigation action per year. Hence, (.05 x 7
producers) + (.05 x 14 importers) = 1 litigation action.
n/
EPA will maintain adequate technical and administrative support to implement
this program. Such support shall include timely responses to requests for
information, procedural inquiries and program implementation workshops, and
technical support to address data management concerns. FTE level equals 50
percent of operational FTE levels.
o/
Travel costs include $310 for airfare, $50 for car rental, and $85 for per
diem for two days for a total of $530 each trip, or $14,840 for 28 trips.
-------
-3-
REGULATORY FEES
INDUSTRY ADMINISTRATIVE BURDENS
JHXJXNuTES
a/
Total Producer. Hours represents the Number of Occurrences per year x
Producer Hours per Occurrence x seven producers. (C = AxBx7)
b/
Total Producer Dollars represents Total Producer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (D = C x
$50.00)
£/
Total Importer Hours represents the Number of Occurrences per year x
Importer Hours per Occurrence x 14 importers. (F = AxExl4)
Total Importer Dollars represents Total Importer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (G = Fx$50.00)
Total Industry Costs represents the sum of Total Producer Dollars and Total
Importer Dollars. (H = D+G)
Number of fee payments is based on the assumption that quarterly payments
will be made to EPA.
Firms will maintain data for EPA in the same format as collected for their
internal use. Hence, this activity will require no additional time.
by
Number of reports compiled and submitted per year is based on the assumption
that producers/importers will be required to submit reports quarterly in a
format specified by EPA on fee payments, production, feedstock consumption,
shipments, total consumption rights, potential production rights, production
rights, conversion rights, and data on recoverable and recyclable materials.
i/
Number of additional information requests assumes there is a 50 percent
probability each month that firms will need to provide additional
information to meet EPA requirements. Hence, (.50 x 4) ~ 2 additional
requests per firm.
j/
Number of additional or corrected fee amounts submitted assumes that 10
percent of producers and importers will be required to submit additional
payments quarterly. Hence, (.10 x 4) ~ .4 additional payments per firm.
-------
-4-
.Hours for site visits assumes one visit per year to each of the seven
producers and 14 importers. Each producer is assumed to have two
facilities. Total producer hours, therefore, are multiplied by two to
represent 14 visits.
I/
Number of enforcement actions involving penalties assumes there is a ten
percent .probability that any one producer or importer will be required to
pay a penalty for a fee violation.
Number of enforcement actions involving litigation assumes there is a five
percent probability that any one producer or importer will be involved in
litigation regarding a fee violation.
-------
EXHIBIT 8
CFC CONTROL OPTIONS
Direct Regulation
EPA Adninistrative Burdens
ACTIVITIES
START-UP PHASE
t. Design Reporting and Compliance Monitoring System for Targeted
Industry Applications
A. Design compliance plan format
B. Develop criteria for evaluating adequacy of compliance
plans
C. Design carpiiance report format
D. Develop criteria for determining the adequacy of
compliance reports
Develop policy and protocol for site visits
2.
4.
E.
Design System for Monitor 109 Total Use of Regulated Controlled
Substances
A. Design Section 114 letter and Federal Register notice for
obtaining total controlled substance use data from
producers/importers
B. Develop means of determining if additional regulations
are needed
C. Develop criteria for selecting additional control
regulations
1.SUBTOTAL
3. Develop Enforcement and Litigation Policies
Design Guidelines and Permitting Procedures for Destruction
and Permanent Encapsulation of Controlled Substances
TOTAL EPA START-UP
2.SUBTOTAL
3.SUBTOTAL
4.SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
B
EPA
HOURS PER
OCCURRENCE
32
16
16
16
32
16
32
32
80
48
EPA
C
TOTAL
EPA
HOURS
-------
EXHIBIT 8 (CONTINUED)
CFC CONTROL OPTIONS
Direct Regulation
EPA Adninistratwe Burdens
ACTIVITIES
OPERATIONS PHASE
1.
2.
4.
5.
6.
Receive and Log Compliance Plans
Evaluate the Adequacy of Compliance Plans
Notify Firms of Results of Compliance Plan Review
Conduct Compliance Monitoring Activities
A. Receive and log quarterly coupllance reports
B. Evaluate adequacy of quarterly compliance reports
C. Notify firms of results of compliance report review
D. Conduct site visits
Take Enforcement Action as Needed
A. Levy penalties
B. Conduct litigation
Evaluate Need for Further Reductions
A. Prepare and send Section 114 letters
B. Receive Section 114 letters and evaluate results
1.SUBTOTAL
2.SUBTOTAL
3.SUBTOTAL
4.SUBTOTAL
5.SUBTOTAL
6.SUBTOTAL
TOTAL EPA OPERATIONS
TECHNICAL AND ADMINISTRATIVE SUPPORT [p]
TRAVEL COSTS
TOTAL EPA OPERATIONS (including travel and support costs)
TOTAL EPA START-UP AND OPERATIONS
TOTAL EPA FTE (HOURS/2080)
EPA
CONTRACTOR
A BCD
NUMBER OF EPA TOTAL TOTAL
OCCURRENCES HOURS PER EPA EPA
PER YEAR OCCURRENCE HOURS DOLLARS
(C=A*B)ta] (D=C*(30.45)[bl
1.00
1.00
1.00
4.00 [i]
4.00
4.00
203.00 [id
20.00 [n]
10.00 [o]
1.00
1.00
>rt costs)
1,368 (f)
5,063 [g] '
320 [hi
1,350 [j]
1,688 [k]
200
24
160
2.080
200
80
SSSS1
1.368
1.368
5.063
5,063
320
320
5,400
6,752
800
4,872
17,824
3,200
20,800
24,000
200
80
280
48.855
19,044
67,899
66.219
32.80
41.656
(41,656
154,168
(154,168
9,744
(9,744
164,430
205.598
24,360
148,352
(542,741
97,440
633,360
(730,800
6,090
2,436
(8,526
(1,487,635
(579,890
(107,590 Cq]
(2,175,115
(2,184,859
E F G
CONTRACTOR TOTAL TOTAL
HOURS PER CONTRACTOR CONTRACTOR
OCCURRENCE HOURS DOLLARS
(F=A*E)[c] (G=F*(50.00)[dl
0
60,762 [g]
30,381 [h]
0
60,762 Ik]
20,254 [I]
0
0
0
1,200
600
0
0
60,762
60,762
30,381
30,381
0
243,048
81,016
0
324,064
0
0
0
1.200
600
1,800
417,007
417,007
429,207
0
(0
3.038.100
(3,038,100
1,519,050
(1,519,050
0
12,152,400
4,050,800
0
(16,203,200
0
0
(0
60.000
30.000
(90.000
(20,850,350
(20,850.350
(21.460.350
TOTAL
TOTAL
AGENCY
COST
(H=0+GHe]
41.656
(41.656
3.192,268
(3.192,268
1.528,794
(1.528.794
164,430
12.357,998
4,075,160
148,352
(16,745.941
97.440
633,360
(730,800
66,090
32,436
(98,526
(22.337.985
(579,890
(107,590
(23.025,465
(23.645,209
-------
EXHIBIT 8 (CONTINUED)
CFC CONTROL OPTIONS
Direct Regulation
Industry Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Evaluate Expected Impact of Regulations
A. Analyze impact of regulations
B. Plan operational response to regulations
2.
3.
Prepare and Submit Compliance Plan
A. Prepare and submit compliance plan
B. Respond to EPA requests for further information
1.SUBTOTAL
Design System to Meet EPA Reporting and Compliance Monitoring
Requirements
2. SUBTOTAL
3. SUBTOTAL
OPERATIONS PHASE
TOTAL INDUSTRY START-UP
Comply with EPA Reporting and Compliance Monitoring Requirements
A. Research and Compile Information
B. Prepare and submit reports
C. Respond to requests for additional information
D. Prepare for and accomndate EPA site visits
2.
Respond to Any Enforcement Activity
Pay penalties (Includes negotiation)
1.SUBTOTAL
conduct litigation (Includes negotiation, preparation for
litigation)
A
NUMBER OF
OCCURRENCES
PER
YEAR
1.00
1.00
1.00
0.50 th)
1.00
4.00 [i]
4.00
0.04 [j]
0.05
0.10 [I]
0.05 [ml
B
PRODUCER
HOURS PER
OCCURRENCE
0
0
0
0
0
0
0
0
0
0
0
PRODUCER
C
TOTAL
PRODUCER
HOURS
[b]
(el 4.000
8.000
12,000
5.600
800
6.400
4,000
4.000
22,400
8,000
4,000
16
[kl 1
12,017
8
52
K
TOTAL
INDUSTRY
DOLLARS
-------
EXHIBIT 8 (CONTINUED)
CFC CONTROL OPTIONS
Direct Regulation
Industry Administrative Burdens
ACTIVITIES
A
NUMBER OF
OCCURRENCES
PER YEAR
B
PRODUCER
HOURS PER
OCCURRENCE
PRODUCER
c
TOTAL
PRODUCER
HOURS
D
TOTAL
PRODUCER
DOLLARS
(0=C**50)
E
IMPORTER
HOURS PER
OCCURRENCE
IMPORTER
f
TOTAL
IMPORTER
HOURS
(F=A«EM4)
G
TOTAL
IMPORTER
DOLLARS
(G=F**50)
1
H 1
FIRM TOTAL
HOURS PER FIRMS [a]
OCCURRENCE
>ACKAGING
J
TOTAL
INDUSTRY
HOURS
[bl
K
TOTAL
INDUSTRY
DOLLARS
(KcJ*S50Hc)
3.
Respond to EPA Monitoring of Total Controlled Substance Use
(producers/importers)
A. Research and compile Information
B. Prepare response to Section 114 letter
C. Send information to EPA
1.00
1.00
1.00
3. SUBTOTAL
TOTAL INDUSTRY OPERATIONS
TOTAL INDUSTRY START-UP AND OPERATIONS
120
40
2
sss
840
280
14
1.134
1.134
1.134
42,000
14,000
700
56,700
56,700
56,700
20
20
2
BSSSSSK2B
280
280
28
588
588
SXSXSSXBSK&X&X&S
588
14,000
14,000
1,400
29,400
29.400
--3===-===:
29.400
-======----rs:5s==:
0 SO
==-=----=--=========
12,077 603.660
____________=s=====_
34,477 SI,723,860
-------
EXHIBIT 8 (CONTINUED)
CFC CONTROL OPTIONS
DIRECT REGULATION
INDUSTRY ADMINISTRATIVE BURDEN
ACTIVITIES
START-UP PHASE
1. Evaluate Expected Impact of Regulations
A. Analyze impact of regulations
B. Plan operational response to regulations
1. SUBTOTAL
2.
3.
Prepare and Submit Compliance Plan
A. Prepare and submit compliance plan
B. Respond to EPA requests for further information
Design System to Meet EPA Reporting and Compliance Monitoring
Requirements
2.SUBTOTAL
3. SUBTOTAL
TOTAL INDUSTRY START-UP
OPERATIONS PHASE
1. Comply with EPA Reporting and Compliance Monitoring Requirements
A. Research and Compile Information
B. Prepare and submit reports
C. Respond to requests for additional information
D. Prepare for and accommodate EPA site visits
2. Respond to Any Enforcement Activity
A. Pay penalties (includes negotiation)
B. Conduct litigation (includes negotiation, preparation for
litigation)
1. SUBTOTAL
STERILIZATION
L
TOTAL
FIRMS [a]
154
154
154
154
154
154
154
154
2
2
2
H
TOTAL
INDUSTRY
HOURS
(M=A«H*L) [b]
If] 6,160
12,320
18,480
8,624
1.232
9,856
6,160
6,160
34,496
12,320
6,160
25
[k] 2
18,507
16
104
N
TOTAL
INDUSTRY
DOLLARS
(N=H*t50)le]
308.000
616.000
924.000
431.200
61,600
492,800
308.000
308.000
SI, 724,800
616.000
308,000
1.232
120
925.352
800
5.200
AUTOMOBILE AIR CONDITIONING
0
TOTAL
FIRMS la]
20.000 [g]
20,000
20,000
20.000
20,000
tasaaaaaaaaaaai
20.000
20,000
20,000
200 [k]
200
200
P
TOTAL
INDUSTRY
HOURS
(P=A*H*O) [b]
800,000
1,600,000
2.400.000
1.120,000
160,000
1,280,000
800.000
800.000
:==========ss:
4,480,000
1,600,000
800,000
3,200
240
2,403,440
1,600
10,400
Q
TOTAL
INDUSTRY
DOLLARS
(Q=P**50) tcl
40,000.000
80.000.000
120.000,000
56,000,000
8,000,000
64,000.000
40.000,000
40,000,000
S224, 000,000
80.000,000
40,000,000
160,000
12.000
120,172,000
80,000
520,000
TOTAL
R
TOTAL
INDUSTRY
COST
(R=D+G+K+N+0)[d]
40,508,000
81,016,000
121,524,000
56,711,200
8,101,600
64.812.800
40,508,000
40,508,000
(226,844,800
81,016,000
40,508,000
162,032
12,180
121,698.212
81,200
527.800
2.SUBTOTAL
120
6.000
12,000
600,000
609.000
-------
EXHIBIT 8 (CONTINUED)
CFC CONTROL OPTIONS
DIRECT REGULATION
INDUSTRY ADMINISTRATIVE BURDEN
3.
ACTIVITIES
Respond to EPA Monitoring of Total Controlled Substance Use
(producers/ Importers )
A. Research and conpile information
B. Prepare response to Section 114 letter
C. Send information to EPA
3. SUBTOTAL
TOTAL INDUSTRY OPERATIONS
TOTAL INDUSTRY START-UP AND OPERATIONS
L
TOTAL
FIRMS [a]
o
0
0
STERILIZATION
H
TOTAL
INDUSTRY
HOURS
-------
EXHIBIT 8
DIRECT REGULATION
EPA ADMINISTRATIVE BURDENS
FOOTNOTES
Total EPA Hours represents the Number of Occurrences per year x EPA Hours
per Occurrence. (C = AxB)
b/
Total EPA Dollars represents Total EPA hours x $30.45. $30.45 represents
the hourly rate of pay of a government employee at Grade 10, step 7, which
is $14.50 per hour, and an overhead rate of 110 percent. Source: EPA
Appendix D.28.1: Preparing Information Collection Requests. (D = Cx$30.45)
c/
Total Contractor Hours represents the Number of Occurrences per year x
Contractor Hours per Occurrence. (F = AxE)
d/
Total Contractor Dollars represents Total EPA Hours x $50.00. $50.00
represents an average hourly rate of pay for a contractor. (G = Fx$50.00)
e/
Total Agency Costs represents the sum of Total EPA Dollars and Total
Contractor Dollars. (H = D+G)
£/
There are assumed to be 100 packaging firms, 154 sterilization firms, and
20,000 large automobile air conditioning shops. Total number of covered
firms = 20,254. It is assumed that reports can be logged at a rate of 15
per hour.
£/
Evaluating adequacy of compliance plans assumes that the contractor will
review one every three hours, and EPA will review four per hour.
V
Notifying firms of review assumes that the contractor will spend 90 minutes
per firm preparing a letter with the results of the compliance review and
EPA will spend 320 hours total on review and oversight activities.
i/
Number of reports received per year is based on the assumption that firms
will be required to submit reports quarterly.
I/
Receiving and logging reports assumes that reports can be logged in at a
rate of 15 per hour.
k/
The EPA and contractor hours assume that the contractor will spend 3 hours,
and EPA will spend an average of five minutes, per firm on this activity.
-------
-4-
i/
• Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one firm will be required to pay a penalty for
a violation.
m/
Number of enforcement actions involving litigation assumes there is a five
percent probability that any one firm will be involved in litigation
regarding a violation.
-------
EXHIBIT 9
CFC CONTROL OPTIONS
Allocated Quotas and Regulatory Fees Hybrid
EPA Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Establish Production Quotas and Initial Fee Level, and Refine Formula for
Adjusting Fee Level
A. Calculate base year allocations based on relative shares of historic
market
B. Review available data regarding the economics of the controlled
substance industry and historical impacts of changing controlled
substance prices
C. Review existing controlled substance model and revise as necessary to
use in estimating appropriate fee levels
D. Run model to estimate fee levels
E. Finalize Initial fee and self-adjusting formula contained in final
rule
F. Determine schedule and procedures for periodic reassessment of the
self-adjusting formula
G. Notify producers/importers of final allocations of production and
consumption quotas, and fee levels
Prepare allocations
Send allocations
Answer inquiries
2. Design Tracking and Transfer System
A. Design computer system
B. Design process for establishing quota accounts
C. Develop procedures for reviewing and approving requests for
consumption, production, and conversion rights, and for transfers
Define information that producers/importers must provide to EPA
Determine process for requesting transfers
Design and test forms and instructions for conducting transfers
Design process for notifying firms of completed transfer activity
D. Develop tracking routine
Design routine to check transfer requests against balances and
"flag" any problems
Design routine to modify accounts
1. SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
B
EPA
HOURS PER
OCCURRENCE
64
64
960
320
480
160
496
160
16
320
192
32
200
64
32
96
8
160
96
64
EPA
C
TOTAL
EPA
HOURS
(C=A*B) [a]
64
64
960
320
480
160
496
2,544
192
32
200
160
D
TOTAL
EPA
DOLLARS
(D=C**30.45Hb)
1,949
1,949
29,232
9,744
14,616
4,872
15,103
177,465
5,846
974
6,090
4,872
E
CONTRACTOR
HOURS PER
OCCURRENCE
600
960
3,600
2,400
2,400
600
1,500
1,500
0
0
1,800
300
1.860
600
300
900
60
1,500
900
600
CONTRACTOR
F
TOTAL
CONTRACTOR
HOURS
(F=A«E)lcI
600
960
3.600
2,400
2.400
600
1,500
12,060
1,800
300
1,860
1,500
G
TOTAL
CONTRACTOR
DOLLARS
CG=F**50.00)(d]
30,000
48,000
180,000
120,000
120,000
30,000
75,000
$603,000
90,000
15.000
93,000
75,000
TOTAL
H
TOTAL
AGENCY
COST
(H=D+G)(el
31.949
49,949
209,232
129,744
134,616
34,872
90,103
4680,465
95,846
15,974
99,090
79,872
2.SUBTOTAL
584
S17.783
5,460 1273,000
(290,783
-------
EXHIBIT 9 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Regulatory Fees Hybrid
EPA Administrative Burdens
ACTIVITIES
EPA
C
NUMBER OF EPA TOTAL TOTAL
OCCURRENCES HOURS PER EPA EPA
PER YEAR OCCURRENCE HOURS DOLLARS
(C-A*B)[al
-------
EXHIBIT 9 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Regulatory Fees Hybrid
EPA Administrative Burdens
ACTIVITIES
OPERATIONS PHASE
1. Set up Tracking System and Establish Accounts for All Producers/Importers
2. Track Requests for Consunption, Production, and Conversion Rights, and
for Transfers
A. Receive requests for transfers and additional rights
B. Evaluate requests and required documentation
C. Examine "problem" requests and notify firms
D. Modify records
E. Notify producers/importers of approval
1. SUBTOTAL
3. Conduct Compliance Monitoring Activities
A. Receive and review reports on fee payments, production and shipments,
use of raw materials, total consumption rights, potential
production rights, production rights, conversion rights, and data on
recoverable and recyclable material
B. Receive and review reports on import and export activities
C. Verify fee payment reports with U.S. Treasury records
0. Obtain additional information from producers/importers/exporters as
needed
E. Evaluate data on production/consumption levels and fees paid
to ensure that fees submitted reflect actual production/consumption
levels (includes checking calculations of fee payments)
F. Notify firms of delinquent or incorrect fee payments
G. Conduct site visits to ensure production/import/export levels and
fee payments are consistent with records
Schedule site visits
Plan site visit activities
Conduct site visits
H. Evaluate data on production/import/export levels (from reports,
in-house tracking systems, and site visits) to ensure that firms have
complied with their quotas. Examine import/export records; reconcile
differences; account for destruction
2.SUBTOTAL
EPA
A BCD
NUMBER OF EPA TOTAL TOTAL
OCCURRENCES HOURS PER EPA EPA
PER YEAR OCCURRENCE HOURS DOLLARS
Ie]
8,609
$8,609
105,860
247,102
599,170
4,942
130,570
t1.087,644
171,662
111.031
94,231
109,578
195,787
114,424
51.156
271,387
tl.119,257
-------
EXHIBIT 9 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Regulatory Fees Hybrid
EPA Administrative Burdens
ACTIVITIES
4. Revise Self-Adjusting Formula as Necessary
A. Determine If fee levels (as determined by self-adjusting formula) are
yielding revenue to capture windfall profits and if formula needs to
be revised
B. Prepare formula revisions as necessary, based on results of analysis,
or based on changes in regulations
5. Take Enforcement Action as Needed
A. Levy penalties (includes notification, documentation, calculations,
and negotiations)
B. Conduct litigation (includes notification, documentation, negotiation,
and preparation for litigation)
4. SUBTOTAL
4. SUBTOTAL
TOTAL EPA OPERATIONS
TECHNICAL AND ADMINISTRATIVE SUPPORT IN
TRAVEL COSTS
TOTAL EPA OPERATIONS (including travel and support costs)
TOTAL EPA START-UP AND OPERATIONS
TOTAL EPA FTE (HOURS/2080)
A B
NUMBER OF EPA
OCCURRENCES HOURS PER
PER YEAR OCCURRENCE
1.00 6
1 .00 160
Z.OO [p] 160
1.00 (ql 2,080
iupport costs)
EPA
C
TOTAL
EPA
HOURS
(C°A*B)[ai
6
160
166
320
2.080
2,400
24,202
6,689
30,891
15.395
17.02
D
TOTAL
EPA
DOLLARS
<0=C'$30.45)(b]
183
4,872
$5.055
9,744
63,336
(73,080
$736,945
1203,680
$14,840 [si
$955,465
tl, 092,612
CONTRACTOR
E F
CONTRACTOR TOTAL
HOURS PER CONTRACTOR
OCCURRENCE HOURS
(F»A*E)[C]
20 20
4,800 4,800
4,820
0 0
0 0
0
35,954
35,954
65.474
G
TOTAL
CONTRACTOR
DOLLARS
(G=F*t50.00)[d]
1.000
240,000
$24 1.000
0
0
$0
$1,797.700
$1.797.700
$3.273.700
TOTAL
H
TOTAL
AGENCY
COST
(H=0+G)[e]
1.183
244.872
$246,055
9,744
63,336
$73,080
$2,534,645
$203.680
$14.840
$2,753.165
$4,366.312
-------
EXHIBIT 9 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Regulatory Fees Hybrid
Industry Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Evaluate Expected Impact of Production Ouotas and Fees on Operations
A. Analyze ittpact of limits and fees
B. Plan operational response to limits and fees
C. Plan transfer and export activities
2. Design Internal Fee Payment System
A. Set up system for determining fee amount owed
B. Set up accounting system to pay correct fee amounts to U.S. Treasury
1.SUBTOTAL
3. Design System to Heet EPA Reporting and Compliance Monitoring Requirements
A. Develop in-house system to track production/consunption levels, and
fees paid
B. Design reporting system to meet EPA requirements
2. SUBTOTAL
3. SUBTOTAL
TOTAL INDUSTRY START-UP
OPERATIONS PHASE
1. Implement Operational Changes Necessary to Comply with Regulations and
Fee System
2. Pay Fees Based on Production/Import Levels
A. Determine fee amounts owed
B. Disburse fee amounts to the U.S. Treasury with appropriate paperwork
C. Notify EPA of payment
1.SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
1.00
1.00
1.00
t.OO
1.00
1.00
4.00
4.00
4.00
B
PRODUCER
HOURS PER
OCCURRENCE
200
£00
160
120
80
160
40
600
[fl 16
2
PRODUCER
C
TOTAL
PRODUCER
HOURS
-------
EXHIBIT 9 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Regulatory Fees Hybrid
Industry Administrative Burdens
ACTIVITIES
3.
5.
6.
Conduct Transfer Transactions
A. Prepare and submit transfer request to EPA
B. Obtain EPA approval for transfer
C. Modify records regarding Inventory of production and consumption
rights
Obtain Additional Consumption Rights through Exports
A. Prepare and submit request and proof of exports of controlled
substances
B. Obtain additional consumption rights from EPA
Convert Potential Production Rights into Production Rights through Exports
to Parties (Additional Production Rights are Granted through Transactions
with 25 Kilotorme Parties)
A. Obtain production reduction documentation from embassy
8. Prepare and submit request end proof of exports of controlled
substances
C. Obtain notice of production rights from EPA
3.SUBTOTAL
(.SUBTOTAL
Comply with EPA Reporting and Compliance Monitoring Requirements
A. Maintain records of fees paid, production, raw materials used, sales,
shipments, controlled substances recovered and recycled, and import
and export activities
B. Prepare and submit reports on fees paid, production, feedstock
consumption, shipments, total consumption rights, potential production
rights, production rights, conversion rights, and data on recoverable
and recyclable materials
C. Prepare and submit reports on import end export activities
0. Provide additional Information requested by EPA
E. Prepare for EPA site visits
F. Accommodate EPA site visits
G. Disburse additional or corrected fee amounts to U.S. Treasury
5. SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
75.29
75.29
75.29
75.29
75.29
1.00
1.00
1.00
4.00
4.00
4.00
2.00
1.00
1.00
0.40
B
PRODUCER
HOURS PER
OCCURRENCE
Cg] 5
1
[h] 5
2
(il 40
40
2
0
Ik) 8
40
[m] 24
32
16
[o] 24
PRODUCER
C
TOTAL
PRODUCER
HOURS
-------
EXHIBIT 9 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Regulatory Fees Hybrid
Industry Administrative Burdens
ACTIVITIES
7. Respond to any Enforcement Activity
A. Pay penalties (Includes negotiation)
B. Conduct litigation (includes negotiation, preparation for litigation)
/.SUBTOTAL
TOTAL INDUSTRY OPERATIONS
TOTAL INDUSTRY START-UP AND OPERATIONS
A
NUMBER OF
OCCURRENCES
PER YEAR
0.10
0.05
B
PRODUCER
HOURS PER
OCCURRENCE
[pi 160
[q] 2,080
PRODUCER
C
TOTAL
PRODUCER
HOURS
(C=A«B«7)[al
112
728
840
16,499
26,019
D
TOTAL
PRODUCER
DOLLARS
(D=C*$50) [b]
5,600
36.400
$42.000
$824,933
$1,300,933
E
IMPORTER
HOURS PER
OCCURRENCE
40
1,040
IMPORTER
F
TOTAL
IMPORTER
HOURS
(F=A*E*14)tc3
56
728
784
26,356
35,456
G
TOTAL
IMPORTER
DOLLARS
(G=F*$50) [d]
2,800
36,400
$39,200
$1,317,785
$1,772,785
TOTAL
H
TOTAL
INDUSTRY
COST
-------
EXHIBIT 9
ATJ.nr.ATEn QUOTAS AMD REGULATORY FEES HYBRID
EPA ADMINISTRATIVE BURDENS
FOOTNOTES
Total EPA Hours represents the Number of Occurrences per year x EPA Hours
per Occurrence. (C = AxB)
by
Total EPA Dollars represents Total EPA hours x $30.45. $30.45 represents
the hourly rate of pay of a government employee at Grade 10, step 7, which
is $14.50 per hour, and an overhead rate of 110 percent. Source: EPA
Appendix D.28.1: Preparing Information Collection Requests. (D = Cx$30.45)
£/
Total Contractor Hours represents the Number of Occurrences per year x
Contractor Hours per Occurrence. (F - AxE)
d/
Total Contractor Dollars represents Total EPA Hours x $50.00. $50.00
represents an average hourly rate of pay for a contractor. (G = Fx$50.00)
e/
Total Agency Costs represents the sum of Total EPA Dollars and Total
Contractor Dollars. (H = D+G)
V
Establishing accounts for 21 producers/importers assumes it will take one
hour of EPA time plus contractor support to set up each account.
g/
Number of requests for transfers and additional rights is based on the
assumption that producers and importers choose to conduct transactions three
times per year, and that 30 exporters will request, receive, and
subsequently trade, consumption rights weekly to producers/importers.
Hence, (7 producers x 3) + (14 importers x 3) + (30 exporters x 52) = 1,623
transactions per year.
by
Number of problem transactions assumes 20 percent of the requests will be
flagged as problems. Hence, (1,623 transactions x .20) = 325 problems per
year.
i/
Number of reports received per year is based on the assumption that
producers/importers will be required to submit reports quarterly. Hence,
(21 producers/importers x 4) = 84.
i/
Verification of fee payment reports will be conducted quarterly when reports
are submitted. Hence, (21 producers/importers x 4) - 84.
-------
-2-
.Number of times EPA will require additional information assumes there is a
50 percent probability each quarter that any one firm will need to provide
additional information to meet EPA reporting requirements. Hence, [(.50 x 7
producers) + (.50 x 14 importers) x 4] =42 additional information requests
per year.
I/
Number of times EPA will evaluate data on production/import levels assumes
evaluations will occur quarterly. Hence, (21 producers/importers x 4) ~ 84.
m/
Number of notices assumes that there is a 20 percent probability each
quarter that any one producer or importer will make a delinquent or
incorrect fee payment. Hence, [(.2 x 7 producers) + (.2 x 14 importers) x
4] = 17 notices will be issued per year.
S/
Number of site visits assumes one visit per year to each of the seven
producers, and one visit to the 14 importers. Estimate assumes site visits
are made to two facilities per producer. Hence, (2x7 producers) + (1 x 14
importers) = 28 site visits per year.
o/
Number of times EPA will evaluate data on production/import levels assumes
evaluation will occur quarterly for 21 producers/importers. Hence, (21
producer/importers) x 4 = 84.
E/
Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one producer or importer will be required to
pay a penalty for a fee or rights violation. On average, therefore, EPA is
expected to levy two penalty actions per year. Hence, (.10 x 7 producers) +
(.10 x 14 importers) = 2 penalty actions per year.
a/
Number of enforcement actions involving litigation assumes there is a five
percent probability that EPA will conduct litigation against any one
producer or importer regarding a fee or rights violation. On average,
therefore, EPA is expected to conduct 1 litigation action per year. Hence,
(.05 x 7 producers) + (.05 x 14 importers) = 1 litigation action.
£/
EPA will maintain adequate technical and administrative support to implement
this program. Such support shall include timely responses to requests for
information, procedural inquiries and program implementation workshops, and
technical support to address data management concerns. FTE level equals 50
percent of operational FTE levels.
s/
Travel costs include $310 for airfare, $50 for care rental, and $85 for per
diem for two days for a total of $530 each trip, or $14,840 for 28 trips.
-------
-3-
ALLOCATED QUOTAS AND REGULATORY FEES HYBRID
INDUSTRY ADMINISTRATIVE BURDENS
FOOTNOTES
a/
Total Producer Hours represents the Number of Occurrences per year x
Producer Hours per Occurrence x seven producers. (C - AxBx7)
by
Total Producer Dollars represents Total Producer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (D = C x
$50.00)
£/
Total Importer Hours represents the Number of Occurrences per year x
Importer Hours per Occurrence x 14 importers. (F - AxExl4)
d/
Total Importer Dollars represents Total Importer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (G - Fx$50.00)
e/
Total Industry Costs represents the sum of Total Producer Dollars and Total
Importer Dollars. (H = D+G)
f/
Number of fee payments is based on the assumption that quarterly payments
will be made to EPA.
£/
Number of transfer transactions is based on the assumption that
producers/importers choose to conduct transactions one time per year, and 30
exporters will transfer consumption rights weekly. Hence, (7 producers x 1)
+ (14 importers x 1) + (30 exporters x 52) * 21 producers/importers = 75.29
transactions per year.
h/
Number of requests to obtain additional consumption rights through exports
assumes that firms will conduct such activities one time per year, and that
30 exporters will request, receive, and subsequently trade, consumption
rights weekly to producers/importers. Hence, (7 producers x 1) + (14
importers x 1) + (30 exporters x 52) * 21 producers/importers = 75.29
requests per year.
i/
Number of requests to convert potential production rights into production
rights through exports assumes that producers/importers will choose to
conduct such activities one time per year.
i/
Firms will maintain data for EPA in the same format as collected for their
internal use. Hence, this activity will require no additional time.
-------
-4-
k/
Number of reports compiled and submitted per year is based on the assumption
that producers/importers will be required to submit reports quarterly.
I/
Firms will submit report data quarterly in the same format as collected for
internal use. EPA will not require a specific form for data on production
and import/export activities, but will specify the format for reporting
payment of fees. This number assumes 8 hours per quarter per firm to
package and mail the information to EPA on production and import/export
activities, and fee payments.
B/
Number of additional information requests assumes that there is a 50 percent
probability each quarter that producers/importers will need to provide
additional information to EPA quarterly.
S/
Hours for site visits assumes one visit per. year to each of the seven
producers and 14 importers. Each producer is assumed to have two
facilities. Total producer hours, therefore, are multiplied by two to
represent 14 visits.
fl/
Number of additional or corrected fee amounts submitted assumes that 10
percent of producers and importers will be required to submit additional
payments quarterly. Hence, (.10 x 4) = .4 additional payments per firm.
B/
Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one producer or importer will be required to
pay a penalty for a fee or rights violation.
a/
Number of enforcement actions involving litigation assumes there is a five
percent probability that any one producer or importer will be involved in
litigation regarding a fee or rights violation.
-------
EXHIBIT 10
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
EPA Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Establish Production Quotas
A. Calculate base year allocations based on relative shares of historic
market
B. Notify producers/importers of final allocations of production quotas
Prepare allocations
Send allocations
Answer inquiries
2. Design Tracking and Transfer System
A. Design computer system
B. Design process for establishing quota accounts
C. Develop procedures for reviewing and approving requests for
consumption, production, and conversion rights, and for transfers
Define information that producers/importers must provide to EPA
Determine process for requesting transfers
Design and test forms and instructions for conducting transfers
Design process for notifying firms of approved transfer activity
D. Develop tracking routine
Design routine to check transfer requests against account balances
and "flag" any problems
Design routine to modify accounts
3. Design Recordkeeping and Compliance Monitoring System
A. Develop detailed design of system
Define information that producers/importers must provide on
produetion/consunption levels, and establish format for entering
data
Set up data base for monitoring production/consumption levels
and transfer activities
Develop guidelines for determining whether a violation has
occurred
B. Develop instructions for preparation of information on production,
sales, shipments, use of raw materials, total consumption rights,
potential production rights, production rights, conversion rights, and
data on recoverable and recyclable materials
1. SUBTOTAL
2.SUBTOTAL
A
NUMBER OF
OCCURRENCES
PER YEAR
1.00
1.00
L
1.00
1.00
1.00
1.00
L
1.00
1.00
B
EPA
HOURS PER
OCCURRENCE
64
496
160
16
320
192
32
200
64
32
96
B
160
96
64
592
192
256
144
96
EPA
C
TOTAL
EPA
HOURS
(C=A*B)[a]
64
496
560
192
32
200
160
584
592
96
D
TOTAL
EPA
DOLLARS
CD=C*$30.«5)Ib]
1,949
15,103
17,052
5,846
974
6,090
4,872
SI 7. 783
18.026
2,923
E
CONTRACTOR
HOURS PER
OCCURRENCE
600
1,500
1,500
0
0
1,800
300
1,860
600
300
900
60
1,500
900
600
5.550
1,800
2,400
1,350
900
CONTRACTOR
F
TOTAL
CONTRACTOR
HOURS
-------
ACTIVITIES
C. Develop instructions for obtaining information on import and export
activities
D. Determine site visit policies (for monitoring compliance)
Define purpose, items to be inspected, duration of visit, develop
schedules, design notices to producers/importers
E Design operational guidelines for the violation and penalty system
F Design compliance plan format
G Develop criteria for evaluating adequacy of compliance plans
H Design compliance report format
Develop criteria for determining adequacy of compliance reports
Develop policy and protocol for site visits
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
EPA Administrative Burdens
NUMBER OF
OCCURRENCES
PER TEAR
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
i. Develop Enforcement and Litigation Policies
i. Design Guidelines and Permitting Procedures for Destruction and Permanent
Encapsulation of Controlled Substances
TOTAL EPA START-UP
OPERATIONS PHASE
I. Receive and Log Compliance Plans
2. Evaluate the Adequacy of Compliance Plans
i. Notify Firms of Results of Compliance Plan Review
I. Set Up Tracking System and Establish Accounts for All Producers/Importers
3.SUBTOTAL
4.SUBTOTAL
5.SUBTOTAL
1.SUBTOTAL
2.SUBTOTAL
3.SUBTOTAL
4.SUBTOTAL
1.00
1.00
1.00
1.00
1.00
1.00
EPA
CONTRACTOR
BCD E F G
EPA TOTAL TOTAL CONTRACTOR TOTAL TOTAL
HOURS PER EPA EPA HOURS PER CONTRACTOR CONTRACTOR
OCCURRENCE HOURS DOLLARS OCCURRENCE HOURS DOLLARS
CC=A«BHa] (D°C*$30.45)lbl [el
39,936
47,923
111,821
80,974
40,487
40,487
40,487
80,974
S826.540
92,436
$92,436
91,462
S91.462
$1,423,272
40,803
$40,803
3,168.011
$3,168,011
1.517.Z44
$1.517.244
8,609
20
$609
160
(8,000
(8,609
-------
ACTIVITIES
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
EPA Administrative Burdens
EPA
C
NUMBER OF
OCCURRENCES
PER YEAR
B
EPA TOTAL
HOURS PER EPA
OCCURRENCE HOURS
[8]
TOTAL
EPA
DOLLARS
(D=C*S30.4S)[bl
CONTRACTOR
E F G
CONTRACTOR TOTAL TOTAL
HOURS PER CONTRACTOR CONTRACTOR
OCCURRENCE HOURS DOLLARS
(F=A*EHcl
-------
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
EPA Administrative Burdens
ACTIVITIES
Take Enforcement Action as Needed
A. Levy penalties
B. Conduct litigation
/.SUBTOTAL
TOTAL EPA OPERATIONS
TECHNICAL AND ADMINISTRATIVE SUPPORT [V]
TRAVEL COSTS
TOTAL EPA OPERATIONS (including travel and support costs)
TOTAL EPA START-UP AND OPERATIONS
TOTAL EPA FIE (HOURS/2080)
A
NUMBER OF
OCCURRENCES
PER YEAR
22.00 tt]
11.00 [u]
L
MtS)
EPA
B C
EPA TOTAL
HOURS PER EPA
OCCURRENCE HOURS
-------
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
Industry Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Evaluate Expected Impact of Production Quotas and Regulations
A. Analyze impact of limits
B. Plan operational response to limits
C. Plan transfer and export activities
D. Analyze impact of regulations
E. Plan operational response to regulations
2. Prepare and Submit Compliance Plan
A. Prepare and submit compliance plan
B. Respond to EPA requests for further information
3. Design System to Heet EPA Reporting and Compliance Monitoring
Requirements
TOTAL INDUSTRY START-UP
OPERATIONS PHASE
1. Implement Operational Changes Necessary to Comply with Regulations
2. Conduct Transfer Transactions
A. Prepare and submit transfer requests to EPA
B. Obtain EPA approval for transfer
C. Modify records
NUMBER OF
OCCURRENCES
PER TEAR
ggggg
1. SUBTOTAL
2.SUBTOTAL
3.SUBTOTAL
1.00
0.50 [k]
1.00
1.SUBTOTAL
2. SUBTOTAL
1.00
75.29 [I]
75.29
75.29
B
PRODUCER
HOURS PER
OCCURRENCE
160
400
160
0
0
0
0
0
320
5
2
1
PRODUCER
C
TOTAL
PRODUCER
HOURS
(C=A«B*7)ta]
1.120
2,800
1,120
0
0
5,040
0
0
0
0
0
5,040
2,240
2,240
2,635
1,054
527
D
TOTAL
PRODUCER
DOLLARS
(D=C*S50)lbI
56,000
140,000
56,000
0
0
$252,000
0
0
SO
0
SO
$252,000
112,000
(112,000
131,758
52,703
26,352
E
IMPORTER
HOURS PER
OCCURRENCE
80
200
80
0
0
0
0
0
200
5
2
1
IMPORTER
F
TOTAL
IMPORTER
HOURS
(F=A*E*14)[cl
1.120
2,800
1,120
0
0
5.040
0
0
0
0
0
5.040
2,800
2,800
5.270
2.108
1.054
G
TOTAL
IMPORTER
DOLLARS
CGsF*S50)ldl
56,000
140.000
56,000
0
0
$252,000
0
0
' SO
0
SO
$252,000
140,000
$140,000
263.515
105.406
52,703
4,216
$210,812
8.432
$421,624
-------
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
Industry Administrative Burdens
ACTIVITIES
!. Obtain Additional Consumption Rights through Exports
A. Prepare and submit request and proof of exports of controlled
substances
B. Obtain additional consumption rights from EPA
I. Convert Potential Production Rights into Production Rights through Exports
to Parties (Additional Production Rights are Granted through Transactions
with 25 Kilotonne Parties)
A. Obtain production reduction documentation from embassy
B. Prepare and submit request and proof of exports of controlled
substances
C. Obtain notice of production rights from EPA
NUMBER OF
OCCURRENCES
PER YEAR
75.29 (ml
75.29
3. SUBTOTAL
Comply with EPA Reporting and Compliance Monitoring Requirements
A. Maintain records of production, raw materials purchased, sales,
process parameters, and import and export activities
B. Prepare and submit reports on production, feedstock consumption,
shipments, total consumption rights, potential production rights,
production rights, conversion rights, and data on recoverable and
recyclable materials
C. Prepare and submit reports on import and export activities
D. Provide additional information requested by EPA
E. Users research and compile information on controlled substance use
F. Users prepare and submit reports
G. Users provide additional information requested by EPA
H. Prepare for EPA site visits
I. Accommodate EPA site visits
4.SUBTOTAL
1.00 In]
1.00
1.00
4.00
4.00
4.00
2.00 Cq]
4.00
4.00
0.04 (ql
1.00
1.00
B
PRODUCER
HOURS PER
OCCURRENCE
5
2
40
40
2
0
8
40
24
0
' 0
0
32
16
PRODUCER
C
TOTAL
PRODUCER
HOURS
(C=A*B*7)taJ
2,635
1,054
3,689
280
280
14
574
(oj 0
(pi 224
1,120
336
0
0
0
448
224
D
TOTAL
PRODUCER
DOLLARS
(D=C**50)lb]
131,758
52,703
$184,461
14,000
14.000
700
$28,700
0
11.200
56.000
16.800
0
0
0
Crl 22,400
(rj 11.200
E
IMPORTER
HOURS PER
OCCURRENCE
5
2
40
40
2
0
8
40
8
0
0
0
8
16
IMPORTER
F
TOTAL
IMPORTER
HOURS
-------
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
Industry Administrative Burdens
ACTIVITIES
6.
Respond to Any Enforcement Activity
Pay penalties
Conduct Litigation
6.SUBTOTAL
TOTAL INDUSTRY OPERATIONS
TOTAL INDUSTRY START-UP AND OPERATIONS
A
NUMBER OF
OCCURRENCES
PER YEAR
0.10 [u]
0.05 [v]
B
PRODUCER
HOURS PER
OCCURRENCE
160
2.080
PRODUCER
C
TOTAL
PRODUCER
HOURS
(C=A«B*7) [a]
112
728
840
13.911
18.951
D
TOTAL
PRODUCER
DOLLARS
-------
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
Industry Administrative Burdens
ACTIVITIES
START-UP PHASE
1. Evaluate Expected Impact of Production Quotas and Regulations
A. Analyze impact of limits
B. Plan operational response to limits
C. Plan transfer and export activities
D. Analyze impact of regulations
E. Plan operational response to regulations
2. Prepare and Submit Compliance Plan
A. Prepare and submit compliance plan
B. Respond to EPA requests for further information
3. Design System to Meet EPA Reporting and Compliance Monitoring
Requirements
TOTAL INDUSTRY START-UP
OPERATIONS PHASE
1. Implement Operational Changes Necessary to Comply with Regulations
2. Conduct Transfer Transactions
A. Prepare and submit transfer requests to EPA
B. Obtain EPA approval for transfer
C. Modify records
1.SUBTOTAL
2.SUBTOTAL
3.SUBTOTAL
1.SUBTOTAL
2. SUBTOTAL
PACKAGING
H I
FIRM TOTAL
HOURS PER FIRMS Ce]
OCCURRENCE
(J=A
0
0
0
40
80
56
16
40
0
0
0
0
ooooo
100
100
100
100
0
0
0
AUTOMOBILE AIR CONDITIONING
J
TOTAL
FIRM
HOURS
*H*I>[«
0
0
0
4,000
8,000
12,000
5,600
800
6,400
4,000
4,000
22,400
0
0
0
0
0
K L M N
TOTAL FIRM TOTAL TOTAL
FIRM HOURS PER FIRMS Ce] FIRM
DOLLARS OCCURRENCE HOURS
-------
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
Industry Administrative Burdens
ACTIVITIES
3.
5.
Obtain Additional Consumption Rights through Exports
A. Prepare and submit request and proof of exports of controlled
substances
B. Obtain additional consumption rights from EPA
Convert Potential Production Rights into Production Rights through Exports
to Parties (Additional Production Rights are Granted through Transactions
with 25 Kilotome Parties)
A. Obtain production reduction documentation from embassy
B. Prepare and submit request and proof of exports of controlled
substances
C. Obtain notice of production rights from EPA
Comply with EPA Reporting and Compliance Monitoring Requirements
A. Maintain records of production, raw materials purchased, sales,
process parameters, and import and export activities
B. Prepare and submit reports on production, feedstock consunption,
shipments, total consunption rights, potential production rights,
production rights, conversion rights, and data on recoverable and
recyclable materials
C. Prepare and submit reports on import and export activities
D. Provide additional information requested by EPA
E. Users research and compile information on controlled substance use
F. Users prepare and submit reports
G. Users provide additional information requested by EPA
H. Prepare for EPA site visits
I. Accoomodate EPA site visits
3.SUBTOTAL
4.SUBTOTAL
PACKAGING
H
FIRM
HOURS PER
OCCURREN
CE
0
0
0
0
0
0
0
0
0
20
10
8
8
16
1
TOTAL
FIRMS [el
0
0
0
0
0
0
0
0
0
100
100
100
1
1
J
TOTAL
FIRM
HOURS
(J=A*HM)IfJ
0
0
0
0
0
0
0
0
0
0
0
8.000
4,000
32
Is] 8
16
K
TOTAL
FIRM
DOLLARS
(h)
395,273
158,109
S553.382
42,000
42,000
2.100
186,100
0
33,600
168.000
28,000
80,400.000
40,200,000
321,600
108,400
183,200
5.SUBTOTAL
12,056 S602.800
2.411,200 (120,560.000 S121.442.800
-------
EXHIBIT 10 (CONTINUED)
CFC CONTROL OPTIONS
Allocated Quotas and Direct Regulation Hybrid
Industry Administrative Burdens
ACTIVITIES
Respond to Any Enforcement Activity
Pay penalties
Conduct Litigation
6.SUBTOTAL
TOTAL INDUSTRY OPERATIONS
TOTAL INDUSTRY START-UP AND OPERATIONS
H
FIRM
HOURS PER
OCCURRENCE
80
1.040
PACKAGING
1 J
TOTAL TOTAL
FIRMS le] FIRM
HOURS
-------
EXHIBIT 10
ALLOCATED QUOTAS AND DIRECT REGULATION HYBRID
EPA ADMINISTRATIVE BURDENS
FOOTNOTES
a/
Total EPA Hours represents the Number of Occurrences per year x EPA Hours
per Occurrence. (C = AxB)
V
Total EPA Dollars represents Total EPA hours x $30.45. $30.45 represents
the hourly rate of pay of a government employee at Grade 10, step 7, which
is $14.50 per hour, and an overhead rate of 110 percent. Source: EPA
Appendix D.28.1: Preparing Information Collection Requests. (D = Cx$30.45)
£/
Total Contractor Hours represents the Number of Occurrences per year x
Contractor Hours per Occurrence. (F = AxE)
d/
Total Contractor Dollars represents Total EPA Hours x $50.00. $50.00
represents an average hourly rate of pay for a contractor. (G •= Fx$50.00)
e/
Total Agency Costs represents the sum of Total EPA Dollars and Total
Contractor Dollars. (H = D+G)
£/
There are assumed to be 100 packaging firms, and 20,000 large automobile air
conditioning shops. Total number of covered firms is 20,100. It is assumed
that reports can be logged in at a rate of 15 per hour.
£/
Evaluating adequacy of compliance plans assumes that the contractor will
review one every three hours, and EPA will review four per hour.
by
Notifying firms of review assumes that the contractor will spend 90 minutes
per firm preparing a letter with the results of the compliance review and
EPA will spend 320 hours total on review and oversight activities.
i/
Number of requests for transfers and additional rights is based on the
assumption that producers and importers choose to conduct transactions three
times per year, and that 30 exporters will request, receive, and
subsequently trade, consumption rights weekly to producers/importers.
Hence, (5 producers x 3) + (15 importers x 3) + (30 exporters x 52) = 1,623
transactions per year.
j/
Number of problem transactions assumes 20 percent of the requests will be
flagged as problems. Hence, (1,623 transactions x .20) = 325 problems per
year.
-------
-2-
k/
Number of reports received per year is based on the assumption that
producers/importers will be required to submit reports quarterly.
I/
Number of times EPA will require additional information assumes there is a
50 percent probability that any one firm will need to provide additional
information to meet EPA requirements. Hence, (.50 x 7 producers) + (.50 x
14 importers) x 4 = 42 additional information requests per year.
a/
Number of site visits assumes one visit per year to each of the seven
producers, and one visit per year to each of the 14 importers. Each
producer is assumed to have two facilities. Hence, (1x7 producers x 2) +
(1 x 14 importers) - 28 site visits per year.
S/
Number of times EPA will evaluate data on production/import levels assumes
evaluation will occur quarterly for 21 producers/importers. Hence, (21
producer/ importers) x 4 = 84.
fi/
Number of reports reviewed per year is based on the assumption that
packaging and automobile air conditioning firms will be required to submit
reports quarterly.
B/
Receiving and logging reports assumes that reports can be logged by EPA at a
rate of 15 per hour.
a/
Evaluating adequacy of reports assumes that the contractor will spend 3
hours, and EPA will spend an average of five minutes, per firm on this
activity.
£/
Notifying firms of review assumes that the contractor will spend 1 hour per
firm preparing a letter with the results of the compliance report review.
s/
Number of site visits assumes that one percent of the automobile air
conditioning firms will be visited and that one percent of the packaging
firms will be visited. (20,000 x .01) + (100 x .01) = 201 site visits.
Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one producer, importer, packaging firm or
automobile air conditioning firm will be required to pay a penalty for a
violation. On average, therefore, EPA is expected to levy 22 penalties per
year. Hence, (.10 x 7 producers) + (.10 x 14 importers) + (.10 x 201
visited packaging and automobile air conditioning firms) = 22 penalty
actions per year.
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U/
Number of enforcement actions involving litigation assumes there is a five
percent probability that EPA will conduct litigation against any one
producer, importer, packaging firm, or automobile air conditioning firm
regarding a violation. On average, therefore, EPA is expected-to conduct 11
litigation actions per year. Hence, (.05 x 7 producers) + (.05 x 14
importers) + (.05 x 201 visited packaging and automobile air conditioning
firms) - 11 litigation actions.
Y/
EPA will maintain adequate technical and administrative support to implement
this program. Such support shall include timely responses to requests for
information, procedural inquiries and program implementation workshops, and
technical support to address data management concerns as the program
develops. FTE levels equal 50 percent of operational FTE levels.
w/
Travel costs include $310 for airfare, $50 for car rental, and $85 for per
diem for two days for a total of $530 each trip, or $106,530 for 201
trips.
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ALLOCATED QUOTAS AND DIRECT REGULATION HYBRID
INDUSTRY ADMINISTRATIVE BURDENS
FOOTNOTES
a/
Total Producer Hours represents the Number of Occurrences per year x
Producer Hours per Occurrence x seven producers. (C = AxBx?)
Total Producer Dollars represents Total Producer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (D = C x
$50.00)
£/
Total Importer Hours represents the Number of Occurrences per year x
Importer Hours per Occurrence x 14 importers. (F ~ AxExl4)
d/
Total Importer Dollars represents Total Importer Hours x $50.00. $50.00
represents an average hourly rate of pay for a private firm. (G = Fx$50.00)
e/
Total Firms represents the total number of firms in each industry involved
in an activity.
£/
Total Firm Hours represents the Number of Occurrences per year x Firm Hours
Per Occurrence x Total Firms. (J = AxHxI, N = AxLxM)
£/
Total Firm Dollars represents Total Firm Hours x $50.00. $50.00 represents
an average hourly rate of pay for a private firm. (K = J x $50.00, 0 =
Nx$50.00).
Total Industry Costs represents the sum of Total Producer Dollars, Total
Importer Dollars, and Total Firm Dollars. (P = D+G+K+0) .
i/
The total number of firms in the packaging industry to be affected by direct
regulation is estimated at 100.
i/
The total number of large automotive shops in the automobile air
conditioning industry to be affected by direct regulation is estimated at
20,000.
k/
Number of additional information requests assumes that there is a 50 percent
probability that firms will need to provide additional information to meet
EPA requirements.
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i/
Number of transfer transactions is based on the assumption that
producers/importers choose to conduct transactions one time per year, and
that 30 exporters will transfer consumption rights weekly. Hence, (7
producers x 1) + (14 importers x 1) + (30 exporters x 52) * 21 •
producers/importers = 75.29 transactions per year.
!/
Number of requests to obtain additional consumption rights through exports
assumes that firms will conduct such activities one time per year, and that
30 exporters will request, receive, and subsequently trade, consumption
rights weekly to producers/importers. Hence, (7 producers x 1) + (14
importers x 1) + (30 exporters x 52) * 21 producers/importers = 75.29
requests per year.
U/
Number of requests to convert potential production rights into production
rights through exports assumes that producers/importers will choose to
conduct such activities one time per year.
fi/
Firms will maintain data for EPA in the same format as collected for their
internal use. Hence, this activity will require no additional time.
E/
Firms will submit report data quarterly in the same format as collected for
internal use. EPA will not require a specific form. This number assumes 4
hours per quarter per firm to package and mail the information to EPA.
£/ Number of additional information requests assumes that there is a 50 percent
probability each quarter that producers/importers will need to provide
additional information to EPA quarterly. Hence, (.50 x 4) - 2. For
packaging and automobile air conditioning firms, there is a one percent
chance on a quarterly basis. Hence, (.01 x 4) - .04.
£/
Hours for site visits assumes one visit per year to each of the seven
producers and 14 importers. Each producer is assumed to have two
facilities. Total producer hours, therefore, are multiplied by two to
represent 14 visits.
S/
This number assumes that one percent of the packaging firms will be visited.
(.01 x 100) - 1.
£/
This number assumes that one percent of the automobile air conditioning
firms will be visited. (.01 x 20,000) - 200.
u/
Number of enforcement actions involving penalties assumes there is a ten
percent probability that any one producer, importer, packaging firm or
automobile air conditioning firm will be required to pay a penalty for a
violation.
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v/ .
Number of enforcement actions involving litigation assumes there is a five
percent probability that any one producer, importer, packaging firm or
automobile air conditioning firm will be involved in litigation regarding a
violation.
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