July 27, 2010

National Emission Standards for Hazardous Air Pollutants for Area Sources: Industrial, Commercial, and Institutional Boilers; Proposed Rule

Proposed Rule
Summary

Score: 33 / 60

Additional details
Agency
Environmental Protection Agency
Regulatory Identification Number
2060-AM44
Agency Name
Environmental Protection Agency
Rule Publication Date
06/04/2010
Comment Closing Date
08/23/2010
Dollar Year
2006
Time Horizon (Years)
1 (for year 2016)

RULE SUMMARY

EPA is proposing national emission standards for control of hazardous air pollutants from two area source categories: Industrial boilers and commercial and institutional boilers. The proposed emission standards for control of mercury emissions from coalfired area source boilers and the proposed emission standards for control of polycyclic organic matter emissions from all area source boilers are based on the maximum achievable control technology. The proposed emission standards for control of mercury emissions from biomass-fired and oilfired area source boilers and for other hazardous air pollutants are based on EPA’s proposed determination as to what constitutes the generally available control technology or management practices.

EPA is also clarifying that gas-fired area source boilers are not needed to meet the 90 percent requirement of section 112(c)(3) of the Clean Air Act. Finally, we are also proposing that existing area source facilities with an affected boiler with a designed heat input capacity of 10 million Btu per hour or greater undergo an energy assessment on the boiler system to identify cost-effective energy conservation measures.

MONETIZED COSTS & BENEFITS (AS REPORTED BY AGENCY)

Dollar Year
2006
 
Time Horizon (Years)
1 (for year 2016)
 
Discount Rates
3%
7%
Expected Costs (Annualized)
$10900 million
$10900 million
Expected Benefits (Annualized)
$59,000-$140,000 million
$53,000-$130,000 million
Expected Costs (Total)    
Expected Benefits (Total)    
Net Benefits (Annualized)    
Net Benefits (Total)
$48,000-$130,000 million
$42,000-$130,000 million

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?
In part because of the multiple rules and combined RIA for the interrelated rules, all documents were not easily found, linked together or easily navigated.
4/5
2. How verifiable are the data used in the analysis?
The data are referenced within articles, other government reports and other EPA rulemakings and studies. It is very difficult to trace back the data, but not impossible. It really helps if you are familiar with the other EPA rulemakings and data sources.
3/5
3. How verifiable are the models and assumptions used in the analysis?
The models used are almost all either based on peer reviewed academic literature or peer reviewed by EPA funded scientific panels.
5/5
4. Was the analysis comprehensible to an informed layperson?
The analysis draws on many academic disciplines and at times is extremely complicated, thus making it difficult for the layperson to understand. However, part of this is explained by the complicated nature of the problem being addressed.
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?
Premature mortality and various morbidity outcomes from reducing fine particulate matter in the air (pm 2.5 per ton) are carefully and fully discussed.
5/5
Does the analysis identify how these outcomes are to be measured?
As specified by the Clean Air Act, various enumerated source categories must meet emission limits for particulate matter 2.5 and other hazardous air pollutants in terms of pounds emitted per million British Thermal Units of heat input. Dose response models are estimated from the epidemiologic literature to estimate the reduction in mortality and improvement in morbidity. Thus outcomes are not measured, just predictors.
3/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The desired outcomes are assumed to occur based on the reduction of emissions from compliance with the emissions standards.
3/5
Does the analysis present credible empirical support for the theory?
Relevant peer reviewed models and past agency practices support the theories used.
5/5
Does the analysis adequately assess uncertainty about the outcomes?
A range of assumptions is used in a sensitivity analysis including threshold and no threshold assumptions in the risk assessment, a high and low estimate from two epidemiologic studies and the two discount rates specified by OMB Circular A-4 (3% and 7%). Also a Monte Carlo simulation done in a RIA for a previous particulate matter air is referenced.
4/5
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?
3/5
Does the analysis identify a market failure or other systemic problem?
EPA states that it is implementing provisions of the Clean Air Act, responding to a 2007 DC Circuit court vacatur, and following past agency action plans. It does not explicitly discuss market failure or a systemic problem.
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 agency does use mainstream models to show that emission reductions should improve desired outcomes.
3/5
Does the analysis present credible empirical support for the theory?
The extensive empirical evidence cited is credible.
4/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
The analysis adresses uncertainty by way of presenting ranges of benefit estimates, but the agency views as settled, by previous agency actions and studies, that the size of the problem is of major proportions and is settled science.
3/5
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 mentions another approach, which it briefly discusses.
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 RIA does analyze an option with the same monetized benefits but which costs significantly more.
2/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
The option analyzed provides the same monetized benefits as the proposal.
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?
EPA uses a 2015 baseline as the year the rule would be fully effective.
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?
Incremental costs and benefits are relative only to the baseline.
1/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
It appears to do a good job of analyzing both engineering costs and social costs.
5/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
EPA uses a 100 sector multimarket model that uses domestic and international supply and domestic demand elatillcities to simulate domestic and international price impacts.
5/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
Yes, the analysis examines cost in terms of the reactions to the price impacts including import changes and job creation and destruction.
5/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
Cost estimates are presented only as point estimates.
2/5
Does the analysis identify the alternative that maximizes net benefits?
One option to the proposal is presented and its net benefits are less, but other alternatives are not analyzed.
3/5
Does the analysis identify the cost-effectiveness of each alternative considered?
CEA as required by OMB Circular A-4 is not performed.
2/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
The incidence of costs is not analyzed except by firm size as required by the Regulatory Flexibility Act.
3/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
The analysis does discuss groups that would benefit but assumes that the benefits are pretty much evenly distributed throughout the country.
3/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
The agency presents no evidence that it used the analysis, although there is no contrary evidence either.
1/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
See above. The lack of incremental alternatives is evidence that the agency did not maximize net benefits, even though net benefits were calculated.
2/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
The rule does establish emission standards by source category that could be used to track compliance.
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?
EPA does not indicate what outcomes it might use to track performance in the future or even discuss future evaluations.
0/5
 
Total 33 / 60