May 25, 2010

Effluent Limitations Guidelines and Standards for the Construction and Development Point Source Category

Proposed Rule
Summary

Score: 37 / 60

Additional details
Agency
Environmental Protection Agency
Regulatory Identification Number
2040-AE91
Agency Name
Environmental Protection Agency
Rule Publication Date
11/28/2008

RULE SUMMARY

The Environmental Protection Agency is proposing a regulation that would strengthen the existing regulatory program for discharges from construction sites by establishing technology-based Effluent Limitations Guidelines and New Source Performance Standards for the Construction and Development (C&D) point source category. This proposal, if implemented, would significantly reduce the amount of sediment and other pollutants discharged from construction sites. EPA estimates that this proposed rule would cost $1.9 billion dollars per year with annual monetized benefits of $332.9 million. This proposed rule requests comment and information on the proposed regulation and an alternate option with a different numeric limit based on different technologies, as well as specific aspects of the proposal such as technologies, costs, loading reductions, and economic achievability.

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?
The RIA could be found through a support document link within rule, is not on regulations.gov, and cannot be found by searching the agency website with the RIN.
2/5
2. How verifiable are the data used in the analysis?
The rule and the RIA discuss the data selection at length. Most data and studies have links and descriptions and sources for all data are given but not always linked.
4/5
3. How verifiable are the models and assumptions used in the analysis?
The models and assumptions seem to often rely on peer-reviewed publications as their basis, but not always. Where not, the models seem justifiable and it's possible they came from peer-reviewed publications elsewhere but just aren't cited.
4/5
4. Was the analysis comprehensible to an informed layperson?
An economist would understand it all, though it is slightly heavy on acronyms.
4/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
5/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
This is thoroughly discussed in multiple sections: Less dredging means easier navigation, easier water storage; less sediment in water aids water treatment; and less sediment improves "water quality" which consumers are willing to pay for.
5/5
Does the analysis identify how these outcomes are to be measured?
By performing this analysis, all the outcomes are somehow measured.
4/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
Yes; by limiting sediment runoff from construction sites, the outcomes listed above will be achieved.
5/5
Does the analysis present credible empirical support for the theory?
It appears to have good empirical support, but much of it comes from other EPA documents that are not directly linked (e.g. Technical Assessment Document).
4/5
Does the analysis adequately assess uncertainty about the outcomes?
The RIA includes numerous sensitivity analyses as well as discussions on limitations and uncertainties.
5/5
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?
2/5
Does the analysis identify a market failure or other systemic problem?
The market failure isn't made explicitly clear, except that sediment runoff from construction sites imposes an external cost on water users. The analysis could be improved by specifically discussing the market failure.
2/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
The analysis lists many different aspects of water that are negatively affected by sediment runoff as well as the extent of construction (which means more runoff) in USA.
3/5
Does the analysis present credible empirical support for the theory?
Models/data given in section 6 go into detail on how runoff affects water.
3/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
The RIA discusses briefly variation in compliance costs across states, pointing out that compliance costs may differ with soil and precipitation differences. This only implies that there is some uncertainty in the runoff problem; otherwise, the existence or size seem to be taken as given.
1/5
7. How well does the analysis assess the effectiveness of alternative approaches?
3/5
Does the analysis enumerate other alternatives to address the problem?
The analysis considers three options. However, the option chosen (as well as the others considered) does not narrowly define the technologies to be used but allows for innovations and improvements on technology.
3/5
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 three options are 1) setting minimum sizing criteria for sediment basins at construction sites 10 acres or larger; 2) same as 1, but with numeric turbidity limits at sites 30 acres or larger; and 3) same as 1, but with numeric turbidity limits at sites 10 acres or larger. Thus despite having three options, they are all fairly command-and-control options (although the turbidity limit is performance-based) and of a fairly narrow range.
2/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
All three options are thoroughly evaluated; estimated benefits, broken down into different outcomes listed above, from all three are provided in tables and in text.
5/5
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?
The baseline assumes full compliance with currently existing regulations (this may not reflect reality).
2/5
8. How well does the analysis assess costs and benefits?
4/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
The analysis includes a thorough identification of all costs—both direct and indirect. It specifically addresses equilibrium effects and breaks out a separate section on impact on single-family houses (due to higher construction costs).
5/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
Yes, though the analysis focuses on construction costs.
4/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
The analysis represents a best practice in a supply and demand, economy-wide model as well as on one specific good (single family houses).
5/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
Yes; it consideres substitution, deadweight loss, etc.; the analysis is a best practice.
5/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
The RIA includes numerous sensitivity analyses as well as discussions on limitations and uncertainties.
4/5
Does the analysis identify the alternative that maximizes net benefits?
It is implicitly identified but not necessarily explicitly recommended. It appears to be left to the reader to figure out which one it is (pretty easy to do).
4/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Implicitly, as costs of each option are carefully considered.
3/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
The costs are broken down to sectors of the construction industry under all options considered. This is a best practice.
5/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
Incidence of benefits are well broken down—e.g., dredging costs and water storage cost reductions (which are benefits) are broken down across regions.
4/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
The option that maximized benefits in the RIA is not the one chosen in the rule. On the other hand, the rule mentions the RIA early and refers to calculations from it. But in the end a non-benefit maximizing option was chosen, suggesting the RIA may not have been used.
3/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
The analysis mentions that other options were considered, but there is no explicit justification for choosing the non-maximizing option within the rule.
1/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
The analysis discusses monitoring reports that will be used to enforce the regulation and could be used to track results. Specific details on these discharge monitoring reports (DMR’s) are not included at this stage—they are only mentioned in passing as something that will result in small administrative costs. Unable to determine whether these reports are prospective or definitely part of the regulatory plan.
2/5
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?
The RIA contains data that could be used for future evaluations, which presumably will continue to be produced in the monitoring reports.
3/5
 
Total 37 / 60