ENVIRONMENTAL ASSESSMENT FOR PROPOSED ENERGY CONSERVATION 

STANDARDS FOR FLUORESCENT LAMP BALLASTS 

TABLE OF CONTENTS 

EA.1 INTRODUCTION ...............................................................................................................1 

EA.2 METHODOLOGY ..............................................................................................................1 

EA.2.1 Carbon Dioxide ........................................................................................................1
 

EA.2.2 Sulfur Dioxide..........................................................................................................1 

EA.2.3 Nitrogen Oxides .......................................................................................................2
 

EA.2.4 Mercury....................................................................................................................3 

EA.2.5 Particulate Matter.....................................................................................................3 

EA.2.6 Monetization of Emissions Reduction Benefits .......................................................3 

EA.3 RESULTS ............................................................................................................................4 

REFERENCES ................................................................................................................................5 

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ENVIRONMENTAL ASSESSMENT FOR PROPOSED ENERGY CONSERVATION 

STANDARDS FOR FLUORESCENT LAMP BALLASTS 

EA.1 INTRODUCTION 

The U.S. Department of Energy (DOE) will conduct an environmental assessment as part 

of the notice of proposed rulemaking for fluorescent lamp ballasts. DOE will assess 

environmental effects by using a variant of the Energy Information Administration’s National 

Energy Modeling System (NEMS) known as NEMS-Building Technologies (BT) to provide key 

input to the analysis. The environmental assessment produces results in a manner similar to those 

provided in the Annual Energy Outlook (AEO). 

The primary environmental effects of these standards would be reduced power plant 

emissions resulting from reduced consumption of electricity. DOE will assess these 

environmental effects by using NEMS-BT to provide key inputs to its analysis. The portion of 

the environmental assessment that NEMS-BT will produce considers carbon dioxide (CO2), 

nitrogen oxides (NOx), and mercury (Hg). The environmental assessment also considers impacts 

on SO2 emissions. For each trial standard level (TSL), DOE will calculate total undiscounted and 

discounted power plant emissions using NEMS-BT. 

EA.2 METHODOLOGY 

DOE will conduct each environmental assessment performed in this rulemaking as an 

incremental policy impact (i.e., a standard for the products under evaluation; in this case, 

fluorescent lamp ballasts) of the AEO2009 forecast, applying the same basic set of assumptions 

used in AEO2009.

1

 For example, the emissions characteristics of an electricity generating plant 

will be exactly those used in AEO2009. Also, forecasts conducted with NEMS-BT consider the 

supply-side and demand-side effects on the electric utility industry. Thus, the analysis will 

account for any factors affecting the type of electricity generation and in turn the type and 

amount of airborne emissions the utility industry generates. 

EA.2.1 Carbon Dioxide 

In the absence of any Federal emissions control regulation of power plant emissions of 

CO2, a DOE standard is likely to result in reductions of these emissions. The CO2 emission 

reductions likely to result from a standard will be estimated using NEMS-BT and national energy 

savings estimates drawn from the national impact analysis spreadsheet model. The net benefit of 

the standard is the difference between emissions estimated by NEMS-BT at each standard level 

considered and the AEO reference case. NEMS-BT tracks CO2 emissions using a detailed 

module that provides results with broad coverage of all sectors and inclusion of interactive 

effects. 

EA.2.2 Sulfur Dioxide 

DOE has preliminarily determined that SO2 emissions from affected electric generating 

units (EGUs) are subject to nationwide and regional emissions cap and trading programs that are 

likely to eliminate the standards’ impact on SO2 emissions. The costs of meeting such emission 

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cap requirements are reflected in the electricity prices and forecasts used in DOE’s analysis of 

the standards. Title IV of the Clean Air Act sets an annual emissions cap on SO2 for all affected 

EGUs. SO2 emissions from 28 eastern States and the District of Columbia (DC) are also limited 

under the Clean Air Interstate Rule (CAIR, published in the Federal Register on May 12, 2005, 

70 FR 25162), which creates an allowance-based trading program that will gradually replace the 

Title IV program in those States and DC. (The recent legal history surrounding CAIR is 

discussed below.) The attainment of the emissions caps is flexible among EGUs and is enforced 

through the use of emissions allowances and tradable permits. Under existing U.S. 

Environmental Protection Agency (EPA) regulations, any excess SO2 emission allowances 

resulting from the lower electricity demand caused by the imposition of an efficiency standard 

could be used to permit offsetting increases in SO2 emissions by any regulated EGU. However, if 

the standard resulted in a permanent increase in the quantity of unused emission allowances, 

there would be an overall reduction in SO2 emissions from the standards. While there remains 

some uncertainty about the ultimate effects of efficiency standards on SO2 emissions covered by 

the existing cap and trade system, the NEMS-BT modeling system that DOE plans to use to 

forecast emissions reductions currently indicates that no physical reductions in power sector 

emissions would occur for SO2. 

Even if there is no significant reduction in the overall emissions of SO2 that results from 

the standard, there may still be some economic benefit from reduced demand for SO2 emission 

allowances that is not fully reflected in the cost savings experienced by individual consumers. 

Electricity savings that decrease the overall demand for SO2 emissions allowances could lower 

allowance prices and thereby result in some economic benefits for all electricity consumers, not 

just those that reduced their electricity use as a result of an efficiency standard. 

EA.2.3 Nitrogen Oxides 

NEMS-BT also has an algorithm for estimating NOx emissions from power generation. 

The impact of these emissions, however, will be affected by CAIR, which the EPA issued on 

May 12, 2005. CAIR will permanently cap emissions of NOX in 28 eastern states and DC. 70 FR 

25162 (May 12, 2005). 

Much like SO2 emissions, a cap on NOx emissions means that the amended fluorescent 

lamp ballast standards may have little or no physical effect on these emissions in the 28 eastern 

States and DC covered by CAIR. Although CAIR has been remanded to the EPA by the DC 

Circuit, it will remain in effect until it is replaced by a rule consistent with the Court’s July 11, 

2008 opinion in North Carolina v. EPA, 531 F.3d 896 (DC Cir. 2008); see also North Carolina v. 

EPA, 550 F.3d 1176 (DC Cir. 2008). Because all States covered by CAIR opted to reduce NOx 

emissions through participation in cap-and-trade programs for electric generating units, 

emissions from these sources are capped across the CAIR region. DOE also plans to use NEMSBT to estimate the emissions reductions from possible standards in the 22 States where emissions 

are not capped. 

Standards may produce an environmental-related economic benefit in the form of lower 

prices for emissions allowance credits. As with SO2 allowance prices, DOE does not plan to 

monetize this particular benefit because the effect on the NOx allowance price from any single 

energy conservation standard is likely small and highly uncertain. 

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EA.2.4 Mercury 

Similar to emissions of SO2 and NOx, future emissions of Hg would have been subject to 

emissions caps. In May 2005, EPA issued the Clean Air Mercury Rule (CAMR). 70 FR 28606 

(May 18, 2005). CAMR would have permanently capped emissions of mercury for new and 

existing coal-fired power plants in all States by 2010. However, on February 8, 2008, the DC 

Circuit issued its decision in New Jersey v. Environmental Protection Agency, in which the DC 

Circuit, among other actions, vacated the CAMR. 517 F.3d 574 (DC Cir. 2008). EPA has 

decided to develop emissions standards for power plants under the Clean Air Act (Section 112), 

consistent with the DC Circuit’s opinion on the CAMR.2

 Pending EPA’s forthcoming revisions 

to the rule, DOE is excluding the CAMR from its environmental analysis. In the absence of 

CAMR, a DOE standard would likely reduce Hg emissions, and DOE plans to use NEMS-BT to 

estimate these emission reductions. 

EA.2.5 Particulate Matter 

DOE acknowledges that particulate matter (PM) impacts are of concern due to human 

exposures that can impact health. Impacts of PM emissions reduction, however, are much more 

difficult to estimate than other emissions reductions due to the complex interactions between 

PM, other power plant emissions, meteorology, and atmospheric chemistry that impact human 

exposure to particulates. Human exposure to PM usually occurs at a significant distance from the 

power plants that are emitting particulates and particulate precursors. When power plant 

emissions travel this distance, they undergo highly complex atmospheric chemical reactions. 

Although the EPA does keep inventories of direct PM emissions of power plants, in its source 

attribution reviews, the EPA does not separate direct PM emissions from power plants from the 

sulfate particulates indirectly produced through complex atmospheric chemical reactions. The 

great majority of PM emissions from power plants are of these secondary particles (secondary 

sulfates). Thus, it is not useful to examine how the amended standard impacts direct PM 

emissions independent of indirect PM production and atmospheric dynamics. Therefore, DOE is 

not planning to assess the impact of these standards on particulate emissions. Further, even the 

cumulative impact of PM emissions from power plants and indirect emissions of pollutants from 

other sources is unlikely to be significant. 

EA.2.6 Monetization of Emissions Reduction Benefits 

For those emissions for which real national emission reductions are anticipated (CO2, Hg, 

and NOx for 22 States), only ranges of estimated economic values based on environmental 

damage studies of varying quality and applicability are available. Therefore, DOE plans on 

reporting estimates of monetary benefits derived using these values and plans to consider these 

benefits in weighing the costs and benefits of each of the standard levels. In accordance with 

U.S. Office of Management and Budget (OMB) guidance, DOE will conduct two calculations of 

the monetary benefits derived for each of the economic values, one using a real discount rate of 3 

percent and another using a real discount rate of 7 percent.3 

In order to estimate the monetary value of benefits resulting from reduced emissions of 

CO2 emissions, it is DOE’s intent to use in its analysis the most current social cost of carbon 

(SCC) values developed and/or agreed to by interagency reviews. The SCC is intended to be a 

monetary measure of the incremental damage resulting from greenhouse gas (GHG) emissions, 

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including but not limited to net agricultural productivity loss, human health effects, property 

damage from sea level rise, and changes in ecosystem services. Any effort to quantify and to 

monetize the harms associated with climate change will raise serious questions of science, 

economics, and ethics. With full regard for the limits of both quantification and monetization, the 

SCC can be used to provide estimates of the social benefits of reductions in GHG emissions. 

At the time of this notice, the most recent interagency estimates of the potential global 

benefits resulting from reduced CO2 emissions in 2010 were $4.7, $21.4, $35.1, and $64.9 per 

metric ton in 2007 dollars. These values are then adjusted to 2009$ using the standard GDP 

deflator value for 2008 and 2009. For emissions (or emission reductions) that occur in later 

years, these values grow in real terms over time. Additionally, the interagency group determined 

that a range of values from 7 percent to 23 percent should be used to adjust the global SCC to 

calculate domestic effects, although preference will be given to consideration of the global 

benefits of reducing CO2 emissions. See Appendix A of the annex to chapter 15 of the technical 

support document for the full range of annual SCC estimates from 2010 to 2050. 

DOE recognizes that scientific and economic knowledge continues to evolve rapidly as to 

the contribution of CO2 and other GHG to changes in the future global climate and the potential 

resulting damages to the world economy. Thus, these values are subject to change. 

DOE also intends to estimate the potential monetary benefit of reduced NOx, and Hg 

emissions resulting from the standard levels it considers. For NOx emissions, available estimates 

suggest a very wide range of monetary values for NOx emissions, ranging from $370 per ton to 

$3,800 per ton of NOX from stationary sources, measured in 2001$ (equivalent to a range of 

$442 to $4,540 per ton in 2008$).4 

For Hg emissions reductions, DOE has previously determined that the impact of Hg 

emissions from power plants on humans is considered highly uncertain. However, DOE 

identified two estimates of the environmental damage of Hg based on two estimates of the 

adverse impact of childhood exposure to methyl mercury on intelligence quotient (IQ) for 

American children, and subsequent loss of lifetime economic productivity resulting from these 

IQ losses. The high-end estimate is based on an estimate of the current aggregate cost of the loss 

of IQ in American children that results from exposure to Hg of U.S. power plant origin ($1.3 

billion per year in 2000$), which works out to $33.3 million per ton emitted per year (2008$).5 

The low-end estimate is $0.66 million per ton emitted (in 2004$) or $0.745 million per ton in 

2008$. DOE derived this estimate from a published evaluation of mercury control using different 

methods and assumptions from the first study but also based on the present value of the lifetime 

earnings of children exposed to Hg.6

The estimate was derived by back-calculating the annual 

benefits per ton from the net present value of benefits reported in the study. 

EA.3 RESULTS 

The results for the environmental assessment are similar to a complete NEMS run as 

published in the AEO2009. These results include power-sector emissions for SO2, NOx, CO2, and 

Hg in five-year forecasted increments extrapolated to 2044. The outcome of the analysis for each 

TSL is reported as a deviation from the AEO2009 reference (base) case. 

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REFERENCES 

1. U.S. Department of Energy–Energy Information Administration. Annual Energy Outlook 

2009: With Projections to 2030. March 2009. Report No. DOE/EIA-0383 (2009). (Last 

accessed March 11, 2010.) <http://www.eia.doe.gov/oiaf/archive/aeo09/pdf/0383(2009).pdf> 

2. Environmental Protection Agency v. State of New Jersey, et al. 2009. Supreme Court of the 

United States No. 08-512. February 6. (Last accessed March 11, 2010.) 

<http://www.epa.gov/air/mercuryrule/pdfs/certpetition_withdrawal.pdf> 

3. Office of Management and Budget. 2003. Circular A-4: Regulatory Analysis. September 17. 

(Last accessed March 11, 2003.) <http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf> 

4. Office of Management and Budget, Office of Information and Regulatory Affairs. 2006 

Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded 

Mandates on State, Local, and Tribal Entities. January 2007. Unavailable online. 

5. Trasande, L., C. Schechter, K. A. Haynes, and P. J. Landrigan. Applying Cost Analyses to 

Drive Policy that Protects Children: Mercury as a Case Study. Annals of the New York 

Academy of Sciences. 2006. 1076 (September): pp. 911–923. 

6. Gayer, T. and R. Hahn. Designing Environmental Policy: Lessons from the Regulation of 

Mercury Emissions. 2005. American Enterprise Institute-Brookings Joint Center for 

Regulatory Studies: Washington, DC. Regulatory Analysis 05-01. A version of this paper 

was published in the Journal of Regulatory Economics in 2006. 

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