December 19, 2001

The U.S. Environmental Agency's Proposed Rule to Control Emissions From Nonroad Large Spark Ignition Engines and Recreational Engines (Marine and Land-Based)

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Proposed Rule to Control Emissions From Nonroad Large Spark Ignition Engines and Recreational Engines (Marine and Land-Based) 

Stated Purpose:

Help states achieve air quality standards; help reduce acute exposure to CO, air toxics, and PM; and help address visibility and other environmental problems.

Summary of RSP Comment:

To address localized violations of air quality standards, EPA proposes to issue nationwide standards for certain nonroad utility and recreational vehicles (including forklifts and snowmobiles). It has not shown that such nationwide standards will be effective at meeting air quality in the urban regions that are out of attainment, and instead justifies the rule on cost-per-emitted-ton measures that do not inform policy makers as to whether the restrictions will actually contribute to air quality goals. EPA also justifies the stricter emission standards on alleged fuel cost savings to purchasers of these vehicles without recognizing that purchasers value other qualities that would have to be forfeited in these machines.

EPA’s proposal includes both a brief interim "Phase 1" standard followed by a permanent "Phase 2" standard. Yet EPA’s own data reveal that this one-size-fits-all approach does not serve either consumers or air quality well. With forklifts, meeting the interim Phase 1 standard will actually cost purchasers more, distract manufacturers from achieving Phase 2, and delay air quality benefits. With snowmobiles, the Phase 2 standards will deliver few environmental benefits at several times the cost of the Phase 1 standards.

EPA should postpone going forward with the proposed rule until it has conducted a true benefit-cost analysis, coupled with a comparison of alternative regulatory approaches. Primary among these alternatives should be approaches that target controls in urban areas where air quality does not meet standards, rather than targeting recreational vehicles, like snowmobiles, that are not used in urban areas. In estimating benefits, the Agency should drop the estimates of "fuel/maintenance savings" and replace them with dollar estimates of the health/environmental benefits based on a regional modeling of the proposed rule’s clean air impacts. In preparing the cost impacts on consumers, the Agency should rely less on engineering cost estimates (that implicitly bias the analysis against smaller firms) and consider both price and vehicle "performance" impacts on consumer welfare.