### Appendix E

Potential Impacts of State Str ategy Proposed New Measures(This page intentionally left blank.)May 7, 2007 Appendix E 1 ENVIRONMENTAL IMPACT ANALYSIS

Introduction

The control measures proposed in the St ate Strategy were developed for the purpose of improving air qualit y in California. However, as these measures are developed into rules and regulations and subsequently implemented, there is potential for them to have an adverse environmental impact on other natural

resources. The Californi a Environmental Quality Ac t (CEQA) and ARB policy requires an analysis to determine any pot entially adverse environmental impacts that may result from adopt ion of these measures. This appendix presents an analysis of potential impacts and also identi fies mitigation measures that can be implemented to offset any potentially si gnificant impacts. The appendix contains three parts: an environmental review checklist, descriptions of cumulative impacts of the State Strategy, and a de scription of each measure’s potential adverse environmental impacts.

California Environmental Quality Act

The California Secretary for Resource s has determined t hat ARB meets the

criteria for a Certified St ate Regulatory Program (Pub lic Resources Code Section 21080.5). This certification allows AR B to adopt rules, regulations, standards and plans but exempts it from the requirement to prepar e Initial Studies, Notices of Preparation, Negative Declarations or Environmental Impact Reports (EIRs). As a certified agency, however, ARB is required to prepare a substitute document which is subject to other pr ovisions of CEQA such as avoiding significant adverse effects on the envir onment where feasible. This appendix considers cumulative impacts and addresses adverse activities and impacts associated with the proposed measures. As required by CEQA, there will be a 45-day public comment period at which time the public can review and comment on this analysis. ARB will respond in wr iting to all significant environmental concerns raised by the public during this comment period and also at the Board Hearing.

Scope of Analysis

The scope of the analysis is intended to help focus public review and to assure that any questions and comments are appropriate and meaningful. This appendix specifically focuses on potential adverse environmental impacts. The remainder of the report emphasizes pos itive environmental benefits that the proposed strategies will have on air quality which is the purpose and goal of the State Strategy.

This appendix cannot and does not cont ain a detailed, quantitative impact analysis for each of the control measures in the State Strategy. Because the State Strategy identifies proposed fu ture actions to adopt and implementMay 7, 2007 Appendix E 2 emission reduction regulations for which specific regulatory language has not yet been developed, the analysis is necessarily general and qualitative. When a proposed measure is developed and proposed in regulatory format, it will be a process with full public participation. Proposed regulations will undergo a detailed environmental analys is as required by CEQA, will be discussed at public workshops, and will go through the public hearing process as required by law (see the Administrative Procedure Act, Go v. Code section 11340 et seq.). When specific regulatory language is developed, it will be possible to analyze potential environmental impacts in detail. For example, the scope of the impacted population of any given c ontrolled emission source will become further refined during regulatory development. Additi onally, cumulative impacts were

considered for the State St rategy, recognizing these measures are likely to have various phase-in dates. In this a ppendix, potential environmental impacts are identified to the extent currently feasible.

Environmental Checklist

An environmental checklist was us ed to identify and evaluate potential cumulative impacts of the measures proposed in the State Strategy. The

environmental effects checked below indicate those that may be affected by the proposed measures. Further discussion w ill follow regarding the impacts that strategies may have and potential mitigatio n strategies that can be implemented to lessen the impacts.

Aesthetics Air Quality Agricultural

Resources

Biological Resources Cultural Resources Energy Demand

Geology and Soils Hazards/

Hazardous Material Land Use/Planning

Mineral Resources Noise Population and Housing

Public Services Recreation Solid/Hazardous

Waste

Transportation/Traffic Water Quality Mandatory FindingsMay 7, 2007 Appendix E 3 Evaluation of Cumulative Environmental Impacts

Potentially Significant Impact Less Than Significant Impact No Impact

I. AESTHETICS. Would the project:

a) Have a substantial adverse effect on a

scenic vista?

b) Substantially damage scenic resources, including, but not limited to, trees, rock outcroppings, and historic buildings within a state scenic highway?

c) Substantially degrad e the existing visual character or quality of the site and its surroundings?

d) Create a new source of substantial light or glare which would adversely affect day or nighttime views in the area?

II. AIR QUALITY. Would the project:

a) Conflict with or obstruct implementation of the applicable air quality plan?

b) Violate any air quality standard or contribute substantially to an existing or projected air quality violation?

c) Result in a cumulatively considerable net increase of any criteria pollutant for which the project region is non-attainment under an applicable federal or state ambient air quality standard (including releasing emissions which exceed quantitative thresholds for ozone precursors)?

d) Expose sensitive rec eptors to substantial pollutant concentrations?

e) Create objectionabl e odors affecting a substantial number of people?May 7, 2007 Appendix E 4 Potentially Significant Impact Less Than Significant Impact No Impact

III. AGRICULTURE RESOURCES. Would the project:

a) Convert Prime Farmland, Unique Farmland, or Farmland of Statewide Importance (Farmland), as shown on the maps prepared pursuant to the Farmland Mapping and Monitori ng Program of theCalifornia Resources Agency, to nonagricultural use?

b) Conflict with existing zoning for agricultural use, or a Williamson Act

contract?

c) Involve other changes in the existing environment which, due to their location or nature, could result in conversion of Farmland, to non-agricultural use?

IV. BIOLOGICAL RESOURCES . Would the project:

a) Have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and

Game or U.S. Fish and Wildlife Service?

b) Have a substantial adverse effect on any riparian habitat or other sensitive natural community identified in local or regional plans, policies, regulations or by the California Department of Fish and Game or

US Fish and Wildlife Service?

c) Have a substantial adverse effect on federally protected wetlands as defined by

Section 404 of the Clean Water Act (including, but not limit ed to, marsh, vernal pool, coastal, etc.) through direct removal,May 7, 2007 Appendix E 5 Potentially Significant Impact Less Than Significant Impact No Impact

filling, hydrological in terruption, or other

means?

d) Interfere substantially with the movement of any native resident or migratory fish or wildlife species or with established native resident or migratory wildlife corridors, or impede the use of native wildlife nursery sites?

e) Conflict with any local policies or ordinances protecting bi ological resources, such as a tree preservation policy or

ordinance?

f) Conflict with the pr ovisions of an adopted Habitat Conservation Plan, Natural Community Conservation Plan, or other approved local, regional, or state habitat conservation plan?

V. CULTURAL RESOURCES. Would the project:

a) Cause a substantial adverse change in the significance of a historical resource as

defined in '15064.5?

b) Cause a substantial adverse change in the significance of an archaeological resource pursuant to '15064.5?

c) Directly or indire ctly destroy a unique paleontological resource or site or unique geologic feature?

d) Disturb any human remains, including

those interred outside of formal

cemeteries?

VI. ENERGY DEMAND. Would the project:

a) Conflict with adopted energy conservation plans?

b) Result in the need for new orMay 7, 2007 Appendix E 6 Potentially Significant Impact Less Than Significant Impact No Impact

substantially altered power or natural gas utility systems?

c) Create any significant effects on peak and base period demands for electricity and other forms of energy?

d) Comply with existing energy standards?

VII. GEOLOGY AND SOILS. Would the project:

a) Expose people or stru ctures to potential

substantial adverse ef fects, including the risk of loss, injury, or death involving:

i) Rupture of a known earthquake fault, as

delineated on the most recent AlquistPriolo Earthquake Fault Zoning Map issued by the State Geologist for the area or

based on other substantial evidence of a

known fault? Refer to Division of Mines and Geology Special Publication 42.

ii) Strong seismic ground shaking?

iii) Seismic-related ground failure, including liquefaction?

iv) Landslides?

b) Result in substantial soil erosion or the loss of topsoil?

c) Be located on a geologic unit or soil that is unstable, or that would become unstable

as a result of the project, and potentially

result in on- or off- site landslide, lateral spreading, subsidence, liquefaction or collapse?

d) Be located on expansive soil, as defined

in Table 18-1-B of the Uniform Building Code (1994), creating substantial risks to life or property?May 7, 2007 Appendix E 7 Potentially Significant Impact Less Than Significant Impact No Impact

e) Have soils incapable of adequately supporting the use of septic tanks or alternative waste water disposal systems

where sewers are not available for the disposal of waste water?

VIII. HAZARDS AND HAZARDOUS

MATERIALS. Would the project:

a) Create a significant hazard to the public or the environment through the routine transport, use, or disposal of hazardous

materials?

b) Create a significant hazard to the public or the environment through reasonably foreseeable upset and accident conditions involving the release of hazardous

materials into the environment?

c) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to Government Code Section 65962.5 and, as a result, would it create a significant hazard to the public or the

environment?

d) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project result in a safety hazard for people residing or working in the project

area?

e) For a project within the vicinity of a private airstrip, would t he project result in a safety hazard for people residing or working in the project area?

f) Impair implementati on of or physically interfere with an adopted emergency response plan or emergency evacuation plan?May 7, 2007 Appendix E 8 Potentially Significant Impact Less Than Significant Impact No Impact

g) Expose people or structures to a significant risk of lo ss, injury or death involving wildland fires, including where wildlands are adjacent to urbanized areas

or where residences are intermixed with

wildlands?

IX. LAND USE AND PLANNING. Would the project:

a) Physically divide an established community?

b) Conflict with any applicable land use plan, policy, or regul ation of an agency with jurisdiction over the project (including, but not limited to the general plan, specific plan, local coastal program, or zoning ordinance) adopted for the purpose of avoiding or mitigating an environmental

effect?

c) Conflict with any applicable habitat conservation plan or natural community conservation plan?

X. MINERAL RESOURCES. Would the project:

a) Result in the loss of availability of a

known mineral resource that would be of value to the region an d the residents of the

state?

b) Result in the loss of availability of a locally-important mineral resource recovery site delineated on a local general plan, specific plan or other land use plan?

XI. NOISE. Would the project result in:

a) Exposure of persons to or generation of

noise levels in excess of standards established in the local general plan or noise ordinance, or app licable standards ofMay 7, 2007 Appendix E 9 Potentially Significant Impact Less Than Significant Impact No Impact

other agencies?

b) Exposure of persons to or generation of excessive groundborne vibration or groundborne noise levels?

c) A substantial permanent increase in ambient noise levels in the project vicinity above levels existing without the project?

d) A substantial temporary or periodic

increase in ambient no ise levels in the project vicinity above levels existing without the project?

e) For a project located within an airport land use plan or, where such a plan has not been adopted, within two miles of a public airport or public use airport, would the project expose people residing or working in the project area to excessive

noise levels?

f) For a project within the vicinity of a private airstrip, would the project expose people residing or working in the project

area to excessive noise levels?

XII. POPULATION AND HOUSING. Would the project:

a) Induce substantial population growth in an area, either directly (for example, by proposing new homes and businesses) or indirectly (for exam ple, through extension of roads or other infrastructure)?

b) Displace substantial numbers of existing housing, necessitating the construction of replacement housing elsewhere?

c) Displace substantial numbers of people, necessitating the construction of replacement housing elsewhere?May 7, 2007 Appendix E 10 Potentially Significant Impact Less Than Significant Impact No Impact

XIII. PUBLIC SERVICES.

a) Would the project re sult in substantial adverse physical impa cts associated with the provision of new or physically altered governmental facilities, need for new or physically altered governmental facilities,

the construction of which could cause significant environmental impacts, in order to maintain acceptable service ratios, response times or other performance objectives for any of the public services:

Fire protection?

Police protection?

Schools?

Parks?

Other public facilities?

XIV. RECREATION

a) Would the project increase the use of existing neighborhood and regional parks

or other recreational facilities such that substantial physical de terioration of the facility would occur or be accelerated?

b) Does the project include recreational facilities or require the construction or expansion of recreatio nal facilities which might have an adverse physical effect on

the environment?

XV. SOLID/HAZARDOUS WASTE. Would the project:

a) Be served by a landfill with sufficient permitted capacity to accommodate the project’s solid waste disposal needs?May 7, 2007 Appendix E 11 Potentially Significant Impact Less Than Significant Impact No Impact

b) Comply with federal, state, and local statutes and regulatio ns related to solid

and hazardous waste?

XVI. TRANSPORTATION/TRAFFIC. Would the project:

a) Cause an increase in traffic which is substantial in relation to the existing traffic load and capacity of the street system (i.e.,

result in a substantial increase in either the number of vehicle trips, the volume to capacity ratio on roads, or congestion at intersections)?

b) Exceed, either individually or cumulatively, a level of service standard established by the county congestion management agency for designated roads or highways?

c) Result in a change in air traffic patterns, including either an increase in traffic levels or a change in location that results in substantial safety risks?

d) Substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment)?

e) Result in inadequate emergency

access?

f) Result in inadequate parking capacity?

g) Conflict with adopted policies, plans, or programs supporting alternative transportation (e.g., bus turnouts, bicycle racks)?May 7, 2007 Appendix E 12 Potentially Significant Impact Less Than Significant Impact No Impact

XVII. WATER QUALITY . Would the project:

a) Violate any water quality standards or waste discharge requirements?

b) Substantially deplete groundwater supplies or interfer e substantially with groundwater recharge such that there would be a net deficit in aquifer volume or a lowering of the loca l groundwater tablelevel (e.g., the production rate of preexisting nearby wells would drop to a level which would not support existing land uses or planned uses for which permits have been granted)?

c) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, in a manner which would

result in substantial er osion or siltation onor off-site?

d) Substantially alter the existing drainage pattern of the site or area, including through the alteration of the course of a stream or river, or substantially increase

the rate or amount of surface runoff in amanner which would result in flooding onor off-site?

e) Create or contribute runoff water which would exceed the capacity of existing or planned stormwater drainage systems or provide substantial ad ditional sources of polluted runoff?

f) Otherwise substant ially degrade water quality?

g) Place housing within a 100-year flood hazard area as mapped on a federal Flood Hazard Boundary or Flood Insurance RateMay 7, 2007 Appendix E 13 Potentially Significant Impact Less Than Significant Impact No Impact

Map or other flood hazard delineation map?

h) Place within a 100-year flood hazard

area structures whic h would impede or

redirect flood flows?

i) Expose people or structures to a significant risk of lo ss, injury or death involving flooding, including flooding as a

result of the failure of a levee or dam?

j) Inundation by se iche, tsunami, or

mudflow?

XVIII. MANDATORY FINDINGS OF

SIGNIFICANCE

a) Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory?

b) Does the project have impacts that are individually limited, but cumulatively considerable? ("Cumulatively

considerable" means that the incremental effects of a project are considerable when

viewed in connection with the effects of past projects, the effe cts of other current projects, and the effects of probable future projects)?

c) Does the projec t have environmental

effects which will cause substantial adverse effects on human beings, ei ther directly or indirectly?May 7, 2007 Appendix E 14 Cumulative Potential Adverse Environmental Impacts

Each environmental effect outlined in the environmental checklist is further

described below. A detailed reference tabl e at the end of this section identifies each measure in the State Strategy , any potential adverse environmental impacts, and potential mitigation measures.

Several proposed measures are currently in the process of rule development and may have a more detailed assessment of po tential significant impacts. However, for the less developed strategies, we have attempted to include any potential impact that reasonably could occur given current knowledge.

I. Aesthetics

Cumulative Impact: No elem ent of the State Strategy is expected to degrade the natural beauty of California. Instead, the State Strategy will have significant positive impacts on aestheti cs. Regional haze is expected to be reduced by State Strategy elements that reduce hy drocarbon, nitrogen oxide, and particulate

matter emissions.

II. Air Quality

Cumulative Impact: ARB staff believe s the cumulative impact of the State Strategy is to substantially improve air quality, however there are potentially significant impacts to air quality. Some strategies may involve trade-offs, where emissions of one pollutant may increase sl ightly in order to more effectively reduce overall emissions and protect public health.

The four major types of impacts that we re considered are related to criteria pollutants, air toxics, greenhouse gas es, and stratospheric ozone depleting pollutants.

Criteria Pollutants

Potentially significant impacts on criter ia pollutant emissions may occur due to: selective catalytic reduction processes, use of diesel part iculate filters, and production and consumption of lo w-sulfur diesel fuel. However, the cumulative impact of the State Strategy is to reduc e emissions of major criteria pollutants (ROG, NOx, SOx, and PM2.5).

Selective Catalytic Reduction

— Measures in the State Strategy to reduce NOx from diesel-fueled engines may necessitate use of Selective Catalytic Reduction (SCR). For on-road heavy-duty diesel vehicles in particular, SCR is the preferred emission control strategy for meeting the NOx emission r equirements for the 2010 model year. The use of SCR in light -duty diesel vehicles is also being considered by auto manufacturers. S CR reduces NOx into molecular nitrogenMay 7, 2007 Appendix E 15 and water by injecting urea into the ex haust upstream of a catalyst. SCR catalysts function well only within a na rrow temperature win dow, and control systems must be in place to keep the ex haust temperature within an optimum range. If exhaust temperatures ar e too high, the SCR catalyst can be deactivated or fail. If exhaust temperatur es are too low, or too much reductant (usually urea) is used, ammonia can become an exhaust byproduct (called “ammonia slip”) and can be emitted to t he atmosphere. Ammonia slip can worsen as the catalyst ages and becomes less effective.

Diesel Particulate Filters — A number of measures in the State Strategy would require the use of diesel particulate f ilters, add-on devices that are mounted on the exhaust pipe. Certain types of these di esel particulate filters, referred to as passive filters, accelerate the conversion of nitric oxide (NO) to nitrogen dioxide (NO 2 ). As such, there is a potential for an adverse effect on the concentration and location of peak ozone levels in the St ate, especially near centers of diesel activity.

Catalyst manufacturers are aware of the issue, and preliminary analysis suggests that the impacts may be mitigated by desig ning the system to limit the NO to NO 2 conversion rates. In the near term, the advantages of pu tting diesel particulate filters into operation to reduce risk from diesel PM and allowing the technology to develop and mature should offset any limited adverse impacts.

Reformulated Gasoline — The purpose of this strategy is to offset or eliminate excess evaporative emissions caused by ethanol permeation through fuel lines and tanks. Reformulating gasoline may require more feed stock and/or more processing which means that impacts a ssociated with this measure could come

from an increased demand on refineries. However, air district permitting programs will evaluate and mitigate the air quality and environmental impacts to

the extent feasible.

Cold Ironing (Shore-side Power) — This process allows ships to run heating, air conditioning, lights and other operations by plugging into shore-side electrical power. This reduces emissions by allo wing ships to shut down the uncontrolled auxiliary engines which traditionally have po wered these electric-based activities. There are criteria pollutant emissions associated with t he incremental electricity generation from power plants, but they are significantly less than emissions generated by ship engines.

Low Sulfur Diesel Fuel — Low sulfur diesel f uel requires increased hydrotreating of fuel to remove sulfur, which requires increased hydrogen production. Hydrogen production, from petro leum feedstock, has the potential to increase criteria pollutant s (particularly NOx) and CO 2 emissions. The most acute impact of any emissions increas e could be in the communities near refineries, however, air di strict permitting programs will evaluate and mitigate the air quality and environmental impac ts to the extent feasible.May 7, 2007 Appendix E 16 Electrification of Equipment — Electric forklifts, do ckside electrical hookups for larger marine vessels, and other strategies may incrementally increase electricity demand from power plants. The incr ease in power production will have an incidental increase in emissions (primarily NOx) from power plants. Air district permitting programs are in place to limit these emission increases. Overall, emissions should decrease significantly as fuels such as diesel and propane are replaced by the much cleaner natural gas burned at well-controlled power plants.

Locomotives — Diesel oxidation catalysts (DOCs) operating under high loads and temperatures can increase SO2 to SO 4 formation. Locom otives fueled out

of state will use non-road dies el fuel with sulfur levels lowered from 5,000 to 500 ppmw on June 1, 2007. However, since most refueling for inte rstate locomotives occurs in-state, and locomotives in Californi a typically use ultra low sulfur diesel (<15 ppmw), this is not a significant source of SOx. SOx is emitted in direct proportion to the diesel fuel sulfur content.

Vehicle Retirement Program — Scrapping retired vehicles involves the use of heavy-duty equipment to crush vehicles and then transport the recyclable

materials to markets whic h often times are located overseas. The increased processing and transport of the scrapped materials could create additional emissions, however, the State Strategy also includes measures to reduce emissions from ships and heavy-duty off- road equipment. The benefit of retiring high-polluting vehicles greatly outweig hs the emissions from processing.

Air Toxics

Potentially significant air toxics impacts could occur due to reformulation of consumer products and the use of alternativ e fuels, alternative fuel additives and alternative aftertreatment systems. Ho wever, any new formulations of these products and additives would be closely scr utinized to prevent the addition of toxic compounds. These potential impac ts will be greatly offset by the

substantial reductions in toxics from diesel engines required by the State Strategy. The cumulative impact of the State Strategy is to greatly reduce emissions of toxic compounds. A brief description of potentia l impacts of the strategies is provided below.

Selective Catalytic Reduction — Since SCR technology represents a significant departure from conventional emission controls deployed on motor vehicles, there is the potential for thes e systems to emit new toxic substances that have not been readily observed in previous studies, and/or exhibit an increase in some currently emitted toxic substances due to urea-related chemistry. Such seco ndary emissions are likely to include organonitrogen compounds, many of which are listed as toxic air contaminants (TAC) and are carcinogenic.May 7, 2007 Appendix E 17 Vehicle Retirement Program — High-mileage and older vehicles are likely candidates for scrappage. Their deterio ration leads to increased emissions. Once vehicles are scrapped, they can no longer pollute. However, vehicles commonly contain lead, chromium and mercury which may be released during the scrapping process. These toxic ai r pollutants have potential to have an adverse impact on air and water quality if not properly handled. For example, mercury switches used in hood and trunk lighting can be recovered rather than being crushed. Auto dismantlers are regulated by the D epartment of Toxic Substance Control (CCR, Title 22).

Cold Ironing (Shore-side Power)

— This process allows ships to run heating, air conditioning, lights and other operations by plugging into shore-side electrical power. This reduces emissions by allo wing ships to shut down the uncontrolled auxiliary engines which traditionally have po wered these electric-based activities.

There are toxic air contaminants asso ciated with increment al electricity generation at power plants, but they are significant ly less than emissions generated by ship engines.

Consumer Products

— The consumer products meas ures require reformulation

to reduce VOC content. A number of VO Cs currently used in consumer product formulations, such as ethylene-based glyco l ethers, trichloroet hylene (TCE), and toluene, have also been ident ified as toxic air contaminants. When a product is reformulated to meet new VOC limits, however, a manufacturer could use small amounts of a chemical, not us ed before, that may be a to xic air pollutant. This potential impact will need to be evaluated an d mitigated as reformulation options are reviewed during the development of new VOC limits, as staff has done in previous rulemakings.

Two particular toxic air contaminants (T AC) used in some consumer products, methylene chloride (MeCl) and perchloroethylene (Perc), are specifically exempted from the VOC definition becaus e of their very low ozone-forming capabilities. As a result, some manufac turers may choose to use MeCl or Perc

in their reformulations to reduce the VO C content in meeting future limits. However, when setting new VOC limits, staff analyzes the potential use of nonVOC TACs as reformulation options to ensure protection of public health. To avoid increased use of non-VOC TACs, st aff sets emissions standards that are commercially and technologically feasible without use of TACs or bans TACs in the category at hand. Staff has prohi bited three TACs—MeCl, Perc, and TCE— in approximately 56 categories to date, and will consider prohibiting their use in other categories, if feasible.

Cleaner Main Ship Engines — Various technologies can be used to reduce

NOx emissions from main sh ip engines such as low-NO x fuel injectors, delayed injection timing and technologies that add water vapor to the combustion chamber. Impacts associated with technolog ies include slight increases in PM,May 7, 2007 Appendix E 18 hydrocarbons and CO2. Additionally , there may be increased PM levels associated with selective catalytic reduction.

Fuel Additives — Fuel additives or reformulation of fuels may provide possible emission reduction benefits. However, f uel additives or fuel reformulation may

also create adverse emissions and environm ental impacts. Before a fuel additive or fuel reformulation is implemented as an emission reduction strategy, a

multimedia evaluation must be conducted under California Health and Safety

Code Section 43830.8. This evaluation wi ll assess the potential emission impact associated with any additive or fuel reformulation to the environment and public

health.

Greenhouse Gases

Potentially significant greenhouse gas emissi ons could result from measures that may reduce fuel efficiency or increase ener gy use, and consumer product rules.

Diesel-Fueled Engines — Proposed measures to reduc e emissions from dieselfueled engines could require the use of new diesel engines, engine modifications, add-on control devices such as diesel parti culate filters, ox idation catalysts and selective catalytic reduction (SCR) systems, lo w-sulfur diesel fuel , alternative fuel formulations, or other strategies. These strategies have the potential to slightly reduce fuel economy and incr ease greenhouse gas emissions. These impacts may be mitigated as other engine features become more effici ent to meet air pollution emission standards and by reduc ing idling times for trucks and other mobile equipment.

Diesel Particulate Filters — A number of measures in the State Strategy would require the use of diesel particulate filt ers. These particula te filters must be periodically regenerated by burning off t he accumulated carbon and associated hydrocarbons trapped on the filter. Acti ve regeneration met hods use external fuel or energy to heat t he filter and regenerate it.

Cleaner Main Ship Engines

— Various technologies can be used to retrofit main ship engines such as low-NOx fuel injectors, delayed injection timing and technologies that add water vapor to the combustion chamber. Impacts associated with technologies include slight increases in PM, hydrocarbons and

CO 2 . Additionally, there may be increased PM levels associated with selective catalytic reduction.

Consumer Products

— Alternative compounds used to meet lower VOC limits in the State Strategy’s consumer products meas ures could be greenhouse gases. For aerosol products to meet t he VOC limits in the proposed regulations, manufacturers may choose to replace so me or all of the typical hydrocarbon propellants, such as propane and butane, with the hydrof luorocarbons HFC-152a or HFC-134a, or carbon dioxide (CO 2 ), which are greenhouse gases. HFC-152aMay 7, 2007 Appendix E 19 and HFC-134a have no ozone depletion pot ential, do not contribute to the formation of ground-level ozone, are low in toxicity, and are less flammable. In addition, HFC-152a has the lowest global warming potential of all the HFCs and an atmospheric lifetime of only 1.5 year s. While HFC-134a has significantly higher global warming potential than HFC-152a, its use is quite limited. Because HFC-134a has such low flammability, it is typically only used in consumer product applications where flammability is a significant concern. Due to the high cost of HFC-152a and HFC-134a (as much as five to seven times greater than other hydrocarbon propellants, such as propane and butance), it is anticipated

that manufacturers will use as little HFC-152a or HFC-134a as possible when reformulating their aerosol products. Consequently, because these measures would not cause a significant increas e in the use of HFC-152a or HFC-134a, there would be a negligible global warmi ng impact. However, further analysis of the properties and effects of these HF Cs is needed. If the analysis reveals significant impacts, ARB staff would reassess the control strategy. CO 2 used as a replacement for hydrocarbon propell ants would be a recycled byproduct from existing processes and would not create an increase in global warming gases.

Stratospheric Ozone Depleting Pollutants

Consumer Products

— Some hydrochlorofluorocarbons are still used in a very small number of consumer products as solvent. HCFC-22 is also used as a blowing agent in some foam insulati on sealant products because of its low flammability. HCFCs are exempt VOCs under the existing and proposed regulations. It is unknown if there wil l be an increased use of these compounds in meeting lower VOC limits. However, all HCFCs are classified as group II ozone-depleting compounds by U.S. EPA and are scheduled for phase out by 2030. Because of the phase out, manufactu rers are very likely to use blowing agents and solvents other than HCFCs. We therefore anticipate that the impact on ozone depletion due to HCFCs will be negligible.

Vehicle Retirement Program — Auto dismantlers t hat receive end-of-life vehicles with air conditioning systems must remove any refrigerant contained in these systems. During the removal of t he refrigerant, there is potential for an

incidental amount of refr igerant to escape into t he atmosphere. Once the refrigerant is removed, it must be ta ken to a registered facility for proper handling.

III. Agricultural Resources

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on the agricultural resources of California. Ozone pollution causes significant crop yield loss in California. The State Strategy will help reduce ozone levels and consequently reduce crop loss resulting from ozone damage. A discussion of potential environmental impacts associated Department of Pesticide Regulation’s 2008 Pe sticide Element is at t he end of this section.May 7, 2007 Appendix E 20 IV. Biological Resources

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on the biological resources of Ca lifornia. We believe that the proposed measures will improve air quality and c onsequently, will improv e the habitat of our biological resources.

V. Cultural Resources

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on the cultural resources of Calif ornia. We believe that the proposed

measures will reduce ozone and acidic co mpounds in the air. Ozone, which causes oxidation, and airborne acids ar e both known to cause deterioration of archaeological, paleontologica l, and geological features.

VI. Energy Demand

Cumulative Impact: As energy demand in creases as a result of the State Strategy, there is a potential for signifi cant adverse environm ental impacts. These impacts can be mitigated through energy conservation programs, using renewable energy sources, and designi ng engine control syst ems to maximize

fuel efficiencies.

Several State Strategies involve electrific ation of equipment that could result in an increased demand for electricity most likely generated at power plants. In 2005, California produced 78 percent of its own electricity with the remainder imported. The total amount generated in-state came fr om natural gas (37.7%), coal (20%), large hydro-electric (17% ), nuclear (14.4%) and renewable energy sources (10.7%). In addition to incr eased electricity usage, some measures would require engine control devices that ca n reduce fuel efficiencies resulting in more fuel being used.

Reformulated Gasoline — Ethanol has about 30 percent less energy by volume than gasoline, therefore in creased ethanol in gasoline will decrease fuel economy by about 0.3 percent for each 1 percent of ethanol. Staff is investigating a change in the procedure for certifying al ternate formulations of reformulated gasoline that will lead to an in crease in the use of ethanol.

Cold Ironing (Shore-side Power) — This process allows ships to run heating, air conditioning, lights and other operations by plugging into shore-side electrical power. This reduces emissions by allo wing ships to shut down the uncontrolled auxiliary engines which traditionally have po wered these electric-based activities. This technology can significantly reduc e emissions from ship engines, however,

the trade off is an incremental increase in energy demand.May 7, 2007 Appendix E 21 Electrification of Equipment — Electric forklifts, dockside electrical hookups for larger marine vessels, and other strategi es may increase electricity demand from power plants. The increase in power pr oduction will have an incidental increase in emissions (primarily NOx) from power plants. Air district permitting programs are in place to limit these emission increases. Overall, emissions should decrease significantly as fuels such as diesel and propane are replaced by the much cleaner natural gas burned at power plants as well as including more renewable energy source s to the power mix.

Diesel Fueled Engines — Proposed measures to reduc e emissions from dieselfueled engines could require the use of new diesel engines, engine modifications, alternatively fueled engines, add-on control dev ices such as particulate filters and catalysts, low sulfur diesel fuel, alternat ive fuel formulations, or other strategies. These strategies have the potential to c ause a small decrease in fuel economy. Fuel economy impacts may be mitigated as engine design improves and engines operate more efficiently.

Diesel Particulate Filters — A number of measures in the State Strategy would require the use of diesel particulate filt ers. These particula te filters must be periodically regenerated by burning off t he accumulated carbon and associated hydrocarbons trapped on the filter. Acti ve regeneration met hods use external fuel or energy to heat t he filter and regenerate it.

Low Sulfur Diesel Fuel — Low sulfur diesel fuel requires increased hydrotreating of crude oil to remove sulf ur, which would requi re additional energy consumption.

VII. Geology/Soils

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on geology or soils.

VIII. Hazards and Hazardous Materials

Cumulative Impact: The purpos e of the State Strategy is to help California attain

the federal 8-hour ozone and PM 2.5 standards. ARB’s goal is to ensure that all individuals in California, especially child ren and the elderly, can live, work, and play in a healthy environment. Each of the measures in the State Strategy is

intended to reduce the health risks from air pollution. The measures would reduce the pollutants that contribute to adv erse health impacts, including: ozone, inhalable particles (including soot and dust), carbon monoxide, and toxic emissions (like particles emitted from diesel engines and benzene). There is a less than significant cumulative impac t that would result from proposed

measures.May 7, 2007 Appendix E 22 Several State and federal agencies current ly regulate hazardous and hazardous materials. A discussion of these regulat ions will follow Stat e Strategy potential impacts.

Consumer Products — In meeting lower VOC limits, t here is a slight potential that products may become more flammable if reformulation increases the use of highly flammable, exempt VOC solvents such as acetone and methyl acetate.

This could be of concern in the manufacture, storage, shipping and end use of the reformulated products. In many instances, howev er, manufacturers can use other, less flammable, exempt solvents and/or water borne formulations. It

should be noted that the VOCs that acetone often replaces are generally highly flammable as well. In addition, acetone is currently used in many consumer products without significant safety concer ns. Further, the U. S. Department of Transportation requires that c onsumer products meet specific criteria to ensure that there are no significant safety concerns with trans port and storage of the products.

Selective Catalytic Reduction (SCR)

— Selective catalytic reduction is likely to be used on heavy-duty diesel engines to r educe NOx in the exhaust. Urea is the preferred reductant used to react with the NOx, in the presence of a catalyst, to form nitrogen gas and water. The use of ammonia as a reductant in motor vehicle-based SCR systems is very unlikely.

Fuel Additives and Reformulation

— Before proposing rules requiring fuel reformulations, staff must conduct a mu ltimedia evaluation as required under California Health and Safety Code Secti on 43830.8. This evaluation will assess the potential impact associated with any f uel reformulation to the environment and public health including worker exposure.

Diesel Particulate Filters

— A number of measures in the State Strategy would require the use of diesel particulate f ilters. Some safety concerns include reduced visibility from the driver’s seat due to new equipment mounted near eye level, particularly on off-road equipment such as bulldozers, backhoes, and

tractors. ARB staff be lieves that proper engineeri ng design can mitigate or eliminate these pot ential problems.

Diesel particulate filters must be regenerated by burni ng off the accumulated carbon and associated hydrocarbons tr apped on the filter. Active regeneration methods use external fuel or energy to heat the filter and regener ate it. A slight potential exists for a runaway regeneration that could pose a fire hazard. Proper engineering design should mitigate or e liminate these potential risks. Diesel particulate filter measures will be writt en to assure that the design is proven

effective.May 7, 2007 Appendix E 23 Idling Inspections

— Increased idling at inspection stops for heavy-duty diesel will expose people involved with or performi ng the inspections to toxic diesel PM emissions. Diesel engines emit a complex mix of pollutants, t he most visible of which are very small carbon particles, or ‘soot’ known as diesel PM.

Power Plants — Increased energy required from power plants may be a source

of localized releases of toxic air cont aminants causing exposure to workers and nearby residents.

Hazardous Materials

Hazards are related to the risks of fire, explosions, or releases of hazardous

substances in the event of accident or upset conditions. Hazards are thus related to the production, use, storage, and transport of hazardous materials. Industrial production and processing fac ilities are potential sites for hazardous materials. Examples of hazardous mate rials used by consumers include fuels, paints, paint thinner, nail polish, and solvents. Hazardous materials may be stored at facilities producing such mate rials and at facilities where hazardous materials are part of the production pr ocesses. Storage refers to the bulk handling of hazardous materials before and after they are transported to the general geographical area of use. Currently, hazardous materials are transported throughout Californi a via all modes of trans portation including rail, highway, water, air, and pipeline.

State law requires detailed planning to ensure that hazardous materials are properly handled, used, stored, and disposed of to prevent or mitigate injury to

health or the environment in the event that such materials are accidentally released. The Office of Emergency Services (OES) enforces these requirements. Federal laws, such as the Emergency Planning and CommunityRight-to-Know Act of 1986 (also known as Title III of the S uperfund Amendments and Reauthorization Act or SARA) impose similar requirements.

The U.S. Department of Tr ansportation (U.S. DOT) has regulatory responsibility for the safe transport of hazardous mate rials between states and to foreign countries. U.S. DOT regulat ions govern all means of transportation, except for those packages shipped by mail. Hazar dous materials sent by U.S. mail are covered by U.S. Postal Service (USP S) regulations. Common carriers are licensed by the California Highway Patrol (CHP), pursuant to the California Vehicle Code, §32000. This section requi res licensing of every motor (common) carrier who transports, for a fee, in ex cess of 500 pounds of hazardous materials at one time and every carrier, if not for hi re, who carries more than 1,000 pounds of hazardous material of the type requiring placards.

The CHP and Caltrans have primary respons ibility for enforcing federal and State regulations and responding to hazardous ma terials transportation emergencies.

The CHP enforces hazardous material s and hazardous waste labeling andMay 7, 2007 Appendix E 24 packaging regulations that prevent leakage and spills of material in transit and provide detailed information to cleanup cr ews in the event of an accident. Vehicle and equipment inspection, shipment preparation, contai ner identification, and shipping documentation are all part of the responsibility of the CHP. The CHP also conducts regular inspections of licensed transporters to assure regulatory compliance.

Pursuant to the Emergency Servic es Act, California has developed an Emergency Response Plan to coordinat e emergency services provided by federal, State, and local government agenc ies and private persons. Response to hazardous materials incidents is one part of this plan. The plan is administered by OES, which coordinates the responses of other agencies including U.S. EPA, CHP, Department of Fish and Game, the ap plicable regional water quality control board, and local fire depar tments (see California Government Code, §8550).

In addition, pursuant to the Hazardous Materials Release Response Plans and Inventory Law of 1985 (the Business Plan Law), local agencies are required to develop area plans for response to releas es of hazardous materials and wastes. These emergency response plans depend to a large extent on the business plans submitted by persons who handle haz ardous materials. An area plan must include pre-emergency planning of pr ocedures for emergency response,

notification and coor dination of affected governm ent agencies and responsible parties, training, and follow-up. Hazar dous materials incidents are reported to OES, which compiles and archives the information.

Public Health

The Toxic Air Contaminant Identification and Control Act (Health and Safety Code §§ 39650 et seq ., Food and Agriculture Code Sections 14021 et seq .) established California’s two-phased program to identify and control air toxics. In the first phase (risk assessment), ARB selects substances for review, considering criteria relating to “the risk of harm to public health, amount or potential amount of emissions, manner of, and exposure to, usage of the substance in California, persistenc e in the atmosphere, and ambient concentrations in the community” (Health and Safety Code § 39666(f)). One example of an identified TAC is particul ate matter from diesel-fueled engines.

In the risk management phase of the program, ARB reviews the emission

sources of an identified TAC to determine if any regulatory action is necessary to reduce the risk. The analysis includes a revi ew of controls already in place, the available technologies and associated costs for reducing emissions, and the

associated risk.

Also in the risk management phase, ARB, work ing closely with the air districts, is responsible for developing control measures for all identified TACs except those used as pesticides. Pesticides are ev aluated in a similar process by theMay 7, 2007 Appendix E 25 Department of Pesticide Regulation. Following ARB adoption of measures to control a specific toxic compound, the districts must adopt equal or more stringent regulations for the stationary sources in their jurisdiction. Regulations

to control airborne toxic emissions from mo bile sources are the responsibility of

ARB.

The Air Toxics Hot Spots Program (H ealth and Safety Code §§ 44300-44384) requires facilities to report their toxic ai r emissions, ascertain health risks, and to notify nearby residents of signifi cant risks. Facilities that pose a significant health risk to the community are required to reduce their risk through a risk management plan.

Worker Safety Requirements

The California Occupational Safety and Health Administra tion (Cal/OSHA) and the Federal Occupational Safety and He alth Administration (OSHA) are the agencies responsible for assuring worker safety in the handling and use of chemicals in the workplace. In Ca lifornia, Cal/OSHA assumes primary responsibility for developing and enforcing workplace safety regulations. Under the authority of the Occ upational Safety and Health Act of 1970, OSHA has adopted numerous regulations pertaining to worker safety (contained in 29 CFR). These regulations set standards for safe workplaces and work practices, including the reporting of accidents and occupational injuries. Some OSHA regulations contain standards relating to hazardous materials handling, including workplace conditions, employee protecti on requirements, firs t aid, and fire protection, as well as material handling and storage. Because California has a federally-approved OSHA program , it is required to adopt regulations that are at least as stringent as those found in 29 CFR.

Cal/OSHA regulations concerning the use of hazardous materials in the workplace (detailed in CCR, Title 8) include requirements for employee safety training, availability of safety equipment, accident and illness prevention programs, hazardous substance exposu re warnings, and emergency action and fire prevention plan preparation. Cal/OSHA enforces hazard communication program regulations contai ning training and information requirements, including procedures for identifying and labeling hazardous substances. The hazard communication program also requires that Material Safety Data Sheets (MSDSs) be available to employees and that em ployee information and training programs be documented. These regulations also require preparation of emergency action plans (escape and evacuation procedures, rescue and medical duties, alarm systems, and emergency evacuation training).

Both federal and State laws include specia l provisions for hazard communication to employees in research laboratories, including training in chemical work practices. The training must include inst ruction in methods for the safe handling of hazardous materials, an explanation of MSDSs, use of emergency responseMay 7, 2007 Appendix E 26 equipment and supplies, and an explanation of the bu ilding emergency response plan and procedures. Chemical safety info rmation must also be available at the workplace. More detailed training and monitoring is required for the use of carcinogens, ethylene oxide, lead, asbesto s, and certain other chemicals listed in 29 CFR. Emergency equipment and supplies, such as fire extinguishers, safety showers, and eye washes, must also be ke pt in accessible places. Compliance with these regulations reduces the risk of accidents and adverse worker health

effects.

The National Fire Code (NFC), St andard 45 (published by the National Fire Protection Association) contains standards for laboratories using chemicals that are not requirements but are generally em ployed by organizations in order to protect workers. These standards provi de basic protection of life and property in laboratory work areas through prevention a nd control of fires and explosions, and also serve to protect personnel from expos ure to non-fire health hazards. While NFC Standard 45 is regarded as a national ly recognized standard, the California Fire Code (24 CCR) contains State standards for the use and storage of hazardous materials and special standards for buildings where hazardous

materials are found. Some of these r egulations consist of amendments to NFC Standard 45. California Fire Code regulat ions require emergency pre-fire plans to include training programs in first aid, the use of fire equipm ent, and methods of

evacuation.

IX. Land Use/Planning

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on land use and planning.

X. Mineral Resources

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on mineral resources.

XI. Noise

Cumulative Impact: The cumulative effe ct of the State Strategy will not have a potentially significant impact on noise, although an increase of the number of trucks idling at inspection stops may result in increased noise.

Diesel-Fueled Engines — The recommended measures to reduce emissions from diesel-fueled engines could require the use of add-on control devices such as particulate filters, oxidation cata lysts and engine modifications. This could result in a potential increase in noise levels due to exhaust system changes to accommodate add-on controls. However, te sting of current add-on controls has shown no increase in noise, and ARB staff does not expect future adverse noise impacts.May 7, 2007 Appendix E 27 XII. Population and Housing

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on population and housing.

XIII. Public Services

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on public services.

XIV. Recreation

Cumulative Impact: The St ate Strategy is not expec ted to cause any adverse impacts on recreation. By reducing the number of days with unhealthy air quality, ARB expects that our parks and out door recreational facilities could see increased usage by children, the elderly , asthmatics, and others with sensitive airways or chronic breathing problems.

XV. Solid/Hazardous Waste

Cumulative Impact: The cumulative impact of all strategies in the State Strategy would be a small, but potentially signific ant, increase of both solid and hazardous wastes. To mitigate these impacts, ARB will work with the California Department of Toxic Substances Control (DTSC) and the California Integrated Waste Management Board (CIWMB) to reduce wa ste production in these and other

areas.

State and local agencies currently regul ate solid and hazardous waste. A discussion of these regulations will fo llow the proposed strategies below.

Vehicle Retirement Program

— High-mileage and older vehicles are likely candidates for scrappage rendering them i noperable to pollute. There are many

non-hazardous materials in a vehicle that could be discarded in landfills. Such

materials include iron and al uminum engine blocks, st eel and plastic from chasses and interiors, glass, chromi um-containing bumpers, and rubber hoses. Mitigation for the expansion of this pr ogram would involve reusing or recycling the above mentioned materials. According to the Bureau of Automotive Repair, on average 90 percent of a scrapped vehicl e is recycled with the remaining 10 percent considered fluff which is typically landfilled. A signific ant amount of scrap and recycled materials are shipped to foreign markets.

Diesel-Fueled Engines and Vehicles — The proposed measures to reduce emissions from diesel-fueled engines and v ehicles could require the use of new diesel engines or add-on control devices such as particulate filters and oxidation catalysts. Potential adverse impacts include increased scrapping of diesel engines and vehicles, and impacts due to handling and disposal of collectedMay 7, 2007 Appendix E 28 particulate matter. Also, diesel oxidat ion catalysts are considered hazardous at the end of life. The impact of accele rated vehicle scrapping can be largely mitigated by recycling and reclamation of hazardous materials.

Diesel Particulate Filters

— A number of measures in the State Strategy would require use of diesel particulate filter s. Diesel particula te filters will probably produce a small amount of wa ste ash for disposal. This waste is estimated at about 10 to 150 grams of ash per vehicl e per year and is projected to be

considered a hazardous material due to zinc content. While most larger maintenance facilities can be expected to handle, collect, and dispose of this material properly, it is less certain how smaller facilities will handle waste ash. The filters themselves will eventually also be retired. Some filters contain a precious metal catalyst that is valuable for recycling and reclaiming. Other spent filters may not be worth recycling and may be disposed of at a proper landfill. We do not expect that the spent filt ers themselves will be considered a

hazardous material.

Electrification of Equipment — Electrification equipment can provide significant reductions of air pollutant emissions. Ho wever, electrification strategies may result in the production and use of a si gnificant number of batteries. These batteries are normally recycled, and the recy cle rate for lead-acid batteries is currently more than 95 percent. However, the increase in the number of spent batteries to be processed would potent ially have significant impacts on the recycling industry and on the disposal syst em for non-recyclable materials. Leasing, deposit, or rebate programs for elec tric batteries could be required to increase recycling. A spent battery exc hange for battery replacement could also reduce waste impacts. With these mitigati on measures in place, battery disposal impacts should not be significant.

Solid Waste Regulations

Solid waste consists of residential wastes (garbage and rubbish produced by households), construction wastes, commercial and industrial wastes, home appliances and abandoned vehicles, and sludge residues (waste remaining at the end of the sewage treatment process). CCR Title 14, Division 7, provides the

State standards for the m anagement of facilities that handle and/or dispose of solid waste. CCR Title 14, Division 7, is administered by the CIWMB and the designated Local Enforcement Agency (LEA). The designated LEA for each county is the County Department of Environmental Health.

CCR Title 14, Division 7, establishes general standards to provide required levels of performance for facilities that handle and/ or dispose of solid waste. Other Title 14 requirements include operational plans, closure plans, and post-closure monitoring and maintenance plans. Title 14 covers various solid waste facilities including, but not limited to landfills, ma terial recovery fac ilities (MRF), transfer stations, and composting facilities.May 7, 2007 Appendix E 29 Hazardous Waste Regulations

Hazardous materials are substances with certain physical properties that could pose a substantial present or future hazard to human health or the environment when improperly handled, disposed, or otherwise managed. As defined in CCR Title 22, Division 4.5, Chapter 11, Article 3, hazardous materials are grouped into the following four categor ies based on their properties: toxic (causes human health effects), ignitable (has the ability to burn), corrosive (causes severe burns or damage to materi als) and reactive (causes explosions or generates toxic gases). A hazardous wa ste is any hazardous material that is discarded, abandoned, or otherwise is not recycled. If improperly handled,

hazardous materials and wastes can result in public health hazards if released to the soil or groundwater or th rough airborne releases in vapors, fumes, or dust.

Under the Resource Conservation and Recovery Act (RCRA), U.S. EPA regulates the generation, transportation, treatment, storage, and disposal of

hazardous waste. RCRA was amended in 1984 by the Hazardous and Solid Waste Act (HSWA), which affirmed and extended the concept of regulating hazardous wastes from generat ion through disposal. HSWA specifically prohibits the use of certain techniques for the disposal of some types of hazardous wastes. Under RCRA, individual stat es may implement their own hazardous waste programs in lieu of RCRA as long as the state program is at least as stringent as the federal RCRA requirem ents. U.S. EPA approved California’s program to implement federal r egulations as of August 1, 1992.

DTSC administers the Hazardous Wast e Control Law (HWCL). Under HWCL, DTSC has adopted extensive regulati ons governing the generation, transportation, and disposal of hazardous wastes. HWCL differs little from RCRA; both laws impose “cradle to grave” regulatory systems for handling hazardous wastes in a manner that pr otects human health and the environment. Regulations implementing HWCL are generally more stringent than regulations implementing RCRA. HWCL regulations list more than 780 hazardous chemicals, as well as nearly 30 more common materials that may be hazardous, and establish criteria for identifying, packaging, and labeling hazardous wastes. They prescribe management practices fo r hazardous wastes; establish permit requirements for hazardous waste tr eatment, storage, disposal, and transportation; and identify hazardous wastes that cannot be disposed of in

landfills.

Under both RCRA and HWCL, hazardous wa ste manifests must be retained by the generator for a minimum of three year s. Hazardous waste manifests list a description of the waste, its intended destination, and regulatory information about the waste. A copy of each mani fest must be filed with DTSC. The generator must match copies of hazardous waste manifests with certification notices from the treatment, disposal, or recycling facility. Hazardous waste asMay 7, 2007 Appendix E 30 defined in the Code of Federal Regul ations Title 40 (40 CFR) 261.20 and CCR Title 22, Article 9 (including list ed substances, 40 CFR 261.30) is disposed

of in Class I landfills. California has enac ted strict legislation for regulating Class I landfills (Health and Safety C ode, §§25209 - 25209.7). For example, the

treatment zone of a Class I landfill must not extend more than five feet below the

initial surface and the base of the zone mu st be a minimum of five feet above the highest anticipated elevation of underly ing groundwater (Health and Safety Code, §25209.1(h)). The Health and Safety Code also requires Class I landfills to be equipped with liners, a leachat e collection and removal system, and a groundwater monitoring system (Health an d Safety Code, §25209.2(a)). Such systems must meet the requirements of DTSC and the SWRCB (Health and Safety Code, §25209.5).

XVI. Transportation and Traffic

Cumulative Impact: Moderni zation of motor vehicle fl eets has the potential to generate increased travel. Because newer vehicles tend to be driven more frequently and make longer trips, this c ould increase the number of vehicles on the roads. Although modernization and turnover of fleets is intended to decrease the emissions from these vehicles, more vehicles on the roads could result in increased congestion.

XVII. Water Resources

Cumulative Impact: The St ate Strategy would signific antly reduce a number of air pollutants and the reductions in depositio n will improve overall water quality in California. Also, accelera ted retirement of older equi pment with potentially leaky gasoline or diesel engines will reduce fluid (oil and grease) drips, resulting in cleaner storm water runoff. Several potent ially significant adverse water quality impacts are identified, including im pacts from reformulated gasoline and reformulated low-VOC consumer products.

Although rain can effectively scrub the air clean, air pollutants absorbed by rainwater can have an adverse impact w hen deposited into surface waters. NOx

and SOx emissions can form acids that ca n lower the pH of sensitive mountain lakes and streams and adversely affect the flora and fauna. NOx emissions can oxidize to nitrate, a powerful fertilizer, and can spur algae growth contributing to lake water turbidity and algae blooms. Organic molecules can be deposited in surface waters and affect the aquatic pl ants and animals. Toxic air contaminants (TACs) can dissolve in rain and eventually stress or kill organisms.

This environmental analysis of water resources is divided into two major categories—water quality and water demand. However, no significant negative impacts on water demand were identified. Several State and federal agencies regulate water resources and water qualit y. A discussion of these agencies’ regulations will follow the Stat e Strategy potential impacts.May 7, 2007 Appendix E 31 Reformulated Gasoline — Ethanol in Gasoline Since the phase out of MTBE from Calif ornia gasoline formulations and federal denial of a request for a waiver from t he oxygenate requirement, California has reformulated its gasoline with ethanol. As modifications to the rule are developed, there may be an increase of the amount of et hanol used as an oxygenate. There is potent ial for biological effects fr om this formulation in the event there is discharge to groundwater or surface waters. Ethanol may have an impact on the biodegradation of hydrocarbons which can worsen the effects of a gasoline spill. Ethanol may inhibit biol ogical degradation of Benzene, Toluene, EthylBenzene and Xylene (BTEX) due to bacterial preference for ethanol resulting in longer groundw ater plumes of BTEX.

Diesel-Fueled Engines — The State Strategy to reduce emissions from onroad, off-road, and stationary diesel-fuel ed engines could require or encourage the use of alternatively f ueled engines and alternative fuel formulations. Because

some alternative diesel fuel formulat ions and additives could more readily dissolve in water, these control measures have the potential to adversely impact local ground and surface waters.

The use of these alternative fuels is not ex pected to result in significantly greater adverse water quality impacts than the use of regular diesel fuels. A number of rules and regulations are currently in plac e to minimize the potential impacts from underground leaking storage tanks and spills from fueling activities. These include requirements for the construction of the storage tan ks, requirements for double containment, and installation of leak detection systems. These regulations minimize the potential for additi onal leaks from the use of diesel fuels

or alternative fuels.

Consumer Products — Two toxic air contaminants (TAC) used in some consumer products, methylene chloride (Me Cl) and perchloroethylene (Perc), are specifically exempted from the VOC definition in reco gnition of their very low ozone-forming capabilities. Some manufactu rers could use MeCl or Perc in their

formulations to reduce the VOC content to meet future limits, creating potential adverse environmental impacts for primar ily air, and possibly, though much less likely, soil and water.

ARB staff has recognized the potential fo r increased use of TACs in consumer products and has taken steps to mitigate and limit the use of these compounds in

recent Board actions. These actions in clude: the toxics control measure for automotive maintenance and repair activiti es; aerosol adhesives limits in the consumer products regulation; the prohibiti on of para-dichlorobenzene in solid air fresheners and toilet/urinal care products; an d reactivity limits in the aerosol coating regulations. ARB periodically su rveys all categories for their chemical composition including TA Cs and also tracks the use of MeCl and Perc in regulated consumer products thro ugh yearly manufacturer reporting requirements. Further, ARB staff has pr oposed VOC limits in the past that wereMay 7, 2007 Appendix E 32 achievable without the incr eased use of TACs. Furthermore, Proposition 65 labeling requirements disc ourage manufacturers from reformulating consumer products with TACs.

ARB staff actively seeks to prevent increased use of TACs when setting new VOC limits. In the future, if new produc ts contain Perc and MeCl, ARB staff will monitor their use and limit or prohibit t heir use in additional consumer products, when applicable. Mitigation measures will be implemented if a significant presence of consumer product-related Pe rc is anticipated in wastewater.

Vehicle Retirement Program

— High-mileage and older vehicles are likely candidates for scrappage. Their deteriora tion leads to increased emissions. Once scrapped, they can no longer po llute. Scrapped vehicles commonly contain residual fuels, such as gasoline, lubricating oils and other fluids that may potentially harm water quality if not proper ly handled. There are regulations and rules to properly manage these programs, however, there is a potential for adverse environmental impac ts if these pollutants are leaked to surface and groundwater.

State and Regional Water Boards

California has an extensive regulatory pr ogram to control water pollution. The most important statute gov erning water quality is the Porter-Cologne Act, which gives the State Water Resources Contro l Board (SWRCB) and the nine regional water quality control boards (RWQCB) broad powers to protect surface and groundwater supplies in California, regul ate waste disposal, and require cleanup of hazardous conditions (California Wate r Code §§3000-13999.16). In particular, the SWRCB establishes water-related pol icies and approves water quality control plans, which are implemented and enforced by the RWQCBs. The nine regional boards include: North Coast, San Franci sco Bay, Central Coast, Los Angeles, Central Valley, Lahontan, Colorado River Basin, Santa Ana, and San Diego.

It is the responsibility of each regional board to pr epare water quality control plans to protect surface and groundwater s upplies within its region. These plans must: identify important regional water resources and their beneficial uses, such as domestic, navigational, agricultural, industrial, and recreational; establish water quality objectives, limits, or levels of water constituents or characteristics established for beneficial uses and to prevent nuisances; and present an implementation program necessary to ac hieve those water quality objectives. These plans also contain technical information for determining waste water discharge requirements and taking enforcement actions. The plans are typically reviewed and updated every three y ears (California Water Code §13241).

California dischargers of waste that “could affect the quality of the waters of the State” are required to f ile a report of waste disc harge with the appropriate regional water board (California Water C ode §13260). The report is essentially aMay 7, 2007 Appendix E 33 permit application and must contain informati on required by the regional board. After receipt of a discharge report, the r egional board will issue “waste discharge requirements” analogous to a permit with conditions prescribing the allowable nature of the proposed discharge (Ca lifornia Water Code §§3263, 13377, and 13378).

National Pollutant Discharge El imination System Requirements

Most discharges into California’s waters are regulated by the National Pollutant Discharge Elimination System (NPDES), a regulatory program under the federal Clean Water Act. The NPDES is supervised by U.S. EPA, but administered by the SWRCB. NPDES requirements apply to discharges of pollutants into navigable waters from a point source, di scharges of dredged or fill material into navigable waters, and the disposal of sewage sludge that could result in pollutants entering navigable waters. Ca lifornia has received U.S. EPA approval of its NPDES program. Pursuant to California’s NPDES program, any waste discharger subject to t he NPDES program must obt ain an NPDES permit from the appropriate RWQCB. The permits typi cally include criteria and water quality objectives for a wide range of constit uents. The NPDES program is selfmonitoring, requiring periodic effluent sa mpling. Permit compliance is assessed monthly by the local RWQCB. Any NPDE S violations are then categorized and reported to U.S. EPA on a quarterly basis.

U.S. EPA has also published regulations that require certain industries, cities and counties to obtain NPDES permits for st ormwater discharges [55 CFR (1990)]. The regulations set permit application r equirements for classes of stormwater discharges specifically ident ified in the federal Clean Wa ter Act. The regulated stormwater discharges include those associ ated with industrial activity and from municipal storm sewer systems servi ng a population of 100,000 or more.

Discharges to Publicly-Owned Treatment Works (POTWs)

Water discharges to a public sewage system (referred to generically as a POTW), rather than direct ly to the environment, are not subject to the NPDES discharge requirements. Instead, such discharges are subject to federal pretreatment requirement s under §§307(b) and (c) of the Clean Water Act [33 USC §1317(b)-(c)]. Al though these pretreatment standards are enforced directly by U.S. EPA, they are implement ed by local sanitation districts (Monahan

et al. , 1993). The discharger, however, has the responsibility to ensure that the waste stream complies with the pretreatment requireme nts of the local system. Any facility using air pollution control equipment affecting water quality must receive a permit to operate from the loca l sanitation district. In cases where facilities modify their equipment or install air pollution controls that generate or alter existing wastewater streams, owner/operators must notify the local sanitation district and request that their existing permit be reviewed and modified.May 7, 2007 Appendix E 34 To ensure compliance with wastewater pret reatment regulations, local sanitation districts sample and analyze the wa stewater streams from facilities approximately two to four times per year. Persons who violate California’s water quality laws are subject to a wide array of enforcement provisions. In 1990, U.S. EPA revised and extended existing regulations to further regulate hazardous waste dischargers and require effl uent testing by POTWs. To comply with revised permit limits, POTWs may al ter their operations or impose more stringent local limits on indus trial user discharges of hazardous wastes (Monahan

et al ., 1993). POTWs in California are operated by sanitation districts that adopt ordinances establishing permi t systems and fee structures.

Department of Pesticide Regul ation’s 2008 Pesticide Element

The pesticide element requires the Departm ent of Pesticide Regulation (DPR) to implement regulations that re strict the amount of VOCs that may be emitted from field fumigation. The 2008 element updates the current pestici de element of the ozone SIP, which provides for percent age reductions in emissions from 1990

levels.

An analysis of potentially significant env ironmental effects will occur before final implementation of the specific field fumigant regulations. The fumigant regulations have been developed enough to assess the potential environmental impacts at this point.

Cumulative Impact of 2008 Pesticide Element : Adoption of this element into the SIP would not have significant or potent ially significant adverse effects on the

environment.

Potential Environmental Impact s of 2008 Fumigant Regulations

The fumigant regulations to be implement ed in 2008 will establish limits on the amount of VOCs that may be emitted from field fumigation in certain areas and will prescribe allowable applic ation methods statewide. Pesticide applicators are expected to take one or more of the following actions to comply with the regulations: Use lower emission applicat ion methods, reduce application rates, reduce the acres fumigated, and shift fumigant applications outside the peak ozone season. DPR expects most of t he required emission reductions to come through use of lower emission applicati on methods, generally tarping, postfumigation water treatments, and drip c hemigation. The r egulations will give applicators a choice of application met hods, but in general the impacts will be negligible regardless of wh ich options are selected.

DPR's review of the proposed action s howed that no significant adverse environmental impact to California's envir onment can reasonably be expected to occur from implementing it s commitment to promulgat e fumigation regulations.May 7, 2007 Appendix E 35 In reaching this conclusion, DPR c onsidered the possible impacts discussed

below.

Air Quality

Shifting fumigations outside the peak ozone season could cause current particulate emissions from tractors and other application equipment to shift from summer to late fall or early spring . However, increased fumigations and associated particulate emissions during the winter peak particulate season are unlikely due to wet fields and other constraints.

Since the 2008 fumigant r egulation would establish application limits during May through October only, there is a potential for an increas ed use of fumigants in the months preceding or follo wing the peak ozone season. However, current DPR regulations and U.S. EPA label restricti ons are designed to prevent acute or chronic toxic exposure and are sufficient to avoid any adverse effects of toxic emissions from any increased use of fumigants.

In addition, the restriction of allow able application methods in the proposed regulations will reduce air emissions of the fumigants. Emissions of fumigants included in the proposed regul ation have little or no cont ribution to particulate matter pollution, acid rain, climate change, or other ai r quality impacts.

Agricultural Resources

Reducing the acreage fumigat ed would cause the previously fumigated fields to be converted to crops that do not use fu migants or to non-agricultural uses. The most likely conversions in specific areas are unknown at this time. DPR expects that growers in all areas can, and will, meet the emi ssion limits primarily through changing application methods, and thus the regulations will not cause a significant reduction in the number of acres fumigated or conversion of agricultural land to other uses.

Resource/Energy Use

Post-fumigation water treat ments and drip chemigation (pesticide application via an irrigation system rather than by tractor applicati on) will require greater quantities of water, with associated energy use and other effect s. Less diesel

fuel and other desirable effects associat ed with decreased tractor use will offset any potential impacts. However, the relati ve increase from current water use is expected to be negligible.

Solid Waste

The disposal of solid waste may increase slightly due to use of plastic tarpaulins under the proposed regulations, but the increase is not expected to be significantMay 7, 2007 Appendix E 36 since a great majority of the fumigations already use tarpaulins when it is a feasible mitigation measure.

Water Quality

DPR’s evaluation of the post-fumigation water treatments and drip chemigation applications show virtually no potential for ground water contamination by the fumigants with the estimated irrigation increases.

Other

Fumigation is primarily used to contro l diseases and nematodes. If fumigant application rates are reduced as a result of the regulations, use of non-fumigant pesticides, such as fungicides and nemat icides could be increased. Increasing

the use of such non-fumi gant pesticides may result in potential adverse environmental impacts to soil, air or water.

Environmental Analysis for the Proposed Revision to the Pesticide

Commitment in the 1994 Ozone SIP

Aside from the Ventura ar ea, the 2008 pesticide element requires the same or

more VOC reductions than the current pesticide element (1994 Plan). The 2008 pesticide element does, however, allow less VOC reductions for pesticide use in the Ventura area only. Either plan would provide for significant reductions from actual, current levels. For Ventura Count y to meet the targets of the 1994 Plan, 2.2 tons per day reductions are requi red. The 2008 pesticide element would require a 1.2 ton per day reduction that would result from the 2008 fumigation regulations. The additional ton of VOC reductions needed to satisfy the 1994

SIP commitment will instead come from other sources of VOCs in the Ventura

area. A more detailed discussion of this allowance and emission reduction offsets is included in the Appendix H.

Potential environmental impacts resulting from the proposed revision to the 1994 Plan may come from the use of methyl bromide and methyl isothiocyanategenerating fumigants. These fumigants co mprise approximately 50 percent of the pesticide VOC inventory in Ventur a. These two fumigants have very low reactivity, indicating that they do not appreciably contribute to ozone formation. Methyl bromide is an ozone depleti ng substance, and its production and importation are regulated under the Clean Air Act. Ozone depletion is not a localized effect, and the amount of methyl bromide emitted due to this Plan is negligible. It is estimated that 0.5 t ons per day more methyl bromide will be emitted from field fumigation under the 2008 pesticide element target than would

be allowed under the 1994 Plan. This is approximately 0.0002 percent of the worldwide methyl bromide emissions. No other adverse effects should occur because the fumigants included in the proposed regulation have little or noMay 7, 2007 Appendix E 37 contribution to particulate matter pollution, acid rain, climate change, or other air quality impacts.

DPR regulations and U.S. EPA label restrict ions currently in place are designed to prevent acute or chronic toxic exposure. They are sufficient to avoid adverse effects of toxic emissions from any additi onal use of these fumigants that would result if the VOC reduction targets in the pesticide element of the SIP were one ton per day higher in Ventura in 2008.

Cumulative Impact of Proposed Revision to the 1994 Plan: The change to the 2008 pesticide element targets will not have a significant adverse environmental impact on air quality.

Cumulative Impacts of State Measu res and Local District Measures

The cumulative impacts of the State Strategy within each impact area have been discussed in the previous sections. This analysis does not set forth the environmental impacts of measures contai ned in district plans, as districts are required to perform their own environmental analysis of their stationary source

control measures. The 8-hour Ozone and PM2.5 SIP, however , will incorporate

both state and local m easures. Local measures fr om the non-attainment areas may also have adverse environmental impacts . Interested parties that want to review and assess impacts associated wit h each district should do so at the district level. ARB, as the state agency responsible for preparing the SIP, coordinating district efforts to co mply with federal SIP requirements and forwarding the SIP components to U.S. EPA, will collect and compile the each district’s plan, along with their envir onmental documentation, and send the entire SIP package to U.S. EPA.

At this time, the air dist ricts with the most serious air quality problems in the State, South Coast Air Basin and the San Joaquin Valley, both have performed environmental analyses for their plans. All other non-attainm ent districts are expected to perform environmental analyses prior to adoption by their respective

district boards.

The cumulative impacts discussion contai ned in the South Coast Air Quality Management District’s Draft Environmental Impact Report (EIR) for the 2007 Air Quality Management Plan, is hereby inco rporated by reference. The San Joaquin Valley Unified Air Pollution C ontrol District Initial Study/Proposed Negative Declaration is also her eby incorporated by reference.May 7, 2007 Appendix E 38 Project Alternatives

As discussed at the beginning of this appendix, ARB meets the criteria for a Certified State Regulatory Pr ogram. This certification requires ARB to present a range of reasonable alternatives for any project under consideration. CEQA requires a certified agency to include one of the following in the document: 1) Alternatives to the activity and miti gation measures to avoid or reduce any significant or potentially significant effe cts that the project might have on the environment; or 2) A statem ent that the agency’s review of the project showed that the project would not have any significa nt or potentially significant effects on the environment, and therefore no alter natives or mitigation measures are proposed to avoid or reduce any signific ant effects on the environment. The

statement shall be su pported by a checklist or other documentation to show the possible effects that the agency examined in reaching this conclusion. (CEQA Guidelines Section 15252).

The alternatives presented in this appendix were evaluated for their comparative merits to the proposed project. Under CEQA, the alternatives are required to feasibly obtain the objectives of the propos ed project. For this reason, it is important to note the State of California is under legal obligation to prepare a State Implementation Plan wh ich demonstrates it will r each attainment for the

8-hour ozone and PM2.5 standards.

Review of the cumulative impacts from all proposed new measur es or strategies shows there may be potentially significant adverse impacts if all measures are adopted. Therefore, alternatives to the State Strategy are considered below.

Alternative 1 — No Project

CEQA documents typically assume that t he adoption of a ‘no project’ alternative

would result in no further action on t he part of the project proponent or lead agency. For example, in the case of a proposed housing development project, adopting the ‘no project’ alternative termi nates further consideration of that housing development or any housing develop ment alternative identified in the

associated CEQA document. In that ca se, the existing setting would remain unchanged.

One interpretation of the ‘no project’ alte rnative is that if this alternative was selected, all the measures in the State Strategy are rejected. Since the State Strategy contains all currently known feas ible State strategies or measures that ARB could potentially take to reduce oz one-forming emissions, this would mean that no additional measures on existing sources or measures on uncontrolled sources would be developed. The result would be the eventual deterioration of California air quality as population increases and would very likely prevent the State from being able to meet its requirement to meet the 8-hour ozone and PM2.5 standards. In addition, California wo uld fail to meet federal Clean Air ActMay 7, 2007 Appendix E 39 mandates and would be subject to federal sanctions. Water quality would suffer

as acidic rain increases and toxic air contaminants are deposited on the ground. Public exposure to toxic ma terials would increase. Higher levels of air pollutants would deteriorate aesthetics by increasi ng haze and would damag e crops. Only

modest benefits would be achieved from a no project alternatives, such as any

small increase in solid or hazar dous waste would not be generated.

Alternative 2 — Adopt Fewer Measures

As mentioned previously, the State Strat egy contains all measures to reduce

ozone that ARB staff has determined are feas ible to achieve. Instead of adopting all of these measures, ARB could adopt only some of them, although there would

be numerous alternative subset s of the measures identifi ed in the State Strategy to consider. However, adopting fewer meas ures would not result in the expected

emissions reductions needed to meet t he 8-hour ozone and PM 2.5 standards. This would then place an increased res ponsibility on local districts and the federal government to achieve suffici ent emissions reductions to meet the

standard.

Alternative 3 — Adopt Measures with Different Emission Standards

For each individual measure, many alternat ives exist for various levels of control and variable emission standards for the regul ated sources. It is not possible to examine these many alternatives in detail without engaging in speculation, because the measures ultimately adopt ed by ARB will depend on the information that is learned in the future during t he regulatory development process. In general, however, ARB staff believes that it will be necessary to adopt all State Strategy measures and emission standards that are determined to be feasible,

rather than a subset of feasible measur es and standards. To attain the federal

ozone standard in the South Coast and San Joaquin Valley, sign ificant additional emission reductions will be needed beyond the defined measures specifically identified in the Strategy. Therefore, failing to adopt all feasible measures and

emission standards would result in fa ilure to meet federal Clean Air Act mandates and would subject the St ate to federal sanctions.

Impacts of Individual Proposed Measures

The measures in the State Strategy wil l help make progress toward our goal of healthy air for all Californians. Each of the defined St ate measures was evaluated to identify adverse environmental impacts. The following table lists each of the measures, any potentially significant environmental impacts, and possible mitigation strategiesMay 7, 2007 Appendix E 40Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresPASSENGER VEHICLESExpanded Passenger Vehicle Retirement:Increase the number of vehicles in the BAR scrappageprogram.Air: Potential for incidental refrigerant leaks fromair conditioning systems when attaching equipmentto facilitate removal of the refrigerant.Solid/Hazardous Waste: Lead, chromium, andmercury in vehicles can become toxic aircontaminants and pose health risks to facilityworkers.Solid/Hazardous Waste: Increased scrappageincluding steel, plastics and other materials thatcould potentially be disposed in landfills.Water: Fuel, oil, and lubricants may leak anddisperse into groundwater. If improperly disposed,elements including lead, chromium and mercurycan disperse into ground or surface water as partof landfill leachate.Ensure best managementpractices are used by industry.Promote recovery and reclamationof hazardous wastes.Promote reuse and recycling ofparts and scrapped materials.Proper facility management andadherence to regulations regardingthe collection of fluids for recovery.Modification of Reformulated Gasoline Program:Modify California’s Reformulated Gasoline Program tooffset ROG emissions due to the increased use of ethanolas an additive.Energy: Ethanol blends have about 30 percentless energy by volume than gasoline, so increasedethanol in gasoline will decrease fuel economy byabout 0.3 percent for each 1 percent of ethanol.Manufacturers may be required touse more robust fuel systems onnew motor vehicles, althoughincreased fuel permeation fromolder model year vehicles wouldnot be addressed.May 7, 2007 Appendix E 41Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresWater: Ethanol reduces electron-acceptors ingroundwater and reduces biodegradation ofbenzene, toluene, ethylbenzene, and xylenecontained in gasoline. Potential for increase ofgroundwater plumes.None identified.Smog Check ImprovementsLow Pressure Evaporative Test:Require testing and repair ofevaporative system leaks forall vehicles subject to Smog Check inspection.Solid/Hazardous Waste: Increased disposal offaulty emission control parts.Recycle fuel tank, fuel lines and/orcatalyst when feasible.More Stringent Cutpoints:Set more stringent Smog Check pass/fail cutpoints.Solid/Hazardous Waste: Increased disposal offaulty emission control parts.Recycle fuel tank, fuel lines and/orcatalyst when feasible.Annual Inspections of Older Vehicles:Inspect annually rather than every two years.Solid/Hazardous Waste: Increased scrappage,disposal and repair of faultyemission control parts.Promote reuse and/or recycling ofparts and scrapped materials.Annual Inspections for High Annual Mileage Vehicles:Inspect annually rather than every two years.Solid/Hazardous Waste: Increased scrappage,disposal and repair of faultyemission control parts.Promote reuse and/or recycling ofparts and scrapped materials.Add Visible Smoke Test:Include in the Smog Check test a visible smoke test toidentify vehicles with excess PM emissions.Solid/Hazardous Waste: Increased scrappage,disposal and repair of faultyemission control parts.Promote reuse and/or recycling ofparts and scrapped materials.May 7, 2007 Appendix E 42Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresInspection of Light- and Medium-Duty Diesels:Include light- and medium-duty diesel vehicles in SmogCheck to improve maintenance and reduce emissions.Repair poorly maintained or old emission systems.Solid/Hazardous Waste: Increased scrappage,disposal and repair of faultyemission control parts.Promote reuse and/or recycling ofparts and scrapped materials.Inspection of Motorcycles:Include motorcycle inspections as part of Smog Check.Solid/Hazardous Waste: Increased disposal offaulty emission control parts.Promote reuse and/or recycling ofparts and scrapped materials.TRUCKSCleaner In-Use Heavy-Duty Trucks:Reduce excess emissions attributable to enginedeterioration, poor maintenance, or tampering. Conductvisual, under-the-hood inspections of the emission controldevices.Air: Use of Diesel Particulate Filters (DPFs) mayaccelerate conversion of nitric oxide (NO) tonitrogen dioxide (NO2).Air: Potential to increase ozone concentration,nitric acid, and secondary particulate matterformation.Air: Metals from various forms of catalyzedaftertreatment systems can be eroded and emittedas airborne PM, such as vanadium pentoxide fromSCR.Air: Idling while waiting to be tested or while beingtested could slightly increase all emissions.Air: Other secondary emissions are likely to includeorganonitrogen compounds, many of which arelisted as TACs and are carcinogenic.Design DPF systems to limit NO toNO2conversion rates.Design system to maximizeefficiency.Ban use of potentially hazardousmetals and deploy alternativecatalyst formulations (e.g.,zeolites) which don’t containvanadium.Design system to maximizeefficiencies.Deploy alternative catalystformulations which minimizeemissions of organonitrogencompounds. Continue research toMay 7, 2007 Appendix E 43Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasures(continued)Cleaner In-Use Heavy-Duty TrucksEnergy: Active regeneration of DPFs may includeusing external fuel or energy to burn offaccumulated carbon andassociated hydrocarbonstrapped on filter.Energy: Maintaining the integrity of the add-oncontrols could extend the time period for thedecrease in fuel economy.Hazards/Hazardous Materials: Increased idling atinspection stops has potential to expose anyonenearby to increased toxic diesel PM emissions.Noise: Increased number of trucks and idling atinspection stops could cause an increase in noise.Solid/Hazardous Waste: Waste ash from DPFscontaining zinc may be generated.Solid/Hazardous Waste: Focus of measure is tomaintain and repair devices, not replace them. Ifthey are replaced, they may be sent to landfills.Transportation/Traffic: Existing roadside inspectionprogram will likely be expanded and increase thenumber of locations where trucks will be pulledover and tested.assess deployment of SCR andpotential emission impacts.Promote energy conservationthough effect of DPFs is expectedto be negligible.Design system to maximizeefficiency.Locate inspection stops with abuffer zone between the stop andsensitive receptors.Locate inspection stops in areaswith a buffer zone between thestop and sensitive receptors.Promote recycling, reuse andwaste management strategies atscrappage/maintenance centers.None required.Impact is not expected to have anysignificant impact on traffic andwould not require mitigation.May 7, 2007 Appendix E 44Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresGOODS MOVEMENTClean Up Existing Commercial Harbor Craft:Reduce emissions by replacing or retrofitting old engines.Air: Increased levels of NO2affecting ozone andsecondary nitrate formation and nitric acid. Mayenhance formation of sulfates.Air: Selective catalytic reduction (SCR) of dieselexhaust using urea injection may increaseammonia emissions.Air: Reduction of fuel efficiency due to exhaustbackpressures may require more fuel use resultingin increased CO2emissions.Energy: Retrofitting post-combustion controls onengines may result in increased fuel use.Hazards/Hazardous Materials: Use of additives indiesel fuel or the use of alternative diesel fuels maycreate new hazards or enhance the hazard ofdiesel fuel.Solid/Hazardous Waste: Waste ash from DPFscontaining zinc may be generated. Scrappage ofolder engines and their components.Water: Emulsified diesel fuel or fuel additives mayincrease soluble components in surface and subsurface water that could result from spillage andleakage from storage tanks.Use low-sulfur fuels.Adjust urea injection rates to nearstoichiometric proportions withrespect to NOx mass flow rates.Design system to maximizeefficiencies.Design system to maximizeefficiencies.Any reformulation of diesel fuel orthe requirement for additives willbe reviewed under a multimediaevaluation. Mitigation measureswill be identified under thatprocess.Promote reclamation and recyclingof materials.Require spill prevention plan andsafe storage practices.May 7, 2007 Appendix E 45Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresAuxiliary Ship Engine Cold Ironing and Other CleanTechnology:Reduce emissions from ships at berth with at-docktechnologies such as cold ironing (electrical power) andother clean technologies.Air: Localized release of criteria pollutants andtoxic air contaminants from power plants.Energy: Increased energy demand for shore-sidepower.Solid/Hazardous Waste: Emission filters maycapture more emissions and require disposal ofhazardous ash.Promote use of renewable energysources.Promote use of renewable energyand adopt stricter stationarysource controls.Ensure proper disposal of anyhazardous materials generated.Cleaner Main Ship Engines and Fuels:Further reduce emissions from main engines throughadded retrofits such as selected catalytic reduction.Support efforts to accelerate use of cleaner ships andrebuilt engines. Require ships to use low sulfur diesel fuelin main engines.Air: SCR could increase releases of ammonia.Air: Diesel oxidation catalyst could form sulfates athigher temperatures.Air: Technologies such as low-NOx fuel injection,delayed injection timing and water vapor added tocombustion chamber can cause slight increases inPM, hydrocarbons and CO2.Air: Distillation of heavy fuels can increase CO2emissions at refineries.Solid/Hazardous Waste: Diesel oxidation catalystswhich contain platinum are considered hazardousat end of life.Promote catalyst recycling.Use low sulfur diesel.Design systems to maximizeefficiencies.Air district permitting programsmust evaluate and mitigate any airquality impacts to the extentfeasible.Promote reclamation of metalsfrom DOCs.Port Truck Modernization:Retrofit or replace older heavy-duty diesel trucks thatAir: Use of Diesel Particulate Filters (DPFs) mayaccelerate conversion of nitrous oxide (NO) toDesign DPF systems to limit NO toNO2conversion rates.May 7, 2007 Appendix E 46Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresservice ports.nitrogen dioxide (NO2). Potential to increaseozone concentration, nitric acid, and secondaryparticulate matter formation.Energy: Increased use of fuel or energy for activeregeneration of DPFs.Solid/Hazardous Waste: Waste ash from DPFcontaining zinc may be generated.Use renewable energy sources.Promote reclamation of metals.Locomotive Engines:Accelerate the introduction of cleaner line haul engines(Tiers 2.5 & 3) and concurrently rebuild older engines tocleaner standards using exhaust after treatment devices.Air: NOx would be slightly higher, and the SCRswould require urea. This could increase ammoniaslip.Air: NO2fraction may be increased with DPFs, totalNOXremains approximately the same.Air: SOXcould increase at higher temperatures aswell as NO2.Energy: Diesel particulate filters, diesel oxidationcatalysts, and SCRs can decrease fuel efficiencydue to pressure loss and regeneration issues.After treatment technology would have thepotential to reduce fuel efficiency.Hazards/Hazardous Materials: Possible high levelsof zinc in DPF ash would need to be handledproperly.Solid/Hazardous Waste: DPF’s will need to bedisposed of once removed. Depending on catalyticmaterial used during manufacturing, DOCs couldbecome hazardous waste when they are removed.Design control systems to keep theexhaust temperatures within anoptimum range so urea is fullyutilized.None identified.Use ultra low-sulfur diesel fuel.Adjust urea injection rates to nearstoichiometric proportions withrespect to NOx mass flow rates.Install ammonia slip catalysts.Promote reclamation and recoveryof materials.Maintain the after treatmenttechnology in proper and cleanworking order on a regularschedule. Ensure technology usesnonhazardous manufacturingmaterial.May 7, 2007 Appendix E 47Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresCONSTRUCTION AND OTHER EQUIPMENTCleaner In-Use Off-Road Equipment:Establish fleet average emission limits for constructionfleets requiring older engines be retrofitted or replaced withcleaner engines.Air: Diesel particulate filters, lean NOx catalystsand SCRs may have slight fuel economy penaltycausing increase in CO2emissions.Air: Diesel oxidation catalysts may form sulfates athigh temperatures.Air: Diesel particulate filters may increase NO2portion of NOx emissions.Air: Increased ammonia emissions from SCRs.Air: Secondary emissions from SCR are likely toinclude organonitrogen compounds, many of whichare listed as TACs and are carcinogenic.Energy: Diesel particulate filters may requireelectricity to regenerate the filter.Hazards/Hazardous Materials: Metals from variousforms of catalyzed aftertreatment systems can beeroded and bleed out into the environment, e.g.,vanadium pentoxide from SCR.Solid/Hazardous Waste:Engines that are replacedthrough repowering could be sent to a landfill.Design system to maximizeefficiency.Use low sulfur diesel fuel (15ppm)to minimize sulfate emissions.Use filters meeting ARB’s cap of20 percent NO2to NOx emissionratio.Use an ammonia slip catalystdownstream of SCR catalyst tooxidize ammonia.Deploy alternative catalystformulations which minimizeemissions of organonitrogencompounds.Promote conservation and use ofrenewable energy sources.Ban use of potentially hazardousmetals and deploy alternativecatalyst formulations (e.g.,zeolites) which don’t containvanadium.Set guidelines on proper disposalmethods of engines, catalysts andfilters, (i.e., melting, recycling,scrapping rather sending to alandfill)May 7, 2007 Appendix E 48Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasures(continued)Cleaner In-Use Off-Road Equipment:Solid/Hazardous Waste: Catalyzed aftertreatmentsystems could be hazardous waste at the end oftheir useful life, depending on materials in catalyticcoating.Solid/Hazardous Waste: Particulate filters could behazardous waste due to ash containing metals,such as zinc. Also ash from periodic cleaning offilters could be considered hazardous for the samereasons.Water: Fluids (oils, etc) in engines that arereplaced through repowering could leach intowater.Depending on materials used inaftertreatment systems, recycleprecious metals (i.e., platinum)Reduce amount of ash producedsuch as by providing low-ashlubrication oil. Reclaim zinc.Ensure proper disposal and facilitymaintenance.AGRICULTURAL EQUIPMENTAgricultural Equipment Fleet Modernization:Acceleratefleet modernization of agricultural equipment by replacingolder, dirtier equipment with engines reflecting cleanertechnologies.Although there is no specific proposal at this timefor agricultural equipment, if an emission reductionstrategy similar to the Cleaner In-Use Off-RoadEquipment is pursued, the potential adverseenvironmental impacts would be expected to bethe same.EVAPORATIVE & EXHAUST STRATEGIESNew Emission Standards for Recreational Boats:Adopt catalyst-based standards for new outboard enginesand evaporative emission standards for all sources ofrecreational boat evaporative emissions.None identified. None required.May 7, 2007 Appendix E 49Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresOff-Road Recreational Vehicle Expanded EmissionStandards:Adopt exhaust and evaporativeemission standards toreduce the amount of ROG from off-highway motorcyclesand all-terrain vehicles.Air (exhaust): Potential for two-way catalysts toemit higher levels of NO2 affecting ozone, NO2,nitric acid, and secondary particulate.Noise: May increase if catalysts are used.Solid/Hazardous Waste (exhaust): Exhaustcatalysts may contain hazardous materialsincluding precious metals and benzene residue.Solid/Hazardous Waste (evaporative): Evaporativecanisters may contain hazardous material includingprecious metals and benzene residue.Solid/Hazardous Waste (evaporative): Faultycontrol parts may be disposed of in landfills.Use of three-way catalysts willreduce HC, CO, and NOxemissions.Encourage catalyst designs toinclude sound mufflingRequire proper disposal and/orrecycling.Require proper disposal and/orrecycling.Promote recycling.Portable Outboard Marine Tank Evaporative Standards:Set evaporative emission standards to reduce emissionsfrom tanks, hoses, primers bulbs and connecting devices.None identified.None required.Refueling Gasoline Tank Evaporative Standards:Set standards for refueling gasoline tanks typicallymounted on pickups and large recreational vehicles andused to refuel equipment and other smaller vehicles.Solid/Hazardous Waste: Replacement controlparts, such as carbon canisters and lowpermeating hoses, may be sent to landfills.Promote recycling.Gas Station Refueling Hose Evaporative Standards:Set evaporative emission standards to control permeationfrom gasoline dispenser hoses.None identified.None required.May 7, 2007 Appendix E 50Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresEnhanced Vapor Recovery for Above Ground StorageTanks:Adopt enhanced vapor recovery performance standardsand specifications to control standing loss and working lossemissions from above ground gasoline storage tanks.None identified since replaced parts are usuallyreconditioned.None required.CONSUMER PRODUCTSTighten standards or require product reformulation forconsumer products categories.Air: Potential small increase in greenhouse gases,depending on the alternative used.Air: Potential increase of TACs, depending onformulation.Hazards/Hazardous Materials: Reformulation forexempt VOC solvents may potentially increaseflammability of solvent such as acetone and methylacetate.Water: Any increase in PERC could negativelyimpact wastewater.Ensure that HFC propellants arenot the sole reformulation option.Prohibit use of TACs in categorieswhere their use in formulation orreformulation is likely.Existing regulations requireconsumer products to meet criteriathat ensures there are nosignificant safety concerns withtransport and storage of products.None identified.May 7, 2007 Appendix E 51Potential Adverse Environmental Impacts ofthe Proposed 2007 State Strategies for the California SIPStrategy DescriptionPotential Adverse EnvironmentalImpactsPotential MitigationMeasuresPESTICIDESRestrict VOC emitted from field fumigation, and set areactivity standard or requirement for registration of someliquid pesticides.Agriculture: Acreage no longer fumigated toachieve VOC reductions could be converted tonon-agricultural uses.Air: Methyl bromide and methyl isothiocyanate,which are ozone-depleting substances, mayincrease slightly in Ventura County.Solid/Hazardous Waste: Solid waste disposal mayincrease due to use of plastic tarpaulins under theproposed regulation.Water: Post-fumigation water treatments mayrequire greater quantities of water use.Emission limits can be met in allareas primarily by changingapplication methods.The allowable volume increaseonly in Ventura County is expectedto be negligible.Most fumigations currently usetarpaulins as a feasible mitigationmeasure. Any increase overcurrent disposal of tarpaulins isexpected to be negligible.Drip chemigation uses irrigationsystems rather than tractorapplication. This method offsetsthe use of diesel fuel and otherundesirable effects associated withtractor use. The relative increasein water use over current use isexpected to be minimal.May 7, 2007 Appendix E 52 ECONOMIC IMPACT ANALYSIS

Introduction

ARB staff has estimated the costs and ec onomic impacts that could result in 2014 from the proposed State Strategy to reduce emissions of oxides of nitrogen (NOx), reactive organic gas es (ROG), fine particulate matter (PM2.5) and oxides of sulfur (SOx) in the South Coast and San Joaquin Valley St ate Implementation Plans (SIP). The emission reductions are needed to meet the attainment

deadlines for the federal 8-hour ozone and PM2.5 standards. This analysis includes the costs and economic impacts of all proposed control measures under State jurisdiction, including passenger vehicles and trucks, goods movement, construction and mining equipment, engi ne exhaust and evaporation, and consumer products. It is im portant to note that the cost s reflected in this section represent costs incurred in 2014 only alt hough some measures will begin to be implemented prior to 2014 and continue after 2014.

The proposed State Strategy measures, when adopted as rules or regulations, are likely to cause technological changes that could increase the production costs for regulated industries. In creased costs could have an initial contractionary effect on those industries, which in turn could affect other related industries either negatively or positively. For example, indus tries that provide supplies and services to affected indus tries could experience a reduction in demand for their products and services whil e suppliers of environmental products and services could experience an increase in their sales. The net effect on the California economy of these activities hinges on the extent to which products and services are obtained locally. Usi ng an updated version of EnvironmentalDynamic Random Analysis model (E-DRAM) 1 , staff estimated the net effects in

2014 of these activities on the affected industries and the overall economy. The

California industries affected most are those engaged in the production, distribution, sales, and use of cars and trucks, goods movement, off-road equipment and engines, and consumer products.

The proposed State Strategy would bring about significant societal benefits, including less illness and medi cal expenses and fewer lost work and school days, to Californians. In its report to C ongress in 1999, U.S. EPA found that the

monetized benefits of t he Clean Air Act exceed its compliance costs by a ratio of

four to one. 2 Using the findings in this report and considering that ARB regulations are usually more stringent and thus more costly, ARB staff estimates

1 For a complete description of E-DRAM, see Pe ter Berck, “The Economy-wide Effects of AirQuality Regulations,” prepared for California Air Resources Board, June 2005. Industrial sectors in the E-DRAM were further refined by David Roland-Holst and Ryan Kellogg, “Documentation of the 120 Sector SAM for California, 2003,” July 2006.

2 U.S. EPA Report to Congress, “The Benefits and Costs of the Clean Air Act 1990 to 2010,”

November 1999.May 7, 2007 Appendix E 53 that each dollar spent on clean air in California generates, on average, three

dollars in societal benefits.

Annual direct costs of all proposed State Strategy measures are estimated to be $4.6 billion in 2014. Increased costs that would result from the proposed State Strategy would reduce California’s economic output in 2014 from $2.948 trillion to $2.938 trillion (roughly $10 billion or 0.30 percent), personal income by $5 billion (0.30 percent), and California employm ent by approximately 37,000 jobs (0.20 percent). These changes reflect a sli ght slow-down in the growth of the California economy from what it would be otherwise. From 2007 through 2014, California output is expected to grow by $74 billion, personal income by $45 billion, and employment by 198,900 per year. The impact of the proposed State Strategy would be a slight reduction in the annual growth rate of: economic output (from 2.85 percent to 2.80 percent); personal income (from 2.90 percent to 2.88 percent); and employment (fro m 1.20 percent to 1.17 percent).

Cost of Control Measures

Most control measures i dentified in the proposed Stat e Strategy rely on the application of current technologies to ac hieve additional emission reductions. Some control measures, however, rely on the development of new technologies. The implementation of these control measures may fundamentally change the ways many products are manufactured, distributed, and used. Whether these changes require the reformulation of a cons umer product or gaso line, retrofit of diesel trucks and buses, more st ringent standards on in-board and outboard marine engines or modernization of port trucks, we assumed that they impose costs on businesses. This analysis provi des estimates of those direct costs.

ARB staff estimated the cost of each c ontrol measure using the most reliable

information available. For some contro l measures, staff developed control costs directly based on the application of curr ent technologies. For most control measures, however, staff estimated control costs indirectly by multiplying either the cost-effectiveness estimate by the emission reduction associated with the proposed State Strategy measur e, or an estimate of the unit cost increase by the number of products that ar e projected to be used.

The control costs in this report represent very rough estimates of the costs of the proposed State Strategy and may change when more specific regulatory language is developed. There is an ext ensive public process as part of the development of each proposed State Stra tegy measure into a regulation or program. ARB staff gather s detailed industry-specific information and assesses the potential costs to businesses, gover nment, and consumers. The measures will be discussed at public workshops , and proposed regulations will go through the public hearing process as required by law. When specific regulatory language is developed, it will be possible to analyze potential costs andMay 7, 2007 Appendix E 54 economic impacts in more detail. This information will be presented with each regulatory proposal for Board consideration.

Cost-effectiveness Estimates

Cost-effectiveness is an estimate of the unit cost of reducing a pollutant which varies by pollutant and control strat egy. The ARB cost-effectiveness estimation of its past control measures for ROG r eductions from consumer products range from under $0.50 per pound ( $1,000 per ton) to about $6 per pound ($12,000 per ton). For NOx+ROG reductions from mob ile sources, the range varies from less than $0.50 per pound ($1,000 per ton) to abo ut $3 per pound ($6,000 per ton). The figures below show cost-effectivene ss estimates for California consumer products and mobile source control and f uel measures approved by the ARB in the late 1980s, 1990s, and early 2000s.

Cost-Effectiveness Values for Various Consumer Products Regulations

Cost-Effectiveness of Major Regulations

Consumer Products

Automotive
Coatings Consumer

Products Consumer

Products Aerosol Adhesives

Aerosol Coatings Consumer

Products Aerosol Coatings

Consumer

Products Consumer

Products Consumer

Products Consumer

Products

Antiperspirants Aerosol painting Architectural
Coatings

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5

198

8 198 9

1 9 9 0

1 9 9 1

1 992

1 993 1994 1995 1996 199 7 199 8

1 9 9 9
2 0 0 0
2 001 2 002 2003 200 4 200 5
2 0 0 6
2 0 0 7

Board Hearing YearDollars per Pound of VOC ReductionMay 7, 2007 Appendix E 55 Cost-Effectiveness Values for Various Mobile-Source and Fuel Regulations

In the early 2000s, ARB adopted a number ofPM control measures. The costeffectiveness estimates for those meas ures ranged from $7 per pound ($14,000 per ton) to $28 per pound ($56,000 per ton).

For the purpose of this analysis, ARB sta ff made a very conservative assumption

that future emission reductions will be mo re expensive to obtain than the past

reductions. This is because firms are r equired to meet more stringent air quality

standards or to control emission sources previously unregulated because of the high cost of control. In the past, however, businesses have always found innovative ways to meet standards at costs much lower than estimated by staff.

We have no reason to believe that this tr end will not continue in the future. For example, in 1988 the South Coast Air District estimated the cost of NOx reduction from a natural gas-fired pow er plant to be about $25,000 per ton compared to the industry estimate of $45, 000 per ton. By 1995, when the rule requirements became effective, the actual cost of NOx control from power plants was about $12,000 per ton. Similarly, ARB staff estimated the cost to control evaporative emissions from vehicles to be about $170 per vehicle in 1990 while Cost-Effectiveness of Major Regulations

Mobile Sources and Fuel

LSI Engine In-Use Truck

Urban Bus Small Off-Road Marine Engine

2007 HDDE

Off-Road Cycle 2.4 HDDE

NTE & ESC Off-Cycle LDT

2-Stroke Lawn

Off-Road Motorcycle RFG 2

4-Stroke Lawn OBD 1 Off-Road Diesel 0.4 Nox LDV 0.25 HC LDV

5g HDD LEV Medium Truck

0.0 0.5 1.0 1.5 2.0 2.5 3.0

19

85

1 986

1 987 1988 19 8 9 19 90

1 991

1 992

1 993 19 9 4 19 9 5

1 996

1 997

1 998 1999 20 0 0 20 01 2 002
2 003 2004 20 0 5 20 06
2 007

Board Hearing YearDollars per Pound of Ozone PrecursorMay 7, 2007 Appendix E 56 the industry estimate was about $783 per vehicle. When the regulation was implemented, the actual cost of the regul ation was closer to the lower estimate. 3

The cost-effectiveness estimates used fo r the proposed State Strategy ranged from a low of approximately $3,000 to a high of $32,000 per ton of ROG emissions reduced, from $3,000 to $43,000 per ton of NOx em issions reduced, and from $5,000 to $55,000 per ton of PM emissions reduced. The costeffectiveness estimates for SOx range from $8,000 to $43, 000 per ton and are based on the use of clean fuels in ships and cold ironing of ship engines. These two measures are expected to reduce SO x emissions by 75 tons. The tables

below illustrate how the cost of reducing a ton of eit her ROG or NOx would rise as more emission reductions are required. All cost-effectiveness numbers are in

constant 2006 dollars.

Cost-Effectiveness Ranking of the Statewide Control Measures for

ROG Reduction

Statewide Measures Average

C/E (2006 $/ton) Rank Estimated

Statewide

ROG Red. (TPD) Estimated

Statewide

Cumulative

ROG Red. (TPD) More Stringent Cutpoints (S mog Check) $3,020 1 1.6 1.6

Recreational Boat New Standards $4,754 2 14.3 15.9

Consumer Products $4,852 3 30.6 46.5

Low Pressure Evaporative Test $5,427 4 8.2 54.7

Cleaner Line-Haul Locomotives $10,082 5 3.8 58.5

Old Vehicle Retirement $11,426 6 5.9 64.4

Off-Road Recreational Evaporative $13,385 7 20.1 84.5

Cleaner In-Use Off-Road E quipment $13,600 8 7.1 91.6

Reformulated Gasoline Program $14,253 9 16.0 107.6

High Mileage Vehicles (Smog Check) $15,773 10 1.0 108.6

Older Vehicle Inspection (Smog Check) $21,303 11 6.3 114.9

Motorcycle Inspection (Smog Check) $22,780 12 4.1 119.0

Cleaner In-Use Heavy-Duty Trucks $31,789 13 22.3 141.3

3 Lents, J.; Barnes, K.; Nikkila, N.; and Tatsutani, M.; The Regulation of Automobile Emissions: A Case Study. In Environmental Regulation and Technology Innovation: Controlling Mercury

Emissions from Coal-fired Boilers. Northeast States for Coordinated Air Use Management, Boston, MA, September 2000.May 7, 2007 Appendix E 57 Cost-Effectiveness Ranking of the Statewide Control Measures for

NOx Reduction

Statewide Measures Average

C/E (2006 $/ton) Rank Estimated

Statewide

NOx Red.

(TPD) Estimated

Statewide

Cumulative

NOx Red.

(TPD) More Stringent Cutpoints (S mog Check) $3,020 1 4.1 4.1

Recreational Boat New Standards $4,754 2 1.3 5.4

Clean Up Existing Harbor Craft $4,964 3 16.3 21.7

Cleaner Ship Engines and Fuels $8,092 4 94.4 116.1

Cleaner Line-Haul Locomotives $10,082 5 40.5 156.6

Old Vehicle Retirement $11,426 6 4.8 161.4

Cleaner In-Use Off-Road E quipment $13,600 7 27.8 189.2

High Mileage Vehicles (Smog Check) $15,280 8 3.3 192.5

Light/Med. Duty Diesels (Sm og Check) $18,600 9 1.1 193.6

Old Vehicle Inspection (Smog Check) $21,303 10 14.5 208.1

Motorcycle Inspection (Smog Check) $22,780 11 1.1 209.2

Cleaner In-Use Heavy-Duty Trucks $31,789 12 193.8 403.0

Port Truck Modernization $32,536 13 2.0 405.0

Auxiliary Ship Engine Cold Ironing $42,866 14 26.0 431May 7, 2007 Appendix E 58 Cost-Effectiveness Ranking of the Statewide Control Measures for

PM2.5 Reduction

Statewide Measures Average

C/E (2006 $/ton) Rank Estimated

Statewide

ROG Red.(TPD) Estimated

Statewide

Cumulative

ROG Red. (TPD) Clean Up Existing Harbor Craft $4,964 1 0.8 0.8

Cleaner Ship Engines and Fuels $7,553 2 11.7 12.5

Cleaner Line-Haul Locomotives $10,082 3 1.3 13.8

Old Vehicle Retirement $11,426 4 0.1 13.9

Lt./Med. Duty Diesels (Smoke Check) $18,600 5 0.1 14.0

Cleaner In-Use Off-Road E quipment $20,899 6 6.6 20.6

Cleaner In-Use Heavy-Duty Trucks $31,789 7 12.7 33.3

Truck Fleet Modernization $32,536 8 0.6 33.9

Auxiliary Ship Engine Cold Ironing $42,866 9 0.4 34.3

Visible Smoke Test (Smoke Check) $54,782 10 0.4 34.7

Annual Costs

Annual direct costs of all proposed State Strat egy measures in 2014 are estimated to be approximately $4.6 billion. This represents about 0.2 percent of the California Gross State Product (GSP) in 2014. GSP measures the value of all goods and services produced in California in a given year.

The table below provides estimates of total annual costs of the proposed State Strategy by source categories for the y ear 2014. Measures to reduce emissions from heavy-duty trucks alone account for 57 percent of annual State Strategy

costs. Measures to reduce emissi ons from passenger cars and heavy-duty

trucks combined account for 66 percent of the costs.

Measures to reduce emissions from goods movement at Califor nia ports account for 26 percent of annual proposed State Strategy costs, of which about 81 percent stems from the use of cleaner engines and fuel for ships and the application of cold ironing to auxiliary ship engines. The remaining annual State Strategy cost is associated with measures that intend to reduce emissions from construction equipment (4 percent),May 7, 2007 Appendix E 59 off-road engine exhaust and evaporation (3 percent), and consumer products (1 percent). All costs are in constant 2006 dollars.

Estimates of Total Annual Costs of the Proposed State Strategy for 2014 (Millions of 2006 Dollars)

Statewide

Cost % of

Total Passenger Vehicles: 396.6 8.6 Smog Check: Low Pressure Evaporative Test 16.2 More Stringent Cutpoints 6.3 Annual Inspections for Older Vehicles 161.7 Annual Inspections for High Annual Mileage Vehicles 24.8

Add Visible Smoke Test 8.0 Inspection of Light-Duty Diesels 8.2 Inspection of Motorcycles 43.2

Other:

Old Vehicle Retirement 45.0 Modifications to Reformulated Gasoline Program 83.2

Trucks: 2,654.8 57.4 Cleaner In-Use Heavy-Duty Trucks 2,654.8

Goods Movement: 1,186.2 25.7 Clean Up Existing Harbor Craft 31.0 Auxiliary Ship Engine Cold Ironi ng & Other Clean Technology 422.4 Cleaner Main Ship Engines and Fuels 534.0

Accelerated Introduction of Clean er Line-Haul Locomotives 167.9

Port Truck Modernization 30.9 Construction Equipment: 206.0 4.4 Cleaner In-Use Off-Road Equipment 206.0 Evaporative & Exhaust Standards: 125.3 2.7

New Emission Standards for Recreational Boats 27.1 Off-Road Recreational Vehicle Expanded Emission Standards 98.2

Consumer Products: 54.2 1.2 Tighten Standards 54.2

Total 4,623.1 100.0

Annual costs of the proposed State Strategy can also be classified by the type of pollutants. The table be low provides a list of a ffected pollutants and their

associated costs. As shown in the follo wing table, NOx cont rol accounts for 75 percent of total annual costs, ROG control for 15 percent, SOx control for 5 percent and PM2.5 for 5 percent. Of $4.6 billion total annual statewide costs, the

cost for South Coast businesses and cons umers will be $1.3 billion or 29 percent of statewide costs, and for San Joaqui n Valley businesses and consumers it will be $757 million or 16 percent of the statewide costs.May 7, 2007 Appendix E 60 Estimated Annual Costs of the Propo sed State Strategy by Pollutants (Millions of 2006 Dollars)

Annual Costs Pollutant Statewide South Coast San Joaquin % of

Total ROG $ 699.9 $ 227.8 $113.9 15 NOx $3,449.7 $ 976.5 $608.3 75 SOx $ 230.0 $ 61.1 N/A 5 PM2.5 $ 243.5 $ 63.2 $ 35.1 5

Total $4,623.1 $1,328.6 $757.3 100.0

In order to estimate the total impac t of the proposed Stat e Strategy on the California economy, we also classified these costs according to the latest

E-DRAM industrial sector classificati ons. The new model has 108 industrial sectors, of which six industrial sectors and one hous ehold sector would be affected directly by the proposed State Strategy. The next table provides estimates of total annual costs by a ffected industries and government. About 1 percent of the total annual cost would be borne by government and about 83 percent by transportation industry. T he balance will be borne by the vehicle service industry (6 percent), constructi on industry (4 percent), boat and shipping repair industry (3 percent), petroleum refinery industry (2 percent), and chemical and drug industry (1 percent).

Estimates of Total Annual Costs of Pr oposed State Strategy by Affected

Industries for 2014 (Millions of 2006 Dollars)

Industry Annual Costs %Total Boat and Ship Building Repair $ 125.3 3 Chemical and Drugs Manufacturing $ 54.2 1 Construction Industry $ 206.0 4 Government Payments to Household $ 45.0 1 Petroleum Refining $ 83.2 2

Vehicle Services $ 268.4 6
Transportation $3,841.0 83

Total $4,623.1 100

Economic Impacts

Control costs provide a means to estima te the direct expenditures that will be incurred by California businesses, gover nments, and individuals to meet the requirements of the proposed State Strategy . These costs would in turn bring about additional (indirect) changes in the California economy that may increase

the overall costs. Increased control cost s, for example, may result in higher product prices. California firms may respond by cutting back production andMay 7, 2007 Appendix E 61 decreasing employment. On the other hand, the planned control measures may

also increase demand for environmental products and services, thus inducing firms supplying those products and serv ices to expand their production and increase their hiring of workers.

This change in costs will in turn a ffect other industries both negatively and positively. The net effect on the California economy of these activities hinges on the extent to which products and se rvices are obtained locally. Using a macroeconomic model, staff estimated the net effects of these activities on affected industries and the overall economy. The California industries affected most are those engaged in the production, distribution, sales, and use of passenger vehicles and trucks, goods mo vement, construction and agricultural equipment, engine exhaust and evaporatio n, and consumer products.

The economic model, however, does not account for the enormous benefits to

California businesses and citize ns that air quality regulat ions will bring. Improved air quality reduces illness and infant mo rtality and increases natural resources and work force productivity. Contro l programs also induce significant advancement of clean technologies. As st ated earlier, ARB staff estimates that

the benefits to California fr om currently adopted air pollution control measures exceed the costs by about three to one. That is, each dollar spent on clean air generates, on average, three dollars in so cietal benefits that improve the quality

of life.

Environmental-Dynamic Revenue Analysis Model (E-DRAM)

The overall impact of all direct and indi rect economic effects associated with the planned control measures ar e estimated using a comput able general equilibrium (CGE) model of the California econom y. A CGE model simulates various economic relationships in a market econom y where prices and production adjust in response to changes in behavior resulting from regulatory changes. More specifically, it describes the rela tionships among producers, consumers, government, and the rest of t he world. The CGE model used for this analysis is the latest updated version of the En vironmental Dynamic Revenue Analysis Model (E-DRAM). E-DRAM was firs t developed as DRAM for the California Department of Finance 4 . The model can be used to measure the total impact of a change caused by a regulation in one in dustry on all other industries within California. The economic impact results are measured in terms of changes in the State output, personal income, and employment.

The new model is based on a revised database called a social accounting matrix (SAM). The revisions to SAM include a ca libration of the base year in the model to calendar year 2003 from fiscal year 1998-1999, an updating of energy data, and a more detailed sectoring of the California economy. The new E-DRAM

4 For a complete description of DRAM, see Berc k, Peter, E. Golan and B. Smith, “Dynamic Revenue Analysis for California, Califor nia Department of Finance, Summer 1996.May 7, 2007 Appendix E 62 divides the California economy into 174 distinct sectors, consisting of 108 industrial sectors, two fact or sectors (labor and capital), eight household sectors (classified by income level), nine co mposite goods sectors, one investment sector, and 45 government sectors (sev en federal, 27 State, and 11 local), and one sector that represents the rest of the world.

Data for the industrial sectors originated with the Bureau of Economic Analysis of the U.S. Department of Commerce, based on the Census of Business – a detailed survey of companies conducted in the U.S. every five years. The conversion of national data to updated Calif ornia data is accomplished by Impact Analysis for Planning (IMPLAN), a program that primarily utilizes state-level employment data to scale nat ional-level industrial data down to the size of a

state.

In much the same way as firms, households are al so aggregated. California households were divided into categories based upon their taxable income. There are seven such categories in the model , each one corresponding to a California personal income tax marginal tax rate (0, 1, 2, 4, 6, 8, and 9.3 percent). Thus, the income for the “one-percent” househo ld is calculated by adding up the income from all households in the one-percent bracket.

Similarly, the expenditur e of the one-percent household on agricultural goods is calculated by adding up all expenditu re on agricultural goods for these

households. The total ex penditure on agricultural goods is found by adding the expenditure of all households together.

Overall Economic Impact

Increased costs of the propos ed State Strategy will affe ct the California economy through many complex interactions. E-DRAM was developed to simulate many of these complex interactions. Using t he model, ARB staff, in consultation with UC Berkeley researchers, conducted an a ssessment of the economic impacts of the proposed State Strategy on the California economy.

The results shown below are based on pr eliminary emission reduction estimates and may change slightly. ARB staff will perform a confirmatory analysis with EDRAM prior to the heari ng for Board approval.

The following table summarizes the impact of the proposed State Strategy on the California economy in the year 2014, bas ed on the E-DRAM results. We project the costs of the proposed St ate Strategy will reduce Ca lifornia economic output by roughly $9 billion (0.3 percent) and Cali fornia employment by approximately 37,000 jobs (0.2 percent) in 2014. Pe rsonal income would also decline by roughly $5 billion (0.3 percent) in 2014.May 7, 2007 Appendix E 63 Impact on the California Economy of Pr oposed State Strategy in the Year

2014 (Billions of 2006 Dollars)

California Economy Without State Strategy With State Strategy Difference (Impact) % Total

Output $2,948 $2,939 -$ 9 -0.3 Personal Income $1,739 $1,734 -$ 5 -0.3 Employment (thousands) 17,782 17,745 - 37 -0.2

Conclusion

Total annual direct costs associated with the proposed State Strategy are estimated to be approximately $4.6 billion in 2014, 29 percent of which will be on South Coast residents and 16 percent on San Joaquin residents. Accounting for indirect costs, the propos ed State Strategy is expe cted to reduce California economic output by about $9 billion, personal income by about $5 billion, and employment by about 37,000 in 2014. In th e context of the St ate’s economy, the economic impact of the propos ed State Strategy is small and is not expected to impose a noticeable impact. It should be noted here that the proposed State Strategy would bring about significant so cietal benefits to Californians. These benefits, which are difficult to expre ss solely in economic terms, are not quantified in this analysis. Prior analyse s have estimated that the benefits of California’s air quality regulations exceed the costs by a ratio of about three to

one.