The Section 812 

Benefit-Cost Analyses 

of the 

Clean Air Act 

Jim DeMocker 

Office of Policy Analysis and Review 

Office of Air and Radiation 

1990 Clean Air Act, Section 812 1990 Clean Air Act, Section 812

Ö EPA “... shall conduct a 

comprehensive analysis of the 

impact of this Act on the 

public health, economy, and 

environment of the United 

States.” 

Ö Retrospective + biennial 

Prospectives 

Ö Review by outside experts 

a Advisory Council on Clean Air 

Compliance Analysis 

1
1970 1980 2000 2010 2020 

B 

No-CAA 

With-CAA 

Without-CAAA90 

Emissions 

Retrospective First Prospective 

Second Prospective 

C 

With-CAAA90 

812 Scenarios -- Schematic 

1990 

D 

E F 

A 

First Prospective 2010 Reductions First Prospective 2010 Reductions

Endpoint Incidences % of Baseline 

Mortality (30+) 23,000 1.00 

Chronic Bronchitis 20,000 3.14 

Chronic Asthma 7,200 3.83 

Cardiopulmonary 

Hospitalizations 

64,000 0.62 to 0.86 

Asthma ERVs 4,800 0.55 

Restricted Activity 

Days 

12,000 

Work Loss Days 4,100,000 

Minor Illnesses Millions 0.24 to 10.4 

2 
<1 

3 

<1 

2 

6 

100 

27 

0 20 40 60 80 100 120 

Agriculture 

Visibility 

Productivity 

Other Morbidity 

Chronic Bronchitis 

Mortality 

Cost 

Billions of 1990$ 

2010 Monetized Benefits 2010 Monetized Benefits – First Prospective First Prospective

Key factors: 

PM mortality CRF (Pope 1995) 

Mortality valuation ($4.8M/life) 

Titles I through V Only 

0 

50 

100 

150 

200 

250 

300 

Direct Cost 

Primary Central 

Primary - Monte Carlo 

VSLY 

Dockery PM 

Laden 2006 (cs) PM 

Billions of 1990$ 

Primary Primary vs Alternative Estimates Alternative Estimates

First Prospective 2010 Costs & Benefits First Prospective 2010 Costs & Benefits

95th 

5th 

110 

27 

26 

270 ~260 

210 

63 

Estimate Not 

in Pro I Study 

3
Council Closure Letter Council Closure Letter – First Prospective First Prospective

Ö "The Council believes that the [Prospective Study] is a 

serious, careful study that, in general, employs sound 

methods and data.” 

Ö “While we do not endorse all details of the study, we believe 

that the study’s conclusions are generally consistent with the 

weight of available evidence.” 

Ö Recommendations for Second Prospective: 

a Disaggregate Benefits and Costs by Title or Provision 

a Cost Uncertainty 

a Revise Mortality Risk Valuation Estimates 

a Increase Set of Ecosystem Benefits Valued 

a Estimate Exposure and Effects of Air Toxics 

Council Letter Council Letter – Second Prospective Blueprint Second Prospective Blueprint

ÖRecommendations for Second Prospective: 

aImplement Learning Laboratories 

aDisaggregation by Major Emitting Sector 

aAir Toxics Case Study 

aCGE Modeling 

aDiscounting (inc. cessation lags) 

aRevise Mortality Risk Valuation Estimates 

aExpand Uncertainty Analysis, per NAS (2002) 

aEcological Effects Case Study 

aConsider Role of QALYs, but outside of BCA 

4 
Council Letter Council Letter – Second Prospective Blueprint Second Prospective Blueprint

Ö “The Council strongly advocates that the Agency continue to 

conduct these important benefit-cost assessments ...” 

Ö “These analyses provide a rigorous example for other 

regulatory impact assessments and serve an important educational 

role for the Agency.” 

Ö “Information requirements identified in the 812 Analysis 

stimulate important research both inside and outside the 

Agency.” 

Ö “The Council emphasizes that the 812 Analyses are not merely a 

perfunctory accounting exercise, but an ambitious and difficult 

enterprise that pushes the Agency to the frontiers of science 

in many different disciplines.” 

Scenario Development 

Sector Modeling 

Air Quality Modeling 

Physical Effects 

Economic Valuation 

Direct Cost 

Benefits and Costs CGE modeling 

Emissions 

Scenarios: 

Core 

Hi Econ Growth 

Lo Econ Growth 

Marginal Changes 

Supplemental Analyses: 

Uncertainty 

HAP case study 

Eco case study 

Eco lit review 

Title VI reanalysis 

Complete Underway Pending 

5 
Preliminary Prospective II Results Preliminary Prospective II Results –

Direct Cost Direct Cost

$0 

$10 

$20 

$30 

$40 

$50 

$60 

2000 2010 2020 

Direct Annual Cost (Billion 1999$) 

Unidentified - Non-California 

Unidentified - California 

Local Controls 

Onroad Vehicles and Fuels 

Nonroad Vehicles and Fuels 

Nonpoint Sources 

Non-EGU Point Sources 

Electric Utilities 

Direct Compliance Cost Direct Compliance Cost

Pro Ivs Preliminary Pro II Preliminary Pro II

$0 

$10 

$20 

$30 

$40 

$50 

$60 

2000-Pro1 2010-Pro1 2000 2010 2020 

Direct Annual Cost (Billion 1999$) 

TOTAL 

Unidentified - Non-California 

Unidentified - California 

Local Controls 

Onroad Vehicles and Fuels 

Nonroad Vehicles and Fuels 

Nonpoint Sources 

Non-EGU Point Sources 

Electric Utilities 

6
Emissions Reductions Emissions Reductions

Pro Ivs Preliminary Pro II Preliminary Pro II

0 

20 

40 

60 

80 

100 

120 

140 

160 

2000-Pro1 2010-Pro1 2000 2010 2020 

Emissions Reductions (Million short tons) 

Primary PM2.5 

Primary PM10 

CO 

SO2 

NOx 

VOC 

Looking Ahead Looking Ahead

Ö 812 studies are ongoing 

a Analytical system is state of the art 

a Rigorous external peer review by dedicated panels 

a Prospective II publication expected 2009 

Ö Gain insights 

a Update answer to core question of overall value of CAAA90 

a Per Council— 

• Educational role and methods development (e.g., case studies) 

• Stimulate research and refine priority-setting (e.g., disaggregation) 

Ö Explore new opportunities 

a Derivative analyses, such as pollutant-specific $/ton mapping 

a Reconsider Learning Laboratory initiative 

a Reconciliation of climate change and criteria pollutant assessments 

Ö www.epa.gov/oar/sect812 

7