National Ambient Air Quality Standards for Ozone --Final Regulatory Impact AnalysisBriefing for Interagency WorkgroupU.S. Environmental Protection AgencySeptember 3, 2015Outline•OverviewofMethodology•AnalyticalStructureofFinalRIA•Resultsfor2025foreverywhereintheU.S.,exceptCalifornia•ResultsforpostͲ2025forCalifornia•AnalysesIncludedfromProposalRIA2DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEForecast Future Year Base CaseEmissions & Air QualityEstimate 2025 Baseline AirQualityEstimate Air Quality andEmissions Reductions forAttainment of the Revised &Alternative NAAQS LevelsCalculate Costs Associated withIdentified Control StrategiesCalculate Costs Associatedwith Identified andUnidentified ControlStrategiesEstimate Total CostsConduct Benefits AnalysisAssociated with Identified ControlStrategiesConduct Benefits AnalysisAssociated with Identifiedand Unidentified ControlStrategiesEstimate Total BenefitsEstablishBaselineControl Strategies,EmissionsReductions fromIdentifiedControls, BenefitsEmissionsReductions BeyondIdentified Controls

DRAFT DELIBERATIVE MATERIAL for INTERAGENCY REVIEW

ͲͲ DO NOT DISTRIBUTEOverviewofMethodology3ProjectedOzoneDesignValues–2025Baseline4DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEAnalyticalStructureofFinalRIA•FutureYearof2025•2025baselineincorporatesCSAPR,MATS,TierIII,andRegionalHaze,aswellasadjustmentforCleanPowerPlan•Analyzed70and65ppb•CostsandBenefits•2025foreverywhereintheU.S.,exceptCalifornia•PostͲ2025forCalifornia•AdjustedbaselineairqualitytoreflectmobilesourceemissionsreductionsforCalifornia•Assumedcostsoccurthroughtheendof2037/beginningof2038•ModeledbenefitsforCaliforniausingprojectedpopulationdemographicsfor20385DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEAnalyticalStructureofFinalRIA•Toestimatecostsfromunidentifiedcontrols,weused$15,000/tonastheprimaryvalueforNOxonly•Valueisconsistentwithproposalandreflectsthatsomecontrolslikelycostlessthan$15,000/tonandsomecostmorethan$15,000/ton•Toestimatecostsfromidentifiedcontrols,appliedslightlyhighercutoffvaluesthanatproposal•RevieweddataonidentifiedcontrolmeasuresforbothNOxandVOCanddefinedtransparentmethodologyforselectingcutoffvalues•ForNOxcontrols,plottedexponentialtrendlinethroughidentifiedcontrolcostcurveanddeterminedcutoffvalueof$19,000/ton•ForVOCcontrols,theidentifiedcontrolcostcurverevealedclearpointforcutoffvalueof$33,000/ton•VOCcontrolsaregenerallymoreexpensivethanNOxcontrolsandwereappliedinspecificlocationswhererelativeeffectivenesshadgreatereffectonozoneconcentrations•Becausefewcontrolsareactuallyappliedatvaluesabove$15,000/ton,thesehighercutoffvaluesdon’tsubstantiallyaltercostestimates•MediancontrolcostforNOxcontrolswas$10,400/ton•97%ofNOxcontrolsappliedat$15,000/tonorless•BenefitsAnalysis•Addedworkerproductivityestimatesinasensitivityanalysis•Modifiedsetofepidemiologystudiesforestimatingchangesinasthmaexacerbationandrespiratoryhospitaladmissionsassociatedw/ozoneexposure6DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEAnalyticalStructureofFinalRIA•Conductedadditionalairqualityemissionssensitivitymodelingruns•Generatedmorerefinedozoneresponsefactorsthatallowanalysisofmoretargetedandeffectiveemissionsreductionsacrosssmallergeographicareas•InEastTexas,localemissionsreductionswere2to3timesmoreeffectiveatreducingozoneconcentrationsthantheequivalentregionalemissionsreductionsusedintheproposal•IntheNortheast,localemissionsreductionswereupto2.5timesmoreeffectiveatreducingozoneconcentrationsthantheequivalentregionalemissionsreductionsusedintheproposal•Allowedustorefinecostandbenefitestimates•Updated2025basecaseairqualitymodeling•Improvementstoemissionsinventories,modelinginputs,andmodelsforkeysectors,includingEGU,oil&gas,andonroad sources•Newprojected2025DVs7DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEDRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEW–DONOTDISTRIBUTE8ProposalFinalFinalRegionsforRefinedAirQualityEmissionsSensitivityModeling– ProposalandFinal7New2025ProjectedOzoneDVs•For70ppb,comparedtoproposalthereareareaswithhigherandlowerprojectedDVs•TwoareaswithlargeDVdecreasesdominatetheDVchanges•TwofewercountiesaroundDallaswithDVs>70ppb•Decreasesofupto2.2ppbinTexascountiesaroundDallasandHouston•Decreasesofupto1.5ppbinSuffolkCounty,NYandFairfield,CT•DVincreaseswereobservedinDenver,Louisville,Sheboygan,andPittsburghareas•For65ppb,comparedtoproposalthereareincreasesanddecreasesinprojectedDVsacrossamoredispersedsetofgeographicareasandtheDVdecreasesseeninTexasandNortheastnolongerdominate9DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEDifferencesinResultsfromProposalRIA•FortheproposalRIAthereweretwoareasprojectedtoexceedthebaseline,andatfinaltherearenoareasprojectedtoexceed– forU.S.exceptCalifornia•ForCalifornia,therewereasimilarnumberofareasprojectedtoexceedinboththeproposalandfinalanalyses•For70ppb,nationwideNOxreductionsneededare~50%lowerandresultingbenefitsandcostsarebetween55%and60%lowerthanwereestimatedfortheproposal•Withnewairqualitymodelingapproach,ozoneconcentrationsmoreresponsivetochangesinemissionsclosertosomemonitors– thisaccountsfor80%ofthedifference•Remaining20% ofdifferenceresultsfromchangesinmodelsandinputsusedtogeneratetheupdated2025basecase•Appliedagreaternumberoflowercost,identifiedcontrols•For65ppb,nationwideNOxreductionsneededare~20%lower,resultingbenefitsare~20%lower,andresultingcostsareslightlyhigherthanestimatedfortheproposal•InthepostͲ2025analysisforCalifornia,resultsaresimilartoproposalbecausemethodsandinputsarethesameandbaselineDVsdidnotchange10DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEControlStrategyResults–SummaryofEmissionsReductionsforU.S.,exceptCalifornia,2025IdentifiedControlsAppliedEGUsSCRsandSNCRsNonpointNSCR – ICEngines(oil&gas),LowNOxBurners(commercial/residential)NonroadDieselenginerebuildsandretrofitsNonͲEGUPointLowNOx burnersandSCR11EmissionsReductionsfor70and65ppb(AnnualThousand Tons/Yrin2025)(Results IncrementaltoBaseline)AQLevelPollutantIdentifiedControlReductionsUnidentifiedControlReductions%fromUnidentifiedControls75ͲͲ ͲͲ ͲͲ ͲͲ70NOxVOC2402047017%0%65NOxVOC550110860061%0% DRAFT DELIBERATIVE MATERIAL for INTERAGENCY REVIEW

ͲͲ DO NOT DISTRIBUTETotalAnnualCostsforU.S.,exceptCalifornia,2025(billionsof2011$,7%DiscountRate)*Engineeringcostsreflect7%discountrate.Wedonothaveacomprehensivedatasettobeabletocalculateengineeringcostsata3%discountrate.Results IncrementaltoBaseline*AlternativeStandards(ppb)TotalCosts*IdentifiedControlCostsUnidentifiedControl CostsPercentUnidentifiedControl Costs70$1.4 $0.69 $0.70 51%65 $15.5 $2.6 $13 83%12 DRAFT DELIBERATIVE MATERIAL for INTERAGENCY REVIEW

ͲͲ DO NOT DISTRIBUTEHealthBenefitsResultsin2025(nationwidebenefitsofattainmenteverywhereexceptCalifornia)13HealthEndpoint70ppb 65ppbOzoneͲrelatedprematuredeathsavoided(all ages)(shortͲterm)96to160 490to820PMͲrelatedprematuredeathsavoided (age30+)(longͲterm) 220to500 1,100to2,500OtherhealtheffectsavoidedNonͲfatalheartattacks(age18Ͳ99)PM28to260 140to1,300Respiratoryhospitaladmissions(age0Ͳ99)O3+PM2501,200Cardiovascularhospitaladmissions(age18Ͳ99)PM80 400Asthmaemergencydepartmentvisits(age0Ͳ18)O3+PM630 3,300Acutebronchitis(age8Ͳ12)PM340 1,700Asthmaexacerbation(age6Ͳ18)O3+PM230,000 1,100,000Lostworkdays(age18Ͳ65)PM28,000 140,000Minorrestricted activitydays(age18Ͳ65)O3+PM620,000 3,100,000Upper& lowerrespiratory symptoms(children)PM11,000 53,000SchoollossdaysO3160,000 790,000Note,incidenceestimatesinbluereflectimpactsfromozone(eitheralone,orincombinationwithPMasnoted)ͲLongterm(OzoneͲattributable)respiratorymortality:340,1700forstandardlevelsof70ppband65ppbrespectively. Agency Work Product, For Internal Agency Use Only Ͳ Do Not Quote, Cite or Attribute

DRAFT DELIBERATIVE MATERIAL for INTERAGENCY REVIEW

ͲͲ DO NOT DISTRIBUTETotalMonetizedCostsandBenefitsfor2025(nationwidebenefitsofattainmentintheU.S.excludingCaliforniaͲbillionsof2011$,7%discountrate)1470ppb 65ppbTotalCosts$1.4 $15.5TotalHealthBenefits$2.9to$5.9 $15to$30Ozone $1.0to$1.7 $5.3to$8.7PM $1.9to$4.2 $9.3to$21NetBenefits$1.5to$4.5 Ͳ$1.0 to$14Atproposal,for70ppbcostswere$3.9billionandbenefitsrangedfrom$6.4to$13billion.For65ppb,costswere$15billionandbenefitsrangedfrom$19to$38billion.DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEControlStrategyResults–SummaryofEmissionsReductionsforCalifornia,postͲ202515EmissionsReductionsfor70and65ppb(AnnualThousand Tons/Yr2025)(Results IncrementaltoBaseline)AQLevel PollutantIdentifiedControlReductionsUnidentifiedControlReductionsPercentfromUnidentified75NOxVOC3255156083%0%70 NOx 0 51 100%65 NOx 0 100 100%DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTETotalAnnualCostsforCalifornia,postͲ2025(billionsof2011$,7%DiscountRate)*Engineeringcostsreflect7%discountrate.Wedonothaveacomprehensivedatasettobeabletocalculateengineeringcostsata3%discountrate.Results IncrementaltoBaseline*AlternativeStandards(ppb)TotalCosts* IdentifiedControlCostsUnidentifiedControl CostsPercentUnidentifiedControl Costs70$0.80 0 $0.80 100%65 $1.5 0 $1.5 100%16DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEAtproposal,for70ppbcostswere$0.8billionandfor65ppb,costswere$1.6billion.HealthBenefitsResultspostͲ2025(nationwidebenefitsofattainmentinCalifornia)17HealthEndpoint 70ppb 65ppbOzoneͲrelatedprematuredeathsavoided(all ages)(shortͲterm)72to120 150to240PMͲrelatedprematuredeathsavoided (age30+)(longͲterm) 43to98 84to190OtherhealtheffectsavoidedNonͲfatalheartattacks(age18Ͳ99)PM6to51 11to100Respiratoryhospitaladmissions(age0Ͳ99)O3+PM150 300Cardiovascularhospitaladmissions(age18Ͳ99)PM16 31Asthmaemergencydepartmentvisits(age0Ͳ18)O3+PM380 760Acutebronchitis(age8Ͳ12)PM64 130Asthmaexacerbation(age6Ͳ18)O3+PM160,000 330,000Lostworkdays(age18Ͳ65)PM5,300 10,000Minorrestricted activitydays(age18Ͳ65)O3+PM360,000 720,000Upper& lowerrespiratory symptoms(children)PM2,000 3,900SchoollossdaysO3120,000 240,000Note,incidenceestimatesinbluereflectimpactsfromozone(eitheralone,orincombinationwithPMasnoted)ͲLongterm(OzoneͲattributable)respiratorymortality:290,590forstandardlevelsof70ppband65ppbrespectively. Agency Work Product, For Internal Agency Use Only Ͳ Do Not Quote, Cite or AttributeDRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTETotalMonetizedCostsandBenefitsforpostͲ2025(nationwidebenefitsofattainmentinCaliforniaͲbillionsof2011$,7%DiscountRate)1870ppb 65ppbTotalCosts$0.8 $1.5TotalHealthBenefits$1.2to$2.1 $2.3to$4.2Ozone $0.8to$1.3 $1.6to$2.6PM $0.4to$0.8 $0.7to$1.6NetBenefits$0.4to$1.3 $0.8to$2.7Atproposal,for70ppbcostswere$0.8billionandbenefitsrangedfrom$1.1to$2billion.For65ppb,costswere$1.6billionandbenefitsrangedfrom$2.2to$4.1billion.DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTEAnalysesIncludedfromProposalRIA•EJAnalysis•LimitedscreeninganalysisofsocioͲdemographiccharacteristicsofpopulationslivinginareaswithmonitorDVsexceedingrevisedandalternativestandards•Updatedanalysiswithcurrentairqualitydata(2012Ͳ2014)•EmploymentImpactsofAirQuality•DiscussionofpeerͲreviewedliteraturerelatedtoeffectsofenvironmentalregulationonemployment•QualitativediscussionofemploymentrelatedtoinstallationofNOxcontrolsoncoalͲandgasͲfiredelectricgeneratingunits,industrialboilers,andcementkilnsattypicalplants•WelfarecoͲbenefits•Forproposal,estimatedchangesinyieldsinforestryandagriculturalsectorsusingFASOMGHG•Includeddiscussionfromproposal,butnotquantitativeestimates19DRAFTDELIBERATIVEMATERIALforINTERAGENCYREVIEWͲͲDONOTDISTRIBUTE