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National Ambient Air Quality Standards for Particulate Matter; Proposed Rule
Score: 34 / 60
RULE SUMMARY
Based on its review of the air quality criteria and the national ambient air quality standards (NAAQS) for particulate matter (PM), the EPA proposes to make revisions to the primary and secondary NAAQS for PM to provide requisite protection of public health and welfare, respectively, and to make corresponding revisions to the data handling conventions for PM and ambient air monitoring, reporting, and network design requirements. The EPA also proposes revisions to the prevention of significant deterioration (PSD) permitting program with respect to the proposed NAAQS revisions. With regard to primary standards for fine particles (generally referring to particles less than or equal to 2.5 micrometers (mm) in diameter, PM2.5), the EPA proposes to revise the annual PM2.5 standard by lowering the level to within a range of 12.0 to 13.0 micrograms per cubic meter (mg/m3), so as to provide increased protection against health effects associated with long- and short term exposures (including premature mortality, increased hospital admissions and emergency department visits, and development of chronic respiratory disease) and to retain the 24-hour PM2.5 standard. The EPA proposes changes to the Air Quality Index (AQI) for PM2.5 to be consistent with the proposed primary PM2.5 standards. With regard to the primary standard for particles generally less than or equal to 10 mm in diameter (PM10), the EPA proposes to retain the current 24-hour PM10 standard to continue to provide protection against effects associated with short-term exposure to thoracic coarse particles (i.e., PM10-2.5). With regard to the secondary PM standards, the EPA proposes to revise the suite of secondary PM standards by adding a distinct standard for PM2.5 to address PM-related visibility impairment and to retain the current standards generally to address non-visibility welfare effects. The proposed distinct secondary standard would be defined in terms of a PM2.5 visibility index, which would use speciated PM2.5 mass concentrations and relative humidity data to calculate PM2.5 light extinction, translated to the deciview (dv) scale, similar to the Regional Haze Program; a 24-hour averaging time; a 90th percentile form averaged over 3 years; and a level set at one of two options—either 30 dv or 28 dv.
COMMENTARY
Using the fixed costs methodology to estimate the costs of new, future technology that will enable certain non-attainment regions to come into compliance leads to costs that are too small. The RIA cites literature that suggests that the EPA has, in the past, overestimated future costs, and presents examples. However, the examples include the SO2 trading market which induces high cost abaters to buy pollution permits from low cost abaters. No such exchange is possible under this rule. Without a property right and a space for exchange, no single firm has the ability—or the incentive—to trade and lower its abatement costs. By using constant costs, the RIA assumes lowering particulate levels from 15 to 13 μg/m3 is the same as moving from 12 to 10 μg/m3. This is why the net benefits are estimated to be higher for much lower levels of fine particulate. So, why not pick the one with a higher net benefit to society? Probably because the current result gives the administrator the ability to appear reasonable and pick a higher fine particulate level even though a lower level produces a greater net benefit. The NPRM is heavily focused on scientific impacts rather than accuracy in benefit-cost analysis, which is seen as contrary to the required focus on creating a margin of safety regardless of costs. Costs are seen as trivial, which is implausible, and benefits are often described qualitatively.
MONETIZED COSTS & BENEFITS (AS REPORTED BY AGENCY)
| Dollar Year | 2006 ($millions) | |
| Time Horizon (Years) | 2020 | |
| Discount Rates | 3% | 7% |
| Expected Costs (Annualized) | Not Reported by Agency | Not Reported by Agency |
| Expected Benefits (Annualized) | Not Reported by Agency | Not Reported by Agency |
| Expected Costs (Total) | $69 | Not Reported by Agency |
| Expected Benefits (Total) | $2,300-5,900 | $2,100-5,400 |
| Net Benefits (Annualized) | Not Reported by Agency | Not Reported by Agency |
| Net Benefits (Total) | Not Reported by Agency | $2,000-5,300 |
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? NPRM and the RIA are listed on the regulations.gov web site. The RIA can also be found using a keyword search on the EPA's website. Some information is admitted to be not publicly available (information where disclosure is restricted by statute, and some copyright material). | 4/5 |
| 2. How verifiable are the data used in the analysis? Sources for all data are provided but not necessarily linked. Almost all are verifiable. Many data are taken from published studies. | 3/5 |
| 3. How verifiable are the models and assumptions used in the analysis? Works are clearly cited; however, it is difficult to verify assumptions in each model used to connect particulate matter to health outcomes—especially for long-run exposure. This is less of a problem for short-run exposure tests. For example, most cited literature fails to include co-pollutants as potential sources of negative health effects. When these are included, the relationship between particulate matter and health outcomes becomes less statistically significant. The EPA has responded to US Court of Appeals criticism that its proposals lacked an evidentiary basis and has made a major effort to marshal published research. An unfortunate effect of this effort has been to make the modeling less accessible. | 3/5 |
| 4. Was the analysis comprehensible to an informed layperson? Results and conclusions are clear, but one needs both an economic and epidemiological background to fully understand the proposed rule and RIA. The underlying work is demanding, and numerous judgment calls by the administrator are revealed explicitly in the document. | 3/5 |
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? It does. The reduction in long-term exposure and 24-hour peak exposure to particulate matter between 10 micrograms and 2.5 micrograms (PM2.5) will enhance the quality and quantity of life by reducing the probability of numerous cardiovascular-related and lung-cancer mortality and respiratory-related morbidity. | 5/5 |
| Does the analysis identify how these outcomes are to be measured? The proposed rule and the RIA cite a number of studies that look at the correlation between short-run and long-run exposure to particulates and pre-mature mortality, non-fatal heart attacks, cardiovascular and respiratory hospital admissions, asthma, bronchitis, and work days lost. It also tilts at measuring the impact of particulates on corrosion of property. | 4/5 |
| Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes? The theory is crude but coherent. By requiring states to form and implement plans to reduce particulate emissions, the lower annual exposure will improve the health of citizens. The secondary rule will also ensure improved visibility. | 4/5 |
| Does the analysis present credible empirical support for the theory? There is credible evidence that lower levels of particulates are associated with lower cardiovascular-related mortality and respiratory-related morbidity. There are, however, only a few studies that included other potential sources of health-reducing emissions along with particulates, and fewer still that continue to find a beneficial effect on long-run health with lower particulate levels when other co-pollutants are included in the study. | 3/5 |
| Does the analysis adequately assess uncertainty about the outcomes? Analysis is based on published work and simulation. The RIA uses Monte Carlo methods to generate confidence intervals around the estimated health impact and monetized benefits. The EPA does acknowledge the uncertainty associated with small levels of particulate emissions and thus includes "a set of twelve estimates of the concentration-response function based on results of the PM2.5 mortality expert elicitation study in addition to our core estimates" (ES-11). According to the RIA, "Even these multiple characterizations omit the uncertainty in air quality estimates, baseline incidence rates, populations exposed, and transferability of the effect estimate to diverse locations" (RIA 8-3). | 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? | 2/5 |
| Does the analysis identify a market failure or other systemic problem? It doesn't explicitly. The EPA assumes but never identifies exactly why particulate levels may be too high in the short-run and long-run. It mentions that the source of the particulates are both man-made and natural, but assumes the levels are too high. | 1/5 |
| Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal? It doesn't directly. The RIA does reveal that fine particulate levels are associated with certain cardiovascular and respiratory health problems, but does not consider any sense in which the problem is too large. There is no mention of externalities or a socially efficient level of emissions. | 1/5 |
| Does the analysis present credible empirical support for the theory? The RIA presents evidence to support NPRM's potential for achieving health benefits. However, "Most of the estimated avoided premature deaths occur at or above the lowest measured PM2.5 concentration in the two studies used to estimate mortality benefits" (RIA 5-2). | 2/5 |
| Does the analysis adequately assess uncertainty about the existence or size of the problem? It recognizes omissions. The RIA acknowledges that different fine particulates may affect health outcomes. The RIA (4-8) reveals that "only two counties are projected to exceed an alternative standard of 13/35 ... Riverside County, CA and San Bernardino County, CA. ... Six counties are projected to exceed an alternative standard of 12/35, 18 counties ... to exceed an alternative standard of 11/35, and 35 counties ... to exceed an alternative standard of 11/30." | 4/5 |
| 7. How well does the analysis assess the effectiveness of alternative approaches? | 3/5 |
| Does the analysis enumerate other alternatives to address the problem? It does, in the sense of narrow standards. Although different emission standards are analyzed, the rule commands states to implement programs to meet the new PM2.5 standards. Just variation on cc scheme. | 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)? It is a case of very narrow standards. NPRM and the RIA both look at four annual and 24-hour emission levels: revised annual standard levels of 13/12/11 μg/m3 in conjunction with retaining the 24-hour standard level at 35 μg/m3 (13/35; 12/35; 11/35) and a revised annual standard level of 11 μg/m3 in conjunction with a revised 24-hour standard level at 30 μg/m3 (11/30). | 1/5 |
| Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved? There are no alternative approaches, simply different levels of PM2.5, although the analysis does a thorough job of determining the outcome under each alternative PM2.5 standard. | 3/5 |
| 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 is well defined overall and by each monitoring area, in terms of the current regulatory environment. The RIA baseline includes various rules that are in the process of implementation. | 4/5 |
| 8. How well does the analysis assess costs and benefits? | 3/5 |
| Does the analysis identify and quantify incremental costs of all alternatives considered? It just identifies and quantifies the total costs of all four annual and 24-hour emission levels. | 5/5 |
| Does the analysis identify all expenditures likely to arise as a result of the regulation? The RIA estimates the costs of future technological developments in response to the proposed rule. The costs associated with monitoring, reporting, and record-keeping for affected sources are not included in these annualized cost estimates. Data on costs of measurement, which seem to be location-specific, are included. | 3/5 |
| Does the analysis identify how the regulation would likely affect the prices of goods and services? It does not. However, the RIA does discuss certain types of production that may be affected by the new PM2.5 standard. The analysis is focused on engineering studies of costs and not behavioral responses in markets. P.440 of the RIA is instructive: the EPA assumes that willingness to pay for visibility improvements does not vary with area or populations and admits the assumptions are not currently testable—but the claims seem highly unlikely. | 1/5 |
| Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation? It acknowledges that new technology will be developed in response to the regulation. The RIA does not appear to include the relocation of firms located in high particulate-level areas. The focus is on ecosystem responses. | 1/5 |
| If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis? The RIA notes: "Estimating engineering costs for emission reductions needed beyond those from known controls to reach attainment in 2020 is inherently a challenging exercise." Therefore the RIA uses two types of future cost estimation methodologies: fixed-cost and alternative hybrid costs for each particulate level for each region of the country separately. The fixed cost assumes each reduction level costs the same, where as the hybrid assumes a quadratic relationship. It appears that the RIA uses the quadratic method as a straw man so that the EPA can then say that the fixed-cost method is the more reasonable method. | 2/5 |
| Does the analysis identify the alternative that maximizes net benefits? The proposed rule does estimate the costs and benefits of each alternative and identifies, though does not select, the alternative that maximizes net benefits. | 4/5 |
| Does the analysis identify the cost-effectiveness of each alternative considered? It incidentally reveals cost effectiveness. The RIA does not directly report the cost effectiveness of each alternative. However, the RIA reports the reduction in mortality, morbidity, hospital visits, and work days lost for each alternative particulate standard and the estimated costs of each particulate standard. | 3/5 |
| Does the analysis identify all parties who would bear costs and assess the incidence of costs? The RIA reports the costs by region, but not by all sectors. It discusses the impact on different groups, such as the elderly. | 3/5 |
| Does the analysis identify all parties who would receive benefits and assess the incidence of benefits? The RIA reports the incidences of benefits by region and age and by those with certain types of health maladies, such as asthma. | 4/5 |
Use | |
| 9. Does the proposed rule or the RIA present evidence that the agency used the analysis? No, in fact the proposed rule states: "The RIA is done for informational purposes only, and the proposed decisions on the National Ambient Air Quality Standards in this rulemaking are not in any way based on consideration of the information or analyses in the RIA." The EPA is using analysis to press ahead with an older proposal that was stopped. | 1/5 |
| 10. Did the agency maximize net benefits or explain why it chose another alternative? The proposed rule chooses the less stringent emission standard which results in a lower net benefit. This is quite odd. The rule lowers the level of fine particulate to a range of 12.0 to 13.0 micrograms per cubic meter (μg/m3) even though a lower standard of 11 (μg/m3) results in a greater net benefit. The proposed rule does not maximize net benefits, and explains this in terms of the requirements governing environmental regulation (not to CBA over human health). The proposed rule repeatedly notes that an administrator has the final say in the manner and can weigh the research on short- and long-term particulate exposure as a matter of judgment. The proposed rule also repeatedly states that in "setting the National Ambient Air Quality Standards, the EPA may not consider the costs of implementing the standards." This was confirmed by the Supreme Court in Whitman v. American Trucking Associations, 531 U.S. 457, 465–472, 475–76 (2001). So a CBA was done (credit here) but ignored. | 2/5 |
| 11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future? Standards will be hit or not, basically. The Clean Air Act governs the establishment, review, and revision of the national ambient air quality standards. Section 109(d)(1) requires that "not later than December 31, 1980, and at 5-year intervals thereafter, the Administrator shall complete a thorough review of the criteria published under section 108 and the national ambient air quality standards and shall make such revisions in such criteria and standards and promulgate such new standards as may be appropriate." It does not explicitly state that health measures will be included in the future. | 3/5 |
| 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? Yes, there will be new particulate monitoring system up and running in five years that will be used to assess the results. Monitoring sites and particulate measures could lead to worrying averaging effects in current procedures. | 3/5 |
| Total | 34 / 60 |
Additional details
- Agency
- Environmental Protection Agency
- Regulatory Identification Number
- 2060-AO47
- Rule Publication Date
- 06/29/2012
- Comment Closing Date
- 08/31/2012
- Dollar Year
- 2006 ($millions)
- Time Horizon (Years)
- 2020