CWIS Testimony, Ackerman and Stanton, August 18, 2011

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ENVIRONMENTAL PROTECTION AGENCY

Attention: Docket ID EPA-HQ-OW-2008-0667

Regulation of Cooling Water Intake Structures at Existing Facilities

Comments by Frank Ackerman, Ph.D., and Elizabeth A. Stanton, Ph.D.1

1. Introduction

EPA is proposing requirements under section 316(b) of the Clean Water Act for cooling water 

intake structures (CWISs) at existing power generation and manufacturing facilities that 

withdraw more than 2 million gallons per day (MGD) of water. As part of that process, EPA has 

performed a cost-benefit analysis of four regulatory options. The benefits are developed and 

presented in EPA’s Environmental and Economic Benefits Analysis for Proposed Section 316(b) 

Existing Facilities Rule (EEBA); the costs are developed and presented in EPA’s Economic and 

Benefits Analysis for Proposed Section 316(b) Existing Facilities Rule (EA). A number of 

supporting calculations appear in the Technical Development Document for the Proposed Section 

316(b) Existing Facilities Rule (TDD).

In these comments we review EPA’s analysis of the benefits of regulatory options, and the

agency’s use of the cost-benefit framework in the regulatory process. In a number of instances 

we offer more complete estimates of benefits, generally implying that the monetizable benefits of 

regulation are much greater than EPA’s estimates would suggest. In addition, we discuss EPA’s 

calculation of electricity rate impacts and changes in employment resulting from regulation; 

these calculations, which receive little emphasis in EPA’s analysis, imply that electric rate 

impacts are minimal, while employment is highest under the most stringent regulatory proposal.

We also discuss the importance of the benefits that cannot be monetized, and the meaning of the 

incompleteness of benefit estimates. Some limitations of the benefit calculations are mentioned 

by EPA; other limitations are indirectly illustrated by EPA’s apparent inability to complete its 

own agenda of benefit valuation. When important benefits are impossible to monetize in 

principle, or impossibly expensive to monetize in practice, then the cost-benefit approach is not a 

useful one; it weighs a relatively complete estimate of costs against an incomplete estimate that 

represents an unknown fraction of the benefits. 

In light of the obstacles to completion of the cost-benefit calculation, other approaches to 

decision-making are more appropriate. A break-even analysis, showing how large the 

unmeasured benefits would have to be to outweigh the costs, suggests that the cost of regulation 

is quite modest. Estimated impacts on electricity bills, calculated but not emphasized by EPA, 

also show that the cost will be small. EPA offers two methods of calculation of electricity rate 

impacts; neither is large, and the more complete, sophisticated model estimates rate impacts that 

are within the noise level (i.e., indistinguishable from zero in practice) for future forecasts.

 

1

Senior economists, Stockholm Environment Institute-U.S. Center, 11 Curtis Ave., Somerville, MA 02144; e-mail 

Frank.Ackerman@sei-us.org, Liz.Stanton@sei-us.org . Our resumes are attached at the end of these comments.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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If EPA’s recommendation of site-specific decisions is based on concern regarding impacts on 

smaller facilities, then a better approach would be to adopt a national standard with a higher 

threshold. Requiring cooling towers for facilities above 500 MGD, for example, would exempt 

roughly 80 percent of all in-scope facilities, including exemption of all but seven manufacturing 

facilities – but would still result in 80 percent of the benefits of EPA’s Option 3, which requires 

cooling towers for all facilities. 

Because the extraordinary difficulty of benefits calculation is the Achilles heel of the cost-benefit 

process, recommending site-specific calculations throughout the country will only make things 

worse. If EPA does not have the resources to complete the benefits calculation at a national level, 

why should state agencies be more able to do so? If EPA is determined to pass the problem on to 

the states (an option which we do not support), it should develop standardized procedures, and a 

set of default values for costs of control technologies, and for all major benefits categories, 

suitable for use in local analyses. Without such detailed procedural and quantitative guidance, 

site-specific decisions would lead to hundreds of often mediocre, under-resourced and underresearched repetitions of the analysis EPA has just engaged in at a national level. 

2. What’s missing from EPA’s benefit estimates?

2.1. Overview of EPA’s analysis 

A brief description of EPA’s cost-benefit analysis is needed, in order to frame the discussion of 

problems in the benefit estimates. 

EPA compares costs and benefits for four options for controlling mortality from impingement 

and entrainment. Impingement controls are almost identical in each case: Options 1-3 require 

impingement controls everywhere, while Option 4 requires them for facilities with design intake 

flow (DIF) of more than 50 million gallons per day (MGD) – a threshold that excludes 73 

percent of manufacturing facilities, but only 17 percent of electric generators (TDD, Exhibit 4-3). 

Differences among options are much greater in entrainment controls. While all options require 

entrainment mortality control for new units at existing facilities, they differ in the more 

important category of requirements for existing units, as follows:

 Option 1: Impingement mortality controls everywhere; entrainment mortality controls 

on a site-specific basis.

 Option 2: Impingement mortality controls everywhere; entrainment mortality controls 

for existing facilities with DIF greater than 125 MGD

 Option 3: Impingement mortality controls everywhere; entrainment mortality controls 

everywhere

 Option 4: Impingement mortality controls for existing facilities with DIF greater than 

50 MGD, and best professional judgment for facilities below 50 MGD; entrainment 

mortality controls on a site-specific basis.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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Calculation of impingement and entrainment losses are based on surveys at 97 facilities, 

including some in each region; values are extrapolated to other facilities within the same region, 

based on flow rates. All cost and benefit data are calculated on a regional basis, with separate 

calculations for the Great Lakes, Inland waterways (other than Great Lakes), California, and four 

East and Gulf Coast regions (North Atlantic, Mid-Atlantic, South Atlantic, and Gulf of Mexico). 

Most of the facilities covered by the regulation, and most of the total intake flow, are in the 

Inland region, with many facilities located on major rivers such as the Mississippi, Ohio, 

Missouri, Delaware, and Illinois Rivers.

Data for power plants in California are excluded, since EPA believes that they are adequately 

covered by similar state regulation; for this analysis the “California” region consists of four 

manufacturing facilities in California, and four facilities in Hawaii. The California region is the 

smallest in many data categories in the analysis, often by a wide margin. There are no in-scope 

facilities in Oregon, only one in Washington, and no data from Alaska. Thus the analysis 

virtually excludes the Pacific coast.

Table 1 reproduces the EPA final results, summed across all regions (EBA, Tables 12-2, 13-4):

Table 1: EPA estimates of benefits, costs, and net benefits

Costs are much higher for Options 2 and 3, since their entrainment controls are interpreted as 

requiring cooling towers at large (Option 2) or all (Option 3) facilities. The small cost difference 

between Options 2 and 3 shows that the calculations are dominated by costs at large facilities. 

Likewise, the costs of impingement controls everywhere (Option 1) or only at large facilities 

(Option 4) are similar, implying that most costs are incurred at large facilities. 

Monetized benefits are much lower than costs – indeed, more than an order of magnitude lower 

in every case. This result, based as it is on extensive, detailed analysis by EPA, could create the 

erroneous impression that all four options should be rejected. As we will explain, the results 

shown in Table 1 are misleading in multiple respects. The benefits calculation, the focus of our 

comments, is incomplete both because it entirely excludes numerous important categories of 

benefits, and because, even in the included categories, there are analytical errors and arbitrary 

judgments that lead to unreasonably low benefits estimates. 

Questions could be raised about EPA’s cost estimates. Research on regulatory cost estimates has 

shown that costs are typically overestimated in advance, and drop after implementation of 

regulations (Ackerman 2006; McGarity and Ruttenberg 2002; Harrington, Morgenstern, and 

Nelson 2000). There are several reasons for this pattern: advance estimates usually ignore the 

Discount rate: 3% 7% 3% 7% 3% 7%

Option 1 $18 $16 $384 $459 -$366 -$443

Option 2 $120 $92 $4,463 $4,699 -$4,343 -$4,608

Option 3 $125 $95 $4,632 $4,862 -$4,507 -$4,767

Option 4 $17 $16 $327 $383 -$309 -$367

Total Benefits and Social Costs by Option (Millions; $2009) 

 Total Monetized Benefits Total Social Costs Net Benefits
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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possibility of learning and innovation in regulatory compliance, which often lowers costs in 

practice; regulators often rely on the regulated industries for empirical data, even though those 

industries may have a strategic interest in overstating costs; and conservative estimates about 

high costs may seem prudent in the face of potential court challenges to regulations.

We have focused, however, on the benefits side of the cost-benefit comparison, and have not 

analyzed EPA’s cost estimates. In most of these comments, therefore, we compare EPA’s cost 

estimates to various modified estimates of benefits. A final comparison combines our re-estimate 

of benefits with a re-estimate of costs developed in a comment letter by Bill Powers – showing 

positive net benefits for every option at both discount rates. 

Our benefits calculations address the same categories of benefits evaluated by EPA, and rely on 

the estimates of baseline mortality developed by EPA – even though, as we will show, there are 

reasons to question those mortality estimates. We retain the entire complex apparatus of EPA’s 

benefit calculations, including fractional reductions in baseline mortality under different 

regulatory options, and the annualized present value calculations at discount rates of 3 percent 

and 7 percent; we change only selected inputs into those calculations, discussed below. Our 

“bottom line” calculation shows that better estimates for the benefit categories evaluated by EPA 

exceed, by far, the costs of Options 1 and 4, and are equal to most of the costs of Options 2 and 

3. With a modest estimate for the group of excluded benefit categories as a whole, all four 

options have benefits greater than EPA’s estimate of their costs.

2.2 Excluded benefit categories

EPA presents a hierarchy of categories of benefits that result from reducing impingement and 

entrainment losses:

 Marketed goods

 Direct use

 Indirect use

 Non-market goods

 Direct use

 Indirect use

 Non-use values

The benefits calculations, however, include only parts of the two direct use categories and an 

estimate of non-use values for two regions of the country, as explained in detail in EEBA, Table 

4.1 (p. 4-3), and summarized more briefly here in Table 2.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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Table 2:Benefit categories in EPA analysis

Direct-use marketed-goods benefits consist of increases in commercial fishery landings, which 

are valued by EPA. This is the one category where EPA’s analysis is most adequate; the 

resulting benefit estimates are quite small. Indirect-use marketed-goods benefits, none of which 

are estimated by EPA, include increases in: equipment sales, rental, and repair; bait and tackle 

sales; consumer choices in stores and restaurants; property values near the water; and 

ecotourism. 

Direct-use benefits from non-market goods include the increased value of recreational fishing 

trips due to increased catch rates, which is valued (although, we will argue, significantly 

undervalued) by EPA. Other direct-use benefits from non-market goods include increases in 

rates of participation in recreational fishing, and the improved value of subsistence fishing, 

neither of which is estimated by EPA. Indirect-use benefits from non-market goods, which are 

not valued in EPA’s calculations, include the increased value of, and increased participation in, 

boating, scuba diving, and near-water recreation based on enjoying observation of fish (or of 

birds catching fish).

The important category of non-use values includes the increase in existence value (or 

stewardship), altruism, bequest motives, and appreciation of ecological services apart from 

human uses. A large majority of organisms affected by CWISs have no recreational or 

commercial uses; non-use value is the only value they have. EPA offers a benefits transfer 

estimate of non-use values for only two of the seven regions of the country, along with a 

conceptually mistaken (and quantitatively trivial) estimate of the unique value attached to 

threatened and endangered species. 

As EPA itself concludes,

While EPA can identify and hypothesize regarding the direction and relative importance 

of impacts of CWISs on the totality of the aquatic ecosystem ..., EPA is currently unable 

to connect these effects with quantifiable environmental benefits. Thus, it is highly likely 

Example of monetary indicator Estimated by EPA?

Direct use benefits Commercial fish sales Yes

Indirect use benefits Sales of commercial fishing equipment No

Direct use benefits Spending by recreational anglers on travel, 

licenses, and gear Significant underestimate

Indirect use benefits

Spending by hunters and birdwatchers drawn 

by birds that eat small fish; spending of scuba 

divers.

No

Non-use values

Value of existence of fish and aquatic 

ecosystems, independent of human use; value 

of saving endangered species

Very incomplete

Category

Marketed Goods (e.g. salmon)

Non-Market Goods (e.g. sportfish and preyfish)
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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that the total environmental and monetary impacts of CWISs are significantly 

underestimated... (EEBA, p. 2-22).

In the original version of the proposed rule, prior to editing by the Office of Management and 

Budget (OMB), EPA’s discussion of limitations of the benefits calculations was even more 

explicit:

... the calculation of reduced impingement and entrainment benefits of closed 

cycle cooling does not account for 97 percent of the direct use A1E [age-1 

equivalents] of organisms entrained by cooling water intakes. Moreover, the 

monetized benefit values do not include the majority of the indirect use and 

nonuse value of the reductions in I&E [impingement and entrainment] mortality, 

and completely exclude categories such as the non commercial portion of impacts 

to threatened and endangered species, the thermal discharge impacts to water 

quality, and species composition. (Original CWIS rule, p.166)

2.3. Commercial and recreational benefits

Commercial and recreational benefits are based on a common calculation of fishery yields. 

Impingement and entrainment losses are converted to age-1 equivalents for commercially and 

recreationally valuable species, and for forage fish consumed by the directly valuable species. 

These age-1 equivalent losses are converted to forgone fishery yields, including the assumption 

that 10 percent of the lost biomass of forage species would have been converted into the directly 

valuable species (EEBA, pp.3-2, 3-3). The commercial and recreational fractions of the forgone 

yields are then analyzed separately.

The assumption of 10 percent “trophic transfer” of biomass from prey to predator species is an 

average of the findings from numerous studies, calculated in Pauly and Christensen (1995). 

There is wide variation in trophic transfer rates in different aquatic habitats, ranging from below 

2 percent to above 24 percent in studies cited by Pauly and Christensen. The use of a global 

average may not be appropriate for the individual regions evaluated by EPA; the detailed local 

data developed for these regions by EPA should be accompanied by local calculations of trophic 

transfer rates.

For commercial species, EPA calculates losses in pounds of each species and multiplied by 

market prices to obtain gross revenue losses. They suggest that the appropriate way to value this 

would be to calculate losses of consumer and producer surplus (EEBA, Chapter 6). Due to the 

small expected change in prices, however, they conclude that changes in consumer surplus 

would be negligible. The estimated commercial impact, therefore, is solely an estimate of change 

in producer surplus, calculated in practice as a fraction of gross revenue for each species. That 

fraction is the estimated ratio of net benefits to gross revenues, or “normal” profits as a percent 

of sales; it varies by species, but is often 50 percent or more. No commercial impacts were 

calculated for the Inland region since there is negligible commercial fishing in that region. In 

practice, the estimated commercial impacts are quite small.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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For recreational species, EPA calculates impingement and 

entrainment losses in numbers of fish of each species, 

estimates the number of lost fish that would have been caught 

by recreational anglers, and then multiplies by an estimate of 

the marginal recreational value per fish, derived from a metaanalysis of recreational fishing studies developed for a 

previous phase of the 316(b) rulemaking process (EEBA, 

Chapter 7). Values per fish (i.e., the amount that recreational 

anglers are assumed willing to pay per fish they catch) range

from about $1 for panfish to $13 for salmon. 

Other studies have also estimated the impact of CWISs on 

recreational fishing benefits. A study of the damages caused 

by impingement and entrainment at the Bay Shore Power Plant

(BSPP) in Ohio, a large (650 MGD) facility on Lake Erie, 

reviewed the research literature on recreational and 

commercial values per fish, and adopted a set of values for 

fish species found in that region (Gentner and Bur 2009). For 

the most important local species, walleye, this study estimated 

a recreational value of $20.05 (converted to 2009 dollars) per fish, almost five times EPA’s 

estimate of $4.10 (in 2009 dollars) for walleyes in the Great Lakes (Gentner and Bur 2009, Table 

8; EEBA Table 7-3). This is indirectly a test of the reasonableness of EPA’s intricate 

methodology for determining what recreational anglers are willing to pay: is catching a walleye a 

$4 or a $20 experience? Figure 1, from a Lake Erie fishing website, does not look like evidence 

for EPA’s lower estimate; if anything, it suggests consideration of values higher than $20. 

The contradictions between EPA’s recreational estimates and the BSPP study’s estimates are 

troubling; the differences extend beyond the value per fish. EPA’s estimates of baseline mortality 

of walleyes in the Great Lakes are low, in the hundreds of fish per year. The BSPP study, 

looking only at one Great Lakes plant, counted impingement of tens of thousands of walleyes per 

year in the data for that plant, along with entrainment of larvae amounting to hundreds of 

thousands of adult-equivalent fish.

According to EPA, walleyes are a very small part of the recreational impacts of CWISs in the 

Great Lakes. According to the BSPP study, they represent the largest recreational damages from 

impingement and entrainment at this plant in western Lake Erie. An Internet search for “walleye 

fishing Lake Erie” turns up a number of companies that seem to agree that this is an important 

industry (including one that is the source of Figure 1). 

Nor is the problem limited to walleye: species for which the BSPP study found greater age-1-

equivalent baseline mortality at that plant alone than EPA found in the Great Lakes as a whole 

include channel catfish, freshwater drum, rainbow smelt, and white bass, in addition to walleye.2

Indeed, the total estimate of age-1-equivalent baseline mortality of all species at BSPP is slightly 

 

2 EPA includes large numbers of age-1-equivalent mortality not specified by species (identified only as forage 

species or harvested species), and does not report separate estimates for several of the most numerous species at 

BSPP. The examples in the text are species for which both studies reported estimates.

Figure 1. Source: www.walleye.com
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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greater than EPA’s estimate for all species in the Great Lakes (EEBA, Table C-11; Gentner and 

Bur 2009, Table 7).

In short, the BSPP study, based on detailed local data for one important plant, identifies patterns 

of baseline mortality inconsistent with EPA’s estimates, and adopts different estimates of 

recreational value; the BSPP valuation appears more intuitively plausible, at least in the case of 

walleye, one much-prized Great Lakes species. 

As an alternative approach to valuation of benefits, therefore, we have calculated the BSPP ratio 

of recreational and commercial benefits to age-1-equivalent baseline mortality, $0.536 (in 2009 

dollars) per age-1-equivalent, and applied it to EPA’s baseline mortality estimates nationwide. 

This results in recreational and commercial benefits about 15 times as large as EPA’s estimates. 

Including these benefits, while making no other changes in EPA’s cost and benefit estimates, 

yields the benefits shown in Table 3. Under this scenario, Options 2 and 3 have $500 to $700 

million of benefits, and Option 4 is close to having benefits equal to costs.

Table 3: Extrapolating BSPP ratio of recreational and commercial benefits to baseline mortality

Source: Authors’ calculations.

2.4. Non-use values

Non-use benefits are an important, large, and imprecise category; they are meant to convey the 

numerous non-utilitarian meanings and values of nature. Studies repeatedly show that there is 

substantial willingness to pay for the existence of, or protection of, fish and other species, 

extending far beyond the limited use values. There is, however, no consensus about exactly how 

to monetize non-use values. 

EPA notes that, “Overall, the public appears to hold substantial nonuse values for ecosystems 

and species impacted by CWISs...This evidence suggests that the nonuse benefits of 316(b) 

regulation, although unquantified, are substantial.” (EEBA, p.8-3). EPA is reportedly developing 

a survey to estimate total willingness to pay for improvements to fishery resources affected by 

impingement and entrainment, but has not yet done so. In the absence of such a survey, 

EPA reviews some of the academic literature on the subject (EEBA, Chapter 8), but strangely 

concludes that only one study, from Rhode Island, is usable for this analysis, and that its values 

can only be applied to the North Atlantic and Mid-Atlantic regions (i.e., the Atlantic coast from 

Discount rate: 3% 7% 3% 7% 3% 7%

Option 1 $270 $246 $384 $459 -$114 -$213

Option 2 $681 $505 $4,463 $4,699 -$3,782 -$4,194

Option 3 $702 $518 $4,632 $4,862 -$3,930 -$4,344

Option 4 $264 $241 $327 $383 -$62 -$143

Total Benefits and Social Costs by Option (Millions; $2009) 

 Total Monetized Benefits Total Social Costs Net Benefits
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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Maine to Virginia). Thus non-use values in regions located farther from Rhode Island are 

effectively set to exactly zero. This nonsensical outcome will persist until and unless EPA’s 

broader study is completed, or the agency agrees to use values from the published literature for 

the other five regions, as it did for the two northeastern ones. 

The Rhode Island study estimated household willingness to pay at $0.76 per percentage point 

increase in the population of migratory, non-harvested fish. On EPA’s reading of the study, 

willingness to pay estimates for different species are not additive; rather, overall willingness to 

pay should be based on the most affected species (EEBA, p.8-12). For the North Atlantic and 

Mid-Atlantic regions, EPA finds that that species is winter flounder (although this conclusion is 

based on data on only a few species), with baseline mortality from CWISs of 6.6 percent. So 

EPA calculates the percent change in winter flounder numbers from each regulatory option, and 

multiplies this value by $0.76 per household for the 26.4 million households in those two 

regions. The result, for Option 3, is annual willingness to pay of $112.1 million for the two 

regions combined; EPA’s discounting procedure reduces this to an annualized estimate of $75.5 

million at a 3 percent discount rate, or $58.5 million at 7 percent (EEBA, Table 8-5, p.8-14). 

Estimates for Option 2 are slightly lower than for Option 3; estimates for Option 1 are less than 

$1 million.

These numbers are doubly conservative: they assume that there is no non-use value of fish in the 

Northeast to households outside the region; and they assume that there is no way to use these 

numbers to extrapolate non-use values for fish at risk from CWISs in other regions.

The geographic scope of non-use value has been studied by John Loomis – a leading expert in 

the field, whose work is cited by EPA (Loomis 2000). Loomis writes:

While benefits per household do exhibit a statistically significant decrease with distance 

from the wildlife habitat, aggregate benefits are still substantial at 1,000 miles from the 

public good ... on average, measuring only the benefits at the state level would result in 

just 13 percent of the national total public good benefits... (Loomis 2000, pp.319-320)

Even for valuation of endangered species in California, Loomis found that in-state non-use 

benefits accounted for less than 20 percent of the national total; for smaller states such as 

Washington, in-state benefits could be less than 5 percent of the total. In most cases, perhousehold benefits did not fall as low as 50 percent of the local (within 100 miles) value until 

1,500 miles or farther away (Loomis 2000 Figure 1, p.318).

On this basis, it is appropriate to increase EPA’s non-use values for impingement and 

entrainment losses in the North Atlantic and Mid-Atlantic regions, to reflect the reduced but nonzero value per household of this region’s fish to the rest of the nation. There were 117.2 million 

households in the United States in 2009.3This implies that there were 90.8 million households 

outside the North Atlantic and Mid-Atlantic regions. We tested the assumption that this group’s

non-use value for North Atlantic and Mid-Atlantic fish is on average half as great, per 

household, as for the households in the region – a conservative estimate, based on Loomis’ 

analysis. The result is that the total non-use values for the North Atlantic and Mid-Atlantic 

 

3 U.S. Census Bureau, Current Population Survey, 2009, Table H1.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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regions should be 2.72 times as large as EPA’s estimates4– for example, $205 million 

annualized willingness to pay under Option 3 at a 3 percent discount rate, or $159 million at 7

percent.

The second gap in EPA’s estimates is the failure to include anything for non-use values of fish in 

other regions. Of course, it would be ideal to have locally specific studies of everything – but 

EPA has prescribed for itself a research agenda that it has not yet been able to complete. In the 

absence of locally specific numbers, zero does not seem like a sensible estimate of non-use 

values elsewhere. In reality, fish elsewhere are not less valuable simply because EPA has not yet 

studied them.

A better estimate, for use until regionally specific numbers become available, is that non-use 

benefits might be roughly proportional to age-1-equivalent (A1E) baseline mortality. The North 

Atlantic and Mid-Atlantic regions together account for 1,050 million, or 48 percent, of the 

national total of 2,189 million A1E baseline mortality (EEBA, Appendix C). Thus the 

extrapolated national total of non-use benefits is 2,189/1,050 = 2.085 times the two-region total. 

The results of applying this benefits transfer method to non-use benefits in all regions, leaving all 

other aspects of EPA’s costs and benefits unchanged, are reported in Table 4. 

Table 4: Benefits transfer estimate of non-use values

Source: Authors’ calculations.

EPA itself presents an alternative method, valuing the amount of habitat needed to offset 

impingement and entrainment mortality (EEBA, Chapter 9). This yields values greater than our 

corrections of EPA’s Rhode Island-based estimates. EPA seems more comfortable with this 

methodology: it is consistent with the approach adopted in some other regulatory proceedings; 

and studies of willingness to pay are apparently more readily available for habitats than for fish, 

making this method easier to implement. EPA calculates that there would be large willingness to 

pay for the habitat-equivalent of fish lost to CWISs. 

Non-use value calculated with the “habitat restoration area equivalent” methodology for Option 

1 would be about $500 million per year; under Options 2 and 3, it would be a little over $2.0 

billion per year at a 3 percent discount rate, or a little over $1.5 billion at a 7 percent discount 

rate (EEBA, Table 9-5, p.9-16). Use of this value would close the entire gap between estimated 

 

4 The 90.8 million households elsewhere, with average willingness to pay half as great as the in-region households, 

contribute the same amount as 45.4 million in-region households. The region actually includes 26.4 million 

households; thus the national total is equivalent to (45.4 + 26.4) million in-region households, which is 2.72 times as 

large as 26.4 million.

Discount rate: 3% 7% 3% 7% 3% 7%

Option 1 $20 $18 $384 $459 -$364 -$440

Option 2 $454 $351 $4,463 $4,699 -$4,009 -$4,348

Option 3 $473 $365 $4,632 $4,862 -$4,159 -$4,497

Option 4 $20 $18 $327 $383 -$307 -$365

Total Benefits and Social Costs by Option (Millions; $2009) 

 Total Monetized Benefits Total Social Costs Net Benefits
CWIS Testimony, Ackerman and Stanton, August 18, 2011

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costs and benefits under Option 1, or about half the gap under Options 2 and 3. Yet it is not 

included in EPA’s best estimate of costs and benefits. Applying EPA’s habitat area restoration 

benefits to non-use benefits in all regions, making no other changes to EPA’s cost and benefit 

estimates, yields the results shown in Table 5. This modification yields positive net benefits in 

Options 1 and 4 at both discount rates.

Table 5: Habitat area restoration method for non-use benefits in all regions

Source: Authors’ calculations.

2.4. Threatened and endangered species

A fourth category listed by EPA, the value of threatened and endangered species, receives a 

particularly incomplete treatment. Threatened and endangered species are often thought to have 

large non-use values; that is, people value their existence, and are willing to pay to prevent 

extinction. EPA notes that there are significant impacts on threatened and endangered species 

from CWISs (EEBA, Chapter 5), but then claims inability to come up with any reasonable 

estimates for the value of these impacts. 

Instead, EPA includes only the impacts on recreational use of two of the 88 threatened and 

endangered species affected by CWIS in its benefits estimates. That is, the agency includes 

recreational benefits to anglers who catch two of the threatened and endangered species (EEBA, 

Chapter 5, pp.5-12, 5-13.) EPA reports on an earlier regulatory analysis that estimated a 

recreational value of $70 per California sturgeon, a value which is transferred to anglers for 

pallid sturgeon and paddlefish in the Inland region. This analysis makes no use of the threatened 

or endangered status of the fish in question, except insofar as that contributes to the high value 

per fish. Instead, it estimates the value of letting anglers break the laws protecting these species, 

and catch the fish that would otherwise have been killed by impingement and entrainment. 

Analogously, one could estimate the value of endangered African wildlife on the basis of the 

amount that poachers get for illegal sales of rhinoceros horns. Valuation based on poaching, 

however, misses something essential about the values that people place on the existence of 

threatened and endangered species. Indeed, the laws protecting these species reflect the fact that 

society assigns a value to them that is far above (or more precisely speaking, categorically 

different from) their market price.

Oddly enough, despite this absurdity, EPA appears to be aware of the research literature on the 

non-use value of threatened and endangered species. The same chapter of the EEBA applies the 

Discount rate: 3% 7% 3% 7% 3% 7%

Option 1 $531 $493 $384 $459 $147 $34

Option 2 $2,116 $1,579 $4,463 $4,699 -$2,347 -$3,120

Option 3 $2,145 $1,601 $4,632 $4,862 -$2,486 -$3,261

Option 4 $530 $492 $327 $383 $204 $109

Total Benefits and Social Costs by Option (Millions; $2009) 

 Total Monetized Benefits Total Social Costs Net Benefits
CWIS Testimony, Ackerman and Stanton, August 18, 2011

12

meta-analysis model of threatened and endangered species valuation developed by Richardson 

and Loomis (2009) to a possible change in the Inland region’s threatened and endangered species 

(EEBA, pp. 5-13), and discusses at length valuation of sea turtle mortality (EEBA, pp.5-14 – 5-

17). Both of these calculations rely on hypothetical, unsupported estimates of the change in 

affected populations attributable to baseline impingement and entrainment: 0.25 percent or 0.5

percent reduction in the Inland region threatened and endangered species; and a 1 percent

reduction in endangered sea turtle populations.

The results of these calculations, which are not included in EPA’s overall estimates of values 

affected by CWISs, are crucially dependent on the assumed percentage of the affected population 

that is lost under baseline conditions. For Inland region threatened and endangered species, a 

0.25 percent change in population size is said to be worth $1.02 per household; a 0.5 percent

change is worth $1.85. But why does EPA select these percentages rather than others? No 

evidence or argument is presented on this question. Elsewhere, EPA considers 1 percent losses 

for sea turtles, and uses estimates as high as 6.6 percent baseline losses for winter flounder in the 

North Atlantic and Mid-Atlantic, as seen in the previous section. In the absence of any empirical 

information about Inland region losses, we suggest using numbers that fall between the sea turtle 

and winter flounder loss estimates, such as 2 percent or 4 percent losses of Inland region 

threatened and endangered species. The very fact that species are classified as threatened or 

endangered implies that their numbers are limited; annual mortality of a few percent due to 

cooling water intake does not seem impossible.

The same methodology used by EPA would value 2 percent losses at $6.18 per household, and 4 

percent losses at $11.31.

5

EPA applies its estimate per household to 59.6 million households in 

the affected states. Following the methodology explained in the previous section, we apply our 

estimates, $6.18 or $11.31 per household, to those 59.6 million households, plus half of that

amount, $3.09 or $5.66 per household, to the 57.6 million households in the rest of the country. 

The result is a nationwide non-use value for Inland region threatened and endangered species of 

$546 million at 2 percent losses, or $999 million at 4 percent losses. 

Again following the model of the previous section, we then scale this up in proportion to A1E 

baseline mortality, for an approximation to national threatened and endangered values. Since the 

Inland region accounts for 879 million of the 2,189 million nationwide A1E baseline mortality, 

we multiply our Inland estimates by 2,189/879 = 2.49 to obtain national estimates. Table 6

presents the results of applying this benefits transfer method, using 2 percent losses, to the 

threatened and endangered species benefits in all regions; all other aspects of EPA’s cost and 

benefits are unchanged. This calculation alone is enough to make net benefits positive for 

Options 1 and 4, and significantly reduces the negative net benefits for Options 2 and 3.

 

5 The Richardson and Loomis equation used to estimate these values, presented in EEBA, Appendix F, is a 

logarithmic relationship. This means that each doubling of the percentage losses increases household willingness to 

pay by the same factor, which turns out to be 1.83. Multiplying EPA’s estimate at 0.5 percent losses by this factor, 

twice, yields $6.18 – the appropriate estimate for four times EPA’s loss percentage, i.e. 2 percent losses. 

Multiplication of this value by 1.83 yields $11.31, the appropriate estimate for 4 percent losses.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

13

Table 6. Benefits transfer estimate of threatened and endangered benefits, assuming 2% loss

Source: Authors’ calculations.

Table 7 presents the equivalent calculation, assuming 4 percent losses. Under this assumption, 

net benefits are larger for Options 1 and 4, and represent smaller negatives for Options 2 and 3.

Table 7. Benefits transfer estimate of threatened and endangered benefits, assuming 4% loss

Source: Authors’ calculations.

Next, we summarize our recalculations with a combined estimate, using the BSPP-based 

estimate of recreational and commercial benefits, the habitat area valuation for non-use values, 

and the benefits transfer estimate of threatened and endangered species benefits assuming 4 

percent losses. The combined result of these recalculations is shown in Table 8. Options 1 and 4 

have net benefits in excess of $1 billion per year. Options 2 and 3 still have negative net benefits, 

but the amounts are much reduced; at the 3 percent discount rate, benefits are equal to 92 percent 

of costs for Option 2, and 90 percent for Option 3.

Table 8. Combined effect of benefits recalculations

Source: Authors’ calculations.

Discount rate: 3% 7% 3% 7% 3% 7%

Option 1 $564 $514 $384 $459 $180 $55

Option 2 $909 $707 $4,463 $4,699 -$3,554 -$3,993

Option 3 $911 $697 $4,632 $4,862 -$3,721 -$4,165

Option 4 $563 $514 $327 $383 $237 $131

Total Benefits and Social Costs by Option (Millions; $2009) 

 Total Monetized Benefits Total Social Costs Net Benefits

Discount rate: 3% 7% 3% 7% 3% 7%

Option 1 $1,018 $928 $384 $459 $634 $469

Option 2 $1,564 $1,218 $4,463 $4,699 -$2,899 -$3,482

Option 3 $1,565 $1,198 $4,632 $4,862 -$3,067 -$3,664

Option 4 $1,017 $928 $327 $383 $691 $545

Total Benefits and Social Costs by Option (Millions; $2009) 

 Total Monetized Benefits Total Social Costs Net Benefits

Discount rate: 3% 7% 3% 7% 3% 7%

Option 1 $1,783 $1,635 $384 $459 $1,399 $1,176

Option 2 $4,121 $3,118 $4,463 $4,699 -$342 -$1,581

Option 3 $4,163 $3,127 $4,632 $4,862 -$468 -$1,735

Option 4 $1,777 $1,629 $327 $383 $1,451 $1,246

Total Benefits and Social Costs by Option (Millions; $2009) 

 Total Monetized Benefits Total Social Costs Net Benefits
CWIS Testimony, Ackerman and Stanton, August 18, 2011

14

Finally, we examine an alternative estimate of the costs of Options 2 and 3, based on the 

comment letter submitted in this case from Bill Powers of Powers Engineering. Powers identifies 

numerous technical problems in EPA’s estimates of cooling tower costs, and concludes that the 

annualized national pre-tax compliance costs for power plants under Option 2 and Option 3 

would be $3,029 million and $3,104 million annually (compared to $4,933 million and $5,079 

million in EPA’s estimates, as shown in EBA, Table 3-8). Assuming no change in EPA’s 

estimates of costs to manufacturers, the Powers corrections imply that the total cost of Option 2 

is 62.8 percent, and the total cost of Option 3 is 62.9 percent, of the corresponding EPA figures. 

(There is no change to the costs of Options 1 and 4.)

Table 9 compares the Powers cost estimates to our combined benefit estimates, from Table 8. 

The result is that net benefits are positive for every option, at both the 3 percent and 7 percent 

discount rates. In fact, net benefits are relatively similar, roughly $1,200 to $1,500 million, in six 

of the eight cases shown (Options 1 and 4 at both discount rates, and Options 2 and 3 at 3 

percent); they are much smaller, but still positive, for Options 2 and 3 at 7 percent.

Table 9. Powers cost estimates and our combined benefits estimates

Source: Authors’ calculations.

In summary, reasonable recalculation of the estimated value of benefits, combined with an expert 

reassessment of the costs of cooling towers, imply that the monetized portion of benefits could 

exceed the costs for every option considered by EPA, either at a 3 percent or a 7 percent discount 

rate.

3. Interpreting the incompleteness of benefit valuations

Cost-benefit analysis is designed to weigh the relevant costs of a proposal against the 

corresponding benefits. This process cannot yield a meaningful result unless the calculations of 

costs and benefits are equally complete. In the private sector, a balance sheet that weighs all of a 

company’s income against some of its expenditures does not provide a useful picture of the 

company’s true financial condition. Likewise, in the public sector, a comparison of complete 

costs and incomplete benefits does not provide an accurate picture of net benefits to society.

Yet a comparison of complete costs and incomplete benefits is exactly what EPA has produced 

in this case. The costs of compliance with regulation of CWISs are the monetary costs of 

constructing and operating cooling towers and other control technologies. Such costs are backed 

up by detailed engineering analyses, and often by recent experience in building similar facilities, 

Discount rate: 3% 7% 3% 7% 3% 7%

Option 1 $1,783 $1,635 $384 $459 $1,399 $1,176

Option 2 $4,121 $3,118 $2,803 $2,951 $1,318 $167

Option 3 $4,163 $3,127 $2,913 $3,058 $1,250 $69

Option 4 $1,777 $1,629 $327 $383 $1,451 $1,246

Total Benefits and Social Costs by Option (Millions; $2009) 

 Total Monetized Benefits Total Social Costs Net Benefits
CWIS Testimony, Ackerman and Stanton, August 18, 2011

15

or buying and installing similar equipment. These costs are well understood, and are well defined 

in monetary terms. While there may be disputes about whether the costs have been correctly 

estimated (such as the questions raised by Bill Powers), these are straightforward questions of 

fact, resolvable in principle by empirical evidence. There are no large cost categories that are 

omitted for lack of clarity about how to measure or monetize them.

Contrast this with the calculation of the benefits of regulating CWISs. These benefits consist, in 

large part, of reduced numbers of deaths of fish and other marine organisms, caused by reduction 

in impingement and entrainment. How should such benefits be measured and monetized? 

Measurement is itself a complex undertaking, with far fewer standardized answers than on the 

cost side. Monetization can be even more challenging, or, in principle, even impossible. 

Categories that cannot be both measured and monetized are typically excluded, effectively 

valuing them at zero – as is the case for non-use benefits for five of the seven regions in this rule. 

In short, the difficulties of both measurement and monetization ensure that the benefit estimates 

are incomplete, and that only a fraction of these benefits are awkwardly or indirectly expressed 

in monetary terms. Thus there is a built-in bias in the completeness of coverage: regulatory costs 

are more thoroughly measured and more meaningfully expressed in monetary terms; regulatory 

benefits are much less completely measured, and much less adequately monetized. 

So imagine finding (as in some scenarios in this case) that EPA’s estimate of the costs of 

regulation exceeds the estimated, monetized benefits. This is comparable to a business 

discovering that an exact tally of monthly expenses exceeds its best guess at some unspecified 

fraction of the month’s revenues. This does not prove that the bottom line for the month is a loss; 

on many reasonable assumptions about the missing data, the business actually ends the month in 

the black. 

The problem is more difficult because the missing data in the CWIS cost-benefit analysis may 

not be susceptible to quantification or monetization. This case is centrally dependent on the nonuse value of aquatic ecosystems in general, including (but not limited to) the heightened non-use 

value of threatened and endangered species. Ethical statements about nature, environmental 

integrity, and obligations to protect ecosystems and biodiversity, which are at stake for many 

people, are only awkwardly translated into the language of monetized non-use values. The 

beliefs of many stakeholders may be distorted beyond recognition in this process (or ignored for 

lack of research meeting rigid specifications) – which is why cost-benefit analysis is poorly 

suited for this case.

4. Other methods of decision-making

4.1 Breakeven analysis

EPA’s breakeven analysis in EEBA, Section 10.5 finds that non-use values would have to be $3 

to $4 per household under Option 1, and about $40 per household under Options 2 and 3, for 

benefits to breakeven with costs. This calculation assumes that only households in states with inscope facilities care about the fish affected by these facilities (although those states encompass 
CWIS Testimony, Ackerman and Stanton, August 18, 2011

16

almost all of the population), and uses 2000 Census data on the number of households. Using the 

Census Bureau estimate of the number of households in the country in 2009, the non-use value 

for breakeven would drop by 12 percent, to about $35 per household under Options 2 and 3.

A similar breakeven analysis can be applied to our calculations, as presented above. Using the 

combined benefits estimates in Table 8, EPA’s cost estimates, and the number of households in 

2009, Option 3 would break even if the value of all excluded benefit categories was $4 per 

household per year at a 3 percent discount rate, or $15 at 7 percent. The corresponding figures 

for Option 2 are $3 and $13.50. (Using the Powers cost estimates, as shown in Table 9, this 

analysis becomes moot, since the breakeven value for excluded benefits is negative.)

These relatively comprehensible numbers – a $35 to $40 per household gap between total costs 

and monetized use-value benefits in EPA’s original analysis, or a $3 to $15 per household value 

for omitted benefits in our Table 8 analysis – could be used in a more straightforward approach 

to valuation: describing the benefits of not killing large numbers of fish, shellfish, etc., and 

asking whether people are willing to pay the indicated amount in higher electricity bills. This 

provides what might be called a “holistic” comparison of costs and benefits (see Ackerman and 

Heinzerling (2004), Chapter 9). It is more meaningful and accessible than a complex academic 

analysis of what we infer people must be willing to pay; instead, it involves asking them directly, 

with the question tailored to this decision in particular.

EPA also analyzes two other important economic indicators: the expected impacts on electricity 

costs, and on employment. In brief, their analyses show that changes in electricity rates will be 

minimal, while economic benefits are greatest with Option 3.

4.2. Simple electricity model finds small effects

EPA does its electricity impacts analysis twice, at different levels of complexity. First, a

relatively simple model (in EBA, Chapter 5) assumes 100 percent pass-through of compliance 

costs into electricity prices. 

As EPA has noted earlier (EBA, Chapter 2H), however, 100 percent pass-through of compliance 

costs is far from being a likely outcome of new CWIS regulation nationwide. In states that still 

have traditional cost-of-service rate regulation, utilities would be entitled to recover 100 percent 

of their increased costs, plus appropriate interest; but in states that have deregulated electricity 

prices, cost recovery is more doubtful. In deregulated states, the marginal cost of electricity 

supply, which determines prices, may be based on costs at facilities that already have cooling 

towers, or on facilities that are exempt – in which case there will be little or no effect of new 

CWIS requirements on rates. In an analysis of closed cycle cooling requirements for 25 steam 

generators in New York, a deregulated state, Robert McCullough finds that the affected plants 

are almost never on the margin, so the price of electricity is almost never based on their costs, 

and closed cycle cooling requirements will have almost no effect on state electricity rates

(McCullough 2010).

There are 14 states, plus the District of Columbia, where electricity deregulation is in effect (see 

map, EBA Figure 2H-6, p. 2H-21). These deregulated jurisdictions include 43 percent of in-scope 

electric generators, 43 percent of in-scope capacity, and 41 percent of in-scope generation (EBA, 
CWIS Testimony, Ackerman and Stanton, August 18, 2011

17

p.2H-20). Traditional cost-of-service regulation, allowing full pass-through of costs, applies to 

less than 60 percent of electricity production that is affected by CWIS regulation.

The states with electricity deregulation roughly correspond to the North American Electricity 

Reliability Council (NERC) regions NPCC, RFC, and TRE (compare the map of deregulated 

states, EBA Figure 2H-6, p. 2H-21, with the map of NERC regions, EBA Figure 6-1, p. 6-3) – or 

in the older NERC regional map which EPA sometimes uses, NPCC, ECAR, MAAC, MAIN, 

and ERCOT.6 Of the $6.22 billion in annualized compliance costs under Option 3, these 

deregulated regions account for $3.56 billion, or 57 percent of the total (EBA, Table 5-6, p. 5-

16). Thus only 43 percent of compliance costs occur in the traditionally regulated NERC regions, 

where full pass-through of these costs to customers is assured.

The simple model, with 100 percent pass-through of costs, projects average annual increases in 

electricity bills as of 2015 amounting to $1.41 per household under Option 1, $17.09 under 

Option 2, and $17.60 under Option 3 (EBA, Table 5-5, p. 5-14). The largest increase in any 

NERC region, under any of the options, was $27.88 per household. Electricity price increases 

average less than $1.57 per MWh (0.157¢ per kWh) under Option 3. The national average 

percentage increase in electricity rates under Option 3 is 1.40 percent for the residential sector, 

and 1.68 percent for all sectors. (In all cases, impacts under Option 2 are slightly smaller than 

under Option 3; and impacts under Option 1 are imperceptibly small – e.g., 0.13 percent increase 

in electricity rates for all sectors.) Moreover, the deregulated NERC regions all have moderately 

greater than average price increases in this model; hence the average for the traditionally 

regulated regions, where prices will be passed on in full, is even lower.

Again, it should be noted that the Powers cost estimates are less than two-thirds of EPA’s 

estimates for Options 2 and 3, implying that the resulting electricity rate impacts would be 

proportionally smaller.

4.3. Sophisticated electricity model finds smaller effects

Second, EPA repeats the analysis of electricity impacts, using the Integrated Planning Model 

(IPM), a more complex and sophisticated model (EBA, Chapter 6). The IPM results are lengthy 

and are not easy to summarize, but the projected impacts on electricity prices are consistently 

smaller than in the simple model. 

IPM models electricity supply and demand in much greater detail, including individual facilitylevel detail on almost all of the in-scope facilities. It considers existing environmental regulations 

affecting facilities, and models the dispatch order of electricity supply options. EPA focuses on 

IPM projections for 2028, after in-scope facilities are all assumed to be in compliance with any 

new regulations. Compared to a baseline projection without new CWIS regulation, Option 3 

causes small changes in 2028 electricity prices: five of the eight NERC regions have price 

increases, ranging up to only 0.5 percent; the other three regions have decreases, ranging down to

a 1.7 percent drop (EBA, Table 6-2, pp. 6-12 – 6-15). Again, impacts are almost as large under 

 

6 EBA mentions several times that NERC regions have “recently” changed, but never explains the change. In 2006, 

the former ECAR, MAAC, and MAIN regions were combined into RFC (Mid Atlantic-Great Lakes), ERCOT was 

renamed TRE (Texas), and MAPP was renamed MRO (Upper Midwest). Other regions remained unchanged, 

including NPCC (New York-New England). EBA uses both the pre-2006 and current NERC regions at different 

points in the electricity analysis in Chapter 5.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

18

Option 2, and minute under Option 1. EPA reports that in the IPM analysis for 2028, Option 3 

“would not be expected to have a material ongoing effect on capacity availability and supply 

reliability” (EBA, p. 6-17), and that “the net change in generation is essentially zero. No NERC 

region records a consequential change in total generation” (EBA, p.6-18).

4.4. Output and employment impacts look best with Option 3

EPA also analyzes the output and employment impacts of Options 1, 2, and 3 (EBA, Chapter

10). To simplify a complicated story, there are two somewhat offsetting effects. On the one hand, 

EPA models the impacts of the substantial one-time costs of compliance, such as construction of 

cooling towers, and the recurring costs of compliance, primarily the energy penalty for the use of 

cooling towers. These costs increase expenditures, creating jobs and incomes. On the other hand, 

EPA assumes that electric utilities will raise prices to recover their increased costs; higher 

electricity prices reduce the supply and demand for other goods and services. In effect, higher 

electricity prices transfer spending from other sectors of the economy into electric utilities and 

their suppliers. Since electric utilities and the petroleum and coal industry create much less 

employment, per million dollars of spending, than manufacturing, construction, and other sectors 

(EBA, Table 10-1, p. 10-4), this tends to reduce overall employment.

The employment-reducing aspect of the analysis is overstated in two ways. First, EPA again 

assumes that all electric generators will be able to achieve complete cost recovery, as is the case 

under traditional cost-of-service utility regulation (see EBA, p. 10-17). Yet as noted above, 43 

percent of in-scope capacity and 41 percent of in-scope generation are located in jurisdictions 

where electricity rates have been deregulated, and full cost recovery is not guaranteed. 

Second, despite considerable attention to details of timing in the analysis of compliance costs, 

EPA arbitrarily assumes that cost recovery occurs at a constant annual rate from 2013 through 

2056, noting that “To the extent that the rate increase from compliance costs would phase in 

before reaching the “steady state” constant value, this analysis will overstate the economic

impact from the electricity rate increase.” (EBA, p. 10-7.) This is not just a theoretical possibility: 

Since compliance costs will phase in over more than a decade following the effective date of the 

regulation, traditional utility rate regulation would impose a similar phase-in period for cost 

recovery. Thus EPA’s failure to model the timing of cost recovery has exaggerated the

employment impacts of electricity rate increases.

EPA introduces another needless complication into the analysis, considering the results obtained 

by accounting for only part of the price impacts of electricity, as well as the whole effect 

(described as “Case 1” and “Case 2”, see EBA, p. 10-11). It is perhaps of academic interest that 

Case 1, defined as including only part of the anticipated price impacts, makes the regulatory 

options look worse than Case 2, defined as including the full price impacts. This does not 

translate into real-world significance, however: No argument for basing decisions on Case 1 is 

made in EBA; the more comprehensive Case 2 (often described as “with supply elasticity” in 

tables) appears to be EPA’s best estimate.

In terms of output effects, EPA’s findings are unambiguous: the stronger the regulation, the 

greater the boost to GDP. The average annual effect on output, from 2012 through 2056, is -$194 

million from Option 1, +$768 million from Option 2, and +$4,258 million from Option 3 (EBA, 

Table 10-9, p. 10-15). In terms of employment effects, EPA reports the opposite, finding job 
CWIS Testimony, Ackerman and Stanton, August 18, 2011

19

losses becoming greater as regulation becomes stricter. As noted above, however, EPA 

overstates the employment-reducing effects in its analysis. If electric generators in deregulated 

jurisdictions are able to pass on roughly half of their cost increases, then EPA’s net employment 

impacts would be reversed, as shown in Table 10. Under this assumption, Option 2 creates a net 

increase in employment, and Option 3 creates even more jobs.

Table 10: Average annual employment effects of regulatory options, 2012-2056

full-time equivalent jobs, national totals

EPA version 50% pass-through in 

deregulated states

Option 1 -2,475 -1,161

Option 2 -12,251 +2,116

Option 3 -12,441 +2,374

Source: “EPA version” from EBA, Table 10-10, p. 10-16. “50% pass-through” assumes that only half of the 

roughly 40% of national total costs incurred in deregulated states can be recovered from customers; it therefore 

assumes a 20% reduction in the job losses due to electricity price impacts on households and other product markets, 

in EBA, Table 10-10.

Even without this correction for deregulated states, EPA presents a view of employment impacts 

that favors Option 3, based on calculations analogous to those used throughout the analysis of 

costs and benefits. EPA calculates the present value of the future stream of jobs at discount rates 

of 3 percent and 7 percent, and then annualizes this present value at the same discount rate (EBA, 

Table 10-11, p. 10-17). Because so many of the new jobs created by regulation occur relatively 

soon, in the wave of construction required for compliance, the regulatory options all look better 

at 7 percent than at 3 percent. At either discount rate, Option 3 is the best for employment: at 7 

percent, it creates an annualized increase of 10,102 jobs, better than Options 1 and 2; at 3 

percent, it creates an annualized loss of 319 jobs, a smaller loss than either of the other options. 

In short, the annualized present value calculation confirms the finding of our (perhaps more 

transparent) 50 percent pass-through scenario in Table 10: Stricter regulation is better for 

employment, as well as output. The numbers of jobs are not large, relative to the U.S. economy 

as a whole; this is to be expected, given the generally small size of the regulatory costs involved 

in this case. (The Powers cost estimates would reduce the already small employment and output 

impacts by more than one-third.) Remember that EPA’s estimates of total costs are small in 

macroeconomic terms: annualized costs of a few billion dollars are an insignificant percentage of 

a $14 trillion economy. The annualized total cost of Option 3 at a 7 percent discount rate, the 

highest cost estimate in the analysis, is $4.86 billion, or 0.033 percent (1/30 of one percent) of 

US GDP. As the employment estimates, electricity rate impacts, and breakeven calculations all 

demonstrate, there is no basis for arguing that CWIS regulation, as proposed in any of the 

options in this case, would be harmful to the economy.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

20

5. Alternative thresholds

In our final comparison of the Powers cost estimates and our combined benefits estimates, in 

Table 9, the monetized benefits exceed the costs even for Option 3, the most stringent regulation 

under consideration. Thus we see no need to propose alternatives. If however, the interest in 

other options is driven by concern for specific categories, such as small facilities, it would be 

better to exempt those categories than to advocate site-specific calculations everywhere; the 

latter alternative would cause a huge increase in regulatory burdens, as discussed in the next 

section.

Facilities below 500 MGD, for example, represent roughly 80 percent of all facilities, but only 

19 percent of the total water flow and 25 percent of the pre-tax compliance costs of Option 3 (our 

calculations from TDD, Exhibits 7-1, 7-2). Thus a proposal structured like Option 2, but with a 

500 MGD threshold for the cooling tower requirement, would exempt most of the in-scope 

facilities – including all but seven of the manufacturers – while still regulating 81 percent of the 

water flow, and presumably achieving 81 percent of the benefits. In other words, such an 

approach would still achieve most of the total benefits, while reducing rather than increasing the 

regulatory analysis requirements. 

6. Site-specific calculations

Cost-benefit analysis, even at the national level, is an ambiguous process that offers only weak 

and incomplete guidance to public policy decisions. On the theoretical level, it is stymied by the 

asymmetry between well-defined, monetized costs versus qualitatively important but partially 

unquantifiable or unmonetizable benefits, as discussed in section 3. In practice, the claimed 

objectivity and transparency of the cost-benefit process dissolves in the face of staggering 

technical complexity and dependence on arbitrary, potentially subjective judgment calls, as seen 

in section 2. 

A switch to site-specific calculations would magnify all of these problems, and force them to be 

analyzed and debated again and again in underfunded local proceedings throughout the country.

The tasks involved are formidable: full calculation of monetary benefits in this case is evidently 

more than EPA can handle at the national level. The agency’s failure to produce any estimate 

whatsoever of non-use benefits for 5 of the 7 regions, and failure to produce any sensible, nontrivial estimate of the benefits of protecting threatened and endangered species nationwide, 

suggests that valuation of benefits is a challenging undertaking. For state and local agencies with 

far more limited time and budgets for analysis, it will simply prove impossible.

Thus we recommend strongly against site-specific calculations. If, however, it is decided to 

require site-specific calculation of costs and benefits for individual facilities, there will be a need 

for a reproducible, localizable version of this analysis, requiring standardized approaches to both 

costs and benefits. To that end, EPA should start by making four important changes to the sitespecific cost-benefit analysis process envisioned in the Proposed Rule. 

First, EPA should clarify how costs and benefits are to be compared. EPA’s novel formulation 

in the Section 316(b) context that benefits should “justify” the costs of entrainment controls is 
CWIS Testimony, Ackerman and Stanton, August 18, 2011

21

unclear; some states may interpret it as a departure from the “wholly disproportionate” standard 

used under the Clean Water Act. It is likely that states will disagree sharply on the point at 

which the costs of closed-cycle cooling are justified, and how this comparison is to be made. 

Some states may conclude that the benefits of more protective standards are not justified unless 

an applicant conducts a fine-grained analysis, similar to EPA’s, and determines that the 

monetizable social benefits are larger than the monetized social costs. Given the extreme 

difficulty of conducting such an analysis, this approach would effectively determine in advance 

that more protective standards could never be justified. Other states may conclude that properly 

monetizing the non-use values of aquatic ecosystems is impossible (after all, the task is beyond 

EPA’s capacity) and, therefore, the costs of entrainment controls are justified so long as they are 

not wholly disproportionate to the non-monetized benefits of the rule. 

A clear interpretive standard set by federal regulation would prevent states from making costbenefit comparisons under disparate standards. It would also prevent states from relying on costbenefit considerations in a manner that is inconsistent with the limits that Congress placed on the 

use of cost-benefit comparisons. Therefore, EPA should establish that the new “benefits justify 

the costs” standard is consistent with its existing Clean Water Act guidance: the costs of a 

protective measure are justified so long as they are not wholly disproportionate to the benefits 

conferred by that measure.

Second, EPA should ensure that government employees or contractors are the sole arbiters of the 

technical adequacy of all cost-benefit analyses. The current study process is deeply flawed 

because consultants and peer reviewers hired by the applicant will generally become advocates 

for the applicant’s position rather than impartial adjudicators. This risk is greatest where, as 

here, most applicants are repeat players: a parent company that owns or operates multiple 

facilities can provide pliant consultants and reviewers with a steady stream of work. Even if 

applicants pay for the cost of conducting studies and peer reviews, the integrity of the analytical 

process can only be assured if the State, not the applicant, selects the contractors and oversees 

the studies.

Third, because cost-benefit analyses are complex and require analysts to make considerable 

assumptions, applicants require additional guidance on how they should be performed. 

Therefore, EPA should restore a number of guidance statements that were deleted by OMB. For 

example, OMB deleted EPA’s explanation of the difference between the social costs and the 

private costs to facilities of installation downtime and energy penalties, and how these costs 

should be calculated to avoid overestimating the social costs.7 OMB also removed EPA’s 

guidance on discount rates. EPA had called for facilities to use a “social discount rate . . . 

reflecting society’s rate of time preference as opposed to a facility’s cost of capital,” and 

suggested 3 percent, as per existing OMB guidance.8 EPA should restore both of these guidance 

statements to the rule text.

Finally, EPA should provide standardized default values and valuation methodologies for costs 

of control technologies, and for all major benefits categories, suitable for use in local analyses. 

In particular, EPA should require:

 

7

See redlined version of original CWIS rule, p. 338-339. 

8

See redlined version of original CWIS rule, p. 340. 
CWIS Testimony, Ackerman and Stanton, August 18, 2011

22

 Estimates of national, not regional, non-use values – As noted above, economic studies 

have repeatedly shown that people place a high value on preserving and protecting 

ecosystems even if they do not live close to them. A complete benefits analysis must 

include the value that all Americans derive from protecting wildlife, not just the benefits 

to those people who live close to a particular waterbody.

 A clear explanation of how the heightened value of protecting threatened and endangered 

species is included in the benefits analysis – Americans place a particularly high value on 

protecting and preserving threatened and endangered species. This additional value must 

be reflected in the benefits analysis.

 Quantified uncertainty estimates – EPA generally promotes transparent and (where 

possible) quantified disclosure of scientific and economic uncertainties in its analysis.

Uncertainty is particularly problematic in this rulemaking because it is asymmetric: the 

costs of entrainment controls are well quantified, but the benefits are incompletely 

quantified and systematically underestimated. Thus, EPA should require anyone 

conducting a cost-benefit analysis to disclose the uncertainty in their estimates of the 

number of fish and other organisms affected by this rule, and in the economic benefits of 

protecting these organisms. EPA stated repeatedly in the preamble to the proposed rule 

that it underestimated the economic benefit to society of saving the more than one trillion 

fish and other organisms currently killed each year in cooling water intakes. Yet even 

with these caveats, EPA’s numbers take on a false air of precision since they are 

unaccompanied by quantified error estimates. EPA should require that all cost-benefit 

studies include a quantitative measure of the uncertainty in the different estimates so that 

regulators understand the error range associated with the estimates they have received.

 A buffer or margin of safety for threatened and endangered species – The difference 

between killing 1 percent and 2 percent of all the individuals in an endangered population 

can be the difference between survival and extinction for that species. Threatened and 

endangered species should not be required to bear the risk that an applicant has erred in 

its cost-benefit calculations. Because estimates of both the physical and economic 

benefits of entrainment controls are uncertain, where threatened or endangered species, or 

species of concern are involved, EPA should require that applicants do their utmost to 

quantify the uncertainties in their benefits estimate, and then base their benefits 

calculations on the upper end of the error range. 

 Non-use value estimates no lower than those found by EPA – Contingent valuation of 

environmental goods is a difficult undertaking. Such studies must be done with care and 

transparency because an applicant can significantly alter the results of a site-specific costbenefit analysis by manipulating estimates of non-use values. Presently, EPA is 

conducting a national willingness to pay study to develop accurate and transferable 

estimates of the non-use benefits of wildlife. If applicants or regulators can document a 

substantial basis to deviate upwards from EPA’s estimates, this should be permitted. But 

as a safeguard against inaccurate estimation studies, EPA should not allow applicants to 

present non-use values for fish and aquatic ecosystems that are lower than those found in 

EPA’s forthcoming study.
CWIS Testimony, Ackerman and Stanton, August 18, 2011

23

The difficulty of imagining success in this agenda is a reason why the issue should continue to be 

addressed and resolved at a national level, where much greater resources are available for 

analysis.

References

Ackerman, Frank. 2006. The Unbearable Lightness of Regulatory Costs. Fordham Urban Law 

Journal 33, no. 4: 1071-1096.

Ackerman, Frank, and Lisa Heinzerling. 2004. Priceless: On Knowing the Price of Everything 

and the Value of Nothing. New York: The New Press.

Gentner, Brad, and Mike Bur. 2009. Economic Damages of Impingement and Entrainment of 

Fish, Fish Eggs, and Fish Larvae at the Bay Shore Power Plant. Silver Spring, MD: 

Gentner Consulting Group, September. 

http://www.sierraclub.org/coal/oh/downloads/bay_shore_economic_report.pdf.

Harrington, Winston, Richard D Morgenstern, and Peter Nelson. 2000. On the accuracy of 

regulatory cost estimates. Journal of Policy Analysis and Management 19, no. 2 (March 

1): 297-322. doi:10.1002/(SICI)1520-6688(200021)19:2<297::AID-PAM7>3.0.CO;2-X.

Loomis, John B. 2000. Vertically Summing Public Good Demand Curves: An Empirical 

Comparison of Economic versus Political Jurisdictions. Land Economics 76, no. 2 (May 

1): 312-321. doi:10.2307/3147231.

McCullough, Robert. 2010. The Economics of Closed Cycle Cooling in New York. Portland, OR: 

McCullough Research, June 3. 

http://www.newenergychoices.org/uploads/EconomicsCCC_NY.pdf.

McGarity, Thomas O., and Ruth Ruttenberg. 2002. Counting the Cost of Health, Safety, and 

Environmental Regulation. Texas Law Review 80: 1997-2058.

Pauly, D., and V. Christensen. 1995. Primary production required to sustain global fisheries. 

Nature 374, no. 6519 (March 16): 255-257. doi:10.1038/374255a0.

Richardson, Leslie, and John Loomis. 2009. The total economic value of threatened, endangered 

and rare species: An updated meta-analysis. Ecological Economics 68, no. 5 (March): 

1535-1548. doi:10.1016/j.ecolecon.2008.10.016.
 U.S. Center • 11 Curtis Avenue, Somerville, MA 02144 __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Page 1 of 7

FRANK ACKERMAN

frank.ackerman@sei-us.org

www.sei-us.org/ClimateEconomics

(617) 627-6957

SUMMARY:

Economist with expertise in climate change; a prominent critic of conventional economic approaches to 

climate policy. Has written extensively for academic, policy and general audiences and has directed 

studies for a wide range of government agencies, international organizations, and nonprofit groups.

EDUCATION:

Ph.D. in Economics, 1975, Harvard University

Bachelor of Arts (mathematics and economics), 1967, Swarthmore College, Swarthmore, PA

EXPERIENCE:

Stockholm Environment Institute–U.S. Center, Somerville, MA

Senior economist and director, Climate Economics Group, 2007-present

Tufts University, Somerville, MA

Senior research fellow, Global Development and Environment Institute, 2007-present

Director, Research and Policy Program, Global Development and Environment Institute, 1995-2007

Research professor, Department of Urban and Environmental Policy and Planning, 1995-2007

Tellus Institute, Boston, MA

Senior economist, 1985-1995

University of Massachusetts, Amherst and Boston, MA

Visiting assistant professor of economics, Boston, 1984-85

Visiting assistant professor of economics, Amherst, 1982-83

Dollars and Sense, Somerville, MA

Editor and business manager, 1974-1982

AFFILIATIONS:

Economics for Equity and the Environment (E3 Network), Portland, OR

Co-founder and steering committee member, 2007-present

Center for Progressive Reform, Washington, DC

Member scholar, 2002-present
FRANK ACKERMAN (cont.)

Page 2 of 7

PUBLICATIONS (selected):

Books:

Can We Afford the Future? Economics for a Warming World (2008 hardcover, 2009 paperback). London: 

Zed Books.

Poisoned for Pennies: The Economics of Toxics and Precaution (2008). Washington, DC: Island Press.

The Flawed Foundations of General Equilibrium: Critical Essays on Economic Theory (2004). Frank 

Ackerman and Alejandro Nadal. London: Routledge.

Microeconomics in Context (2004, 2nd ed. 2008, plus Russian and Vietnamese editions). Neva R. 

Goodwin, Julie A. Nelson, Frank Ackerman and Thomas Weisskopf. New York: Houghton Mifflin (1st

ed.); Armonk, NY: M.E. Sharpe (2nd ed.).

Priceless: On Knowing the Price of Everything and the Value of Nothing (2003 hardcover, 2005 

paperback). Frank Ackerman and Lisa Heinzerling. New York: The New Press.

The Political Economy of Inequality (2000). Frank Ackerman, Neva R. Goodwin, Laurie Dougherty and 

Kevin P. Gallagher (editors). Washington, DC: Island Press.

The Changing Nature of Work (1998). Frank Ackerman, Neva R. Goodwin, Laurie Dougherty and Kevin 

P. Gallagher (editors). Washington, DC: Island Press.

Why Do We Recycle? Markets, Values, and Public Policy (1997). Washington, DC: Island Press.

Book Chapters (since 2000):

“Carbon Embedded in China’s Trade” and “Policy Implications of Carbon Pricing for China’s Trade” 

(2011). In The Economics of Climate Change in China: Towards a Low-Carbon Economy, edited by Fan

Gang, Nicholas Stern, Ottmar Edenhofer, Xu Shanda, Klas Eklund, Frank Ackerman, Li Lailai and Karl 

Hallding. Earthscan: London. A previous version of “Carbon Embedded in China’s Trade” appeared as 

SEI Working Paper WP-US-0906.

“Cost-Benefit Analysis of Climate Change: Where It Goes Wrong” (2010). In Economic Thought and 

U.S. Climate Change Policy, ed. David M. Driesen. Cambridge, MA: The MIT Press.

“The New Climate Economics: The Stern Review versus its Critics” (2009). In Twenty-First Century 

Macroeconomics: Responding to the Climate Challenge, eds. Jonathan M. Harris and Neva R. Goodwin.

Cheltenham, UK, and Northampton, MA: Edward Elgar Publishing.

“Wrong in retrospect: cost-benefit analysis of past successes” (2007). Frank Ackerman, Lisa Heinzerling 

and Rachel I. Massey. In Frontiers in Ecological Economic Theory and Application, eds. Jon D. Erickson 

and John M. Gowdy. Cheltenham, UK: Edward Elgar Publishing.

“Waste, Recycling, and Climate Change: U.S. Perspective” (2002). In Recovering Energy From Waste, 

eds. Velma I. Grover, Vaneeta Kaur Grover, William Hogland. Enfield, NH: Science Publishers.

“Getting the Prices Wrong: The Limits of Market-Based Environmental Policy” (2001). Frank Ackerman 

and Kevin P. Gallagher. In Taking Sides: Clashing Views on Controversial Economic Issues, eds. T. 

Swartz and F. Bonello. New York: McGraw Hill.
FRANK ACKERMAN (cont.)

Page 3 of 7

“Trade Liberalization and Pollution Intensive Industry in Developing Countries: A Partial Equilibrium 

Approach” (2000). Frank Ackerman and Kevin P. Gallagher. In Methodologies for Environmental 

Assessments of Trade Liberalization Agreements, ed. Dale Andrews. Paris: OECD Press.

Journal Articles (selected):

“CRED: A new model of climate and development” (2011). Ecological Economics, in press. Frank 

Ackerman, Elizabeth A. Stanton and Ramón Bueno. Previous versions appeared as UN/DESA Working 

Paper No. 96 and as SEI Working Paper WP-US-1003.

“The Economics of 350” (2010). Frank Ackerman, Elizabeth A. Stanton, Stephen J. DeCanio, Eban 

Goodstein, Richard B. Howarth, Richard B. Norgaard, Catherine S. Norman, Kristen A. Sheeran. 

Solutions 1:5 (Sept.-Oct. 2010), pp. 49-56.

“Fat Tails, Exponents, Extreme Uncertainty: Simulating Catastrophe in DICE” (2010). Frank Ackerman, 

Elizabeth A. Stanton and Ramón Bueno. Ecological Economics 69:9, pp. 1657-1665. A previous version 

appeared as SEI Working Paper WP-US-0901.

“Carbon Markets Are Not Enough” (2010). United Nations Conference on Trade and Development 

(UNCTAD) Trade and Environment Review 2009/2010, pp. 26-30.

“Climate and development economics: Balancing science, politics and equity” (2009), Elizabeth A. 

Stanton and Frank Ackerman. Natural Resources Forum 33:4, pp. 262-273. A previous version appeared 

as SEI Working Paper WP-US-0908.

“Limitations of Integrated Assessment Models of Climate Change” (2009). Frank Ackerman, Stephen J. 

DeCanio, Richard B. Howarth and Kristen Sheeran. Climatic Change 95:3-4, pp. 297-315. 

“Inside the Integrated Assessment Models: Four Issues in Climate Economics” (2009). Elizabeth A. 

Stanton, Frank Ackerman and Sivan Kartha. Climate and Development 1:2, pp. 166-184. A previous 

version appeared as SEI Working Paper WP-US-0801.

“Did the Stern Review Underestimate U.S. and Global Climate Damages?” (2009). Frank Ackerman, 

Elizabeth A. Stanton, Chris Hope, and Stephane Alberth. Energy Policy 37:7, pp. 2717-2721. A previous 

version appeared as SEI Working Paper WP-US-0802.

“The Shrinking Gains from Global Trade Liberalization in Computable General Equilibrium Models”

(2008). Frank Ackerman and Kevin P. Gallagher. International Journal of Political Economy 37:1, pp. 

50-77.

“Climate Economics in Four Easy Pieces” (2008). Development 51:3, pp. 325-331.

“Hot, It’s Not: Reflections on Cool It! by Bjorn Lomborg” (2008). Climatic Change 89:3-4, pp. 435-446.

“A comment on ‘Economy-wide estimates of the implications of climate change: Human health’” (2008).

Frank Ackerman and Elizabeth A. Stanton. Ecological Economics 66:1, pp. 8-13.

“Mad Cows and Computer Models: The U.S. Response to BSE” (2008). Frank Ackerman and Wendy A. 

Johnecheck. New Solutions 18:2, pp. 145-156. 

“Implications of REACH for Developing Countries” (2008). Frank Ackerman, Elizabeth A. Stanton, 

Brian Roach and Anne-Sofie Andersson. European Environment 18:1, pp. 16-29. 
FRANK ACKERMAN (cont.)

Page 4 of 7

“The Economics of Atrazine” (2007). International Journal of Occupational and Environmental Health

13:4, pp. 441-449.

“Law and Economics for a Warming World” (2007). Lisa Heinzerling and Frank Ackerman. Harvard 

Law and Policy Review 1:2, pp. 331-362. 

“The Carbon Content of Japan-U.S. Trade” (2007). Frank Ackerman, Masanobu Ishikawa and Mikio 

Suga. Energy Policy 35:9, pp. 4455-4462.

“European Chemical Policy and the United States: The Impacts of REACH” (2007). Frank Ackerman,

Elizabeth A. Stanton and Rachel Massey. Renewable Resources Journal 25:1. A previous version 

appeared as Global Development and Environment Institute Working Paper 06-06.

“The Economics of Inaction on Climate Change: A Sensitivity Analysis” (2006). Frank Ackerman and 

Ian J. Finlayson. Climate Policy 6:5, pp. 509-526. A previous version appeared as Global Development 

and Environment Institute Working Paper 06-07.

“The Unbearable Lightness of Regulatory Costs” (2006). Fordham Urban Law Journal 33:4, pp. 1071-

1096.

“The Shrinking Gains from Trade: a Critical Assessment of Doha Round Projections” (2005). Global 

Development and Environment Institute Working Paper 05-01. Also published, in Italian translation, as 

“La valutazione degli effetti della liberalizzazione commerciale: un esame critico” (2006). QA: Rivista 

dell’Associazione Rossi-Doria 2006:3.

“Applying Cost-Benefit to Past Decisions: Was Environmental Protection Ever a Good Idea?” (2005). 

Lisa Heinzerling, Frank Ackerman and Rachel Massey. Administrative Law Review 57:1. Reprinted, as 

one of the ten best environmental and land use law review articles of 2005, in Land Use & Environmental 

Law Review (2006).

“Pricing the Priceless: Cost-Benefit Analysis of Environmental Protection” (2002). Frank Ackerman and 

Lisa Heinzerling. University of Pennsylvania Law Review 150:5, pp. 1553-1584. Reprinted, as one of the 

ten best environmental and land use law review articles of 2002, in Land Use & Environmental Law

Review (2003).

“Mixed Signals: Market Incentives, Recycling and the Price Spike of 1995” (2002). Frank Ackerman and

Kevin P. Gallagher. Resources, Conservation and Recycling 35:4, pp. 275-295.

“Still Dead After All These Years: Interpreting the Failure of General Equilibrium Theory” (2002). 

Journal of Economic Methodology 9:2, pp. 119-139.

“Economic Theory and Climate Change Policy” (1999). Irene Peters, Frank Ackerman and Steve Bernow. 

Energy Policy 27, pp. 501-504.

“Grandfathering and Environmental Compatibility: The Costs of Cleaning Up the Clean Air Act” (1999). 

Frank Ackerman, Bruce Biewald, William Moomaw, Tim Woolf and David White. Energy Policy 27, pp. 

929-940.

Working Papers and White Papers (selected):

“Climate damages in the FUND model: A disaggregated analysis” (2011). Frank Ackerman and Charles 

Munitz. SEI Working Paper WP-US-1105.
FRANK ACKERMAN (cont.)

Page 5 of 7

“Comparing climate strategies: Economic optimization versus equitable burden-sharing” (2011). Frank 

Ackerman, Ramón Bueno, Sivan Kartha and Eric Kemp-Benedict. SEI Working Paper WP-US-1104.

“Estimating Regions’ Relative Vulnerability to Climate Damages in the CRED Model” (2011). Elizabeth 

A. Stanton, Jeffrey Cegan, Ramón Bueno and Frank Ackerman. SEI Working Paper WP-US-1103.

“Use of McKinsey abatement cost curves for climate economics modeling” (2011). Frank Ackerman and

Ramón Bueno. SEI Working Paper WP-US-1102.

“No State Left Behind: A Better Approach to Climate Policy” (2010). Elizabeth A. Stanton and Frank 

Ackerman. Economics for Equity and the Environment (E3 Network) white paper, released with the 

report Emission Reduction, Interstate Equity, and the Price of Carbon (see reports listing below).

“Understanding Interstate Differences in U.S. Greenhouse Gas Emissions” (2010). Elizabeth A. Stanton, 

Frank Ackerman and Kristen A. Sheeran. SEI Working Paper WP-US-1004.

“Financing the Climate Mitigation and Adaptation Measures in Developing Countries” (2009). G-24 

Discussion Paper No. 57, United Nations Conference on Trade and Development. A previous version 

appeared as SEI Working Paper WP-US-0910.

Reports and Policy Studies (selected):

Climate Risks and Carbon Prices: Revising the Social Cost of Carbon (2011). Frank Ackerman and 

Elizabeth A. Stanton. Report commissioned by Economics for Equity and the Environment (E3 Network).

The Water-Energy Nexus in the Western States: Projections to 2100 (2011). Jeremy Fisher and Frank 

Ackerman. Report funded by a Kresge Foundation grant.

The Last Drop: Climate Change and the Southwest Water Crisis (2011). Frank Ackerman and Elizabeth 

A. Stanton. Report funded by a Kresge Foundation grant.

“Testimony on EPA’s ‘Coal Combustion Residuals: Proposed Rule’” (2010). Frank Ackerman and 

Elizabeth A. Stanton. Submitted as part of Earthjustice/Environmental Integrity Project testimony on 

Docket ID EPA-HQ-RCRA-2009-6040.

Emission Reduction, Interstate Equity, and the Price of Carbon (2010). Elizabeth A. Stanton and Frank 

Ackerman. Report commissioned by Economics for Equity and the Environment (E3 Network).

The socio-economic implications of climate change on FYR Macedonia and national policy options on 

adaptation (2010). Frank Ackerman and Elizabeth A. Stanton. Report commissioned by the United 

Nations Development Programme.

The Social Cost of Carbon (2010). Frank Ackerman and Elizabeth A. Stanton. Report commissioned by 

Economics for Equity and the Environment (E3 Network).

Daydreams of disaster: An evaluation of the Varshney-Tootelian critiques of AB 32 and other regulations

(2009). Report to the California Attorney General.

The Socio-Economic Impact of Climate Change in Armenia (2009). Elizabeth A. Stanton, Frank 

Ackerman and Flávia Resende. Report commissioned by the United Nations Development Programme.

The Economics of 350: The Benefits and Costs of Climate Stabilization (2009). Frank Ackerman,

Elizabeth A. Stanton, Stephen J. DeCanio, Eban Goodstein, Richard B. Howarth, Richard B. Norgaard, 

Catherine S. Norman, Kristen A. Sheeran. Report commissioned by Economics for Equity and the 

Environment (E3 Network), with SEI-U.S. and Ecotrust.
FRANK ACKERMAN (cont.)

Page 6 of 7

Greenhouse Gases and the American Lifestyle: Understanding Interstate Differences in Emissions

(2009). Elizabeth A. Stanton, Frank Ackerman and Kristen Sheeran. Report commissioned by Economics 

for Equity and the Environment (E3 Network), with Ecotrust.

The Caribbean and Climate Change: The Costs of Inaction (2008). Ramón Bueno, Cornelia Herzfeld, 

Elizabeth A. Stanton and Frank Ackerman. Report commissioned by the Environmental Defense Fund.

The Cost of Climate Change: What We’ll Pay if Global Warming Continues Unchecked (2008). Frank 

Ackerman and Elizabeth A. Stanton. Report commissioned by the Natural Resources Defense Council.

Florida and Climate Change: The Costs of Inaction (2007). Elizabeth A. Stanton and Frank Ackerman.

Report commissioned by the Environmental Defense Fund.

Critique of Cost-Benefit Analysis, and Alternative Approaches to Decision-Making (2008). Report to 

Friends of the Earth England, Wales and Northern Ireland.

Generated User Benefits and the Heathrow Expansion: Understanding Consumer Surplus (2008). 

Elizabeth A. Stanton and Frank Ackerman. Report to Friends of the Earth England, Wales and Northern 

Ireland.

Out of the Shadows: What’s Behind DEFRA’s New Approach to the Price of Carbon (2008). Elizabeth A. 

Stanton and Frank Ackerman. Report to Friends of the Earth England, Wales and Northern Ireland.

Debating Climate Economics: The Stern Review vs. Its Critics (2007). Report to Friends of the EarthU.K.

Implications of REACH for the Developing Countries (2006). Lead author, with a four-country research 

team. Report to the European Parliament, Directorate-General for External Policies of the Union.

French Industry and Sustainable Chemistry: The Benefits of Clean Development (2005). Frank Ackerman 

and Rachel Massey. Report commissioned by Greenpeace France.

The True Costs of REACH (2004). Frank Ackerman and Rachel Massey. Report to the Nordic Council of 

Ministers.

The Economics of Phasing Out PVC (2003, revised 2006). Frank Ackerman and Rachel Massey. Report 

funded by the Mitchell Kapor Foundation and the John Merck Fund.

Greenhouse Emissions From Waste Management: A Survey of Data Reported to the U.N. Framework 

Convention on Climate Change by Annex I Countries (2003). Frank Ackerman, William Moomaw and 

Robin Taylor. Report to United Nations Framework Convention on Climate Change.

Misc. Publications:

“The Need for a Fresh Approach to Climate Change Economics” (2010). Frank Ackerman, Stephen J. 

DeCanio, Richard B. Howarth and Kristen Sheeran. Proceedings of the Workshop on Assessing the 

Benefits of Avoided Climate Change, March 16-17, 2009, Pew Center on Global Climate Change, 

Arlington, VA, pp. 159-181.

“Stern Advice for Copenhagen” (2009). Review of Blueprint for a Safer Planet, by Nicholas Stern, in 

Nature Reports: Climate Change (online journal), April 2009.
FRANK ACKERMAN (cont.)

Page 7 of 7

“The Outer Bounds of the Possible: Economic Theory, Precaution, and Dioxin” (2003). Presented at the 

Dioxin 2003 conference, Boston, Aug. 24-29. Published in Organohalogen Compounds 65, pp. 378-81.
 U.S. Center • 11 Curtis Avenue, Somerville, MA 02144 __________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Page 1 of 4

ELIZABETH ANNE STANTON

liz.stanton@sei-us.org

www.sei-us.org/ClimateEconomics

(617) 627-6872

SUMMARY:

Economist focused on environmental policy, economic inequality, and the interplay between climate 

protection and development, conducting independent research and analysis as well as studies 

commissioned by government agencies, international organizations, and nonprofit groups.

EDUCATION:

Ph.D. in Economics, 2007, University of Massachusetts-Amherst

Master of Arts in Economics, 2000, New Mexico State University Las Cruces, NM

Bachelor of International Studies, 1994, School for International Training, Brattleboro, VT

EXPERIENCE:

Stockholm Environment Institute–U.S. Center, Somerville, MA

Senior economist, 2010-present

Economist, 2008-2009

College of New Rochelle, New Rochelle, NY

Assistant professor, Department of Economics, 2007-2008

Tufts University, Somerville, MA

Research fellow, Global Development and Environment Institute, 2006-present

Adjunct professor, Department of Urban Environmental Policy and Planning, 2007

University of Massachusetts-Amherst, Amherst, MA

Editor and researcher, Natural Assets Project, Political Economy Research Institute, 2002-2005

Center for Popular Economics, Amherst, MA

Program Director, 2001-2003

Fitchburg State College, Fitchburg, MA

Adjunct professor, Social Sciences Department, 2006

University of Massachusetts-Amherst, Amherst, MA

Adjunct professor, Department of Economics, 2003-2006

Castleton State College and the Southeast Vermont Community Learning Collaborative, 

Dummerston, VT

Adjunct professor, 2005

School for International Training, Brattleboro, VT

Adjunct professor, Program in Intercultural Management, Leadership, and Service, 2004
ELIZABETH A. STANTON (cont.)

Page 2 of 4

AFFILIATIONS:

Economics for Equity and the Environment (E3 Network), Portland, OR

Climate Task Force member, 2007-present

Center for Popular Economics, Amherst, MA

Staff economist, 2001-present

PUBLICATIONS:

Books and Book Chapters:

“Greenhouse Gases and Human Well-Being: China in a Global Perspective” (2011). In The Economics of 

Climate Change in China: Towards a Low-Carbon Economy, edited by Fan Gang, Nicholas Stern, Ottmar 

Edenhofer, Xu Shanda, Klas Eklund, Frank Ackerman, Li Lailai and Karl Hallding. Earthscan: London. A 

previous version appeared as SEI Working Paper WP-US-0907.

Reclaiming Nature: Worldwide Strategies for Building Natural Assets (2007). James K. Boyce, Elizabeth 

A. Stanton and Sunita Narain, eds. Anthem Press: London.

“Land Reform and Sustainable Development” (2007). James K. Boyce, Peter Rosset and Elizabeth A. 

Stanton. In Reclaiming Nature: Worldwide Strategies for Building Natural Assets, edited by James K. 

Boyce, Sunita Narain and Elizabeth A. Stanton. Anthem Press: London.

Environment for the People (2005). Elizabeth A. Stanton and James K. Boyce. Political Economy 

Research Institute: Amherst, MA.

Journal Articles:

“Negishi welfare weights in integrated assessment models: The mathematics of global inequality” (2010). 

Climatic Change 107:3, pp. 417-432. A previous version appeared as SEI Working Paper WP-US-0902.

“CRED: A new model of climate and development” (2011). Ecological Economics, in press. Frank 

Ackerman, Elizabeth A. Stanton and Ramón Bueno. Previous versions appeared as UN/DESA Working 

Paper No. 96 and as SEI Working Paper WP-US-1003.

“The Economics of 350” (2010). Frank Ackerman, Elizabeth A. Stanton, Stephen J. DeCanio, Eban 

Goodstein, Richard B. Howarth, Richard B. Norgaard, Catherine S. Norman, Kristen A. Sheeran. 

Solutions 1:5 (Sept.-Oct. 2010), pp. 49-56.

“Fat Tails, Exponents, Extreme Uncertainty: Simulating Catastrophe in DICE” (2010). Frank Ackerman, 

Elizabeth A. Stanton and Ramón Bueno. Ecological Economics 69:9, pp. 1657-1665. A previous version 

appeared as SEI Working Paper WP-US-0901.

“Climate and development economics: Balancing science, politics and equity” (2009), Elizabeth A. 

Stanton and Frank Ackerman. Natural Resources Forum 33:4, pp. 262-273. A previous version appeared 

as SEI Working Paper WP-US-0908.

“Inside the Integrated Assessment Models: Four Issues in Climate Economics” (2009). Elizabeth A. 

Stanton, Frank Ackerman and Sivan Kartha. Climate and Development 1:2, pp. 166-184. A previous 

version appeared as SEI Working Paper WP-US-0801.
ELIZABETH A. STANTON (cont.)

Page 3 of 4

“Did the Stern Review Underestimate U.S. and Global Climate Damages?” (2009). Frank Ackerman, 

Elizabeth A. Stanton, Chris Hope, and Stephane Alberth. Energy Policy 37:7, pp. 2717-2721. A previous 

version appeared as SEI Working Paper WP-US-0802.

“A comment on ‘Economy-wide estimates of the implications of climate change: Human health’” (2008).

Frank Ackerman and Elizabeth A. Stanton. Ecological Economics 66:1, pp. 8-13.

“Implications of REACH for Developing Countries” (2008). Frank Ackerman, Elizabeth A. Stanton, 

Brian Roach and Anne-Sofie Andersson. European Environment 18:1, pp. 16-29. 

“European Chemical Policy and the United States: The Impacts of REACH” (2007). Frank Ackerman,

Elizabeth A. Stanton and Rachel Massey. Renewable Resources Journal 25:1. A previous version 

appeared as Global Development and Environment Institute Working Paper 06-06.

Working Papers and White Papers:

“Estimating Regions’ Relative Vulnerability to Climate Damages in the CRED Model” (2011). Elizabeth 

A. Stanton, Jeffrey Cegan, Ramón Bueno and Frank Ackerman. SEI Working Paper WP-US-1103.

“Casting DICE for 350 ppm” (2011). Ramón Bueno and Elizabeth A. Stanton. SEI Working Paper WPUS-1101.

“No State Left Behind: A Better Approach to Climate Policy” (2010). Elizabeth A. Stanton and Frank 

Ackerman. Economics for Equity and the Environment (E3 Network) white paper, released with the 

report Emission Reduction, Interstate Equity, and the Price of Carbon (see reports listing below).

“Understanding Interstate Differences in U.S. Greenhouse Gas Emissions” (2010). Elizabeth A. Stanton, 

Frank Ackerman and Kristen A. Sheeran. SEI Working Paper WP-US-1004.

Reports and Policy Studies:

Climate Risks and Carbon Prices: Revising the Social Cost of Carbon (2011). Frank Ackerman and 

Elizabeth A. Stanton. Report commissioned by Economics for Equity and the Environment (E3 Network).

The Last Drop: Climate Change and the Southwest Water Crisis (2011). Frank Ackerman and Elizabeth 

A. Stanton. Report funded by a Kresge Foundation grant.

California Water Supply and Demand: Technical Report (2011). Elizabeth A. Stanton and Ellen 

Fitzgerald. Report funded by a Kresge Foundation grant.

“Testimony on EPA’s ‘Coal Combustion Residuals: Proposed Rule’” (2010). Frank Ackerman and 

Elizabeth A. Stanton. Submitted as part of Earthjustice/Environmental Integrity Project testimony on 

Docket ID EPA-HQ-RCRA-2009-6040.

Emission Reduction, Interstate Equity, and the Price of Carbon (2010). Elizabeth A. Stanton and Frank 

Ackerman. Report commissioned by Economics for Equity and the Environment (E3 Network).

“Costing Climate Impacts and Adaptation: A Canadian Study on Coastal Zones” (2010). Elizabeth A. 

Stanton, Marion Davis and Amanda Fencl. Report commissioned by the National Round Table on the 

Environment and the Economy Economic Risks and Opportunities of Climate Change Program.

The socio-economic implications of climate change on FYR Macedonia and national policy options on 

adaptation (2010). Frank Ackerman and Elizabeth A. Stanton. Report commissioned by the United 

Nations Development Programme.
ELIZABETH A. STANTON (cont.)

Page 4 of 4

The Social Cost of Carbon (2010). Frank Ackerman and Elizabeth A. Stanton. Report commissioned by 

Economics for Equity and the Environment (E3 Network).

The Socio-Economic Impact of Climate Change in Armenia (2009). Elizabeth A. Stanton, Frank 

Ackerman and Flávia Resende. Report commissioned by the United Nations Development Programme.

The Economics of 350: The Benefits and Costs of Climate Stabilization (2009). Frank Ackerman,

Elizabeth A. Stanton, Stephen J. DeCanio, Eban Goodstein, Richard B. Howarth, Richard B. Norgaard, 

Catherine S. Norman, Kristen A. Sheeran. Report commissioned by Economics for Equity and the 

Environment (E3 Network), with SEI-U.S. and Ecotrust.

Greenhouse Gases and the American Lifestyle: Understanding Interstate Differences in Emissions

(2009). Elizabeth A. Stanton, Frank Ackerman and Kristen Sheeran. Report commissioned by Economics 

for Equity and the Environment (E3 Network), with Ecotrust.

Literature review of water resources infrastructure and related environmental costs and benefits, for 

“Default Case Study Values and Management Options for WEAP in Massachusetts,” part of Keep Water 

Local, a project of the Massachusetts Riverways Program, Commonwealth of Massachusetts, 2008.

The Caribbean and Climate Change: The Costs of Inaction (2008). Ramón Bueno, Cornelia Herzfeld, 

Elizabeth A. Stanton and Frank Ackerman. Report commissioned by the Environmental Defense Fund.

The Cost of Climate Change: What We’ll Pay if Global Warming Continues Unchecked (2008). Frank 

Ackerman and Elizabeth A. Stanton. Report commissioned by the Natural Resources Defense Council.

Generated User Benefits and the Heathrow Expansion: Understanding Consumer Surplus (2008). 

Elizabeth A. Stanton and Frank Ackerman. Report to Friends of the Earth England, Wales and Northern 

Ireland.

Out of the Shadows: What’s Behind DEFRA’s New Approach to the Price of Carbon (2008). Elizabeth A. 

Stanton and Frank Ackerman. Report to Friends of the Earth England, Wales and Northern Ireland.

Florida and Climate Change: The Costs of Inaction (2007). Elizabeth A. Stanton and Frank Ackerman.

Report commissioned by the Environmental Defense Fund.

“United States-Specific Human Development Index: Methodology and Data” (2007). Report 

commissioned by American Human Development Report Project, as a technical background paper to The 

Measure of America: American Human Development Report 2008-2009.

Climate Change – the Costs of Inaction (2006). Frank Ackerman and Elizabeth A. Stanton. Report to 

Friends of the Earth England, Wales and Northern Ireland.

Implications of REACH for the Developing Countries (2006). Contributor, as part of a four-country 

research team led by Frank Ackerman. Report to the European Parliament, Directorate-General for

External Policies of the Union.