United States Air and Energy Engineering

Environmental Protection Research Laboratory

Agency Research Triangle Park, NC 27711

Terri Young, Randy Randolph, and Daniel Bowman

E AP Project Summary

Economic Growth Analysis

System: Version 2.0

Research and Development EPA/600/SR-94/139 December 1994

The two-volume report describes the

development of, and provides information needed to operate, the Economic

Growth Analysis System (E-GAS)

model. The model will be used to project

emissions inventories of volatile organic

compounds (VOCs), oxides of nitrogen

(NOX), and carbon monoxide (CO) for

ozone nonattainment areas and Regional Oxidation Model (ROM) modeling regions.

The report details the design and development of E-GAS and includes detailed descriptions of the workings of

the E-GAS computer modeling software

components and external software.

The system is an economic and activity forecast model that translates the

user’s assumptions regarding regional

economic policies and resource prices

into Source Classification Code (SCC)

level growth factors. The report provides E-GAS users with sufficient background information to define and calibrate the E-GAS model, as well as the

procedures and syntax necessary to

operate the system. The organization

of the user’s manual is determined by

the process used in operating the system, providing images of sample

screens as well as text.

This Project Summary was developed

by EPA’s Air and Energy Engineering

Research Laboratory, Research Triangle

Park, NC, to announce key findings of

the research project that is fully documented in two volumes (see Project

Report ordering information at back).

Introduction

On November 15, 1990, the Clean Air

Act Amendments (CAAA) of 1990 were

signed into law. The CAAA require that

extreme, severe, serious, and multi-state

moderate ozone non-attainment areas use

photochemical grid modeling to demonstrate future attainment with the ozone

national ambient air quality standard

(NAAQS) [Section 182(e)(2)(A)]. In addition to photochemical grid modeling, the

CAAA require that moderate, serious, severe, and extreme ozone non-attainment

areas submit rate-of-progress (ROP) inventories demonstrating a 15% reduction

in emissions from 1990 to 1996

[Section 182(b)(1)(A)]. Further, ROP inventories for serious, severe, and extreme

areas must include demonstration of a

3% reduction (averaged over 3 years) from

1996 until attainment is achieved

[Section 182(c)(2)(B)].

Section 182(b)(1)(A) of the CAAA specifies that the 15% reduction from baseline

emissions accounts for any growth in emissions after 1990. A key component of the

ROP inventories and photochemical grid

modeling demonstrations will be the development of credible growth factors for

the existing inventories.

Since growth in source emissions largely

depends on the amount of economic activity growth in an area, a consistent set of

growth factors requires forecasts using

consistent Gross National Product (GNP)

forecasts and a consistent methodology

for estimating economic activity in Urban

Airshed Model (UAM) and Regional Oxi-
2

dant Model (ROM) modeling regions. The

need for consistent economic growth factors, however, must be satisfied in a way

that allows states to use their own estimates of national and regional economic

activity. The Economic Growth Analysis

System (E-GAS) is an economic and activity forecast model which satisfies both

of these standards.

The existing inventories for ROP demonstration and photochemical modeling will

be housed in the Aerometric Information

Retrieval System (AIRS). E-GAS can be

applied to AIRS inventories for the development of emission projections to 2010,

when extreme areas must reach attainment. State users can create custom GNP

forecasts and may modify input assumptions for the regional models in the EGAS system. The system also allows EPA

users to develop volatile organic compound

(VOC), nitrogen oxide (NOx

), and carbon

monoxide (CO) growth factors using a

single GNP forecast, providing baseline

emission growth estimates for comparison

with growth factors submitted by the states.

The nonattainment areas modeled were

chosen on the basis of their nonattainment

designation. All serious, severe, and extreme areas were modeled, as were multistate moderate areas. These areas, their

designations and area definitions, were

announced in the November 6, 1991, Federal Register.

To minimize both the number and run

time of the models in E-GAS, eight models were developed. Separate models were

developed for EPA Regions 1, 4, 5, 6, 7,

and 9. In addition, models were developed that combine the areas in EPA Regions 2 and 3 and EPA Regions 8 and 10.

Each model includes all extreme, severe,

serious, and multi-state moderate areas,

as well as each state and partial state in

the region.

E-GAS is a menu-driven system that

guides the user through a series of screens

which collect information for adapting the

model to the user’s needs. User input is

limited to selecting menu items and setting parameters by entering data in text

boxes.

The E-GAS modeling system contains

three tiers. Tier 1 includes available national economic forecasts which are used

to drive the regional economic models;

Tier 2 includes regional economic models

for the UAM modeling areas, as well as

the states in the ROM modeling regions;

and Tier 3 estimates fuel consumption,

physical output, and Vehicle Miles Traveled (VMT) based on Tier 2’s regional

economic forecasts. The tiers must be

sequentially executed, since data are created by and passed from early tiers for

transfer to later tiers. The three-tiered structure of E-GAS allows users flexibility in

modeling. While tiers must be run before

proceeding to later tiers, the system allows the models to be rerun at the user’s

discretion. For example, users may run a

variety of national models before performing regional modeling on the last national

model run.

The National REMI Model allows the

user to create a national-level growth projection. It is Tier 1 of the three-part process of creating estimated growth factors;

it generates data to drive the Regional

REMI Model (Tier 2). This tier may be

rerun any number of times before proceeding to Tier 2. Five national forecasts

are available: Bureau of Labor Statistics

(BLS), Data Resources, Inc. (DRI), Research Seminar in Quantitative Economics (RSQE), Wharton Econometric Forecasting Associates (WEFA), and user-entered Gross National Product (GNP) Data.

The Regional REMI Model allows the

user to develop a regional growth simulation. This is Tier 2 of the three-part process of creating estimated growth factors;

it generates data to drive the Growth Factor Module (Tier 3). In the E-GAS model,

more than 100 regular economic policy

variables, translator variables, and population variables can be adjusted. Changing these variables allows the user to simulate the economic impact of anticipated

government policy changes, market

changes, or other exogenous changes to

the regional economy. These variables are

accessed from the REMI EDFS-14 model

and offer scenarios for changes in tax

rates (corporate profit tax, equipment tax,

investment tax, personal income tax, and

property tax), costs (including relative production cost, import cost, and export cost),

wage rate, employment transfer payments,

purchasing power, and final demand. This

tier may be rerun any number of times

before proceeding to Tier 3.

The Growth Factor Module is the third

tier where growth factors are generated

and written to files in the \EGAS

subdirectory. This module translates

changes in the economic activity levels of

the most recent regional forecast to growth

factors for physical output, fuel consumption, and VMT. These growth factors will

be developed for two-, three-, and fourdigit Standard Industrial Classification (SIC)

levels, depending on available data for

developing and disaggregating the factors. These

SIC-level growth factors will be matched

with SCC codes. The user is given a

choice of file formats as either the Emission Preprocessor System (EPS) format

or an ASCII text file. The file is output by

year, county level, and SCC code.

E-Gas Reference Manual

The Reference Manual provides background information on the design, development, and implementation of the E-GAS

system, as well as information concerning

the execution of the system itself. Chapter

1 provides an overview of the system as

well as discussions of basic system design and development considerations.

Chapter 2 discusses the CAAA requirements related to the use of photochemical

grid modeling in demonstrating future

NAAQS attainment and the submission of

rate of progress plans that will demonstrate how an area will achieve the 15%

reduction in VOC emissions by 1996 visa-vis the use of E-GAS. Chapter 3 discusses the current EPA emissions projection guidance and its relationship to EGAS. Chapter 4 explains the role and use

of national and regional economic forecasts in E-GAS. Chapter 5 discusses how

fuel choice is forecast within E-GAS. Chapter 6 discusses how electric utility generation is estimated within E-GAS. Chapter 7

discusses how physical output is estimated

within E-GAS. Chapter 8 explains the

methodology used within E-GAS to forecast vehicle miles traveled. Chapter 9 explains, CROSSWALK, the final component of E-GAS. CROSSWALK assigns

growth factors from the other E-GAS modules to point, area, and mobile SCC’s.

Appendix A lists the data used to develop

electric utility generation estimates. Appendix B lists the parameter values by

state used in the electric utility module

within E-GAS. Appendix C lists the Bureau of Labor Statistics codes and SCC

matches within CROSSWALK. Appendix

D provides an example of the CROSSWALK output files.

E-Gas User’s Guide

The User’s Guide can be used to pilot

the user through the E-GAS system. Chapter 1 introduces the terminology used with

the system as well as the syntax and

format of the program and user guide.

Chapter 2 discusses the use of E-GAS by

explaining the logical progression of the

program, presenting sample screens, providing explanations of input formats, and

describing the E-GAS utilities found

throughout the system. Chapter 3 describes the role of national economic models in E-GAS and the five options available to the user. Chapter 4 explains the

general function of E-GAS’s policy variables; it then describes the specific variables while explaining their input. Chapter

5 describes the role of model suppres-
3

sions in E-GAS and describes all suppressions available to the user. Chapter 6

describes the operation of and data required for the E-GAS National Model (Tier

1). Chapter 7 provides similar descriptions

of the Regional Model (Tier 2), and Chapter 8 describes Tier 3, the Growth Factor

Module. Chapter 9 identifies contacts for

further information regarding the operation of E-GAS and the logic of the system.

Basic Hardware Requirements

The program has been designed for an

IBM-compatible personal computer environment. The system requires the following minimum hardware configurations:

• IBM 80386 or 100% compatible

personal computer

• Math coprocessor

• 580 Kilobytes of Conventional

Memory

• 100 Megabytes of available fixed

disk storage

• VGA graphics capabilities

• DOS 5.0 or higher

• 5.25 or 3.5 in. floppy disk drive
4

T. Young, R. Randolph, and D. Bowman are with TRC Environmental Corp., 6320

Quadrangle Dr., Suite 100, Chapel Hill, NC 27514.

Sue Kimbrough is the EPA Project Officer (see below).

The two-volume report, entitled “Economic Growth Analysis System: Reference

Manual, Version 2.0; and User’s Guide, Version 2.0,” includes paper copy and

eight sets of floppy disks (Order No. PB95-501961/AS; Cost: $360.00; subject to

change).

The set will be available only from:

National Technical Information Service

5285 Port Royal Road

Springfield, VA 22161

Telephone: 703-487-4650

The EPA Project Officer can be contacted at:

Air and Energy Engineering Research Laboratory

U.S. Environmental Protection Agency

Research Triangle Park, NC 27711

• •

United States

Environmental Protection Agency

Center for Environmental Research Information

Cincinnati, OH 45268

EPA/600/SR-94/139

Official Business

Penalty for Private Use $300

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EPA

PERMIT No. G-35