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CHAPTER 10: QUALITATIVE DISCUSSION OF EMPLOYMENT IMPACTS OF AIR 

QUALITY

Overview

Executive Order 13563 directs federal agencies to consider regulatory impacts on job 

creation and employment: “our regulatory system must protect public health, welfare, safety, and 

our environment while promoting economic growth, innovation, competitiveness, and job 

creation. It must be based on the best available science”. Although benefit-cost analyses do not 

typically include a separate analysis of regulation-induced employment impacts,1 during periods 

of sustained high unemployment, such impacts are of particular concern and questions may arise 

about their existence and magnitude. This chapter discusses some, but not all, possible types of 

labor impacts that may result from measures to decrease NOx emissions. 

Section 10.1 describes the theoretical framework used to analyze regulation-induced 

employment impacts, discussing how economic theory alone cannot predict whether such 

impacts are positive or negative. Section 10.2 presents an overview of the peer-reviewed 

literature relevant to evaluating the effect of environmental regulation on employment. Section 

10.3 discusses employment related to installation of NOx controls on coal and gas-fired electric 

generating units, industrial boilers, and cement kilns. 

10.1 Economic Theory and Employment

Regulatory employment impacts are difficult to disentangle from other economic changes 

affecting employment decisions over time and across regions and industries. Labor market 

responses to regulation are complex. They depend on labor demand and supply elasticities and 

possible labor market imperfections (e.g., wage stickiness, long-term unemployment, etc). The 

unit of measurement (e.g., number of jobs, types of job hours worked, and earnings) may affect 

observability of that response. Net employment impacts are composed of a mix of potential 

declines and gains in different areas of the economy (the directly regulated sector, upstream and 

downstream sectors, etc.) over time. In light of these difficulties, economic theory provides a 

constructive framework for analysis.

 

1 Labor expenses do, however, contribute toward total costs in the EPA’s standard benefit-cost analyses.
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Microeconomic theory describes how firms adjust input use in response to changes in 

economic conditions.2 Labor is one of many inputs to production, along with capital, energy, and 

materials. In competitive markets, firms choose inputs and outputs to maximize profit as a 

function of market prices and technological constraints.3,4

Berman and Bui (2001) and Morgenstern, Pizer, and Shih (2002), adapt this model to 

analyze how environmental regulations affect labor demand.5 They model environmental 

regulation as effectively requiring certain factors of production, such as pollution abatement 

capital, at levels that firms would not otherwise choose.

Berman and Bui (2001, pp. 274-75) model two components that drive changes in firmlevel labor demand: output effects and substitution effects.6 Regulation affects the profitmaximizing quantity of output by changing the marginal cost of production. If regulation causes 

marginal cost to increase, it will place upward pressure on output prices, leading to a decrease in 

demand, and resulting in a decrease in production. The output effect describes how, holding 

labor intensity constant, a decrease in production causes a decrease in labor demand. As noted by 

Berman and Bui, although many assume that regulation increases marginal cost, it need not be 

the case. A regulation could induce a firm to upgrade to less polluting, and more efficient 

equipment that lowers marginal production costs. In such a case, output could increase for 

facilities that do not exit the industry. For example, improving the heat rate of a utility boiler 

increases fuel efficiency, lowering marginal production costs, and thereby potentially increasing 

the boiler’s generation. An unregulated profit-maximizing firm may not have chosen to install 

such an efficiency-improving technology if the investment cost were too high.

The substitution effect describes how, holding output constant, regulation affects laborintensity of production. Although stricter environmental regulation may increase use of pollution 

 

2 See Layard and Walters (1978), a standard microeconomic theory textbook, for a discussion, in Chapter 9. 

3 See Hamermesh (1993), Ch. 2, for a derivation of the firm’s labor demand function from cost-minimization. 

4

In this framework, labor demand is a function of quantity of output and prices (of both outputs and inputs).

5 Berman and Bui (2001) and Morgenstern, Pizer, and Shih (2002) use a cost-minimization framework, which is a 

special case of profit-maximization with fixed output quantities.

6 The authors also discuss a third component, the impact of regulation on factor prices, but conclude that this effect 

is unlikely to be important for large competitive factor markets, such as labor and capital. Morgenstern, Pizer 

and Shih (2002) use a very similar model, but they break the employment effect into three parts: 1) a demand 

effect; 2) a cost effect; and 3) a factor-shift effect.
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control equipment and energy to operate that equipment, the impact on labor demand is 

ambiguous. Equipment inspection requirements, specialized waste handling, or pollution 

technologies that alter the production process may affect the number of workers necessary to 

produce a unit of output. Berman and Bui (2001) model the substitution effect as the effect of 

regulation on pollution control equipment and expenditures required by the regulation and the 

corresponding change in labor-intensity of production. 

In summary, as output and substitution effects may be positive or negative, theory cannot 

predict the direction of the net effect of regulation on labor demand at the level of the regulated 

firm. Operating within the bounds of standard economic theory, however, empirical estimation 

of net employment effects on regulated firms is possible when data and methods of sufficient 

detail and quality are available. The literature, however, illustrates difficulties with empirical 

estimation. For example, studies sometimes rely on confidential plant-level employment data 

from the U.S. Census Bureau, possibly combined with pollution abatement expenditure data that 

are too dated to be reliably informative. In addition, the most commonly used empirical methods 

do not permit estimation of net national effects.

The conceptual framework described thus far focused on regulatory effects on plant-level 

decisions within a regulated industry. Employment impacts at an individual plant do not 

necessarily represent impacts for the sector as a whole. The approach must be modified when 

applied at the industry level.

At the industry-level, labor demand is more responsive if: (1) the price elasticity of 

demand for the product is high, (2) other factors of production can be easily substituted for labor, 

(3) the supply of other factors is highly elastic, or (4) labor costs are a large share of total 

production costs.7 For example, if all firms in an industry are faced with the same regulatory 

compliance costs and product demand is inelastic, then industry output may not change much, 

and output of individual firms may change slightly.8In this case the output effect may be small, 

while the substitution effect depends on input substitutability. Suppose, for example, that new 

equipment for heat rate improvements requires labor to install and operate. In this case the 

substitution effect may be positive, and with a small output effect, the total effect may be 

 

7 See Ehrenberg & Smith, p. 108. 

8 This discussion draws from Berman and Bui (2001), pp. 293. 
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positive. As with potential effects for an individual firm, theory cannot determine the sign or 

magnitude of industry-level regulatory effects on labor demand. Determining these signs and 

magnitudes requires additional sector-specific empirical study. For environmental rules, much of 

the data needed for these empirical studies are not publicly available, would require significant 

time and resources in order to access confidential U.S. Census data for research, and also would 

not be necessary for other components of a typical RIA. 

In addition to changes to labor demand in the regulated industry, net employment impacts 

encompass changes in other related sectors. For example, the proposed guidelines may increase 

demand for pollution control equipment and services. This increased demand may increase 

revenue and employment in the firms supporting this technology. At the same time, the regulated 

industry is purchasing the equipment and these costs may impact labor demand at regulated 

firms. Therefore, it is important to consider the net effect of compliance actions on employment 

across multiple sectors or industries.

If the U.S. economy is at full employment, even a large-scale environmental regulation is 

unlikely to have a noticeable impact on aggregate net national employment.9Instead, labor 

would primarily be reallocated from one productive use to another (e.g., from producing 

electricity or steel to producing high efficiency equipment), and net national employment effects 

from environmental regulation would be small and transitory (e.g., as workers move from one 

job to another).10

Affected sectors may experience transitory effects as workers change jobs. Some workers 

may retrain or relocate in anticipation of new requirements or require time to search for new 

jobs, while shortages in some sectors or regions could bid up wages to attract workers. These 

adjustment costs can lead to local labor disruptions. Although the net change in the national 

workforce is expected to be small, localized reductions in employment may adversely impact 

individuals and communities just as localized increases may have positive impacts.

 

9 Full employment is a conceptual target for the economy where everyone who wants to work and is available to do 

so at prevailing wages is actively employed. The unemployment rate at full employment is not zero. 

10 Arrow et. al. 1996; see discussion on bottom of p. 8. In practice, distributional impacts on individual workers can 

be important, as discussed in later paragraphs of this section.
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If the economy is operating at less than full employment, economic theory does not 

clearly indicate the direction or magnitude of the net impact of environmental regulation on 

employment; it could cause either a short-run net increase or short-run net decrease 

(Schmalansee and Stavins, 2011). An important research question is how to accommodate 

unemployment as a structural feature in economic models. This feature may be important in 

assessing large-scale regulatory impacts on employment (Smith 2012).

Environmental regulation may also affect labor supply. In particular, pollution and other 

environmental risks may impact labor productivity or employees’ ability to work.11 While the 

theoretical framework for analyzing labor supply effects is analogous to that for labor demand, it 

is more difficult to study empirically. There is a small emerging literature, described in the next 

section that uses detailed labor and environmental data to assess these impacts.

To summarize, economic theory provides a framework for analyzing the impacts of 

environmental regulation on employment. The net employment effect incorporates expected 

employment changes (both positive and negative) in the regulated sector and elsewhere. Labor 

demand impacts for regulated firms, and also for the regulated industry, can be decomposed into 

output and substitution effects which may be either negative or positive. Estimation of net 

employment effects for regulated sectors is possible when data of sufficient detail and quality are 

available. Finally, economic theory suggests that labor supply effects are also possible. In the 

next section, we discuss the empirical literature.

10.2 Current State of Knowledge Based on the Peer-Reviewed Literature

The labor economics literature contains an extensive body of peer-reviewed empirical 

work analyzing various aspects of labor demand, relying on the theoretical framework discussed 

in the preceding section.12 This work focuses primarily on effects of employment policies such 

as labor taxes and minimum wages.13 In contrast, the peer-reviewed empirical literature 

specifically estimating employment effects of environmental regulations is more limited. 

 

11 E.g. Graff Zivin and Neidell (2012).

12 Again, see Hamermesh (1993) for a detailed treatment. 

13 See Ehrenberg & Smith (2000), Chapter 4: “Employment Effects: Empirical Estimates” for a concise overview.
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Empirical studies, such as Berman and Bui (2001), suggest that net employment impacts 

were not statistically different from zero in the regulated sector. Other research suggests that 

more highly regulated counties may generate fewer jobs than less regulated ones (Greenstone 

2002). Environmental regulations may affect sectors that support pollution reduction earlier than 

the regulated industry. Rules are usually announced well in advance of their effective dates and 

then typically provide a period of time for firms to invest in technologies and process changes to 

meet the new requirements. When a regulation is promulgated, the initial response of firms is 

often to order pollution control equipment and services to enable compliance when the regulation 

becomes effective. Estimates of short-term increases in demand for specialized labor within the

environmental protection sector have been prepared for several EPA regulations in the past, 

including the Mercury and Air Toxics Standards (MATS).14 Overall, the peer-reviewed literature 

does not contain evidence that environmental regulation has a large impact on net employment 

(either negative or positive) in the long run across the whole economy. 

10.2.1 Regulated Sectors 

Berman and Bui (2001) examine how an increase in local air quality regulation affects 

manufacturing employment in the South Coast Air Quality Management District (SCAQMD), 

which includes Los Angeles and its suburbs. From 1979 to 1992 the SCAQMD enacted some of 

the country’s most stringent air quality regulations. Using SCAQMD’s local air quality 

regulations, Berman and Bui identify the effect of environmental regulations on net employment 

in regulated manufacturing industries relative to other plants in the same 4-digit SIC industries 

but in regions not subject to local regulations.15 The authors find that “while regulations do 

impose large costs, they have a limited effect on employment” (Berman and Bui, 2001, p. 269). 

Their conclusion is that local air quality regulation “probably increased labor demand slightly” 

but that “the employment effects of both compliance and increased stringency are fairly precisely 

 

14 U.S. EPA (2011b).

15 Berman and Bui include over 40 4-digit SIC industries in their sample. They do not estimate the number of jobs 

created in the environmental protection sector.
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estimated zeros, even when exit and dissuaded entry effects are included” (Berman and Bui, 

2001, p. 269).16

A small literature examines impacts of environmental regulations on manufacturing 

employment. Kahn and Mansur (2013) study environmental regulatory impacts on geographic 

distribution of manufacturing employment, controlling for electricity prices and labor regulation 

(right to work laws). Their methodology identifies employment impacts by focusing on 

neighboring counties with different ozone regulations. They find limited evidence that 

environmental regulations may cause employment to be lower within “county-border-pairs.” 

This result suggests that regulation may cause an effective relocation of labor across a county 

border, but since one county’s loss may be another’s gain, such shifts cannot be transformed into 

an estimate of a national net effect on employment. Moreover this result is sensitive to model 

specification choices.

10.2.2 Labor Supply Impacts

The empirical literature on environmental regulatory employment impacts focuses 

primarily on labor demand. However, there is a nascent literature focusing on regulation-induced 

effects on labor supply.17 Although this literature is limited by empirical challenges, researchers 

have found that air quality improvements lead to reductions in lost work days (e.g., Ostro 1987). 

Limited evidence suggests worker productivity may also improve when pollution is reduced. 

Graff Zivin and Neidell (2012) used detailed worker-level productivity data from 2009 and 2010, 

paired with local ozone air quality monitoring data for one large California farm growing 

multiple crops, with a piece-rate payment structure. Their quasi-experimental structure identifies 

an effect of daily variation in monitored ozone levels on productivity. They find “ozone levels 

well below federal air quality standards have a significant impact on productivity: a 10 parts per 

billion (ppb) decreases in ozone concentrations increases worker productivity by 5.5 percent.” 

(Graff Zivin and Neidell, 2012, p. 3654).18

 

16 Including the employment effect of existing plants and plants dissuaded from opening will increase the estimated 

impact of regulation on employment.

17 For a recent review see Graff-Zivin and Neidell (2013).

18 The EPA is not quantifying productivity impacts of reduced pollution in this rulemaking using this study. In light 

of this recent research, however, the EPA is considering how best to incorporate possible productivity effects in 

the future.
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This section has outlined the challenges associated with estimating regulatory effects on 

both labor demand and supply for specific sectors. These challenges make it difficult to estimate 

net national employment estimates that would appropriately capture the way in which costs, 

compliance spending, and environmental benefits propagate through the economy. Quantitative 

estimates are further complicated by the fact that macroeconomic models often have little 

sectoral detail and usually assume that the economy is at full employment. The EPA is currently 

seeking input from an independent expert panel on modeling economy-wide regulatory impacts, 

including employment effects.19

10.3 Employment Related to Installation and Maintenance of NOx Control Equipment

This section discusses employment related to installation of NOx controls on coal and 

gas-fired electric generating units, industrial boilers, and cement kilns, which are among the 

highest NOx-emitting source categories in EPA’s emissions inventory (see chapter 3 for more 

detail on emissions). Sections 10.3.1 and 10.3.2 below contain estimates of the number of direct 

short-term and long-term jobs that would be created by addition of NOx controls at these three 

categories of emissions sources, for various size units. Because the apportionment of emissions 

control across emissions sources in this RIA analysis is illustrative and not necessarily 

representative of the controls that will be required in individual state SIPs, EPA did not estimate 

short-term or long-term employment that would result from addition of NOx controls at these 

three source categories at the national level. 

10.3.1 Employment resulting from addition of NOx controls at EGUs

Coal-fired (EGUs are likely to apply additional NOx controls in response to State 

Implementation Plans (SIPs) approved pursuant to a revised ozone standard. While many EGUs 

have already installed and operate various NOx control devices, there are additional existing 

coal-fired EGU units that could decrease NOx emissions by installing or upgrading their NOx 

reducing systems. While all existing coal fired EGUs already have low nox burners, there are 

EGUs that could have a selective catalytic reduction (SCR) system installed, or could improve 

their NOx emissions by replacing an existing selective non-catalytic reduction (SNCR) system 

 

19 For further information see: <https://www.federalregister.gov/articles/2014/02/05/2014-02471/draft-supportingmaterials-for-the-science-advisory-board-panel-on-the-role-of-economy-wide-modeling>.
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with an SCR system. The EPA identified 159 existing coal-fired EGUs, with a total of 55.4 GW 

of capacity, that (1) are in areas anticipated to need additional NOx reductions under the most 

stringent revised ozone standard under consideration, and (b) do not already have an SCR 

emission control system. While there are currently SNCR systems in use that could be upgraded 

to an SCR system, the EPA’s 2025 baseline analysis20 estimates that the remaining SNCR 

systems will already be upgraded by 2025 in response to existing emission control programs.

The EPA used a bottom up engineering analysis using data on labor productivity, 

engineering estimates of the types of labor needed to manufacture, construct and operate SCRs 

on EGUs. The EPA’s labor estimates include not only labor directly involved with installing 

SCRs on EGUs and on-site labor used to operate the SCRs once they become operational, but 

also include the labor requirements in selected major upstream sectors directly involved 

manufacturing the materials used in SCR systems (steel), as well as the chemicals used to 

operate an SCR system (ammonia and the catalyst used to in the construction and operation of 

SCR systems, including such as steel, concrete, or chemicals used to manufacture NOx controls.

This section presents an illustrative analysis of the direct labor needs to install and 

operate SCRs at 3 common sizes of coal-fired EGUs: 300 MW, 500 MW and 1000 MW. As 

discussed below, the illustrative analysis is for a “model plant” of each size, using consistent 

assumptions about the plant’s operation that impact the material and labor needs of an 

representative plant such as the capacity factor, heat rate, and type of coal. The analysis does not 

include an estimate of the aggregate total of the labor needed for installing and running SCRs in 

any particular level of the revised ozone standard, nor does it reflect plant-specific variations in 

labor needs due to regional differences in prices and labor availability, existing control 

technology at the plant, etc.

The analysis draws on information from four primary sources:

 Documentation for EPA Base Case v.5.13 Using the Integrated Planning Model. 

November, 2013

 

20 The 2025 baseline used in this illustrative analysis is the “business as usual” baseline used in the proposed carbon 

pollution guidelines for existing power plants and emission standards for modified and reconstructed power 

plants (aka the proposed Clean Power Plan, June, 2013).
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 “ENGINEERING AND ECONOMIC FACTORS AFFECTING THE INSTALLATION 

OF CONTROL TECHNOLOGIES: An Update”. By James E. Staudt, Andover 

Technology Partners. December, 2011.

 “Regulatory Impact Analysis (RIA) for the final Transport Rule”. June 2011

 “Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing 

Power Plants and Emission Standards for Modified and Reconstructed Power Plants”. 

June 2013

10.3.1.1 Existing EGUs Without SCR Systems

The EPA identified 159 existing coal-fired EGU units that are estimated to continue to be 

in operation in 2025 under the “business as usual” base case that are located in areas considered 

likely to be affected by State Implementation Plans developed for a 60 ppb ozone standard. The 

size distribution of the 159 units are shown in Figure 6.6.x-1. The 159 units have a total 

generating capacity of 55.4 GW, and are anticipated to generate 309,000 GWh of electricity in 

2025. With the current level of NOx controls installed (or anticipated to be installed by 2025 to 

meet existing environmental regulations), these 159 units are estimated to emit 323.4 tons of 

NOx in 2025.

With the current level of NOx controls installed (or anticipated to be installed by 2025 to 

meet existing environmental regulations), these 159 units are estimated to emit [X] tons of NOx 

in 2025. The following key assumptions are used to estimate the amount of labor needed to 

install and operate SCR systems of various sizes.
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Figure 10-1. Size Distribution of 159 Existing Coal-Fired EGU Units without SCR NOx 

Controls

10.3.1.2 Labor Estimates for Installing and Operating SCR Systems 

All labor estimates in this illustrative analysis are in terms of person-years (i.e., full time 

equivalents, or FTEs). 

The labor involved with manufacturing and installing the SCRs is a one-time labor need, 

and occurs over a 2 to 3 year construction period; the estimated FTEs during the construction 

phase are presented as the cumulative amount of labor over the multi-year period. The 

construction phase labor includes both labor directly involved with installing the SCR on site 

(including boiler makers, general labor and engineering), as well as the labor needed to 

manufacture steel (the largest component of SCRs).

There are three types of annual labor estimated to operate the SCRs, and will be needed 

each year the EGU is in operation. The largest category is on-site labor at the EGU. The other 

two labor categories are needed in the manufacturing of two chemicals used as inputs to the 

operation of an SCR: ammonia and the catalyst. The estimated amounts of direct labor involved 

with installing SCR systems is shown in Table 10-1.

0

5

10

15

20

25

30

35

40

0 - 150

MW

150 - 250

MW

250 - 350

MW

350 - 450

MW

450 - 550

MW

550 - 650

MW

650 - 750

MW

750 -

1350 MW

# of Units

Size Distribution of 159 Existing Coal-Fired EGU

Units Without SCR NOx Controls
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Table 10-1. Summary of Direct Labor Impacts for SCR installation at EGUs

Plant Size

300 MW 500 MW 1000 MW

Construction Phase 

(One time, Total Labor over 2-3 Year Period)

Direct Construction-related 

Employment 158.7 264.4 528.8

Steel-related Employment 0.9 1.5 3.0

Total 159.6 265.9 531.9

Operation Phase (Annual Operations)

5.5

0.8

Operation and Maintenance 1.9 2.8 4.6

Ammonia Supply 0.2 0.4 0.8

Catalyst Supply 1.2 1.9 3.8

Total 3.4 5.1 9.2

The key assumptions used in the labor analysis are presented in Table 10-2.

Table 10-2. Key Assumptions in Labor Analysis for EGUs

Assumptions Key Factor Source 300 MW 500 MW 1000 MW

Capital Investment 

to Install SCR

Utility-owned Capital 

Recovery Rate for 

Environmental 

Retrofits (12.1%)

IPM 5/13 Base 

Case 

Documentation

$86.1 

million $133 million $244 million

Result: FTEs to 

Install SCR 1,100 hours/MW Staudt, 2011

158.65 264.42 528.85

Steel Needed per 

MW

2.5 tons/MW, cost = 

$550/ton Staudt, 2011

FTEs per $1 

million of Steel

2.2 FTE per $1 

million Staudt, 2011

Result: FTEs for 

Steel Manufacture 0.91 1.51 3.03

Result: Total 

FTEs to Install

Installation assumed 

to require 2-3 years

159.56 265.94 531.87
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Assumptions Key Factor Source 300 MW 500 MW 1000 MW

Labor Cost (fixed 

O&M) per Year

IPM analysis 

of CPP 

baseline 

$218,000 $310,500 $513,000

Result: FTEs per 

Year

8.9 FTEs per $1 

million of Fixed O&M CSAPR RIA

1.95 2.76 4.57

Ammonia Used per 

Year

0.39 lbs NH3 per lbs 

NOx reduced; cost = 

$150/ton; 90% NOx 

control CSAPR RIA

$87,925 $208,745 $398,505

Result: FTEs to 

Manufacture 

Ammonia

2.1 FTE per $1 

million NH3

0.18 0.44 0.84

Catalyst Used per 

Year

0.00002 m3 per MW 

generated; cost = 

$8,475 per m3; 90% 

Capacity Factor CSAPR RIA

$382,684 $603,697 $1,180,711

Result: FTEs to 

Manufacture 

Catalyst

3.2 FTE per $1 

million catalyst CSAPR RIA

1.22 1.93 3.78

Result: Total 

FTES to Operate 

Annually

3.36 5.13 9.18

10.3.2 Assessment of Employment Impacts for Industrial, Commercial, and Institutional (ICI) 

Boilers and Cement Kilns

Facilities other than electric power generators are likely to apply NOx controls in 

response to State Implementation Plans (SIPs) approved pursuant to a revised ozone standard. In 

addition to EGUs, the EPA estimated the amount and types of direct labor that might be used to 

apply and operate NOX controls for ICI boilers and for cement kilns. As with EGUs, the EPA 

used a bottom up engineering analysis using data on labor productivity, engineering estimates of 

the types of labor needed to manufacture, construct and operate NOx controls on ICI boilers and 

cement kilns. No estimates were made for labor requirements in upstream sectors such as steel, 

concrete, or chemicals used to manufacture or search as inputs to NOx controls. In addition, the 

numbers presented in this section are only indicative of the relative number and types of labor 
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that might be used at these two categories of plants, without calculating an estimate of the labor 

that would be required by them in the aggregate (SC&A, 2014).

10.3.2.1 ICI Boilers

There are a number of control technologies available to reduce NOx emissions from ICI 

boilers. The EPA anticipates that the most commonly applied control technology for ICI boilers 

that could require NOx reductions as part of an ozone SIP will be selective catalytic reduction 

(SCR). The analysis calculates s labor requirements to fabricate, install, and operate different 

sizes of SCR for coal, oil and natural gas ICI boilers. Estimated total labor costs are a function 

of total capital costs and boiler size in EPA’s Coal Utility Environmental Cost (CUECost) 

model. Total SCR capital costs of ICI boilers was estimated using the EPA’s Control Strategy 

tool (CoST) model. Labor is estimated to be about 50% of the total capital costs of an SCR. 

(SC&A, 2014).

Just over 24% of total capital costs are for labor used in SCR fabrication. This 

percentage was multiplied by the total capital cost, and the resulting dollar amount was 

converted into full time equivalents (FTE) based on the average annual salary of workers (as 

outlined in IEC, 2011). The annual compensation came from the Bureau of Labor Statistics 

(BLS). This salary number was adjusted to account for benefits also based on BLS data. The 

total fabrication expenditures were divided by the average fabrication labor compensation to 

estimate the number of full time equivalent workers in SCR fabrication. 

The calculation of construction or installation labor is based on previous research on 

labor required for SCR installation at utility boilers. (Staudt 2011). Based on that, we estimate 

that 27% of SCR capital costs are spent on installation labor. We applied that percentage to the 

estimates of the capital costs of SCR for ICI boilers to give us the total labor expenditures, which 

we then converted to FTE based on average annual compensation provided by BLS. 

Operation and Maintenance labor was estimated using the CUECost model. Maintenance 

and administrative labor for SCR is estimated to be small in relation to fabrication and 

construction, with the caveat that available information on which to base an estimate is sparse. 

According to the approach used in the CUECost model, most utility boilers require a full time 

worker to operate and maintain the equipment. ICI boilers are much smaller and so are likely to 
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require less than one FTE. Table 10-3 below provides summary labor estimates for SCR at 

varying sized ICI boilers.

Table 10-3. Summary of Direct Labor Impacts for ICI Boilers

Plant Type Boiler Size 

(MMBtu/hr)

One-Time Employment 

Impacts1(Annual 

FTEs)

Recurring Annual 

Employment Impacts2

(FTEs per year)

Coal-fired 750 19.5 1.2

500 15.2 1.1

400 13.6 1.0

250 10.7 0.9

Oil-fired 250 9.8 0.9

150 7.3 0.9

100 5.5 0.8

50 3.2 0.8

Natural Gas-fired 250 10.5 0.9

150 11.0 0.9

100 8.4 0.9

50 6.5 0.8

1. Includes Fabrication and Installation Labor

2. Includes Operations, Maintenance, and Administrative Support

10.3.2.2 Cement Kilns

There are a number of technologies that can be used to control NOx emissions at cement 

kilns. The analysis focused on synthetic non-catalytic reduction (SNCR) as the most likely 

choice for future NOx controls at cement kilns affected by requirements in ozone SIPs. 

Although SNCR is not considered an appropriate technology for wet and long dry kilns, most 

new or recently constructed kilns will likely be preheater and precalciner kilns, and these kilns 

will likely operate using SNCR as a control technology. 

Fabrication capital cost was estimated for an SNCR system for a mid-sized preheater and 

precalciner kiln (125 to 208 tons of clinker per hour). The percent of capital cost of these 

systems attributable to labor is 44% based on vendor supplied estimates. (Wojichowski, 2014). 

This labor cost was converted to FTE using BLS data. A similar methodology was used to 

estimate installation labor. Labor costs for SNCR installation was estimated by the vendor to be 

17% of the capital cost. That was converted to FTE using BLS data. This information is 

summarized in Table 10-4.
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review***

10-16

Table 10-4. Estimated Direct Labor Impacts for SNCR Applied to Mid-Sized Cement 

Kilns (125-208 tons clinker/hr)

Kiln Type Preheater / Precalciner

Manufacturing FTE 1.5

Installation FTE 0.9

O&M Annual Recurring FTE 13

10.4 References

Bureau of Labor Statistics, 2011. “National Compensation Survey: Occupational Earnings in the United States, 

2010.” Located online at: http://www.bls.gov/ncs/ncswage2010.htm#Wage_Tables

Bureau of Labor Statistics, 2014. “Employer Costs for Employee Compensation”. Released September 10, 2014. 

Located online at: http://www.bls.gov/news.release/ecec.toc.htm 

U.S. Environmental Protection Agency (U.S. EPA), 2002: USEPA Office of Air Quality Planning and Standards, 

EPA Air Pollution Control Cost Manual, Sixth Edition, EPA/452/B-02-001, Research Triangle Park, NC, January 

2002.

U.S. Environmental Protection Agency (U.S. EPA), 2007: Alternative Control Techniques Document Update –

NOx Emissions from New Cement Kilns, EPA-453/R-07-006, prepared by EPA and Research Triangle Institute for 

EPA Office of Air Quality Planning and Standards, Sector Policies and Programs Division, November 2007.

U.S. Environmental Protection Agency (U.S. EPA). 2011. Regulatory Impact Assessment for the Cross State Air 

Pollution Rule. Office of Air Quality Planning and Standards, Research Triangle Park, NC. Available at 

http://www.epa.gov/airtransport/pdfs/FinalRIA.pdf.

U.S. Environmental Protection Agency (U.S. EPA). 2014. Regulatory Impact Analysis for the Clean Power Plan. 

Office of Air and Radiation, Washington, D.C. Available at: 

http://www.epa.gov/ttn/ecas/regdata/RIAs/111dproposalRIAfinal0602.pdf

SC&A,2014:, Assessment of Employment Impacts of NOx Controls. Memorandum prepared to Jason Price, IEc and 

Ellen Kurlansky, US EPA., prepared by J. Wilson; M Mullen; and j Schreiber, SC&A, Inc. September 2014

Staudt, 2011: Staudt, James E., Engineering and Economic Factors Affecting the Installation of Control 

Technologies—An Update, Andover Technology Partners, North Andover, MA, December 15, 2011.

Wojichowski, 2014: David Wojichowski, De-Nox Technologies, LLC, SNCR cost estimates provided to Maureen 

Mullen, SC&A via email, September 25, 2014.