From: Higgins, Cortney [mailto:Cortney_Higgins@omb.eop.gov] 

Sent: Wednesday, May 21, 2014 5:59 PM 

To: Wayland, Robertj 

Subject: RE: Revised BB 1&2 Document 

Thanks! 

From: Wayland, Robertj [mailto:Wayland.Robertj@epa.gov] 

Sent: Wednesday, May 21, 2014 5:25 PM 

To: Higgins, Cortney 

Cc: Culligan, Kevin 

Subject: Revised BB 1&2 Document 

Cortney – 

Attached is a revised BB 1&2 document adding in the blank tables, and a few other edits. Please 

let either Kevin or me know if you have additional questions/concerns. 

thanx! 

bob 

Robert J. Wayland, Ph.D. 

Leader, Energy Strategies Group 

U.S. Environmental Protection Agency 

Office of Air Quality Planning and Standards 

Sector Policies and Programs Division 

Mail Code D243-01 

Research Triangle Park, NC 27709 

Office: (919) 541-1045 

Cell: (919) 306-2290 

Fax: (919) 541-5450 

Email: wayland.robertj@epa.gov 

************************************* 

 DRAFT/Deliberative Document - FOIA Exempt 

************************************* 

<< Memo BB 1+2_5-21-14_v2.docx >> 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

3-1 

MEMO: EMISSION REDUCTIONS, COSTS, BENEFITS AND ECONOMIC 

IMPACTS ASSOCIATED WITH BUILDING BLOCKS 1 AND 2 

1 Introduction 

This memo provides estimates of the costs, energy impacts, and the monetized climate 

benefits and air pollution health co-benefits associated with emission reductions for two 

illustrative compliance scenarios associated with building blocks 1 and 2 only. It also includes 

estimates of the labor impacts on the regulated sector. The methods applied to generate these 

estimates are described in detail in Chapter 3, 4, and 6 of the Regulatory Impact Analysis (RIA). 

For brevity, this memo just reports the results of these analyses. 

EPA used the Integrated Planning Model (IPM), developed by ICF International, to 

conduct this analysis. It provides forecasts of least cost capacity expansion, electricity dispatch, 

and emission control strategies while meeting energy demand and environmental, transmission, 

dispatch, and reliability constraints.

This analysis also evaluates the climate benefits associated with emission reductions of 

CO2 and the air pollution health co-benefits associated with reduced emissions of SO2, NO2NOx, 

and PM2.5, which would lead to lower ambient concentrations of PM2.5 and ozone. Unlike the 

analysis of health co-benefits in Chapter 4 of the RIA, estimates of emissions reductions of 

directly emitted particles available are not available for this analysis. Similar to Chapter 4 of the 

RIA, unquantified co-benefits include exposure to several HAP (including mercury and 

hydrogen chloride), carbon monoxide, SO2, and NO2, as well as ecosystem effects, and visibility 

impairment. 

2 State Goals for Building Blocks 1 and 2 

This analysis includes state-specific rate-based goals that reflect a two-building block 

approach. It is also based upon the same modeling framework, assumptions and calculations as 

presented in the RIA. The two-blocks incorporated in the following state goals include efficiency 

improvements at existing coal steam electric generating units (EGUs) and use of lower emitting 

power sources (increased utilization of existing NGCCs) and are identical to the proposed levels, 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

3-2 

included for purposes of establishing state-specific goals, associated with Option 1 (6% 

efficiency improvement and no more than 70% redisptach). 

Table 1. State-specific Goals for Two-Block Approach 

State Interim Rate (2020 - 2029 average) Final Rate (2029 Rate) 

Alabama 1,329 1,329 

Alaska 1,252 1,252 

Arizona 900 900 

Arkansas 1,115 1,115 

California 838 838 

Colorado 1,521 1,521 

Connecticut 809 809 

Delaware 1,013 1,013 

Florida 910 910 

Georgia 1,296 1,296 

Hawaii 1,751 1,751 

Idaho 858 858 

Illinois 1,865 1,865

Indiana 1,834 1,834 

Iowa 1,846 1,846 

Kansas 2,186 2,186 

Kentucky 1,9861,977 1,977 

Louisiana 1,099 1,099 

Maine 848 848 

Maryland 1,868 1,868 

Massachusetts 886 886 

Michigan 1,511 1,511 

Minnesota 1,369 1,369 

Mississippi 843 843 

Missouri 1,784 1,784 

Montana 2,295 2,295 

Nebraska 1,941 1,941 

Nevada 882 882 

New Hampshire 878 878 

New Jersey 905 905 

New Mexico 1,447 1,447 

New York 927 927 

North Carolina 1,329 1,329 

North Dakota 2,226 2,226 

Ohio 1,714 1,714 

Oklahoma 1,186 1,186 

Oregon 852 852 

Pennsylvania 1,480 1,480 

Rhode Island 918 918

South Carolina 1,514 1,514 

South Dakota 1,456 1,456 

Tennessee 1,798 1,798 

Texas 1,083 1,083 

Utah 1,559 1,559 

Virginia 1,135 1,135 

Washington 811 811 

West Virginia 1,933 1,933 

Wisconsin 1,619 1,619 

Wyoming 2,1512,145 2,145 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

3-3 

3 Emissions and Power Sector Impacts 

Tables 2 through 16 report the emissions and power sector impacts of the two-block approach. 

Table 2. Projected CO2 Emission Impacts 

 CO2 Emissions 

 (MM Tonnes) 

CO2 Emissions 

Reductions from 

Reference Base Case 

 (MM Tonnes) 

CO2 Emissions Reductions: 

Percent Change from 

ReferenceBase Case

 2020 2025 2030 2020 2025 2030 2020 2025 2030 

ReferenceBase 

Case 2,161 2,231 2,256 

Two-Block 

Regional 

1,9301,9

49

1,9731,99

2

1,9972,01

6

23121

2

25823

9

25824

0

11%10

%

12%11

%

11%11

%

Two-Block State 1,9081,9

27

1,9471,96

5

1,9631,98

2

25223

4

28426

6

29227

4

12%11

%

13%12

%

13%12

%

Source: Integrated Planning Model run by EPA, 2014 

Table 3. Projected Non-CO2 Emissions Reductions, 2020-2030 

Base Case 

Two Block Two Block 

Regional State Regional State 

2020 

SO2 (thousand tons) 1,476 1,243 1,199 -15.7% -18.8% 

NOX (thousand tons) 1,559 1,319 1,286 -15.4% -17.5% 

Hg (tons) 8.3 7.2 7.1 -12.8% -13.9% 

HCl (thousand tons) 8 8 8 2.9% -1.3% 

2025 

SO2 (thousand tons) 1,515 1,228 1,171 -19.0% -22.7% 

NOX (thousand tons) 1,587 1,317 1,272 -17.0% -19.9% 

Hg (tons) 8.7 7.4 7.3 -14.9% -16.2% 

HCl (thousand tons) 8 9 9 0.8% 3.0% 

2030 

SO2 (thousand tons) 1,530 1,188 1,134 -22.3% -25.9% 

NOX (thousand tons) 1,537 1,274 1,224 -17.1% -20.4% 

Hg (tons) 8.8 7.4 7.3 -15.2% -16.8% 

HCl (thousand tons) 9 9 9 0.0% -5.1% 

Source: Integrated Planning Model run by EPA, 2014 

Table 4. Annualized Compliance Costs (billions of 2011$) 

 2020 2025 2030 

Two Block Regional 3.2 3.0 6.8 

Two Block State 4.4 4.6 9.8 

Source: Integrated Planning Model run by EPA, 2014 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

3-4 

Table 51. Generation Mix (thousand GWh) 

 Base Case Two Block Two Block 

 Regional State Regional State 

2020 

Pulverized Coal 1,665 1,435 1,395 -14% -16%

NG Combined Cycle (existing) 1,003 1,178 1,170 17% 17%

NG Combined Cycle (new) 85 153 199 81% 134%

Combustion Turbine 19 34 31 79% 63%

Oil/Gas Steam 52 25 26 -51% -50%

Non-Hydro Renewables 299 300 300 0% 0%

Hydro 280 283 283 1% 1%

Nuclear 817 819 819 0% 0%

Other 8 8 9 11% 17%

Total 4,227 4,235 4,232 0% 0%

2025 

Pulverized Coal 1,702 1,420 1,377 -17% -19%

NG Combined Cycle (existing) 919 1,176 1,144 28% 24%

NG Combined Cycle (new) 280 310 385 11% 37%

Combustion Turbine 27 42 38 57% 42%

Oil/Gas Steam 37 20 20 -47% -46%

Non-Hydro Renewables 335 335 335 0% 0%

Hydro 280 282 282 1% 1%

Nuclear 817 819 819 0% 0%

Other 6 7 8 15% 22%

Total 4,404 4,411 4,408 0% 0%

2030 

Pulverized Coal 1,668 1,372 1,321 -18% -21%

NG Combined Cycle (existing) 810 1,144 1,099 41% 36%

NG Combined Cycle (new) 599 551 644 -8% 7%

Combustion Turbine 23 43 40 92% 78%

Oil/Gas Steam 23 15 17 -34% -29%

Non-Hydro Renewables 350 352 353 1% 1%

Hydro 280 282 282 1% 1%

Nuclear 797 797 797 0% 0%

Other 6 7 8 23% 31%

Total 4,557 4,565 4,560 0% 0%

Note: “Other” mostly includes MSW and fuel cells. Source: Integrated Planning Model run by EPA, 2014

Table 6. Total Generation Capacity by 2020-2030 (GW) 

 Base 

Case 

Two Block Two Block 

 Reg. State Reg. State 

2020 

Pulverized Coal 244 219 211 -10% -13% 

NG Combined Cycle (existing) 219 221 221 1% 1% 

NG Combined Cycle (new) 12 23 30 93% 153% 

Combustion Turbine 146 148 149 1% 2% 

Oil/Gas Steam 83 80 79 -3% -5% 

Formatted Table
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

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Non-Hydro Renewables 93 93 93 0% 1% 

Hydro 101 101 101 0% 0% 

Nuclear 103 103 103 0% 0% 

Other 5 5 5 2% 2% 

Total 1,005 994 992 -1% -1% 

2025 

Pulverized Coal 243 219 211 -10% -13% 

NG Combined Cycle (existing) 219 221 221 1% 1% 

NG Combined Cycle (new) 39 49 59 25% 52% 

Combustion Turbine 149 160 160 8% 7% 

Oil/Gas Steam 82 80 79 -2% -4% 

Non-Hydro Renewables 103 104 104 0% 1% 

Hydro 101 101 101 0% 0% 

Nuclear 103 103 103 0% 0% 

Other 5 5 5 2% 2% 

Total 1,044 1,042 1,043 0% 0% 

2030 

Pulverized Coal 240 217 209 -10% -13% 

NG Combined Cycle (existing) 219 221 221 1% 1% 

NG Combined Cycle (new) 84 88 101 6% 20% 

Combustion Turbine 156 174 172 12% 10% 

Oil/Gas Steam 82 80 79 -2% -4% 

Non-Hydro Renewables 107 108 109 1% 1% 

Hydro 101 101 101 0% 0% 

Nuclear 101 101 101 0% 0% 

Other 5 5 5 2% 2% 

Total 1,095 1,095 1,096 0% 0% 

Source: Integrated Planning Model run by EPA, 2014 

Table 7. Projected Capacity Factor of Existing Coal Steam and Natural Gas Combined 

Cycle Capacity 

 Existing Coal Steam Existing Natural Gas Combined 

Cycle 

 2020 2025 2030 2020 2025 2030 

Base Case 78% 80% 79% 52% 48% 42% 

Option 2 Regional 75% 74% 72% 61% 61% 59% 

Option 2 State 75% 74% 72% 60% 59% 57% 

Source: Integrated Planning Model run by EPA, 2014

Formatted Table
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

6 

Table 68. Projected Capacity Additions, Gas (GW) 

Cumulative Capacity Additions: Gas 

Combined Cycle 

Incremental Cumulative Capacity 

Additions: Gas Combined Cycle 

2020 2025 2030 2020 2025 2030 

ReferenceBase Case 11.9 38.9 83.8 

Two Block Regional 23.1 48.7 88.5 11.1 9.8 4.7 

Two Block State 30.2 58.9 100.7 18.3 20.0 17.0 

Source: Integrated Planning Model run by EPA, 2014 

Table 79. Projected Capacity Additions, Non-hydro Renewable (GW) 

Cumulative Capacity Additions: 

Renewables 

Incremental Cumulative Capacity Additions: 

Renewables 

2020 2025 2030 2020 2025 2030 

ReferenceBase Case 17.8 28.4 32.7 

Two Block Regional 18.1 28.8 33.6 0.3 0.4 0.8 

Two Block State 18.3 29.0 33.7 0.5 0.6 1.0 

Source: Integrated Planning Model run by EPA, 2014 

Table 810. Coal Production for the Electric Power Sector, 2020 

Coal Production (MM Tons) Percent Change from ReferenceBase Case

Two Block Two Block 

Base Case Regional State Regional State 

Appalachia 140 110 111 -22% -21% 

Interior 249 230 224 -8% -10% 

West 446 324 308 -27% -31% 

Waste Coal 9 11 11 20% 20% 

Imports 0 0 0 

Total 844 675 654 -20% -22% 

Source: Integrated Planning Model run by EPA, 2014 

Table 119. Power Sector Gas Use 

Power Sector Gas Use (TCF) Percent Change in Power Sector Gas Use 

2020 2025 2030 2020 2025 2030 

ReferenceBase Case 8.35 8.88 9.89 

Two Block Regional 9.90 10.90 12.14 18.7% 22.7% 22.6% 

Two Block State 10.14 11.14 12.42 21.5% 25.5% 25.6% 

Table 120. Projected Average Minemouth and Delivered Coal Prices (2011$/MMBtu) 

Minemouth Delivered - Electric Power Sector 

2020 2025 2030 2020 2025 2030 

ReferenceBase Case 1.73 1.88 2.06 2.62 2.80 2.98

Two Block Regional 1.55 1.69 1.81 2.32 2.47 2.59

Two Block State 1.55 1.69 1.83 2.31 2.47 2.62

Table 131. Projected Average Minemouth and Delivered Coal Prices: Percent Change 

from Base Case Projections 

Minemouth Delivered - Electric Power Sector 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

7 

2020 2025 2030 2020 2025 2030 

Two Block Regional -10.6% -10.5% -12.1% -11.5% -11.8% -13.0%

Two Block State -10.5% -10.4% -11.0% -11.7% -11.9% -12.2%
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

8 

Table 142. Projected Delivered Natural Gas Prices (2011$/MMBtu)

 Henry Hub Delivered - Electric Power 

Sector 

 2020 2025 2030 2020 2025 2030 

Base Case 4.98 5.68 6.00 5.36 6.11 6.39 

Two Block Regional 5.53 6.06 6.62 5.90 6.42 6.94 

Two Block State 5.56 6.10 6.73 5.93 6.45 7.05 

Delivered - Electric Power Sector 

2020 2025 2030 

Reference 5.36 6.11 6.39 

Two Block Regional 5.90 6.42 6.94 

Two Block State 5.93 6.45 7.05 

Table 153. Delivered Projected Natural Gas Prices: Percent Change from Base Case 

Projections

 Henry Hub Delivered - Electric Power 

Sector 

 2020 2025 2030 2020 2025 2030 

Two Block Regional 10.9% 6.7% 10.3% 9.9% 5.0% 8.6% 

Two Block State 11.5% 7.3% 12.2% 10.6% 5.5% 10.3% 

Table 16. 2020 Projected Contiguous U.S. and Regional Retail Electricity Prices 

(cents/kWh) 

 

2020 Projected Retail Price 

(cents/kWh) 

Percent Change from Base 

Case 

 

Base 

Case 

Two Block 

Regional 

Two Block 

State 

Two Block 

Regional 

Two Block 

State 

ERCT 9.9 10.3 10.4 4.8% 5.1% 

FRCC 10.6 11.0 11.2 3.6% 5.1% 

MROE 10.4 10.5 10.5 0.6% 0.5% 

MROW 9.2 9.2 9.3 0.0% 1.8% 

NEWE 13.8 14.2 14.5 2.5% 5.0% 

NYCW 18.0 18.3 18.5 1.9% 2.6% 

NYLI 14.7 15.1 15.2 2.5% 3.3% 

NYUP 12.7 13.0 13.1 2.1% 2.8% 

RFCE 12.2 12.6 12.7 3.2% 3.6% 

RFCM 10.7 10.7 10.8 0.3% 1.1% 

RFCW 10.1 10.3 10.4 1.7% 2.5% 

SRDA 9.0 9.2 9.2 2.8% 2.6% 

Formatted Table

Formatted: 05 BodyText

Formatted Table
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

9 

SRGW 9.3 9.5 9.6 1.9% 2.9% 

SRSE 10.4 10.4 10.5 0.5% 0.7% 

SRCE 8.2 8.2 8.2 -0.9% -0.9% 

SRVC 10.7 10.6 10.7 -0.3% -0.1% 

SPNO 10.6 10.5 10.5 -1.0% -1.3% 

SPSO 8.3 8.8 8.8 5.0% 5.3% 

AZNM 10.5 10.7 10.8 1.7% 2.9% 

CAMX 14.3 14.6 14.6 2.2% 2.4% 

NWPP 7.3 7.4 7.4 1.3% 1.4% 

RMPA 8.9 9.0 9.2 0.7% 2.9% 

Contiguous 

U.S. 

10.4 10.6 10.7 1.9% 2.5% 

Table 17. 2025 Projected Contiguous U.S. and Regional Retail Electricity Prices 

(cents/kWh) 

 2025 Projected Retail Price (cents/kWh) Percent Change from Base Case 

 Base Case Two Block 

Regional Two Block State Two Block Regional Two Block State 

ERCT 11.2 11.5 11.5 2.5% 3.0% 

FRCC 10.9 11.2 11.3 2.6% 4.0% 

MROE 10.5 10.5 10.4 0.3% -0.8% 

MROW 9.2 9.4 9.6 1.9% 4.2% 

NEWE 14.2 14.6 14.9 2.2% 4.4% 

NYCW 18.8 19.2 19.3 2.0% 2.3% 

NYLI 15.6 16.0 16.1 2.9% 3.3% 

NYUP 13.2 13.5 13.6 2.0% 2.3% 

RFCE 12.6 12.8 12.9 1.6% 2.0% 

RFCM 10.7 10.8 10.9 0.7% 1.8% 

RFCW 10.9 11.0 11.1 0.7% 1.0% 

SRDA 9.3 9.6 9.6 2.7% 3.0% 

SRGW 10.1 10.3 10.3 1.3% 1.9% 

SRSE 10.3 10.5 10.5 1.1% 1.1% 

SRCE 8.2 8.1 8.1 -1.5% -1.7% 

SRVC 10.6 10.6 10.6 -0.1% 0.1% 

SPNO 10.3 10.3 10.3 -0.2% -0.3% 

SPSO 8.8 9.3 9.2 4.9% 4.4% 

AZNM 10.8 11.1 11.3 2.7% 4.7% 

CAMX 13.9 14.1 14.1 1.0% 1.0% 

NWPP 7.4 7.4 7.5 0.7% 1.7% 

RMPA 9.4 9.5 9.7 0.9% 3.3% 

Formatted Table
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

10 

Contiguous U.S. 

10.8 10.9 11.0 1.4% 2.0% 

Table 18. 2030 Projected Contiguous U.S. and Regional Retail Electricity Prices 

(cents/kWh) 

 2030 Projected Retail Price (cents/kWh) Percent Change from Base Case 

 Base Case Two Block 

Regional Two Block State Two Block Regional Two Block State 

ERCT 11.6 12.1 12.1 4.0% 4.8% 

FRCC 10.9 11.5 11.6 5.0% 6.3% 

MROE 10.5 10.7 10.7 2.3% 1.6% 

MROW 9.4 9.6 9.8 2.1% 4.9% 

NEWE 15.1 15.4 15.4 2.0% 1.8% 

NYCW 19.9 20.3 20.3 1.7% 1.6% 

NYLI 16.9 17.2 17.1 1.8% 1.3% 

NYUP 14.2 14.5 14.5 1.7% 1.6% 

RFCE 12.4 12.8 12.8 2.8% 3.4% 

RFCM 10.8 11.0 11.1 1.8% 2.9% 

RFCW 11.2 11.4 11.4 1.3% 1.8% 

SRDA 9.5 9.9 10.0 4.5% 5.0% 

SRGW 10.4 10.5 10.6 0.9% 1.6% 

SRSE 10.4 10.6 10.7 2.4% 2.6% 

SRCE 8.1 8.1 8.1 -1.2% -1.2% 

SRVC 10.4 10.4 10.5 0.6% 1.1% 

SPNO 10.2 10.2 10.2 -0.1% 0.2% 

SPSO 9.1 9.7 9.6 6.3% 6.1% 

AZNM 11.5 11.8 12.0 2.7% 4.4% 

CAMX 14.1 14.4 14.5 1.9% 2.3% 

NWPP 7.4 7.5 7.6 1.2% 2.6% 

RMPA 9.9 10.1 10.4 2.1% 5.7% 

Contiguous U.S. 

10.9 11.2 11.3 2.3% 2.9% 

4 Estimated Climate Benefits from CO2 Emission Reductions

Tables 19 through 213 report the climate benefits estimated in three analysis years (2020, 

2025, and 2030) for the two illustrative compliance scenarios (i.e., state and regional) evaluated. 

Formatted Table
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

11 

Table 149. Estimated Global Climate Benefits of CO2 Reductions for Building Blocks 1 and 

2 in 2020 (billions of 2011$)* 

Discount Rate and Statistic State Regional 

Million metric tonnes of CO2 reduced 252 231 

5% (average) $3.2 $3.0 

3% (average) $12 $11 

2.5% (average) $17 $16 

3% (95th percentile) $34 $31 

* The SCC values are dollar-year and emissions-year specific. SCC values represent only a partial accounting of 

climate impacts. 

Table 1520 Estimated Global Climate Benefits of CO2 Reductions in 2025 (billions of 

2011$)* 

Discount Rate and Statistic State Regional 

Million metric tonnes of CO2 reduced 284 258 

5% (average) $4.2 $3.9 

3% (average) $14 $13 

2.5% (average) $21 $19 

3% (95th percentile) $43 $39 

* The SCC values are dollar-year and emissions-year specific. SCC values represent only a partial accounting of 

climate impacts. 

Table 16 21 Estimated Global Climate Benefits of CO2 Reductions in 2030 (billions of 

2011$)* 

Discount Rate and Statistic State Regional 

Million metric tonnes of CO2 reduced 292 258 

5% (average) $5.0 $4.4 

3% (average) $16 $14 

2.5% (average) $23 $21 

3% (95th percentile) $50 $44 

* The SCC values are dollar-year and emissions-year specific. SCC values represent only a partial accounting of 

climate impacts. 

5 Estimated Human Health Co-Benefits 

Tables 224 through 246 provide the emission reductions estimated to occur in three 

analysis years (2020, 2025, and 2030) for two illustrative compliance scenarios (i.e., state and 

regional) by region (i.e., East, West, and California). Tables 25 7 through 279 report the health 

co-benefits estimated in three analysis years (2020, 2025, and 2030) for the two illustrative 

compliance scenarios (i.e., state and regional) evaluated. 

Table 1722 Emission Reductions of Criteria Pollutants in 2020 (thousands of short tons) 

Region SO2 All-year NOx Ozone-Season NOx 

State 

East 253 233 96 

West 23 40 17 
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12 

California 0 0 0 

Total 277 273 113 

Regional 216 209 86 

East 15 29 12 

West 1 2 1 

California 232 240 98 

Total 216 209 86 

Table 1823 Emission Reductions of Criteria Pollutants in 2025 (thousands of short tons) 

Region SO2 All-year NOx Ozone-Season NOx 

State 

East 318 265 111 

West 26 41 17 

California 0 9 1 

Total 344 315 128 

Regional 

East 265 237 97 

West 22 26 11 

California 1 8 1 

Total 287 270 109 

Table 1924 Emission Reductions of Criteria Pollutants in 2030 (thousands of short tons) 

Region SO2 All-year NOx Ozone-Season NOx 

State 

East 365 265 108 

West 31 48 21 

California 0 0 0 

Total 396 313 128 

Regional 

East 316 233 92 

West 26 29 12 

California 1 1 0 

Total 342 263 105 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

13 

Table 205 Summary of Estimated Monetized Health Co-benefits in 2020 (millions of 

2011$)* 

Pollutant 3% Discount Rate 7% Discount Rate 

State 

SO2 $10,000 to $23,000 $9,300 to $21,000 

NOx (as PM2.5) $1,600 to $3,600 $1,400 to $3,200 

NOx (as Ozone) $450 to $1,900 $450 to $1,900 

Total $12,000 to $29,000 $11,000 to $26,000

Regional 

SO2 $8,900 to $20,000 $8,000 to $18,000 

NOx (as PM2.5) $1,500 to $3,300 $1,300 to $3,000 

NOx (as Ozone) $410 to $1,700 $410 to $1,700 

Total $11,000 to $25,000 $9,800 to $23,000

* All estimates are rounded to two significant figures so numbers may not sum down columns. The estimated 

monetized co-benefits do not include climate benefits or reduced health effects from direct exposure to NO2, SO2, 

ecosystem effects, or visibility impairment. All fine particles are assumed to have equivalent health effects, but the 

benefit-per-ton estimates vary depending on the location and magnitude of their impact on PM2.5 levels, which 

drive population exposure. The monetized co-benefits incorporate the conversion from precursor emissions to 

ambient fine particles and ozone. Co-benefits for PM2.5 precursors are based on regional benefit-per-ton estimates. 

Co-benefits for ozone are based on ozone season NOx emissions. Ozone co-benefits occur in analysis year, so they 

are the same for all discount rates. Confidence intervals are unavailable for this analysis because of the benefit-perton methodology. In general, the 95th percentile confidence interval for monetized PM2.5 benefits ranges from 

approximately -90 percent to +180 percent of the central estimates based on Krewski et al. (2009) and Lepeule et 

al. (2012). 

Table 216 Summary of Estimated Monetized Health Co-benefits in 2025 (millions of 

2011$)* 

Pollutant 3% Discount Rate 7% Discount Rate 

State 

SO2 $14,000 to $32,000 $13,000 to $29,000 

NOx (as PM2.5) $2,100 to $4,800 $1,900 to $4,300 

NOx (as Ozone) $680 to $2,900 $680 to $2,900 

Total $17,000 to $40,000 $15,000 to $36,000

Regional 

SO2 $12,000 to $27,000 $11,000 to $24,000 

NOx (as PM2.5) $1,900 to $4,200 $1,700 to $3,800 

NOx (as Ozone) $600 to $2,600 $600 to $2,600 

Total $14,000 to $34,000 $13,000 to $30,000

* All estimates are rounded to two significant figures so numbers may not sum down columns. The estimated 

monetized co-benefits do not include climate benefits or reduced health effects from direct exposure to NO2, SO2, 

ecosystem effects, or visibility impairment. All fine particles are assumed to have equivalent health effects, but the 

benefit-per-ton estimates vary depending on the location and magnitude of their impact on PM2.5 levels, which 

drive population exposure. The monetized co-benefits incorporate the conversion from precursor emissions to 

ambient fine particles and ozone. Co-benefits for PM2.5 precursors are based on regional benefit-per-ton estimates. 

Co-benefits for ozone are based on ozone season NOx emissions. Ozone co-benefits occur in analysis year, so they 

are the same for all discount rates. Confidence intervals are unavailable for this analysis because of the benefit-perton methodology. In general, the 95th percentile confidence interval for monetized PM2.5 benefits ranges from 

approximately -90 percent to +180 percent of the central estimates based on Krewski et al. (2009) and Lepeule et 

al. (2012). 
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Table 227 Summary of Estimated Monetized Health Co-benefits in 2030 (millions of 

2011$)* 

Pollutant 3% Discount Rate 7% Discount Rate 

State 

SO2 $17,000 to $39,000 $16,000 to $35,000 

NOx (as PM2.5) $2,100 to $4,700 $1,900 to $4,200 

NOx (as Ozone) $700 to $3,000 $700 to $3,000 

Total $20,000 to $47,000 $18,000 to $43,000 

Regional 

SO2 $15,000 to $34,000 $14,000 to $31,000 

NOx (as PM2.5) $1,800 to $4,100 $1,700 to $3,700 

NOx (as Ozone) $600 to $2,600 $600 to $2,600 

Total $18,000 to $41,000 $16,000 to $37,000 

* All estimates are rounded to two significant figures so numbers may not sum down columns. The estimated 

monetized co-benefits do not include climate benefits or reduced health effects from direct exposure to NO2, SO2, 

ecosystem effects, or visibility impairment. All fine particles are assumed to have equivalent health effects, but the 

benefit-per-ton estimates vary depending on the location and magnitude of their impact on PM2.5 levels, which 

drive population exposure. The monetized co-benefits incorporate the conversion from precursor emissions to 

ambient fine particles and ozone. Co-benefits for PM2.5 precursors are based on regional benefit-per-ton estimates. 

Co-benefits for ozone are based on ozone season NOx emissions. Ozone co-benefits occur in analysis year, so they 

are the same for all discount rates. Confidence intervals are unavailable for this analysis because of the benefit-perton methodology. In general, the 95th percentile confidence interval for monetized PM2.5 benefits ranges from 

approximately -90 percent to +180 percent of the central estimates based on Krewski et al. (2009) and Lepeule et 

al. (2012). 

6 Combined Climate Benefits and Health Co-benefits 

Tables 2810 through 3012 provide the combined climate and health benefits for each 

compliance scenarios evaluated for 2020, 2025, and 2030. 
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Table 238 Combined Climate Benefits and Health Co-Benefits in 2020 (billions of 2011$)* 

SCC Discount Rate 

Climate 

Benefits 

Only 

Climate Benefits and Health Co-Benefits 

(Discount Rate Applied to Health Co-Benefits) 

3% 7% 

State 252 million metric tonnes CO2

5% $3.2 $16 to $32 $14 to $29 

3% $12 $24 to $40 $23 to $38 

2.5% $17 $30 to $46 $28 to $43 

3% (95th percentile) $34 $47 to $63 $46 to $61 

Regional 231 million metric tonnes CO2

5% $3.0 $14 to $28 $13 to $26 

3% $11 $21 to $36 $20 to $33 

2.5% $16 $27 to $41 $26 to $39 

3% (95th percentile) $31 $42 to $57 $41 to $54 

*All estimates are rounded to two significant figures. Climate benefits are based on reductions in CO2 emissions. 

Co-benefits are based on regional benefit-per-ton estimates. Co-benefits for ozone are based on ozone season NOx 

emissions. Ozone co-benefits occur in analysis year, so they are the same for all discount rates. The health cobenefits reflect the sum of the PM2.5 and ozone co-benefits and reflect the range based on adult mortality functions 

(e.g., from Krewski et al. (2009) with Bell et al. (2004) to Lepeule et al. (2012) with Levy et al. (2005)). The 

monetized health co-benefits do not include reduced health effects from direct exposure to NO2, SO2, and HAP; 

ecosystem effects; or visibility impairment. 

Table 249 Combined Climate Benefits and Health Co-Benefits in 2025 (billions of 2011$)* 

SCC Discount Rate 

Climate 

Benefits 

Only 

Climate Benefits and Health Co-Benefits 

(Discount Rate Applied to Health Co-Benefits) 

3% 7% 

State 284 million metric tonnes CO2

5% $4.2 $21 to $44 $20 to $40 

3% $14 $31 to $54 $30 to $50 

2.5% $21 $38 to $61 $36 to $57 

3% (95th percentile) $43 $60 to $83 $59 to $79 

Regional 258 million metric tonnes CO2

5% $3.9 $18 to $37 $17 to $34 

3% $13 $27 to $46 $26 to $43 

2.5% $19 $33 to $52 $32 to $49 

3% (95th percentile) $39 $54 to $73 $52 to $70 

*All estimates are rounded to two significant figures. Climate benefits are based on reductions in CO2 emissions. 

Co-benefits are based on regional benefit-per-ton estimates. Co-benefits for ozone are based on ozone season NOx 

emissions. Ozone co-benefits occur in analysis year, so they are the same for all discount rates. The health cobenefits reflect the sum of the PM2.5 and ozone co-benefits and reflect the range based on adult mortality functions 

(e.g., from Krewski et al. (2009) with Bell et al. (2004) to Lepeule et al. (2012) with Levy et al. (2005)). It is 

important to note that the monetized health co-benefits do not include reduced health effects from direct exposure to 

NO2, SO2, and HAP; ecosystem effects; or visibility impairment. 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

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Table 2530 Combined Climate Benefits and Health Co-Benefits in 2030 (billions of 2011$)* 

SCC Discount Rate 

Climate 

Benefits 

Only 

Climate Benefits and Health Co-Benefits 

(Discount Rate Applied to Health Co-Benefits) 

3% 7% 

State 292 million metric tonnes CO2

5% $5.0 $25 to $52 $23 to $48 

3% $16 $36 to $63 $35 to $59 

2.5% $23 $44 to $70 $42 to $66 

3% (95th percentile) $50 $70 to $97 $68 to $92 

Regional 258 million metric tonnes CO2

5% $4.4 $22 to $45 $20 to $41 

3% $14 $32 to $55 $30 to $51 

2.5% $21 $38 to $62 $37 to $58 

3% (95th percentile) $44 $61 to $85 $60 to $81 

*All estimates are rounded to two significant figures. Climate benefits are based on reductions in CO2 emissions. 

Co-benefits are based on regional benefit-per-ton estimates. Co-benefits for ozone are based on ozone season NOx 

emissions. Ozone co-benefits occur in analysis year, so they are the same for all discount rates. The health cobenefits reflect the sum of the PM2.5 and ozone co-benefits and reflect the range based on adult mortality functions 

(e.g., from Krewski et al. (2009) with Bell et al. (2004) to Lepeule et al. (2012) with Levy et al. (2005)). It is 

important to note that the monetized health co-benefits do not include reduced health effects from direct exposure to 

NO2, SO2, and HAP; ecosystem effects; or visibility impairment. 

7 Net Benefits 

Tables 3113 through 3315 summarize the benefits, costs, and net benefits for 2020, 2025, 

and 2030 for the two illustrative compliance scenarios evaluated for building blocks 1 and 2 

only. 
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17 

Table 2631 Summary of Monetized Benefits, Compliance Costs, and Net Benefits in 2020 

(billions of 2011$) a

State 

3% Discount Rate 7% Discount Rate 

Climate Benefits b 

5% discount rate 

3% discount rate 

2.5% discount rate 

95th percentile at 3% discount rate 

$3.2 

$12 

$17 

$34 

Air pollution health co-benefits c $12 to $29 $11 to $26 

Total Compliance Costs d $4.4 

Net Benefits e $20 to $36 $18 to $33 

Non-Monetized Benefits 

Direct exposure to SO2 and NO2

1.1 tons of Hg 

Ecosystem Effects 

Visibility impairment 

Regional 

3% Discount Rate 7% Discount Rate 

Climate Benefits b

5% discount rate 

3% discount rate 

2.5% discount rate 

95th percentile at 3% discount rate 

$3.0 

$11 

$16 

$31 

Air pollution health co-benefits c $11 to $25 $9.8 to $23 

Total Compliance Costs d $3.2 

Net Benefits e $18 to $32 $17 to $30 

Non-Monetized Benefits 

Direct exposure to SO2 and NO2

1.1 tons of Hg 

Ecosystem Effects 

Visibility impairment a

 All estimates are for 2020 and are rounded to two significant figures, so figures may not sum. 

b

 The climate benefit estimates in this summary table reflect global impacts from CO2 emission changes and do not account for 

changes in non-CO2 GHG emissions. Also, different discount rates are applied to SCC than to the other estimates because CO2

emissions are long-lived and subsequent damages occur over many years. The SCC estimates are year-specific and increase over 

time. 

c The air pollution health co-benefits reflect reduced exposure to PM2.5 and ozone associated with emission reductions of directly 

emitted PM2.5, SO2 and NOX. The range reflects the use of concentration-response functions from different epidemiology studies. 

The reduction in premature fatalities each year accounts for over 90 percent of total monetized co-benefits from PM2.5 and ozone. 

These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature 

mortality because the scientific evidence is not yet sufficient to allow differentiation of effect estimates by particle type. d Total costs are approximated by the illustrative compliance costs estimated using the Integrated Planning Model and a discount 

rate of approximately 5%. This estimate includes monitoring, recordkeeping, and reporting costs and demand side energy 

efficiency program and participant costs. 

e

 The estimates of net benefits in this summary table are calculated using the global SCC at a 3 percent discount rate (model 

average). Tables 10-12 in this memo present combined climate and health estimates based on additional discount rates. 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

18 

Table 27 32 Summary of Monetized Benefits, Compliance Costs, and Net Benefits in 2025 

(billions of 2011$) a

State 

3% Discount Rate 7% Discount Rate 

Climate Benefits b 

5% discount rate 

3% discount rate 

2.5% discount rate 

95th percentile at 3% discount rate 

$4.2 

$14 

$21 

$43 

Air pollution health co-benefits c $17 to $40 $15 to $36 

Total Compliance Costs d $4.6 

Net Benefits e $27 to $49 $25 to $46 

Non-Monetized Benefits 

Direct exposure to SO2 and NO2

1.4 tons of Hg 

Ecosystem Effects 

Visibility impairment 

Regional 

3% Discount Rate 7% Discount Rate 

Climate Benefits b

5% discount rate 

3% discount rate 

2.5% discount rate 

95th percentile at 3% discount rate 

$3.9 

$13 

$19 

$39 

Air pollution health co-benefits c $14 to $34 $13 to $30 

Total Compliance Costs d $3.0 

Net Benefits e $24 to $43 $23 to $40 

Non-Monetized Benefits 

Direct exposure to SO2 and NO2

1.3 tons of Hg 

Ecosystem Effects 

Visibility impairment a

 All estimates are for 2025 and are rounded to two significant figures, so figures may not sum. 

b

 The climate benefit estimates in this summary table reflect global impacts from CO2 emission changes and do not account for 

changes in non-CO2 GHG emissions. Also, different discount rates are applied to SCC than to the other estimates because CO2

emissions are long-lived and subsequent damages occur over many years. The SCC estimates are year-specific and increase over 

time. 

c The air pollution health co-benefits reflect reduced exposure to PM2.5 and ozone associated with emission reductions of directly 

emitted PM2.5, SO2 and NOX. The range reflects the use of concentration-response functions from different epidemiology studies. 

The reduction in premature fatalities each year accounts for over 90 percent of total monetized co-benefits from PM2.5 and ozone. 

These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature 

mortality because the scientific evidence is not yet sufficient to allow differentiation of effect estimates by particle type. d Total costs are approximated by the illustrative compliance costs estimated using the Integrated Planning Model and a discount 

rate of approximately 5%. This estimate includes monitoring, recordkeeping, and reporting costs and demand side energy 

efficiency program and participant costs. 

e

 The estimates of net benefits in this summary table are calculated using the global SCC at a 3 percent discount rate (model 

average). Tables 10-12 in this memo present combined climate and health estimates based on additional discount rates. 
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

19 

Table 28 33 Summary of Monetized Benefits, Compliance Costs, and Net Benefits in 2030 

(billions of 2011$) a

State 

3% Discount Rate 7% Discount Rate 

Climate Benefits b 

5% discount rate 

3% discount rate 

2.5% discount rate 

95th percentile at 3% discount rate 

$5.0 

$16 

$23 

$50 

Air pollution health co-benefits c $20 to $47 $18 to $43 

Total Compliance Costs d $9.8 

Net Benefits e $27 to $53 $25 to $49 

Non-Monetized Benefits 

Direct exposure to SO2 and NO2

1.5 tons of Hg 

Ecosystem Effects 

Visibility impairment 

Regional 

3% Discount Rate 7% Discount Rate 

Climate Benefits b

5% discount rate 

3% discount rate 

2.5% discount rate 

95th percentile at 3% discount rate 

$4.4 

$14 

$21 

$44 

Air pollution health co-benefits c $18 to $41 $16 to $37 

Total Compliance Costs d $6.8 

Net Benefits e $25 to $48 $23 to $45 

Non-Monetized Benefits 

Direct exposure to SO2 and NO2

1.3 tons of Hg 

Ecosystem Effects 

Visibility impairment a

 All estimates are for 2030, and are rounded to two significant figures, so figures may not sum. 

b

 The climate benefit estimates in this summary table reflect global impacts from CO2 emission changes and do not account for 

changes in non-CO2 GHG emissions. Also, different discount rates are applied to SCC than to the other estimates because CO2

emissions are long-lived and subsequent damages occur over many years. The SCC estimates are year-specific and increase over 

time. 

c The air pollution health co-benefits reflect reduced exposure to PM2.5 and ozone associated with emission reductions of directly 

emitted PM2.5, SO2 and NOX. The range reflects the use of concentration-response functions from different epidemiology studies. 

The reduction in premature fatalities each year accounts for over 90 percent of total monetized co-benefits from PM2.5 and ozone. 

These models assume that all fine particles, regardless of their chemical composition, are equally potent in causing premature 

mortality because the scientific evidence is not yet sufficient to allow differentiation of effect estimates by particle type. d Total costs are approximated by the illustrative compliance costs estimated using the Integrated Planning and a discount rate of 

approximately 5%. This estimate includes monitoring, recordkeeping, and reporting costs and demand side energy efficiency 

program and participant costs. 

e

 The estimates of net benefits in this summary table are calculated using the global SCC at a 3 percent discount rate (model 

average). Tables 10-12 in this memo present combined climate and health estimates based on additional discount rates.
***E.O. 12866 Review – Draft – Do Not Cite, Quote or Release During Review*** 

20 

8 Labor

Table 34 presents the labor changes estimated in job-years associated with the illustrative 

building blocks 1 and 2 analysis.

Table 29 34 Engineering-Baseda Changes in Labor Utilization, Building Blocks 1 & 2 

(Number of Job-Years of Employment in Year)

Category Regional Compliance State Compliance 

2017-2020 2021-2025 2026-2030 2017-2020 2021-2025 2026-2030 

Construction-related (One-time) Changes*

Heat Rate Improvement: Total 37,400 0 0 35,300 0 0 

Boilermakers and General 

Construction 26,000 0 0 24,500 0 0 

Engineering and Management 6,900 0 0 6,500 0 0 

Equipment-related 3,300 0 0 3,200 0 0 

Material-related 1,200 0 0 1,100 0 0 

New Capacity Construction: 

Total 7,700 7,300 1,600 11,000 9,400 1,000 

Renewables 0 500 1,600 -700 500 1,600 

Natural Gas 7,700 6,800 0 11,700 8,900 -600 

Recurring Changes**

2020 2025 2030 2020 2025 2030 

Operation and Maintenance: 

Total -10,970 -9,500 -8,300 -14,100 -12,200 -10,600 

Changes in Gas 1,330 1,500 1,100 2,200 2,400 2,100 

Retired Coal -11,800 -10,700 -9,200 -15,600 -14,100 -12,300 

Retired Oil and Gas -500 -300 -200 -700 -500 -400 

Fuel Extraction: Total -1,900 -1,000 -700 -1,500 -1,000 -800 

Coal -9,700 -11,100 -12,000 -10,500 -12,400 -13,500 

Natural Gas 7,800 10,100 11,300 9,000 11,400 12,700 

Supply Side Employment 

Impacts – Quantified 32,230 -3,200 -7,400 30,700 -3,800 -10,400 

a

 Job-year estimates are derived from IPM investment and O&M cost estimates, as well as IPM fuel use estimates 

(tons coals or MMBtu gas)

b

All job-year estimates on this are Full Time Equivalent (FTE) jobs. Job estimates in the Demand-Side energy 

efficiency section (below) include both full time and part time jobs

*Construction-related job-year changes are one-time impacts, occurring during each year of the 2 to 4 year period 

during which construction and HRI installation activities occur. Figures in table are average job-years during each of 

the years in each range. Negative job-year estimates when additional generating capacity must be built in the base 

case, but is avoided in the Guideline implementation scenarios due to HRI or Demand-side energy efficiency 

programs. 

**Recurring Changes are job-years associated with annual recurring jobs including operating and maintenance 

activities and fuel extraction jobs. Newly built generating capacity creates a recurring stream of positive job-years, 

while retiring generating capacity, as well as avoided new built capacity, create a stream of negative job-years. In 

addition, there are recurring jobs prior to 2020 to fuel and operate new generating capacity brought online before 

2020; the recurring jobs prior to 2020 are not estimated.

Formatted: 05 BodyText
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21 

9 References 

Bell, M.L., et al. 2004. “Ozone and Short-Term Mortality in 95 U.S. Urban Communities, 1987-

2000.” Journal of the American Medical Association, 292(19): pp. 2372-8. 

Krewski D; M. Jerrett; R.T. Burnett; R. Ma; E. Hughes and Y. Shi, et al. 2009. Extended FollowUp and Spatial Analysis of the American Cancer Society Study Linking Particulate Air 

Pollution and Mortality. HEI Research Report, 140, Health Effects Institute, Boston, MA. 

Lepeule, J.; F. Laden; D. Dockery and J. Schwartz. 2012. “Chronic Exposure to Fine Particles 

and Mortality: An Extended Follow-Up of the Harvard Six Cities Study from 1974 to 

2009.” Environmental Health Perspectives, July, 120(7): pp. 965-70. 

Levy, J.I.; S.M. Chemerynski and J.A. Sarnat. 2005. “Ozone Exposure and Mortality: An 

Empiric Bayes Meta-regression Analysis.” Epidemiology, 16(4): pp. 458-68.