## Summary of Interagency Working Comments on Draft Language under

EO12866/13563 Interagency Review. Subject to Further Policy Review.

1  Choose a consistent discount rate

A single discount rate should be used when comparing costs and benefits that occur in the same year. Because of limited cost data, the EPA uses a 7 percent discount rate to estimate costs for most technologies

. In some of the analysis the EPA calculates costs using a 3 percent discount rate for the control technologies that have sufficient data. The benefits are reported using a 3 percent and 7 percent discount rate. The EPA argues that this approach follows OMB guidelines. However, while OMB advocates the use of 3 percent and 7 percent discount rates, this does not mean that different discount rates should be used in a single estimate of net benefits. In fact, i t is not possible to interpret net benefits that are estimated using different discount rates when the benefits occur in the same year as the costs. Furthermore, it is not appropriate to report cost estimates for known controls when a share of those costs has been estimated using a 3 percent discount rate, and the remainder of those costs have been estimated using a 7 percent discount rate. See Arrow et al. (2012) for a discussion of the problem of using different discount rates when costs and benefits occur in the same year, in the context of the social cos t of carbon

. For these reasons, commenters invite discussion with EPA about producing internally consistent cost estimates using a 3 percent discount rate and reporting net benefits that do not mix discount rates.

EPA Response:

 EPA will present net benef its at a 7% discount rate only for this RIA. EPA will leave calculations of costs and benefits at 3% in their respective chapters and sections. See Execut ive Summary Tables ES

- 6 and ES

- 10 and Chapter 8

, Tables 8

- 1 and 8

- 2 for relevant changes.

 In Chap ter 7, in the discussion preceding Tables 7

- 1 through 7

- 3, for the non

- EGU point source category EPA will present the discrete costs at both 3% and 7%.

 EPA proposes for the final RIA to provide estimates at 3% and 7%, to the extent possible. If not all d ata is able to be calculated at a 3% discount rate and because we may not have methods in place to adjust the annualized cost from 7% to 3% for a portion of the estimates

, we offer the option of interpreting the 3% costs as an upward bias

.

 EPA agrees that providing comparisons of social costs and social benefits at 3 and 7 percent is appropriate. Ideally, streams of social costs and social benefits over time would be estimated and the net present values of each would be compared to determine net benefits of the illustrative attainment strategies. Estimating multiple years of costs and benefits is not possible for this RIA due to data and resource limitations. As a result, we provide a snapshot of costs and benefits in 2025, using the best available infor mation to approximate social costs and social benefits recognizing uncertainties and limitations in those estimates.

Our cost estimates are based on engineering costs, including capital expenditures and annual operating costs, annualized over the lifetim e of a control device. In developing these annualized cost estimates EPA is able to generate cost estimates at 3 percent and 7 percent when disaggregated data (capital expenditures and operation and maintenance costs) are provided. Some control data that EPA gathers is only provided as a cost per ton of emissions reduced, and this data is not able to be disaggregated to recalculate using a different discount

## Summary of Interagency Working Comments on Draft Language under

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2 rate than the standard 7% provided in most studies. Benefits estimates associated with emission re ductions are not discounted or annualized over the lifetime of the control devices. However, the value of mortality risk reductions associated with the emissions reductions in 2025 reflects the assumption that mortality risk reductions do not all occur in the year when emissions and ambient PM2.5 concentrations decrease, but rather, are distributed over a 20 year period following the change in ambient PM2.5 concentrations. We discount the value of those future risk reductions so that the benefits in 2025 properly reflect the lower value in 2025 of mortality risk reductions occurring in future years. Costs of illness associated with non

- fatal heart attacks are also discounted because some of the costs occur in years following the occurrence of the heart at tack. These two cases of discounting for specific benefits categories are adjustments to the unit values for the health effects to reflect lags in benefits and costs, and not adjustments to reflect the timing of emissions reductions.

The three different uses of discounting in the RIA

– (i) construction of annualized engineering costs, (ii) adjusting the value of mortality risk for lags in mortality risk decreases, and (iii) adjusting the cost of illness for non

- fatal heart attacks to adjust for lags in f ollow up

costs

-- are all appropriate. Our estimates of net benefits are the approximations of the net value (in 2025) of benefits attributable to emissions reductions needed to attain just for the year 2025.

 EPA added discussion of why it is not approp riate to present regional net benefits. See Section ES.2 of the Executive Summary and Chapter 8, Section 8.1.

 For the final RIA q uantify, to the extent possible, the sources of the differences between the 2010 RIA and the 2014 RIA

There will likely be considerable public interest in the difference between the net benefits estimated in 2010 and 2014. T he EPA should provide a quantitative analysis of the reasons why the estimated costs and benefits differ between the 201 0 RIA and the 2014 RIA. Whereas the 2010 RIA indicated negative net benefits under a wide range of assumptions for 70 ppb, the 2014 RIA indicates positive net benefits for 70 ppb. The 2014 RIA reports net benefits of $2.5 to $9.1 billion (7 percent discount rate) if the standard were set at 70 ppb rather than the current standard of 75 ppb. The 2010 RIA reports a change in net benefits of

- $24 to $16 billion if the standard had been set at 70 ppb rather than 75 ppb (to facilitate the comparison between the two RIA’s, throughout this discussi on we compare 70 ppb and 75 ppb, noting that the baseline in the 2010 RIA was 84 ppb). Thus, the 2010 RIA indicated that there was a significant likelihood that net benefits of 70 ppb would turn out to be negative, when compared with 75 ppb. In contrast, t he range of net benefits in 2014 does not include levels below zero.

Lower estimated costs explain most of the change between 2010 and 2014. In 2014, the estimated annual cost of achieving 70 ppb from a baseline of 75 ppb is $3.9 billion. In 2010, the ad ditional annual cost of achieving 70 ppb, compared to 75 ppb, is $11.4 billion to $19.4 billion (using the two endpoints of the reported cost ranges). Thus, estimated costs have fallen by 66 to 80 percent. In contrast, the estimated annual benefit is $6.4 to $13 billion (7 percent discount rate) in the 2014 RIA, and

- $4.5 to $27.5 billion in the 2010 RIA. Thus, the range of benefits has narrowed between 2010 and 2014, and on average expected benefits are just a few billion dollars lower in 2014 than in 2010

.
In Section 7.5 of the RIA, the EPA provides four explanations for the lower 2014 cost estimates:

## Summary of Interagency Working Comments on Draft Language under

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3 1. Changing the baseline starting point from 84 to 75 ppb, reducing the amount of emissions reductions needed and associated costs of attainment 2. Shifting the baseline year from 2020 to 2025, allowing for more time for Federal measures to work and for areas to reach attainment 3. Identifying additional known controls that are less expensive than unknown controls 4. Fewer counties exceeding the alternative standards an alyzed, and fewer emissions reductions are needed for attainment

Reason 1 does not explain the lower cost estimate that was calculated above, because these calculations compared 70 and 75 ppb. Reasons 2

- 4 must therefore explain this reduction, and the EP A could quantify the relative importance of these explanations. For example, it would be straightforward (although it would take some work) to compare concentration levels in 2020 and 2025 to assess the importance of changing the baseline year. A decomposi tion of the cost change from the 2010 RIA to the 2014 RIA into these three categories would help reconcile the notable difference between these quantitates.

EPA Response : EPA added discussion to existing discussion in Section 7.5 about changes in methodologies since the 2008 and 2010 analyse s, what changes had substantial influence on lower cost estimate, and why. See additional discussion in RLSO in Chapter 7

.

 Provide confidenc e intervals for ozone benefits estimates in the Executive Summary

The short

- term health benefits from lo wer ozone levels are based on results from two studies, Smith et al. (2009) and Zanobetti and Schwartz (2008). Although the results of these studies are consistent with the results from earlier studies, there remains statistical uncertainty about the size of the mortality effect, as well as uncertainty about the relevance of these results for the specific ozone concentrations considered in this rulemaking. Chapter 5 contains a lengthy discussion of the uncertainty associated with the health benefits estimates, but the Executive Summary and Chapter 5 should present a clearer summary of the impli cations of both types of uncertainty.

Although Zanobetti and Schwartz report a statistically significant effect of ozone concentrations on mortality, there is some statistical uncertainty. The study reports a 0.32 percent decrease in mortality for each 10 ppb decrease in summer 8

- hour ozone concentrations, with a 95 percent confidence interval of (0.20, 0.43) . The analysis is based on pooled data from 48 cities; but the city

- by

- city analysis shows almost no significant effects, with the exception s of N ew Y ork City , Phoenix, and Boulder. In Washington, DC there is a statistically significant mortality decrease associated with a 10

- ppb increase. To make the statistical uncertainty more transparent, the 95 percent confidence intervals reported in Table 5

- 19 sh ould also be rep orted in the Executive Summary.

EPA Response : EPA added the 95 percent confidence intervals reported in Table s 5

- 19 and 5

- 26

, as well as clarifying footnotes to Tables ES

- 7 and ES

- 11 in the Executive Summary.

There is also some ambiguity about the relevance of the statistical results for low ozone concentrations

. For example, Zanobetti and Schwartz do not completely document t he range of ozone levels that statistically identify the estimated mortality effects , but the study menti ons that Los Angeles has the highest 75 th

- percentile value of 8

- hr ozone, with a value of 75.9 ppb . This value does
not preclude the possibility that the mortality effect is being estimated primarily from higher ozone

## Summary of Interagency Working Comments on Draft Language under

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4 levels

— i.e., levels that would be irre levant to a reduction from 75 ppb to 70 ppb or lower. Put another way, if the statistical evidence is based entirely on data from cities that had higher concentrations, the findings of this paper could, in principle, be consistent with an absence of mortal ity effects caused by a reduction from 75 ppb to 70 ppb. In the draft proposed rule, the EPA discounts epidemiological studies for precisely this reason

— that the effects estimated in these studies may be based on ozone variation at levels above those being considered for the new standards. This apparent inconsistency could be reconciled by re

- estimating the mortality effects using the same data as were used in the referenced studies, except restricting the samples to observations with ozone concentrations e xpected to occur under hypothetical standards of 70 or 75 ppb. This does not necessarily require dropping all observations with concentrations above these levels, but it could require dropping some of the extremely high values; a more thorough analysis wou ld be necessary for determining the appropriate sample

. Although the proposed rule must be published very soon, the EPA could complete this analysis in time for the final rule, and could announce its intention to do so in the proposed rule.

EPA Response: The derivation of effect estimates for specific segments of the ambient ozone range associated with the underlying study (Zanobetti and Schwartz 2008) would represent new research/analysis and is not within the scope of the current RIA

.

 In the final ru le RIA, conduct an ex post analysis of Tier 3 emissions reductions

Tier 2 and 3 vehicle standards, as well as sulfur requirements for fuels, are expected to substantially reduce NOx emissions from on

- road light

- duty vehicles. The RIA for Tier 2 projects annual NOx emissions reductions of 3 million tons by 2020 and the Tier 3 RIA projects an additional 329,000 tons of NOx reduced annually by 2030 (the Tier 3 figures include reductions from both light

- duty and heavy

- duty vehicle s). For comparison, light

- duty NOx emissions in 2000 were 3.5 million tons, and the Tier 2 RIA predicted 2020 NOx emissions of 4.5 million tons in the business

- as

- usual case.

These projected emissions reductions account for a large share of the reduction s needed to achieve 75 ppb. The EPA estimates that, to achieve 75 ppb, total NOx emissions would have to decrease from 13 million tons in 2011 to 7.4 million tons in 2025

— i.e., a decrease of 5.6 million tons. To achieve 70 ppb in 2025, NOx emissions would have to decrease by an additional 640,000 tons. The EPA projects

on

- road vehicle emissions reductions to account for 70 percent of the NOx emissions reduction needed to meet 75 ppb, and 63 percent of the emissions reductions needed to meet 70 ppb. Furtherm ore, light

- duty vehicles would account for most of the on

- road emissions reductions. Thus, Tier 2 and Tier 3 play crucial roles in meeting ozone standards of 70 or 75 ppb.

The projected emissions reductions under Tier 2 and Tier 3 depend on numerous assu mptions, such as future vehicle miles traveled and the turnover of the vehicle stock (because the tailpipe standards apply only to new vehicles). In principle, these assumptions could yield emissions projections that turn out to be lower or higher than act ual emissions. If Tier 2 and Tier 3 cause greater emissions reductions than projected, for instance, meeting any given ozone standard would be less costly than suggested by the RIA.

Given the importance of light

- duty emissions reductions for meeting ozone standards, an ex post analysis of the vehicle tailpipe standards would be valuable. Such an analysis could help improve the quality of the cost estimates for future PM and ozone NAAQS rulemakings, which will similarly rely on forecasts of vehicle emission s. Such an analysis would be consistent with Executive Order 13563, which requires agencies to conduct “periodic review of existing significant regulations.” The

## Summary of Interagency Working Comments on Draft Language under

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5 proposed rule could announce EPA’s intention to conduct such a retrospective analysis, and sol icit comment on the data that would be needed

.
EPA Response: The on

- road modeling performed for the ozone NAAQS p roposal RIA represents the best estimate of the impacts of Tier 2 and Tier 3 as of the time of the modeling, and the assumptions about these r ules reflected in this proposal are consistent with what was used for the Tier 3 final rule modeling released this past spring. Emission s reductions from these rules are not static within our models; rather EPA is continuously collecting data on vehicle e missions performance, vehicle activity, fleet turnover, etc., and subsequently updating our emissions models such that the impacts of rules in the model baseline reflect the most current assumptions available. For the ozone NAAQS f inal RIA , EPA plans to u se the latest available emissions modeling, which will include, for example, the most up

- to

- date versions of the AEO and MOVES (MOVES2014), to estimate the on

- road emissions. An ex

- post analysis is not necessary as the

ozone NAAQS final RIA modeling will already reflect our best estimates of Tier 2 and Tier 3 emission s impacts according to the most recent update of the model’s data and underlying assumptions. To estimate the impact of Tier 3 separately from Tier 2, EPA believes that the RIA that accompani es the Tier 3 FRM, specifically the technical support documentation, is sufficient to provide the quantification of the additional impact of Tier 3. The Tier 3 RIA was completed in March of 2013. More information on Tier 3 can be found here: http://www.e pa.gov/otaq/tier3.htm.

 Provide empirical support for the application of known controls

The known controls are applied in proportion to emissions from each sector. This assumption is simple and it could be validated by comparing with actual historical Sta te Implementation Plans for past NAAQS.

EPA Response: Th at is not correct. The known controls are not applied in proportion to emissions from each sector. Known controls are applied where emissions are known and where potential additional controls have been identified. For example, onroad mobile source emissions are stil l significant, but we did not apply any controls for this sector beyond the reductions that will be achieved by existing rules

.

 Discuss the effect of lower ozone standards on PM concentrations

Reducing NOx emissions to meet ozone standards also reduces PM concentrations because NOx is a precursor to PM. Consequently, the EPA includes the associated health benefits of lower PM concentrations when estimating the benefits of lower ozone concentrations. The inclusion of co

benefits is consistent with recent RIAs, such as the RIA for the proposed Clean Power Plan.

However, it may be inappropriate to attribute some of these PM decreases to the ozone standard. Instead, as below, a reduction in NOx emissions to meet the ozone standards makes it easier to attain the PM NAAQS. The NOx emissions reductions therefore result in lower abatement costs of reaching the PM NAAQS, and not greater health benefits.

The PM standards that were finalized in 2012 reduce the primary standard from 15 to 12 micrograms per cubic met er. To meet the standards, states with non

- attainment areas could require businesses to adopt a variety of technologies that would ultimately reduce PM concentrations, such as requiring

## Summary of Interagency Working Comments on Draft Language under

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6 technologies that reduce NOx emissions from power plants and technolog ies that reduce direct PM emissions like fabric filters. The estimated annual cost of meeting the lower PM standards is $53 to $350 million, and some of the costs include the adoption of technologies that reduce direct PM emissions from point sources other than power plants.

To the extent that states would otherwise use direct PM technologies to meet the PM standards, the ozone RIA may mischaracterize the effects of lower ozone standards on PM concentrations and public health. The average cost of PM techno logies such as electrostatic precipitators range from roughly $50 to $1,000 per metric ton of PM emissions. Consider a hypothetical area that is in non

attainment for the new PM standards and that would be in non

- attainment for an ozone standard of 70 ppb, but would be in attainment for 75 ppb. Suppose that, if the ozone standards were left at 75 ppb, the state would require sources in that area to install direct PM control technologies, at a cost of $50 to $1000 per metric ton of PM emissions. Alternativel y, consider what happens if the ozone standards are reduced to 70 ppb. The same state would require NOx emitters to install NOx control technologies sufficient to attain the ozone standard. But, these NOx technologies would also reduce PM levels, which wou ld effectively mean that the state does not have to impose such stringent PM technology requirements than if the NOx technologies had not been installed. Consequently, the lower ozone standard causes ozone levels to fall, but does not cause PM levels to fa ll by as much as reported in the RIA. Therefore, the PM co

- benefits would not be as large as reported. However, because the ozone standard would obviate the need to install direct PM technologies, there would be real cost savings that are also not included in the RIA.

In short, by not taking the 2012 PM standards into account, the ozone RIA overstates the health benefits of tighter ozone standards, and simultaneously understates the cost savings. The first effect causes net benefits to be over

- estimated, a nd the second causes net benefits to be under

- estimated. Because the direct PM technologies are highly cost effective (meaning that the value of the health benefits from lower PM exceeds the cost of PM abatement), the magnitude of the under

- estimate in the ozone RIA likely exceeds the over

- estimate, meaning that net benefits in the ozone RIA are probably over

- estimated. The ozone RIA should acknowledge and discuss these issues, and ideally account for them in the RIA for the final standards.

EPA Response:

 EPA added a footnote to relevant discussion in Chapter 1, Section 1.3.2

 EPA added a footnote to relevant discussion in the Overview section of Chapter 4

 There were no additional NOx controls applied in the PM 2.5 NAAQS RIA and therefore there would be little to no impact on the controls selected as part of this analysis. In addition, the only geographic areas that exceed the alternative oz one standard levels analyzed in this RIA and in the 2012 PM 2.5 NAAQS RIA are in California. The attainment dates for a new PM 2.5 NAAQS would likely precede attainment dates for a revised o zone NAAQS. While the 2012 PM 2.5 NAAQS RIA concluded that controls on directly emitted PM 2.5 were the most cost

effective on a$/ug basis, states may choose to adopt different control options. These options could include NOx controls. It is difficult to determine the impact on costs and benefits for this RIA, it is highly dependent upon the control measures that would be chosen and th e costs of these measures.

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7  Report net benefits by region

Figure ES

- 2 show s that only a few counties would exceed an ozone standard of 70 ppb. These counties (excluding the California counties with extreme non

- attainment status) are located in Texas and t he New York City area. If a lower standard is adopted, the non

- attainment group would expand to include scattered counties in other regions, such as the Southwest and Midwest.

Because non

- attainment areas are not geographically dispersed, the costs of re ducing the ozone standard from 75 ppb to 70 ppb would likely be heavily geographically concentrated, as indicated in Chapter 4. In the simulation the EPA uses to estimate compliance costs, standards below 75 ppb are met by applying technologies within a ce rtain fixed region surrounding the non

- attainment areas only.

The benefits of lower standards may be more widespread than costs, however, because of ozone transport. Application of the NOx abatement technologies near the non

- attainment areas would affect ozone and PM levels in other areas, including areas that already meet the PM and ozone standards. The reductions in ozone and PM concentrations would generate health benefits in those additional regions.

Because the costs may be more geographically conce ntrated than the benefits, the EPA should provide some geographic information about the costs, benefits, and net benefits. Of course, the geographic variation of the ozone benefits could be illustrated, but not the PM co

- benefits.

EPA Response:

• In the E xecutive Summary, EPA added new Tables ES

- 8 and ES

- 9 to provide information on the costs by geographic region for the U.S., except California in 2025 and a regional breakdown of benefits for 2025. Also in the Executive Summary

, EPA added new Tables ES

- 12 and ES

- 13 to provide information on the costs for California for post

- 2025 and a regional breakdown of benefits for post

- 2025.

• In Chapter 8, EPA added new Tables 8

- 3 and 8

- 5 to provide information on the costs by geographic region for the U.S., except California in 2025 and a regional breakdown of benefits for 2025 . Also in Chapter 8, EPA added new Tables 8

- 4 and 8

- 6 to provide information on the costs for California for pos t

- 2025 and a regional breakdown of benefits for post

- 2025.

• EPA added discussion of why it is not appropriate to present regional net benefits. See Section ES.2 of the Executive Summary and Chapter 8, Section 8.1.

 In the final rule RIA, validate projections of economic activity, vehicle use, and population

The forecasted emissions depend on future economic activity , vehicle use, and population, all of which are very difficult to predict. Future immigration patterns, for example, will influence t he population levels in the non

- attaining counties, and various immigration policies could alter these flows dramatically. It would be instructive to see how the computed health benefits change under different assumptions about immigration.

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8 More broadly, given the uncertainty in predicting these future outcomes and their centrality in computing the benefits, it would be helpful to present estimates of the confidence intervals surrounding these estimates. Chapter 5 contains a long discussion of uncertainty about the concentration

- response function and other issues in the academic literature that affect how the EPA estimates the effect of ozone concentrations on health. However, projections of population, VMT, and economic activity play an important role in e stimating the overall health benefits because a) they determine the extent of pollution reductions that will be needed to meet each level of the proposed NAAQS and b) they affect the spatial distribution of the population, which in turn affects benefits be cause ozone concentrations do not decrease uniformly across regions.

Vehicle miles travelled (VMT), for instance, has been declining in recent years despite earlier projections that they would continue to rise. These sorts of forecast errors are unavoida ble, but a measure of how this uncertainty is contributing to uncertainty in benefits would make the resulting values easier to interpret. Like the uncertainty in the PM health benefits, it would be straightforward to measure or estimate this form of uncer tainty based on a statistical model predicting VMT as a function of factors such as vehicle fuel economy, income, population, etc. (see, for example, research by Ken Small and others cited in the CAFE RIA). Error in the VMT forecast would then have to be
p ropagated through the analysis, requiring say several hundred runs to generate confidence intervals. As a first step, it may be desirable to assess the effect of VMT uncertainty and immigration/population uncertainty independently of other sources of uncer tainty.

EPA Response:

• EPA’s estimates of future vehicle miles traveled (VMT) used the latest available version of AE0 (AEO2013 at the time of the modeling) for the ozone NAAQS p roposal RIA . For the ozone NAAQS f

inal RIA , EPA plans to use updated VMT and vehicle population for the base year (2011) and the most current version of the AEO for future projections. Given that we use VMT projections from AEO and we do not use a sta tistical model to forecast VMT, it is not straightforward or feasible to conduc t an uncertainty analysis on these modeling inputs.

• We do address uncertainty related to population projections in Appendix 5A, Table 5A

- 1. There we state that: “ Comparisons using historical census data show that population projections are ±5% national ly, but projection accuracy can vary by locality. Historical error for Woods & Poole’s population projections has been ±8.1% for county

- level projections and ±4.1% for states (Woods and Poole, 2012). The magnitude of impact on total monetized benefits depe nds on the specific location where PM is reduced. ”

 In the final rule RIA, provide a clearer sense of the nature of unknown costs by including examples of previously unknown technologies and conducting a simple case study

The EPA defines two categories o f emissions control technologies : “ known ” and “ unknown. ” The results show that unknown controls play an increasingly important role as the standards are reduced from 70 ppb to 60 ppb and the known controls are exhausted. The unknown controls also account f or all of the emissions reductions for California. Furthermore, the EPA argues in Chapter 7 that technological change will cause new technologies to emerge that are not currently “known”.

This has generated public criticism that the RIA relies on future technological change that is not guaranteed to happen, and fueled public misunderstanding of the term “unknown,” which suggests to

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9 the uninitiated that all of these technologies are literally unknown and yet to be invented. The importance of the unknown co ntrols in total costs creates two issues: first, the cost estimates are highly uncertain; and second, following from the first, the cost estimates are much more exposed to public criticism than if all of the costs were known.

The EPA provides a few examples of unknown controls that could be used in practice, such as fuel switching, but the EPA does not provide any sense of whether these approaches would be quantitatively important. To strengthen this argument, the EPA could pro vide further discussion and analysis to address these issues in the final rule. First, the EPA could describe technologies that are now known (i.e., at the time of the rulemaking) that were unknown in the 2010 RIA. Table 7

- 4 partly addresses this issue, bu t the analysis could be sharper. For example, many of the technologies that are described in the Tier 3 RIA were unknown technologies in the 2010 RIA. The EPA could quantify the NOx emissions reductions that these technologies would yield under Tier 3. Thi s quantity may turn out to be a significant share of the unknown costs in the previous RIA. This comparison of Tier 3 reductions and previously unknown reductions would provide a clearer sense to the public that the term unknown technologies does not mean that the mobile source technologies do not exist, just that they have yet been part of an existing federal regulation. So, in other words, if the Tier 3 technologies were somehow known at the time of the previous NAAQS RIA, the share of known costs would h ave been much larger, and the overall cost estimates much smaller, than was presented in that RIA. EPA makes this point qualitatively, but providing some quantitative estimates would help the public understand the practical meaning of the term unknown tech nologies.

Second, the EPA could provide a simple case study of a hypothetical policy that would use “unknown” controls. For example, suppose a hypothetical state introduces a vehicle retirement program that aims at removing from the road older cars that h ave higher NOx emissions rates. The EPA could estimate the costs of such a policy using analysis reported in the existing literature, which would avoid the need for an extensive and time

- consuming cost

- benefit analysis. This would provide some additional i nformation for the public about the possible costs of implementing state SIPs, and reduce the mystery surrounding the term unknown technologies.

EPA Response:

 As discussed in Section 7.2, EPA is exploring how to leverage information in previous NAAQS RIAs to better understand how changes in emissions inventories, known control technologies, and the regulatory landscape influence baseline emissions. The objectiv e of the effort is to provide insights into what proportion of the unknown emissions reductions subsequently become known because of technical change and diffusion, unanticipated regulations, and improvements in tools and data. However, comparing data acr oss RIA cycles is challenging because of these changes, so the outcome of this investigation is uncertain.

 Because the analysis in the RIA is illustrative, the various actions sources perform to reduce emissions in the analysis result from hypothetical po licies. We continue to improve our understanding of emissions sources and potential control technologies in order to reduce the uncertainties surrounding the emissions reductions from unidentified technologies. EPA is investigating the ability to incorpo rate fuel switching measures into our tools for the final RIA.

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10  Clarify the implications of failing to account for NOx abatement technologies that would be used to meet other NAAQS

Chapter 1 states that “ The baseline for this analysis does not assume emi ssions controls that might be implemented to meet the other NAAQS for PM 2.5 , NO 2 , or SO 2 .” Presumably, the baseline also does not include full attainment with the other NAAQS. Therefore, under this assumption, the baseline accounts for NOx abatement techno logies that would be used to meet various national rules that are included in the baseline, such as the Clean Power Plan. But abatement technologies that would be used to meet the other NAAQS, whose costs and benefits have been estimated in previous rulema kings, would still be available to meet the ozone NAAQS. The argument provided in Chapter 1 for omitting these technologies from the baseline is that the data and modeling in the previous analyses are outdated.

At first glance, this assumption would appea r to cause costs to be under

- estimated because technologies that are assumed to be available for meeting the ozone standards would in fact already have been used to meet other standards. However, if those technologies were accounted for in the baseline, th en the NOx emissions reductions from those abatement technologies would also be accounted for, in which case less additional abatement would be needed to meet the ozone standards. Therefore, assuming that the other NAAQS are not included in the baseline, t hese two effects would cancel and omitting these technologies from the baseline would not affect the cost estimates. The RIA should explain this point to avoid confusing the public and also clarify that the other NAAQS are not included in the baseline for the purposes of estimating benefits, either.

EPA Response:

 EPA added a footnote to relevant discussion in Chapter 1, Section 1.3.2

 EPA added a footnote to relevant discussion in the Overview section of Chapter 4

 There were no additional NOx controls applied in the PM 2.5 NAAQS RIA and therefore there would be little to no impact on the controls selected as part of this analysis. In addition, the only geographic areas that exceed the alternative ozone standard levels analyzed in this RIA and in the 201 2 PM 2.5 NAAQS RIA are in California. The attainment dates for a new PM 2.5 NAAQS would likely precede attainment dates for a revised o zone NAAQS. While the 2012 PM 2.5 NAAQS RIA concluded that controls on directly emitted PM 2.5 were the most cost

effective on a$/ug basis, states may choose to adopt different control options. These options could include NOx controls. It is difficult to determine the impact on costs and benefits for this RIA, it is highly dependent upon the contro l measures that would be chosen and the costs of these measures.

 Provide evidence of the quality of the fit between ozone concentrations and NOx emissions

Chapter 3 describes a process for estimating the relationship between NOx emissions, VOC emissions , and ozone concentrations. Ozone sensitivity factors were estimated using the modeled response of ozone to changes in NOx and VOC emissions. The changes in NOx emissions needed to meet 60, 65, and 70 ppb were calculated using these sensitivity factors.

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11 A ccording to the equations in Chapter 3, the sensitivity factors are constants, in which case the ozone concentration is a linear function of NOx emissions. The discussion in Chapter 2 points out that NOx emissions have highly nonlinear effects on ozone con centrations, however. Therefore, the approach to estimating the emissions reductions needed to meet the lower ozone standards must be taken as an approximation. That’s fine given the modeling challenges to relaxing this assumption, but can the EPA provide some supporting evidence that the approximation is reasonable in the neighborhood of the relevant NOx emissions and ozone concentrations, and for the specific areas that are predicted to be in non

- attainment?

EPA Response: We acknowledge the uncertaintie s a ssociate with this approach in C hapter 3, however we believe this approximation to be appropriate for this type of analysis. We note that in many cases we do not use a single sensitivity factor, but instead have tiered steps of sensitivities based on m ultiple modeling runs at different levels of emission reductions in a single

area. This allows us to create piecewise linear relationships to account for nonlinearities in the system. Specifically, i n California and the Northeast, we modeled three increa sing levels of emissions reductions and interpolated between them. In the Central region we modeled two distinct levels of emissions reductions and interpolated between them. In the Southwest and Midwest we modeled a single emissions reduction and interp olated between base conditions and the reduced emissions l evel. This interpolation is appropr i a te since past modeling studies have shown that the linear response assumption is reasonable for emission perturbations up to approximately 30% (Hakami et al., 2003; Cohan et al, 2005). We have chosen our distinct modeled levels of emissions reductions such that each interpolated value is within 30% of an actual modeled level.

Cohan, D.S., Hakami, A., Hu, Y., Russell, A.G. (2005). Nonlinear response of ozone to emissions: Source apportionment and sensitivity analysis. Environmental Science & Technology, 39: 6739

- 674

Hakami, A., Odman, M.T., Russell, A.G. (2003). High

- order direct sensitivity analysis of multidimensional air quality models. Environmen tal Science & Technology, 37: 2442

- 2452.

 Executive Summary

Please present more detailed cost tables from Chapter 7 in this section. Suggest deleting “supplemental” in characterizing CA analysis.

EPA Response:

• EPA added a new Table ES

- 8 t o provide information on the costs by geographic region for the U.S., except California in 2025 , and a new Table ES

- 12 to provide information on the costs for California for post

- 2025.

• EPA will leave the “supplemental” characterization in the Executive Summary.

 Chapter 5

Would you clarify exactly what air quality modeling was done to assess the reduction in secondary PM formation?

## Summary of Interagency Working Comments on Draft Language under

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12 EPA Response: The approach used to model cobenefits for PM 2.5 is described in section 5.4.4, including detail on the method used to generate the dollar

- per

- ton estimates underlying the cobenefits simulation . That description includes detail on the air quality modeling underlying dollar

- per

- ton estimates ( note that we have enhanced that discussion in response to this comment

– see foot note #8 )

. We have also added Appendix 5E to the RIA which present s both the dollar

per

- ton estimates for each of the 17 sectors

, as well as NOx emissions estimates by sector used in generating the PM 2.5 cobenefit estimates.

To what extent were the income elasticities changed from previous rulemakings?

EPA Response: Income elasticities have not been modified (they are the same values as used in the 2010 Reconsideration).

5

- 53

– 5

- 54: We suggest that using Graff Zivin and Neidell (2012) to assess worke r productivity may not be appropriate without understanding the generalizability of the study results. We suggest that EPA use the previous discussion regarding the nascent literature on the effect of ozone on worker productivity.

EPA Response: We have a dded text requesting public comment on the use of Graff Zivin and Neidell (2012) to generate an updated estimate of worker productivity impacts (see section 5.6.3.4). We also state that we will consider public comments in determining whether to generate

an estimate based on the newer study as part of the final RIA.

 Chapter 7

Is EPA able to separate unknown emissions reductions into reductions from unknown sources but potentially known technology (e.g., area sources) vs unknown technology?
Has EPA considered incorporating existing regulations that might potentially govern area sources (e.g., energy efficiency regulations for ovens in commercial bakeries)? Please explain why the average cost of known controls for EGUs is declining from 70 ppb to 65

p pb? Please explain why the average cost of known controls for non

- EGU point sources and area sources appear to be largely constant with increasing stringency. Shouldn’t they be increasing? Why is $15,000/ton a reasonable estimate for unknown emission cost s when there are known technologies with costs that are significantly higher than $15,000/ton (e.g., $90,000/ton)? We Suggest articulating this point further. Does $15,000/ton depend on EPA’s assumption about likely compliance behavior? Suggest articulat ing learning by doing literature into learning by doing literature and technology diffusion literature (around 7

- 20). Suggest acknowledging that there are opportunity costs associated with regulation directed R&D vs the counterfactual R&D (around 7

- 18).
7

- 1: Please report costs associated with monitoring provisions of this NPRM.
7

- 9: Was PACE a pilot study scale survey?

EPA Response:

## Summary of Interagency Working Comments on Draft Language under

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13  EPA included the estimated costs (draft EPA ICR #0940) associated with the monitoring provisions in Chapter 9, Section 9.2.

 The cost trend is increasing for some sectors and decreasing for others. The variation is small for most sectors and depends on the sources that happen to be in the geographic areas of control. In general, the same set of controls is being applied at each level of the alternative standards analyzed. The primary difference in the control strategies for the alternative standards is the greater size of the geographic area of control as the stringency of the alternative standards increases. Overall for al l sectors as a whole, the average cost per ton is actually increasing slightly with increasing stringency of the alternative standard analyzed.

 EPA bolstered justification of $15,000/ton average cost in Section 7.3.1 for unknown emissions reductions with strengthened discussion of cost/per ton for ma jor NOx

- reducing regulations (Section 7.2.2)

, as well as reference to observed annualized NOx offset prices

.

 EPA enhanced discussion and citations of technical change to address technical change and diffusion (Section 7.2.3)

.

 EPA added discussion and citations relating to possibilities of environment

- related research and development crowding out other research and development (Section 7.2.3)

.

 EPA clarified PACE survey was a large scale survey (with approximat ely 20,000 plants bring surveyed) administered by the US Census Bureau (Section 7.2)

.

 Chapter 8

8

- 14: Wouldn’t economic growth also be reflected in the income growth as well?

EPA Response: Yes and that is reflected in the discussion in the right

- hand column in Table 8

- 4 (original table number, but revised to Table 8

- 8)

.

 Chapter 9

Section 9.2: Please include the monitoring related burden in this section. Table 9

- 1: Please provide a footnote clarifying what “other or multiracial” constitutes. Table 9

- 2: Please provide a footnote clarifying what “low income” constitutes.

EPA Response:

 EPA included the estimated costs (draft EPA ICR #0940) associated with the monitoring provisions in Chapter 9 , Section 9.2.

 EPA is unable to add definitions to Tables 9

- 1 and 9

- 2 at this time because this is language common to rulemakings across the Agency and cannot be unilaterally changed.

 Chapter 10

## Summary of Interagency Working Comments on Draft Language under

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14 Table 10

- 1: Are the results labor impacts per SCR? If so , please clarify. Also given the magnitude of the effects and the speculative nature of the inquiry, the commenter suggests deleting the upstream effects.

EPA Response: EPA will delete the discussion/results of upstream effects.

Table 10

- 3: Are the re sults labor impacts per boiler? If so, please clarify.

EPA Response: EPA will clarify that these results are labor impacts per boiler.

Table 10

- 4: Are the results labor impacts per cement kiln? If so, please clarify.

EPA Response: EPA will clarify that these results are labor impacts per cement kiln.

 Background Ozone

(2

- 11) 2.4 See suggested edit in red

. Natural sources of ozone precursor emissions such as wildfires, prescribed fire, lightning, and vegetation can lead to ozone formation by c hemical react ions with other natural sources

.
EPA Response: The EPA recognizes wildfires as being “natural,” but expanding natural fire to include prescribed fires is a policy decision that is outside the scope of this ozone NAAQS review rulemaking. The EPA has not incorporated this change.

(2

- 16) The additional 2007 modeling confirms that background ozone, while generally not approaching levels of the ozone standard, can comprise a considerable fraction of total seasonal mean ozone across the U.S (EPA, 2014c).

Some commenters note that it is relevant for the public and areas potentially affected by the standards for assessing the confidence in the model and calculation effort to know the areas that don’t meet this
gener ality. Please add a map to that reflects this fact

.
EPA Response: There are already multiple maps in Chapter 2 of this document and Chapter 2 of the Policy A ssessment
, which show various aspects of background ozone. We believe the existing maps are suffi cient in F igures 2

- 6 through 2

- 10 suffice to address this point.

(2

- 17) The Policy Assessment for the Review of the Ozone National Ambient Air Quality Standards (US EPA, 2014c) concluded that “anthropogenic sources within the U.S. are largely responsible for 4 th highest 8

- hour daily maximum O 3 concentrations” based on modeling using a 2007 base year and the two distinct modeling methodologies described above.

Some commenters note that 2007 is not an NEI year and that it would be helpful to provide a description of the approach taken for wildfire, prescribed fire and agricultural emissions in this
assessment.

EPA Response: We have added a brief discussion of the emissions used for the 2007 modeling and pointed the reader to the Policy Assessment for more details. In addition, we clarify that the

## Summary of Interagency Working Comments on Draft Language under

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15 2007 modeling is used to demonstrate current knowledge on background ozone but is not part of the RIA analysis to determine costs and benefits.

(2

- 17) These infrequent episodes usually occur in relation to a specific event, and occur more often in specific geographical locations, such as at high elevations or wildfire prone areas du ring the local dry

season.

Some commenters note that as the wildfire contribution is not constant and increasing significantly, the potential for these assumptions to change would be appropriate to document here.

EPA Response: EPA recognizes that clima te change may also influence future ozone concentrations through a variety of mechanisms, including more prevalent wildfires. To the extent that climate change does lead to higher ozone concentrations, there could potentially be a need for more stringent emissions reductions to counteract the higher ozone potential from warmer conditions, higher stagnation frequency, and greater wildfire activity. However, there are significant uncertainties regarding the precise location and timing of climate change impa cts on air quality. Generally, climate projections are most robust for periods at least several decades in the future because the forcing mechanisms that drive near

- term natural variability in climate patterns (e.g., El Nino, North American Oscillation) h ave substantially larger signals over short time spans than the driving forces related to long

- term climate change. It should be noted that international emissions, which may also influence future ozone concentrations, are also held constant in this analy sis based on a similar rationale regarding the significant uncertainty in estimating future levels. We have added this information to the RIA.

(3A

- 1) Biogenic and fire emissions were held constant for all emissions cases and were based on 2011

- specific d ata. Table 3

- 1 shows the modeled 2011 and 2025 NO X and VOC emissions by sector.

Please specify what types of fire is being discussed here. Based on the commenter’s understanding of the RIA modeling, this used the 2011 National Emission Inventory and inclu ded the full fire inventory comprised of wildfire, prescribed fire and agricultural burning for both base case background and held constant as background for the 2025 projection. The Fires category is included in the Table 3

- 1 which we assume reflects cont rollable sources as we don’t see the biogenic category there. Why is fire in this table? The trends in increasing wildfire and temperature appear not to be considered here. With these trends as well as general temperature effect on ozone production stat ed elsewhere, please add some discussion of the potential of these factors leading to uncertainty in the outcome and background. Increasing temperature will also affect biogenic emissions as well and should be considered as increased uncertainty which cou ld lead to chronic nonattainment.

EPA Response:

 We have updated Table 3

- 1 so that is now specifies that both wild and prescribed fires are included in the fires sector.

 We have updated Table 3

- 1 to include biogenic emissions so that it now includes al l modeled U

. S

. emissions (both from “background” sources and from sources that are controlled to meet various levels of the standard).

## Summary of Interagency Working Comments on Draft Language under

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16  Table 3

- 1 summarizes all U

. S

. emission s included in the modeling

, while Table 3

- 3 summarizes only the emissions sectors for which controls were applied to meet various standard levels. Additional text has been added to C hapter 3 to clarify this point.

(3A

- 1) A summary of total Anthropogenic NO x and VOC emissions by region from the 2025 base case and explicit emissions control cases is given in Table 3

- 3.

In the table it is footnoted that fire emissions are omitted. Won’t this emission exclusion affect the background? That will affect the cos ts of meeting the control scenario.

EPA Response: As stated above, fires are included in the modeling, however we do not “control” fires in this analysis so we did not perform any emissions sensitivities on fires. We have clarified that Table 3

- 1 shows all modeled U

. S

. emission s, while Table 3

- 3 only includes the subset of emissions that were evaluated for controls.

(3A

- 55) A variety of influences including transport from California and other regional transport, cross

border pollution from Mexico, and e xceptional events (e.g., wildfires and stratospheric intrusions) could contribute to ozone concentrations at the 26 sites. Each of these contributors is described further below, along with the Clean Air Act provisions that offer varying degrees of regulato ry relief. The commenter’s understanding of the RIA modeling is that it used the 2011 National Emission Inventory and included the full fire inventory comprised of wildfire, prescribed fire and agricultural burning for both base case background and held c onstant as background for the 2025 projection. If this is correct, this sentence should include discussion of this assumption.

EPA Response: The commenter’s assumption is correct

. Please see responses above about the reasons for holding fire emiss ions constant from 2011 to 2025.



###  Comparison of Baseline Emissions and Controls across Ozone NAAQS RIAs from 1997 to 2014 (7

- 12) 7.2.2

While each ozone NAAQS analysis since 1997 has required at least some emissions reductions from controls that were unkn own at the time of the analysis, evidence suggests that over time new information on exogenous factors affecting baseline emissions and emissions controls becomes available that can shift emissions reductions from the unknown to the known category. However , that is limited as the standard gets closer to background levels in each county. The closer the standard is to background levels, the less ability state planners will have to maintain attainment with the standards. For those counties out of attainment primarily due to background levels, it will become progressively more difficult to achieve compliance with known or unknown controls due to lack of sources to regulate.

(7

- 18) One factor to consider is the degree to which a particular sector is likely to be close to fully controlled, e.g., in comparing existing emissions with uncontrolled emissions levels, is the percent of control close to 100 percent? In those cases, achieving a dditional reductions through technological change is likely to be more difficult and costly, because the benefits of investment in those technologies is smaller, due to smaller remaining potential for abatement. As mentioned earlier, the tighter the stand ard is relative to background levels, the less potential technological advances will provide to state planners as they develop implementation plans to demonstrate how they will come into compliance with the standards. In some cases, when the contribution of sources to emission

## Summary of Interagency Working Comments on Draft Language under

EO12866/13563 Interagency Review. Subject to Further Policy Review.

17 levels in excess of the standard is insignificant compared to background levels from natural sources (wildfires and prescribed fires) or from international emissions, the assumption of unknown controls to achieve compliance may be un realistic. In those cases, chronic nonattainment with the standards may become the norm.

(7

- 23) See suggested edit in red

... As the EPA continuously improves its data and tools, we expect to better characterize the currently unobserved pieces of the MACC. I n addition, EPA will include consideration of the number of identifiable sources that may be controlled relative to background levels as a contravening factor in how the MACC may be shifted outwards with technological change. The costs of control (known o r unknown) will become steeper the closer the standards is set relative to uncontrollable background levels. As a result of our consideration of these complexities, we are currently unable to quantitatively predict future shifts in the abatement supply cu rve because many factors are intertwined and data are incomplete or highly uncertain.

(7

- 25) See suggested edit in red

.... The hybrid cost methodology assumed increasing marginal costs of control along an upward

- sloping marginal cost curve. The hybrid appro ach assumed the rate of increase in the marginal costs of abatement is proportional to the weighted ratio of the amount of abatement using identified controls to the remaining needed abatement using unidentified controls. 1 Under this approach, the relativ e costs of unspecified controls in different geographic areas reflect the expectation that average per

- ton control costs are likely to be higher in areas needing a higher ratio of emission reductions from unspecified and known controls. However, the weight , which reflects the anticipated degree of difficulty of achieving needed emissions reductions, and the ratios that informed the slope of the marginal abatement cost curve in previous NAAQS analyses were strong assumptions that have not been empirically te sted. U ntil now, EPA has not considered the relationship between the degree to which the standard is set relative to the background levels in a county. While similar, that is slightly different than our previous consideration of how many tons of reductio ns were needed from unknown relative to known controls. We now weight the hybrid costs on the percentage of emissions from known sources relative to background. The logic being that in nonattainment counties that have a high percentage of emissions comin g from uncontrollable background sources relative to all other sources, the costs of control will be extremely high.

(7

- 27) See suggested edit in red

.... Because of this uncertainty, we use alternative assumptions of the average cost in the Appendix, a first sensitivity analysis using an assumed cost of $10,000 per ton and a second sensitivity analysis using an assumed $20,000 per ton. 2 Then using the ratio of all known source contributions relative to uncontrollable background sources, we adjust the $20,000 per ton upper bound upwards to reflect the difficulty some counties may encounter in meeting attainment when there simply are not ve ry many controllable sources relative to uncontrollable sources. This range is inclusive of the annualized NOx offset prices observed in recent years in the areas likely to need unknown controls to achieve the proposed standard, and if anything, suggests the central estimate of 15K is conservative.

1 See , for example , Section 7.2 and Appendix &.A.2 is the December 2012 RIA for the final PM NAAQS, available

at http://www.epa.gov/ttn/ecas/regdata/RIAs/finalria.pdf

.

2 As shown in Section 7.1, we also performed a similar analysis for VOC controls which indicated that about 52 percent of VOC controls available in the analysis for less than $15,000 per ton, with an a verage of about $12,000 per ton. While a limited amount of extrapolated VOC emissions reductions were needed for the 60 ppb alternative level for the East (41,000 tons), we decided to use the same $15,000 per ton (with $10,000 and $20,000 per ton for the s ensitivity analysis) for VOC controls for simplicity.

## Summary of Interagency Working Comments on Draft Language under

EO12866/13563 Interagency Review. Subject to Further Policy Review.

18 (7

- 31) See suggested addition below in red

.... 4. Emission Reductions Needed Beyond Known Controls : Less emission reductions needed beyond known controls applied in this analysis (keeping costing methodology constant, fixed cost approach) due to the increased application of known control measures mentioned above.

5. Proportion of known sources to uncontrollable background levels: for the upper bound the proportion of known source contributions to uncontrollabl e background sources was considered as a means to reflect the difficulty in demonstrating attainment when the standard is set close to the background levels in that county.

EPA Response: EPA does not think it is analytically appropriate to use the proport ion of known emissions sources to uncontrollable background levels to inform cost estimates for emissions reductions from unidentified controls. This suggestion is quite similar to assuming costs are a function of the ratio between unknown and known emiss ions reductions used in previous RIAs. The ratio

- based approach assumed the rate of increase in abatement costs is proportional to the weighted ratio of the amount of abatement using identified controls to the remaining needed abatement using unidentified controls. As discussed in Section 7.3.1 of the RIA, the weight, which reflects the anticipated degree of difficulty of achieving needed emissions reductions, and the ratios that informed the slope of the marginal abatement cost curve in previous NAAQS

an alyses were strong assumptions that have not been empirically tested. Incorporating the remaining anthropogenic emissions within this weighted ratio would add substantial new uncertainties to the approach.

 Can EPA please clarify why there is not much difference between the health benefit values at 3% and 7%?

EPA Response: Dollar b enefit estimat es are driven primarily by projected reductions in PM 2.5 - related and ozone

- related mortality. PM 2.5 - related long

- term mortality estimates are based on the appli cation of a 20

- year segmented lag structure (see section 5.6.4.1 ) which has a substantial fraction (80%) of mortality occurring within the first five years. Consequently, differences in the social discount rate have a small impact on monetization of this e ndpoint. In addition, the fraction of mortality associated with reductions in ozone is based on short

- term exposure modeling and consequently all of the reductions are assumed to occur in the same initial year (and for that reason, differences in social di scount rates do not have any impact at all).

 When EPA discusses the proposed decision on the secondary NAAQS, rather than phrasing the proposed level as “within a range identical to the proposed range for the primary standard,” why doesn’t EPA instead re fer to the numeric range (65 to 70)? This may strengthen the agency’s case that the proposed secondary standard reflects a careful step

- by

- step analysis of whether a given 8

- hour level (65

- 70) can achieve the appropriate seasonal/cumulative average outcom e and may help avoid the misimpression that EPA is trying to achieve a pre

- determined outcome of not setting a separate secondary standard.

EPA Response: In the Executive Summary and Chapter 1, we changed the language about the proposed level of the secondary standard to be consistent with the comment received on and the changes made in the rule preamble.

## Summary of Interagency Working Comments on Draft Language under

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19  Page 5

- 5 (top of page)

– EPA states that causal a nd likely causal relationships were quantified with confidence. It may be helpful to provide a few sentences explaining how “suggestive” relationships were handled in analysis. Additionally, in Table 5

- 3, it would improve transparency and readability if EP A were to provide basic information about the causality statement (causal, likely causal, suggestive) determined for each health effect.

EPA Response: As noted in the footnote to Table 5

- 3, endpoints with a “suggestive” classification for causality in th e ISA are only evaluated qualitatively and are not included in the quantitative analysis of benefits. Only those endpoints given a “causal” or “likely causal” classification in the ISA are included in the quantitative assessment of incidence reductions and associated dollar benefits (see section 5.2

– note, we have corrected an error in the draft text which said that we included endpoints with a suggestive causal classification in the quantitative analysis

– that is not correct. Only endpoints with causal o r likely causal classification were included ).

 Section 8, Comparison of Costs and Benefits, seems to focus largely on costs and is very light on a discussion of health benefits. Section 8.4 in particular, Key Observations from the Analysis, does not inclu de any information about health benefits. Minor comment: every page in Section 8 is number page 8

- 14. This should be corrected.

EPA Response : We h ave added a bullet summarizing benefits to the overall conclusions (this should balance that aspect of the pre sentation in section 8).

Additional comments on RIA

 A question was asked about why average costs may decrease when analyzing lower alternative standards.

EPA Response: The cost trend is increasing for some sectors and decreasing for others. The variation is small for most sectors and depends on the sources that happen to be in the geographic areas of control. In general, the same set of controls is being applied at each level of the alternative standards analyzed. The primary difference in the co ntrol strategies for the alternative standards is the greater size of the geographic area of control as the stringency of the alternative standards increases. Overall for all sectors as a whole, the average cost per ton is actually increasing slightly with increasing stringency of the alternative standard analyzed.

 A question was asked about what is included in the Open Burning control measure, and specifically, does it include Prescribed Burning ?

EPA Response: The Open Burning Control Measure is for Yard Waste and Land Clearing Debris. It consists of periodic daily bans on burning such waste, as the predicted ozone levels indicate that such burning activities should be postponed. This control measure does NOT include any Prescribed Burning activities. A d escription of this control measure will be added to the Chapter 4 Appendix where control measures are listed.

 A question was asked about the minimum size of small sources included in the control strategy, specifically about sources as small as emitting 1 ton/yr being included?

## Summary of Interagency Working Comments on Draft Language under

EO12866/13563 Interagency Review. Subject to Further Policy Review.

20 EPA Response: We identified an error in Table 7

- 4 in Chapter 7 that may have led to this confusion. We will correct the information presented in the T able. The minimum source size to which we applied controls is 25 tons/yr for NOx and 25 tons/yr for VOC. We also used a minimum emissions reduction constraint of 5 tons/yr for NOx and 1 ton/yr for VOC (i.e., we did not apply controls to sources where the control would result in a reduction less than 1 ton/yr of VOC). Nonpoint (area) so urce emissions (e.g., dry cleaners, woodstoves, burning of yard waste) are estimated on a county

- wide basis because these sources are generally too small and/or too numerous to estimate emissions for individual sources. For the nonpoint source sector, we a pplied the control constraints mentioned above to the county

- wide emissions. For example, we did not apply controls to counties where the NOx emissions from open burning of yard waste was less than 25 tons/yr, or where the NOx control would result in emiss ion s reductions of less than 5 tons/yr. This information will be added to the discussion of controls in the Chapter 4 Appendix.