PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

-- REVISED --

PROPOSED

2003 STATE AND FEDERAL STRATEGY FOR

THE CALIFORNIA STATE IMPLEMENTATION PLAN 

SECTION V

POTENTIAL IMPACTS

Release Date: August 25, 2003

Hearing Date: September 24-25, 2003
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

TABLE OF CONTENTS

CHAPTER A. ENVIRONMENTAL IMPACT ANALYSIS ..................................... V-A-1

1. The California Environmental Quality Act..................................................... V-A-1

2. Project Alternatives ......................................................................................V-A-2

3. Potential Adverse Environmental Impacts.................................................... V-A-3

4. Cumulative Impacts of State Measures and Local District Measures......... V-A-25

5. Impacts of the Individual Defined Measures...............................................V-A-25

6. Environmental Justice ................................................................................ V-A-35

CHAPTER B. ECONOMIC IMPACT ANALYSIS................................................. V-B-1

1. Cost of Defined State Measures .................................................................. V-B-2

2. Economic Impacts........................................................................................ V-B-8

3. Conclusion ................................................................................................. V-B-11
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Staff Contact List

Subject Contact Email Phone

Environmental Impact

Analysis Darrell Hawkins dhawkins@arb.ca.gov (916) 322-2745

Economic Impact Analysis Reza Mahdavi rmahdavi@arb.ca.gov (916) 323-8704
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ENVIRONMENTAL IMPACT ANALYSIS

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This chapter is unchanged from the Section V, Chapter A. Environmental Impact

Analysis chapter that was released on May 12, 2003, except for the addition of one

footnote.

CHAPTER A. ENVIRONMENTAL IMPACT ANALYSIS

1. The California Environmental Quality Act

The California Environmental Quality Act (CEQA) and ARB policy require an

analysis to determine the potential adverse environmental impacts of proposed projects.

This chapter presents ARB’s analysis of the potential adverse environmental impacts of

the Proposed State and Federal Strategy (Strategy). This chapter also summarizes and

discusses ARB’s environmental justice policies and identifies the specific strategies in

the Proposed Strategy that, if adopted, will reduce air pollution at the community level. 

ARB’s program involving adoption or approval of standards, rules, regulations,

and plans has been certified by the Secretary of Resources as meeting certain

environmental standards set forth in CEQA (see Public Resources Code

section 21080.5). Hence, ARB need only prepare “functionally equivalent”

environmental documents instead of Initial Studies, Negative Declarations, and

Environmental Impact Reports. In addition, ARB will respond in writing to all significant

environmental concerns raised by the public during the public review period or at the

Board hearing. 

In order to provide for meaningful public review and comment on this

environmental analysis, it is important to first explain what this analysis is not. This

chapter does not set forth in detail the beneficial environmental impacts that will result

from the Proposed Strategy. ARB is proposing the measures contained in the

Proposed Strategy because they will benefit air quality. The rest of this report

discusses the measures and their intended benefits. This chapter focuses primarily on

the potential adverse environmental impacts that may result from the State defined

measures identified in the Strategy. 

Furthermore, this chapter cannot and does not contain a detailed, quantitative

impact analysis of the control strategies contained in the Proposed Strategy. Because

the Proposed Strategy is a plan for future action to adopt measures and strategies for

which specific regulatory language has not yet been developed, this analysis is

necessarily general and qualitative. Each strategy will be developed over time. Some

may be developed as incentive or voluntary programs. Most will be proposed in

regulatory format with full public participation. The regulatory measures will undergo a

detailed environmental analysis as required by CEQA, will be discussed at public

workshops, and will go through the public hearing process as required by law (see the

Administrative Procedure Act, Gov. Code section 11340 et seq.). When specific

regulatory language is developed, it will be possible to analyze potential environmental

impacts in detail. In this chapter of the Proposed Strategy, potential environmental

impacts are estimated to the extent currently feasible.
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2. Project Alternatives

CEQA requires an Environmental Impact Report (EIR) to describe and evaluate

the comparative merits of a range of reasonable alternatives to a proposed project

[CEQA Guidelines Section 15126 (d)]. Alternatives chosen for analysis should feasibly

attain the basic objectives of the proposed project. The range of alternatives required in

an EIR is governed by the "rule of reason" that the EIR set forth only those alternatives

necessary to permit a reasoned choice. An EIR need not consider an alternative whose

effect cannot be reasonably ascertained and whose implementation is remote and

speculative [CEQA Guidelines Section 15126 (d)(5)(c)]. 

a. Alternative 1 - ‘No Project’ 

CEQA requires a specific alternative of ‘no project’ to be evaluated. CEQA

documents typically assume that the adoption of a ‘no project’ alternative would result in

no further action on the part of the project proponent or lead agency. For example, in

the case of a proposed housing development project, adopting the ‘no project’

alternative terminates further consideration of that housing development or any housing

development alternative identified in the associated CEQA document. In that case, the

existing setting would remain unchanged. 

One interpretation of the ‘no project’ alternative is that if the ‘no project’

alternative was selected, all the measures in the Proposed Strategy are rejected. Since

the Proposed Strategy contains all currently known feasible State strategies or

measures that ARB could potentially take to reduce ozone, this would mean that no

additional measures on existing sources or measures on uncontrolled sources would be

developed. The result would be the continual deterioration of California air quality as

population increases. In addition, California would fail to meet SIP commitments and

would be subject to federal sanctions. Water quality would suffer as acidic rain

increases and toxic air contaminants are deposited on the ground. Public exposure to

toxic materials would increase. Higher levels of air pollutants would deteriorate

aesthetics by increasing haze and would damage crops. On the positive side, there

might not be the small increases in solid and hazardous waste that could result from the

measures.

b. Additional Alternatives -Adopting Fewer Strategies or Measures, or

Adopting Strategies or Measures with Different Emission Standards 

As mentioned previously, the Proposed Strategy contains all feasible State

strategies or measures to reduce ozone that ARB staff is currently aware of. Instead of

adopting all of these measures, ARB could adopt only some of them. Numerous

alternatives therefore exist to adopt various subsets of the measures identified in the

Plan. In addition, for each individual measure there exists many alternatives for

different possible emission standards or levels of control for the sources that are being

regulated. 
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It is not possible to examine these many alternatives in detail without engaging in

speculation, because the measures ultimately adopted by ARB will depend on the

information that is learned in the future during the regulatory development process. In

general, however, ARB staff believes that it will be necessary to adopt all Strategy

measures and emission standards that are determined to be feasible, rather than a

subset of feasible measures and standards. This is because to attain the federal ozone

standard in the South Coast and San Joaquin Valley, significant additional emission

reductions will be needed beyond the defined measures specifically identified in the

Strategy. Therefore, failing to adopt all feasible measures and emission standards

would result in failure to meet California’s SIP commitments, and would subject the

State to sanctions under the federal Clean Air Act. 

3. Potential Adverse Environmental Impacts

The following environmental impact areas were considered for each proposed

control measure.

• Water Resources

• Air Quality

• Energy Demand

• Hazards and Hazardous Materials 

• Solid / Hazardous Waste

• Noise

• Transportation and Traffic

• Aesthetics 

• Agricultural Resources 

• Biological Resources 

• Cultural Resources 

• Geology and Soils 

• Land Use and Planning

• Mineral Resources

• Population and Housing

• Public Services

• Recreation

Each environmental impact area is described below. Impacts considered

potentially significant are noted in parenthesis at the end of each description. A detailed

reference table identifying each measure in the Proposed Strategy, any potential

adverse environmental impacts, and some potential mitigation measures is at the end of

this section.

At this time, some measures have been developed more fully than others and

more impacts have been identified. However, for those less developed strategies, we
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have attempted to include any potential impact that reasonably could occur, given our

present knowledge.

a. Water Resources

This environmental analysis of water resources is divided into two major

categories – water quality and water demand. Several potentially significant adverse

water quality impacts are identified, including impacts from alternative transportation

fuels, and reformulated low-VOC consumer products. However, the cumulative effect of

the Proposed Strategy is expected to be beneficial to water quality. No significant water

demand impacts have been identified. 

Measures in the Proposed Strategy with potential water quality impacts are

described further below. 

i. Water Quality

Although rain can effectively scrub the air clean, air pollutants absorbed by

rainwater can have an adverse impact when deposited into surface waters. NOx and

SOx emissions can form acids that can lower the pH of sensitive mountain lakes and

streams and adversely affect the flora and fauna. NOx emissions can oxidize to nitrate,

a powerful fertilizer, and can spur algae growth contributing to lake water turbidity and

algae blooms. Organic molecules can be deposited in surface waters and affect the

aquatic plants and animals. Toxic air contaminants (TACs) can dissolve in rain and

eventually stress or kill organisms. 

Cumulative Impact: The Proposed Strategy would significantly reduce a

number of air pollutants and the reductions in deposition will improve overall water

quality in California, especially in sensitive lakes in the Sierra Nevada and other eastern

mountains. Also, accelerated retirement of older equipment with potentially leaky

gasoline or diesel engines will reduce fluid (oil and grease) drips, resulting in cleaner

storm water runoff. 

The use of alternative fuels is not expected to result in greater adverse water

quality impacts than the use of regular petroleum-based fuels. A number of regulations

are currently in place to minimize the potential impacts from leaks and spills. The

reformulation of consumer products to reduce VOC emissions can be monitored to

minimize any potential adverse impacts on water quality. The few measures with a

potential for adverse water quality impacts would include mitigation strategies to

minimize their limited impact. Cumulative impacts are expected to be less than

significant.

ii. State and Regional Water Boards

California has an extensive regulatory program to control water pollution. The

most important statute governing water quality is the Porter-Cologne Act, which gives
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the State Water Resources Control Board (SWRCB) and the nine regional water quality

control boards (RWQCB) broad powers to protect surface and groundwater supplies in

California, regulate waste disposal, and require cleanup of hazardous conditions

(California Water Code §§3000-13999.16). In particular, the SWRCB establishes waterrelated policies and approves water quality control plans, which are implemented and

enforced by the RWQCBs. The nine regional boards include: North Coast,

San Francisco Bay, Central Coast, Los Angeles, Central Valley, Lahontan, Colorado

River Basin, Santa Ana, and San Diego.

It is the responsibility of each regional board to prepare water quality control

plans to protect surface and groundwater supplies within its region. These plans must

identify important regional water resources and their beneficial uses, such as domestic,

navigational, agricultural, industrial, and recreational; establish water quality objectives,

limits, or levels of water constituents or characteristics established for beneficial uses

and to prevent nuisances; and present an implementation program necessary to

achieve those water quality objectives. These plans also contain technical information

for determining waste water discharge requirements and taking enforcement actions.

The plans are typically reviewed and updated every three years (California Water

Code §13241).

California dischargers of waste that “could affect the quality of the waters of the

State” are required to file a report of waste discharge with the appropriate regional water

board (California Water Code §13260). The report is essentially a permit application

and must contain information required by the regional board. After receipt of a

discharge report, the regional board will issue “waste discharge requirements”

analogous to a permit with conditions prescribing the allowable nature of the proposed

discharge (California Water Code §§3263, 13377, and 13378).

iii. National Pollutant Discharge Elimination System

Requirements

Most discharges into California’s waters are regulated by the National Pollutant

Discharge Elimination System (NPDES), a regulatory program under the federal Clean

Water Act. The NPDES is supervised by U.S. EPA, but administered by the SWRCB.

NPDES requirements apply to discharges of pollutants into navigable waters from a

point source, discharges of dredged or fill material into navigable waters, and the

disposal of sewage sludge that could result in pollutants entering navigable waters.

California has received U.S. EPA approval of its NPDES program. Pursuant to

California’s NPDES program, any waste discharger subject to the NPDES program

must obtain an NPDES permit from the appropriate RWQCB. The permits typically

include criteria and water quality objectives for a wide range of constituents. The

NPDES program is self-monitoring, requiring periodic effluent sampling. Permit

compliance is assessed monthly by the local RWQCB and any NPDES violations are

then categorized and reported to U.S. EPA on a quarterly basis.
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U.S. EPA has also published regulations that require certain industries, cities and

counties to obtain NPDES permits for stormwater discharges [55 CFR (1990)]. The

new regulations set forth permit application requirements for classes of stormwater

discharges specifically identified in the federal Clean Water Act. The regulated

stormwater discharges include those associated with industrial activity and from

municipal storm sewer systems serving a population of 100,000 or more.

iv. Discharges to Publicly-Owned Treatment Works (POTWs)

Water discharges to a public sewage system (referred to generically as a

POTW), rather than directly to the environment, are not subject to the NPDES discharge

requirements. Instead, such discharges are subject to federal pretreatment

requirements under §§307(b) and (c) of the Clean Water Act [33 USC §1317(b)-(c)].

Although these pretreatment standards are enforced directly by U.S. EPA, they are

implemented by local sanitation districts (Monahan et al., 1993). The discharger,

however, has the responsibility to ensure that the waste stream complies with the

pretreatment requirements of the local system. Any facility using air pollution control

equipment affecting water quality must receive a permit to operate from the local

sanitation district. In cases where facilities modify their equipment or install air pollution

controls that generate or alter existing wastewater streams, owner/operators must notify

the local sanitation district and request that their existing permit be reviewed and

modified. 

To ensure compliance with wastewater pretreatment regulations, local sanitation

districts sample and analyze the wastewater streams from facilities approximately two to

four times per year. Persons who violate California’s water quality laws are subject to a

wide array of enforcement provisions. In 1990, U.S. EPA revised and extended existing

regulations to further regulate hazardous waste dischargers and require effluent testing

by POTWs. To comply with revised permit limits, POTWs may alter their operations or

impose more stringent local limits on industrial user discharges of hazardous wastes

(Monahan et al., 1993). POTWs in California are operated by sanitation districts that

adopt ordinances establishing permit systems and fee structures. There are 630

POTWs in California.

Alternative Diesel Fuels and Emulsified Diesel – The Proposed Strategies to

reduce emissions from on-road, off-road, and stationary diesel-fueled engines could

require or encourage the use of alternatively fueled engines and alternative fuel

formulations. Because some alternative diesel fuel formulations and additives could

more readily dissolve in water, these control measures have the potential to adversely

impact local ground and surface waters. 

Emulsified diesel fuel is diesel with a small amount of water mixed in and

emulsified until stable. By lowering combustion temperatures, the water reduces NOx

formation. Use of emulsified diesel may have some negative water quality impacts

because spilled emulsified diesel is more soluble in water than spilled diesel. The

chemicals in the alternative diesel fuels will be evaluated for toxic effects during the
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health effects evaluation that is required before the fuel receives federal registration

prior to approval. 

The use of these alternative fuels is not expected to result in significantly greater

adverse water quality impacts than the use of regular diesel fuels. A number of rules

and regulations are currently in place to minimize the potential impacts from

underground leaking storage tanks, and spills from fueling activities, including

requirements for the construction of the storage tanks, requirements for double

containment, and installation of leak detection systems. These regulations minimize the

potential for additional leaks from the use of diesel fuels or alternative fuels.

(Not Significant)

Consumer Products – Two TACs used in some consumer products, methylene

chloride (MeCl) and perchloroethylene (Perc), are specifically exempted from the VOC

definition in recognition of their very low ozone-forming capabilities. Some

manufacturers could use MeCl or Perc in their formulations to reduce the VOC content

to meet future limits, creating potential adverse environmental impacts for air, soil and

water. 

ARB staff has recognized the potential for increased use of MeCl and Perc in

consumer products and has taken steps to mitigate and limit the use of these

compounds in recent Board actions. These actions include: the toxics control measure

for automotive maintenance and repair activities; aerosol adhesives limits in the

consumer products regulation; and reactivity limits in the aerosol coating regulations.

ARB also currently tracks the use of MeCl and Perc in regulated consumer products

through yearly manufacturer reporting requirements. Further, ARB staff has proposed

VOC limits in the past that were achievable without the increased use of TACs.

Furthermore, Proposition 65 labeling requirements discourage manufacturers from

reformulating consumer products with TACs. 

In the future, if new products contain Perc and MeCl, ARB staff will monitor their

use and, if necessary, limit or prohibit their use in additional consumer products.

Mitigation measures will be implemented if a significant presence of consumer productrelated Perc is detected in wastewater. 

Under these control measures, petroleum-based products are expected to be

reformulated to aqueous-based products to comply with specified VOC emission

reduction requirements. Like petroleum-based materials, aqueous materials may lead

to adverse impacts to water resources if contaminated products are not handled

properly. However, the use of water to reformulate would generally lead to products

that would be less toxic than petroleum based materials and generate fewer impacts to

water quality.

(Not Significant)
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v. Water Demand

No significant negative impacts on water demand were identified.

Cumulative Impact: None.

b. Air Quality 

Cumulative Impacts: ARB staff believes the cumulative impact of the Proposed

Strategy is to substantially improve air quality. However, some strategies may involve

trade-offs, where emissions of one pollutant may increase slightly in order to more

effectively reduce overall emissions and protect public health. The initial environmental

analysis has examined each measure for potential adverse air quality impacts. The

impacts are divided into four major categories – criteria pollutants, air toxics, global

warming, and stratospheric ozone depletion. 

Potentially significant impacts on criteria pollutant emissions may occur due to:

selective catalytic reduction processes; use of diesel particulate filters; and production

of low-sulfur diesel fuel. However, the cumulative impact of the Proposed Strategy is to

reduce emissions of every major criteria pollutant (ROG, NOx, SOx, PM10, PM2.5, and

CO). 

Potentially significant air toxics impacts could occur due to reformulation of

consumer products and the use of new fuel or alternative fuel additives. However, any

new formulations of these products and additives would be closely scrutinized to

prevent the addition of toxic compounds. These potential impacts will be more than

offset by the substantial reductions in toxics from diesel engines required by the Plan.

The cumulative impact of the Proposed Strategy is to greatly reduce emissions of toxic

compounds. 

Potentially significant global warming impacts could result from measures that

may reduce fuel efficiency or increase energy use, strategies that increase natural gas

consumption, and consumer product rules. To offset these greenhouse gas increases,

local transportation agencies are proposing transportation control measures and

districts (like the South Coast Air Quality Management District) are proposing strategies

that promote fuel efficiency and pollution prevention. In general, strategies that

conserve energy and promote clean technologies usually also reduce greenhouse gas

emissions. Other local agencies may also promote transportation measures, fuel

efficient technologies and pollution prevention methods. With some of these mitigating

strategies in effect, this Strategy is not expected to have a significant adverse impact on

global warming. 

No potentially significant stratospheric ozone depletion impacts were identified. 
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i. Criteria Pollutants

The Proposed Strategy will achieve significant reductions of criteria pollutant

emissions. Some individual strategies, however, may result in slight increases in one

pollutant in order to more effectively reduce emissions of another. 

Cumulative Impact: Potential adverse impacts on criteria pollutant emissions

may occur due to: selective catalytic reduction processes; use of diesel particulate

filters; and production of low-sulfur diesel fuel. However, the cumulative impact of the

Proposed Strategy is to reduce emissions of every major criteria pollutant (ROG, NOx,

SOx, PM10, PM2.5, and CO) and to benefit overall air quality.

Diesel-Fueled Engines – Measures in the Proposed Strategy to reduce NOx

from diesel-fueled engines may necessitate use of Selective Catalytic Reduction (SCR).

SCR reduces NOx into molecular nitrogen and water by injecting ammonia into the

exhaust upstream of a catalyst. If too much ammonia is used, the ammonia can slip

past the catalyst unreacted (called “ammonia slip”) and be emitted to the atmosphere.

Ammonia slip can worsen as the catalyst ages and becomes less effective. In many

SCR installations, ammonia slip must be continuously monitored and controlled. A limit

on ammonia emissions is normally included in the Permit to Operate for the SCR.

(Potentially Significant) 

Diesel Particulate Filters – A number of measures in the Proposed Strategy

would require the use of diesel particulate filters, add-on devices that are mounted on

the exhaust pipe. Certain types of these diesel particulate filters, referred to as passive

filters, accelerate the conversion of nitrous oxide (NO) to nitrogen dioxide (NO2). As

such, there is a potential for an adverse effect on the concentration and location of peak

ozone levels in the State, especially near centers of diesel activity, as well as increases

in levels of NO2, nitric acid, and secondary particulate matter formation.

Catalyst manufacturers are aware of the issue and preliminary analysis suggests

that the impacts may be adequately mitigated by designing the system to limit the NO to

NO2 conversion rates. In the near term, the advantages of getting diesel particulate

filters into operation to reduce risk from diesel PM and allowing the technology to

develop and mature should offset any limited adverse impacts.

(Potentially Significant)

Low Sulfur Diesel Fuel – Low sulfur diesel fuel requirements may necessitate

increased hydrotreating of fuel to remove sulfur, which would require increased

hydrogen production. Hydrogen production, in turn, would require energy, which could

increase criteria pollutant (particularly NOx), as well as produce an increase in CO2

emissions. The most acute impact of this process change and emissions increase

could be in the communities near refineries. Air district permitting programs will

evaluate and mitigate the air quality and environmental impacts to the extent feasible.

(Potentially Significant)
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Electrification of Equipment – Electric forklifts, dockside electrical hookups for

larger marine vessels, the addition of vapor recovery at marinas and other strategies

may increase electricity demand from power plants. The increase in power production

will increase emissions (primarily NOx) from power plants somewhat. Air district

permitting programs are in place to limit these emission increases. Overall, emissions

should decrease significantly as fuels such as diesel and propane are replaced by the

much cleaner natural gas burned at power plants.

(Not Significant)

Forklift Purchases – Requirements for zero-emission forklifts (currently electric

technology) may cause users to buy and rent larger capacity forklifts fueled by propane

or diesel or to delay purchases of new electric forklifts and use older and dirtier forklifts

longer. Use of these larger or older forklifts would increase emissions. This regulation

will be developed with full consideration of the limits of electric forklifts and the needs of

forklift operators. Exemptions for specific applications may be included. This issue will

be thoroughly studied to minimize unintended emissions increases.

(Potentially Significant)

ii. Air Toxics

Cumulative Impact: ARB staff believes that the Proposed Strategy as a whole

will substantially reduce emissions of TACs. However, some strategies may involve a

slight increase in emissions of one pollutant in order to more effectively reduce overall

emissions or health risk. Potentially significant air toxics impacts could occur due to

reformulation of consumer products and the use of new fuel or alternative fuel additives.

However, any new formulations of these products and additives would be closely

scrutinized to prevent the addition of toxic compounds. The cumulative impact of the

Proposed Strategy is to reduce emissions of toxic compounds. 

A brief description of potential impacts of the strategies is provided below. 

Consumer Products – The consumer products measures would reduce organic

gas emissions by requiring reformulation to reduce VOC content. A number of VOCs

currently used in consumer product formulations, such as ethylene-based glycol ethers,

trichloroethylene (TCE), and toluene, have also been identified as toxic air

contaminants. When a product is reformulated to meet new VOC limits, however, a

manufacturer could use small amounts of a chemical, not used before, that may be a

toxic air contaminant. This potential impact will need to be evaluated and mitigated as

reformulation options are reviewed during the development of new VOC limits.

Two particular TACs used in some consumer products, methylene chloride

(MeCl) and perchloroethylene (Perc), are specifically exempted from the VOC definition

because of their very low ozone-forming capabilities. As a result, some manufacturers

may choose to use MeCl or Perc in their reformulations to reduce the VOC content in

meeting future limits. In the future, if new products contain Perc and MeCl, ARB staff
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will monitor their use and, if necessary, limit or prohibit their use in additional consumer

products. 

Under these control measures, petroleum-based products are expected to be

reformulated to aqueous-based products to comply with specified VOC emission

reduction requirements. The use of water to reformulate would generally lead to

products that would be less toxic than petroleum based materials and generate fewer

impacts to air quality.

(Not Significant)

Fuel Additives – Before proposing rules requiring fuel additives, staff will

evaluate the chemicals in the additives for their toxic effects. Since additives are

federally regulated, they will undergo a health effects evaluation prior to approval. 

(Not Significant)

iii. Global Warming

In general, strategies that promote clean technologies usually also reduce

greenhouse gas emissions. However, some of the individual measures in the Proposed

Strategy may result in an increase in the release of greenhouse gases. 

Cumulative Impact: Potentially significant global warming impacts may occur

due to measures that may slightly reduce fuel efficiency or increase energy use. In

addition, strategies that promote natural gas (methane) may increase the potential for

methane leaks to the atmosphere. Finally, greenhouse gas emissions resulting from

consumer product measures could be potentially significant. These potential impacts

could be mitigated by local traffic control measures and by fuel conservation education.

With these or other mitigating strategies in effect, this Strategy is not expected to have a

significant adverse impact on global warming. 

Diesel-Fueled Engines – Proposed Strategy measures to reduce emissions

from diesel-fueled engines could require the use of new diesel engines, engine

modifications, alternatively fueled engines, add-on control devices such as particulate

filters and catalysts, low-sulfur diesel fuel, alternative fuel formulations, or other

strategies. These strategies have the potential to slightly reduce fuel economy and

increase greenhouse gas emissions. These impacts may be mitigated as other engine

features become more efficient to meet air pollution emission standards.

(Potentially Significant)

Mandatory Chip Reflash – During the 1990s, some engine manufacturers

programmed the computer chips in diesel engines to maximize power and fuel

efficiency with result that NOx emissions were higher. This was in violation of federal

and State air pollution regulations. A Proposed Strategy measure would accelerate

correction of this problem by requiring computer chips to be reprogrammed to reduce

NOx emissions before they are brought in for rebuild. Greenhouse gas emissions could
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increase slightly due to a decrease in fuel efficiency.

(Potentially Significant) 

Natural Gas – Natural gas (methane) is a clean burning fuel but is also a potent

greenhouse gas. Strategies that promote natural gas use (in place of diesel fuel, for

example) may increase the risk of methane leaks to the atmosphere.

(Potentially Significant)

Diesel Particulate Filters – A number of measures in the Proposed Strategy

would require the use of diesel particulate filters. These particulate filters must be

periodically regenerated by burning off excess hydrocarbons trapped on the filter.

Active regeneration methods use external fuel or energy to heat the filter and

regenerate it.

(Not Significant)

Off-Road Spark Ignition Engines – Retrofit emission controls for off-road spark

ignition vehicles and equipment could decrease fuel efficiency slightly and increase

carbon dioxide emissions.

(Potentially Significant)

Consumer Products – Alternative compounds used to meet lower VOC limits in

the Proposed Strategy’s consumer products measures could be greenhouse gases.

For aerosol products to meet the VOC limits in the proposed regulations, manufacturers

may choose to replace some or all of the typical hydrocarbon propellants with HFC152a or CO2, both of which are greenhouse gasses. HFC-152a has no ozone depletion

potential, does not contribute to the formation of ground-level ozone, is low in toxicity,

and is only mildly flammable. In addition, HFC-152a has the lowest global warming

potential of all the HFCs and an atmospheric lifetime of only 1.5 years. Due to the high

cost of HFC-152a (as much as five to seven times greater than other hydrocarbon

propellants), it is anticipated that manufacturers will use as little HFC-152a as possible

when reformulating their aerosol products. Consequently, the impact on global warming

from increased use of HFC-152a should be negligible. However, further analysis of the

properties and effects of HFC-152a is needed. Should the analysis reveal significant

impacts, ARB staff would reassess the control strategy. CO2 used as a replacement for

hydrocarbon propellants would be a recycled byproduct from existing processes and

would therefore not contribute to global warming.

(Not Significant)

iv. Stratospheric Ozone Depletion

Cumulative Impact: One strategy had a potential impact on the stratospheric

ozone layer, but the impact is not considered significant.

Consumer Products – Some HCFCs are still used in consumer products as

propellants and are exempt VOCs under the existing and proposed regulations. It is

unknown if there will be an increased use of these compounds in meeting lower VOC
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limits. However, all HCFCs are classified as group II ozone-depleting compounds by

U.S. EPA and are scheduled for phase out between 2004 and 2030. Because of the

phase out, manufacturers may prefer to use propellants other than HCFCs. We

therefore anticipate that the impact on ozone depletion due to HCFCs will be negligible,

or there may be an environmental benefit as manufacturers switch to more benign

alternative propellants.

(Not Significant)

c. Energy Demand

Cumulative Impact: ARB staff has identified some potentially significant

adverse energy impacts for some individual measures. Potentially significant impacts

include: reduced fuel economy due to some diesel engine strategies and increased

electricity demand due to electrification of equipment and vehicles. Fuel economy

impacts may be mitigated as other engine features become more efficient to meet air

pollution emission standards. Electricity demands can be offset somewhat if equipment

is charged at night when electricity demand is low. Alternative methods of generating

electricity, such as solar panels or fuel cells, might also be incorporated. The

cumulative impact of all of the State SIP measures could be a small but measurable

increase in energy demand.

Mobile, Stationary, and Portable Diesel-Fueled Engines – Proposed Strategy

measures to reduce emissions from diesel-fueled engines could require the use of new

diesel engines; engine modifications; alternatively fueled engines; add-on control

devices such as particulate filters and catalysts; low-sulfur diesel fuel; alternative fuel

formulations; or other strategies. These strategies have the potential to cause a small

decrease in fuel economy. Fuel economy impacts may be mitigated as other engine

features become more efficient to meet air pollution emission standards.

(Potentially Significant)

Alternative Fuels: Emulsified Diesel – Emulsified diesel fuel is diesel with a

small amount of water mixed in and emulsified until stable. By lowering combustion

temperatures and affecting combustion chemistry, the water reduces NOx formation.

Negative effects include a small fuel efficiency penalty and a decrease in available

power.

(Potentially Significant)

Low Sulfur Diesel Fuel – Low sulfur diesel fuel requirements may necessitate

increased hydrotreating of fuel to remove sulfur, which would require additional energy

consumption.

(Potentially Significant)

Mandatory Chip Reflash – During the 1990s, some diesel engine

manufacturers programmed the computer chips in diesel engines to maximize power

and fuel efficiency with the result that NOx emissions were higher. A Proposed Strategy

measure would accelerate correction of this problem by requiring computer chips to be
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reprogrammed to reduce NOx emissions before they are brought in for rebuild. Diesel

fuel usage could increase due to a slight decrease in fuel efficiency.

(Potentially Significant) 

Electrification – Measures in the Proposed Strategy for electrification of forklifts

and other equipment can provide significant reductions of air pollutant emissions.

However, these projects can create a greater demand for electricity to charge or

operate the equipment. These demands can be offset somewhat if equipment is

charged at night when electricity demand is low. Alternative methods of generating

electricity, such as solar panels or fuel cells, might also be incorporated. 

(Potentially Significant) 

Diesel Particulate Filters – A number of measures in the Proposed Strategy

would require the use of diesel particulate filters, add-on devices that are mounted on

the exhaust pipe. These particulate filters must be periodically regenerated by burning

off excess hydrocarbons trapped on the filter. Active regeneration methods use

external fuel or energy to heat the filter and regenerate it. However, the additional

energy required should not be significant.

(Not Significant)

Fuel Vapor Recovery – The addition of vapor recovery at marinas and

improvements for aboveground tanks may increase electrical use slightly.

(Not Significant)

d. Hazards/Human Health

The purpose of the Proposed Strategy is to help California attain the federal onehour ozone and PM10 standards. ARB’s goal is to ensure that all individuals in

California, especially children and the elderly, can live, work, and play in a healthy

environment. Each of the measures in the Proposed Strategy is intended to reduce the

health risks from air pollution. The measures would reduce the pollutants that

contribute to adverse health impacts, including: ozone, inhalable particles (including

soot and dust), carbon monoxide, and toxic emissions (like particles emitted from diesel

engines and benzene).

Cumulative Impact on Human Health: The cumulative impact of the Proposed

Strategy will be to reduce human health risk. However, measures in the Proposed

Strategy to reduce emissions from consumer products could have local human health

impacts. 

Cumulative Impact on Human Hazards: Vapor recovery for marina fueling

stations and use of selective catalytic reduction have known hazard impacts which can

and will be mitigated. Reformulation of consumer products could increase the use of

exempt but more flammable VOC solvents such as acetone and methyl acetate. With

mitigation measures in effect, the cumulative impact of the Proposed Strategy on

hazard risk is not projected be significant. 
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i. Hazardous Materials

Hazards are related to the risks of fire, explosions, or releases of hazardous

substances in the event of accident or upset conditions. Hazards are thus related to the

production, use, storage, and transport of hazardous materials. Industrial production

and processing facilities are potential sites for hazardous materials. Some facilities

produce hazardous materials as their end product, while others use such materials as

an input to their production processes. Examples of hazardous materials used by

consumers include fuels, paints, paint thinner, nail polish, and solvents. Hazardous

materials may be stored at facilities producing such materials and at facilities where

hazardous materials are part of the production processes. Storage refers to the bulk

handling of hazardous materials before and after they are transported to the general

geographical area of use. Currently, hazardous materials are transported throughout

California in great quantities via all modes of transportation including rail, highway,

water, air, and pipeline.

State law requires detailed planning to ensure that hazardous materials are

properly handled, used, stored, and disposed of to prevent or mitigate injury to health or

the environment in the event that such materials are accidentally released. The Office

of Emergency Services (OES) enforces these requirements. Federal laws, such as the

Emergency Planning and Community-Right-to-Know Act of 1986 (also known as Title III

of the Superfund Amendments and Reauthorization Act or SARA) impose similar

requirements. 

The U.S. Department of Transportation (U.S. DOT) has regulatory responsibility

for the safe transport of hazardous materials between states and to foreign countries.

U.S. DOT regulations govern all means of transportation, except for those packages

shipped by mail. Hazardous materials sent by U.S. mail are covered by U.S. Postal

Service (USPS) regulations. U.S. DOT regulations are contained in 49 CFR; USPS

regulations are in 39 CFR. Common carriers are licensed by the California Highway

Patrol (CHP), pursuant to the California Vehicle Code, §32000. This section requires

licensing of every motor (common) carrier who transports, for a fee, in excess of

500 pounds of hazardous materials at one time and every carrier, if not for hire, who

carries more than 1,000 pounds of hazardous material of the type requiring placards.

Common carriers conduct a large portion of their business in the delivery of hazardous

materials.

The CHP and Caltrans have primary responsibility for enforcing federal and State

regulations and responding to hazardous materials transportation emergencies. The

CHP enforces hazardous materials and hazardous waste labeling and packaging

regulations that prevent leakage and spills of material in transit and provide detailed

information to cleanup crews in the event of an accident. Vehicle and equipment

inspection, shipment preparation, container identification, and shipping documentation

are all part of the responsibility of the CHP. The CHP also conducts regular inspections
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of licensed transporters to assure regulatory compliance. Caltrans has emergency

chemical spill identification teams at 72 locations throughout California.

Pursuant to the Emergency Services Act, California has developed an

Emergency Response Plan to coordinate emergency services provided by federal,

State, and local government agencies and private persons. Response to hazardous

materials incidents is one part of this plan. The plan is administered by OES, which

coordinates the responses of other agencies including U.S. EPA, CHP, Department of

Fish and Game, the applicable RWQCB, and local fire departments (see California

Government Code, §8550).

In addition, pursuant to the Hazardous Materials Release Response Plans and

Inventory Law of 1985 (the Business Plan Law), local agencies are required to develop

“area plans” for response to releases of hazardous materials and wastes. These

emergency response plans depend to a large extent on the business plans submitted by

persons who handle hazardous materials. An area plan must include pre-emergency

planning of procedures for emergency response, notification and coordination of

affected government agencies and responsible parties, training, and follow-up.

Hazardous materials incidents are reported to OES, which compiles and archives the

information. 

ii. Public Health

The Toxic Air Contaminant Identification and Control Act (Health and Safety

Code §§ 39650 et seq., Food and Agriculture Code Sections 14021 et seq.) established

California’s two-phased program to identify and control air toxics. In the first phase (risk

assessment), ARB selects substances for review, considering criteria relating to “the

risk of harm to public health, amount or potential amount of emissions, manner of, and

exposure to, usage of the substance in California, persistence in the atmosphere, and

ambient concentrations in the community” (Health and Safety Code § 39666(f)). One

example of an identified TAC is particulate matter from diesel-fueled engines.

In the risk management phase of the program, ARB reviews the emission

sources of an identified TAC to determine if any regulatory action is necessary to

reduce the risk. The analysis includes a review of controls already in place, the

available technologies and associated costs for reducing emissions, and the associated

risk.

Also in the risk management phase, ARB, working closely with the air districts, is

responsible for developing control measures for all identified toxic air contaminants

except those used as pesticides. Pesticides are evaluated in a similar process by the

Department of Pesticide Regulation. Following ARB adoption of measures to control a

specific toxic compound, the districts must adopt equal or more stringent regulations for

the stationary sources in their jurisdiction. Regulations to control airborne toxic

emissions from mobile sources are the responsibility of ARB.
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The Air Toxics Hot Spots Program (Health and Safety Code §§ 44300-44384)

requires facilities to report their air toxics emissions, ascertain health risks, and to notify

nearby residents of significant risks. Facilities that pose a significant health risk to the

community are required to reduce their risk through a risk management plan.

iii. Worker Safety Requirements

The California Occupational Safety and Health Administration (Cal/OSHA) and

the Federal Occupational Safety and Health Administration (OSHA) are the agencies

responsible for assuring worker safety in the handling and use of chemicals in the

workplace. In California, Cal/OSHA assumes primary responsibility for developing and

enforcing workplace safety regulations. Under the authority of the Occupational Safety

and Health Act of 1970, OSHA has adopted numerous regulations pertaining to worker

safety (contained in 29 CFR). These regulations set standards for safe workplaces and

work practices, including the reporting of accidents and occupational injuries. Some

OSHA regulations contain standards relating to hazardous materials handling, including

workplace conditions, employee protection requirements, first aid, and fire protection, as

well as material handling and storage. Because California has a federally approved

OSHA program, it is required to adopt regulations that are at least as stringent as those

found in 29 CFR.

Cal/OSHA regulations concerning the use of hazardous materials in the

workplace (detailed in CCR, title 8) include requirements for employee safety training,

availability of safety equipment, accident and illness prevention programs, hazardous

substance exposure warnings, and emergency action and fire prevention plan

preparation. Cal/OSHA enforces hazard communication program regulations containing

training and information requirements, including procedures for identifying and labeling

hazardous substances. The hazard communication program also requires that Material

Safety Data Sheets (MSDSs) be available to employees and that employee information

and training programs be documented. These regulations also require preparation of

emergency action plans (escape and evacuation procedures, rescue and medical

duties, alarm systems, and emergency evacuation training). 

Both federal and State laws include special provisions for hazard communication

to employees in research laboratories, including training in chemical work practices.

The training must include instruction in methods for the safe handling of hazardous

materials, an explanation of MSDSs, use of emergency response equipment and

supplies, and an explanation of the building emergency response plan and procedures.

Chemical safety information must also be available at the workplace. More detailed

training and monitoring is required for the use of carcinogens, ethylene oxide, lead,

asbestos, and certain other chemicals listed in 29 CFR. Emergency equipment and

supplies, such as fire extinguishers, safety showers, and eye washes, must also be kept

in accessible places. Compliance with these regulations reduces the risk of accidents

and worker health effects.
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The National Fire Code (NFC), Standard 45 (published by the National Fire

Protection Association) contains standards for laboratories using chemicals that are not

requirements, but are generally employed by organizations in order to protect workers.

These standards provide basic protection of life and property in laboratory work areas

through prevention and control of fires and explosions, and also serve to protect

personnel from exposure to non-fire health hazards. While NFC Standard 45 is

regarded as a nationally recognized standard, the California Fire Code (24 CCR)

contains State standards for the use and storage of hazardous materials and special

standards for buildings where hazardous materials are found. Some of these

regulations consist of amendments to NFC Standard 45. California Fire Code

regulations require emergency pre-fire plans to include training programs in first aid, the

use of fire equipment, and methods of evacuation.

Consumer Products – In meeting lower VOC limits, there is a slight potential

that products may become more flammable if reformulation increases the use of highly

flammable exempt VOC solvents such as acetone and methyl acetate. This could be of

concern in the manufacture, storage, shipping and end use of the reformulated

products. In many instances, however, manufacturers can use other, less flammable,

exempt solvents and/or water borne formulations.

(Potentially Significant)

Marina Vapor Recovery – Unlike vehicle service station fueling, gasoline vapors

recovered during marina fueling operations are not easily transferred back to the marina

gasoline storage tank. At vehicle service stations, the storage tank is in close proximity

to the dispenser, while at marinas, the storage tank may be several hundred feet away

at a higher elevation. 

The marina vapor recovery measure may involve collection of vapors at the

dispenser into a carbon canister system. These systems have been used in refinery

operations to collect organic vapors. As with all gasoline vapor recovery systems, there

is a potential to form an explosive gas mixture when the vapors mix with air. This is an

especially critical concern with boats since the boat hull can collect leaking heavy

gasoline vapors. The State Fire Marshall reviews all vapor recovery equipment designs

and procedures to assure that they will not cause any undue risk. The U.S. Coast

Guard would probably also have to approve the system. A more detailed analysis will

be provided when regulations implementing this measure are proposed for adoption.

(Potentially Significant)

Selective Catalytic Reduction (SCR) – Selective catalytic reduction may be

used on large diesel engines to reduce NOx in the exhaust. Ammonia or urea is used

to react with the NOx, in the presence of a catalyst, to form nitrogen gas and water. In

some SCR installations, anhydrous ammonia is used. There are known safety hazards

related to the storage and handling of this volatile and poisonous liquid. These hazards

must be addressed in the initial system design and periodically in hazard assessments.

(Potentially Significant) 
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Fuel Additives – Before proposing rules requiring fuel additives, staff will

evaluate the chemicals in the additives for their toxic effects. Since additives are

federally regulated, they will undergo a health effects evaluation prior to approval. 

(Not Significant)

Cargo Tank Vapor Recovery – Cargo tank vapor recovery measures in the

Proposed Strategy will prevent the escape of gasoline vapors contained in cargo tanks

and delivery hoses. Gasoline vapors can be explosive or flammable if not handled

properly. Thus, vapor recovery systems must be designed to eliminate the risk of

explosion or fire. The State Fire Marshal reviews all vapor recovery equipment designs

and procedures to assure that they will not cause any undue risk. 

(Not Significant)

Diesel Particulate Filters – A number of measures in the Proposed Strategy

would require the use of diesel particulate filters. Some safety concerns include

reduced visibility from the driver’s seat due to new equipment mounted near eye level,

particularly on off-road equipment such as bulldozers, backhoes, and tractors. ARB

staff believes that proper engineering design can mitigate or eliminate these potential

problems.

(Not Significant) 

Another property of diesel particulate filters is that they must be regenerated by

burning off excess hydrocarbons trapped on the filter. Active regeneration methods use

external fuel or energy to heat the filter and regenerate it. Some small potential exists

for a runaway regeneration that could pose a fire hazard. Proper engineering design

should mitigate or eliminate these potential risks. Diesel particulate filter measures will

be written to assure that the design is proven effective.

(Not Significant)

Alternative Fuels: Compressed Natural Gas (CNG) – Proposed Strategy

incentive programs and in-use strategies may require or promote the use of alternative

fuels, particularly compressed natural gas (CNG). This presents a potential safety issue

due to the increased use and handling of gaseous fuels. While CNG is flammable, it

has been demonstrated in recent years that the fire risks from CNG use are known,

manageable, and reasonable. CNG is an increasingly common fuel which is developing

a proven safety record.

(Not Significant)

e. Solid / Hazardous Waste

Cumulative Impact: The cumulative impact of all strategies in the Proposed

Strategy would be to create a small but potentially significant increase of both solid and

hazardous wastes. To mitigate these impacts, ARB will work with the California

Department of Toxic Substances Control (DTSC) and the California Integrated Waste

Management Board (CIWMB) to reduce waste production in these and other areas.
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Several Proposed Strategy measures may produce small amounts of solid or

hazardous wastes. The strategies with potential impacts are: controls for diesel-fueled

engines and vehicles, use of particulate filters, a pilot program to replace emission

controls on older light duty vehicles, electrification of forklifts and other equipment, and

gasoline vapor recovery for marinas. The potential impacts of these and other

measures on solid or hazardous waste are described below.

i. Solid Waste

Solid waste consists of residential wastes (trash and garbage produced by

households), construction wastes, commercial and industrial wastes, home appliances

and abandoned vehicles, and sludge residues (waste remaining at the end of the

sewage treatment process). CCR title 14, Division 7, provides the State standards for

the management of facilities that handle and/or dispose of solid waste. CCR title 14,

Division 7, is administered by the CIWMB and the designated Local Enforcement

Agency (LEA). The designated LEA for each county is the County Department of

Environmental Health.

CCR title 14, Division 7, establishes general standards to provide required levels

of performance for facilities that handle and/or dispose of solid waste. Other title 14

requirements include operational plans, closure plans, and post-closure monitoring and

maintenance plans. Title 14 covers various solid waste facilities including but not

limited to landfills, material recovery facilities (MRFs), transfer stations, and composting

facilities.

ii. Hazardous Waste

Hazardous materials are substances with certain physical properties that could

pose a substantial present or future hazard to human health or the environment when

improperly handled, disposed, or otherwise managed. As defined in CCR title 22,

Division 4.5, Chapter 11, Article 3, hazardous materials are grouped into the following

four categories based on their properties: toxic (causes human health effects), ignitable

(has the ability to burn), corrosive (causes severe burns or damage to materials) and

reactive (causes explosions or generates toxic gases). A hazardous waste is any

hazardous material that is discarded, abandoned, or to be recycled. The criteria that

render a material hazardous also make a waste hazardous (Health and Safety Code, §

25151). If improperly handled, hazardous materials and wastes can result in public

health hazards if released to the soil or groundwater or through airborne releases in

vapors, fumes, or dust.

Under the Resource Conservation and Recovery Act (RCRA), U.S. EPA

regulates the generation, transportation, treatment, storage, and disposal of hazardous

waste. RCRA was amended in 1984 by the Hazardous and Solid Waste Act (HSWA),

which affirmed and extended the concept of regulating hazardous wastes from

generation through disposal. HSWA specifically prohibits the use of certain techniques

for the disposal of some types of hazardous wastes. Under RCRA, individual states
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may implement their own hazardous waste programs in lieu of RCRA as long as the

state program is at least as stringent as the federal RCRA requirements. U.S. EPA

approved California’s program to implement federal regulations as of August 1, 1992.

DTSC administers the Hazardous Waste Control Law (HWCL). Under HWCL,

DTSC has adopted extensive regulations governing the generation, transportation, and

disposal of hazardous wastes. HWCL differs little from RCRA; both laws impose “cradle

to grave” regulatory systems for handling hazardous wastes in a manner that protects

human health and the environment. Regulations implementing HWCL are generally

more stringent than regulations implementing RCRA. HWCL regulations list over 780

hazardous chemicals, as well as nearly 30 more common materials that may be

hazardous, and establish criteria for identifying, packaging, and labeling hazardous

wastes. They prescribe management practices for hazardous wastes; establish permit

requirements for hazardous waste treatment, storage, disposal, and transportation; and

identify hazardous wastes that cannot be disposed of in landfills.

Under both RCRA and HWCL, hazardous waste manifests must be retained by

the generator for a minimum of three years. Hazardous waste manifests list a

description of the waste, its intended destination, and regulatory information about the

waste. A copy of each manifest must be filed with DTSC. The generator must match

copies of hazardous waste manifests with certification notices from the treatment,

disposal, or recycling facility. Hazardous waste as defined in the Code of Federal

Regulations title 40 (40 CFR) 261.20 and CCR title 22, Article 9 (including listed

substances, 40 CFR 261.30) is disposed of in Class I landfills. California has enacted

strict legislation for regulating Class I landfills (Health and Safety Code, §§25209 -

25209.7). For example, the treatment zone of a Class I landfill must not extend more

than five feet below the initial surface and the base of the zone must be a minimum of

five feet above the highest anticipated elevation of underlying groundwater (Health and

Safety Code, §25209.1(h)). The Health and Safety Code also requires Class I landfills

to be equipped with liners, a leachate collection and removal system, and a

groundwater monitoring system (Health and Safety Code, §25209.2(a)). Such systems

must meet the requirements of DTSC and the SWRCB (Health and Safety Code,

§25209.5).

Hazardous waste can also be transported to permitted facilities outside of

California. The nearest out-of-state landfills are U.S. Ecology, Inc., located in Beatty,

Nevada; USPCI, Inc., in Murray, Utah; and Envirosafe Services of Idaho, Inc., in

Mountain Home, Idaho. Incineration is provided at the following out-of-state facilities:

Aptus, in Aragonite, Utah and Coffeyville, Kansas; Rollins Environmental Services, Inc.,

in Deer Park, Texas and Baton Rouge, Louisiana; Chemical Waste Management, Inc.,

in Port Arthur, Texas; and Waste Research & Reclamation Co. in Eau Claire, Wisconsin

(SCAQMD, 1996).

Diesel-Fueled Engines and Vehicles – The recommended measures to reduce

emissions from diesel-fueled engines and vehicles could require the use of new diesel

engines or add-on control devices such as particulate filters and catalysts. Potential
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adverse impacts include increased scrapping of diesel engines and vehicles, and

impacts due to handling and disposal of collected particulate matter. The impact of

accelerated vehicle scrapping can be largely mitigated by recycling.

(Potentially Significant)

Diesel Particulate Filters – A number of measures in the Proposed Strategy

would require use of diesel particulate filters. Diesel particulate filters will probably

produce a small amount of waste ash for disposal. This waste is estimated at about 10

to 150 grams of ash per vehicle per year and is projected to be considered a hazardous

material due to zinc content. While most larger maintenance facilities can be expected

to handle, collect, and dispose of the material properly, as a hazardous waste, it is less

certain how smaller facilities will handle waste ash. The filters themselves will

eventually also be retired. Some filters contain a precious metal catalyst that is valuable

for recycling and reclaiming. Other spent filters may not be worth recycling and may be

disposed of at a proper landfill. We do not expect that the spent filters themselves will

be considered a hazardous material.

(Potentially Significant) 

Motor Vehicles – Replacement of Old Emission Control Parts – Several

strategies will evaluate the benefits of replacing key emission control parts with new

parts on older vehicles which exceed their original certification standards. Parts to be

replaced include catalysts, carbon canisters, fuel lines and oxygen sensors. Catalysts

normally contain precious metals and are recycled. The other replaced components

would probably be disposed of in landfills. 

(Potentially Significant)

Electrification – Electrification of forklifts and other equipment can provide

significant reductions of air pollutant emissions. However, electrification strategies may

result in the production and use of a significant number of batteries. These batteries are

normally recycled and the recycle rate for lead-acid batteries is currently over 95%.

However, the increase in the number of spent batteries to be processed would

potentially have significant impacts on the recycling industry and on the disposal system

for non-recyclable materials. Leasing, deposit, or rebate programs for electric batteries

could be required to increase recycling. A spent battery exchange for battery

replacement could also reduce waste impacts. With these mitigation measures in

place, battery disposal impacts should not be significant.

(Not Significant)

Forklift Scrapping – The recommended measure to reduce emissions from

forklifts could require the replacement of older forklifts with new electrical equipment.

Potential adverse impacts include increased scrapping of forklifts and engines. The

impact of accelerated vehicle scrapping can be largely mitigated by recycling.

(Not Significant)

Marina Vapor Recovery – A marina vapor recovery measure may involve

collection of vapors at the dispenser into a carbon collection device (carbon bed). As
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marinas have fairly low gasoline throughputs, vapors may be collected over a period of

several days before the carbon is recycled. At this time, ARB believes that the carbon

would be recycled rather than discarded as waste. A more detailed analysis will be

provided when regulations implementing this program are proposed for adoption.

(Potentially Significant)

Small Off-Road Engines – Lower emission standards for new non-handheld

lawn and garden equipment may require emission control parts, such as catalysts, that

may ultimately be discarded into landfills. Recycling of catalysts could mitigate much of

the impact. 

(Not Significant)

f. Noise 

Cumulative Impact: The cumulative effect of the Proposed Strategy will not

have a potentially significant impact on noise. Some air pollution strategies described in

the Proposed Strategy, such as measures that promote the electrification of vehicles

and forklifts, may reduce noise.

Mobile, Stationary, and Portable Diesel-Fueled Engines – The recommended

measures to reduce emissions from diesel-fueled engines could require the use of addon control devices such as particulate filters and catalysts and engine modifications.

This could result in a potential increase in noise levels due to exhaust system changes

to accommodate add-on controls. However, testing of current add-on controls has

shown no increase in noise and ARB staff does not expect future adverse noise impacts

(Not Significant). 

g. Transportation and Traffic 

No element of the Proposed Strategy is expected to have negative impacts on

transportation or traffic. Although many control measures in the Proposed Strategy call

for emission reductions from motor vehicles, these control measures rely on

technological changes, which will not impact transportation or traffic. 

h. Aesthetics 

No element of the Proposed Strategy is expected to degrade the natural beauty

of California. Instead, the Proposed Strategy will have significant positive impacts on

aesthetics. Regional haze will be reduced by Proposed Strategy elements that reduce

hydrocarbon, nitrogen oxide, and particulate matter emissions. Acid rain (which

damages trees, lakes, historic buildings and rock formations, etc.) will be reduced by

measures that reduce NOx emissions.
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i. Agricultural Resources 

The Proposed Strategy is not expected to cause any adverse impacts on the

agricultural resources of California. Ozone pollution causes significant crop yield loss in

California. The Proposed Strategy will help reduce ozone levels and consequently

reduce crop loss resulting from ozone damage. 

j. Biological Resources 

The Proposed Strategy is not expected to cause any adverse impacts on the

biological resources of California. We believe that the proposed measures will improve

air quality and consequently, will improve the habitat of our biological resources. 

k. Cultural Resources 

The Proposed Strategy is not expected to cause any adverse impacts on the

cultural resources of California. We believe that the proposed measures will reduce

ozone and acidic compounds in the air. Ozone, which causes oxidation, and airborne

acids are both known to cause deterioration of archaeological, paleontological, and

geological features. 

l. Geology and Soils 

The Proposed Strategy is not expected to cause any adverse impacts on geology

or soils. 

m. Land Use and Planning 

The Proposed Strategy is not expected to cause any adverse impacts on land

use and planning. 

n. Mineral Resources 

The Proposed Strategy is not expected to cause any adverse impacts on mineral

resources.

o. Population and Housing 

The Proposed Strategy is not expected to cause any adverse impacts on

population and housing.

p. Public Services

The Proposed Strategy is not expected to cause any adverse impacts on public

services.
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q. Recreation

The Proposed Strategy is not expected to cause any adverse impacts on

recreation. By reducing the number of days with unhealthy air quality, ARB expects that

our parks and outdoor recreational facilities could see increased usage by children, the

elderly, asthmatics, and others with sensitive airways or chronic breathing problems. 

4. Cumulative Impacts of State Measures and Local District Measures

For each environmental impact area, the cumulative environmental impacts of

the State Strategy are discussed above. This section addresses the cumulative

environmental impacts of the State Strategy combined with the impacts of the plans of

the local air districts. To address these combined impacts, the cumulative impacts

discussion contained in the South Coast Air Quality Management District’s Draft

Environmental Impact Report (EIR) for the 2003 Air Quality Management Plan

(SCAQMD Plan), released in April 2003, is hereby incorporated by reference. 

Because of the serious air quality problem in the South Coast Air Basin, the

SCAQMD has defined the greatest present need for new emission reductions, and the

SCAQMD Plan has outlined the most comprehensive set of measures to achieve these

reductions. The measures set forth in the SCAQMD Plan therefore constitute a “worst

case” scenario for cumulative impacts. While it is possible that future SIP revisions for

other districts may contain measures that are not discussed in the SCAQMD Plan, at

this time we do not know what such hypothetical future measures may be and it would

be speculative to attempt to evaluate them. For the purposes of this analysis, therefore,

the most reasonable approach is to utilize the SCAQMD Plan as a “worst case”

scenario. 

ARB staff has reviewed and considered the cumulative impacts analysis

contained in the SCAQMD EIR and concurs with its approach and conclusions. This

analysis considers the cumulative impacts of the measures contained in the State

Strategy combined with the measures in the SCAQMD Plan. The SCAQMD analysis

can be found in Chapter 4 of the SCAQMD EIR, entitled “Environmental Impacts and

Mitigation Measures.” To avoid redundancy, it is appropriate to incorporate this analysis

by reference rather than repeat it here. The SCAQMD EIR can be found on the

SCAQMD internet site at:

http://www.aqmd.gov/ceqa/documents/2003/aqmd/draftEA/AQMP/AQMP_DEIR.html.

5. Impacts of the Individual Defined Measures

The State and federal measures in the Proposed Strategy will help make

progress toward our goal of healthy air for all Californians. Each of the defined State

measures was evaluated to identify adverse environmental impacts. The following table

lists each of the measures, any potentially significant environmental impacts, and

possible mitigation methods.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-26

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

MOBILE SOURCES

Light and Medium-Duty Vehicles

LT/MEDDUTY-1 Replace or Upgrade Emission Control Systems on Existing Passenger Vehicles --

Pilot Program.

Waste: Some increased disposal offaulty emission control parts.

Recycle partfeasible.

LT/MEDDUTY-2 Improve Smog Check to Reduce Emissions from Existing Passenger and Cargo

Vehicles.

Waste: Some increased disposal offaulty emission control parts.

Recycle partfeasible.

On-Road Heavy-Duty Diesel Engines and Vehicles

ON-RD HVYDUTY-1

Augment Truck and Bus HighwayInspections with Community-BasedInspections. 

None Identified None Requi

ON-RD HVYDUTY-2

Capture and Control Vapors from GasolineCargo Tankers. 

None Identified None Requi
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-27

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

ON-RDHVYDUTY-3

Pursue Approaches to Clean Up the Existingand New Truck/Bus Fleet – PM In-UseEmission Control, Engine Software Upgrade,On-Board Diagnostics, Manufacturers’ InUse Compliance. 

Air: Potential for passive particulatefilters to emit higher levels of NO2affecting ozone, NO2, nitric acid, andsecondary particulate.Energy: Potential fuel efficiency lossdue to controls.Waste: Filter ash and spent filter maybe a hazardous waste.Waste: Potential increase in engineand vehicle scrapping.Waste: Some increased disposal offaulty emission control parts. Hazards/Human Health: Potential fueladditives could be hazardous.Water: Emulsified diesel may disperseinto surface water easily.

Limits on NO rates.Design systepressure anmonitoring.Promote safand recyclinPromote recvehicles.Recycle partfeasible.Additives muRequire spil
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-28

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

Off-Road Compression-Ignition Engines

OFF-RD CI-1

Pursue Approaches to Clean Up the ExistingOff-Road Equipment Fleet (CompressionIgnition Engines) -- Retrofit Controls.

Air: Potential for passive particulatefilters to emit higher levels of NO2affecting ozone, NO2, nitric acid, andsecondary particulate.Energy: Potential fuel efficiency lossdue to controls.Waste: Filter ash and spent filter maybe a hazardous waste.Hazards/Human Health: Potential fueladditives could be hazardous.Water: Emulsified diesel may disperseinto surface water easily.

Limits on NO rates.Design systepressure anmonitoring.Promote safand recyclinAdditives muRequire spil

OFF-RD CI-2

Implement Registration and InspectionProgram for Existing Off-Road Equipment toDetect Excess Emissions [CompressionIgnition Engines].

Waste: Some increased disposal offaulty emission control parts.

Recycle partfeasible.

Off-Road Large Spark-Ignition Engines

OFF-RD LSI-1

Set Lower Emission Standards for New OffRoad Gas Engines [Spark-Ignition Engines25 hp and Greater].

None Identified None Requi
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-29

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

OFF-RDLSI-21

Clean Up Existing Off-Road Gas EquipmentThrough Retrofit Controls [Spark-IgnitionEngines 25 hp and Greater].

Waste: Some increased disposal offaulty emission control parts.Air: Potential decrease in fuel economycould increase carbon dioxideemissions. Energy: Potential decrease in fueleconomy.

Recycle partfeasible.Design retroimpact on fuDesign systeadverse imp

OFF-RD LSI-31

Require Zero Emission Forklifts WhereFeasible -- Lift Capacity <8,000lbs.

Air: Potential increase in purchases oflarger and/or diesel forklifts to avoidelectric could increase emissions.Air: Increase in emissions fromelectrical power plants.Air: Potential for older and dirtierforklifts to be kept longer.Energy: Increase in demand forelectrical power.Waste: Potential increase in forkliftscrapping.Waste: Potential increase in batterywaste.

Regulation wconsider and emission incAir district pelimit emissioRegulation wconsider and emission incCharge batteUse solar paPromote recvehicles.Promote bat

1OFF-RD LSI-2 and OFF-RD LSI-3 from the May draft have been consolidated into a new measure named OFF-R

Road Gas Equipment Fleet Through Retrofit Controls and New Emission Standards (Spark-Ignition Engines 25 hp refer to Section II for more information.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-30

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

Small Off-Road Engines

SMALL OFF-RD-1

Set Lower Emission Standards for NewHandheld Small Engines and Equipment --Like Weed Trimmers, Leaf Blowers, andChain Saws [Spark-Ignition Engines Under25 hp].

None Identified None Requi

SMALL OFF-RD-2

Set Lower Emission Standards for New NonHandheld Small Engines and Equipment --Like Lawnmowers [Spark-Ignition EnginesUnder 25 hp].

Waste: Potential for catalyst systemsto be sent to landfill. 

Promote rec
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-31

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

Commercial Marine Vessels and Ports

MARINE1 Pursue Approaches to Clean Up the Existing Harbor Craft Fleet -- Cleaner Engines and

Fuels.

Air: Potential for passive particulatefilters to emit higher levels of NO2affecting ozone, NO2, nitric acid, andsecondary particulate.Air: Potential for ammonia emissionsfrom NOx controls.Air: Potential decrease in fuel economy(add on control devices, alternativefuels) could increase carbon dioxideemissions. Air: Expanded use of alternative fuelscould increase emissions at refineries.Energy: Potential fuel efficiency lossdue to controls.Waste: Filter ash and spent filter maybe a hazardous waste.Waste: Potential increase in enginescrapping.Hazards/Human Health: Potential fueladditives could be hazardous.Water: Emulsified diesel fuel oradditives may disperse into surfacewater easily.Hazards/Human Health: Potential forammonia storage hazards.

Ensure systedesigned to NO to NO2. emissions.Monitor and Promote incAir district pelimit emissioDesign to rerequire back Promote safand recyclinPromote recAdditives muRequire spilsafe storage Require prophazard asse
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-32

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

MARINE2 Pursue Approaches to Reduce Land-Based Port Emissions – Alternative Fuels, Cleaner

Engines, Retrofit Controls, Electrification,Idling Restrictions.

Air: Potential for passive particulatefilters to emit higher levels of NO2affecting ozone, NO2, nitric acid, andsecondary particulate.Air: Potential decrease in fuel economy(add on control devices, alternativefuels) may increase emissions ofcarbon dioxide. Air: Expanded use of alternative fuelscould increase emissions at refineries. Energy: Potential decrease in fueleconomy due to controls.Energy: Potential increase in electricityuse due to electrification. Waste: Filter ash and spent filters maybe a hazardous waste.Waste: Potential increase in enginescrapping.Hazards/Human Health: Potential fueladditives could be hazardous.Water: Emulsified diesel fuel oradditives may disperse into surfacewater easily.

Ensure systedesigned to NO to NO2. emissions.Promote incAir district pelimit emissioDesign to rerequire back Promote enePromote safand recyclinPromote recAdditives muRequire spilsafe storage 

Conventional and Alternative Fuels

FUEL-1 Set Additives Standards for Diesel Fuel to

Control Engine Deposits. 

Hazards/Human Health: Potential fueladditives could be hazardous.

Additives mu
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-33

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

FUEL-2 Set Low-Sulfur Standards for Diesel Fuel for

Trucks/Buses, Off-Road Equipment, andStationary Engines. 

Energy: Increase in energy use forrefining to remove sulfur.Air: Production of cleaner fuels couldincrease emissions at refineries. 

Promote eneDistrict to reon all modifi

CONSUMER PRODUCTS, VAPOR RECOVERY, AND PESTICIDES

Consumer Products

CONS-1 Set New Consumer Products Limits for 2006. Air: Potential use of TACs

Water: Potential use of TACsHazards: Potential flammabilityOther: Potential global warming, ozonedepletion

Air, Water, Hand prohibit reformulating paradichloroPerc or otheGlobal WarmOzone deple

CONS-2 Set New Consumer Products Limits for 2008

– 2010. 

Air: Potential use of TACsWater: Potential use of TACsHazards: Potential flammabilityOther: Potential global warming, ozonedepletion

Air, Water, Hand prohibit reformulating or other TACGlobal WarmOzone deple
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-34

Table V-A-1: Potential Adverse Environmental Impacts of

the Proposed 2003 State and Federal Strategy for the California SIP

Number Description Potential Adverse Environmental

Impacts

Mitig

Fueling and Vapor Recovery

FVR-1 Increase Recovery of Fuel Vapors from

Aboveground Storage Tanks.

Energy: Increase in electrical use. Promote ene

FVR-2 Recover Fuel Vapors from Gasoline

Dispensing at Marinas. 

Waste: generates gasoline vaporcollection devices (carbon beds).Energy: Increase in electrical use. 

Develop recregenerate gdevices.Promote ene

FVR-3 Reduce Fuel Permeation Through Gasoline

Dispenser Hoses.

None Identified None Requi

Pesticides

PEST-1 Implement Existing Pesticide Strategy None Identified None Requi
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-35

6. Environmental Justice

In December 2001, ARB adopted a set of policies and associated actions that

provide the framework for incorporating environmental justice into ARB’s programs

consistent with the directives of State law. The proposed policies and actions are based

on State law, which describes "environmental justice" as "the fair treatment of people of

all races, cultures, and incomes with respect to the development, adoption,

implementation, and enforcement of environmental laws, regulations, and policies."

ARB’s environmental justice policies will help ensure that we take into account

neighborhood impacts as we prioritize and develop controls and pollution-prevention

strategies.

The environmental justice policies touch virtually every ARB program, including

motor vehicles, air-quality planning, toxics, research, enforcement, and air monitoring.

They apply to all communities in California but recognize that extra efforts may be

needed in some communities due to historical land-use patterns, limited participation in

public processes in the past, and a greater concentration of air pollution sources in

these communities. 

The Proposed Strategy incorporates environmental justice policies in order to

help prioritize our activities to reduce public exposure to air toxics as well as regional

pollutants whose sources are concentrated in some communities. While all of the

proposed State measures would result in better air quality for residents throughout

California, we are making measures that cut exposure and risk in communities with high

air pollution burdens a high priority for development. These include strategies to

capture emissions from gas cargo tankers, retrofit trash trucks, restrict idling for trucks

and buses, augment the truck inspection program in communities with high truck traffic,

clean up port-related sources, and reduce fuel vapors from gasoline storage and

refueling. 

ARB has placed a high priority on controlling particulate emissions from diesel

engines, the dominant source in California of known risk from air toxics. Several

measures outlined in the Proposed Strategy have their origin in the Diesel Risk

Reduction Plan, which lays out a three pronged approach to reduce emissions and the

associated risk from diesel PM: (1) new regulatory standards for all diesel-fueled

engines to reduce diesel PM emissions 90 percent from current levels; (2) retrofit of inuse engines; and (3) the use of low sulfur fuel to provide the quality of diesel fuel

needed by the advanced diesel PM emission controls. 

ARB staff is committed to working with districts, local governments and affected

communities to improve statewide compliance for all air pollution sources, whether

under ARB or district jurisdiction. ARB staff has already begun to incorporate

environmental justice perspectives into our program activities. ARB staff is working with

districts to assure that all air pollution complaints are promptly investigated and that

feedback is provided to the public on the actions taken in response to those complaints.

ARB staff is also working with the local air districts to improve accessibility of
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ENVIRONMENTAL IMPACT ANALYSIS

V-A-36

information regarding enforcement activities, including notices of violations, monetary

penalties, and other settlement of violations. ARB is also reviewing its own enforcement

activities and redirecting efforts where we can achieve a more direct community benefit. 

Another matter of concern in communities stems from historic land use patterns

and practices that have led to siting of air pollution sources in close proximity to homes

and schools. In addition to working to reduce air toxics, ARB staff is developing a

handbook intended to provide more information to decision-makers at the local level.

In addition to the specific measures in the Proposed Strategy, ARB staff has

identified ideas in the long-term strategy that will move the State toward zero and nearzero technologies. ARB will work with local governments to look for new opportunities

to apply these far reaching technologies in communities -- for example, using converted

electric or fuel-cell postal-delivery vehicles and public transit buses in affected

neighborhoods.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-1

This chapter is unchanged from the Section V, Chapter B. Economic Impact

Analysis chapter that was released on June 25, 2003, except for the addition of two

footnotes.

CHAPTER B. ECONOMIC IMPACT ANALYSIS

ARB staff has estimated the statewide costs and economic impacts that could

result in 2010 from implementation of the defined State measures in this Proposed

Strategy. This analysis includes the costs and economic impacts of all proposed

measures identified for sources under State jurisdiction, including mobile sources,

fueling infrastructure, and consumer products.

Because the specific sources and approaches to achieve the reductions from the

long-term strategy (also known as the black box) are not yet defined, we have no

reasonable basis to estimate the potential cost of this element. When specific

measures to implement this long-term strategy are identified in a subsequent SIP

revision, we will evaluate the corresponding economic impacts.

The proposed SIP measures, when adopted, are likely to cause technological

changes that may increase the production costs for regulated industries. Increased

costs would have an initial contractionary effect on those industries, which in turn could

affect other related industries, either negatively or positively. For example, industries

that provide supplies and services to affected industries could experience a reduction in

demand for their products and services. On the other hand, suppliers of environmental

products and services could experience an increase in their sales. The net effect on the

California economy of these activities hinges on the extent to which products and

services are obtained locally. Using a dynamic model of the California economy

(E-DRAM),2 we estimated the net effects of these activities on affected industries and

the overall economy. Based on this model, the California industries affected most by

the planned control measures are those engaged in the production, distribution, sales,

and use of on-road and off-road motor vehicle and mobile equipment, fueling

infrastructure, and consumer products. 

Annual direct costs of all defined State measures would be approximately

$770 million statewide and $265 million in the South Coast in 2010. Increased costs

that would result from the proposed measures are projected to reduce California’s

economic output by roughly $1.5 billion (0.06 percent) and California employment by

less than 1,300 jobs (0.01 percent) in 2010. Personal income would also be projected

to decline by roughly $1.3 billion (0.09 percent), implying that personal income of an

average California household would fall by about 26 cents per day. The proposed

measures, however, would also bring significant social benefits (including less illness

and medical expense, and fewer lost work and school days) to Californians. In its report

 

2 For a complete description of E-DRAM, see Peter Berck, “Developing a Methodology for Assessing the

Economic Impacts of Large Scale Environmental Regulations”, Prepared for California Air Resources

Board, November 1999.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-2

to Congress in 1999, the U.S. EPA found that the monetized benefits of the Clean Air

Act exceed its compliance costs by a ratio of four to one.3 Based on this report, ARB

staff estimates that each dollar spent on clean air in California generates, on average,

three dollars in social benefits that improve the quality of life.

1. Cost Of Defined State Measures

Most of the defined State measures rely on the application of current

technologies to achieve additional emission reductions. Some measures, however, rely

on the anticipated development of new technologies. The implementation of these

control measures may change the ways many products are manufactured, distributed,

and used. Whether these changes require the reformulation of a consumer product,

retrofit of diesel trucks and buses, or clean-up of the existing harbor craft fleet, we

assumed that they would impose costs on businesses. This analysis provides

estimates of those direct costs.

ARB staff estimated the cost of each defined State measure using the most

reliable information currently available. For those measures where data were available,

staff developed control costs directly based on the application of current technologies.

For most control measures, however, staff estimated control costs indirectly by

multiplying the cost-effectiveness estimate by the emission reductions associated with

the proposed measure.

The control costs in this report represent rough estimates of the costs of the

proposed measures and may change when more specific regulatory language is

developed. There is an extensive public process to develop each plan measure into a

regulation or program - ARB staff gather detailed industry-specific information and

assess the potential costs to business, government, and consumers. The measures will

be discussed at public workshops, and proposed regulations will go through the public

hearing process as required by law. When specific regulatory language is developed, it

will be possible to analyze potential cost and economic impacts in more detail. This

information will be presented with each regulatory proposal for Board consideration.

a. Cost-Effectiveness Estimates

Cost-effectiveness is a measure of the unit cost of reducing a pollutant, and

varies by pollutant and control strategy. The estimated cost-effectiveness of past ARB

control measures to reduce volatile organic compounds (VOC) from consumer products

has ranged from under $0.50 per pound ($1,000 per ton) to about $6 per pound

($12,000 per ton). To reduce NOx+HC from mobile sources, the range varied from less

than $0.50 per pound ($1,000 per ton) to about $5.60 per pound ($11,000 per ton).

These estimates are generated as part of regulatory development process and have

typically turned out to be higher than the actual costs. Figures V-B-1 and V-B-2 show

cost-effectiveness estimates for California consumer products and mobile source and

 

3 U.S. EPA Report to Congress, “The Benefits and Costs of the Clean Air Act 1990 to 2010”, November

1999.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-3

fuel measures approved by ARB since the late 1980s. Cost-effectiveness numbers are

presented in historical dollars and therefore are not adjusted for inflation.

Figure V-B-1

Cost-Effectiveness Values for Selected Consumer Products Regulations

Figure V-B-2

 Cost-Effectiveness Values for Selected Mobile Source and Fuel Regulations

Aerosol Paints

3.03

Antiperspirants

0.85

Consumer 

Products

1.70

Consumer 

Products

1.00

Consumer 

Products

0.51

Consumer 

Products

0.70

Aerosol Coatings

1.57

Consumer 

Products

0.40

Aerosol Coatings

0.74

Aerosol Adhesives

6.02

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Board Hearing Year

Dollars per Pound of VOC Reduction

0.4 NOx LDV

RFG 2

5g HDD

0.25 HC LDV

OBD 1

2-Stroke Lawn

LEV

4-Stroke Lawn

Off-Rd Diesel

Off-Rd Motorcycle

Med. Duty

Truck

Off-Cycle

LDT

2.4g HDDE

NTE & ESC Test

Off-Rd

CI

2007

HDDE

Outboard

Marine 

Fuel

Container

Transit Bus

Inboard

Marine

OBD 2

Enhanced

Vapor

Recovery

On-Rd

Motorcycle

0

1

2

3

4

5

6

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004

Board Hearing Year

Dollars per Pound of Ozone Precursor

LDV – light duty vehicle

HDD – heavy-duty vehicle

HC – hydrocarbon

OBD – on-board diagnostics

RFG – reformulated gasoline

LEV –low-emission vehicle

MDT – medium-duty truck

LDT – light-duty truck

HDDE – heavy-duty diesel engine

NTE – not-to-exceed

ESC – European Stationary Cycle
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-4

For the purpose of this analysis, ARB staff makes a conservative assumption that

future emission reductions will be more expensive to obtain than the past reductions.

This is because firms are required to meet more stringent air quality standards or to

control unregulated emission sources. In the past, however, businesses have always

found innovative ways to meet standards at costs much lower than estimated by staff.

We believe that this trend will continue in the future. For example, the South Coast

District estimated the cost of NOx reduction from a natural gas-fired power plant to be

about $25,000 per ton in 1988 compared to the industry estimate of $45,000 per ton.

By 1995, when the rule requirements became effective, the actual cost of NOx control

from power plants was about $12,000 per ton. Similarly, staff estimated the cost to

control evaporative emissions from vehicles to be about $170 per vehicle in 1990 while

the industry estimate was about $783 per vehicle. When the regulation was

implemented, it became clear that the actual cost of the regulation was closer to the

lower estimate. 

The cost-effectiveness estimates used for the proposed State measures

averaged about $9,200 (from $1,100 to $22,000) per ton of ROG emissions reduced,

and about $8,300 (from $1,100 to $22,000) per ton of NOx emissions reduced.

Tables V-B-1 and V-B-2 provide cost-effectiveness rankings of the defined State

measures for both ROG and NOx reductions (see Table I-2 for the full name of each

measure). All cost-effectiveness numbers are in constant 2002 dollars per ton.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-5

Table V-B-1

Cost-Effectiveness Ranking of the Defined Statewide Measures for

ROG Reduction

Statewide Measures

Average

C/E

(2002

$/ton)

Rank Estimated

Statewide

ROG Red.

(TPD)

Estimated

Statewide

Cumulative

ROG Red.

(TPD)

SMALL OFF-RD-2 $1,100 1 14.9 14.9

SMALL OFF-RD-1 $1,600 2 4.0 18.9

ON-RD HVY-DUTY-3 $2,200 3 8.1 27.0

OFF-RD LSI-2** $3,000 5 2.8 30.4

ON-RD HVY-DUTY-1 $3,000 6 0.3 30.7

LT/MED-DUTY-2 $3,200 7 16.1 46.8

ON-RD HVY-DUTY-2 $4,000 8 13.8 60.6

FVR-3 $4,000 9 1.1 61.7

FVR-1 $4,000 10 0.3 62.0

CONS-2 $4,480 11 28.1 90.1

CONS-1 $4,480 12 5.4 95.5

OFF-RD LSI-3** $7,500 13 1.3 96.8

FVR-2 $8,000 14 0.3 97.1

MARINE-2 $11,000 15 0.3 97.4

OFF-RD CI-1* $21,000 16 18.4 115.8

LT/MED-DUTY-1 $22,000 17 27.0 142.8

* The primary purpose of this measure is to reduce toxic diesel particulate; the ROG

control is a secondary benefit.

** OFF-RD LSI-2 and OFF-RD LSI-3 from the May draft have been consolidated into a

new measure named OFF-RD LSI-2: Clean Up Off-Road Gas Equipment Fleet

Through Retrofit Controls and New Emission Standards (Spark-Ignition Engines

25 hp and Greater). Please refer to Section II for more information.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-6

Table V-B-2

Cost-Effectiveness Ranking of the Defined Statewide Measures for

NOx Reduction

Statewide Measures

Average

C/E

(2002

$/ton)

Rank Estimated

Statewide 

NOx Red.

(TPD)

Estimated

Statewide

Cumulative

NOx Red.

(TPD)

SMALL OFF-RD-2 $1,100 1 2.4 2.4

SMALL OFF-RD-1 $1,600 2 0.4 2.8

OFF-RD LSI-1 $2,100 3 1.9 4.7

ON-RD HVY-DUTY-3 $2,200 4 21.9 26.6

OFF-RD LSI-2* $3,000 6 5.8 40.5

LT/MED-DUTY-2 $3,200 7 24.3 64.8

OFF-RD LSI-3* $7,500 8 4.9 69.7

MARINE-2 $11,000 9 0.3 70.0

LT/MED-DUTY-1 $22,000 10 26.9 96.9

*OFF-RD LSI-2 and OFF-RD LSI-3 from the May draft have been consolidated into a

new measure named OFF-RD LSI-2: Clean Up Off-Road Gas Equipment Fleet

Through Retrofit Controls and New Emission Standards (Spark-Ignition Engines

25 hp and Greater). Please refer to Section II for more information.

b. Annual Costs

Annual direct costs of all near-term control measures are estimated to be

approximately $770 million statewide and $265 million in the South Coast in 2010.

Annual statewide costs represent about 0.03 percent of the California Gross State

Product (GSP) in 2010. GSP measures the total economic activity in California.

ARB also recognizes that the defined State and local control measures are not

sufficient to meet ozone attainment goals in the South Coast by 2010. ARB staff has

proposed to lead a multi-agency (State, local, and federal) effort and public process

beginning in 2004 to identify and adopt long-term strategies. Because of great

uncertainty associated with the sources and approaches for potential long-term control

strategies, this analysis does not include the costs of such control strategies. When

those strategies are identified in a subsequent SIP revision by 2007, we will evaluate

the corresponding economic impacts. This process will consider long-term strategies

needed for ozone attainment in the San Joaquin Valley as well.

 

Table V-B-3 provides estimates of total annual costs of the proposed control

measures by source categories for the State and South Coast in 2010. Stationary and
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-7

area sources account for about 7 percent of annual plan costs statewide. About

95 percent of the costs associated with stationary and area sources are due to new

VOC limits for consumer products. All costs are stated in constant 2002 dollars. 

Mobile source control measures account for 93 percent of annual control costs,

of which about 68 percent stems from on-road mobile sources control measures. The

control measure to replace or upgrade emission control systems on existing passenger

vehicles accounts for the bulk of the cost increase.

Table V-B-3

Statewide Estimates of Total Annual Costs of the Defined State Measures for 2010

 (Millions of 2002 Dollars)

South Coast

Cost

Statewide

Cost

% of

Total

Stationary and Area Sources:

Consumer Products $23 $55 7

Fueling and Vapor Recovery $ 1 $ 3 0

Total for Stationary and Area Sources $24 $58 7

Mobile Sources:

On-Road:

Light- and Medium-Duty Vehicles $165 $480 62

Heavy-Duty Vehicles $ 16 $ 44 6

Subtotal for On-Road $181 $524 68

Off-Road:

Off-Road Compression Ignition Engines $39 $141 18

Off-Road Large Spark-Ignited Engines $11 $ 28 4

Small Engines $ 5 $ 9 1

Marine Vessels and Ports $ 4 $ 12 2

Subtotal for Off-Road $59 $190 25

Total for Mobile Sources $240 $714 93

Total $264 $772 100

In order to estimate the total impact of the statewide costs on the California

economy, we reclassified these costs according to the E-DRAM’s industrial sector

classifications. The model has 30 industrial sectors.4

 Of these 30 sectors, five would

be affected directly by the defined control measures. Table V-B-4 provides estimates of

total annual costs by affected industries. About 70 percent of total annual costs would

be borne by the motor vehicle industry. All off-road control measures, except Marine

 

4 For complete definitions of industrial sectors in the E-DRAM model, see Peter Berck, E. Golan and B.

Smith, “Dynamic Revenue Analysis for California”, California Department of Finance, Summer 1996, pp.

16-25, and Peter Berck, “Developing a Methodology for Assessing the Economic Impacts of Large Scale

Environmental Regulations", Prepared for California Air Resources Board, February 2000, p. 7.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-8

Vessels and Ports, are reclassified under gasoline and diesel power engines industry in

the E-DRAM model. This industry would account for 23 percent of the statewide SIP

total annual costs.

Table V-B-4

Statewide Estimates of Total Annual Costs of the Defined State Measures

by Affected Industries for 2010

(Millions of 2002 Dollars)

Affected Industrial Sectors in

E-DRAM

South Coast

Annual Costs

Statewide

Annual Costs

%Total

Consumer Chemicals $ 23 $ 55 7

Gasoline- and Diesel- Powered Engines $ 55 $178 23

Motor Vehicles $181 $524 69

Transportation $ 4 $ 12 1

Other Services $ 1 $ 3 0

Total $264 $772 100

2. Economic Impacts

Control costs provide a means to estimate the direct expenditures that will be

incurred by California businesses, governments, and individuals to meet the

requirements of the proposed control measures. These costs would, in turn, bring

about additional (indirect) changes in the California economy that may increase the

overall costs of the defined measures to the economy. Increased control costs, for

example, may result in higher product prices. California firms may respond by cutting

back production and decreasing employment. On the other hand, the proposed

measures may also increase demand for environmental products and services, thus

inducing firms supplying those products and services to expand their production and

increase their hiring of workers. 

This change in costs will in turn affect other industries both negatively and

positively. The net effect on the California economy of these activities hinges on the

extent to which products and services are obtained locally. Using a macroeconomic

model, staff estimated the net effects of these activities on affected industries and the

overall economy. The California industries and individuals affected most by the

proposed control measures are those engaged in the production, distribution, sales, and

use of on-road and off-road motor vehicles and mobile equipment, fueling infrastructure,

and consumer products.

The economic model, however, does not account for the enormous benefits to

California businesses and citizens that air quality regulations will bring. We believe that

actions to improve air quality reduce premature death from cardiopulmonary causes,

hospitalizations from acute respiratory disease, aggravation of asthma, lost work days,

as well as school absences, and increase natural resources and work force productivity.

Control programs also induce significant advancement of clean technologies. Based on

the U.S. EPA report to Congress, ARB staff estimated that the benefits to California of

currently adopted air pollution control measures exceed their costs by a ratio of about 3
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-9

to 1. That is, each dollar spent on clean air generates on average three dollars in social

benefits that improve the quality of life.

a. Environmental-Dynamic Revenue Analysis Model (E-DRAM)

The overall impact of all direct and indirect economic effects associated with the

proposed control measures are estimated using a computable general equilibrium

(CGE) model of the California economy. A CGE model simulates various economic

relationships in a market economy where prices and production adjust in response to

changes caused by regulations to establish the equilibrium in markets for all goods and

services and factor of production (i.e., labor and capital). The CGE model used for this

analysis is a modified version of the California Department of Finance's Dynamic

Revenue Analysis Model (DRAM).5 The new modified model is called

Environmental-DRAM (E-DRAM).6 E-DRAM describes the relationships among

California producers, California consumers, government, and the rest of the world.

Changes to the model enable it to assess the economic impacts of large-scale

environmental regulations. The economic impact results are estimated in terms of

changes in the State output, personal income, and employment.

As stated above, E-DRAM is a CGE model that describes the relationship among

California producers, California consumers, government, and the rest of the world. The

model consists of over 1,000 equations designed to capture the interactions between 30

California sectors, 2 factor sectors (labor and capital), 7 household sectors (classified by

income level), 1 investment sector, and 36 government sectors (8 federal, 21 State, and

8 local), and the rest of the world. 

Data for the industrial sectors originated with the Bureau of Economic Analysis of

the U.S. Department of Commerce, based on the Census of Business – a detailed

survey of companies conducted in the U.S. every five years. The conversion of national

data to updated California data is accomplished by Impact Analysis for Planning

(IMPLAN), a program that primarily utilizes state-level employment data to scale

national-level industrial data down to the size of a state. 

In much the same way as firms, households are also aggregated. California

households were divided into categories based upon their taxable income. There are

seven such categories in the model, each one corresponding to a California personal

income tax marginal tax rate (0, 1, 2, 4, 6, 8, and 9.3 percent). Thus, the income for the

“one-percent” household is calculated by adding up the income from all households in

the one-percent bracket.

Similarly, the expenditure of the one-percent household on agricultural goods is

calculated by adding up all expenditures on agricultural goods for these households. 

 

5 For a complete description of DRAM, see Peter Berck, E. Golan and B. Smith, "Dynamic Revenue

Analysis for California", California Department of Finance, Summer 1996.

6 Berck, Peter, "Developing a Methodology for Assessing the Economic Impacts of Large Scale

Environmental Regulations", Prepared for California Air Resources Board, February 2000. 
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-10

The total expenditure on agricultural goods is found by adding the expenditure of all

households together. 

b. Overall Economic Impact

 

Increased costs of the defined measures would affect the California economy

through many complex interactions. E-DRAM was developed to simulate many of these

complex interactions. Using the model, ARB staff in consultation with UC Berkeley

researchers conducted an assessment of the economic impacts of the new State

measures on the California economy. 

Table V-B-5 summarizes the impacts of the defined State measures on the

California economy for fiscal year 2010. Since the current E-DRAM model is built to

reproduce the economic conditions of fiscal year 1998/99, we first extrapolated the

model out to 2010 based on state population, personal income, and industry-specific

forecasts.7 Annual costs of the proposed measures were then adjusted to fiscal year

2010.

 The results of the E-DRAM simulation show that the costs of the proposed State

measures would reduce California economic output by roughly $1.5 billion

(0.06 percent) and California employment by less than 1,300 jobs (0.01 percent) in

2010. Personal income would also decline by roughly $1.30 billion (0.09 percent),

implying that personal income of an average California household would fall by less

than $95 per year, which amounts to about 26 cents per day. 

Table V-B-5

Economic Impacts of the Defined State Measures on the California Economy

in Fiscal Year 2010

California Economy Without

Statewide

Measures

With

Statewide

Measures

Difference % Total

Output (Billions) $2,331.11 $2,329.65 $1.46 0.06

Personal Income (Billions) $1,513.95 $1,512.64 $1.31 0.09

Employment (thousands) 16,689 16,688 1.3 0.01

 

3. Conclusion

Total annual direct costs associated with all proposed defined State measures

are estimated to be approximately $770 million in 2010. Accounting for indirect costs,

these measures would be expected to reduce California economic output by about

$1.5 billion, personal income by about $1.30 billion, and employment by less than

1,300. In the context of the State’s economy, the economic impacts of the measures

are small and are not expected to impose a noticeable impact on the California

 

7 For a more detail description of the E-DRAM extrapolation to “out years”, please see “Benefits of

Reducing Demand for Gasoline and Diesel,” a joint report to California Air Resources Board and

California Energy Commission prepared by Arthur D. Little, Inc., March, 2002.
PROPOSED 2003 STATE AND FEDERAL STRATEGY FOR CALIFORNIA SIP

SECTION V – POTENTIAL IMPACTS

ECONOMIC IMPACT ANALYSIS

V-B-11

economy. The defined State measures would also bring about significant health,

economic and social benefits to Californians. These benefits, which are difficult to

express solely in economic terms, are not quantified in this analysis. Prior analyses

have estimated that the benefits of California’s air quality regulations exceed the costs

by a ratio of about 3 to 1. Therefore, implementation of the proposed measures would

be expected to improve the well-being of Californians.