November 2, 2010

Control of Emissions From New Marine Compression-Ignition Engines At or Above 30 Liters per Cylinder

Proposed Rule
Summary

Score: 37 / 60

Additional details
Agency
Environmental Protection Agency
Regulatory Identification Number
2060-AO38
Agency Name
Environmental Protection Agency
Rule Publication Date
08/28/2009
Comment Closing Date
09/28/2009

RULE SUMMARY

EPA is proposing emission standards for new marine diesel engines with per cylinder displacement at or above 30 liters (called Category 3 marine diesel engines) installed on U.S. vessels, under section 213 of the Clean Air Act (CAA or ‘‘the Act’’). The proposed engine standards are equivalent to the nitrogen oxides (NOX) limits recently adopted in the amendments to Annex VI to the International Convention for the Prevention of Pollution from Ships (MARPOL Annex VI) and are based on the position advanced by the United States Government as part of those international negotiations. The nearterm standards for newly-built engines would apply beginning in 2011. Longterm standards would begin in 2016 and are based on the application of highefficiency aftertreatment technology. We are also proposing a change to our diesel fuel program that would forbid the production and sale of marine fuel oil above 1,000 ppm sulfur for use in the waters within the proposed U.S. ECA and internal U.S. waters and allow for the production and sale of 1,000 ppm sulfur fuel for use in Category 3 marine vessels.

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
2060-AO38 can be found from regulations.gov using RIN and keyword search. To find the RIA on regulations.gov, search by keyword (the title). On the EPA website, the proposed regulation can be found by clicking on Laws and Regulations. They then provide various links to search engines to find the RIA.
4/5
2. How verifiable are the data used in the analysis?
Its difficult to verify the data because of the complexity and amount of data used in the analysis. In particular, the benefits data are data used and developed in other rulemakings and add up to thousands of pages. However sources for most data are provided with some links and URLs.
3/5
3. How verifiable are the models and assumptions used in the analysis?
Models are also extremely complex and in some cases are black boxes. However, they have been used before by EPA and are peer reviewed by EPA advisory committees. Models and assumptions are consistent with or based on cited literature or analyses, but it is not obvious to the reader that all the cited works are recent, peer-reviewed scientific publications.
4/5
4. Was the analysis comprehensible to an informed layperson?
The RIA is well written and understandable especially for laypersons familiar with Clean Air Act rules. Tables, links and footnotes help significantly. However, the RIA is somewhat longwinded.
4/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
4/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
Mortality and morbidity improvements are the outcomes identified, which clearly affect citizens' quality of life.
5/5
Does the analysis identify how these outcomes are to be measured?
It is not clear how the expected health improvements flowing from the regulation and, in particular, from the coordinated strategy that depends upon International Maritime Agreements, will be measured.
3/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The benefits of the regulation depend on the emission reductions of diesel particulate matter that are expected from the regulation of ocean going vessels. However, there is no discussion of how to determine whether this particular regulation will affect particulate matter and ozone induced mortality given the many other regulations aimed at the same problem and given the difficulty of measuring health impacts of particulate matter and ozone in general.
3/5
Does the analysis present credible empirical support for the theory?
EPA has used the empirical support used for this regulation in previous rulemakings and had it peer reviewed by its advisory boards.
4/5
Does the analysis adequately assess uncertainty about the outcomes?
The agency discusses the reasons why the benefit estimates in particular are uncertain. The analysis devotes a section or two regarding the uncertainty of the outcomes in addition to expressing the limits of their analysis.
3/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
4/5
Does the analysis identify a market failure or other systemic problem?
EPA does discuss that emissions are a classic negative externality and has a good discussion of why the market does not work in this case.
4/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
In this case it is self evident that there is a systemic and classic market failure from the diesel fumes emitted by ocean-going vessels especially in certain large seaports.
4/5
Does the analysis present credible empirical support for the theory?
Evidence is presented that diesel fumes are a negative externality in emission control areas such as Long Beach and LA seaports.
4/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
There is not much uncertainty about the salience of the problem if you accept the science.
4/5
7. How well does the analysis assess the effectiveness of alternative approaches?
4/5
Does the analysis enumerate other alternatives to address the problem?
The RIA enumerates alternative thresholds for specific variables in the analysis, and discusses the consideration of several alternatives: "In the course of designing our rulemaking, we investigated several alternative approaches to both the engine and fuel programs. The analysis for those alternatives is contained in the preamble, and is not duplicated in this RIA," but also gives a somewhat alternative option to address the problem as described in appendix 3B.
4/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
The range of options is fairly wide including speeding up compliance dates, subsidies, local regulation, and voluntary compliance but tends to see these as complements rather than substitutes.
4/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
It does so in a qualitative sense.
2/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
It considers a baseline scenario for 2020 and 2030 taking into account other EPA regulations, economic trends and expected growth in demand for better health based on per capita income increases.
5/5
8. How well does the analysis assess costs and benefits?
4/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
It identifies only the incremental costs of the option chosen.
2/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
It includes the direct compliance costs such as for new engines and the increased costs from fuel switching from residual to distillates as well as the possible output effects of higher prices.
5/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
Yes, it does an excellent job of explaining the economic models used and the effect of using different elasticity estimates of supply and demand on prices,
5/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
It models the social welfare impacts of behavioral changes on both the consumers and producers of ocean transport services .
5/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
EPA does not expect much uncertainty in the cost estimates, especially compared to the benefit estimates. The analysis presents point estimates for costs..
3/5
Does the analysis identify the alternative that maximizes net benefits?
The analysis presents benefit and cost estimates for only the proposed option, and thus there is no way to know whether net benefits are maximized.
1/5
Does the analysis identify the cost-effectiveness of each alternative considered?
The analysis presents a cost-effectiveness analysis for the proposed option but does not present a table of the cost per ton of emissions removals for other EPA regulations also aimed at SOx, NOx, and fine particulate matter.
2/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
The analysis shows that almost all costs would be borne by consumers of marine transport services and that these services would increase in price by about $17 per container (about 3% of shipping costs) and about $7 per day for a typical cruise passenger.
4/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
The analysis calculates the health improvement for various categories of citizens including by demographics and geography.
5/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
The agency states that the rule is base on statutory imperatives, international maritime agreements, and technical feasibility concerns.
1/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
It does not discuss this issue, but the analysis for the coordinated strategy shows benefits far in excess of the costs.
2/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
This is not discussed, but the RIA does contain measures that could be used to track future success.
1/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
This is not discussed, but the RIA does contain measures and a template that could be used to perform a retrospective analysis..
2/5
 
Total 37 / 60