8-1

CHAPTER 8: COMPARISON OF COSTS AND BENEFITS

Overview

The EPA has performed an illustrative analysis to estimate the costs and human health 

benefits of nationally attaining alternative ozone standards. The EPA Administrator is proposing 

to revise the level of the primary ozone standard to within a range of 65 to 70 ppb and is 

soliciting comment on alternative standard levels below 65 ppb, as low as 60 ppb. Per Executive

Order 12866 and the guidelines of OMB Circular A-4, this Regulatory Impact Analysis (RIA) 

presents the analyses of the following alternative standard levels -- 60 ppb, 65 ppb, and 70 ppb. 

This chapter summarizes these results and discusses the implications of the analysis. The cost 

and benefit estimates below are calculated incremental to a 2025 baseline assuming attainment of 

the existing ozone standard of 75 ppb and incorporating air quality improvements achieved 

through the projected implementation of existing regulations. 

8.1 Results

In this RIA we present the primary costs and benefits estimates for full attainment in 

2025. For analytical purposes, we assume that almost all areas of the country will meet each 

alternative standard level in 2025 through the adoption of technologies at least as effective as the 

control strategies used in this illustration. It is expected that some costs and benefits will begin 

occurring earlier, as states begin implementing control measures to attain earlier or to show 

progress towards attainment. For California, we provide estimates of the costs and benefits of 

attaining the standard in a post-2025 time frame. 

In estimating the incremental costs and benefits of potential alternative standard levels, 

we recognize that there are several areas that are not required to meet the existing ozone standard 

by 2025. The Clean Air Act allows areas with more significant air quality problems to take 

additional time to reach the existing standard. Several areas in California are not required to 

meet the existing standard by 2025, and depending on how areas are ultimately designated for a 

revised standard, many areas may not be required to meet a revised standard until sometime 

between 2032 and 2038. We were not able to project emissions and air quality beyond 2025 for 

California; however, we adjusted baseline air quality to reflect mobile source emissions 

reductions for California that would occur between 2025 and 2030; these emissions reductions 
8-2

were the result of mobile source regulations expected to be fully implemented by 2030. While 

there is uncertainty about the precise timing of emissions reductions and related costs for 

California, we assume costs occur through 2038. In addition, we model benefits for California 

using projected population demographics for 2038. 

Because of the different timing for incurring costs and accruing benefits and for ease of 

discussion throughout the analyses, we refer to the different time periods for potential attainment 

as 2025 and post-2025 to reflect that (1) we did not project emissions and air quality for any year 

other than 2025; (2) for California, emissions controls and associated costs are assumed to occur 

through 2038; and (3) for California benefits are modeled using population demographics in 

2038. It is not straightforward to discount the post-2025 results for California to compare with 

or add to the 2025 results for the rest of the U.S. While we estimate benefits using 2038 

information, we do not have good information on precisely when the costs of controls will be 

incurred. Because of these differences in timing related to California attaining a revised 

standard, the supplementalseparate costs and benefits estimates for post-2025 should not be 

added to the primary estimates for 2025.

By the 2030s, various mobile source rules, such as the onroad and nonroad diesel rules 

are expected to be fully implemented. Because California will likely not have all of its areas in 

attainment with a revised standard until sometime after its attainment date for the existing 

standard, it is important to reflect the impact these mobile source rules might have on the 

emissions that affect ozone nonattainment. To reflect the emissions reductions that are expected 

from these rules, we subtract those from the estimates of the emissions reductions that might be 

needed for California to fully attain in 2025, making our analysis more consistent with full 

attainment later than 2025. The EPA did the analysis this way to be consistent with the 

requirements in the Clean Air Act and because forcing full attainment in California in an earlier 

year would likely lead to overstating costs due to (1) benefits those areas might enjoy from 

existing federal or state programs implemented between 2025 and the future potential attainment 

year, (2) the likelihood that energy efficiency and cleaner technologies will be further 

implemented, and/or (3) the potential decline in costs of existing technologies due to economies 

of scale or improvements in the efficiency of installing and operating controls (‘learning by 

doing’).
8-3

Tables 8-1 and 8-2 summarize the costs and benefits of the three potential alternative 

standard levels analyzed and shows the net benefits for each of the levels across a range of 

modeling assumptions related to the calculation of costs and benefits. Tables 8-3 and 8-4 

provide information on the costs by geographic region for the U.S., except California in 2025

and on the costs for California for post-2025. Tables 8-5 and 8-6 provide a regional breakdown 

of benefits for 2025 and a regional breakdown of benefits for post-2025.

The estimates for benefits reflect the variability in the functions available for estimating 

the largest source of benefits – avoided premature mortality associated with simulated reductions 

in ozone and PM2.5 (as a co-benefit). The low end of the range of net benefits is constructed by 

subtracting the cost from the lowest benefit, while the high end of the range is constructed by 

subtracting the cost from the highest benefit. Following these tables is a discussion of the 

implications of these estimates, as well as the uncertainties and limitations that should be 

considered in interpreting the estimates. 

In the RIA we provide estimates of costs of emissions reductions to attain the proposed 

standards in three regions -- California, the rest of the western U.S., and the eastern U.S. In 

addition, we provide estimates of the benefits that accrue to each of these three regions resulting 

from (i) control strategies applied within the region, (ii) reductions in transport of ozone 

associated with emissions reductions in other regions, and (iii) the control strategies for which 

the regional cost estimates are generated. These benefits are not directly comparable to the costs 

of control strategies in a region because the benefits include benefits not associated with those 

control strategies.

The net benefits of emissions reductions strategies in a specific region would be the 

benefits of the emissions reductions occurring both within and outside of the region minus the 

costs of the emissions reductions. Because the air quality modeling is done the national level, we 

do not estimate separately the nationwide benefits associated with the emissions reductions 

occurring in any specific region.1 As a result, we are only able to provide net benefits estimates 

at the national level. The difference between the costs for a specific region and the benefits 

 

1 For California, we provide separate estimates of the costs and nationwide estimates of benefits, so it is appropriate 

to calculate net benefits. As such, we provide net benefits for the post-2025 California analysis.
8-4

accruing to that region is not an estimate of net benefits of the emissions reductions in that 

region.

Table 8-1. Total Costs, Total Monetized Benefits, and Net Benefits in 2025 for U.S., except 

California (billions of 2011$)a

Total Costs Monetized Benefits Net Benefitsa

7% 

Discount

Rate

3% 

Discount

Rate

7% 

Discount

Rate

3% 

Discount

Rate

7% 

Discount

Rate

Proposed Alternative Standard Levels

70 $3.9 $6.9 to $14 $6.4 to $13 $3.0 to $10.1 $2.5 to $9.1

65 $15 $20 to $41 $19 to $38 $5 to $26 $4 to $23

Alternative Standard Level

60 $39 $37 to $75 $34 to $70 ($2) to $36 ($5) to $31

a We do not have a comprehensive data set to be able to calculate engineering costs at a 3% discount rate. See 

Chapter 7, Section 7.1.2 for additional details on the data limitations. As a result, the net benefit calculations at 3% 

were computed by subtracting the costs at 7% from the monetized benefits at 3%.

a EPA believes that providing comparisons of social costs and social benefits at 3 and 7 percent is 

appropriate. Estimating multiple years of costs and benefits is not possible for this RIA due to data and resource 

limitations. As a result, we provide a snapshot of costs and benefits in 2025, using the best available information to 

approximate social costs and social benefits recognizing uncertainties and limitations in those estimates.

Table 8-2. Total Costs, Total Monetized Benefits, and Net Benefits of Control Strategies 

Applied in California, Post-2025 for California (billions of 2011$)a

Total Costs Monetized Benefits Net Benefitsa

7% 

Discount

Rate

3% 

Discount

Rate

7% 

Discount

Rate

3% 

Discount

Rate

7% 

Discount

Rate

Proposed Alternative Standard Levels

70 $0.80 $1.1 to $2 $1.1 to $2 $0.3 to $1.2 $0.3 to $1.2

65 $1.6 $2.3 to $4.2 $2.2 to $4.1 $0.7 to $2.6 $0.6 to $2.5

Alternative Standard Level

60 $2.2 $3.4 to $6.2 $3.2 to $5.9 $1.2 to $4 $1 to $3.7

a We do not have a comprehensive data set to be able to calculate engineering costs at a 3% discount rate. See 

Chapter 7, Section 7.1.2 for additional details on the data limitations. As a result, the net benefit calculations at 3% 

were computed by subtracting the costs at 7% from the monetized benefits at 3%.

a EPA believes that providing comparisons of social costs and social benefits at 3 and 7 percent is appropriate. 

Estimating multiple years of costs and benefits is not possible for this RIA due to data and resource limitations. As 

a result, we provide a snapshot of costs and benefits in 2025, using the best available information to approximate 

social costs and social benefits recognizing uncertainties and limitations in those estimates.

EPA believes that providing comparisons of social costs and social benefits at 3 and 7 

percent is appropriate. Ideally, streams of social costs and social benefits over time would be 

estimated and the net present values of each would be compared to determine net benefits of the 

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illustrative attainment strategies. The three different uses of discounting in the RIA – (i) 

construction of annualized engineering costs, (ii) adjusting the value of mortality risk for lags in 

mortality risk decreases, and (iii) adjusting the cost of illness for non-fatal heart attacks to adjust 

for lags in follow up costs -- are all appropriate. Our estimates of net benefits are the 

approximations of the net value (in 2025) of benefits attributable to emissions reductions needed 

to attain just for the year 2025.

Table 8-3. Summary of Total Control Costs (Known and Extrapolated) by Alternative 

Level for 2025 - U.S., except California (mbillions of 2011$, 7% Discount Rate)a

Alternative Level Geographic Area Total Control Costs (Known and 

Extrapolated)

70 ppb

East 3.9,900

West -

Total $3.9,900

65 ppb

East 15,000

West 0.400

Total $15.,000

60 ppb

East 33,000

West 5.,800

Total $39,000

a All values are rounded to two significant figures. Extrapolated costs are based on the faverageixed-cost 

methodology.

Table 8-4. Summary of Total Control Costs (Known and Extrapolated) by Alternative 

Level for post-2025 - California (bmillions of 2011$, 7% Discount Rate)a

Alternative Level Geographic Area

Total Control Costs 

(Known and 

Extrapolated)

70 ppb California $0.800

65 ppb California $1.,600

60 ppb California $2.,200

a All values are rounded to two significant figures. Extrapolated costs are based on the averagefixed-cost 

methodology.
8-6

Table 8-5. Regional Breakdown of Monetized Ozone-Specific Benefits Results for the 2025 

Scenario (nationwide benefits of attaining each alternative standard everywhere 

in the U.S. except California) – Full Attainment a

Region

Proposed and Alterative Standards

70 ppb 65 ppb 60 ppb

East b 99% 96% 92%

California 0% 0% 0%

Rest of West 1% 4% 7%

a Because we use benefit-per-ton estimates to calculate the PM2.5 co-benefits, a regional breakdown for the cobenefits is not available. Therefore, this table only reflects the ozone benefits.

b

Includes Texas and those states to the north and east. Several recent rules such as Tier 3 will have substantially 

reduced ozone concentrations by 2025 in the East, thus few additional controls would be needed to reach 70 ppb. 

Table 8-6. Regional Breakdown of Monetized Ozone-Specific Benefits Results for the post2025 Scenario (nationwide benefits of attaining each alternative standard just in 

California) – Full Attainment a

Region

Proposed and Alterative Standards

70 ppb 65 ppb 60 ppb

East 0% 0% 0%

California 93% 94% 94%

Rest of West 6% 6% 6%

a Because we use benefit-per-ton estimates to calculate the PM2.5 co-benefits, a regional breakdown for the cobenefits is not available. Therefore, this table only reflects the ozone benefits.

In this RIA, we quantify an array of adverse health impacts attributable to ozone and 

PM2.5. The Integrated Science Assessment for Ozone and Related Photochemical Oxidants 

(“Ozone ISA”) (U.S. EPA, 2013a) identifies the human health effects associated with ozone 

exposure, which include premature death and a variety of illnesses associated with acute (dayslong) and chronic (months to years-long) exposures. Similarly, the Integrated Science 

Assessment for Particulate Matter (“PM ISA”) (U.S. EPA, 2009) identifies the human health 

effects associated with ambient particles, which include premature death and a variety of 

illnesses associated with acute and chronic exposures. Air pollution can affect human health in a 

variety of ways, and in Table 8-37 we summarize the “categories” of effects and describe those 

that we could quantify in our “core” benefits estimates and those we were unable to quantify 

because we lacked the data, time or techniques. 

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Table 8-73. Human Health Effects of Pollutants Potentially Affected by Strategies to 

Attain the Primary Ozone Standards

Benefits Category Specific Effect

Effect Has 

Been 

Quantified

Effect Has 

Been 

Monetized

More 

Information

Improved Human Health

Reduced incidence 

of premature 

mortality from 

exposure to ozone

Premature mortality based on short-term 

exposure (all ages)

  Section 5.6

Premature respiratory mortality based on 

long-term exposure (age 30–99)

 a Section 5.6

Reduced incidence 

of morbidity from 

exposure to ozone

Hospital admissions—respiratory causes 

(age > 65)

  Section 5.6

Emergency department visits for asthma 

(all ages)

  Section 5.6

Asthma exacerbation (age 6-18)  

Minor restricted-activity days (age 18–65)   Section 5.6

School absence days (age 5–17)   Section 5.6

Decreased outdoor worker productivity 

(age 18–65)

a a Section 5.6

Other respiratory effects (e.g., mediation 

use, pulmonary inflammation, decrements 

in lung functioning)

— — ozone ISA c

Cardiovascular (e.g., hospital admissions, 

emergency department visits)

— — ozone ISA c

Reproductive and developmental effects 

(e.g., reduced birthweight, restricted fetal 

growth)

— — ozone ISA c

Reduced incidence 

of premature 

mortality from 

exposure to PM2.5

Adult premature mortality based on 

cohort study estimates and expert 

elicitation estimates (age >25 or age >30)

  Section 5.6 of 

PM RIA

Infant mortality (age <1)   Section 5.6 of 

PM RIA

Reduced incidence 

of morbidity from 

exposure to PM2.5

Non-fatal heart attacks (age > 18)   Section 5.6 of 

PM RIA

Hospital admissions—respiratory (all 

ages)

  Section 5.6 of 

PM RIA

Hospital admissions—cardiovascular (age 

>20)

  Section 5.6 of 

PM RIA

Emergency department visits for asthma 

(all ages)

  Section 5.6 of 

PM RIA

Acute bronchitis (age 8–12)   Section 5.6 of 

PM RIA

Lower respiratory symptoms (age 7–14)   Section 5.6 of 

PM RIA

Upper respiratory symptoms (asthmatics 

age 9–11)

  Section 5.6 of 

PM RIA

Asthma exacerbation (asthmatics age 6–

18)

  Section 5.6 of 

PM RIA

Lost work days (age 18–65)   Section 5.6 of 

PM RIA

Minor restricted-activity days (age 18–65)   Section 5.6 of 

PM RIA

Chronic Bronchitis (age >26) — — Section 5.6 of 

PM RIA
8-8

Benefits Category Specific Effect

Effect Has 

Been 

Quantified

Effect Has 

Been 

Monetized

More 

Information

Emergency department visits for 

cardiovascular effects (all ages)

— — Section 5.6 of 

PM RIA

Strokes and cerebrovascular disease (age 

50–79)

— — Section 5.6 of 

PM RIA

Other cardiovascular effects (e.g., other 

ages)

— — PM ISA b

Other respiratory effects (e.g., pulmonary 

function, non-asthma ER visits, nonbronchitis chronic diseases, other ages 

and populations)

— — PM ISA b

Reproductive and developmental effects 

(e.g., low birth weight, pre-term births, 

etc.)

— — PM ISA b,c

Cancer, mutagenicity, and genotoxicity 

effects

— — PM ISA b,c

Reduced incidence 

of morbidity from 

exposure to NO2

Asthma hospital admissions (all ages) — — NO2 ISA d

Chronic lung disease hospital admissions 

(age > 65)

— — NO2 ISA d

Respiratory emergency department visits 

(all ages)

— — NO2 ISA d

Asthma exacerbation (asthmatics age 4–

18)

— — NO2 ISA d

Acute respiratory symptoms (age 7–14) — — NO2 ISA d

Premature mortality — — NO2 ISA b,c

Other respiratory effects (e.g., airway 

hyperresponsiveness and inflammation, 

lung function, other ages and populations)

— — NO2 ISA b,c

a We are in the process of considering an update to the worker productivity analysis for ozone based on more recent 

literature.

b We assess these benefits qualitatively because we do not have sufficient confidence in available data or methods.

c We assess these benefits qualitatively because current evidence is only suggestive of causality or there are other 

significant concerns over the strength of the association.

d We assess these benefits qualitatively due to time and resource limitations for this analysis.

8.2 Discussion of Results 

The costs and benefits presented in this RIA incorporate an array of methodological and 

technical changes that the EPA has adopted since the previous review of the ozone standards in 

2008 (U.S. EPA, 2008) and proposed reconsideration in 2010 (U.S. EPA 2010). 

Several factors contributed to lower cost estimates, including shifting the baseline year 

from 2020 to 2025 allowing for more time to attain and for Federal measures to work. The 

baseline starting point has changed from 84 ppb to 75 ppb, substantially reducing the amount of 

emissions reductions needed and the associated costs of attainment. Also, we have identified 

additional known controls, which are less expensive per ton than unknown controls. Lastly, 
8-9

there are fewer counties exceeding the alternative standards analyzed, therefore fewer emissions 

reductions are needed for attainment, resulting in lower cost estimates.

While the costs presented in this analysis decreased compared to the prior analyses, the 

benefits estimates remained about the same despite the baseline differences. The main factors 

that affected the benefits estimates included the updated analysis year of 2025, which affects 

population projections, baseline mortality rates, and income growth adjustment. The Value of a 

Statistical Life was revised, and we removed thresholds and the assumption of no causality for 

ozone mortality (which as assumed in 2008). The differences resulted in a tighter benefits range, 

but the total benefits are about the same as the previous ozone RIA analyses.

8.2.1 Relative Contribution of PM Benefits to Total Benefits

Because of the relatively strong relationship between PM2.5 concentrations and premature 

mortality, PM co-benefits resulting from reductions in NOx emissions can make up a large 

fraction of total monetized benefits, depending on the specific PM mortality impact function 

used, and on the relative magnitude of ozone benefits, which is dependent on the specific ozone 

mortality function assumed. PM co-benefits based on daily average concentrations are 

calculated over the entire year, while ozone related benefits are calculated only during the 

summer ozone season. Because the control strategies evaluated in this RIA are assumed to 

operate year round rather than only during the ozone season, this means that PM benefits will 

accumulate during both the ozone season and the rest of the year.

For primary benefits estimates in 2025, PM2.5 co-benefits account for between 70 and 75

percent of co-benefits, depending on the standard analyzed and on the choice of ozone and PM 

mortality functions used.2 The estimate with the lowest fraction from PM co-benefits occurs 

when we model benefits for the lowest alternative standard level analyzed (60ppb) and add the 

lower bound core estimates for both ozone-related and PM2.5 (co-benefit) related mortality. The 

estimate with the highest fraction from PM co-benefits results from modeling the highest 

 

2 For the supplementalseparate results for post-2025, PM2.5 co-benefits account for between 30 and 45 percent of 

total benefits, again depending on the standard level analyzed and the choice of ozone and PM mortality functions.
8-10

alternative standard level analyzed (70ppb) based on combining the high-bound core ozone and 

PM2.5 (co-benefit) related mortality estimates. 

8.2.2 Developing Future Control Strategies with Limited Data

Because of relatively higher ozone levels in several large urban areas (Southern 

California, Houston, and the Northeastern urban corridor, including New York and Philadelphia) 

and because of limitations associated with the data on currently known emissions control 

technologies, the EPA recognized that known and reasonably anticipated emissions controls 

would likely not be sufficient to bring some areas into attainment with either the existing or 

alternative, more stringent ozone standard levels. Therefore, we designed this analysis in two 

stages: the first stage focused on analyzing the air quality improvements that could be achieved 

through application of documented, well-characterized emissions controls, and the costs and 

benefits associated with those controls. The second stage took the emissions reductions beyond 

known controls and used an extrapolation method to estimate the costs and benefits of these 

additional emissions reductions needed to bring all areas into full attainment with the alternative 

standard levels analyzed. 

The structure of the RIA reflects this two-stage analytical approach. Separate chapters are 

provided for the emissions, air quality, and cost impacts of modeled controls. We used the 

information currently available to develop reasonable approximations of the costs and benefits of 

the extrapolated portion of the emissions reductions necessary to reach attainment. However, 

because of the uncertainty associated with the extrapolation of costs, we judged it appropriate to 

provide separate estimates of the costs and benefits for partial attainment (based on known 

controls) and full attainment (based on known controls and extrapolation), as well as an overall 

estimate for reaching full attainment. There is a single chapter on benefits, because the 

methodology for estimating benefits does not change between stages. However, in that chapter, 

we again provide separate estimates of the benefits associated with the partial attainment and full 

attainment portions of the analysis.

In both stages of the analysis, it should be recognized that all estimates of future costs and 

benefits are not intended to be forecasts of the actual costs and benefits of implementing 

potentially revised standards. Ultimately, states and local areas will be responsible for 
8-11

developing and implementing emissions control programs to reach attainment with the ozone 

NAAQS, with the timing of attainment being determined by future decisions by states and the 

EPA. Our estimates are intended to provide information on the general magnitude of the costs 

and benefits of alternative standard levels rather than on precise predictions of control measures, 

costs, or benefits. With these caveats, we expect that this analysis can provide a reasonable 

picture of the types of emissions controls that are currently available, the direct costs of those 

controls, the levels of emissions reductions that may be achieved with these controls, the air 

quality impact that can be expected to result from reducing emissions, and the public health 

benefits of reductions in ambient ozone levels. This analysis identifies those areas of the U.S. 

where our existing knowledge of control strategies is not sufficient to allow us to model 

attainment, and where additional data or research may be needed to develop strategies for 

attainment.

In many ways, RIAs for proposed actions are learning processes that can yield valuable 

information about the technical and policy issues that are associated with a particular regulatory 

action. This is especially true for RIAs for proposed NAAQS, where we are required to stretch 

our understanding of both science and technology to develop scenarios that illustrate how certain 

we are about how economically feasible the attainment of these standards might be regionally. 

The proposed ozone NAAQS RIA provided great challenges when compared to previous RIAs 

primarily because as we tighten standards across multiple pollutants with overlapping precursors 

(e.g., the recent tightening of the PM2.5 standards), we move further down the list of costeffective known and available controls in our database. With the more stringent NAAQS, more 

areas will need to find new ways of reducing emissions. While we can speculate on what some 

of these technologies might look like based on new developments in energy efficiency and clean 

technology, the specific technological path in different nonattainment areas is not clear.

Because of the uncertainty regarding the development of future emissions reduction 

strategies, a significant portion of the analysis is based on extrapolating from available data on 

known control technologies to generate the emissions reductions necessary to reach full 

attainment of an alternative ozone NAAQS and the resulting costs and benefits. Studies indicate 

that it is not uncommon for pre-regulatory cost estimates to be higher than later estimates, in part 

because of difficulty in predicting technological changes. Over longer time horizons, such as the 
8-12

time allowed for areas with high levels of ozone pollution to meet the ozone NAAQS, the 

opportunity for technical change is greater (See Chapter 7, Section 7.2 for additional discussion). 

Also, because of the nature of the extrapolation method for benefits (which focuses on reductions 

in ozone only at monitors that exceed the NAAQS), we generally understate the total benefits 

that would result from implementing additional emissions controls to fully attain the ozone 

NAAQS (i.e., assuming that the application of control strategies would result in ozone reductions 

both at nonattainment and attainment monitors). On the other hand, the possibility also exists 

that benefits are overestimated, because it is possible that new technical changes might not meet 

the specifications, development time lines, or cost estimates provided in this analysis.

8.3 Framing Uncertainty 

This section includes a qualitative presentation of key factors that (1) could impact how 

air quality changes over time; (2) could impact the timing for meeting an alternative standard; (3) 

are difficult to predict and quantify; and (4) introduce additional uncertainty into this analysis. 3 

These factors, summarized in Table 8.48 below, include energy development, distribution, and 

use trends; land use development patterns; economic factors; energy and research and 

development policies; climate signal changes; and the influence of technological change. 

Additional factors that could have an impact on how air quality changes over time include 

environmental indicators other than climate change and societal preferences and attitudes toward 

the environment and conservation; the potential direction and magnitude of these additional 

factors is less clear.

These key factors can impact the estimated baseline air quality used in the analysis, and 

as a result the types of control measures and associated costs needed to meet an alternative 

standard. In addition, some combinations of the key factors could have significant effects 

beyond the effects of any individual factor. We cannot estimate the probability that any one 

factor or combination of factors will occur, but we do believe that they introduce additional, 

broader uncertainties about future trends that provide important context for the costs and benefits 

presented in this analysis.

 

3 OMB Circular A-4 indicates that qualitative discussions should be included in analyses whenever there is 

insufficient data to quantify uncertainty.
8-13

Table 8-84. Relevant Factors and Their Potential Implications for Attainment

Individual Factors Potential Implications for NAAQS 

Attainment

Information on Trends

Energy --

Extraction, 

conversion, 

distribution and 

storage, efficiency, 

international energy 

trends 

Geopolitics, reserves, international 

and domestic demand, and 

technological breakthroughs in 

energy technologies can drive fuel 

prices up or down. 

If more renewable sources of energy 

are employed and use of natural gas 

increases, then emissions may be 

lower, potentially lowering 

attainment costs. 

Recently there has been an increase in domestic 

production of oil and a relative decrease in 

imported oil, in addition to policies and 

investments geared toward the development of 

alternative fuels and energy efficiency.4 This is 

likely a result of all of these activities, which 

have led to a reduction of U.S. dependence on 

imports of foreign oil.

Several trends have emerged within the last ten 

years and are expected to continue, including 

increased natural gas production and 

consumption, renewable energy installations, 

and energy efficiency technology installations.5

Land Use 

Development 

Patterns –

Design of urban areas, 

vehicle-miles travelled 

A move toward denser urban 

settlements, slowing of growth in 

vehicle miles travelled (VMT) and 

increased use of public transit could 

decrease emissions, potentially 

lowering attainment costs.6 

Recent trends in VMT illustrate some of the 

uncertainty around future emissions from 

mobile sources7. In 2006, projections of VMT 

showed a sustained increase,8 yet VMT growth 

slowed in recent years and actually declined in 

2008 and 2009.9 Between 2000 and 2010 

average growth in VMT was 0.8%, as 

compared to 2.9% from the previous decade. 

The Economy

An increase in economic growth, 

investment in technologies that have 

high energy use, and a return of U.S. 

manufacturing could lead to higher 

emissions making attainment

potentially more costly. A slowing 

of the economy, investments in 

energy efficient technologies, and a 

continuation of a service-based 

economy could lead to lower 

Affluence leads to increased consumption and 

energy use. However, this increase may not be 

proportional. Energy and materials is not 

directly proportional to economic growth, 

decreasing or stabilizing over time in spite of 

continued economic growth.11

 

4 http://energy.gov/articles/us-domestic-oil-production-exceeds-imports-first-time-18-years

5 http://www.eia.gov/forecasts/aeo/er/pdf/0383er%282014%29.pdf; 

http://energy.gov/sites/prod/files/2014/08/f18/2013%20Wind%20Technologies%20Market%20Report%20Present

ation.pdf; http://www.eia.gov/electricity/monthly/update/archive/april2014/;

http://www.ercot.com/content/news/presentations/2014/GCPA%20%2002%20Oct%202013%20FINAL.pdf; 

http://energy.gov/eere/sunshot/photovoltaics.

6 For example, see Cervero (1998), the Center for Clean Air Policy’s Transportation Emissions Guidebook 

(http://www.trb.org/Main/Blurbs/156164.aspx). For ongoing research see 

http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp?ProjectID=3092.

7 For example, see the Transportation Research Board’s National Cooperative Highway Research Program 

(NCHRP) 2014.

8 https://www.fhwa.dot.gov/policy/2006cpr/chap9.htm#body

9 https://www.fhwa.dot.gov/policyinformation/travel_monitoring/13jantvt/page2.cfm

11 UNEP 2011, http://www.unep.org/resourcepanel/decoupling/files/pdf/decoupling_report_english.pdf
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Individual Factors Potential Implications for NAAQS 

Attainment

Information on Trends

emissions making attainment 

potentially less costly.10

Policiesa –

Energy efficiency,

energy security, 

direction of research 

and development, 

renewable energy

A move toward energy security and 

independence would mean an 

increased use of domestic energy 

sources. If this results in a fuel mix 

where emissions decrease, then 

attainment could likely be less costly. 

If not, attainment could likely be 

more costly. A move toward 

investments in fuel efficiency and 

low emissions fuels could decrease 

emissions and likely lower 

attainment costs.

State and local policies related to energy 

efficiency, cleaner energy, energy security12, as 

well as the direction of research and 

development of technology can have a direct or 

indirect effect on emissions. Policies that result 

in energy efficiency, renewable energy, the use 

of cleaner fuels and conservation measures 

would likely result in decreased emissions and 

likely decrease attainment costs.13 Growth in 

energy demand has stayed well below growth 

in gross domestic product, likely as a result of 

technological advances, federal, state and local 

energy efficiency standards and policies, and 

other macroeconomic factors.14 U.S. 

productivity per energy expended relative to 

other countries suggests that additional 

efficiency gains are possible.15

Intensity, Location 

and Outcome of the 

Climate Change 

Signal

Strong climate signals that bring high 

temperatures could increase ozone, 

likely making attainment more 

costly. 

Uncertainty exists regarding how the climate 

signal will interact with air quality, as well as 

with other factors. However, research 

demonstrates that in areas where there are both 

high levels of emissions and high temperatures, 

attaining an ozone standard will likely be much 

harder. The magnitudes of these impacts will 

depend on atmospheric chemical and physical 

processes, as well as anthropogenic activities 

that increase or decrease NOx and/or VOC 

emissions.16 

Technological 

Change -- Including 

emissions reductions 

technologies and other 

technological 

developments

Innovation in production and 

emissions control technologies, 

learning that lower costs, and 

breakthroughs in battery/energy 

storage technologies for use with 

renewable energy could improve air 

quality, reducing emissions and 

likely lowering attainment costs. 

Examples of emerging technologies include 

carbon capture and sequestration (CCS), battery 

technologies, emerging advanced biofuels, 

which could all have breakthroughs that could 

impact fuel use. Similarly, shifts in industrial 

production processes, such as a move from 

using primary metals to more recycling could 

impact energy use17.

a Policies refer to any policies or regulations that are not environmental regulations set by U.S. EPA, states, tribes, or 

local authorities. 

 

10 For example, Bo (2011), and http://www.epa.gov/region1/airquality/nox.html for manufactures contributions to 

NOX emissions.

12 For example, http://www2.epa.gov/laws-regulations/summary-energy-independence-and-security-act.

13 For example, see http://www.dsireusa.org/solar/solarpolicyguide/.

14 http://bipartisanpolicy.org/sites/default/files/BPC%20SEPI%20Energy%20Report%202013_0.pdf, p. 5.

15 http://bipartisanpolicy.org/sites/default/files/BPC%20SEPI%20Energy%20Report%202013_0.pdf, p. 69.

16 See Jacobs (2009).

17 http://www.eia.gov/todayinenergy/detail.cfm?id=16211
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8.4 Key Observations from the Analysis

The following are key observations about the RIA results. 

 Tightening the ozone standards can incur significant, but uncertain, costs. Our 

estimates of costs for a set of modeled NOx and VOC controls comprise only a small part 

of the estimated costs of full attainment. These estimated costs for the modeled set of

controls are still uncertain, but they are based on the best available information on control 

technologies, and have their basis in real, tested technologies. Estimating costs of full 

attainment was based on a generalized relationship between emissions and ozone levels. 

This introduces significant uncertainty into the calculation of the emissions reductions that 

might be needed to reach full attainment.

 Tightening the ozone standards can also result in significant benefits. Estimates of 

benefits are driven largely by projected reductions in ozone-related short-term mortality 

and co-benefits associated with reductions in PM2.5-related long-term mortality. Although 

using a benefit-per-ton approach in modeling PM2.5-related cobenefits (rather than direct 

modeling) has increased uncertainty, this approach is peer-reviewed and robust. We also 

modeled reductions in ozone-related long-term respiratory mortality, however due to 

concerns over potential double counting of benefits and limitations in our ability to project 

the lag-structure of reductions in this mortality endpoint, we did not include these 

estimates as part of the core benefit estimate. In addition to these mortality endpoints, we 

did quantify a wide-range of morbidity endpoints for both ozone and PM2.5, although these 

contribute only minimally to total monetized benefits.

 .

 Air quality modeling approach can introduce uncertainty. Based on air quality 

modeling sensitivity analyses, there is significant spatial variability in the relationship 

between local and regional NOx emission reductions and ozone levels across urban areas. 

We performed a national scale air quality modeling analysis to estimate ozone 

concentrations for the future base case year of 2025. To accomplish this, we modeled 

multiple emissions cases for 2025, including the 2025 base case and twelve (12) 2025 

emissions sensitivity simulations. The 12 emissions sensitivity simulations were used to 

develop ozone sensitivity factors (ppb/ton) from the modeled response of ozone to changes 

in NOx and VOC emissions from various sources and locations. These ozone sensitivity 

factors were then used to determine the amount of emissions reductions needed to reach 

the 2025 baseline and evaluate potential alternative standard levels of 70, 65, and 60 ppb 

incremental to the baseline. We used the estimated emissions reductions needed to reach 

each of these standard levels to analyze the costs and benefits of alternative standard 

levels. 

 Available technologies that might achieve NOx and VOC reductions to attain 

alternative ozone NAAQS are not sufficient. In some areas of the U.S., the information 

we have about existing controls does not result in sufficient emissions reductions needed to 

meet the existing standard. After applying existing rules and the illustrative known 
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controls across the nation (excluding California), in order to reach 70 ppb we were able to 

identify controls that reduce overall NOx emissions by 490,000 tons and VOC emissions 

by 55,000 tons. In order to reach 65 ppb we were able to identify controls that reduce 

overall NOx emissions by 1,100,000 tons and VOC emissions by 110,000 tons. After these 

reductions, in order to reach 70 ppb over 150,000 tons of NOx emissions remained, and in 

order to reach 65 ppb over 750,000 tons of NOx emissions remained. 

 California costs and benefits are highly uncertain. California faces large challenges in 

meeting any alternative standard, but their largest challenges may be in attaining the 

existing standard. Because our analysis suggested that all available controls would be 

exhausted in attempting to meet the current 75 ppb standard, all of the benefits and costs of 

lower standards in California are based on the application of unknown controls. Both the 

benefits and the costs associated with the assumed NOx and VOC reductions in California 

are particularly uncertain. 

 Some EPA existing mobile source programs will help areas reach attainment. These 

programs promise to continue to help areas reduce ozone concentrations beyond 2025. In 

California, continued implementation of mobile source rules, including the onroad and 

nonroad diesel rules and the locomotive and marine engines rule, are projected to reduce 

NOx emissions by an additional 14,000 tons and VOC emissions by an additional 6,300 

tons between 2025 and 2030. These additional reductions will likely reduce the overall 

emissions reductions needed for attainment relative to what California might have needed 

to reduce from other sectors if attainment were to be required in 2025. 

 The economic impacts (i.e., social costs) of the cost of these modeled controls were not 

included in this analysis. Incorporating the economic impact of the extrapolated portion 

of the costs was too uncertain to be included as part of these estimates, and it was 

determined best to keep the modeled and extrapolated costs on the same basis. 

 Costs and benefits will depend on implementation timeframes. States will ultimately 

select the specific timelines for implementation as part of their State Implementation Plans. 

To the extent that states seek classification as extreme nonattainment areas, the timeline for 

implementation may be extended beyond 2025, meaning that the amount of emissions 

reductions that will be required in 2025 will be less, and costs and benefits in 2025 will be 

lower.

8.5 References

Cervero, R. (1998) The Transit Metropolis, A Global Inquiry. Island Press, Washington, D.C.

Jacob, D. J., & Winner, D. (2009). Effect of climate change on air quality. Atmospheric Environment, 43, 51-63.

NCHRP (2014). The Effects of Socio-Demographics on Future Travel Demand, Transportation Research Board of 

the National Academies, Washington, D.C. Strategic Issues Facing Transportation, Report 750, Volume 6.

U.S. Environmental Protection Agency (U.S. EPA). 2008. Final Ozone NAAQS Regulatory Impact Analysis. Office 

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

http://www.epa.gov/ttn/ecas/regdata/RIAs/452_R_08_003.pdf.
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U.S. Environmental Protection Agency (U.S. EPA). 2010. Regulatory Impact Analysis (RIA) for the Proposed 

Reconsideration of the ozone National Ambient Air Quality Standards (NAAQS). Office of Air Quality Planning 

and Standards, Research Triangle Park, NC. January. Available at <http://www.epa.gov/ttn/ecas/regdata/RIAs/s1-

supplemental_analysis_full.pdf>. 

U.S. EPA. 2009. Integrated Science Assessment for Particulate Matter: Final. Research Triangle Park, NC: U.S. 

Environmental Protection Agency. (EPA document number EPA/600/R-08/139F).

U.S. EPA. 2013a. Integrated Science Assessment for Ozone and Related Photochemical Oxidants: Final. Research 

Triangle Park, NC: U.S. Environmental Protection Agency. (EPA document number EPA/600/R-10/076F).