$ £\ I? Office of Inspector General
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| I Special Review
Consistency and Transparency in Determination
of EPA's Anticipated Ozone Designations
Report No. 2002-S-00016 August 15, 2002
~SPHERE
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Regions Covered:
Regions 1-10
Program Office Involved:
Inspector General Division
Conducting the Audit:
Office of Air Quality Planning
and Standards
Mid-Atlantic Audit and
Evaluation Resource Center
Philadelphia, PA
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
MID-ATLANTIC AUDIT AND EVALUATION RESOURCE CENTER
1650 Arch Street
Philadelphia, Pennsylvania 19103-2029
(215)814-5800
August 15, 2002
MEMORANDUM
SUBJECT: Special Review Report:
Consistency and Transparency in Determination
of EPA's Anticipated Ozone Designations
Report No. 2002-S-00016
FROM: Lisa White /s/ Lisa White
Project Manager
Mid-Atlantic Audit and Evaluation Resource Center (3AI00)
TO: Tom Curran, Acting Director, Office of Air Quality
Planning and Standards (C40404)
Attached is a copy of the final report on Consistency and Transparency in
Determination of EPA's Anticipated Ozone Designations. This special review
contains issues that describe conditions the Office of Inspector General (OIG) has
identified and an OIG recommendation. This report represents the opinion of the
OIG. Final determinations on matters in this report will be made by EPA managers
in accordance with established EPA resolution procedures. Accordingly, the findings
described in this special review do not necessarily represent the final EPA position
and are not binding upon EPA in any enforcement proceeding brought by EPA or
the Department of Justice.
ACTION REQUIRED
You are requested to provide a written response to this special review within 90 days
of the date of this report. We have no objections to the further release of this report.
If you or your staff have any questions regarding this report, please contact me or
Lorraine Fleury at (215) 814-5800. For your convenience, this report will be
available at httv://www.eva.sov/oieearth/eroom.htm.
V
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Executive Summary
Purpose
The 1990 Clean Air Act requires the Environmental Protection Agency
(EPA) to designate counties as being in nonattainment, in attainment,
or unclassifiable with respect to the national ambient air quality
standards for ozone. In 1990, the acceptable ozone level was based on
the 1-hour ozone standard. In 1997, EPA issued a new 8-hour ozone
standard to provide increased protection to the public. This new
standard was challenged in court. While EPA has prevailed on the
basic issues regarding the challenges to its 8-hour ozone standard,
pursuant to court decisions in that litigation, EPA is developing a new
implementation plan for the 8-hour ozone standard.
The objectives of this review were to determine (1) whether each of
EPA's Regional offices used a specific process/method/approach for
obtaining stakeholder input for the 1-hour ozone designations; (2) what
process/method/approach was used for the preliminary analysis of the
8-hour ozone designations; and (3) the potential usefulness of the Multi-
criteria Integrated Resource Assessment (MIRA) decision approach, in
which stakeholder participation creates open, transparent decisions
regarding the anticipated 8-hour ozone designations.
Results in Brief
EPA's guidance for the 1-hour ozone designations was not specific as to
how stakeholder participation should be used in the ozone designations.
The guidance for the preliminary 8-hour ozone designations is more
comprehensive than the approach EPA followed in 1990, in that it
acknowledges the importance of stakeholder participation. In addition,
the guidance lists 11 criteria the states should consider if proposing
larger or smaller metropolitan nonattainment boundaries. However,
the preliminary 8-hour ozone guidance did not provide a methodical
process for the Regions and states to use when considering the 11
criteria. Without a consistent Regional approach, the ozone
designations may not be fair or equitable throughout the nation.
Region 3 used the MIRA approach to address the preliminary 8-hour
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ozone designations, and this or a similar multi-criteria approach could
be useful for all EPA Regions. MIRA is a decision making methodology
that documents stakeholders' interests and can assess the impacts of a
given set of criteria simultaneously.
Recommendation
When determining the 8-hour ozone designations, we recommend that
the Director of the Office of Air Quality Planning and Standards
(OAQPS) instruct the EPA Regional offices to use a multi-criteria
approach such as MIRA that offers transparency, consistency, and
potential for consensus building.
Agency Response and OIG Evaluation
OAQPS does not agree with the recommendation in the draft report and
maintains that MIRA cannot be used as the primary tool for
designating areas under the Clean Air Act. They believe that the
primary approach for assigning designations should be a case-by-case
consideration and evaluation of each area's unique situation and
circumstances.
Contrary to OAQPS' response, our report does not recommend that
MIRA be used as the primary tool for designating areas under the
Clean Air Act; rather, it identifies those attributes of MIRA
(consistency, documentation/transparency, and consensus building)
that could help the agency improve its process for the 8-hour ozone
designation. We request that OAQPS reconsider using a multi-criteria
approach like MIRA that offers these attributes.
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Table of Contents
Executive Summary i
Introduction 1
Purpose 1
Background on Designating Ozone Areas 1
The 8-hour Ozone Standard 2
MIRA Background 3
Scope and Methodology 4
EPA Should Promote Consistency and Transparency
Among Regional Offices 5
Varied Processes Used by the Regions for Ozone Designations 5
The 1-Hour Ozone Designation Process 6
Preliminary 8-Hour Ozone Designation Process 6
Benefits of MIRA Demonstrated 8
Recommendation 9
Agency Response 9
OIG Evaluation 10
Appendices 11
A: MIRA Structure 11
B: OIG Questionnaire 13
C: Agency Response and OIG Evaluation 15
D: Example of Sequential vs. Simultaneous Decision Approach 25
E: Distribution List 27
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Introduction
Purpose
The objectives of this review were to determine:
! Whether each of the Environmental Protection Agency's (EPA's)
Regional offices used a specific process/method/approach for
obtaining stakeholder input for the 1-hour ozone designations;
! The process/method/approach used for the preliminary analysis of
the 8-hour ozone designations; and
! The potential usefulness of the Multi-criteria Integrated Resource
Assessment (MIRA) decision approach, in which stakeholder
participation creates open, transparent decisions regarding the
anticipated 8-hour ozone designations.
Background on Designating Ozone Areas
The Clean Air Act requires EPA to designate areas as being in
nonattainment, in attainment, or
unclassifiable with respect to the
national ambient air quality
standards for ozone. The law
requires that no later than 1 year
after promulgation of a new or
revised national ambient air
quality standard, the states submit
a list of all areas to the EPA
Administrator with their
designations. The Administrator
has 2 years from the date of
promulgation of the new or revised
national ambient air quality
standard to promulgate the
designations of all areas. The Clean Air Act provides that the period
may be extended for up to 1 year if the Administrator has insufficient
information to promulgate the designation.
EPA's Goal 1 ("Clean Air"), in the 2000
Strategic Plan, states the air in every
American community will be safe and
healthy to breathe. One of the Agency's
objectives is that by 2012, air throughout
the country meets the national standards
for ozone.
The Office of Inspector General's strategic
area of emphasis, Contributing to
improved environmental quality and
human health, states we will analyze the
use of scientific research in carrying out
the Agency's programs, including the air
program.
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In 1990, the acceptable ozone level was .12 parts per million (ppm),
based on the 1-hour ozone standard. In 1997, EPA revised its 1-hour
primary ozone standard (health-based) with a new 8-hour ozone
standard that decreases the ozone level to .08 ppm, thereby, increasing
health benefits to the public. The benefits of achieving the 8-hour
ozone standard include reduced risks of respiratory symptoms in
children, lessened lung impairments that can lead to chronic
respiratory illnesses (such as emphysema and chronic bronchitis later
in life), and fewer hospital visits for respiratory problems for individuals
with asthma. The new standard would require states to monitor over an
8-hour period, which is a more representative reading. The changes
were made because many new health studies had shown that adverse
health effects occur at exposure times longer than 1 hour and at levels
lower than the previous standard.
It is important to note that EPA and the states do not rely solely on air
quality data when making the ozone designations. Because of the
limited number of ozone monitors, data was not always available. EPA
guidance states that any county with an ozone monitor showing a
violation of the standard needs to be designated nonattainment. For
those areas designated nonattainment, the guidance states that
additional criteria be considered to determine the boundaries of
nonattainment areas. These additional criteria include population
density, traffic congestion, and pollution transport provided by various
stakeholders. Because the ozone designations are based on the
consideration of multiple criteria, EPA needs to be prepared to use a
reliable, consistent method to apply this new standard. Region 3
developed a multi-criteria decision approach, called MIRA, that could
be used to address the above criteria simultaneously when making the
anticipated 8-hour ozone designations.
The 8-hour Ozone Standard
EPA is developing a new implementation strategy for the 8-hour
standard, including how to classify areas designated as nonattainment
for that standard. These classifications will determine the control
measures each nonattainment area will be required to impose to help
the area reach attainment. Once EPA's implementation strategy has
been finalized through rule making, EPA plans to designate areas for
the 8-hour ozone standard.
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MIRA Background
Initially, MIRA was developed by EPA Region 3's Air Protection
Division in response to the Government Performance and Results Act.
Among other things, this act was written to improve federal
effectiveness and public accountability by promoting a focus on results,
service quality, and customer satisfaction. Region 3 developed MIRA
as an effort to link its decisions to environmental impacts and help meet
the Air Protection Division's strategic goals.
MIRA considers economic, social, and political impacts of alternatives
before a decision is made and, ultimately, used to support a final
decision. MIRA documents
stakeholders' interests and can assess
the impacts of a given set of
preferences simultaneously. MIRA
does this by providing a framework to
make the data that is relevant to the
decision transparent and to disclose
stakeholders' interests when changing
the weighting of the preferences to
make a decision. MIRA helps
articulate decisions using data. MIRA
is not a substitute for the decision maker and is not set up to convince
people that there is only one decision; rather, it facilitates discussion
and the creation of additional options that stakeholders and decision
makers may not have thought of but which meet their interests. MIRA
allows for the comparison of the impacts between two or more options,
and empowers decision makers and stakeholders to create and test
options. Its output is not an optimal decision, but information that
spurs discussion, debate, learning, and consensus building.
Details on MIRA's structure are in Appendix A. This report discusses
the "Decision Analysis" module within the MIRA structure as it relates
to the ozone designations. Region 3 used MIRA to develop a response to
the Office of Air Quality Planning and Standards' (OAQPS) request for
a preliminary analysis of the 8-hour ozone designations; however,
because MIRA is relatively new, it has not been utilized for a specific
public policy decision.
Decision Making
! All decisions are tradeoffs among
relevant criteria.
! Decision making is not objective.
! Decision making requires using
judgment (i.e., values).
! Science does not/cannot make
decisions but can be used to drive
decisions.
Source - MIRA training course
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Scope and Methodology
Because the review included assistance by the Region 3 MIRA team, we
considered this a special review and not an audit. However, we followed
applicable Government Auditing Standards to the extent practical -
particularly in regard to qualifications, due professional care, quality
control, planning, supervision, evidence, and reporting. We conducted
meetings with: the Region 3 Air Director; Region 3 MIRA team
members; and OAQPS officials from EPA's Office of Air and Radiation.
We held an entrance conference with OAQPS officials on September 6,
2001, and completed our fieldwork on December 28, 2001. We issued
the draft special review on April 30, 2002. Agency comments and our
evaluation are summarized after the recommendation, and a complete
copy of their response is provided in Appendix C.
We reviewed documentation at the Air and Radiation Information
Center related to the 1-hour ozone designations. We read the draft
journal article prepared by the Region 3 MIRA team, which included a
comparison of MIRA to other multi-criteria decision approaches. We
attended MIRA training. We reviewed the results of the Region 3 case
study, which was able to closely duplicate the results of the 1991 1-hour
ozone designations. We also reviewed EPA guidance for the
preliminary 8-hour ozone standard and the status of the anticipated
8-hour ozone standard. We formulated a national questionnaire (see
Appendix B) that we sent to the EPA Regional offices to identify the
stakeholders and explain how their input was considered in the 1991
decision for the 1-hour standard, and methods used for the preliminary
8-hour standard. Next, we compared the similarities and differences
among the Regional offices.
For the purpose of this review, we looked at one decision approach -
MIRA - and its ability to organize and analyze data and to facilitate
decision making. Our review looked at the decision analysis module of
MIRA and how it could be used with a new ozone standard. We relied
on the technical expertise of the Region 3 MIRA team to demonstrate
how MIRA can assist the Agency when making multi-criteria decisions.
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EPA Should Promote Consistency and
Transparency Among Regional Offices
EPA's guidance for the 1-hour ozone designations was not specific as to
how stakeholder participation should be used in the ozone designations.
The guidance for the preliminary 8-hour ozone designations is more
comprehensive, in that it acknowledges the importance of stakeholder
participation. In addition, the guidance lists 11 criteria the states
should consider if proposing larger or smaller metropolitan
nonattainment boundaries. However, guidance for the preliminary 8-
hour ozone designations did not provide a methodical process for the
states to use when considering the 11 criteria. Without a consistent
Regional approach, the ozone designations may not be fair or equitable
throughout the nation.
In January 2002, the Office of Management and Budget issued
guidelines for ensuring and maximizing the quality, objectivity, utility,
and integrity of information that is shared with the public by each
Federal Agency. By October 1, 2002, Agencies will need to be more
accountable for the information that supports the official position of the
Agency. The more important the information, the higher the quality
standards to which it should be held. We believe MIRA has the
capability, by making its data and methods transparent, to provide the
support EPA will need to meet this Office of Management and Budget
requirement.
Varied Processes Used by the Regions for Ozone Designations
We asked all 10 EPA Regional offices to complete a questionnaire to
enable us to evaluate their processes used to designate and classify
areas for the 1-hour and preliminary 8-hour ozone standard. In
particular, we asked the Regional offices to identify the stakeholders for
the 1-hour ozone designations and explain how their input was
considered. We believe that stakeholder input is essential when
making the ozone designations because, ultimately, stakeholder
cooperation is required to implement the Clean Air Act. For the
prehminary 8-hour ozone designations, we wanted to know how many
criteria were addressed, as stated in the March 28, 2000, OAQPS
memorandum, "Boundary Guidance on Air Quality Designations for the
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8-Hour Ozone National Ambient Air Quality Standards," as well as the
methodologies, if any, used to consider these criteria.
The 1-Hour Ozone Designation Process
In response to our inquiry regarding stakeholders for the 1-hour ozone
designations, we determined that 8 of the 10 Regional offices obtained
stakeholder input, but no consistent process, methodology, or approach
for incorporating stakeholder input was applied. Many of the Regional
offices indicated that they solicited stakeholder input through meetings
or correspondence. Consequently, we could not evaluate the extent to
which stakeholder participation influenced the final recommendations
submitted by the states. For the two Regional offices that did not solicit
stakeholder participation, one said stakeholder input was not applicable
because their states' counties were all in attainment. Another said that
their area was considered all in nonattainment prior to the 1990
designations; therefore, the counties would remain in nonattainment
and stakeholder input was not needed.
Preliminary 8-Hour Ozone Designation Process
The promulgation of the 8-hour ozone standard in 1997 gave EPA the
opportunity to improve on the ozone designation process. The
March 28, 2000, OAQPS memorandum detailed the designation process
for this standard. According to the memorandum, all counties must be
designated in attainment/unclassifiable or in nonattainment.
Attainment is defined when an area is meeting the ozone standard and
unclassifiable is when, due to no data or insufficient data, EPA cannot
make a determination. Nonattainment is defined when counties do not
meet the standard or contribute to ambient air quality in a nearby area
that does not meet the standard. OAQPS instructs the regions to treat
the attainment and unclassifiable designations the same; therefore,
areas without monitors are treated as if they were monitoring in
attainment. Consequently, the designation of
attainment/unclassifiable for these unmonitored areas is not a true
representation of this designation because we cannot determine the
number of counties measuring in attainment versus the number of
counties without monitors.
The memorandum also indicated that because it is best to consider
controls on sources over a larger area due to the nature of ground-level
ozone and transport of ozone, the Metropolitan Statistical Area or the
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Consolidated Metropolitan Statistical Area should serve as the
presumptive boundary for the 8-hour nonattainment area. These are
statistical representations of counties and groups of counties which
function as a unit economically as specified by the Office of
Management and Budget. EPA believes this approach will best ensure
public health protection from the adverse effects of ozone pollution
caused by population density, traffic congestion, commercial
development, and industrial development.
If a state wanted to propose a larger or smaller nonattainment area
other than the default Metropolitan Statistical Area or Consolidated
Metropolitan Statistical Area boundaries, the guidance listed 11
criteria that could be considered. This guidance required the states to
submit their recommendations to EPA for final designations. In our
questionnaire, we asked the Regional offices how many criteria were
considered, as well as what methodologies, if any, were used to consider
the criteria listed below:
1.
Emissions and air quality in adjacent areas
2.
Population density and degree of urbanization, including
commercial development
3.
Monitoring data representing ozone concentrations in local areas
and larger areas
4.
Location of emission sources
5.
Traffic and commuting patterns
6.
Expected growth
7.
Meteorology
8.
Geography/topography
9.
Jurisdictional boundaries
10.
Level of control of emission sources
11.
Regional emission reductions
The Clean Air Act mandates that EPA should consider all areas when
making ozone designations. Results of the questionnaire showed that,
while most of the Regions said they considered the criteria, only three of
the eight Regional offices used a multi-criteria approach. Additionally,
based on discussions with the Regional offices, Region 3 is the only
office, through MIRA, that considered all counties in their ozone
designation. The reason given by the other Regions for not considering
all counties was twofold: (1) it was too resource intensive; and (2) based
on prior information, they did not believe every county needed to be
considered in the analysis.
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Once the air quality data has been entered in a database, the MIRA
approach provides Region 3 the ability to consider all counties in the
same timeframe as it would take to consider only those counties with
monitors. This fact may be particularly appealing to the Regions that
are concerned that considering all counties would entail using
extensive resources.
We believe the inconsistencies among the Regional offices resulted from
the OAQPS memorandum being too general, thus not providing a
methodical process on how to consider the 11 criteria for the
nonattainment boundaries. Two Regional offices noted in their
responses that they would like a more prescriptive way to rank the
criteria, in order of importance, to properly designate boundaries for the
8-hour ozone standard. MIRA provides a framework for the Regional
offices to consider how the criteria applies to their Region and then to
apply those criteria consistently to each county.
Also, in a January 19, 2001 memorandum, OAQPS recognizes there are
differences among the Regions and states in their application of the
earlier guidance for the preliminary 8-hour ozone designations. This
memorandum emphasizes the importance of applying this guidance
nationally in a fair and equitable manner; however, OAQPS did not
provide specifics on how they would accomplish this task.
Benefits of MIRA Demonstrated
The Region 3 MIRA team demonstrated MIRA's capabilities to us in a
case study related to the 1-hour ozone designations. First, the MIRA
team obtained Region 3's 1-hour ozone designations made in 1991.
Using MIRA's framework, the team was able to closely replicate the
1-hour ozone designations. For the 1-hour ozone designations, there
was not always documentation to clearly support why a particular
county was considered in attainment or nonattainment. MIRA
documents how the criteria are weighted and the data the Agency relied
on to make a decision that can be used for future reference.
MIRA affords the decision maker an opportunity to learn about
individual ranking of counties from most nonattainment to least
nonattainment and their rankings relative to each other. Decision
makers are then tasked with making a choice determined by the
scientific data and social values to rank the counties in a manner that
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can be articulated and reproduced. This is where discussion, debate,
and learning occur to determine the appropriateness of the decision,
thus providing stakeholders the opportunity to see how their input
influenced the final designations.
The 1-hour case study did not solicit stakeholder input because the
replication was done for a decision already implemented (the 1991
ozone designations). Although MIRAhas attributes that make it a
viable consideration for decision making, it also has specific limitations.
MIRA is currently housed on several computers in Region 3 and it is
not documented in manuals. While EPA needs to consider the time and
money a Region would need to invest in obtaining the computer
software and teaching MIRA to its employees, we believe it would be a
beneficial investment.
Recommendation
When determining the 8-hour ozone designations, we recommend that
the Director of OAQPS instruct the EPA Regional offices to use a multi-
criteria approach such as MIRA that offers:
~ Documentation and transparency of EPA's decisions to meet the
OMB requirement.
~ Consistency in considering any criteria identified.
~ Development of new options that reflect stakeholder and decision
maker interests, thereby offering greater potential for consensus
building.
Agency Response
OAQPS does not agree with the recommendation in the draft report and
maintains that MIRA cannot be used as the primary tool for
designating areas under the Clean Air Act. Their response contends
that the designation process is prescribed by the Clean Air Act, and
once EPA determines that an air quality monitor is recording a
violation, they must designate the area nonattainment. They further
state that MIRA, as implemented by Region 3, only recognizes the
Clean Air Act and EPA regulatory requirement as an input factor of
equal weight with all other considerations.
However, the response also states that the primary approach for
assigning designations should be a case-by-case consideration and
evaluation of each area's unique situation and circumstances. OAQPS
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indicated they considered the factors used to determine nonattainment
boundaries sequentially and independently versus MIRA, which
considers all the factors simultaneously.
OIG Evaluation
Contrary to OAQPS' response, our report does not recommend that
MIRA be used as the primary tool for designating areas under the
Clean Air Act; rather, it identifies those attributes of MIRA
(consistency, documentation/transparency, and consensus building)
that could help the agency improve its process for the 8-hour ozone
designation.
EPA and the states cannot rely solely on air quality data when making
the ozone designations because, in 2001, only 965 of the 3,100 counties
had ozone monitors. Therefore, they must rely on additional factors
such as population density, traffic congestion, and pollution transport
provided by various stakeholders. OAQPS' guidance did not provide a
methodology for considering the factors, which in turn allows for the
Regions and the states to apply them in whatever order they choose.
MIRA is a tool that can be used to organize the factors listed in the
OAQPS guidance that will ultimately provide options for the decision
maker to use regarding the ozone designations.
We disagree that MIRA only recognizes the Clean Air Act and EPA
regulatory requirement as an input factor of equal weight with all other
considerations. Given the fact that the ozone designations are an air
quality decision, the decision makers, using MIRA, could weight air
quality the heaviest, thereby ranking those areas with poor air quality
the highest in nonattainment.
We believe that considering the factors simultaneously is a more
consistent approach (fair and equitable) than sequentially. When
considering the factors sequentially, the factor that is evaluated first
automatically becomes the most important (or most heavily weighted)
factor. In contrast, the simultaneous evaluation of the factors, allows
the decision maker to determine the relative importance of each factor
to the other. Again, we believe this is a more consistent method than
simply applying several factors to a given area in a random order. For
an example see Appendix D.
OAQPS provided an attachment to their response disagreeing with
specific issues included in the draft report. We have inserted our
comments directly in the attachment (Appendix C).
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Appendix A
MIRA Structure
MIRA Structure
Decision Anahsis
Decision Criteria
Fule & Transport
Module
GeosLaLislicul TtidieuLor
Modulo (GiM)
Data Collection manager (DOM)
F,m is sin rift, AQ, Demographics, Fit.
Decision Criteria - factors, determined by the decision makers, to be important to the
decision.
Data Collection Manager (DCM) - allows the analyst to store, sort, and retrieve data,
such as source emissions, demographics, and air quality values. There is currently no
such system that allows for storage and custom retrieval of data, which can also then be
used directly in decision analysis.
Geostatistical Indicators Module (GIM) - provides a means to reduce spatial fields of
pollutant concentration, usually presented as maps, to a single quantitative index value.
The creation of this area-weighted index allows the analyst the unique ability to
compare the environmental impact among different areas, including non-contiguous
areas. Both the data from the DCM and the indices from GIM can be used to populate
the decision criteria in MIRA's decision analysis module.
Fate & Transport Module - this air quality modeling system is a framework that
demonstrates the ozone impact based on emissions input by the user.
Decision Analysis - the decision maker preferences/judgments are obtained first in
Expert Choice™ and then used in the decision analysis spreadsheet to produce decision
alternatives. The modular construction of MIRA permits the analyst the flexibility to
determine how the DCM and GIM will be used with the decision analysis module.
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Appendix B
OIG Questionnaire
As part of our OIG review entitled, "Review of the Agency's Decision Making Process,
Using the 1 Hour Ozone Nonattainment Boundary Decision as an Illustrative Process
Case Study," we need all the Regional offices to complete this questionnaire. Please
complete the questions in their entirety and respond by electronic mail no later than
Thursday, December 13.
QUESTIONS
1. In response to the March 28, 2000, John Seitz memorandum, did the states
within your Region submit a list recommending nonattainment/attainment
designations for their counties by June 30, 2000? If yes, please indicate which
states provided such a list.
2. a. Please identify who you believe were the stakeholders in the 1-hour ozone
nonattainment designation decision (i.e., those parties or people that are
affected by the designations decision).
b. When your Region determined the designations, did you incorporate the
stakeholders interests in the decision making? Explain the process/
method/approach that was used (i.e., how these stakeholder interests were
considered).
3. Please list which of the 11 criteria, on page four of the memorandum, your states
or you considered.
a. Please indicate how the criteria that were used were considered. Give an
example(s) to illustrate the process.
b. Were the criteria ranked in terms of relative importance to each other and,
if so, please explain the method/process?
c. If there were criteria that were not considered, please indicate or explain
why they were not or could not be considered.
4. Please comment on whether there are elements that you would have liked to
consider in the Agency's decision making process (either specific to the 1 hour
ozone nonattainment decision or generally for the Agency's decision making) but
were not able to (or cannot) consider and why.
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Appendix C
Agency Response and OIG Evaluation
June 26, 2002
MEMORANDUM
SUBJECT: Response to Draft Report: Consistency and Transparency in
Determination of EPA's Anticipated Ozone Designations, April 30, 2002
FROM: Thomas C. Curran, Acting Director (Signed by Tom Curran)
Office of Air Quality Planning and Standards (C404-04)
TO: Carl A. Jannetti
Divisional Inspector General for Audit
Mid-Atlantic Division (3AI00)
Thank you for the opportunity to review and respond to the findings in the
subject report. I appreciate the work your staff put into the review of the Multi-
Criteria Integrated Resource Assessment (MIRA) approach. We believe that MIRA
is a technique that can have potential benefits for certain types of decision making.
For example, we have applied MIRA in developing our monitoring strategy to help
determine the mix and location of various types of air quality monitors across the
country. Also, as you may know, this office has provided funding to Region 3 to help
support the model's development.
However, we have major concerns about using this type of tool to fully address
all of the legal, technical and practical constraints associated with the process of
designating areas as attainment or nonattainment under the Clean Air Act. As a
result, we do not agree with the recommendation in your draft report that MIRA be
used as the primary tool for designating areas under the Clean Air Act.
The draft report suggests that MIRA would provide greater consistency,
transparency and equity in the designation process. We agree that those are
important goals for the designation process and believe there may be a limited role
for MIRA or MIRA-like tools to be used within the statutorily mandated process.
However, OAQPS strongly believes that, while MIRA can help inform decisions on
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designations, it would not be appropriate to use MIRA as the sole or primary basis
for determining the boundaries of nonattainment areas. We believe that the
primary approach for assigning designations should be a case-by-case consideration
and evaluation of each area's unique situation and circumstances.
The Clean Air Act defines a nonattainment area as any area that is violating
the national ambient air quality standard (NAAQS) or is contributing to a violation
of the NAAQS in a nearby area. Thus, once EPA determines that an air quality
monitor is recording a violation of the 8-hour ozone NAAQS, EPA must designate
the area in which the monitor is located and any nearby areas contributing to the
violation as nonattainment. The MIRA, as implemented by Region 3, only
recognizes this Clean Air Act and EPA regulatory requirement as an input factor of
equal weight with all other considerations. Since application of MIRA in this way
could result in the clearly unacceptable designation of an area that is violating the
NAAQS as attainment/unclassifiable, the statutory and regulatory requirements
should be applied before using MIRA and should not be overridden in determining
how an area should be designated.
For the purpose of designations, we do not believe that MIRA can be the
primary basis for considering the unique and complex issues that arise within the
designation process. These concerns are further detailed in the attachment. For
these reasons, I cannot concur with the recommendation in this report to use a
decision tool, such as MIRA, as the primary basis to determine designations.
However, we do believe there may be certain circumstances where the use of a MIRA-
type tool may have a role to play in helping inform the designation process. I would
ask that the report specify that any use of MIRA, or a MIRA-type model, by an EPA
Regional Office to help inform the designation process be coordinated with the Office
of Air and Radiation to help us promote and ensure national consistency in decisions
that are made and to help contribute to lessons learned from using such a tool.
Thank you again for the opportunity to review the draft report and please
direct the final report to the Administrator and my office.
Attached are some additional comments on the draft report. Please let me
know if you have any questions, or have your staff contact Sharon Reinders at (919)
541-5284 or me.
Attachment
EPA:OAR:OAQPS:AQSSD:OPSG:SREINDERS\LLassiter: N. Campus C539-02\l-
5526
File Name: I :\SEC\REINDERS\DraftResponseToOIGonDesigs6-14-02.wpd June
18, 2002 Coordinated w/ Lydia Wegman, John Silvasi and Jan Tierney, OGC.
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Attachment
MIRA's Ability to Address Unique and Complex Situations in the
Designation Process
As with MIRA, EPA considers multiple criteria to determine the area
contributing to a nonattainment problem. However, unlike MIRA, EPA considers
such factors sequentially and independently versus MIRA which considers such
factors altogether with preferences and weights. For example, with regard to
determining the area contributing to a violation, EPA could determine that an area
should be designated nonattainment solely because of significant nitrogen oxide
(NOx) emissions from a single stationary source, such as a power plant, in that area.
Under MIRA, however, such an area may not be designated nonattainment due to a
low model score based solely on a low weight for NOx emissions alone because the
area does not also have other factors, such as significant mobile source emissions or a
large population to raise the model score. Furthermore, MIRA might assign a value
based on the total amount of NOx emissions within a set area, but it does not allow
for consideration of unique circumstances such as the number or geographic location
of such sources or the consequences of aggregating emissions across contiguous or
adjacent areas. Nor does MIRA allow for appropriate consideration of the unique
geographic features of an area or multiple areas, such as the height and location of
mountains and hills in relation to the mix of sources. Consequently, MIRA's system
of preferences and assigning predetermined weighting factors can easily result in
important case-specific factors not being appropriately considered.
Consistency in application and results is possible only if the criteria and
factors are standardized and established nationally and not subject to change.
Assuming that the desired consistency referred to in the report is national, changing
the preferences and weights in MIRA according to subjective preferences will likely
not preserve consistency from area to area, but promote conflicting results. The
possibility of changing factors or assumptions complicates understanding and
comparisons. Furthermore, the possibility of changing these based on stakeholder
interests can easily undermine objectiveness in the designation process by allowing
otherwise unsuitable or inappropriate considerations or weighting to influence the
process. Alternatively, using the set of factors, weights and comparative values of
MIRA as applied in Region 3 may not result in appropriate designation decision for
other areas of the country. Again, the EPA believes that a case-by-case
consideration of each area's facts and circumstances best achieves the goals of the
designation process.
It is important to note that a case-by-case consideration of factors can produce
a consistent, transparent and equitable designation process. The goals of
consistency, transparency and equity are more likely to be achieved through a
centralized decision process for final designation determinations for all areas. This
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is one reason the Administrator has not delegated this authority to designate an
area under a new standard to the Regional Offices.
To help ensure consistency and objectivity in the recommendations provided
to the Administrator, the EPA has issued guidance enumerating a variety of factors
that States should consider in making designation recommendations and that EPA
would consider in reviewing those recommendations. A case-by-case review of each
recommendation by the Regional Offices in conjunction with EPA headquarters
offices ensures consistency in designations. In addition, EPA has made standardized
data bases available to the States and tribes, which include among other things data
on monitored air quality values and data related to the criteria used to determine
boundaries. These data are available on the website
www.epa.gov/ttn/naaqs/ozone/areas/. In the past, EPA has held internal national
workshops with the Regional and headquarters offices to consider each Region's
review of the State and tribe's recommendations in light of EPA guidance. Whereas,
as specified in the Clean Air Act (CAA), our current process allows EPA to rectify
inappropriate State and Regional recommendations, the formulaic structure of
MIRA, which would assign values based on the State or tribal recommendations
without examining the underlying considerations that the State and EPA examined,
could carry any inconsistent recommendations forward into EPA's designation
process.
In terms of transparency, EPA notes that the designation process is clear and
open with several opportunities for the public, States and tribes to review and be
involved in the process. Initially, the process is opened at the State and tribal level,
prior to the time their recommendations are made to EPA. Each State and tribe has
its own process including public and stakeholder processes for responding to
requirements under the CAA. The EPA does not seek to dictate their processes for
responding to the CAA's requirements. Preliminary recommendations for the 8-hour
standard and Regional Offices' initial responses were posted on EPA's website at
www.epa.gov/ttn/naaqs/ozone/areas/recommend/. Another opportunity could arise at
the time that EPA determines whether to modify a recommendation. The EPA's
basis for a designation decision for the 8-hour standard will be documented in the
record for that action. Furthermore, EPA has issued public guidance concerning the
factors that EPA believes are relevant for determining boundaries of nonattainment
areas.
EPA also notes that the use of MIRA could actually delay the designation
process. Since MIRA is a model involving algorithms and weights, if it were to be
used as a sole or primary decision-making tool, it may need peer review and possibly
national rulemaking similar to other mathematical models that we use.
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OIG Evaluation
We disagree with the example regarding the power plant not being considered
nonattainment using the MIRA approach. The MIRAprocess may not
necessarily consider the county in which the power plant is located to be in
attainment if the weight for emissions was rated heavily. MIRA allows the
decision maker to recognize that each area may have unique circumstances.
Once the analysis is complete, if the decision maker wants to change a county
that is currently ranked in attainment to nonattainment, they could change
the weighting of the preferences and run the analysis again. Another option is
to leave the analysis as is and selectively choose the county to be placed in the
nonattainment ranking with a disclosure of why the designation changed. The
MIRA process only informs the decision maker, it does not assign values, make
decisions, or provide optimal answers.
We disagree with OAQPS' response that transparency is the same as public
participation. In the MIRA process, transparency is the ability to document
how the criteria are weighted by the stakeholders and to document the data
relied on by the Agency to make a decision that can be used for future reference.
The following comments generally follow the order of the topics presented in
the body of the report. However, our comments also apply if the topic was addressed
in the Executive Summary.
# Timing and Process of Designations
The following information is intended to supplement this discussion in the
report:
The CAA provides for States to make designation recommendations no later
than 1 year following promulgation of new or revised NAAQS and requires the
Administrator of EPA to promulgate designations no later than 2 years after
promulgation of a new or revised NAAQS. The EPA also provides the opportunity
for recommendations to tribes. However, the CAA also provides that the period for
the Administrator to promulgate designations may be extended by 1 year if the
Administrator has insufficient information. The Transportation Equity Act for the
21st Century (TEA-21) modified these dates as they apply to the 8-hour ozone
NAAQS promulgated in July 1997. Under TEA-21, States were provided with 2
years to recommend designations, and EPA was required to designate areas no later
than 1 year following the time State recommendations were due. The date for EPA
action was ultimately extended by HR-4635, which prohibited EPA from acting until
either the Supreme Court ruled in the challenge to the NAAQS or until June 15,
2001. With the Supreme Court decision in February 2001, the prohibition was lifted.
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The designation program for the air quality standards is not delegated to the
Regional Administrators. Therefore, the Administrator promulgates all
designations for new or revised standards. While the Regional Offices perform the
initial review of designation recommendations, the Office of Air Quality Planning
and Standards (OAQPS) evaluates the results of each review made by Regional
Offices against both the recommendation and EPA guidance. This helps to ensure
consistency in the designation process. It is not always necessary to evaluate all the
criteria in EPA's guidance to determine that the area is in violation of the standard
or is contributing to a violation. Since the criteria are to be considered
independently, the area may be determined to be in violation of the standard or
contributing to a violation based upon an evaluation of less than all of the criteria.
For example, there is no need to look at all of the criteria as they would apply in an
area monitoring attainment in the vicinity unless it is necessary to evaluate whether
it is contributing to a violation in a nearby area. However, we would still evaluate
the State or tribal recommendation.
OIG Evaluation
We added, the sentence regarding the Administrator being granted an
additional year for insufficient data from the Clean Air Act in the background
section. However, we did not add the wording about the Transportation
Equity Act for the 21st Century or the HR-4635 because this section was
background applicable to both the 1-hour ozone designation and the 8-hour
ozone designation and the two acts are not subject to the 1-hour standard.
# 8-hour Ozone Standard
Our Office of General Counsel suggests the following language covering
litigation on the standard to replace the sentence: "On March 26, 2002, EPA's 8-hour
ozone standard was upheld by the District of Columbia Circuit Court of Appeals. As
such key implementation decisions regarding the new standard are anticipated in
the near future."
In response to that challenge, the Supreme Court determined that the
implementation approach EPA set forth at the time the standard was
promulgated was unsupported by the statute. The Court remanded the issue
to EPA; EPA expects to issue a proposed rule in response to that remand in
the near future.
Also, delete references to the "newly affirmed" 8-hour standard. The EPA did not
seek Supreme Court review on one aspect on which we lost in the Court of Appeals.
Thus, there is still an outstanding issue with respect to the standard and it is
inaccurate to say that the standard has been "affirmed" or "upheld" by the court.
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The language in the section entitled "8-hour Ozone Standard Affirmed" (also, delete
"affirmed" from the heading) should be replaced with the following:
The 8-hour ozone standard was challenged in 1997 by the American Trucking
Association, other business groups and certain States. The Court of Appeals
for the District of Columbia Circuit initially determined that EPA's
interpretation of the statute conflicted with the constitutional non-delegation
principle. In addition the court held that EPA had not considered the
beneficial effects of UVB in establishing the NAAQS and that EPA's
implementation policy conflicted with CAA requirements. The EPA sought
review in the Supreme Court of the constitutional and implementation issues.
The Supreme Court found that EPA's interpretation did not violate the non-
delegation doctrine. However, the Court remanded EPA's implementation
approach. The EPA did not seek review of the lower Court's decision that EPA
must consider the beneficial effects of UVB. Because the lower Court had not
considered additional issues at the time it made its ruling based on the non-
delegation doctrine, the Supreme Court remanded the case back to the Court
of Appeals to consider those issues. On remand, the Court of Appeals found
that EPA's action in promulgating the 8-hour ozone NAAQS was not arbitrary
and capricious.
Pursuant to the remand from the Supreme Court, EPA is developing a new
implementation strategy for the 8-hour standard, including how to classify
areas designated as nonattainment for that standard. These classifications
will determine the control measures each nonattainment area will be required
to impose to help the area reach attainment,. Once EPA's implementation
strategy has been finalized through rule making, EPA plans to designate
areas for the 8-hour ozone standard.
On the matter of the Court decision on the implementation plan for the 8-hour
standard, it is not accurate to say that EPA has been instructed to develop an
implementation plan that has the same structure that was written for the 1-hour
ozone standard with regard to classifications. While the Supreme Court ruled that
EPA could not ignore subpart 2 (the structure for the 1-hour ozone standard), it
recognized a gap in coverage and left it up to EPA to resolve this issue. This implies
that the 1-hour standard scheme may not be entirely appropriate for all areas that
are designated nonattainment for the 8-hour standard.
The draft report states that EPA is required to finalize the implementation
plan prior to designations. It is not a statutory requirement to do so. Thus, it is
EPA's current plan to finalize the implementation plan prior to designations
because, in order to begin planning, it is important for the State to know whether and
what implementation planning requirements the area will be subject to under
subpart 2 of the statute.
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The draft report indicates that EPA only relies on information supplied by
States and stakeholders for designations. Once an area is determined to be
nonattainment, EPA and the States use a variety of information to help determine
whether a nearby area, e.g., a county or other geographical entity, contributes to the
nonattainment problem and should be included in the designated nonattainment
area. The EPA issued guidance for States and tribes on determining nonattainment
area boundaries on March 2, 2000, and on July 18, 2002, specifically for tribes
providing the criteria that are to be used to evaluate the appropriate boundaries for
a nonattainment area. The EPA has posted on its web site --
www.epa.gov/ttn/rto/areas -- data in standardized format relating to the criteria in its
guidance to assist States, tribes and Regional Offices in determining boundaries.
These data include but are not limited to monitoring information for all monitors
across the country, modeling for certain areas of the country, emissions sources and
inventories, census data and area-specific information regarding vehicle miles
traveled. The criteria in EPA guidance are used to help resolve the issue of whether
there may be areas that have emissions that contribute to a violation of the standard
in a nearby area.
O/G Evaluation
We revised this section of the final report.
# Report Methodology/MIRA
The report states that MIRA uses data to evaluate the environmental impacts
of EPA's policies and action to designate areas but does not state how this is done or
what the impacts might be. This needs clarification.
O/G Evaluation
We removed this sentence from the final report.
# 1-Hour and Preliminary 8-hour Ozone Designation Process
The report states that EPA's guidance for the 1-hour ozone designations did
not address a process for stakeholder participation. However, stakeholder
involvement can occur at two stages. The first stage is participation at the State and
tribal level, prior to the time their recommendations are made to EPA. Each State
and tribe has its own process for including stakeholders when developing responses
to requirements under the CAA. The EPA does not seek to dictate the States' and
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tribes' processes for responding to the CAA's requirements. The second step could
arise at the time that EPA determines whether to modify a State recommendation.
The statute does not contain a provision requiring EPA to perform a county-
by-county assessment when designating areas; rather it provides that EPA must
designate all areas. The States, tribes and EPA must use their discretion in
determining how to apply the criteria in EPA's guidance for determining boundaries
across the country. For example, in the West, there are large areas of the country
where there are no monitored violations of the ozone standard, and EPA is aware
that population and source density make it highly unlikely that there is an area
violating the standard or contributing to a nearby area that is violating the
standard. Thus, those areas of the country may deserve less scrutiny than areas
along the northeastern seaboard where there have historically been many monitored
exceedances of the ozone standard and population and source density are higher.
The report states that it "could not determine the number of counties
measuring in attainment versus the number of counties without monitors." It is,
however, very straightforward to determine the number of counties measuring in
attainment and the number of counties without monitors. What the report may have
been trying to address is the adequacy of the States' ozone monitoring networks. The
EPA has guidance and regulations addressing networks with which States comply
and when coupled with guidance on boundaries is adequate to determine air quality
and contributions to nonattainment problems.
The report continues with a discussion of the treatment of areas designated
attainment/unclassifiable and suggests that areas without monitors are treated as if
they were monitoring in attainment,. This statement is very misleading. The EPA
treats attainment and unclassifiable areas identically for purposes of designations
primarily because there is no difference in the CAA requirements for attainment and
the unclassifiable areas. The CAA also recognizes that larger urban areas are likely
to have similar levels of ozone across the urbanized area and also have areas that
contribute to those levels. Therefore, the CAA prescribed that even if portions of the
C/MSA do not have monitors, the entire C/MSA be designated as nonattainment.
Region 3 offers a reasonable solution to the problem of not having monitors
everywhere - use of spatial interpolation of air quality data - for assessing whether
an area is meeting the standard. The EPA is evaluating this approach for possible
use in future designations.
OIG Evaluation
We do not dispute that stakeholder participation was part of the 1-hour ozone
designation. However, our report states that we were unable to determine how
stakeholder participation influenced the final recommendations made by the
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states. It is important to note that there are many stakeholders, other than
states and tribes, including industry, environmental groups, and citizens. It is
not clear how the 1-hour ozone designations solicited or incorporated these
stakeholders' concerns.
We agree that the Clean Air Act requires areas be designated for the ozone
standard rather than counties. However, in order to designate areas, a county-
by-county assessment must first be performed.
We disagree with OAQPS that it is very straightforward to determine the
number of counties measuring in attainment and the number of counties
without monitors. The response does not explain how the public could compare
the air quality condition in counties measuring attainment versus the air
quality condition in those that are considered attainment/unclassifiable by
default. This default occurs when a county does not have a monitor to measure
air quality and is not part of a Metropolitan Statistical Area or Consolidated
Metropolitan Statistical Area.
# Benefits of MIRA Demonstrated
The report states that there was not always documentation to clearly support
why a particular county was considered in attainment or nonattainment in EPA's
designations promulgated in 1991. As stated above, the statute does not require
EPA to consider and document its designations decisions on a county-by-county
basis, moreover, EPA believes that the 1991 designations decisions were fully
supported and adequately documented in the record for that action. It is important
to note that, with the exception of one area in the entire country, those regulations
were not challenged.
OIG Evaluation
In our limited review of the 1-hour ozone designation, we found instances
where designation decisions were changed and there was no documentation in
the docket to support the changes. However, it was not the intent of this review
to criticize the 1-hour designation process but rather to help the Agency
improve the 8-hour designation process.
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Appendix D
Example of Sequential vs. Simultaneous Decision Approach
Prepared by: Region 3 MIRA Team
In this example, there are four criteria (air quality, emissions, growth, and
population), and three counties that need to be ranked with regard to
nonattainment. The following chart, based on hypothetical data, ranks each county
for all four criteria on a scale of 1 to 9, with 9 representing the most nonattainment:
County A
County B
County C
Air Quality
9
6
2
Emissions
2
4
7
Population
3
6
5
Growth
4
5
8
If a sequential model is used, for air quality, County A would be ranked the most
nonattainment and County C the least. However, since nonattainment is not only
about air quality status but contribution to downwind nonattainment, the other
decision criteria must be considered. This can cause confusion. For example, while
County C has the best air quality, it has the highest emissions of the three counties.
Therefore, simply comparing rankings for the most important air quality criteria, or
summing all four criteria for each county, is not appropriate.
This presents a dilemma in terms of nonattainment ranking if the sequential model
is used, unless decision makers set County A aside (as nonattainment) based solely
on its air quality value and then evaluate the other counties based on the next single
decision criterion selected by the decision makers, such as emissions, population, and
so on. Proceeding in this manner effectively ignores all but the single criterion that
is currently the subject of the evaluation. Therefore, if County A is set aside based
on its poor air quality value (ignoring its low emissions), Counties B and C are now
evaluated for the next most important criterion: emissions (or some other one if the
decision maker chooses). County C's emissions are the highest of the three counties,
and if we select it for nonattainment, we have effectively ignored its relatively good
air quality.
If this method of setting aside counties as nonattainment once they rank high under
one criterion is used, decision makers will find that nearly all counties evaluated in
this manner will be eventually considered nonattainment. In this example, all
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counties will also eventually be considered nonattainment because although air
quality is the most important criterion (to the exclusion of the others) in the initial
evaluation, each criterion in turn will be evaluated as if it were the most important
criterion for the remaining counties.
In contrast, a simultaneous analysis would permit decision makers to determine
which criteria should be considered more important than the others and give them
more weight. For example, the most important "air quality" criteria can be
considered 40 percent of the ranking, while the less important "population" would
only be given a 10-percent ranking. This would enable decision makers to sum all of
the criteria for each of the three counties and have composite scores that can be used
for comparison purposes, as show below.
County A
County B
County C
Air Quality
9 x 40%
6 x 40%
2 x 40%
Emissions
2 x 30%
4 x 30%
7 x 30%
Population
3x10%
6x10%
5 x 10%
Growth
4 x 20%
5 x 20%
8 x 20%
TOTALS
5.3
5.2
5.0
The result may be what is expected, but it is important to note that these results are
dependent on the preferences used. The results may be different if the preference
value of air quality relative to emissions and the other criteria are changed, even if
air quality is still ranked as the most important criterion. It should be noted that
this technique does not require that the decision maker designate any particular
county attainment or nonattainment - it simply informs the decision maker of the
'nonattainment-ness' of each county relative to the others based on the decision
maker's preferences and the data.
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Appendix E
Distribution List
Office of Inspector General
Office of Inspector General (2410T)
Headquarters Office
Assistant Administrator for Air and Radiation (6101A)
Director, Air Quality Strategies and Standards Division (C50401)
Audit Followup Coordinator - Office of Air Quality Planning and Standards (C40402)
Comptroller (2 731A)
Agency Followup Official (2710A)
Agency Audit Followup Coordinator (2724A)
Associate Administrator for Congressional and Intergovernmental Relations (1301 A)
Associate Administrator for Office of Public Affairs (1701 A)
Director, Office of Regional Operations (1108A)
Regional Offices
Director, Air Protection Division - Region 3 (3AP00)
Chief, Air Quality Planning and Information Services - Region 3 (3AP21)
EPA Regional Administrators (Regions 1-10)
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