May 9, 2011

Sewage Sludge Incineration Units

Proposed Rule
Summary

Score: 31 / 60

Additional details
Agency
Environmental Protection Agency
Regulatory Identification Number
2060-AP90
Agency Name
Environmental Protection Agency
Rule Publication Date
10/14/2010
Comment Closing Date
11/29/2010

RULE SUMMARY

This action proposes how EPA will address Clean Air Act requirements to establish new source performance standards for new units and emission guidelines for existing units for specific categories of solid waste incineration units. In previous actions, EPA has promulgated new source performance standards and emission guidelines for large municipal waste combustion units, small municipal waste combustion units, commercial and industrial solid waste incineration units, and other solid waste incineration units. These actions did not establish emission standards for sewage sludge incineration units. In this action, EPA is proposing new source performance standards and emission guidelines for sewage sludge incineration units.

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 Federal Register notice appears in regulations.gov with a RIN or keyword search. The RIA can be found in the docket by searching for the notice and then clicking on "open docket folder." A keyword search turns up both the proposed rule and the regulatory impact analysis on the EPA's web page.
5/5
2. How verifiable are the data used in the analysis?
Engineering and cost data for each plant—including emissions levels, additional controls needed, and cost data—are all in an appendix. Some are sourced to public sources, but others reference e-mails or other difficult-to-verify sources. Some materials in the docket take a great deal of searching to find. Many of the links are dead.
4/5
3. How verifiable are the models and assumptions used in the analysis?
Some sources are peer-reviewed studies. Most are either consulting studies or EPA documents. The RIA leans heavily on research conducted for other previous RIAs. EPA documents are usually linked; others are not usually linked. Expert elicitation studies summarized in an appendix.
4/5
4. Was the analysis comprehensible to an informed layperson?
The RIA starts off as very readable with a good explanation of background information. Some parts of the RIA, however, bog down in acronyms. (The preamble wallows in them.) There is a list of acronyms, but the analysis often uses industry-specific technical jargon without explanation. Discussion of uncertainties in benefit estimation is hard for non-specialists to follow and may be concealing critical assumptions. We had to re-read multiple parts several times.
2/5

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?
The EPA outlines both quantified and unquantified health benefits in terms of reduced sickness and premature mortality.
5/5
Does the analysis identify how these outcomes are to be measured?
Ultimate health effects can be measured. Only the effects of reductions in particulate emissions are measured, converted to health effects, and monetized. Reductions in other pollutant emissions are measured in tons, but health effects are not calculated or monetized. Multiple charts and graphs explain the measurement methodologies.
4/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
The improved outcomes are supposed to result from a decline in fine particulate matter emissions, which would be a byproduct from regulating nine other air pollutants. The decline in fine particulate matter emissions would reduce exposure. Reduced exposure would reduce sickness and premature mortality.
4/5
Does the analysis present credible empirical support for the theory?
Engineering studies seem to show the regulation reduces emissions. Numerous studies are cited in support of the idea that reduced exposure reduces morbidity/mortality. Peer reviewers agree that the regression analysis is credible. But the analysis appears to say that it does not estimate the change in exposure associated with this specific rule. This would seem to call the entire health benefit estimate into question.
5/5
Does the analysis adequately assess uncertainty about the outcomes?
Analysis provides a range of estimates based on different concentration-response functions in the literature and elicited from experts. Different benefit per ton figures are also used. Other key uncertainties in assumptions are listed and discussed, but not estimated due to absence of relevant air quality data.
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?
0/5
Does the analysis identify a market failure or other systemic problem?
The discussion is completely in terms of legal requirements with no policy content. Sewage sludge incinerators are not specifically named in Section 192(a) of the Clean Air Act. It might have been easy to make an externality case for the regulation, but this was not done.
0/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
No relevant discussion.
0/5
Does the analysis present credible empirical support for the theory?
Calculation of health effects might be interpreted as a claim that the problem this regulation addresses is large ... if the analysis had identified a systemic problem. The only other evidence was a statement that these incinerators are the 6th largest source of mercury emissions accounting for 3 percent of all mercury emissions.
0/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
No relevant discussion.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
3/5
Does the analysis enumerate other alternatives to address the problem?
Three alternative standards are considered.
5/5
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)?
Three principal alternatives were considered—one with more stringent and one with less stringent controls than the chosen option. All were variations on the same regulatory approach.
2/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
Alternatives have identical monetized benefits from particulates but different reductions in other pollutants, which are not monetized. Benefits analysis includes "dis-benefits"—possible increases in emissions from localities opting to landfill their sludge (a cheaper option) and increases in electricity usage from control equipment.
4/5
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?
Baseline is assumed to be current practice, plus a few additional incinerators that have applied for permits. Some aspects of the baseline are ambiguous. The analysis assumes that small municipalities would shift from incinerators to landfills to save regulatory costs, but the same analysis shows they would shift even without the regulation. The shift also reduces emissions.
2/5
8. How well does the analysis assess costs and benefits?
3/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
RIA calculates costs for minimum (floor) requirements plus two more stringent "beyond the floor" options, so incremental costs of these 2 options are clear.
4/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
Compliance expenditures estimated based on engineering calculations of measures needed to reduce emissions to required levels. Appears to underestimate costs a bit by assuming that only 2 of 5 proposed new units become operational within the 5-year window of the analysis.
4/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
The analysis states it uses direct compliance costs, rather than social costs that take into account market reactions and price effects as the guidance requires, because 95 of the 96 regulated entities are local governments. Thus the analysis ignores the effects of increased taxes (or fees?) on incentives, markets, and deadweight loss (generally known as the "tax wedge").
1/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
The analysis considers whether some munciplatities might find using landfills a cheaper option than complying with the new requirements, but landfills appear to be cheaper for some municipalities even without this regulation. The analysis does not examine how taxpayers might respond to higher taxes. It mentions, but does not analyze, a couple of other behavioral changes.
1/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
It calculates emissions if all sources comply or if small sources landfill instead of complying. Cost data are assumed to be certain.
2/5
Does the analysis identify the alternative that maximizes net benefits?
A table lists monetized net benefits of all three alternatives along with a list of reductions in emissions that were not monetized. Only fine particulate matter is assigned a monetary value, and it is not even one of the nine pollutants regulated by this proposal.
3/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Analysis considers cost-effectiveness of emissions reduction for different technologies and each option.
3/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
Analysis considers costs for thetwo major types of incinerators. Analysis considers costs imposed on 18 small governments, but concludes that the impact of these costs is not significant because it is less than 1 percent of these governments' total revenues. Surely the more relevant test is the increased cost as a percentage of the cost of operating these facilities? No discussion of how this regulation ultimately affects local taxpayers.
3/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
A pie chart shows how the health benefits break down between adult mortality and various diseases. The "BenMap" program allows breakdown by geography. Since the EPA claims it does not have emissions data that would let it directly estimate health effects, a more detailed benefit incidence may not be possible.
4/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
EPA was ordered by a court to impose emissions standards on these units. Minimum limitation depends on performance of best-controlled units; thus, it is a calculation based on engineering data that does not even explicitly take health benefits into account. EPA claims its decision on mercury control took costs into account, but this claim is brief and opaque.
2/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
Analysis calculated net benefits of particulate reductions, but not all pollutants. EPA cannot consider cost in establishing minimum controls but must consider cost in establishing controls that go beyond the minimum. So, the reason for EPA's choice on the minimum standard is clear. EPA says it required beyond-minimum controls for mercury because it is cost-effective but not for carbon monoxide because CO control would lead to large emissions increases due to burning more natural gas. It does not explain why $6000 per pound of mercury is cost-effective or how EPA balanced the emissions when considering additional CO reduction.
2/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
There is no commitment to measures or goals, beyond the obvious expectation that operators will comply with the emissions limits. RIA might provide some guidance in setting goals for health effects and costs, but as it does not quantify a lot of health effects, it's only partially helpful.
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?
EPA will require operators to submit performance test data electronically to an EPA database to be used in future reviews of the standards. Thus, EPA can monitor emissions and compliance but not health benefits or costs.
1/5
 
Total 31 / 60