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# OAR Box 1778 Prepped byOllie Stewart



### Document

Number: 

# 67 ) ll-C- 9
Docket Number: 

# A-90-0 6

Printed 10/28/20089:50:54 AM

Sheet 67 of 276P. 2

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. * ^!£ 7 ? UNITE D STATE S ENVIRONMENTA L PROTECTIO N AGENC Y ^ WASHINGTON

. D.C

. 20450 f l Iplff p fE\. 

### OC T 2 6 

### 199 0

Th e Honorabl e Michae l Boski n^ . • . Chairma nn ; ! i Counci l o f Economi c Adviser s '< » MA Y- 7 Executiv e Offic e o f th e Presiden t < Washington f D.C . 2050 0 Dea r Michael : j j :-;•', ry

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A s yo uprocee dwit hth e analysi s th e Presiden t ha s requeste d o f th e economi c cost s o f th e Clea nAi r Ac t conferenc e report , I wante dt o assis t thi s proces s by communicatin g t o yo uth e intentio n o f thi s Agenc y

wit hrespec t to implementatio no f th e Act . Any attemp t to calculat e th e cos t o f variou s provision s o f th e Ac t involve s some interpretatio no f how thos e provision s wil l b e implemente di nth e developmen t o f rule s andguidelines . I though t a clea r statemen t o f how w e intendt o procee dwoul dallo w yo ut o giv e th e Presiden t th e mos t accurat e pictur e possibl e o f th e Act' s economi c implications . A s a genera l matter , th e Agenc y intend s t o exercis e th e discretionar y

authorit y

whic hi t i s grante dunde r variou s section s i na manne r consisten t wit hth e principle s upo nwhic hth e President' s clea nAi r proposa l wa s based . Thi s mean s that , t o th e maximu m exten t mad e possibl e b y th e actua l statutor y language , we wil l mak e us e o f th e flexible , market-base dapproache s tha t ar e th e hallmar ko f th e President' s successfu l initiative . Fo r example , w e wil l attemp t i nth e rulemakin g proces s to mak e maximu m us e o f suc hconcept s a s bankin g andtrading , a s w e hav e don e bot h i nth e developmen t o f th e aci drai nproposa l an di nth e propose d Federa l Implementatio nPla nfo r California . Moreover , a s w e di ddurin g th e debat e o nth e bil l itself , w e wil l embrac e wher e eve r possibl e a performanc e standar dapproac h to achievin g ou r environmenta l objectives , rathe r tha nth e comman d an dcontro l approache s tha t hav e no t bee nsuccessfu l i nth e past . Whe nno t specificall y prohibite db

y th e statute , w e wil l attemp t i nou r decisionmakin g t o achiev e environmenta l objective s i nth e mos t cos t effectiv e wa y t o ensur e tha t ou r nationa l aspiration s fo r economi c growt har e no t compromised .P. 3 &

Ther e ar e a numbe r o f issue s o n whic hth e Administratio n a s

a whol e reache d consensu s during th e developmen t o f ou r proposa l an d th e legislativ e debat e o n th e bill
. I n som e cases , o f course , th e Congres s ha s reache d a somewha t differen t position , o n these , needles s t o say , w e wil l followth e law , including meeting statutor

ydeadlines
. Other s remai n subjec t t o interpretatio n i n th e rulemaking process . O n these , i t woul d b e ou r intentio n t o adop t a s th e basi s fo r regulator yan d administrativ e action s th e positio n reache d byth e Administratio n during th e clea n ai r debate . I n severa l instances , implementatio n o f th e Ac t wil l requir e determinatio n o f th e workability , feasibility , o r cos t o f variou s actions
. We , o f course , wil l wor k closel ywit hth e relevan t economi c an

d lin e agencies , suc ha s CEA , Treasury , OMB , Transportation , an

d Energy , i n th e desig n an d applicatio n o f suc h determinations
. Decision s relate d t o permitting an d enforcemen t ar e som e o f th e mos t importan t i n th e Act . W e hav e worke d i n th e developmen t o f th e legislatio n fo r a permitting an d enforcemen t regime tha t reduce s unnecessaryadministrativ e burden s fo r permittees
. I t i s ou r inten t t o implemen t th e provision s whic hhav e bee n enacte d wit h th e same goa l i n mind
. W e worke d t o develop a comprehensiv e permitting sectio n tha t reduce s redundan t paperwor k requirement s an d th e potentia l fo r "doubl e jeopardy " i n th e Agency' s permi t revie wprocess; - w e recogniz e tha t micromanagemen t b yEP Ao f permitting decision s i s unnecessaryan d likel yt o b e extremel y costly . I believ e tha t th e Clea n Ai r Ac t Amendmen t o f 199 0 i s a landmar k achievemen t fo r th e Presiden t whic hca n b e implemente d i n a waytha t i s consisten t wit hhi s principle s o f balance , flexibility , an

d suppor t fo r marke t mechanisms
. I hav e attache d t o thi s lette r a mor e detaile d statemen t o f ou r inten t i n implementing th e Act . I hop e i t i s helpfu l t o yo u a s yo u prepar e you r fina l cos t estimat e fo r th e President
. I loo k forwar d t o working wit hyo u a s th e Administratio n continue s t o promot e bot heconomi c growt han d environmenta l protection
. Sincerel yyours ,
Will i Attachmen tP. 4

1 . Wettina/Ne wSourc e Revie w—Wher e ther e i s legislative discretion , EPAwil l allo wsource s t o us e netting t o th e maximu m exten t possible , i n accordanc e wit hth e President' s origina l proposal . 2 . WEPCO/Genera l Modif 1 natio n Rule s —T o th e exten t permitte d b

ylaw , EPAvii } revis e th e Agency' s draf t interpretativ e rul e o n WEPC O withi n 4 month s t o confor mt r th e Administration' s recen t legislativ e proposal , a s indicate d i n Administratio n response s t o recen t querie s fromSenato r Ford . T o th e exten t permitte d b

ylaw , EP Awil l issu e * n interpretativ e ruling t o appl y th e sam e basi c principle s t o pollutio n contro l pvoyzcta undertake n t o mee t requirement s impose d pursuan t t o othe r title s o f th e bill
. 3 . Pilo t RegulatoryBudge t — T o th e exten t permitte d b y law , th e EP Awil l develop a n innovative pilo t progra m fo r a regulatorybudge t fo r CTG s (Contro l Technolog yGuidelines ) consisten t wit hCEA' s cos t analysis
. 4 . Permi t Progra

mImplementatio n an d RegulatoryBudge t —EPA wil l implemen t th e permi t progra mi n th e following ways : (a ) us e th e discretio n o f th e bil l t o phase-i n th e permi t progra mstarting wit hmajo r sources ; (b ) establis ha policyo f relianc e o n revie w o f stat e permi t programs , rathe r tha n th e individua l permi t veto , a s th e primaryoversigh t tool ; an d (c ) ensur e tha t modification s t o instal l pollutio n control s d o no t i n an d o f themselve s trigge r th e issuanc e o f a ne wpermit , t o th e exten t allowe d b ylaw . 5 . NO x Contro l i n Nonattainmen t Area s — Befor e requiring NO x control s i n nonattainmen t areas , th e EPAwil l provid e area s wit h a fai r opportunit yt o sho wtha t thes e control s wil l no t contribut e t o ozon e attainment , an d thu s shoul d ho t b e required
. 6 . Realisti c Assumption s fo r Estimating Ris k —EPAwil l continu e t o ensur e tha t i t use s realisti c assumption s i n it s ris k models , including accurat e exposur e modeling an d maximu

mus e o f actua l data . Whe n allowe d b ylaw , EPAwil l bas e ris k assessmen t o n actua l dat a an

d reasonabl e assumption s t o th e maximiu n exten t possible
. 7 . TO P Dow

n BAC T PolicyRevisio n —EP Awil l undertak e a rulemaking o n it s BAC T policyo n an expedite d basi s t o replac e curren t guidelines
. Th e rulemaking , t o b e propose d t o OMB withi n 12 0 days , wil l b e base d o n a cost-effectiv e approach , an d th e curren t guideline s wil l no t b e binding precedent . 8 . Utilit yMAC T Decisio n —EPAwil l bas e it s utilit yMAC T decisio n fo r particulate s an d mercuryo n th e stud yundertake n pursuan t t o statutoryrequirements
.P. 5

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