### Executive Summary

Overview

This Regulatory Impact Analysis (RIA) provides EPA’s estimates of the range of the monetized human health benefits, control costs, and net benef its associated with meeting the revised suite of standards for fine particles (PM 2.5 ) that were promulgated by EPA on September 21, 2006, as well as for meeting a one alternative. The fina l rule established a 24-ho ur standard of 35 μg/m 3
and retained the annual standard of 15 μg/m 3 . EPA also promulgated a final decision to retain

the current 24-hour PM 10 standards and to revoke the current annual PM 10 standards, in order to maintain protection against the health and welf are effects of thoracic coarse particles (PM 10-2.5 ). As was the case for the interim RIA accompa nying the proposed rulemaking, due to data and modeling limitations preclude EPA from assessing th e costs and benefits of retaining the existing

PM 10 standards. This summary outlines the basis for and approach used in the RIA, presents the key results and insights derived from the an alyses, and highlights key uncertainties and

limitations.

In setting primary ambient air quality standard s, EPA’s responsibility under the law is to establish standards that protec t public health. The Clean Air Ac t (“Act”) requires EPA, for each criteria pollutant, to set a sta ndard that protects pub lic health with “an adequate margin of safety.” As interpreted by the Agency and the co urts, the Act requires EPA to base this decision on health considerations; economic factors cannot be considered.

This prohibition against the consideration of cost in the setting of the primary air quality standards, however, does not mean that costs, benefits or other economic considerations are unimportant or should be ignored. The Agency belie ves that consideration of costs and benefits is an essential decision making tool for the efficient implementation of these standards. The impacts of cost, benefits, and efficiency are considered by the states during this process, when states are making decisions regarding what timelines, strategies, and pol icies make the most

sense.

This PM 2.5 NAAQS RIA is focused on development and an alyses of illustrativ e control strategies

to meet alternative suites of standards in 2020, the latest year by which the Clean Air Act generally requires full attainment of the new stan dards. Because the states are ultimately responsible for implementing strategies to meet the revised standards, th e RIA provides insights and analysis of a limited number of illustrative cont rol strategies that states might adopt to meet the revised standards. These strategies are subject to a number of important assumptions, uncertainties and limitations, which we document in the relevant portions of the analysis.

EPA presents this analysis pursuant to Ex ecutive Order 12866 and the guidelines of OMB

Circular A-4. 1 These documents present guidelines for EPA to assess the incremental benefits and costs of the selected regul atory approach as well as one less stringent, and one more stringent, option. In this RIA, the 1997 standa rds represent the less st ringent option, and the

1 For a copy of these requirements, see: http://www.whitehouse.gov /OMB/inforeg/eo12866.pdf and http://www.whitehouse.gov/omb /circulars/a004/a-4.html.

ES-1alternative suite of standards includi ng a tighter annual standard of 14 μg/m 3 together with the

revised 24-hour st andard of 35 μg/m 3 represents the more stringent option.

ES.1 Approach to the Analysis

The RIA consists of multiple analyses including an assessment of the nature and sources of

ambient PM 2.5 ; estimates of current and fu ture emissions of relevant gases and particles that contribute to the problem; air qual ity analyses of baseline and a lternative strategies; development of illustrative control strategies to attain the standa rds alternatives in future years; analyses of the incremental costs and benefits of attaining the alternative standards, together with an examination of key uncertainties and limitations; a nd a series of conclusions and insights gained from the analysis.

Nature of PM 2.5

Particulate matter (PM) is a highly complex mixt ure of solid particles and liquid droplets that occur in the atmosphere together with numerous pollutant gase s that interact with them. Atmospheric particles can be grouped according to various characteristics. For regulatory purposes, fine PM are measured as PM 2.5 . Particles are emitted directly from sources (referred to as primary PM) and are also formed through atmo spheric chemical reactions (referred to as secondary PM). Primary PM 2.5 consists of carbonaceous mate rial (e.g. soot, and accompanying organics)—emitted from cars, trucks, heavy equipmen t, forest fires, and burning waste, as well as from coke ovens, metals from combustion and industrial processe s, with some small

contribution from crustal materials. Secondary PM 2.5 forms in the atmosphere from precursor gases including sulfur and nitrogen oxides fr om power, industrial and other combustion and process sources, certain reactive organic gases fr om diesel and other mobile sources, solvents, fires, and biogenic sources such as trees, and am monia from agricultural operations, natural, and other sources. Fine particles can be transporte d hundreds to thousands of miles from emissions sources. For this reason, fine particle concentrat ions in a particular area may have a substantial contribution from regional transport as well as local sources. As discussed more fully in Chapter 2, there are important regional differe nces in fine particle concentrations and composition that are important to rec ognize in developing control strategies.

Overview of Air Quality Modeling Me thodology/Baseline emissions forecasts

As a first step in the national a ssessment of alternatives, the anal ysis forecasts emissions and air quality in 2015 and 2020 under a regulatory base case that incorporates national, regional, state and local regulations that are al ready promulgated and/or adopte d. This base case does not forecast actions states may take to implement the existing PM 2.5 standards. The regulatory base case includes recent rules that will significantly reduce PM 2.5 concentrations in future years by addressing emissions from the power generation s ector - the Clean Air Interstate Rule (CAIR), the Clean Air Mercury Rule (CAMR), and the Cl ean Air Visibility Ru le (CAVR, which also affects some industrial boiler emissions), and mobile sources through national rules for light and heavy-duty vehicles and non-road mobile sources. Current state programs that address these and other source categories that were on the books as of early 2005 are also modeled for future

ES-2years. Based on the emissions forecast s, EPA developed annual and daily PM 2.5 design value projections using the CMAQ model. 2

Development and Application of Il lustrative Control Strategies

The air quality modeling results for the regulatory base case (Figure ES-1, ES-2) provided the starting point for developing illu strative control strategies to attain the 1997 as well as the

revised and alternative suite s of standards that are the focus of th is RIA. The figures show that by 2020, while PM 2.5 air quality would be significantly better than today under current requirements, several eastern and western Stat es will need to develop and adopt additional controls to attain the revised standards. The modeling s hown in Figure ES-2 suggests that under the revised suite of standards, greater reductions will be needed in some Western areas, particularly in California.

We followed a three-step process to simulate at tainment in each of the areas forecast to need

additional controls to meet the re vised and alternative standards: 1) We identified cost-effective controls to apply in each proj ected nonattainment area and then simulated the resulting air quality change in an air quality model; 2) Fo r those areas that did not attain under 1) we developed and simulated the resu lts of applying additional known emission controls that were not applied in the initial strategy, and then evaluated attainment status considering the uncertainty in the analyses; 3) For areas that we determined would still not attain under the more readily identifiable control strategies in 1) and 2), we used a combination of qualitative and quantitative analysis to estimate the costs and bene fits of fully attaining the standards. This included identification of potential trends in pollu tion control measures (such as greater adoption of hydrogen fuel cell vehicles), extrapolation of costs based on existing technologies, and estimation of benefits by “rolling back” monito r values to just attain the standards.

In developing strategies tailored to specific pr oblem areas, we combined information from our air quality models and our emission control database. These combined data enabled us to selectively apply emission control measures on th ose industrial sources where it was most cost effective to do so—effectively generating the great est estimated air quality improvement at the lowest cost. Because the national and regiona l programs summarized above (e.g. CAIR, mobile rules) will address a good portion of th e regional transport contribution of PM 2.5 , the first set of

controls to meet the 1997 and revised standards focus on reductions in local emissions. These

local emissions are defined as those occurr ing in the projected nonattainment county and immediate surrounding counties in the MSA. In so me cases, the local control strategy did not provide enough emission reductions to attain the st andards. In that case, we explored emission controls among a broader set of counties within the state containing the projected nonattainment area. The exception to this approach is Califor nia, where, due to the extreme and widespread nature of the nonattainment problem, we considered controls throughout Southern California in the attainment strategies.

2 The methodologies for forecasting emissions and air quality and associated uncertainties are detailed in the Technical Support Document – “Air Quality Modelin g Technique used for Multi-Pollutant Analysis?" (http://www.epa.gov/airmarkets/mp/aq support/airquality.pdf). The methodology used to derive the 98 th percentile 24-hour values is summarized in Chapter 4 of this RIA.

ES-3Figure ES-1. Counties Projected to Violate the Revised PM2.5 NAAQS in 2020

Indicates county

monitor exceeds daily standard of 35 μg/m 3

Indicates county

monitor exceeds daily standard of 15 μg/m 3

Indicates county

monitor exceeds

both the annual standard of 15 μg/m 3 and the daily standard of 35 μg/m 3

With CAIR/CAMR/CAVR and Some Current Rules** Absent Additional Local Controls

* Projections as of September 2006. **Current rules include Title IV of CAA, NOx SIP Call, and some existing State rules Counties Projected to Exceed Revised Standards

Annual and Daily Annual Only Daily Only

2015 18 2 32

2020 17 3 28 Indicates county

monitor exceeds daily standard of 35 μg/m 3

Indicates county

monitor exceeds daily standard of 15 μg/m 3

Indicates county

monitor exceeds

both the annual standard of 15 μg/m 3 and the daily standard of 35 μg/m 3

With CAIR/CAMR/CAVR and Some Current Rules** Absent Additional Local Controls

* Projections as of September 2006. **Current rules include Title IV of CAA, NOx SIP Call, and some existing State rules Counties Projected to Exceed Revised Standards

Annual and Daily Annual Only Daily Only

2015 18 2 32

2020 17 3 28

Figure ES-2. Projected Reduction in Daily Design Value Needed to Attain the Revised Daily Standard of 35 μg/m 3 in 2020

ES-4 Less than 1 ug to attain

1 to 2 ug to attain

2 to 5 ug to attain

Greater than 5 ug to attain standard in 2020 with

measures needed to attain the

1997 standards. Incremental to baseline with CAIR/CAMR/CAVR and Mobile Source Rules without additional

local controls for attainment of the current standards*

*Note that attainment with the 1997 annual and daily standards by 2020 would potentially result in reductions

in the number of

nonattainment counties in 2020, especially in the Eastern U.S. Our modeling suggests that Birmingham and Chicago would attain the revised daily Less than 1 ug to attain

1 to 2 ug to attain

2 to 5 ug to attain

Greater than 5 ug to attain standard in 2020 with

measures needed to attain the

1997 standards. Incremental to baseline with CAIR/CAMR/CAVR and Mobile Source Rules without additional

local controls for attainment of the current standards*

*Note that attainment with the 1997 annual and daily standards by 2020 would potentially result in reductions

in the number of

nonattainment counties in 2020, especially in the Eastern U.S. Our modeling suggests that Birmingham and Chicago would attain the revised dailyGiven the baseline air quality forecast under th e alternative standard (14, 35), we added a regional control program covering both utility and industrial sources of SO 2 in portions of the Eastern US due to the number of projected nona ttainment areas under the alternative standard, and prevalence of sulfate in the Eastern U.S.

In general, we were able to model attainment with the alternative standard in most regions of the country with a mix of local or regional control st rategies. The major exceptions are in California and Utah, where modeling of such strategies indicated that severa l counties would not attain the

revised or alternative standards.

ES-2. Results of Benefit-Cost Analysis

Table ES-1 summarizes the net benefits of attaining a revised and alternative PM 2.5 NAAQS.

The table summarizes the full atta inment benefits, economic costs and net benefits at 3 and 7 percent discount rates.

A new component of our benefits analysis is th e expanded characterizatio n of uncertainty about the impacts of PM on the risk of premature deat h. Since the publication of the RIA for the Clean Air Interstate Rule, we have completed a full- scale expert elicitation designed to more fully

characterize the state of our unde rstanding of the con centration-response f unction for PM-related premature mortality. The elicitat ion results form a major component of the current effort to use probabilistic assessment techniques to integrate uncertainty into the main benefits analysis.

To reflect our expanded understanding of uncertain ty, and to move us towards implementation of

the recommendations of the National Research Council’s 2002 report “E stimating the Public Health Benefits of Proposed Air Pollution Regul ations,” our summary benefits estimates are presented as ranges, and include additiona l information on the quantified uncertainty distributions surrounding the points on those ra nges, derived from both the epidemiological studies and the expert elicitation.

Tables ES-2 and ES-3 summarize the estimated benefits associated with at taining the revised and

alternative PM 2.5 standards, incremental to our m odeled attainment strategy for the 1997

standards. These tables include both the estimat ed reductions in the incidence of mortality and morbidity and the monetized value associated with these reductions in inci dence. In addition to these health benefits, we estimat e that, incremental to our modeled attainment strategy for the 1997 standards, the monetary benefits associated with improvements in vi sibility in selected national parks and wilderness areas in 2020 will be $530 million for the revised standards, and $1,200 million for the altern ative standards.

Table ES-2 and ES-3 summarize the range of incide nce and the range of total monetized benefits (health plus visibility) across seve ral sources of mortality effect estimates that we used in our analysis. The ranges reflect two different sources of information about the impact of reductions in PM on reductions in the risk of premature death, including both the published epidemiology literature and an expert e licitation study conducted by EPA in 2006. Estimates based on the American Cancer Society study show benefits of meeting the revised 24- hour PM2.5 standard at $17 billion a year in 2020. In order to provide an indication of the sensi tivity of the benefits estimates to alternative assumptions, in Chapter 5 we present a variety of benefits estimates based on both epidemiological studies (including the American Cancer Society Study and the Six

ES-5ES-6 Cities Study) and the expert elic itation. EPA intends to ask th e Science Advisory Board to provide additional advice as to which scientific studi es should be used in future RIAs to estimate

the benefits of reductions in PM.ES-7Table ES-1: Comparison of Full Attainment Benefits with Social Costsf, Incremental to Attainmentof 1997 Standards (Billion 1999$)Revised standard of 15/35 (μg/m3)Alternative standards of 14/35 (μg/m3)BenefitsaCostsbNetbenefitscBenefitsaCostsbNetbenefitscBenefits Based on Mortality Function from the American CancerSociety Study and Morbidity Functions from the Published Scientific Literatured3%$17$5.4$12$30$7.9$227%$15$5.4$9$26$7.9$18Benefits Range Based on Expert Elicitation Derived Mortality Functions and Morbidity Functions from the Published Scientific LiteratureeLow MeanHigh MeanLow MeanHigh MeanLow MeanHigh MeanLow MeanHigh Mean3%$9$76$5.4$3.5$70$17$140$7.9$8.7$1307%$8$64$5.4$2.4$59$15$120$7.9$6.7$110eAlthough the overall range across experts is summarized in this table, the full uncertainty in the estimates is reflected by the results for the full set of 12 experts. Thetwelve experts’ judgments as to the likelymean effect estimate are not evenly distributed across the range illustrated by arraying the highest and lowest expert means.The distribution of benefits estimates associated with each of the twelve expertresponses can be found in Chapter 5.aResults reflect the use of two different discountrates: 3% and 7%, asrecommended in EPA’sGuidelines for Preparing Economic Analyses(EPA, 2000b) and OMB Circular A-4 (OMB, 2003). Results arerounded to two significant digitsfFor the purposes of comparison with the benefits, EPA uses the total social cost estimate whichis slightly higher than the engineering costbIncludes roughly $180 Million in supplemental engineering costs.cEstimates rounded to two significant digits after calculations.dbased on Pope et al 2002, used asprimary estimate in previous RIAs.Table ES-2. Estimated Reduction in Incidence of Adverse Health and Welfare Effects Associated with Attaining the Revised and Alternative Standards, In cremental to Attainment of the 1997 Standards (95 Percent Confidence Intervals Provided in Parentheses)

Estimate Revised Standards (15/35) Alternative Revised Standards (14/35)

Mortality

Estimate based on American Cancer Society study a 2,500 (1,000 – 4,100) 4,400 (1,700 – 7,100)

Range based on expert elicitation results b

Low Mean 1,200 (0 – 5,800) 2,200
(0 – 11,000)

High Mean 13,000 (6,400 – 19,000) 24,000
(12,000 – 35,000)

Morbidity

Chronic bronchitis (age >25 and over) 2,600 (490 – 4,800) 4,600
(850—8,300)

Nonfatal myocardial infarction (age >17) 5,000 (2,700 – 7,200) 8,700 (4,800 – 13,000)

Hospital admissions—respiratory (all ages) b 530 (260 – 800) 980 (490 – 1,500)

Hospital admissions—cardiovascular (age >17) c 1,100 (690 – 1,500) 2,100 (1,300 – 2,800)

Emergency room visits for asthma (age <19) 1,200 (730 – 1,700) 3,200 (1,900 – 4,500)

Acute bronchitis (age 8–12) 7,300 (–260 – 15,000) 13,000 (–440 – 25,000)

Lower respiratory symptoms (age 7–14) 56,000 (27,000 – 84,000) 88,000 (43,000 – 130,000)

Upper respiratory symptoms (asthmatic children, age 9–18) 41,000 (13,000 – 70,000) 65,000 (20,000 – 110,000)

Asthma exacerbation (asthmatic children, age 6–18) 51,000 (5,600 – 150,000) 79,000 (8,900 – 230,000)

Work loss days (age 18–65) 350,000 (300,000 – 390,000) 550,000 (480,000 – 620,000)

Minor restricted-activity days (age 18–65) 2,000,000 (1,700,000 – 2,300,000) 3,300,000 (2,700,000 – 3,800,000)

a The estimate is based on the concentration-response (C-R) functi on developed from the study of th e American Cancer Society cohort reported in Pope et al (2002), which has prev iously been reported as the primary estimate in recent RIAs.

b The low mean estimate is based on the C-R function provided Expert K. The high mean estimate is based on the C-R function pro vided by Expert E. The expert elicitation project is described in greater detail in Chapter 5, and a complete report of the project is available on EPA’s website. . Although the overall range across experts is summarized in this table, the full uncertainty in the estimates is refl ected by the results for the full set of 12 experts. The twelve experts’ judgments as to the likely mean effect estimate are not evenly distributed acr oss the range illustrated by arraying the highest and lowest expert means. Likewise the 5th and 95th percen tiles for these highest and lowes t judgments of the effect estimate do not imply any particular distribution within those bounds. The di stribution of mortality estimates associated with each of the twelve expert responses can be found in Chapter 5.

ES-8Table ES-3. Estimated Annual Monetized Benefi ts in 2020 of Illustrative Implementation Strategies for the Selected and Alternative PM 2.5 NAAQS, Incremental to Attainment of

the 1997 Standards

Note: Unquantified benefits are not included in these estimates, thus total be nefits are likely to be larger than

indicated in this table.

Total Full Attainment Benefits a (billions 1999$) 15/35 (μg/m3) 14/35 (μg/m3)

Benefits Based on Mortality Function from the Amer ican Cancer Society Study and Morbidity Functions
from the Published Scientific Literature b

Using a 3% discount rate $17 ($4.1 – $36) $30 ($7.3 - $63)

Using a 7% discount rate $15 ($3.5 – $31) $26 ($6.4 - $54)

Benefits Range Based on Expert Elicit ation Derived Mortality Functions and Morbidity Functions from the
Published Scientific Literature c

Low Mean High Mean Low Mean High Mean

Using a 3% discount rate $9 ($0.8 - $42) $76 ($19-$150) $17 ($1.7 - $77) $140 ($36 - $280)

Using a 7% discount rate $8 ($0.8 - $36) $64 ($16 - $130) $15 ($1.6 - $66) $120 ($31 - $240)

a Results reflect the use of two different discount rates: 3% and 7%, as recommended in EPA’s Guidelines for Preparing Economic Analyses (EPA, 2000b) and OMB Circular A-4 (OMB, 2003). Results are rounded to two significant digits.

b The estimate is based on the concentration-response (C-R) function developed from the study of the American Cancer Society cohort reported in Pope et al (2002), which has previo usly been reported as the primary

estimate in recent RIAs.

c Although the overall range ac ross experts is summarized in this table, the full uncertainty in the estimates is reflected by the results for the full set of 12 experts. The twelve experts’ judgments as to the likely mean effect estimate are not evenly distributed across the rang e illustrated by arraying the highest and lowest expert means. Likewise the 5th and 95th percentiles for these hi ghest and lowest judgments of the effect estimate do not imply any particular distribution within those bounds. The distribution of benefits estimates associated with each of the twelve expert resp onses can be found in Chapter 5.

ES-9Table ES-4 summarizes the total annualized engin eering and social costs of meeting the current standard and the alternative scenarios using 3 and 7 percent discount ra tes. Total annualized

costs are estimated from a baseline invent ory in 2020 that refl ects controls for

CAIR/CAMR/CAVR and other on-the-books rules. Based on engineering cost estimates, the incremental cost of the revised standards (15/ 35) is approximately $5.0 to $5.1 billion using 3 and 7 percent discount rates, resp ectively. The incremental costs for the alternative standards are $6.8 to $6.9 billion using 3 and 7 percent discount rates, respectively. These cost numbers are highly uncertain because they incl ude the extrapolated costs of fu ll attainment in California and Salt Lake City. Approximately $4.5 billion of the incremental cost of achieving both 15/35 and 14/35 is attributable to these extrapolated full at tainment costs. An analysis of the costs and benefits of attaining th e 1997 standards in 2015 is provided in Appendix A.

For the purposes of comparison with the benefits, EPA uses the total social cost estimate which is slightly higher than the engineering cost. Tota l social costs (including the general equilibrium impacts on GDP) are estimated to be $5.4 billio n in 2020 for the revised standards, and $7.9

billion for the alternative standards.

Table ES-4. Comparison of Total Annua lized Engineering Costs Across PM NAAQS Scenarios (millions of 1999 dollars, 7% interest rate) a

Scenario

Source Category Revised Stds:
15/35 Alternative
Revised Stds:
14/35

EGU’s $400 $1,100

Mobile Sources $60 $60

Non-EGU’s $380 $1,300

Incremental Residual Cost of Full Attainment b

East $3 $180

West $300 $300

California $4,000 $4,000

Total of Residual Costs of Full Attainment $4,300 $4,500

Total Annualized Costs (incremental to the current standard) – using a 7% interest rate $5,100 $7,000

Total Annualized Costs (incremental to the current standard) – using a 3% interest rate $5,050 $6,800

a Upon review of emissions and air quality results of the control strategies applied in this RIA, some areas had residual nonattainment problems (requiring additional emis sions reductions to meet the standard) as a result of

our initial selection of controls. The incremental costs of fu lly attaining in these areas (the residual cost of full attainment) reflect extrapolated cost s of additional control measures that would be necessary to bring areas with residual nonattainment into compliance. Chapter 4 provides details of the assessment.

b The incremental cost of residual nonattainment (beyond our modeled control strategy) for the West and California are extrapolated. The methodology used to derive these estimates is described in Chapter 6. These estimates are derived using a 7 percent discount rate. The incremental cost of residual non-attainment in the East are based on supplemental carbonaceous particle emission controls, which are detailed in Chapter 4.

ES-10ES-3. Uncertainties and Limitations

Air Quality Modeli ng and Emissions

• Overall, the air quality model performs well in predicting monthly to seasonal concentrations, similar to other state-of-the -science air quality m odel applications for

PM 2.5 . However, there is less certainty in an alyses involving 24-hour model predictions than those involving longer-ter m averages concentrations and performance is better for

the Eastern U.S. than for the West. In bot h the East and West, secondary carbonaceous aerosols are the most challenging species for the modeling system to predict in terms of evaluation against ambient data.

• Underestimation biases in the mobile source emission inventories lead to uncertainty as

to the relative contribution of mobile source emissions to overall PM levels.

• Additional uncertainty is in troduced as a result of our limited understanding concerning the collective impact on future -year emission estimates from economic growth estimates, increases in technological e fficiencies, and limited information on the effectiveness of future control programs.

• The regional scale used for air quality modeling can unders tate the effectiveness of

controls on local sources in urban areas as co mpared to area-wide or regional controls. This serves to obscure local-scale air quality improvements that result from urban-area

controls.

Controls and Cost

• The technologies applied and the emission reduc tions achieved in these analyses may not reflect emerging control devices that could be available in future years to meet any requirements in SIPs or upgrades to some current devices that may serve to increase

control levels.

• The effects from “learning by doing” are not accounted for in the emission reduction estimates for point and area sources. It is possible that an emissi ons control technology may have better performance in reducing em issions due to greater understanding of how best to operate and maintain the technology. As a result, we may understate the emission reductions estimated by these analyses. The mobile source control measures do account for these learning by doing effects.

• The effectiveness of the control measures in these analyses is based on an assumption

that these controls are well maintained throughout their eq uipment life (the amount of time they are assumed to operate). To the extent that a control measure is not well maintained, the control efficiency may be le ss than estimated in these analyses. Since these control measures must operate accordi ng to specified permit conditions, however, it is expected that the maintenance of controls should yield control efficiencies at or very close to those used in these analyses. As a result, we may overstate the emission reductions estimated by these analyses.

• The application of area source control technologies in these analyses assume that a

ES-11constant estimate for emission reduction is reas onable despite variati on in the extent or scale of application (e.g. dust cont rol plans at construction sites ). To the extent that there

are economies of scale in area source control applications, we may overstate the emission reductions estimated by these analyses.

• The cost extrapolation method used to devel op full attainment costs is highly uncertaint and may significantly under or overstate future costs of full attainment.

Benefits

• This analysis assumes that inhalation of fine particles is causally associated with premature death at concentrations near those experienced by most Americans on a daily basis. Although biological mechanisms for th is effect have not yet been specifically identified, the weight of the available epid emiological, toxicologi cal, and experimental evidence supports an assumpti on of causality. The impact s of including a probabilistic representation of causality ar e explored using the result s of the expert elicitation.

• This analysis assumes that all fine particle s, regardless of their chemical composition, are equally potent in causing prem ature mortality. This is an important assumption, because the composition of PM produced via transp orted precursors emitted from EGUs may differ significantly from direct PM released from automotive engines and other industrial

sources. In accordance with advice from th e CASAC, EPA has determined that no clear scientific grounds exist for supporting differential effects estimates by particle type,

based on information in the most recent Criter ia Document. In chap ter 5, we provide a decomposition of benefits by PM component sp ecies to provide additional insights into the makeup of the benefits associ ated with reductions in overall PM 2.5 mass (See Tables 5-32 and 5-33).

• This analysis assumes that the concentration- response (CR) function fo r fine particles is approximately linear within the range of ambient concen trations under consideration (above the assumed threshold of 10 μg/m 3 ). Thus, we assume that the CR functions are applicable to estimates of health benefits a ssociated with reducing fi ne particles in areas with varied concentrations of PM, including both regions that are in attainment with

PM 2.5 standards and those that do not meet th e standards. However, we examine the impact of this assumption by looking at altern ative thresholds in a sensitivity analysis.

• A key assumption underlying the entire analysis is that the forecasts for future emissions and associated air quality modeling are vali d. Because we are projecting emissions and air quality out to 2020, there are inherent uncerta inties in all of the factors that underlie

the future state of emissions and air quality levels.

ES-12ES-4. Conclusions and Insights

EPA’s analysis has estimated the health and welfare benefits of reductions in ambient concentrations of particulate matte r resulting from a set of illustrative control strategies to reduce

emissions of PM 2.5 precursors. The results suggest there will be significant a dditional health and welfare benefits arising from reducing emissi ons from a variety of sources in and around projected nonattaining c ounties in 2020. While 2020 is the late st date by which states would generally need to demonstrate attainment with the revised standards, it is expected that benefits (and costs) will begin occurring earlier, as stat es begin implementing control measures to show progress towards attainment.

There are several important factor s to consider when evaluating th e relative benefits and costs of the attainment strategies for the revi sed 15/35 and alternative 14/35 standards:

 California accounts for a large share of the total benefits and costs for both of the evaluated standards (80 percent of the benefits and 78 percent of the costs of attaining the revised standards, and 50 percent of the bene fits and 58 percent of the costs of attaining the alternative standards). Because we were only able to model a small fraction of the emissions controls that might be needed to reach attainment in Ca lifornia, the proportion

of California benefits in the “residual attainment” category are large relative to other

areas of the U.S. Both the benefits and th e costs associated with the assumed reductions in California are particularly uncertain.

 The comparative magnitudes and distributions of benefits estimates for the revised and alternative standards are significantly affect ed by differences in assumed attainment strategies. As noted above, attainment w ith the revised standards was simulated using mainly local reductions, while a supplement al eastern regional SO2 reduction program

was used for the alternative. Under the assu mptions in the analyses, the regional strategy used in meeting the alternative standard re sulted in significant a dditional benefits in attainment areas than the local area strategy used for the revised standard. This makes

the difference in benefits between the revised and alternative standard s larger than can be accounted for by only the 1 μg/m3 lower annual le vel for the alternative standards.

 Given current scientific uncertainties regard ing the contribution of different components

to the effects associated with PM 2.5 mass, this analysis continues to assume the contribution is directly proportional to their ma ss. In the face of uncertainties regarding this assumption, we believe that strategies wh ich reduce a wide array of types of PM and precursor emissions will have more certain health benefits than strategies that are more narrowly focused. For this reason, the anal ysis provides a rough basis for comparing the assumed benefits associated with different components for different strategies. The illustrative attainment strategy for the revised standards results in a more balanced mix of

reductions in different PM 2.5 components than does the regional strategy for the alterative

standards. Until a more robust scientific basi s exists for making reliable judgments about the relative toxicity of PM, it will not be possible to dete rmine whether the strategy of reducing a wide array of PM t ypes is the optimal approach.

 Because of the limitations and uncertainties in the emissions and air quality components of our assessment, the specific control strategies that might be the most effective in helping areas to reach attainment are still very uncertain. For example, the high

ES-13likelihood of mobile sources emissions being si gnificantly understated biases the analyses by requiring additional controls from other sour ces in both the base case and the analyses of the 1997, revised, and alternative standards.

 Previous analyses have focused on measur ing cost-effectiveness by comparing control measures in terms of cost per ton of emissi ons reduced. In those analyses, direct PM controls usually appear to be less cost-effectiv e because the cost per ton is in the tens of thousands of dollars per ton, while SO2 and NOx controls are on the order of thousands of dollars per ton. The current analysis dem onstrates that when considered on a cost per microgramreduced basis, controls on directly emitted PM are often the most costeffective, because of the significant local contribution of direct PM emissions to nonattaining monitors in urban areas. This fi nding suggests that st ates should consider ranking controls on a cost per microgram basis ra ther than a cost per ton basis to increase the overall cost-effectiveness of attainment strategies.

ES-14