From: Robin Moran/AA/USEPA/US 

To: "Achanta, Chandana L." <Chandana_L._Achanta@omb.eop.gov> 

Cc: William Charmley/AA/USEPA/US@EPA, Ed Nam/AA/USEPA/US@EPA, 

james.tamm@dot.gov, rebecca.yoon@dot.gov, Elizabeth Kopits/DC/USEPA/US@EPA, 

Paul Balserak/DC/USEPA/US@EPA 

Date: 03/25/2010 05:59 PM 

Subjec

t: 

EPA's RIA Executive Summary 

Chandana, here is EPA's Executive Summary for the RIA. 

Robin Moran 

Senior Policy Advisor 

Assessment and Standards Division 

U.S. EPA, Office of Transportation and Air Quality 

2000 Traverwood Dr. 

Ann Arbor, MI 48105 

(734) 214-4781 

(734) 214-4821 (fax) 

[attachment "Executive summary - RIA - to OMB 3-25-10.doc" deleted by Tad 

Wysor/AA/USEPA/US]
Executive Summary 

Executive Summary 

The Environmental Protection Agency (EPA) and the National Highway Traffic Safety 

Administration (NHTSA) are issuing a joint final rulemaking to establish new standards for 

light-duty highway vehicles that will reduce greenhouse gas emissions (GHG) and improve fuel 

economy. The joint rulemaking is consistent with the National Fuel Efficiency Policy 

announced by President Obama on May 19, 2009, responding to the country’s critical need to 

address global climate change and to reduce oil consumption. EPA is finalizing greenhouse gas 

emissions standards under the Clean Air Act, and NHTSA is finalizing Corporate Average Fuel 

Economy standards under the Energy Policy and Conservation Act (EPCA), as amended. These 

standards apply to passenger cars, light-duty trucks, and medium-duty passenger vehicles, 

covering model years (MY) 2012 through 2016. The standards will require these vehicles to 

meet an estimated combined average emissions level of 250 grams of CO2 per mile in MY 2016 

under EPA’s GHG program, and 34.1 mpg in MY 2016 under NHTSA’s CAFE program and 

represent a harmonized and consistent national program (National Program). These standards are 

designed such that compliance can be achieved with a single national vehicle fleet whose 

emissions and fuel economy performance improves year over year. The National Program will 

result in approximately 960 million metric tons of CO2 emission reductions and approximately 

1.8 billion barrels of oil savings over the lifetime of vehicles sold in model years 2012 through 

2016. 

Mobile sources are significant contributors to air pollutant emissions (both GHG and non-GHG) 

across the country, internationally, and into the future. The Agency has determined that these 

emissions cause or contribute to air pollution which may reasonably be anticipated to endanger 

public health or welfare, and is therefore establishing standards to control these emissions as 

required by section 202 (a) of the Clean Air Act.1

 The health- and environmentally-related 

effects associated with these emissions are a classic example of an externality-related market 

failure. An externality occurs when one party's actions impose uncompensated costs on another 

party. EPA’s final rule will deliver additional environmental and energy benefits, as well as cost 

savings, on a nationwide basis that would likely not be available if the rule were not in place. 

Table 1 presents estimated annual net benefits for the indicated calendar years. The table also 

shows the net present values of those net benefits for the calendar years 2012-2050 using both a 

                                                           

1

 “Technical Support Document for Endangerment and Cause or Contribute Findings for Greenhouse Gases 

Under Section 202(a) of the Clean Air Act” Docket: EPA-HQ-OAR-2009-0472-11292, 

http://epa.gov/climatechange/endangerment.html. See also State of Massachusetts v. EPA, 549 U.S. 497, 533 ("If 

EPA makes a finding of endangerment, the Clean Air Act requires the agency to regulate emissions of the 

deleterious pollutant from new motor vehicles"). 

1 
Executive Summary 

3 percent and a 7 percent discount rate. The table includes the benefits of reduced GHG 

emissions—and consequently the annual net benefits—for each of four social cost of carbon 

(SCC) values considered by EPA (please refer to Chapter 7 of this RIA for a discussion of the 

four SCC values). As noted in the SCC TSD, the models used to estimate SCC may not capture 

the economic effects of all possible adverse consequences of climate change and may therefore 

lead to underestimates of the SCC. Note that the quantified annual costs shown in Table 1 are 

negative because fuel savings are included. Fuel savings are considered as negative costs (i.e., 

positive benefits) of the vehicle program. The fuel savings outweigh the costs associated with 

the addition of new technology and, therefore, the vehicle program costs are negative. 

Table 1: Quantified Net Benefits Associated with the Light-Duty Vehicle GHG Programa

(Millions of 2007 dollars) 

2020 2030 2040 2050 NPV, 3% NPV, 7% 

Quantified Annual

Costs

-$20,100 -$64,000 -$101,900 -$152,200 -$1,199,700 -$480,700

Quantified Annual Benefits at each assumed SCC valueb

Avg SCC at 5% $7,400 $17,500 $25,100 $34,700 $312,000 $162,400

Avg SCC at 3% $10,200 $23,700 $34,500 $48,500 $454,200 $304,600

Avg SCC at 2.5% $12,300 $28,800 $41,500 $57,500 $577,100 $427,500

95th percentile SCC 

at 3% $17,500 $41,800 $63,500 $89,500 $816,000 $666,400

Quantified Net Benefits at each assumed SCC value 

Avg SCC at 5% $27,500 $81,500 $127,000 $186,900 $1,511,700 $643,100

Avg SCC at 3% $30,300 $87,700 $136,400 $200,700 $1,653,900 $785,300

Avg SCC at 2.5% $32,400 $92,800 $143,400 $209,700 $1,776,800 $908,200

95th percentile SCC 

at 3% $37,600 $105,800 $165,400 $241,700 $2,015,700 $1,147,100

a

Quantified annual costs are shown as negative here because fuel savings are included.  Fuel savings are

considered as negative costs (i.e., positive benefits) of the vehicle program.  The fuel savings outweigh the

costs associated with the addition of new technology and, therefore, the vehicle program costs are negative.  

The fuel impacts included here were calculated using pre‐tax fuel prices. b Monetized GHG benefits exclude the value of reductions in non‐CO2 GHG emissions (HFC, CH4 and N2O)

expected under this final rule.  Although EPA has not monetized the benefits of reductions in these non‐CO2

emissions, the value of these reductions should not be interpreted as zero.  Rather, the reductions in non‐CO2

GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2.  The SCC TSD notes the

difference between the social cost of non‐CO2 emissions and CO2 emissions, and specifies a goal to develop

methods to value non‐CO2 emissions in future analyses..  Also, Section 7.5 notes that SCC increases over time.  

Corresponding to the years in this table, the SCC estimates range as follows:  for Average SCC at 5%:  $5‐$16;

for Average SCC at 3%:  $21‐$45; for Average SCC at 2.5%:  $35‐$65; and for 95th percentile SCC at 3%:  $65‐

$136.  Section 7.5 also presents these SCC estimates.  Finally, net present value of reduced GHG emissions is

calculated differently than other benefits.  The same discount rate used to discount the value of damages from

future emissions (SCC at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.  

2 
Executive Summary 

Refer to the SCC TSD for more detail.     

This Regulatory Impact Analysis (RIA) contains supporting documentation to the EPA 

rulemaking. NHTSA has prepared their own RIA in support of their rulemaking (this can be 

found in NHTSA’s docket for the rulemaking, NHTSA-2009-0059). While the two rulemakings 

are similar, there are also differences in the analyses that require separate discussion. This is 

largely because EPA and NHTSA act under different statutes. EPA’s authority comes under the 

Clean Air Act, and NHTSA’s authority comes under EPCA, and each statute has somewhat 

different requirements and flexibilities. As a result, each agency has followed a unique approach 

where warranted by these differences. Where each agency has followed the same approach—

e.g., development of technology costs and effectiveness—the supporting documentation is 

contained in the joint Technical Support Document (joint TSD can be found in EPA’s docket 

EPA-HQ-OAR-2009-0472). Therefore, this RIA should be viewed as a companion document to 

the Joint TSD and the two documents together provide the details of EPA’s technical analysis in 

support of its rulemaking. 

While NHTSA and EPA each modeled their respective regulatory programs under the National 

Program, the analyses were generally consistent and featured similar parameters. EPA did not 

conduct an overall uncertainty analysis of the impacts associated with its regulatory program, 

though it did conduct uncertainty and sensitivity analyses of individual components of the 

analysis (e.g., uncertainty ranges associated with quantified and monetized non-GHG health 

impacts). NHTSA, however, conducted a Monte Carlo simulation of the uncertainty associated 

with its regulatory program. The focus of the simulation model was variation around the chosen 

uncertainty parameters and their resulting impact on the key output parameters, fuel savings, and 

net benefits. Among other parameters, NHTSA varied technology costs, technology 

effectiveness, fuel prices, the values of oil consumption externalities and the rebound effect. 

Because of the similarities between the two analyses, EPA references NHTSA RIA Chapter XII 

as indicative of the relative magnitude, uncertainty and sensitivities of parameters of the 

cost/benefit analysis.

This document contains the following; 

Chapter 1: Technology Packages, Cost and Effectiveness. The details of the vehicle 

technology packages used as inputs to EPA’s Optimization Model for reducing Emissions of 

Greenhouse gases from Automobiles (OMEGA) are presented. These vehicle packages 

represent potential ways of meeting the CO2 stringency established by this rule and are the basis 

of the technology costs and effectiveness analyses discussed in Chapter 3 of the Joint TSD. This 

chapter also contains details on the lumped parameter model, which is a major part of EPA’s 

determination of the effectiveness of these packages. 

3 
Executive Summary 

Chapter 2: Air Conditioning. EPA’s unique air conditioning (A/C) program is discussed. 

Details for this chapter include the A/C credit program and the related technology costs and 

effectiveness associated with new A/C systems. The A/C credit program allows manufacturers to 

earn credit for both direct and indirect CO2eq emissions. Direct emission credits are earned 

through reducing refrigerant leakage (as the current refrigerant, R-134a, has a very high global 

warming potential) from the A/C system. The amount of direct emission, or leakage, credit that a 

manufacturer can earn is determined by using a design-based method to calculate the yearly 

refrigerant leakage from a vehicle’s A/C system. This leakage value is then used to calculate a 

“grams-per-mile” credit, with allowances made for the global warming potential of the 

refrigerant. Indirect emission credits are earned through improving the efficiency of the A/C 

system, which reduces the amount of power required to operate the A/C system as well as the 

amount of CO2 emitted by the vehicle. The amount of indirect emission credit is determined by 

using a menu-based approach, where the inclusion of specific efficiency-improving components 

or design elements into a vehicle’s A/C system results in an assigned credit value. 

Chapter 3: Technical Basis of the Standards. This chapter contains two subchapters. In the 

first, EPA evaluates the stringency of the California Pavley 1 program but for a national 

standard. However, as further explained in the preamble, before being able to do so, technical 

analysis was necessary in order to be able to assess what would be an equivalent national new 

vehicle fleet-wide CO2 performance standards for model year 2016 which would result in the 

new vehicle fleet in the State of California having CO2 performance equal to the performance 

from the California Pavley 1 standards. This technical analysis is documented in this subchapter of the RIA. In the second subchapter, EPA discusses an analysis of the “footprint” 

approach EPA is using for establishing standards. 

Chapter 4: Results of Final and Alternative Standards. A conceptual overview of EPA’s 

OMEGA model and technology cost results for the program and alternative standards 

considered. For each manufacturer, EPA estimates the following achieved fleetwide CO2 levels 

and technology costs over the reference case, see Table 2. 

Table 2: Fleetwide Costs in 2016 

 Fleetwide Cost 

BMW $ 1,453 

Chrysler $ 1,329 

Ford $ 1,231 

Subaru $ 899 

General Motors $ 1,219 

Honda $ 575 

Hyundai $ 745 

Tata $ 984 

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Executive Summary 

Kia $ 594 

Mazda $ 808 

Daimler $ 1,343 

Mitsubishi $ 978 

Nissan $ 810 

Porsche $ 1,257 

Suzuki $ 937 

Toyota $ 455 

Volkswagen $ 1,694 

Total $ 948 

Key results of the alternative stringencies analyzed are presented in Table 3: 

Table 3: Key Results Per Reduction Scenarios of 4% and 6% Per Year 

Reduction 

Scenarios 

Industry 

achieved CO2 

level (g/mi) 

Average 

industry cost 

per vehicle 

4% per 

year 256.9 $883

6% per 

year 236.1 $1,343

Chapter 5: Emissions Impacts. This chapter contains the greenhouse gas and non-greenhouse 

gas emission impacts of this rule and includes the impact of credits. 

Greenhouse Emission Impacts of EPA’s Rulemaking

Table 4 shows reductions estimated from EPA’s GHG standards. The analyses assume a precontrol case of MY 2011 CAFE standards continuing indefinitely beyond 2011, and a postcontrol case in which MY 2016 standards continue indefinitely beyond 2016. 

Including the reductions from upstream emissions (fuel production and transport), total 

reductions are estimated to reach 307 MMTCO2eq (million metric tons of CO2 equivalent 

emissions) annually by 2030 (equivalent to a 21 percent reduction in U.S. car and light truck 

emissions as compared to the reference scenario), and grow to over 500 MMTCO2eq in 2050 as 

cleaner vehicles continue to come into the fleet (equivalent to a 23 percent reduction in U.S. car 

and light truck emissions relative to the control case that year). 

Table 4. Projected Net GHG Reductions (MMT CO2 Equivalent per year) 

Calendar Year: 2020 2030 2040 2050 

Net Reduction* 156.4 307.0 401.5 505.9 

5 
Executive Summary 

Net CO2 139.1 273.3 360.4 458.7 

Net other GHG 17.3 33.7 41.1 47.2 

Downstream Reduction 125.2 245.7 320.7 403.0

CO2 (excluding A/C) 101.2 199.5 263.2 335.1

A/C – indirect CO2 10.6 20.2 26.5 33.8

 A/C – direct HFCs 13.3 26.0 30.9 34.2

 CH4 (rebound effect) 0.0 0.0 0.0 0.0 

 N2O (rebound effect) 0.0 -0.1 -0.1 -0.1 

Upstream Reduction 31.2 61.3 80.8 102.9

CO2 27.2 53.5 70.6 89.9 

CH4 3.9 7.6 10.0 12.7 

N2O 0.1 0.3 0.3 0.4 

           * includes impacts of 10% VMT rebound rate  

Impacts of EPA’s Rulemaking on Emissions of Criteria and Toxic Pollutants

 The results of EPA’s analyses on the impacts of the program on annual criteria emissions are 

listed in Table 5. For all criteria pollutants the overall impact of the program will be relatively 

small compared to total U.S. inventories across all sectors. In 2030, EPA estimates the program 

will reduce total NOX, PM and SOX inventories by 0.1 to 0.8 percent and reduce the VOC 

inventory by 1.0 percent, while increasing the total national CO inventory by 0.6 percent. 

EPA estimates that the GHG program will result in small changes for toxic emissions compared 

to total U.S. inventories across all sectors, as listed in Table 6. In 2030, EPA estimates the 

program will reduce total benzene and 1,3 butadiene emissions by 0.1 to 0.3 percent. Total 

acrolein and formaldehyde emissions will increase by 0.1 percent. Acetaldehyde emissions will 

increase by 2.2 percent. 

Table 5. Annual Criteria Emission Impacts of Program (short tons) 

Total Impacts Upstream Impacts Downstream Impacts 

 2020 2030 2020 2030 2020 2030 

VOC -60,187 -115,542 -64,506 -126,749 4,318 11,207 

 % of total 

inventory -0.51% -1.01% -0.55% -1.11% 0.04% 0.01% 

CO 3,992 170,675 -6,165 -12,113 10,156 182,788 

 % of total 

inventory 0.01% 0.56% -0.02% -0.04% 0.01% 0.6% 

NOX -5,881 -21,763 -19,291 -37,905 13,410 16,143 

 % of total 

inventory -0.02 -0.07% -0.06% -0.12% 0.04% 0.05% 

PM2.5 -2,398 -4,564 -2,629 -5,165 231.0 602.3 

 % of total 

inventory -0.03% -0.05% -0.03% -0.06% 0.00% 0.01% 

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Executive Summary 

SOX -13,832 -27,443 -11,804 -23,194 -2,027 -4,249 

 % of total 

inventory -0.41% -0.82% -0.35% -0.69% -0.06% -0.13% 

Table 6. Annual Air Toxic Emission Impacts of Program (short tons) 

Total Impacts Upstream Impacts Downstream Impacts 

 2020 2030 2020 2030 2020 2030 

1,3-Butadiene -95 -21 -1.5 -3.0 -93.6 -18.1 

 % of total 

inventory -0.38% -0.10% -0.01% -0.01% -0.37% -0.09% 

Acetaldehyde 760 668 -6.8 -13.4 766.9 681.5 

 % of total 

inventory 2.26% 2.18% -0.02% -0.04% 2.28% 2.22% 

Acrolein 1 5 -0.9 -1.8 1.7 6.5 

 % of total 

inventory 0.01% 0.07% -0.01% -0.03% 0.03% 0.10% 

Benzene -890 -523 -139.6 -274.3 -750.0 -248.3 

 % of total 

inventory -0.48% -0.29% -0.08% -0.15% -0.40% -0.14% 

Formaldehyde -49 15 -51.4 -101.0 2.1 116.3 

 % of total 

inventory -0.06% 0.02% -0.06% -0.12% 0.00% 0.14% 

Chapter 6: Vehicle Program Costs Including Fuel Consumption Impacts. The program costs 

and fuel savings associated with EPA’s rulemaking. In Chapter 6, we present briefly some of the 

outputs of the OMEGA model (costs per vehicle) and how we use those outputs to estimate the 

annual costs (and fuel savings) of the program through 2050. We also present our cost per ton 

analysis showing the cost incurred for each ton of GHG reduced by the program. 

Chapter 7: Environmental and Health Impacts. This Chapter provides details on the non-GHG 

health and environmental impacts associated with criteria pollutants and air toxics. We also 

present the results of our non-GHG air quality modeling analysis and the quantified and 

monetized estimates of PM2.5- and ozone-related health impacts. Our air quality modeling 

indicates that the final standards have relatively little impact on ambient concentrations of 

modeled PM2.5, ozone, and air toxics (See Chapter 7.2.). The criteria pollutant-related benefits 

of the rule are associated with small reductions in PM2.5. 

As described in Chapter 7.5, EPA used four new estimates of the dollar value of marginal 

reductions in CO2 emissions—known as the social cost of carbon—to calculate total monetized 

CO2 benefits. Specifically, total monetized benefits in each year are calculated by multiplying 

the SCC by the reductions in CO2 for that year. EPA used four different SCC values to generate 

different estimates of total CO2 benefits and capture some of the uncertainties involved in 

7 
Executive Summary 

regulatory impact analysis. Chapter 7 also presents an analysis of the CO2 benefits over the 

model year lifetimes of the 2012 through 2016 model year vehicles. 

Chapter 7.6 also includes additional information about EPA’s mass reduction and safety analysis. 

Chapter 8: Other Economic and Social Impacts.   This chapter provides a description of other 

economic and social impacts associated with the rule, including vehicle sales impacts, consumer 

vehicle choice, energy security, and other economic impacts associated with reduced refueling, 

the value of increased driving, and the cost associated with additional noise, congestion and 

accidents. 

Vehicle Sales Impacts: Our analysis predicts vehicle sales increasing as a result of the rule. 

Because the fuel savings associated with this rule are expected to exceed the technology costs, 

the effective prices of vehicles – the adjusted increase in technology cost less the fuel savings 

over five years -- to consumers will fall, and consumers will buy more new vehicles. This effect 

is expected to increase over time. As a result, if consumers consider at least five years of fuel 

savings at the time that they make their vehicle purchases, the lower net cost of the vehicles is 

expected to lead to an increase in sales for both cars and trucks. Both the absolute and the 

percent increases for truck sales are larger than those for cars (except in 2012). 

Consumer Choice Impacts: Consumer vehicle choice models could in principle be used to 

examine the effects of this rule on the mix of vehicles sold. In practice, however, EPA finds that 

the state of the art of these models is not yet settled. The models show great variation, and there 

has been very little comparative assessment of them. Like NHTSA, EPA will continue its efforts 

to review the literature, but, given the known difficulties, neither NHTSA nor EPA has 

conducted an analysis using these models for this rule. 

Payback Period on New Vehicle Purchases: We also conducted what we call our "payback 

analysis" which looks at how quickly the improved fuel efficiency of new vehicles provides 

savings to buyers despite the vehicles having new technology (and new costs). The consumer 

payback analysis shows that fuel savings will outweigh up-front costs within three years for 

people purchasing new vehicles with cash. For those purchasing new vehicles with a typical 

five-year car note, the fuel savings will outweigh increased costs in the first month of ownership. 

Energy Security Impacts: A reduction of U.S. petroleum imports reduces both financial and 

strategic risks associated with a potential disruption in supply or a spike in cost of a particular 

energy source. This reduction in risk is a measure of improved U.S. energy security. Based on 

these estimates of fuel savings, over the lifetimes of model years 2012-2016, we estimate the 

discounted energy security impacts at $10.1 billion dollars, in 2007 dollars, assuming a 3 percent 

discount rate, and $8.0 billion dollars, assuming a 7 percent discount rate. 

8 
Executive Summary 

Other Impacts: There are other impacts associated with the GHG emissions standards and 

associated reduced fuel consumption. Lower fuel consumption would, presumably, result in 

fewer trips to the filling station to refuel and, thus, time saved. The rebound effect, discussed in 

detail in Chapter 4 of the joint TSD, produces additional benefits to vehicle owners in the form 

of consumer surplus from the increase in vehicle-miles driven, but may also increase the societal 

costs associated with traffic congestion, motor vehicle crashes, and noise. These effects are likely 

to be relatively small in comparison to the value of fuel saved as a result of the proposed 

standards, but they are nevertheless important to include. 

Chapter 8 also presents a summary of the total costs, total benefits, and net benefits expected 

under the final rule. Table 7 presents these economics impacts. 

Table 7. Economic Impacts of the Light-Duty GHG Rule 

2020 2030 2040 2050 NPV, 3%A NPV, 7%A

Vehicle Costsb $15,600 $15,800 $17,400 $19,000 $345,900 $191,900

Fuel Savings -$35,700 -$79,800 -$119,300 -$171,200 -$1,545,600 -$672,600

Benefits from Reduced CO2 Emissions at each assumed SCC valuec,d,e

Avg SCC at 5% $900 $2,700 $4,600 $7,200 $34,500 $34,500

Avg SCC at 3% $3,700 $8,900 $14,000 $21,000 $176,700 $176,700

Avg SCC at 2.5% $5,800 $14,000 $21,000 $30,000 $299,600 $299,600

95th percentile SCC at 3% $11,000 $27,000 $43,000 $62,000 $538,500 $538,500

Other Impacts 

Criteria Pollutant 

Benefitsf,g,h,i B $1,200-

$1,300 

$1,200-

$1,300 

$1,200-

$1,300 $21,000 $14,000

Energy Security Impacts 

(price shock) $2,200 $4,500 $6,000 $7,600 $81,900 $36,900

Reduced Refueling $2,400 $4,800 $6,300 $8,000 $87,900 $40,100

Value of Increased Drivingj $4,200 $8,800 $13,000 $18,400 $171,500 $75,500

Accidents, Noise, 

Congestion -$2,300 -$4,600 -$6,100 -$7,800 -$84,800 -$38,600

Quantified Net Benefits at each assumed SCC valuec,d,e

Avg SCC at 5% $27,500 $81,500 $127,000 $186,900 $1,511,700 $643,100

Avg SCC at 3% $30,300 $87,700 $136,400 $200,700 $1,653,900 $785,300

Avg SCC at 2.5% $32,400 $92,800 $143,400 $209,700 $1,776,800 $908,200

95th percentile SCC at 3% $37,600 $105,800 $165,400 $241,700 $2,015,700 $1,147,100

a

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same 

discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to 

calculate net present value of SCC for internal consistency. Refer to Section III.F for more detail. b

 Fuel savings are shown as negative because fuel savings are included as negative costs (i.e., positive savings). c

 Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) 

expected under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 

emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 

GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC Technical Support 

9 
Executive Summary 

10 

Document (TSD) notes the difference between the social cost of non-CO2 emissions and CO2 emissions, and 

specifies a goal to develop methods to value non-CO2 emissions in future analyses. 

d

 Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC estimates 

range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for Average SCC at 2.5%: 

$35-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also presents these SCC estimates. e

 Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same 

discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used to 

calculate net present value of SCC for internal consistency. Refer to SCC TSD for more detail. 

f

 Note that “B” indicates unquantified criteria pollutant benefits in the year 2020. For the final rule, we only 

modeled the rule’s PM2.5- and ozone-related impacts in the calendar year 2030. For the purposes of estimating a 

stream of future-year criteria pollutant benefits, we assume that the benefits out to 2050 are equal to, and no less 

than, those modeled in 2030 as reflected by the stream of estimated future emission reductions. The NPV of 

criteria pollutant-related benefits should therefore be considered a conservative estimate of the potential benefits 

associated with the final rule. 

g

 The benefits presented in this table include an estimate of PM-related premature mortality derived from Laden et 

al., 2006, and the ozone-related premature mortality estimate derived from Bell et al., 2004. If the benefit 

estimates were based on the ACS study of PM-related premature mortality (Pope et al., 2002) and the Levy et al., 

2005 study of ozone-related premature mortality, the values would be as much as 70% smaller. 

h

 The calendar year benefits presented in this table assume either a 3% discount rate in the valuation of PM-related 

premature mortality ($1,300 million) or a 7% discount rate ($1,200 million) to account for a twenty-year 

segmented cessation lag. Note that the benefits estimated using a 3% discount rate were used to calculate the NPV 

using a 3% discount rate and the benefits estimated using a 7% discount rate were used to calculate the NPV using 

a 7% discount rate. For benefits totals presented at each calendar year, we used the mid-point of the criteria 

pollutant benefits range ($1,250). 

i

 Note that the co-pollutant impacts presented here do not include the full complement of endpoints that, if 

quantified and monetized, would change the total monetized estimate of impacts. The full complement of human 

health and welfare effects associated with PM and ozone remain unquantified because of current limitations in 

methods or available data. We have not quantified a number of known or suspected health effects linked with 

ozone and PM for which appropriate health impact functions are not available or which do not provide easily 

interpretable outcomes (e.g., changes in heart rate variability). Additionally, we are unable to quantify a number of 

known welfare effects, including reduced acid and particulate deposition damage to cultural monuments and other 

materials, and environmental benefits due to reductions of impacts of eutrophication in coastal areas. 

j

 Calculated using pre-tax fuel prices.

Chapter 9: Small Business Flexibility Analysis. EPA’s analysis of the small business impacts 

due to EPA’s rulemaking.