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# CALIFORNI

ACLEA N AI RAC T COST-EFFECTIVENES S GUIDANC

E 

# V

Septembe r199 0

Ai rResource s Boar d Offic eo f .Ai rQualit yPlannin g& Liaiso nP. 3

Principa l Authors : Catherin e Witherspoo n Patric kNevi s

Contributor s Bo bCross , Mobil e Sourc e Divisio n Malcol m Dole , Researc hDivisio n Rand y Guensler , Offic e o f Strategi c Plannin g Rez a Mahdavi , Researc hDivisio n Tod dWong , Stationar y Sourc e Divisio n And y Horwatt , Sout hCoas t AQM D To m Perardi , Ba y

Are a AQM DP. 4

TABL E O F CONTENT S

I . INTRODUCTION

1

II . LEGAL REQUIREMENT S RELATE DT OCOST-EFFECTIVENES S 2

III . DEFINITION

OF COST-EFFECTIVENES S 3
A Genera l Orientatio n3 Cost-Effectivenes s Versu s Cost-Benefi t Analyse s 5 Cost-Effectivenes s Versu s Socio-Economi c Impac t Analyse s 5

IV . AVAILABL E METHOD S FO RDETERMININGCOST-EFFECTIVENES S 6 Method s fo r Determinin gCos t 6 Method s fo r Determinin gEffectivenes s 7 Puttin gI t Al l Togethe r 9

V . SPECIAL TOPIC S RELATE DTOCOST-EFFECTIVENES S DETERMINATION S 9 Accountin gfo r Multi-Pollutan t Reduction s 9 Assessin gTransportatio nContro l Measure s 1 0 Selectin gth e Appropriat e Timeframe 1 0 Adjustin gfo r Reactivit y 1 1

VI . RELATIONSHI P OF COST-EFFECTIVENES S TOOTHE RCONSIDERATION S 1 2

VII . DISTRIC T OPTION S FO RSATISFYINGCOST-EFFECTIVENES S REQUIREMENT S 1 3

REFERENCE S 1 5 APPENDICE S
A . Stationar y

Sourc e Contro l Cos t Calculatio nWorksheet s B . Procedur e t o Calculat e Annualize dCost s C . Procedur e t o Calculat e Ne t Presen t Valu e (SCAQMDMethod ) D . Procedur e t o Calculat e Ne t Presen t Valu e (BAAQMDMethod ) E . Determinin gReactivit y (excerp t fro

m "Propose dRegulation s fo r Low-Emissio nVehicle s an dClea nFuels , Technica l Suppor t Document" )P. 5

I . INTRODUCTION Th e Californi a Clea n Ai r Ac t (Act ) require s ai r pollutio n contro l and ai r qualit ymanagemen t district s (districts ) t o develo p and implemen t program s tha t wil l attai n th e health-base d ambien t ai r qualit ystandard s se t byth e State
. Thes e standard s ar e necessar yt o protec t publi c health , especiall yth e healt ho f children , th e elderly , and thos e wit hrespirator y diseases
. I n adoptin g measure s t o achiev e th e stat e ai r qualit ystandards , district board s mus t weig hman yimportan t considerations
. On e o f the mi s "cost-effectiveness. "
Cos t ha s alway s bee n a consideratio n in th e Ai r Resource s Board' s and th e districts ' regulator yproceedings
. Th e cos t o f emissio n contro l measure s ha s als o bee n addressed , t o varyin g degrees , i n district attainmen t plans
. No t al l agencie s us e th e sam e methods
. Th e Boar d ha s a particula r approac ht o evaluatin g cost s associate d wit hmoto r vehicl e regulations
. District s emplo ya differen t se t o f method s fo r stationar ysourc e controls
. Som e district s focu s o n direc t cost s only ; a t leas t on e district ha s expande d it s cos t analyse s t o includ e socio-economi c impacts
. Effectivenes s i s usuall ydescribe d i n term s o f emissio n reductions
. A contro l measur e i s sai d t o b e "effective " i f i t prevent s futur e increase s in emission s o r reduce s thos e emission s absolutely
. District s wit hreliabl e modelin g capabilit yhav e attempte d t o tak e thi s a ste p farther ; t o describ e effectivenes s in term s o f ai r qualit yimprovement
. Wit hthi s approach , contro l measure s ar e "effective " i f the yreduc e th e ambien t concentration s o f ai r pollutant s o r preven t furthe r deterioratio n i n ai r quality
. Th e Californi a Clea n Ai r Ac t make s cost-effectivenes s a necessar y componen t o f ai r qualit yplannin g and rulemaking
. Unde r th e Act , certai n contro l measure s mus t b e deeme d cost-effectiv e prio r t o adoption
. Th e collectio n o f availabl e measure s mus t b e ranke d (fro mleas t t o mos t cost

effective ) i n district plans , and thos e ranking s mus t b e considere d i n th e developmen t o f adoptio n and implementatio n schedule s fo r individua l measures . Finally , eac hdistrict' s attainmen t pla n mus t b e a cost-effectiv e strateg yfo r attainin g stat e ai r qualit ystandards , whe n viewe d i n it s entirety
. Th e Act' s cost-effectivenes s provision s explicitl ypromot e regulator y efficiency
. Thi s inducemen t wa s ke yt o th e consensu s tha t enable d th e Ac t t o becom e law
. Achievin g stat e ai r qualit ystandard s i s an enormou s tas k tha t wil l tak e unprecedente d effort , cooperation , and individua l commitment
. Doin g s o wit ha minimu mo f economi c impact s i s a commo n aspiration
. Ye t whil e cost-effectivenes s i s give n grea t emphasi s in th e Californi a Clea n Ai r Act , i t i s neithe r th e sol e no r th e dominan t criterio n fo r decisionmaking
. Th e primar ymandat e i s t o achiev e th e stat e ai r qualit y standard s byth e earlies t practicabl e date :P. 6

"District s shal l
. . . conside r th e cost-effectivenes s o f thei r ai r qualit yprograms , rules , regulations , and enforcemen t practice s . . . and shal l striv e t o achiev e th e mos t efficien t method s o f ai r pollutio

ncontrol . However, priority shall be placed upon expeditious progress

toward the goal of healthful

air. (Healt

h& Safet

y Cod e Sectio n 40910 , emphasi s added. )
Th e purpos e o f thi s documen t i s t o advis e district s o f th e lega l requirement s pertainin g t o cost-effectiveness , a s the yprepar e thei r 199 1 attainment plans
. Th e Guidanc e wil l b e revise d periodicall ya s necessar y and wil l b e revise d in 1993 , prio r t o th e preparatio n o f th e secon d roun d o f ai r qualit yplan s du e i n 1994
. Similarly , district s ar e expecte d t o revis e and improv e thei r cost-effectivenes s estimates , bot ha s specifi c control s and subsequen t plan s ar e developed
. Thi s pape r contain s a discussio n of :

o th e cost-effectivenes s requirement s o f th e Act ; o availabl e method s fo r analyzin g th e cos t o f contro l measures ; o specia l issue s relate d t o cost-effectivenes s evaluations ; o th e relationshi p o f cost-effectivenes s t o othe r considerations ; and o distric t option s fo r satisfyin g cost-effectivenes s mandates
.

II
. LEGAL REQUIREMENT S RELATE DT O COST-EFFECTIVENES S Fiv e provision s in th e Californi a Clea n Ai r Ac t addres s cost

effectiveness
. On e i s a genera l directiv e t o districts
. Tw o pertai n t o distric t plan s and th e contro l measure s withi n thos e plans
. Th e remainin g provision s concer n regulation s develope d b yth e Boar d fo r moto r vehicle s and othe r mobil e sources . Eac hon e o f thes e provision s i s discusse d i n detai l below
. Al l section s ar e withi n th e Californi a Healt h& Safet yCode
. Sectio n 4091 0 direct s district s t o conside r th e cost-effectivenes s o f thei r ai r qualit yprograms , rules , regulations , and enforcemen t practices , i n additio n t o othe r relevan t factors
. Tha t sectio n als o admonishe s district s t o striv e fo r efficienc yi n ai r pollutio n control
. Sectio n 40913(b ) require s eac hdistric t boar d t o mak e a determinatio n tha t it s pla n i s a cost-effectiv e strateg yt o achiev e th e stat e standard s b y th e earlies t practicabl e date
. Sectio n 4092 2 addresse s th e individua l contro l measure s withi n distric t plans
. Subdivisio n (a ) require s district s t o includ e a n assessment o f th e cost-effectivenes s o f availabl e and propose d contro l measures , and t o includ e a lis t whic hrank s th e measure s fro mth e leas t cost-effectiv e t o th e mos t cost-effective
. Subdivisio n (b ) require s district s t o conside r th e relativ e cost-effectivenes s o f contro l measure s whe n developin g a n adoptio n and implementatio n schedul e fo r anyspecifi c measure . Pursuan t t o tha t subdivision , district s mus t als o conside r severa l othe r factor s including: technologica l feasibility , tota l emissio n reductio n potential , th e rat e o f reduction , publi c acceptabilit yand enforceability
.P. 7

Sectio n4301 3 authorize s th e Ai r Resource s Boar d(Board ) t o adop t standards , regulation s an dspecification s fo r a hos t o f vehicula r an dmobil e sources , provide dthos e measure s ar e necessary , technologicall y feasible , an dcost-effective . Sectio n4301 8 direct s th e Boar dt o exercis e it s regulator y authorit y

i n accordanc e wit hspecifie dschedule s an dobjectives . Subdivisio n(b ) require s th e AR B t o tak e whateve r action s ar e necessary , cost-effectiv e an d technologicall y

feasibl e t o achiev e a 55 Xreductio ninemission s o f reactiv e organi c gases , anda 15 % reductio ninemission s o f nitroge noxides , from moto r vehicle s b

y th e yea r 2000 . Subdivisio n(c ) direct s th e AR B t o aaop t standard s an

dregulation s tha t wil l resul t i nth e mos t cost-effectiv e combinatio no f contro l measure s onal l classe s o f moto r vehicle s an dmoto r vehicl e fuel .

III . DEFINITIO N

O F COST-EFFECTIVENES S A Genera l Orientatio n I nplai nEnglish , "cost-effective " mean s wort hth e effor t an dexpense . I nth e regulator y

domain , th e worthines s o f certai naction s i s largel y predetermined . Th e Californi a Legislatur e an dth e Unite dState s Congres s hav e establishe dclea r andunambiguou s mandate s t o protec t publi c health . Thus , action s designe dt o achiev e tha t en dar e inherentl y

worthwhile . However , th e cos t o f individua l action s i s stil l relevant . Cos t matter s whe nther e ar e choice s betwee nalternativ e action s tha t achiev e th e same ultimat e objective . Cos t i s als o relevan t whe nregulation s t o protec t publi c healt hencroac hupo nothe r importan t publi c values , suc ha s th e welfar e o f th e poores t amon gus . "Cost-effective " ha s hadparticula r meanin gt o ai r qualit y agencie s fo r th e las t severa l years . Th e Boar dan dsevera l district s us e thi s term t o describ e measure s tha t wil l achiev e emissio nreduction s o r improv e ai r qualit y a t a reasonabl e cost . Cost-effectivenes s i s expresse da s a rate : th e dollar s pe r to no f pollutant s reduced , o r th e dollar s pe r uni t o f ai r qualit y improvement . (A nexampl e o f th e latte r i s th e expecte dpar t pe r millio nchang e i nambien t ozon e concentrations. ) Th e us e o f rate s make s comparison s betwee ndifferen t contro l measure s possible . Moto r vehicl e standards , solven t controls , fue l specifications , transportatio nmeasures , an dindustria l control s ma y var y widel y i nabsolut e costs , ye t be equivalen t ona dolla r pe r tonbasis . Cost-effectivenes s i s a relativ e concept . The Boar dan ddistrict s typicall y

compar e measure s unde r consideratio nt o thos e recentl y adopte do r schedule dfo r action . A measur e i s deeme dcost-effectiv e i f i t reduce s emission s a t a cos t comparabl e t o othe r measures , again , o na pe r to nbasis .P. 8

Ove r time , a "goin grate " fo r pollutan t reduction s ha s bee n established . Thi s rat e i s th e uppe r cos t boundfo r measure s recentl y adopte do r propose dfo r adoption . Th e "goingrate " function s a s a n approximat e limi t oncost-effectivenes s determination s bu t i s no t a n absolut e limit . Th e "goin grate " increase s ove r time , du e t o inflatio nan d increasin gcost s o f pollutio ncontro l technology . Wher e the y ar e neede dt o attai no r maintai nstandards , measure s below th e goin grat e ar e sai dt o be cost-effective ; hence , th e univers e o f cost-effectiv e measure s ca nb e quit e large . Th e curren t "goin grates " fo r pollutio ncontro l ar e liste di nTabl e 1 . Not e tha t ther e i s a separat e rat e fo r eac hpollutant .

Tabl e 1 Cost-Effectivenes s o f Recentl y Adopte dMeasure s Pollutan t Reactiv e Hydrocarbon s Oxide s o f Nitroge n Carbo nMonoxid e Particulat e Matte r Averag e Rat e $ 2-5/pound $ 1-5/pound $ 0.10/pound 

## Highes t Rat e

$ ll/pound $ 12/pound $ 1/pound $ 5/pound

Cost-effectivenes s i s determine dfo r eac hindividua l contro l measure . Th e determinatio ni s usuall y limite dt o th e direc t cost s an dth e direc t result s o f th e measur e bein gevaluated . T o findth e dolla r pe r to nrate , th e direc t cost s o f th e contro l measur e ar e divide db y th e tota l emission s reduce dove r a specifie dtimeframe . Fo r example , a measur e tha t cost s $300,00 0 an

dwhic hreduce s emission s b y 10 0 ton s pe r yea r ove r a te nyea r perio dha s a cost-effectivenes s o f $3,00 0 pe r to no r $1.5 0 pe r pound . I ncost-effectivenes s calculations , th e emissio nreduction s ar e additive . A

measur e tha t reduce s emission s b y te nton s pe r da y

(TPD ) i

n 199 4 an dmaintain s thos e reduction s throug h2004 , ha s a tota l emissio n reductio no f 36,50 0 ton s (1 0 TP Dx1 0 year s x36 5 days/year) . A measur e tha t reduce s emission s b y te nton s pe r da y

in1994 , the nanadditiona l thre e ton s pe r da y

i n199 7 ha s a tota l tonreductio no f 44,16 5 ton s [(1 0 TP Yx3 year s x365 ) + (1 3 TP Yx7 year s x365)] . Cost-effectivenes s i s ofte nnormalize dt o annua l cost s pe r ton , t o enabl e comparison s betwee nmeasures . Th e availabl e method s fo r preparin g cost-effectivenes s evaluation s ar e discusse dinChapte r IV .P. 9

Cost-effectivenes s i s determine d byeac hdistric t in consideratio n o f loca l factors
. Th e cos t o f a particula r contro l measur e ma yvar yfro mon e distric t t o anothe r dependin g o n th e exten t o f contro l alread yimplemented , and th e potentia l emissio n reductions
. However , al l thing s bein g equal , ther e i s littl e variatio n fro m plac e t o place
. Cost-Effectivenes s Versu s Cost-Benefi t Analyse s
Acost-effectivenes s evaluatio n i s muc hmor e limite d i n scop e tha n a cost-benefi t analysis
. Acost-effectivenes s evaluatio n usuall yaddresse s jus t th e direc t cost s (o r savings ) o f a measure ; fo r exampl e planning , researc hand development , installation , engineering , equipmen t and othe r materials , operations , and maintenance
. Furthermore , in mos t cost

effectivenes s evaluations , benefit s ar e describe d onl yin term s o f emissio n reduction s o r ai r qualit yimprovement
. Acost-benefi t analysi s attempt s t o quantif yal l th e cost s and benefit s o f a contro l measure , includin g socia l and environmenta l effects
. Th e objectiv e i s t o determin e whethe r th e measur e wil l produc e a ne t societa l gai n o r loss , i n monetar yterms
. Becaus e cost s an d benefit s ar e weighe d directl yon e agains t th e other , bot hmus t b e quantifie d i n dolla r terms
. Thi s i s a n obstacl e t o usin g cost-benefi t analysi s fo r ai r pollutio n contro l decision s a s i t i s difficul t t o assig n monetar yvalu e t o ai r qualit yand publi c healt hprotection
. Cost-Effectivenes s Versu s Socio-Economi c Impac t Analyse s Socio-economi c impac t analysi s i s als o broade r i n scop e tha n a cost

effectivenes s evaluation
. Socio-economi c analysi s attempt s t o discer n th e rippl e effec t o f contro l measure s throug hothe r sector s o f th e economy , an d t o identif yth e groups , type s o f persons , o r institution s mos t heavil y affected
. A n exampl e wil l hel p t o illustrat e th e difference
. Assum e th e contro l measur e i s th e substitutio n o f natura l ga s fo r fue l oi l a t industria l boilers
. Acost-effectivenes s evaluatio n woul d addres s cost s t o owner s an d operator s o f industria l boilers , suc ha s th e differentia l pric e betwee n th e tw o fuels , th e exten t t o whic hne wequipmen t i s require d (and it s cost) , change s t o maintenanc e and operationa l costs , and th e tota l emission s reduce d byth e measure . Asocio-economi c analysi s goe s severa l step s further
. Thi s typ e o f analysi s migh t examin e th e effec t o f th e measur e o n natura l ga s availability , th e potentia l fo r monopolisti c pressure s i n th e market , change s in fue l oi l sale s and resultin g incom e and employmen t effect s t o fue l oi l producers , th e ethnicit yo f displace d workers , and any othe r effect s tha t ca n b e determine d base d o n availabl e data
. Socio-economi c analyse s requir e a tremendou s amoun t o f dat a t o perfor m adequatel yand ma yrequir e a regiona l economi c model
. Onl yon e ai r pollutio n contro l distric t ha s thi s capabilit ya t th e presen t time : th e Sout hCoas t Ai r Qualit yManagemen t District
. Th e Sout hCoas t Distric t recentl ycontracte d wit hRegiona l Economi c Models , Inc
. (REMI ) t o develo p anP.1 0

econometri c mode l fo r assessin g indirec t socio-economi c impacts
. Th e REM I mode l consist s o f economi c and demographi c element s (suc ha s employmen t deman d and occupation byindustry , marke t share s byindustry , populatio n and labo r supply ) and ca n bot hforecas t and simulat e polic ychange s in a regiona l economy . REM I use s publishe d dat a fro mth e stat e and countie s t o link economi c activitie s i n th e four-count yai r basin
. Th e District' s economi c analyse s fo r pendin g regulation s currentl y identif yth e type s o f affecte d industries , th e rang e o f probabl e costs , th e cost-effectivenes s o f contro l alternatives , and publi c healt hbenefits
. Distric t staf f plan s t o refin e thes e analyse s furthe r i n it s 199 1 pla n usin g th e REM I model
. Th e Distric t i s devotin g particula r attentio n t o jo b los s and impact s o n ethni c groups . Th e Ai r Resource s Boar d usuall yinclude s tw o socio-economi c impact s in it s cos t analyses : cos t t o individua l consumer s and cost s t o smal l businesses
. Fo r eac hfue l regulation , th e Boar d estimate s th e pric e chang e pe r gallo n a t th e retai l pump . Fo r regulation s affectin g ne wmoto r vehicles , th e Boar d compute s th e potentia l increas e i n ne wca r price s o n a pe r uni t basis
. Cost s t o smal l businesse s ar e routinel yidentifie d i n th e staf f report s accompanyin g regulator yproposals , and wher e the yar e foun d overl yburdensom e byth e Board , for m a basi s fo r modification s t o thos e proposals
.

IV . AVAILABL E METHOD S FORDETERMININGCOST-EFFECTIVENES S Method s fo r Determinin g Cos t Ther e ar e tw o basi c method s fo r evaluatin g th e cos t o f individua l contro l measures : th e levelize d cas hflo wmethod , and th e discounte d cas h flo wmethod
. Thes e ar e commonl yreferre d t o a s "annualized " and "net

presen t value, " respectively
. Th e firs t metho d i s th e simplest
. Th e secon d metho d factor s i n th e presen t valu e o f futur e expenditures
. Th e secon d metho d i s use d bybot hth e Ba yAre a and Sout hCoas t Ai r Qualit yManagemen t Districts , and i s startin g t o b e use d mor e frequentl ybyth e Ai r Resource s Boar d fo r fue l relate d measures . Th e annualize d metho d translate s capita l cos t int o a n equivalen t annua l cost , bymultiplyin g capita l cos t agains t a facto r whic hi s a functio n o f th e interes t rat e and equipmen t life
. Th e resultin g annua l cos t i s adde d t o th e yearl yoperatin g cost s t o ge t a total , levelize d annua l investment
. Th e annualize d metho d work s bes t whe n capita l cost s ar e incurre d i n th e firs t yea r onl yand th e interes t rat e remain s constant
. Th e net-presen t valu e metho d calculate s th e cos t o f buyin g and operatin g pollutio n contro l equipment , ove r th e equipmen t life , i n today' s dollars
. Wit hthi s method , annua l operatin g cost s ar e weighte d and progressivel ylowe r weight s ar e assigne d t o cost s th e farthe r the yar e fro m th e present
. Thes e weighte d annua l cost s ar e the n adde d togethe r and summe d wit hth e firs t yea r capita l cost
. Th e resultin g figur e represent s th e tota l cost s associate d wit hth e contro l measure , i n curren t dollars
.P.1 1

Bot hmethod s requir e th e sam e essentia l information
. Th e firs t orde r o f busines s i s t o calculat e capita l and othe r cost s associate d wit hth e contro l measure . "Capita l cost " i s th e one-time , non-recurrin g expens e o f purchasin g pollutio n contro l equipmen t and othe r hardware
. "Othe r costs " migh t includ e operation , planning , researc hand development , installation , maintenance , enforcement , monitoring , and interes t o n borrowe d money . District s i n th e forefron t o f regulator yactivit yca n provid e muc ho f th e necessar ycos t informatio n t o othe r district s (thoug hsom e adjustmen t fo r inflatio n and loca l condition s ma yb e required)
. Appendi xAcontain s worksheet s develope d byth e Sout hCoas t AQM D tha t ca n b e use d t o estimat e cost s fo r ne wstationar ysourc e controls
. Vendor s o f pollutio n contro l technolog yand regulate d industrie s ca n als o b e consulted , bu t district s ma y wan t t o exercis e som e caution
. Vendor s eage r fo r busines s hav e bee n known t o underestimat e contro l costs ; i t i s bes t t o rel yonl yupo n guarantee d price s an

d availability
. Industr yestimates , b ycontrast , ma yrepresen t wors t cas e o r maximu mpossibl e cost
. Cros s checkin g al l estimate s with othe r district s and similarl ysituate d industrie s i s a goo d practice
. Fo r furthe r informatio n o n cos t calculatio n methods , district s ca n refe r t o Appendi xIV- D o f th e Sout hCoas t AQMD' s 198 9 Ai r Qualit yManagemen t Plan , entitled , "Discount Cash Flow Method As Applied to the Cost Analyses of Control Measures."

Copie s o f Appendi xIV- D ca n b e obtaine d fro mth e District
. Asimplifie d procedur e fo r applyin g th e annualize d metho d i s provide d i n Appendi xB
. Appendi xC o f thi s pape r contain s tw o formula s fo r applyin g th e net-presen t method , base d o n th e method s use d b yth e Ba yAre a and th e Sout hCoas t districts
. Method s fo r Determinin g Effectivenes s A s note d i n th e Introductio n and Definitio n sections , pas t estimate s o f th e effectivenes s o f contro l measure s hav e bee n usuall yexpresse d i n term s o f emission s reduced
. Thi s practic e i s consisten t wit hth e Californi a Clea n Ai r Act , whic hdefine s progres s towar d attainmen t in emissio n reductio n term s (fiv e percen t pe r year , average d ove r eac hconsecutiv e thre e yea r perio d - Sectio n 40914)
. Th e typica l uni t o f measuremen t i s ton s pe r da yo r ton s pe r year . Th e tota l quantit yo f ton s reduce d i s calculate d by comparin g controlle d emission s t o wha t woul d otherwis e hav e bee n emitte d durin g eac hyea r o f th e equipment' s life , the n addin g thos e emissio n reduction s together
. Acrud e estimat e o f emissio n reduction s ca n b e develope d byapplyin g contro l factor s t o futur e emission s inventories
. Thus , a measur e tha t achieve s 85 2 contro l woul d reduc e futur e emission s by852
. Bette r estimate s ca n (and should ) b e develope d byconductin g survey s o f affecte d industrie s t o refin e curren t an d futur e emissio n estimates , factorin g i n anylikel y exemption s t o th e contro l measur e (suc ha s a threshol d belo wwhic hn o contro l woul d b e required) , th e degre e o f contro l alread yimplemented , and th e probabl e complianc e rate
.P.1 2

I nman y cases , emissio nreductio nestimate s wil l b e preliminar y an d subjec t t o change . District s ma y wan t t o identif y

a rang e o f estimate s i n thei r plan s t o reflec t th e uncertaintie s inheren t i ncalculatin gemissio n reductions . I nadditio nt o usin gemissio nreduction s a s th e basi s fo r estimate s o f effectiveness , th e Act' s requirement s canb e me t b y usin ga mor e sophisticate dmeasur e o f ai r qualit y improvement s suc ha s th e chang e i n ambien t ozon e expected . Som e effort s hav e bee nmad e t o expres s effectivenes s insuc hterms . However , t o d o this , a reliabl e mode l o f eac h pollutant' s behavio r inth e atmospher e i s essential . I n1982 , th e Ba y Are a AQM Dattempte dt o defin e th e ai r qualit y benefit s o f ozon e precurso r controls . Th e Distric t ra nsensitivit y test s throug hit s Livermor e Regiona l Ai r Qualit y

Mode l (LIRAQ) , t o se e how th e atmospher e responde dt o hydrocarbo nreduction s versu s reduction s i nnitroge noxides , phasin go f controls , an

dth e spatia l distributio no f emissio nchanges . Afte r observin g th e percen t chang e inpredicte dozon e fo r variou s alternativ e strategies , th e Distric t develope deffectivenes s factor s fo r individua l contro l measures , an

dranke dthos e measure s i nterm s o f ambien t impacts . Th e unit s fo r thi s analysi s wer e part s pe r millio no f ozon e (improvemen t o r deterioration) . Unde r curren t photochemica l modelin gprotocols , th e Ba y Area' s 198 2 analysi s o f contro l measur e effectivenes s i s n o longe r deeme dreliable . Thi s i s largel y

du e t o dat a limitations ; ther e wer e insufficien t fiel d measurement s t o verif y th e performanc e o f th e LIRAQ mode l i n1982 . Also , it ha s sinc e bee nshowntha t critica l inpu t dat a wer e flawed . However , th e Ba y Are a andsevera l othe r district s ar e conductin gne w fiel dstudie s an

dhop e t o hav e reliabl e model s upandrunnin gfo r thei r 199 1 plans . I f successful , thes e district s wil l b e abl e t o comput e th e effectivenes s o f contro l measure s inbot hemissio nreduction s an dai r qualit y

terms , an

dma y wis ht o emplo y a napproac ht o cost-effectivenes s tha t consider s th e cos t pe r uni t o f ai r qualit y

improvement . Ther e i s n o referenc e documen t fo r calculatin gcost-effectivenes s i n ai r qualit y

term s no r any

acknowledge d"state-of-the-art. " Th e Ba y Area' s 198 2 pla nan

d198 8 Reasonabl e Furthe r Progres s Repor t ar e instructiv e though , a s t o th e approac huse di ntha t District . Th e Ai r Resource s Board' s Technica l Guidanc e Documen t onphotochemica l modelin gprovide s ampl e assistanc e ondevelopin gth e tool s fo r ai r qualit y analysis . Tha t documen t als o contains , a s anappendix , a brie f repor t o nth e feasibilit y

o f usin g photochemica l model s andothe r technique s t o distinguis hbetwee nemissio n contro l measures . District s usin gth e modelin gapproac hma y wan t t o qualif y

thei r cost effectivenes s finding s andrankings . Photochemica l modelin gadd s a norde r o f complexit y

t o cost-effectivenes s evaluations . Furthermore , al l modelin g application s hav e som e degre e o f uncertainty . Wher e modelin guncertaintie s excee dth e magnitud e o f th e measure s bein gevaluated , cautio ni s indicated . Car e mus t b e take nt o avoi dmistakin gmodelin g"noise " fo r actua l results . Th e Board' s technica l guidanc e onphotochemica l modelin gdiscusse s thi s consideratio ni

ndetail .P.1 3

Puttin g I t Al l Togethe r Th e precedin g section s describe d method s fo r determinin g cos t and fo r determinin g th e effectivenes s o f individua l contro l measures . Cost

effectivenes s i s th e rati o o f thes e tw o output s and it s relationship t o othe r contro l measures . Whe n matchin g on e outpu t (cost ) t o th e othe r (effectiveness) , th e mos t importan t consideratio n i s th e timeframe
. I t i s critica l tha t cos t and effectivenes s b e calculate d fo r th e sam e period
. It' s als o critica l tha t th e distric t us e a consisten t approac hwhe n comparin g variou s type s o f measure s t o on e another
. Th e subjec t o f timeframe s - wha t i s appropriat e and wha t i s no t - i s discusse d i n th e followin g chapter
. Th e greates t obstacl e t o cost-effectivenes s determination s i s limite d data
. I t i s no t alway s possibl e t o precisel ydetermin e th e emissio n reductio n potentia l o r ai r qualit yimpac t o f futur e contro l measures , particularl ythos e whic hforc e th e developmen t o f ne wtechnology
. Cost s ma y b e equall yhar d t o predic t befor e th e component s o f a rul e o r regulatio n hav e bee n full yhammere d ou t and th e affecte d industr yha s ha d a n opportunit yt o comment
. Reasonabl ycomplet e analyse s and informe d judgmen t ar e th e bes t tool s eac hdistric t ha s a t it s disposal
.

V . SPECIAL TOPIC S RELATE DTOCOST-EFFECTIVENES S EVALUATION S Accountin g fo r Multi-Pollutan t Reduction s Som e contro l measure s ma yreduc e mor e tha n on e pollutant
. Ho wi s cost

effectivenes s handle d i n thi s circumstance ? On e optio n i s t o divid e contro l cost s b yth e tota l reduction s o f th e mos t importan t pollutant
. Thi s approac hmake s sens e whe n th e contro l i s targete d a t a singl e pollutant , an d th e additiona l reduction s ar e merel ysid e benefits
. Anothe r optio n i s t o apportio n cost s acros s eac ho f th e pollutant s reduced , e.g. , t o assig n 40 2 o f th e cost s t o on e pollutan t and 60 2 t o another
. Th e latte r approac hmake s sens e whe n bot hpollutant s mus t b e reduce d i n orde r t o achiev e ai r qualit y objectives
. I t i s no t appropriat e t o apportio n cost s t o pollutant s tha t ar e no t targete d fo r control
. Th e cost-effectivenes s calculation s shoul d onl yb e conducte d fo r thos e pollutan t emission s tha t pertai n t o th e standar d o r objectiv e t o b e met
. Assumin g th e goa l i s t o mee t ozon e and carbo n monoxid e (CO ) standards , and th e measur e i n questio n reduce s hydrocarbon s (HC) , nitroge n oxide s (NOx) , C O and particulat e matte r (PM) , th e tota l cos t coul d b e apportione d amon g HC , NO xand CO , bu t no t PM
. Asimpl e wa yt o apportio n cost s i s t o trea t al l emission s a s th e same . Thus , HC , NOx , PM , and C O ton s ar e adde d togethe r t o creat e a tota l to n figure , and th e contro l measur e cost s ar e divide d bythi s sum . Th e on e drawbac k t o thi s approac hi s tha t i t assume s al l reduction s ar e equall y effectiv e o r valuable
. I t als o result s i n misleadin g cost-effectivenes s estimate s fo r vehicula r measures , sinc e C O reduction s typicall yexcee d H C and NO xreduction s bya facto r o f seven . Thi s latte r effec t ca n b e correcte d bydiscountin g C O reduction s bya facto r o f seven , o r byassignin gP.1 4

a n equa l percentag e o f th e cost s t o eac hpollutan t o f concer n withou t regar d t o thei r quantities
. Anothe r apportionmen t metho d i s t o weigh t individua l pollutant s b y thei r ambien t impacts
. Suc hvariabl e weightin g ma yb e especiall y appropriat e fo r ozon e precursors , sinc e th e effectivenes s o f H C and NO x reduction s varie s base d o n existin g pollutan t concentrations
. Determinin g th e appropriat e weight s require s a photochemica l model , though , tha t ca n reliabl ydistinguis hbetwee n H C and NO xreductions
. Variabl e weightin g ma y als o b e appropriat e hydrocarbon s wit hdifferen t reactivitie s (thi s i s discusse d furthe r below)
. Assessin g Transportatio nContro l Measure s Transportatio n contro l measure s (TCMs) ar e thos e measure s tha t reduc e vehicl e mile s travelled , idling , traffi c congestion , o r vehicl e trip s fo r th e purpos e o f reducin g vehicula r emissions
. Transportatio n contro l measure s includ e bot hdirec t regulator ystrategie s (lik e ridesharin g rules ) and modification s t o th e overal l transportatio n syste m(e.g. , addin g Hig h Occupanc yVehicl e lanes)
. Transportatio n contro l measures , unlik e direc t control s o n stationar y o r mobil e source s whos e sol e purpos e i s improve d ai r quality , ar e designe d t o mee t severa l differen t societa l needs
. Thes e includ e increase d mobility , greate r publi c safety , ai r qualit yprotection , and efficien t movemen t o f good s and people
. Th e cost s o f TCM' s hav e t o b e allocate d amon g al l thei r purpose s and benefits
. Som e transportatio n project s ma yals o hav e extremel y lon g depreciatio n period s give n thei r extraordinaril yhig hcapita l costs
. Thi s make s comparison s t o industria l control s difficult
. Cost s ma ynee d t o b e depreciate d ove r a numbe r o f decades
. Industria l control s ar e typicall y depreciate d ove r 1 0 year s - th e presume d "usefu l life " o f th e contro l equipment
. Identifyin g whic hTC Mcost s ar e attributabl e t o ai r qualit yobjective s i s quit e difficult
. Ther e i s n o accepte d metho d fo r assignin g cost s t o variou s objectives
. Furthermore , th e cost s o f th e TCM' s themselve s ofte n def yanalysis
. Wher e roa d constructio n and maintenanc e stop s and TCM' s begi n i s a matte r o f judgment , ofte n subjectiv e judgment
. Becaus e o f thes e differences , th e cost-effectivenes s o f TCM' s require s specia l consideration
. Th e pla n shoul d tr yt o provid e cos t and emissio n estimate s fo r TCM's
. T o th e exten t tha t cost s ca n b e determine d and effectivel yassigne d t o variou s objectives , thos e estimate s shoul d b e include d in th e pla n and th e cost-effectivenes s o f th e TC Mfo r it s contributio n t o reduce d emission s o r improve d ai r qualit yca n b e compare d wit hothe r measures . However , wher e suc han apportionmen t o f cost s i s no t possible , TCM' s nee d no t b e compare d directl ywit hothe r contro l measure s in a district' s plan
. Selectin g anAppropriat e Timeframe Th e timefram e ove r whic hcost s ar e considere d ca n mak e a considerabl e differenc e a s t o whic hmeasure s wil l b e mor e cost-effective
. Aprojec t involvin g a larg e capita l investmen t ma yb e highl ycost-effectiv e i n th e

1 0P.1 5

lon g run , ye t wil l rat e lowin cost-effectivenes s i f evaluate d ove r a shor t timeframe
. Th e objectiv e o f th e Californi a Clea n Ai r Act' s rankin g requiremen t i s t o pu t al l measure s o n equa l footing
. Thi s suggest s tha t a simila r timefram e shoul d b e use d fo r all , bu t tha t clearl ydisadvantage s som e o f th e longe r ter mmeasures . I t als o ignore s difference s in th e servic e lif e o f variou s contro l technologies
. Cost-effectivenes s coul d b e compute d usin g th e actua l servic e lif e o f eac hcontro l measure , whateve r tha t servic e lif e happen s t o be
. Thi s woul d ten d t o equaliz e shor t ter mversu s longe r ter m measures . Cost-effectivenes s coul d als o b e calculate d usin g th e projecte d attainmen t dat e a s a cu t off
. Thi s woul d preven t unreasonabl ylon g depreciatio n periods , bu t woul d no t accoun t fo r measure s neede d t o maintai n stat e standards
. Lastly , a commo n depreciatio n perio d coul d b e use d fo r al l measures , th e drawback s note d abov e notwithstanding
. A s ma yb e obviou s fro mthi s discussion , ther e i s n o perfec t method
. Distric t plan s shoul d identif ywhic ho f thes e approache s wa s use d t o calculat e th e cost-effectivenes s o f availabl e measures . Adjustin g fo r Reactivit y
No t al l hydrocarbon s ar e th e same . Highl yreactiv e hydrocarbon s ten d t o accelerat e th e build-u p o f ozon e i n th e atmospher e whe n sufficien t quantitie s o f NO xar e present
. Th e Boar d and man ydistrict s woul d lik e t o accoun t fo r thes e difference s whe n designin g contro l strategie s and whe n computin g cost-effectivenes s o f variou s hydrocarbo n measures . Lik e othe r factor s i n ozon e formation , reactivit yi s bes t understoo d throug hth e us e o f a photochemica l airshe d model
. Bu t question s hav e bee n raised
. I s ther e a simple r method ? Ca n specifi c reactivit yfactor s b e applie d t o individua l hydrocarbons ? I f tha t wer e possible , th e Boar d and th e district s coul d assig n a highe r valu e t o th e measure s tha t reduc e th e mos t reactiv e hydrocarbons
. Th e Boar d ha s bee n workin g o n jus t suc ha metho d a s par t o f it s upcomin g lo wemissio n vehicle/clea n fue l regulations
. Relyin g o n th e wor k o f Dr
. Willia m

Carte r o f th e Stat e Ai r Pollutio n Researc hCente r a t th e Universit yo f Californi a Riverside , staf f i s proposin g t o creat e reactivit y adjustmen t factor s fro mth e identifie d "maximumincrementa l reactivity " fo r eac hhydrocarbon
. Incrementa l reactivit yi s th e chang e in ozon e cause d b y th e additio n o f a smal l incremen t o f hydrocarbon s t o a pollute d environment , divide d b

yth e amoun t o f hydrocarbon s added
. Th e maximu mreflect s th e highes t ozon e formin g potentia l unde r a se t o f assume d conditions
. Dr
. Carter' s wor k and th e staff' s proposa l ar e describe d in th e technica l suppor t documen t fo r th e propose d lo wemissio n vehicle/clea n fuel s regulations , and i s include d in Appendi xE o f thi s document
. Muc hwor k remain s t o b e done
. Thi s year , Dr
. Carte r wil l recalculat e th e maximu mincrementa l reactivitie s usin g environmenta l conditions tha t ar e representativ e o f ozon e episode s i n California
. Th e uncertaint ybound s wil l als o b e calculate d t o accoun t fo r gap s i n th e curren t understandin g o f atmospheri c chemistry
. 1 1P.1 6

District s wishin g t o mak e reactivit yadjustment s wil l nee d t o speciat e hydrocarbo n emission s data
. District s mayals o nee d t o accoun t fo r regiona l difference s i n atmospheri c chemistr yo r pollutan t loading
. Th e Board' s approac hi s necessaril ygeneric , becaus e moto r vehicl e and fue l measure s hav e statewid e application
. Thi s approac hma yno t b e supportabl e fo r individua l jurisdictions
.

VII . RELATIONSHI P OF COST-EFFECTIVENES S T OOTHE RCONSIDERATION S Cost-effectivenes s i s jus t on e o f severa l criteri a tha t mus t b e considere d in th e plannin g process . Th e Californi a Clea n Ai r Ac t expressl y state s tha t "priorit yshal l b e place d o n th e goa l o f healthfu l air " (Sectio n 40910) , and require s district s t o conside r al l o f th e followin g whe n makin g regulator ychoices : Technologica l feasibility : District s maywan t t o tak e advantag e o f th e bes t availabl e contro l technology , eve n i f i t i s no t th e cheapes t alternativ e o n a pe r to n basis
. Conversely , highl ycost-effectiv e measure s tha t ar e no t technologicall yfeasibl e ma yb e assigne d lo w overal l priorit yunti l thei r feasibilit yimproves
. Tota l emissio n reductio n potential : Tw o measure s wit hth e sam e cost

effectivenes s ma yhav e vastl ydifferen t emissio n reductio n potential
. On e migh t reduc e emission s b ya hal f ton ; th e othe r b y1 2 ton s - eve n thoug hbot hhav e a cost-effectivenes s o f $8,000/ton
. District s ma yb e oblige d t o adop t th e latte r measur e firs t t o mee t th e Act' s fiv e percen t annua l emissio n reductio n requirement
. District s ma yals o adop t measure s tha t ar e les s cost-effectiv e o n a dollar s pe r to n basis , i f th e potentia l emissio n reduction s ar e greater
. Fo r example , a rul e tha t achieve s 1 5 ton s pe r da yreduction s a t a cos t o f $10,000/to n ma y b e adopte d and implemente d befor e a rul e tha t achieve s 2 ton s pe r da y reduction s a t $7,000/ton
. Rat e o f reduction : Th e Ac t place s priorit yo n expediency
. Th e earlies t practicabl e attainmen t dat e mus t b e considere d in developin g adoptio n and implementatio n schedules
. However , balanc e i s important
. Lon g ter mstrategie s ar e neede d in severa l area s t o attai n and maintai n healthfu l ai r quality
. Investin g in thes e strategie s i s important , and shoul d no t b e neglecte d whe n designin g th e 199 1 plan s o r in settin g regulator ypriorities
. Publi c acceptability : Som e measure s tha t woul d b e highl ycost

effectiv e ma yb e unacceptabl e t o th e public
. No-driv e day s o r highris e development s t o limi t trip s ar e tw o cogen t examples
. Lac k o f publi c suppor t doe s no t mea n tha t th e mandate s o f th e Ac t ca n b e se t aside
. Whe n unpopula r measure s ar e critica l fo r attainment , publi c suppor t need s t o b e built
. Bu t whil e publi c educatio n and outreac har e changin g peoples ' attitudes , district s ma ywis ht o mov e ahea d o n mor e acceptabl e measures . Enforceability : Volunteerism , marke t incentives , and othe r flexibl e approache s ma yb e les s costl ytha n traditiona l comman d and contro l regulations
. Withou t sufficien t monitorin g and enforcemen t methods ,
1 2P.1 7

though , th e presume d emissio n reduction s ma yneve r com e t o pass . District s mus t conside r thes e difficultie s whe n craftin g thei r plans
. Althoug hno t explicitl yrequire d byth e Act , district s ma yconside r any an d al l othe r factor s the ydee m relevant
. Possibl e consideration s includ e energ yconservation , wate r conservation , wast e minimization , globa l warming , and potentia l reduction s i n toxi c ai r contaminants
.

VI . DISTRIC T OPTION S FORSATISFYINGCOST-EFFECTIVENES S REQUIREMENT S
Ever ydistric t subjec t t o th e plannin g requirement s in th e Californi a Clea n Ai r Ac t mus t addres s th e cost-effectivenes s provisions
. Failur e t o d o s o woul d b e inconsisten t wit hth e Act , coul d provok e criticism s durin g th e pla n adoptio n process , and ma ysubjec t district s t o lega l challenge
. Th e cost-effectivenes s presentatio n ca n b e simple
. Th e chie f objectiv e i s t o identif yth e cost s associate d wit hvariou s contro l measures . Bein g consistent , straightforwar d and reasonabl ythoroug hi s sufficient
. District s ma ychoos e t o perfor m cost-benefi t o r socio-economi c analyses , bu t tha t i s no t necessar yt o satisf yth e requirement s o f th e Act
. Cost-effectivenes s calculation s ma yb e preliminar yan d approximate
. I t i s importan t t o remembe r tha t cos t and effectivenes s estimate s wil l b e substantiall yrefine d i n th e rulemakin g process . Th e pla n nee d onl yrelat e th e bes t availabl e information
. Th e district s nee d t o mak e thi s informatio n and th e method s use d t o calculat e cost-effectivenes s availabl e t o th e public , and shoul d see k publi c comment s o n th e method s use d throug h workshop s o r othe r revie wmechanisms
. Th e cost-effectivenes s evaluation s nee d onl yg o s o fa r a s th e pla n itself
. I f th e cos t o r effectivenes s o f anyindividua l measur e i s unknown , rankin g tha t measur e ca n b e deferre d unti l th e secon d (o r third ) pla n revision
. Thi s i s especiall ytru e fo r futur e stud ymeasure s an d contingenc y measure s th e distric t i s no t expressl ycommittin g fo r adoption
. W e sugges t groupin g suc hmeasure s unde r a headin g - "Controls for whichcosteffectiveness

cannot

currently

be determined"

- o r a simila

r titl e s

o tha t i t i s clea r tha t cost-effectivenes s wa s considered , bu t coul d no t b e adequatel yquantified
. District s ma yran k measure s bysevera l differen t indice s a s long a s th e plan s includ e a t leas t on e lis t tha t rank s measure s fro mth e mos t cost

effectiv e t o th e leas t cost-effective
. W e sugges t tha t a separat e lis t b e prepare d fo r eac hpollutan t and fo r eac hprecursor , t o facilitat e comparison s betwee n measures . District s d o no t hav e t o includ e list s fo r pollutant s tha t ar e no t par t o f thei r attainmen t strategy
. District s ar e no t obligate d t o adop t o r implemen t contro l measure s in ran k orde r o f cost-effectiveness
. A s discusse d in detai l above , th e Californi a Clea n Ai r Ac t mandate s consideratio n o f severa l differen t factor s and place s an emphasi s o n expeditiou s attainment
. Bu t district s mus t conside r cost-effectivenes s rank s whe n developin g rulemakin g schedule s fo r individua l measures . Thi s ca n b e accomplishe d bycross-referencin g th e annua l regulator ycalenda r require d unde r Sectio n 4092 3 t o th e cost

effectivenes s list s i n th e plan , o r bymentionin g cost-effectivenes s 1 3P.1 8

ranking s i

nth e publi c notic e document s an dstaf f report s fo r individua l controls . Th e Pla nitsel f wil l serv e a s documentatio nfo r eac hdistrict' s chose nschedule . Th e district s andth e Boar dshar e responsibilit y fo r calculatin gcos t effectivenes s estimates , bu t district s ar e responsibl e fo r compilin gtha t informatio nint o a singl e analysis . District s mus t calculat e cost effectivenes s fo r al l contro l measure s unde r loca l jurisdiction . Thi s include s stationar y

source s controls , transportatio ncontro l measures , control s fo r are a sources , andindirec t sourc e controls . Th e Ai r Resource s Boar dwil l provid e district s wit hcost-effectivenes s dat a fo r mobil e source , consume r product , andutilit y engin e controls , s o tha t thes e measure s ca nb e compare dwit hthos e subjec t t o loca l jurisdiction .



### 1 4P.1 9

REFERENCE S

(1 ) Ba y Are a Ai r Qualit y

Managemen t District . "Calculatio nShee t fo r Equivalen t Annua l Cost. " (2 ) Environmenta l Reporter . "EPA Draf t Guideline s fo r Performin g Regulator y

Impac t Analysi s Unde r Executiv e Orde r 12291" . Jul y 16 , 1982 , p . 386 . (3 ) Sout hCoas t Ai r Qualit y Managemen t District . Draf t Bes t Availabl e Contro l Technolog y

Guidelines . Octobe r 7 , 1988 . (4 ) . Fina l Appendi xI V - D . Discoun t Cas hFlow Metho da s Applie dt o th e Cos t Analvsi s o f Contro l Measures . Marc h1989 . (5 ) . Fina l Report . Publi c Healt han dSocio-Economi c Tas kForce . Februar y

1990 .



### 1 5P.2 0



### Appendi xA STATIONAR Y SOURC E CONTRO L COS T CALCULATIO

NWORKSHEET

S (Sout hCoast Ai

r Qualit yManagemen

t District )

Following i s a brie f discussio n o n some frequentl y encountere d capita l an d annua l operating cos t elements , along wit han associate d lis t o f assumptions
. (In th e even t cost s ar e no t readil yavailable , defaul t value s ar e give n i n parentheses. )

II-A. l CAPITAL COST S (assume d t o occu r onl yi n th e firs t year ) Equipmen t purchase , costs : Accessorycosts : Transportatio n & sale s tax : Installatio n cost s Engineering cost s ( § $50/hr ) Contingenc ycost s Tota l capita l cost s ; Equipmen t cost s Fo r cos t analysis , th e equipmen t requirement s hav e t o be specifie d properly
. Th e specification s include , bu t no t limite d to , th e contaminant s being treated , th e typ e o f add

o n control s required , contaminan t concentration s i n th e exhaust , th e exhaus t flowrate , th e temperatur e o f th e exhaus t gas , an

d th e operating hour s o f th e equipment
. Accessorycost s Sometimes , accessorycost s ca n constitut e u p t o 30 % o f th e equipmen t cost
. The yinclude , bu t ar e no t limite d to , th e following :
o Piping fo r steam , water , o r electricit y o Instrumentatio n o Ductwor k fo r inle t an d outle t gase s o Insulatio n o Booste r fan sP.2 1



### Transportatio n cost s Relativel yspeaking , transportatio n cost s ar e fairl ymino r i n mos t cases . However , i f th e specifie d contro l equipmen t require s specia l handlin g o r i f ther e i s a recurrin g nee d fo r transportatio n durin g th e project , suc ha s frequen t shippin g i n rawmaterial s an d transpor t o f wast e products , transportatio n cost s coul d b e quit e significan t and shoul d b e addressed
. Installatio n cost s Thes e includ e materia l an d labo r for :
o Sit e preparatio n o Constructio n o f platform s o Actua l installatio n o f equipmen t and accessorie s Engineerin g cost s
o Syste mspecification/creation/desig n o Performanc e testin g o f th e equipmen t o Start-up Contingenc ycost s Contingenc ycost s ar e cost s tha t ar e expecte d t o occu r bu t ar e uncertai n a t th e tim e o f th e cos t estimation
. Thes e uncertai n cost s ar e minima l fo r matur e technologybu t ar e significan t fo r newe r technology
. Amaximu mo f 10 % o f capita l fo r matur e technologyan d a maximu

mo f 3 0 % fo r untrie d technologyar e recommended 1



### .

"Pleas e se e EPRI , 198 2 fo r mor e details
.P.2 2



### II-A. 2 ANNUAL OPERATIN G & MAINTENANC E COST S

Rawmateria l cost s Fue l cost s Othe r utilit ycost s Maintenanc e cost s (5 % o f equip. ) Operato r cost s ($25/hr ) Enginee r cost s ($50/hr ) Miscell
. credit s Wast e processin g cost s Tota l annua l operating cost s

Annua l operating hour s Multipl yth e numbe r o f operating hour s a da yb yth e numbe r o f workin g day s a year . Rawmateria l cost s Multipl yrawmateria l cost s pe r hou r b yth e annua l operating hours
. Fuel/Utilitie s cost s Multipl yth e utilitie s use d pe r hou r b yth e cos t pe r unit
. The n multipl yth e produc t b yth e annua l operating hours
. Maintenanc e cost s Multipl yth e averag e wag e o f th e maintenanc e personne l pe r hou r b yth e averag e annua l hour s use d b yth e maintenanc e personne l t o repai r th e equipment
. Operato r cost s Multipl yoperato r cost/hou r b yoperato r annua l hours
.P.2 3



### Wast e disposa l cost s Thes e cost s appl yonl yt o th e wast e create d b yth e pollutio n contro l equipment
. I n othe r words , thi s cos t pertain s t o th e cos t tha t woul d no t hav e existe d i f th e fir mdi d no t hav e t o instal l th e contro l equipment
. Th e wast e cost s tha t fal l int o thi s categoryar e associate d with :

o o o o Wast e handlin g o r treatmen t prio r t o shipmen t Wast e transportatio n Wast e regulatoryfee s Wast e disposa l o r wast e offsit e treatmen t Miscellaneou s credit s A s a resul t o f installing th e complianc e technology , a fir m maygenerat e some cas hinflows—define d her e a s credits
. Thes e credit s coul d accru e fro msevera l sources , e.g, :
o Produc t recovery(e.g. , solven t recycling ) o Reductio n i n treatmen t an d disposa l cost s ( e.g. , les s solven t wast e t o b e treated ) o Reductio n i n liabilit yt o worker s (e.g. , reducing exposur e t o dangerou s materials ) o Reduce d fir e hazards , tha t maytransalat e int o reduce d insuranc e premium s o Reductio n i n regulatoryfee s (e.g. , emissio n fees )

II-A. 3 ASSUMPTION S Equipment' s economi c lif e (n ) (1 0 yrs ) Marke t rat e o f interes t (r ) (9% ) Expecte d inflatio n rat e (i ) (5% ) Hence , Rea l interes t rat e ( r - i ) (4% ) Ta xrat e (t ) (45% ) Equipment' s economi c lif e I t i s define d a s th e economicall yviabl e lif e expecte d o f th e equipment
. Thi s mayb e differen t from th e actua l lif e ove r whic hth e equipmen t i s expecte d t o last
. Competitio n an d technologychange s coul d mak e th e economi c lif e muc h shorte r tha n th e actua l life
. Fo r long live d equipment , an economi c lif e o f 1 0 year s i s assumed
.P.2 4



# a

Q?* - 

### Inflatio n rat e

I t i s th e anticipate d annua l inflatio n rat e ove r the economi c lif e of
. th e equipment
. Al l annua l operating cost s ar e assume d t o b e adjuste d b ythi s rate
. Marke t interes t rat e I t i s th e averag e annua l interes t expecte d ove r th e equipment' s economi c life
. Th e interes t rat e o n a 1 0 yea r Treasurybil l woul d b e a goo d proxy . Effectiv e corporat e taxrat e
o Federa l taxe s 35 % o Stat e taxe s 10 % o Tota l 45 % Pric e indice s Ideally , up-to-dat e pric e quote s shoul d b e obtaine d fro m vendors
. I f tha t i s no t possibl e du e t o tim e o r manpowe r constraints , pric e indice s ca n b e use d t o conver t price s i n previou s year s t o price s i n th e curren t year . Fo r chemical

relate d equipment , th e Chemica l Plan t Cos t Inde xshoul d b e used
. Th e Consume r Pric e Inde xshoul d b e use d onl ya s a las t resort , whe n othe r mor e appropriat e indice s ar e no t easil yavailable
.

_P.2 5

Appendi xB PROCEDURE S TOCALCULAT E ANNUALIZE DCOST S

Thi s i s a n exampl e o f usin g th e annualize d metho d o f estimatin g th e cost-effectivenes s o f a contro l measur e tha t wil l hel p attai n th e ozon e standard
. Fo r thi s example , th e followin g i s assumed :

o Equipmen t lif e 1 0 year s
o Rea l interes t rat e 6 percen t (Rea l interes t rat e equal s th e actua l interes t rat e assume d t o b e 1 0 percen t minu s th e rat e o f inflatio n assume d t o b e 4 percent )

o Emission s reduce d 1 0 ton s pe r da y
o Capita l cost s $1 0 millio n
o Annua l operatin g cost s $ 1 millio n Th e firs t ste p i s t o calculat e th e annualize d capita l costs
. Thi s i s don e bydeterminin g th e Capita l Recover yFacto r obtaine d fro mstandar d Compoun d Interes t Facto r tables
. I n thi s example , usin g an equipmen t lif e o f 1 0 year s and a rea l interes t rat e o f 6 percent , th e Capita l Recover y Facto r i s .13 6 (rounded)
. T o ge t th e annualize d capita l costs , multipl yth e estimate d capita l cost s byth e Capita l Recover yFactor : $1 0 millio n time s .13 6 = $1,360,00 0 i n annualize d capita l cost s Th e secon d ste p i s t o add th e annualize d capita l cost s t o th e annua l operatin g cost s t o obtai n th e annualize d cas hflow : $1,360,00 0 + $1,000,00 0 = $2,360,00 0 Th e thir d ste p i s t o divid e th e annualize d cas hflo wb y36 5 day s pe r yea r t o obtai n th e dail ycas hflow : $2,360,00 0 / 36 5 = $646 6 Th e fina l ste p i s t o divid e th e ton s pe r da yi n emission s reductio n int o th e dail ycas hflo wt o obtai n th e dollar s pe r to n cost : $646 6 / 1 0 TP D = $64 6 pe r to n reduce dP.2 6



### Appendi xC PROCEDUR E T O CALCULAT

E NET-PRESEN

T VALUE : SCAQM

D METHO D

T o determin e th e cos t o f contro l i n term s o f dollar s pe r to n o f emission s reduced , th e presen t valu e o f th e equipmen t an d it s operating cost s ar e firs t calculated
. Thi s i s don e b y using a presen t valu e facto r t o conver t th e annua l equipment' s operating cos t int o a fixe d sum , an d adding tha t su mt o th e capita l cost
. Thi s presen t valu e i s the n divide d b yth e emission s reduce d ove r th e lif e o f th e equipment : Cos t o f Contro l = Presen t Valu e

Emission s Reduce d Ove r th e Equipmen t Lif e

II-B. l PRE-TA

X PRESENT VALU E T o calculat e th e pre-ta xpresen t value , th e following formul a shoul d b e used :

P V - C + A*PVFl(n,r-i ) wher e C = upfron t capita l outlay ,

A= annua l operating costs , n = economi c lif e o f th e project , r = marke t interes t rate , i = inflatio n rate , an d PVF 1 = presen t valu e facto r 1 , calculate d fro m th e formul a i n II-B.4
. Fo r example , i f n=1 0 years , r=10% , i=6% ; PVF 1 =8.1 1

II-B. 2 POST-TA

X PRESEN

T VALU E Th e presen t valu e o f th e equipmen t ca n b e calculate d afte r adjusting fo r inflation , taxes , an d depreciation : P V = A*(l-t)*PVTl(n,r-i ) - D*t*PVF2(f,r ) wher e t = th e taxrate , generall y45 %

n = th e economi c lif e o f th e project , D = depreciation , wher e D = C/ f f = th e perio d ove r whic hth e equipmen t ca n b e writte n off , generall y5 years . PVF 2 = presen t Valu e Facto r 2 , give n b yth e formul a i n II-B.4
.P.2 7

Fo r example , i f f= 5 years , r=10% , i=0% ; PVF 2 = 3.79
. (Unlik e th e "real " annua l operatin g component , depreciatio n i s a "nominal " component
. Hence , th e interes t rat e use d fo r th e latte r i s als o nominal)
.
II-B.3 STEP S T O CALCULAT E PRESEN T VALU E
T o calculat e pre-ta xpresen t value , us e onl ystep s l , 4 , 5 , 6 , an d 8
. T o calculat e post-ta xpresen t value , us e al l th e followin g steps
. 1 ) Ad d al l th e component s o f th e annua l operatin g costs
. 2 ) I f taxe s ar e considered , multipl yth e su mo f th e annua l operatin g cost s b y(1-ta xrate) , wher e th e ta xrat e i s th e margina l corporat e ta xrate
. 3 ) Again , i f taxe s ar e considered , an d assumin g tha t th e salvag e valu e i s zero , calculat e th e annua l straight

lin e componen t o f depreciatio n bydividin g th e capita l cost s b yit s write-of f period , typicall y5 years . Multipl ythi s componen t b yth e ta xrate
. 4 ) Selec t a marke t interes t rate , e.g. , 10%
. Adjus t th e marke t interes t rat e fo r inflation , e.g. , 6% , by subtractin g th e inflatio n rat e fro mth e marke t rate
. Th e adjuste d rat e i s know n a s th e "real " interes t rat e which , i n thi s case , i s 4%
. 5 ) Selec t tw o presen t valu e factor s (PVF 1 an d PVF2)
. Th e PVF s ar e function s o f interes t rate s an d equipmen t lives
. Thes e ca n b e obtaine d fro mth e PV F formul a i n II-B.4
. Fo r a 10-yea r equipmen t lif e an d a 4 % rea l interes t rate , PVF 1 i s 8.11
. Fo r a 5-yea r depreciatio n perio d an d a marke t interes t rat e o f 10% , PVF 2 i s 3.79
. 6 ) Determin e th e presen t valu e o f th e annua l cost , by multiplyin g th e resul t fro mSte p l (o r Ste p 2 I f taxe s ar e take n int o account ) b yPVF1
. Th e produc t i s know n a s th e presen t valu e o f th e annua l operatin g cost
. 7 ) Determin e th e presen t valu e o f th e tax-adjuste d depreciatio n componen t bymultiplyin g th e resul t fro m Ste p 3 b yPVF2
. Thi s give s th e presen t valu e o f th e annua l depreciation
.P.2 8



### 8 ) Add th e presen t value s o f th e annua l cos t fro mSte p 6 and th e presen t valu e o f th e annua l depreciatio n fro m Ste p 7 t o th e firs t yea r capita l cost
. Thi s woul d giv e th e tota l presen t valu e o f th e capita l investment
. Th e cos t o f contro l pe r to n o f emission s reduce d i s calculate d b

ydividing th e tota l presen t value , fro mSte p 8 , b yth e amoun t o f emission s reduce d ove r th e lif e o f th e equipment
. Th e formula e i n Sectio n II-B. l an d II-B. 2 nee d t o b e adjuste d fo r mor e comple xsituation s suc ha s changin g interes t rate s o r changing annua l cas hflow s ove r time , th e occurenc e o f capita l cost s beyond th e firs t year , ris k factors , etc
. Amor e generalize d DC F formul a woul d b e needed :
n

NPV = Q CF/(l+r) t 

### t= 0 wher e NPV

i s th e ne t presen t value , C F i s th e ne t cas hflowi n perio d "t" , r i s th e weighte d equit yan d deb t discoun t rat e tha t coul d varyi n eac hperiod , an d n i s th e lif e perio d o f th e cas hflow

z 

### Se e EPA198 5 fo r mor e details
.P.2 9



### II-B. 4 FORMULAT O CALCULAT E PRESENT VALU E FACTOR fPVF^ 3 

### : Thi s formul a i s vali d fo r discret e cas hflows
. I t calculate s th e Presen t Valu e o f a $ 1 spen t ever yyea r fo r "n " years : PVF = { 1 - 1/( 1 + r) n 

### )/ r wher e "r " i s th e interes t rate
. Thi s i s a n formul a base d o n a n approximat e inflatio n adjustment
. Fo r 10 % nomina l interes t rate , 6 % inflatio n rat e an d 1 0 yea r economi c life , thi s varie s fro mth e exact , bu t mor e complex , adjustmen t b yles s tha n 5 %
.

J 

### Mos t spreadshee t softwar e packages , lik e Lotus , provid e presen t valu e functions
. 4 

### Th e exac t formul a fo r th e PVF i s =

[ 1 - 1/( 1 + i r 

### ) n 

### ] i r 

### d + f ) wher e i r 

### = ( i - f)/( l + f ) ,

i = nomina l interes t rate , an d f = inflatio n rat eP.3 0

Appendi x" D PROCEDUR E T OCALCULAT E NET-PRESEN T VALUE : BAAQMDMETHO D

Th e Distric t i s workin g(wit hco-lea dagencie s ABAGan dMTC ) o na

nupdat e t o the regiona l Ozon e Nonattainmen t Are a Plan . 3AAQMDresponsibilitie s inthi s projec t includ e ai r qualit y modeling , evaluatio no f stationar y sourc e controls , an dattainmen t strateg y development . Fo r the 198 2 Pla nwe develope da ne w techniqu e t o compar e an dran kalternativ e contro l measures . Th e procedur e i s simpl e inprinciple , bu t innovativ e init s combinatio no f ai r qualit y modelin g an deconomi c analysis . We wis ht o retai nthi s methodolog y inth e presen t Pla n Update . Th e informatio nbelow i s intende da s guidanc e fo r thos e evaluatin g candidat e contro l measures . I t set s fort hth e assumption s an ddefinition s require dt o kee pthe economi c assessment s consistent , s o tha t the variou s measure s ca nb e compare dan dranke dobjectively . I . GOAL - T o provid e realisti c an dconsisten t cos t estimate s fo r variou s propose dcontro l measures . II . BASI S OF COMPARISONS/RANKIN G- Measure s ar e rzr.tei ir . tersi s c f cos t pe r uni t ozon e reduction ; th e unit s ar e $/pphm . Cost s ar e expresse da s equiv alen t annua l cost s (EAC ) i n198 7 dollars . Th e methodolog y fo r calculatin g EAC i s give ninsectio nII I below . A photochemica l mode l i s use dt o esti mat e the ambien t ozon e reductio nachievabl e from the contro l measure . Th e ozon e reductio nwil l depen donth e amoun t o f precurso r (HC an dN0 X ) emis sio nreductions , andthei r chemica l compositio nan dreactivity . III . PROCEDUR E T OCALCULAT E EQUIVALEN T ANNUAL COS T A . Assumptions : 1 ) tim e perio dt o be considere di s 1 2 year s fro m Jan . 1 , 198 8 t o Dec . 31 , 1999 . 2 ) discoun t rat e = 10 % pe r year . B . Estimat e precurso r emissio nreduction s attainable , year-by-yea r durin g th e 12-year period , assumin ga reasonabl e schedul e fo r rul e develop ment , adoptio nan

dimplementation.(column s 1 an d2 o f Tabl e 1 ) C . Estimat e th e year-by-yea r direc t cost s require dt o achiev e th e emissio n reductions . Conside r capita l costs , maintenance , repair , andoperatin g expenses. * (column s 3 an d4 o f Tabl e 1 )
D . Conver t the year-by-yea r cost s t o presen t value , usin gth e factors* * in colum n5 o f Tabl e 1 . Ente r th e presen t value s incolum n6 . E . Ad dthe individua l yea r presen t value s t o ge t a Tota l Presen t Valu e (Tota l o f colum

n6 i nTabl e 1) . TP

V represent s th e su

m which , i f availabl e an

dinveste dat 10 % return , woul dcove r al l o f the estimate d cost s o f th e contro l program a s listedincolumn s 3 an d4 . F . Multipl y

th e TPV b y 0.14 7 t o ge t the Equivalen t Annua l Cos t (EAC) . Thi s i s ih e uniform

annua l expenditur e from 198 8 throug h199 9 whic h woul dbe equivalen t t o th e actua l (non-uniform ) cost s o f the controls .
* I f no bette r informatio ni s available , annua l "MRO " i s ofte nassume dt o b e 10 % o f capita l costs . **Thes e factor s ar e a functio no f the discoun t rate , an dar e sometime s calle d "presen t worth " factors . NOTE : A widel y use d(bu t les s relevant ) cos t compariso ni s o nth e basi s o f $ pe r to no f precurso r organi c reduction . Thi s valu e canb e obtaine dfrom Tabl e 1 b y dividin gTPV

(colum n6 ) b y Tota l Tons , from

colum n1 .P.3 1 

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. CALCULATIO N SKC T

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YE-fcR Precurso r ReAac^o ^ RO G Ccs H CA^C^J I N\fl.mt«v\«3LvCt q 

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### ^00,00 0 00 , *0 P

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## l*& t 

## POV IW. 

## /s * .751 3

fe830 .62£> 9 024,40 0 

## V5^0 &.7PO

.5^4 5 .513 1 .4U 5

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## t&. .424 1 

## u,oy> ^,+50 *&>,$&> 

## tf,*)!?
<o*>,<*. 

## .3855 .350 5 I 0.318 k 

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52,^ ? 47;7 ^ TOTALS ! 

## \2. 3



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## , 1l? 

## i 1 

## ^

= 3 8 "2 - •*>/*» * eo s 1.71 % 73< = i •> 

## T P V 

## (x0.\4 1 = E7\C-#^ 2 

## ^ C



## •* • Faawalew- r

Annua l Cos t

EAC = . \ uiUcve ; "TP

V - "fota l R-essw t

Value

. ( I +

## P\\ f ? - Discc?uw t

fcxte. = CU

O )



## ^ ^ R'esen- t

Value

. = • Cos t
. n Mg^ v>< - W

Pves eP.3 2



### TABL E

## 1 . CALO)LAT\O U

## SvtEC T FO RG^OWALBN T ^NUAI L COST * Cov\Wc\ NWsiire

.

TPV x R -*

- Equivalen t

Annua l Oos" t

EA C — uiKeve- : TT V = Tota l ReseatVxUe

.

K = • Discoun t

Pa.+ e = o.W = • 0.14 7 x TP V

( l + R) m



### •X^ R'esew t

Valu e= •
J= ? /9ft » ;W i 

### Co& t

t nMe<x

v < c 

# 0 + R)* x-/ W Pv e s ew t Vd. 1 u « , -foctp v =

r ( \+R ) WP.3 3 

# f

Appendi xE DETERMININGREACTIVIT Y

INTRODUCTION

Th e staf f o f th e Ai r Resource s Board(ARB ) propose s t o us e th e "maximu m incrementa l reactivity " o f eac hhydrocarbo nt o develo p hydrocarbo nreactivit y adjustmen t factor s fo r low-emissio n vehicle/clea nfue l regulation s i nCalifornia . Al l vehicle/fue l combination s wil l hav e t o mee t th e same emissio nstandard s fo r oxide s o f nitroge n(NOx) , formaldehyde , evaporative hydrocarbon s an dcarbo n monoxide . Condition s o f maximu

m incrementa l reactivit y occu r wel l withi n th e rang e o f hydrocarbo nt o NOxratio s observe di nCalifornia . Th e linearit y

assumptio nImplici t 1 nIncrementa l reactivit y appear s vali d u pt o a 30 S chang e i

nbas1n-w1d e hydrocarbo nemissions . Th e reactivitie s correlat e wel l wit hozon e dos e i na wid e variet y

o f city specifi c boxmode l scenarios , Including thos e wit hhydrocarbo nt o NO x ratio s fa r highe r tha nmaximu m reactivit y

conditions . I nMay 1990 , Dr . William

Carte r o f th e Statewid e Ai r Pollutio n Researc hCente r a t th e Universit y o f Californi a a t Riversid e determine da

nInteri m

se t o f maximu

m Incrementa l reactivitie s fo r Individua l hydrocarbons , base donenvironmenta l condition s representin ga wid e variet y o f ozon e episode s throughou t th e Unite d States . Durin gth e same time frame , Professo r Arm1stea dRussel l o f Carnegi e Mello nUniversit y calculate dincrementa l reactivitie s fo r a limitednumbe r o f hydrocarbon s wit hhi s airshe dmode l fo r comparison . Othe r group s wil l compar e thes e Incrementa l reactivitie s wit hvalue s derive dfro

m othe r chemica l mechanism s an dmodels . Dr . Carter's interi m reactivities , presente di nAppendi xA-l , ar e propose dfo r adoptio ninth e regulatio nfo r calculatin greactivit y adjustmen t factor s unti l th e fina l reactivitie s ar e availabl e i n1991 . B y th e endo f 1990 , Dr . Carte r wil l recalculat e th e maximum incrementa l reactivitie s usingenvironmenta l condition s representativ e o f ozon e episode s inCalifornia , an destimat e a

nuncertaint y

boundo

n eac hreactivit y

du e t o gap s i

nth e curren t understandin go f atmospheri c chemistry . Therefore , fue l supplier s an dvehicl eP.3 4

manufacturer s wil l bette r understandth e risk s o f tailorin g fuel s an d contro l technologie s t o remov e specifi c hydrocarbons . From now unti l th e en

do f 1991 , th e staf f wil l develo preactivit y adjustmen t factor s wit hhydrocarbo nspeciatio nprofile s fro m vehicle/fue l emissio ntests . Professo r Russel l wil l us e th e reactivity-adjuste dvehicl e emissio nstandard s t o predic t i f th e regulation s wil l have th e intende deffec t o f equa l ozon e impact s fo r an y vehicle/fue l combination . Thes e calculation s wil l be repeate d whe nth e Souther nCaliforni a Ai r Qualit y Study (SCAQS ) modelin g wor k i s complete . Th e AR B wil l continu e t o sponso r laborator y studie s t o reduc e uncertaintie s inincrementa l reactivities , particularl y fo r aromati c compounds , an

dt o review

researc hsponsore db y othe r organizations . Th e staf f plan s t o updat e th e reactivitie s fo r individua l hydrocarbon s ever y thre e years . I nth e followin g sections , reactivit y

adjustment s an

da br ozon e formatio nar e provided , reactivit y

tha t canbe usedt o vehicle s ar e evaluated , an dth e Incrementa l reactivit y approac h protocol s t o develo preactivit i calculat e th e hydrocarbo nreac t backgroundinformatio no nth e needfor 1e f discussio no f th e fundamental s o f Next , th e availabl e measure s o f compar e emission s from alternat e fuele d reason s fo r selectin g th e maximu m ar e discussed . I nth e fina l section , e s fo r individua l hydrocarbon s an dt o 1v1t y adjustmen t factor s ar e given . Traditionally , a

nemissio nstandar dset s limit s onth e amount s o f non-methan e hydrocarbons , carbo nmonoxid e andNOxpermitte dfro m automobile s durin g standardize demissio ntests . Non-methan e hydrocarbo nemission s ar e compose do f many differen t hydrocarbon s an d othe r organi c gases . (Th e term s hydrocarbo nan dorgani c ga s wil l be usedinterchangeably

throughou t th e document. ) Some o f thes e hydrocarbon s ca nlea

dt o muc hhighe r ozon e level s tha nothers . S o long a s al l automobile s wit hsimila r contro l technologie s bur nsimila r fuels , th e mi xo f emitte dhydrocarbon s I s roughl y th e same , an

dther e 1 s n o nee dt o conside r th e mixtur e insettin g standards . However , th e mi xo f emitte dhydrocarbon s ca nb e ver y differen t whe nautomobile s bur ndifferen t fuel s o r us e differen t contro l technologies . Whil e curren t emissio nstandard s appl y t o non-methan e hydrocarbon s measure db y standar dtechniques , othe r organi c gase s emitte dby

automobile s als o pla y Importan t role s inth e ozon e problem . Methano l an

dacetaldehyd e ar e example s o f non-regulate dorgani c gase s tha t mus t b e considere dinorde r t o evaluat e ozon e impact s du e t o th e us e o f differen t fuels . &P.3 5

4

•7 'f d

.A

a » 5 1 VI . OZON E FORMATION Th e fundamental s o f ozon e formatio ni nth e tropospher e have bee n describe delsewher e (Finlayson-Pitt s an dPitts , 1986 ; Atkinson , 1990) , an donl y th e ke y

point s ar e summarize dhere .

A . OXIDE S O F NITROGE N VERSU S HYDROCARBON

CONTRO L Oxide s o f nitroge nar e require dfo r ozon e formation . I f NOxwer e no t emitted , ozon e formatio nwoul dno t occur . Hydrocarbon s greatl y enhanc e th e build-u po f ozon e fro m NOx . I f hydrocarbon s wer e absent , ozon e concentration s woul dremai nacceptabl y low . Oxide s o f nitroge n hav e a shorte r lifetime 1 nth e atmospher e tha nhydrocarbons , an dthei r natura l emission s ar e negligible . Therefore , man-mad e emission s o f NO xultimatel y

limi t how

muc hozon e wil l be formed . Controllin g NO x Increase s th e rat e o f Initia l ozon e formation , an dma y caus e highe r ozon e nea r th e source , wher e ozon e concentration s ar e wel l below thei r pea kvalues . Controllin g hydrocarbon s slow s th e rat e at whic hozon e build s up . Th e benefit s o f controllin g hydrocarbon s ar e greates t nea r th e source , an dles s fo r th e pea kozon e concentration s downwind . Any comprehensiv e ozon e contro l strategy need s t o reduc e th e emission s o f bot hNOxan

dhydrocarbons .

B . REACTIVIT Y Th e mos t basi c definitio no f reactivit y i s th e tendenc y

o f a n organi c ga s t o contribut e t o th e build-upo f ozon e i natmosphere s containin g NOx . Carte r an dAtkinso n(1987 ) hav e approximate d reactivit y

a s th e produc t o f tw o components , th e fractio no f th e hydrocarbo ntha t react s ove r th e cours e o f a da y (kineti c reactivity )

### an dth e amoun t o f ozon e forme db y the fractio nreacte d(mechanisti c reactivity) . Fo r mos t hydrocarbons , reactio nwit hhydroxy l radical s i s the onl y significan t rout e toward s ozon e formation . Therefore , thei r kineti c reactivit y

canbe calculate dfro

m th e hydroxy l radica l rat e constan t an

dradica l levels . Th e hydroxy l radica l rat e constan t ha s bee nmeasure d(Atkinson , 1989 ) o r canbe estimate d(Atkinson , 1987 ) fo r mos t hydrocarbons . Reaction s o f alkene s wit hozone , an d photolysi s o f aldehyde s an dketone s ar e alternat e route s towar dozon e formation . Thes e rate s o f reactio nar e als o know n(Atkinson , 1990) . Incontras t t o th e kineti c reactivities , th e mechanisti c reactivitie s ar e uncertai nfo r mos t hydrocarbon s (Atkinson , 1990) . Suitabl e laboratory

dat a ar e availabl e fo r testin gthe mechanism s o f onl y a limitednumbe r o f hydrocarbons , an dth e mechanism s fo r mos t othe r compound s ar e base donestimate s an dextrapolation s (se e Tabl e VI-1) . Th e mechanisti c reactivitie s fo r highe r molecula r weigh t hydrocarbon s ar e particularl y uncertain . Anadditiona l complicatio ni s tha t laboratory (Carte r an

d Atkinson , 1987 ) an

dmodelin gstudie s (Dodge , 1984 ; Carte r an d Atkinson , 1989 ) show

tha t mechanisti c reactivit y i s a complicate d functio no f environmenta l conditions , particularl y NO xlevels . Som

e hydrocarbon s tha t ar e normall y considere dt o be highl y reactive , such a s aromatics , canevenslightl y suppres s ozon e build-upunde r lo w NO x conditions .
C . HYDROCARBON

ANDOXIDE S O F NITROGE N

DAT A I N CALIFORNI A Th e rati o o f hydrocarbon s t o NO xserve s a s a usefu l measur e o f th e relativ e availabilit y o f NOx . Tabl e VI- 2 summarize s 6:0 0 t o 9:0 0 a.m . PD T averag e hydrocarbo nt o NOxratio s measure dduringth e summe r « o f 198 9 1nCalifornia . Th e rati o i s quit e variabl e from sit e t o sit e | an dfrom da y t o da y a t th e same site . Th e rati o als o varie s acros s a n| ai r basi n(Lonnema nan

dSella , 1989) . % Observedhydrocarbo nspedatlo ndat a ar e ver y simila r a t th e | site s listedi

nTabl e VI-2 . Th e spedatlo ni s consisten t wit hmoto r .£ vehicl e exhaus t an

dan y inconsistencie s canbe attribute dt o stationar y

source s (Poor e e t al. , 1990) . Ther e ar e very few measuremen t program s fo r formaldehyde , th e singl e mos t importan t contributo r t o reactivity , bu t primar y emission s o f formaldehyd e appea r t o correlat e wel l wit hearl y mornin gcarbo nmonoxid e an dNO x concentration s (Lawsone t al. , 1990 ; Fujit a e t al. , 1990) .



# 1„P.37

_



### Tabl e VI-1
. Statu s o f Abilit yt o Mode l Mechanisti c Reactivitie s

Mechanism s fo r thes e compound s ar e estimate d fro m basi c kineti c an

d mechanisti c knowledge :

- methan e ethan e

- propan e - ethano l Experimentally-teste d mechanism s exis t fo r th e following ,

althoug hther e ar e som e uncertainties :

- n-butan e

- formaldehyd e

- methano l - ethen e

- acetaldehyd e

- aceton e - propen e

- propionaldehyd e

- methylethy l keton e Experimentally-teste d mechanism s ar e availabl e fo r th e following ,

bu t ther e ar e majo r uncertainties :

- severa l C c 

### alkane s

- 1,3,5-trimethylbenzen e

- 2,3-dimethylnapthalen e - severa l C
. alkene s 4 *



### - toluen e - xylene s

- benzen e - napthalen e Mechanism s fo r al l othe r organi c gase s ar e approximate d bythos e o f chemicall ysimila r compounds
.
Carte r (1990a )

Table VI-2
. Sunnar y

o f Californi a Hydrocarbo nt o NO xRatio s
Sit e Bakersfleld-Cheste r Lo s Angeles-N . Mai n Sacramento-Citru s Height s SanDiego-Island Redding-Continenta l Chico-Manzanit a SanLui s Obisp o Al l Site s Mean 10. 5 

### 6. 6 12. 2 

### 8. 3 17. 5 11. 2 24. 3 12. 9 Media n



### 8. 9 6. 0 10. 4 

### 6. 6 16. 7 

### 9. 9 15. 9 

### 9. 3 Rana e

5. 2 t o 23. 3 3. 0 t o 12. 0 4. 1 t o 31. 1 1. 7 t o 21. 2 7. 0 t o 44. 1 4. 2 t o 23. 3 5. 9 t o 26 0 1. 7 t o 26 0


### 6:0 0 t o 9:0 0 a.m . PD T average , every thir d da yo n PM1 0 schedule , Jun e t o Septembe r 1989
.P.3 8

VII . MEASURE S O F REACTIVIT Y Atmospheri c scientist s hav e propose dsi xmeasure s o f reactivity . I nthi s section , th e advantage s an ddisadvantage s o f eac hmeasur e ar e discussed , th e rational e fo r selectin gth e maximu m incrementa l reactivit y

approac hi s provided , an dal l evaluation s o f th e metho dt o dat e ar e summarized .

. « A . REVIEW O F MEASURE S O F REACTIVIT Y Th e measure s ar e ordere db y Increasing complexit y o f th e calculatio nan

ddat a requirements .
1 . Tota l Mas s (Exemptin gSom e Compounds ) Curren t hydrocarbo ncontro l strategie s 1 nCaliforni a regulat e th e tota l mas s o f emissions . Methan e an dchlorofluorocarbon s ar e exemp t fro m contro l becaus e o f thei r extremel y lo w reactivities . Thi s approac hdoe s no t dependonenvironmenta l condition s o r uncertaintie s i nth e knowledg e o f atmospheri c chemistry . I t 1 s als o relativel y eas y t o enforc e becaus e i t doe s no t nee dspeciate dhydrocarbo n measurements . Th e tota l mas s approac hIgnore s larg e difference s 1 nreactivit y betwee nhydrocarbons , an dcanb e anInefficien t mean s o f hydrocarbo n control . Traditionally , oxygenate dcompound s suc ha s formaldehyd e an d acetaldehyd e hav e bee nignoredb y th e emissio nstandard s becaus e o f th e specialize dmeasuremen t technique s required . I nextreme cases , thi s approac ht o hydrocarbo ncontro l coul dleadt o ozone increase s i f i t allow s increase s inreactivit y despit e reduction s inth e mas s o f emissions .P.3 9



### 2 . Hydroxy l Radica l Rat e Constan t A simpl e approac hfo r considerin greactivit y 1 s t o us e th e relative rat e o f reactio nwit hth e hydroxy l radica l (Darnal l e t al. , 1976) . Thi s approac hdepend s onth e fac t tha t mos t hydrocarbon s reac t onl y wit hth e hydroxy l radical . I t 1 s no t a stric t measur e o f reactivit y

a s define dearlier , bu t It s lacko f dependenc e o n environmenta l condition s allow s th e derivatio no f a singl e reactivit y scale . The hydroxy l radica l rat e constan t approac h1 s deficien t i n severa l respects . I t canunderestimat e o r overestimat e reactivit y b y ignoringothe r los s processe s o f hydrocarbons , a s wel l a s al l o f the subsequen t reaction s tha t contribut e t o ozon e formation . I t als o overestimate s th e relativ e reactivit y o f rapidl y

reacting hydrocarbons . A

hydrocarbo ntha t react s in3 0 minute s coul dhav e a simila r reactivit y

a s on e tha t react s 1

n30 0 minutes , becaus e they bot hcompletel y

reac t durin gth e cours e o f a day . Bu t the hydroxy l radica l rat e constan t approac hwil l alway s indicat e tha t one hydrocarbo ni s te ntime s mor e reactiv e thanth e other . Thes e variou s deficiencie s offse t on e anothe r fo r mixture s o f many hydrocarbons , bu t error s canb e quit e larg e fo r singl e compounds . 3 . Relativ e Reactivit y I norde r t o approximat e th e effect s o f larg e change s i nemission s onozone , a simplifie dlinea r modelin gtechnique , relativ e reactivity , wa s developed . Thi s techniqu e assume s th e chang e i npeakone-hou r ozon e concentration s i s proportiona l t o th e chang e i nemissio nlevel s o f broadhydrocarbo ngroupings . I t ha s beenusedt o derive the reactivitie s o f methano l an dformaldehyd e relativ e t o othe r hydrocarbon s (Gol dan

dMoulls , 1988 ; Change t al. , 1989) , an dha s been extende dt o ethane , propane , ethano l an dacetaldehyd e (Changan dRudy , 1990) . Dunke r (1990 ) useda simila r measur e fo r reactivit y 'M comparison s o f methanol-fuele dvehicles . f

'.¥ a 

### Th e disadvantage s o f relativ e reactivit y ar e tha t it i s dependen t " 1 o nenvironmenta l conditions , an dth e techniqu e quickl y

become s cumbersome a s th e numbe r o f hydrocarbo nspecie s i s increased . 4 . Incrementa l Reactivit y A measur e tha t correspond s closel y t o th e basi c definitio no f reactivit y

1 s "incrementa l reactivity, " th e chang e i nozon e cause db

y the additio no f a smal l incremen t o f hydrocarbon s t o a pollute d environment , divide db

y th e amoun t o f hydrocarbon s added(Carte r an d Atkinson , 1987 ; 1989) . Incrementa l reactivit y canbe determine d experimentall y

(Carte r an

dAtkinson , 1987 ) or wit hmode l calculation s (Dodge , 1984 ; Carte r an

dAtkinson , 1989) , bu t 1 s ver y dependen t on environmenta l conditions . I t 1 s eve npossibl e t o calculat e wit han

3 

# 1P.4 0



# I airshe dmode l (Russell , 1990) . Calculation s b y Carte r (1990c) , Chang an dRudy (1990 ) an

dDunke r (1980 ) indicat e tha t th e linearit y assumptio nimplici t i nincrementa l reactivit y appear s vali du

pt o a 30 1 chang e i

nbas1n-w1d e hydrocarbo nemissions . Th e disadvantag e o f incrementa l reactivit y i s tha t th e environmenta l condition s mus t be se t t o deriv e a singl e reactivit y scale .
5 . Maximu

m Incrementa l Reactivit y A singl e Incrementa l reactivit y canbe derive dfo r eac h hydrocarbo nb

y usin gth e maximu

m incrementa l reactivit y fo r a rang e o f environmenta l condition s (Carter , 1989ab) . Thi s measur e reflect s th e maximum potentia l fo r ozon e formatio no f th e hydrocarbon . Thi s i s a n appropriat e definitio nt o us e fo r regulator y purposes , sinc e condition s wher e hydrocarbo nreactivitie s tendt o be th e highes t ar e b y definitio nthos e wher e hydrocarbo ncontro l 1 s th e mos t effectiv e contro l strategy

fo r reducin gozone . I ngeneral , maximu m incrementa l reactivitie s ar e founda t a hydrocarbo nt o NOxrati o o f si xt o eight , wit hsome dependenc e onothe r environmenta l conditions . I ncontras t t o previou s wor k(Carter , 1989b) , Carte r (1990d ) ha s develope da scal e tha t represent s maximu m reactivit y

onl y wit hrespec t t o NOxavailability , an drepresent s averag e reactivit y fo r othe r environmenta l conditions . Thes e reactivitie s correlat e wel l wit h ozon e dos e ina wid e variet y o f dty-specifi c boxmode l scenarios , includin gthos e wit hhydrocarbo nt o NOxratio s fa r highe r thanmaximu m reactivit y

conditions . Th e disadvantag e o f th e maximu m Incrementa l reactivit y approac h i s th e uncertaint y

1 nth e mechanisti c reactivities . However , Carte r (1990e ) 1 s workin gona napproac ht o determin e maximu m mechanisti c reactivitie s wit hlaboratory studies .
6 . Airshe dModelin g Anairshe dmode l incorporate s al l know nconsideration s o f environmenta l conditions , an dwil l als o give th e ful l ozon e impac t o f a larg e chang e 1

nemissions . Suc hmodel s us e condense dphotochemica l mechanisms , bu t curren t researc h(Carte r an dAtkinson , 1988 ) suggests tha t thes e mechanism s cangive ozon e prediction s whic har e ver y clos e t o thos e o f mor e detaile dmechanisms . Th e majo r disadvantag e o f airshe dmodel s 1 s tha t th e relativ e amount s o f hydrocarbon s an dNOxpredicte db

y th e model s do no t alway s agre e wit hai r qualit y measurements . Unti l thi s discrepanc y 1 s resolved , i t i s bette r t o us e measure denvironmenta l condition s a s a referenc e point . Anothe r disadvantag e i s that , strictl y speaking , th e result s ar e onl y

applicabl e t o th e particula r episod e beingmodeled .
*£••,-

-P.4 1

Also , us e o f airshe dmodel s i s no t practica l fo r assessin ga larg e numbe r o f contro l strateg y options . 

### V . B . RECOMMENDE DMEASUR E O F REACTIVIT Y Th e staf f recommend s th e us e o f th e maximum incrementa l reactivit y

approac ht o develo phydrocarbo nreactivit y adjustmen t factors . Whil e thi s approac hha s significan t uncertaintie s fo r man y hydrocarbons , i t provide s a systemati c andscientificall y justifiabl e basi s fo r Incorporatin gpresen t knowledg e o f atmospheri c chemistr y in th e derivatio no f reactivit y adjustmen t factor s fo r regulator y purposes . Th e approac hestimate s hydrocarbo nreactivit y fo r environmenta l condition s whic hyiel dth e greates t ozon e reductions . Condition s o f maximu m incrementa l reactivit y occu r wel l withi nth e rang e o f hydrocarbo nt o NO xratio s observe d1nCalifornia . Maximum incrementa l reactivit y 1 s a generalize dscal e whic havoid s th e issu e o f whic hare a i s bein gmodele dwhe nusin gairshe dmodel s andth e applicabilit y

o f th e result s t o othe r areas .
C . EVALUATIO N

O F MAXIMU M

INCREMENTA L REACTIVIT Y Carte r (1989b ) ha s compare dmaximum incrementa l reactivitie s wit h th e hydroxy l radica l rat e constan t approac hfo r alternat e fuel s wher e som e exhaus t spedatlo ndat a ar e availabl e (ARB , 1989) . Despit e error s i nth e hydroxy l radica l rat e constan t approach , ther e i s quit e goo dagreemen t fo r alternat e fuel s othe r tha nmethanol . Chan gand Rud y (1990 ) foun dgoo dagreemen t betwee nmaximu m incrementa l reactivitie s andrelativ e reactivities . Dunke r (1990 ) andSchleye r (1990 ) hav e compare dreactivitie s derive dusin gbot hth e Lurmann , Carter , Coyne r (LCC ) andCarbo nBon d4 r (CB4 ) condense dphotochemica l mechanisms . Dunke r foun dlarg e difference s a t hig hhydrocarbo nt o NO xratios , wher e reactivit y i s - les s important . Schleye r observe ddifference s i nth e reactivit y o f formaldehyde . Thi s Issu e require s additiona l Investigation . Russel l (1990 ) update dhi s airshe dmode l wit hth e LC C mechanism , and1 s i nth e proces s o f calculatin gIncrementa l reactivitie s fo r lumpe dhydrocarbo nclasses . Preliminar y comparison s o f thes e result s .* t o maximu m

Incrementa l reactivitie s sho w goo dagreemen t fo r alkanes , ». ethene , othe r alkenes , toluene , formaldehyde , othe r aldehyde s and:? v methanol . Ther e ar e larg e discrepancie s fo r non-toluen e aromatlc s .iL tha t warran t additiona l Investigation . )A* j

« &

:.3T JP.4 2

* ' a

VIII . PROTOCOL S Th e reactivitie s o f individua l hydrocarbon s ar e use dwit h speciate dexhaus t profile s fo r th e alternat e fuele dvehicle s an dbas e gasolin e t o develo pth e hydrocarbo nreactivit y adjustmen t factors . In thi s section , severa l ARB-sponsore dproject s fo r developin g reactivitie s fo r individua l hydrocarbon s ar e described , an da protoco l fo r developin gth e reactivit y adjustmen t factor s i s proposed .

A . PROTOCO L FORDEVELOPINGREACTIVITIE S FORINDIVIDUAL HYDROCARBON S

1 . Pee r Revie w Th e reactivit y

metho dwa s presente dt o th e Modelin gAdvisor y Committe e (MAC ) a t It s public.meetin g onMa y 31 , 199 0 a t Sacrament o Airport . Th e MA

C provide s scientifi c guidanc e t o th e ARB , an di s chaire db

y Professo r Joh

nSeinfel do f th e Californi a Institut e o f Technology . Th e AR B I s als o receivin gInpu t from a nad-ho c reactivit y advisory pane! , wit hrepresentative s from th e Californi a Energ y Commission , Assembl y

Bil l 23 4 Advisor y

Board , Sout hCoas t Ai r Qualit y Managemen t District , Auto/01 1 Ai r Qualit y Improvemen t Program , Moto r Vehicl e Manufacturer s Association , Wester nState s Petroleu m Association , Californi a Natura l Ga s Vehicl e Coalition , Californi a Renewabl e Fuel s Council , an dWester nLiqui dGa s Association .
2 . Interi m

Maximu m Incrementa l Reactivitie s By th e en do f May , Dr . Carte r wil l publis ha se t o f interi m maximu m incrementa l reactivitie s fo r individua l hydrocarbon s base do n environmenta l condition s representin ga wid e variet y o f ozon e episode s throughou t th e Unite dState s (Carter , .1990d ) an dusin gth e lates tSH E

r ".•* r 

### versio no f hi s photochemica l mechanis m(Carter , 1990b)
. Thes e reactivitie s wil l b e containe di nth e regulatio nfo r us e in calculatin g reactivit yadjustmen t factors
. 3
. Furthe r Studie s O f Maximu m Incrementa l Reactivitie s B yth e en do f 1990 , Dr
. Carte r wil l recalculat e th e maximu m Incrementa l reactivitie s usin g environmenta l condition s representativ e o f ozon e episode s 1 nCalifornia
. Thi s studywil l us e observe ddat a I %_ fro m ozon e episode s capture ddurin g SCAQS ' an dARB' s 198 9 and199 0 f 7 % hydrocarbo nmeasuremen t programs , a s wel l a s trajectorie s fro mal l airshe dsimulation s availabl e fo r California
. On e are a o f § investigatio nwil l b e th e reactivit yeffec t o f nitrou s ad dandmethy l ? > nitrit e emissions , andth e rati o o f nitroge ndioxid e t o nitri c oxid e S 1 nth e exhaust
. Th e staf f anticipate s a recommendatio nwil l b e mad e p : t o measur e thes e compound s durin g vehicl e tests
. I f thes e studie s * Indicat e change s ar e necessar yt o th e Interi mmaximumincrementa l reactivitie s containe d1nth e regulation , o r tha t th e maximumkM incrementa l reactivit ymetho dItsel f shoul db e modified , th e staf f 7-p wil l recommen dchange s t o th e regulation
. | | Dr
. Carte r wil l als o Investigat e th e effec t o f uncertaintie s 1 n rat e constant s andmechanism s o nth e maximumIncrementa l reactivities
. H e wil l estimat e a nuncertaint yboundo nth e maximumincrementa l reactivit yfo r eac hhydrocarbon
. Wit hthi s Information , th e AR B and othe r organization s ca nfocu s researc heffort s o nimportan t hydrocarbon s wit hlarg e uncertainties , andfue l supplier s an dvehicl e manufacturer s wil l bette r understan dth e risk s o f tailorin g fuel s and contro l technologie s t o remov e specifi c hydrocarbons
. Th e staf f anticipate s tha t thi s wil l b e particularl yimportan t fo r aromati c compounds
. 4 . Compar e Maximu

m Incrementa l Reactivitie s Wit hAirshe dMode l Professo r Russel l wil l compar e th e maximumIncrementa l reactivitie s wit hth e result s o f hi s airshe dmode l fo r th e Augus t 3 0 - Septembe r 1 , 198 2 episode
. Thi s wa s a sever e stagnatio nepisod e wher e th e ozon e peak s wer e NOx-limite d(Mllfor de t al. , 1989)
. Th e modeling simulation s wil l addres s concern s a s t o whethe r th e sligh t negativ e reactivit yaromati c compound s exhibi t unde r NOx-limite dcondition s warrant s a differen t basi s fo r a reactivit yscale
. Bot hpea k ozon e andexposur e statistic s wil l b e use d1 nth e comparison
. Thi s wil l b e don e fo r mixture s o f man yhydrocarbon s andfo r singl e compounds
. Th e compariso nwil l b e complete dbyth e endo f May
. Othe r group s wil l compar e th e Incrementa l reactivitie s wit hthos e derive dfro mothe r chemica l mechanism s andmodels
. Th e staf f wil l develo p hydrocarbo nreactivit yadjustmen t factor s byth e endo f 1991 , wit hspedatlo nprofile s fro mvehicle/fue l emissio ntests
. Professo r Russel l wil l us e th e reactivity-adjuste d vehicl e emissio nstandard s t o predic t i f th e regulation s wil l hav e th eP.4 4



# I I

V i

## t

intende deffec t o f equa l ozon e Impact s fo r any vehicle/fue l combination . Thi s calculatio nwil l be repeate dwhe nth e SCAQ S modelin gwor ki s complete .
5 . Updat e Reactivitie s Ever y Thre e Year s Th e AR B wil l continu e t o sponso r laboratory studie s t o reduc e uncertaintie s i

ncurren t understandin go f atmospheri c chemistry , particularl y

fo r aromati c compounds , an dt o review

researc hsponsore d b y othe r organizations . Th e staf f plan s t o updat e th e reactivitie s f § fo r individua l hydrocarbon s ever y thre e years . On e researc htopi c * tha t deserve s attentio n1 s whethe r lo w reactivit y

hydrocarbon s contribut e significantl y t o ozon e formatio na t fa r downwindNO x sources . Thi s transpor t issue need s t o be addresse dwit hdetaile d | regiona l models .

B . PROTOCO L FORCALCULATINGREACTIVIT YADJUSTMEN T FACTOR S
1 . Calculatio nProcedur e Ste p1 - Calculat e tota l reactivit y o f exhaus t pe r mile . Multipl y th e exhaus t emissio nrate s (1 ngrams pe r mile ) o f eac h non-methan e organic ga s (Includingaldehydes , ethers , ketone s an d alcohols ) b

y th e correspondin greactivit y (o na pe r gra

m basis) . The su m o f th e product s 1 s th e tota l reactivit y o f th e exhaus t pe r mile . Ste p2 - Calculat e tota l reactivit y o f exhaus t pe r gra

m o f non-methan e organic gases . Divid e th e tota l reactivit y o f the exhaus t (pe r mile ) b y the tota l emissio nrat e (1 ngrams pe r mile ) o f th e non-methan e organi c gase s (Includingaldehydes , ethers , ketone s an dalcohols) . Ste p3 - Calculat e reactivit y adjustmen t factor . Divid e th e tota l reactivit y o f th e exhaus t (pe r gram ) b y th e correspondin gmeasur e fo r bas e gasoline . Thi s 1 s th e reactivit y adjustmen t factor .
2 . Oxide s O f Nitroge nEmissio nStandard s I nmany area s o f th e state , maxima l ozon e concentration s ar e determine dlargel y

by th e availabilit y

o f NOx . I nthes e areas , hydrocarbo nreactivitie s ar e a les s critica l facto r indeterminingth e tota l amoun t o f ozon e forme ddurin ganepisode . Accordingly , emissio n standard s fo r NOxwil l be establishe dindependentl y o f emissio n standard s fo r hydrocarbons .P.4 5



### 3
. Carbo nMonoxid e An dEvaporativ e Emission s Carbo nmonoxid e and evaporativ e emission s formation , bu t wil l no t b e considere d wit hth e reactivit yadjustmen t factor s ar e calculated , carbo nmonoxid e and evaporativ e emission s wil l contribut e t o ozon e othe r hydrocarbon s whe n Emissio nstandard s fo r b e establishe d independentl yo f emissio nstandard s fo r exhaus t hydrocarbons
.
4 . Refinin gAndMarketin gEmission s Th e reactivit yadjustmen t factor s wil l no t includ e change s i n refinin g o r marketin g emissions
. Thes e stationar ysource s mus t mee t emissio nstandard s establishe d byloca l ai r pollutio ncontro l agencies
. 

# f

*



### •aer ;

•2i:-s

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