Document ID: EPA-HQ-OAR-2004-0022-0502
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2005-09-14T04:00Z

IEc
DRAFT:
May
2005
8­
1
COMPARISONS
OF
COSTS,
BENEFITS,
AND
OTHER
IMPACTS
CHAPTER
8
_________________________________________________________________________________

A
final
component
of
this
assessment
of
the
hazardous
waste
combustion
(
HWC)
maximum
achievable
control
technology
(
MACT)
replacement
standards
is
a
comparison
of
the
costs
and
benefits
of
the
rule.
This
chapter
uses
two
approaches
for
this
comparison.
We
first
consider
costeffectiveness
measures
which
provide
estimates
of
expenditures
per
unit
reduction
of
emissions
for
each
air
pollutant
and
estimates
of
the
cost
per
unit
of
benefit
achieved
by
the
rule.
We
then
compare
the
social
costs
of
the
replacement
standards
with
the
total
monetized
benefits
of
the
rule.
Costbenefit
analysis
is
a
central
feature
of
virtually
all
economic
assessments
and
evaluates
the
economic
efficiency
of
environmental
policies
by
measuring
their
costs
and
benefits,
and
hence
their
net
impacts
on
society.
From
an
economic
viewpoint,
the
standards
would
enhance
economic
efficiency
if
those
who
gain
from
the
rule
could
compensate
those
who
experience
a
welfare
loss
because
of
the
standards
and
still
remain
better
off.
Cost­
benefit
and
cost­
effectiveness
analyses,
however,
should
not
be
the
only
tools
used
in
the
establishment
of
any
final
regulatory
action.
The
HWC
MACT
replacement
standards
are
expected
to
provide
other
benefits
that
are
not
expressed
in
monetary
terms.
When
these
benefits
are
taken
into
account,
along
with
equity­
enhancing
effects
such
as
environmental
justice
and
impacts
on
children's
health,
the
benefit­
cost
comparison
becomes
more
complex.
Consequently,
the
final
regulatory
decision
becomes
a
policy
judgement
that
takes
into
account
efficiency
as
well
as
equity
concerns.

COST­
EFFECTIVENESS
ANALYSIS
Overview
We
developed
two
types
of
cost­
effectiveness
measures:

°
cost
per
unit
reduction
of
emissions
for
each
air
pollutant;
and
IEc
DRAFT:
May
2005
1
Martineau,
Robert
J.
and
David
P.
Novello,
eds.
1998.
The
Clean
Air
Act
Handbook,
American
Bar
Association
Publishing,
Chicago,
as
cited
in
U.
S.
EPA,
Assessment
of
the
Potential
Costs,
Benefits,
and
Other
Impacts
of
the
Hazardous
Waste
Combustion
MACT
Standards:
Final
Rule,
Office
of
Solid
Waste,
July
1999.

2
While
this
presents
a
high­
end
estimate
of
costs
(
i.
e.,
there
are
no
market
adjustments),
it
is
consistent
with
the
method
used
to
estimate
emissions
reductions
(
e.
g.,
all
facilities
operate
in
compliance
with
the
HWC
MACT
replacement
standards).
This
is
a
conservative
estimate
of
cost­
effectiveness,
because
it
does
not
take
into
account
either
the
market­
adjusted
costs
or
reduced
emissions
(
e.
g.,
increased
benefits)
associated
with
systems
that
stop
burning
hazardous
waste
in
response
to
the
standards.

8­
2
°
cost
per
unit
of
benefit
(
e.
g.,
benefits
in
the
form
of
health
and
ecological
improvements).

The
first
cost­
effectiveness
measure
is
useful
for
comparing
the
resources
required
to
reduce
emissions
under
different
air
pollution
policies.
Moreover,
EPA
has
typically
used
this
costeffectiveness
measure
(
defined
as
"
dollar­
per­
ton­
of­
pollutant­
removed")
to
assess
the
decision
to
go
beyond­
the­
floor
(
BTF)
for
MACT
standards.
1
The
second
measure,
cost
per
unit
benefit,
provides
insight
into
how
efficiently
policies
achieve
specific
environmental
or
health
improvements
(
e.
g.,
cost
per
avoided
premature
death).
However,
because
this
measure
only
includes
monetized
benefits,
it
overestimates
costs
per
unit
benefit
and
is
therefore
of
value
primarily
in
comparing
rules
with
similar
non­
monetized
benefits.

Cost­
Effectiveness:
Dollar
per
Unit
of
Reduced
Emissions
There
are
several
ways
to
assess
the
cost­
effectiveness
of
the
HWC
MACT
replacement
standards.
One
approach
is
to
divide
the
total
costs
of
the
standards
by
the
total
emissions
reductions
achieved
across
all
pollutants.
Aggregate
cost­
effectiveness
figures,
however,
are
misleading
because
they
do
not
account
for
differences
in
the
cost­
effectiveness
of
reducing
emissions
of
different
pollutants
or
reflect
differences
in
the
toxicity
of
different
pollutants.
To
assess
cost­
effectiveness
more
appropriately,
we
disaggregate
emissions
reductions
and
control
costs
by
pollutant.
The
development
of
these
pollutant­
specific
cost­
effectiveness
estimates
helps
EPA
compare
alternative
emissions
standards
for
individual
pollutants.
The
two
analytic
components
of
pollutant­
specific
costeffectiveness
measures
are
as
follows:

°
emission
control
expenditures
per
air
pollutant
for
each
regulatory
option;
and
°
emission
reductions
by
pollutant
under
each
regulatory
option.

To
estimate
cost­
effectiveness
by
pollutant,
we
use
engineering
cost
information
for
various
pollution
control
measures
as
described
in
Chapter
4.2
Within
each
source
category
(
cement
kilns,
incinerators,
and
LWAKs),
we
sum
pollutant­
specific
costs
and
emissions
reductions
across
individual
IEc
DRAFT:
May
2005
3
We
evaluate
the
cost
effectiveness
of
the
Agency
Preferred
Approach
incremental
to
the
Option
A
Floor
to
ascertain
the
marginal
cost
effectiveness
of
going
beyond
the
Option
A
Floor.

8­
3
systems.
When
calculating
these
values,
we
make
adjustments
for
control
equipment
that
simultaneously
reduces
emissions
for
more
than
one
air
pollutant.
For
example,
carbon
injection
or
carbon
beds
can
control
both
mercury
and
dioxins/
furans.
In
addition,
a
fabric
filter
that
may
be
required
as
part
of
a
carbon
injection
system
will
also
reduce
emissions
of
particulate
matter,
semivolatile
metals,
and
low­
volatile
metals.
In
the
case
of
carbon
injection
(
CI),
we
assign
costs
to
individual
pollutants
based
on
the
emissions
reduction
required
for
each
pollutant.
For
example,
if
the
installation
of
carbon
injection
equipment
is
expected
at
a
combustion
system
that
requires
a
40
percent
reduction
in
dioxin
emissions
and
an
80
percent
reduction
in
mercury
emissions,
the
individual
cost
calculations
for
this
system
are:

Cost
for
Mercury
control
=
[
80/(
80+
40)
x
CI
cost]

Cost
for
Dioxin
control
=
[
40/(
80+
40)
x
CI
cost]

These
calculations
split
the
costs
of
the
carbon
injection
system
proportionately
between
dioxin
and
mercury.

The
emissions
reductions
for
the
Option
A
Floor,
the
Option
C
Floor,
and
the
Option
D
Floor
are
calculated
as
the
difference
between
baseline
emissions
(
e.
g.,
emissions
under
the
2002
Interim
Standards)
and
the
emissions
allowed
under
each
option.
Emissions
reductions
associated
with
the
Agency
Preferred
Approach,
which
is
a
beyond­
the­
floor
version
of
Option
A,
are
calculated
twice:
incremental
to
baseline
emissions
and
also
incremental
to
the
Option
A
Floor.
3
Exhibit
8­
1
indicates
the
regulatory
options
under
which
emission
reductions
are
expected
for
each
pollutant.
Where
there
is
no
value
in
the
table,
no
reduction
in
emissions
is
expected.
For
example,
in
the
baseline
all
LWAKs
and
incinerators
meet
the
mercury
standards
specified
under
the
Option
A
Floor.
Since
none
of
the
controls
these
systems
are
expected
to
implement
for
other
pollutants
under
the
Option
A
Floor
are
likely
to
control
mercury
emissions,
incinerators
and
LWAKs
are
unlikely
to
reduce
mercury
emissions
under
the
Option
A
Floor.
In
addition,
combustion
systems
that
are
required
to
reduce
emissions
of
just
one
air
pollutant
may
reduce
emissions
of
other
pollutants
as
they
implement
pollution
control
measures
for
the
former.
Whether
these
ancillary
reductions
are
realized
depends
on
which
pollution
control
measures
facilities
decide
to
implement.
IEc
DRAFT:
May
2005
8­
4
Exhibit
8­
1
EXPECTED
AGGREGATE
ANNUAL
EMISSION
REDUCTIONS
Source
Options
Pollutant
Dioxin
(
TEQ),
g
Hg,
Tons
SVM,
Tons
LVM,
Tons
PM,
Tons
TCl,
Tons
LWAK
Baseline
to
Agency
Preferred
Approach
­
­
0.01
­
­
­

Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
­
­

Baseline
to
Option
A
Floor
­
­
0.01
­
­
­

Baseline
to
Option
C
Floor
­
­
0.01
­
­
­

Baseline
to
Option
D
Floor
­
­
­
­
­
­

Incinerators
Baseline
to
Agency
Preferred
Approach
0.20
­
0.15
0.04
10.62
­

Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
­
­

Baseline
to
Option
A
Floor
0.20
­
0.15
0.04
10.62
­

Baseline
to
Option
C
Floor
0.20
­
0.49
0.23
10.62
­

Baseline
to
Option
D
Floor
0.20
­
0.86
0.26
129.35
­

Cement
Kilns
Baseline
to
Agency
Preferred
Approach
­
0.09
0.46
0.11
38.40
­

Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
­
­

Baseline
to
Option
A
Floor
­
0.09
0.46
0.11
38.40
­

Baseline
to
Option
C
Floor
­
0.09
1.95
0.12
38.39
­

Baseline
to
Option
D
Floor
­
0.39
3.15
0.19
479.90
­

Liquid
Boilers
Baseline
to
Agency
Preferred
Approach
0.20
0.14
1.66
8.35
1,581.66
­

Option
A
Floor
to
Agency
Preferred
Approach
0.06
­
­
­
­
­

Baseline
to
Option
A
Floor
0.14
0.14
1.66
8.35
1,581.66
­

Baseline
to
Option
C
Floor
0.14
0.14
1.66
6.80
1,581.66
­

Baseline
to
Option
D
Floor
0.14
0.22
1.83
11.66
2,356.91
­
IEc
DRAFT:
May
2005
Exhibit
8­
1
EXPECTED
AGGREGATE
ANNUAL
EMISSION
REDUCTIONS
Source
Options
Pollutant
Dioxin
(
TEQ),
g
Hg,
Tons
SVM,
Tons
LVM,
Tons
PM,
Tons
TCl,
Tons
8­
5
Coal
Boilers
Baseline
to
Agency
Preferred
Approach
­
0.01
0.66
0.88
507.00
­

Option
A
Floor
to
Agency
Preferred
Approach
­
­
0.45
0.39
468.42
­

Baseline
to
Option
A
Floor
­
0.01
0.20
0.49
38.59
­

Baseline
to
Option
C
Floor
­
0.01
0.20
0.49
38.59
­

Baseline
to
Option
D
Floor
­
0.01
0.20
0.49
38.59
­

HCl
Production
Furnaces
Baseline
to
Agency
Preferred
Approach
­
­
­
­
­
106.94
Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
­
­

Baseline
to
Option
A
Floor
­
­
­
­
­
106.94
Baseline
to
Option
C
Floor
­
­
­
­
­
106.94
Baseline
to
Option
D
Floor
­
­
­
­
­
126.78
We
develop
individual
cost­
effectiveness
(
CE)
measures
for
each
MACT
standard
as
follows:

°
Cost­
Effectiveness
Measures
for
the
Option
A
Floor,
the
Option
C
Floor,
and
the
Option
D
Floor
 
Costs
and
emission
reductions
are
incremental
to
the
baseline
(
e.
g.,
compliance
with
the
2002
Interim
Standards).

°
Cost­
Effectiveness
Measures
for
Agency
Preferred
Approach
 
Costs
and
emission
reductions
are
incremental
to
the
baseline
and
to
the
Option
A
MACT
Floor.

Cost­
Effectiveness
Results
We
summarize
the
cost­
effectiveness
results
in
Exhibit
8­
2
by
pollutant,
source
category,
and
IEc
DRAFT:
May
2005
8­
6
regulatory
option.
Cost­
effectiveness
results
are
measured
in
$
1,000
per
reduced
ton
of
emissions
for
all
pollutants
except
dioxins.
Cost­
effectiveness
for
dioxins
is
expressed
as
$
1,000
per
reduced
gram
of
toxicity
equivalent.
In
some
cases,
we
do
not
present
cost­
effectiveness
figures
because
facilities
are
not
required
to
achieve
emissions
reduction
under
a
specific
standard.
For
example,
all
incinerators
currently
meet
the
Option
A
Floor
standards
for
mercury
emissions;
therefore,
we
do
not
report
incinerator
cost­
effectiveness
results
for
the
mercury
standard
under
the
Option
A
Floor.
Below,
we
summarize
key
findings
from
the
results:

Exhibit
8­
2
COST­
EFFECTIVENESS
RESULTSa
Pollutant
Source
Options
Dioxin
(
TEQ),
$
1,000/
gram
Hg,
$
1,000/
ton
SVM,
$
1,000/
ton
LVM,
$
1,000/
ton
PM,
$
1,000/
ton
TCl,
$
1,000/
ton
LWAKs
Baseline
to
Agency
Preferred
Approach
­
­
$
1,788
$
5,850
­
­

Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
­
­

Baseline
to
Floor
Option
A
­
­
$
1,788
$
5,850
­
­

Baseline
to
Floor
Option
C
­
­
$
1,788
$
5,850
­
­

Baseline
to
Floor
Option
C
­
$
117,743
­
$
10,368
­
­

Incinerators
Baseline
to
Agency
Preferred
Approach
$
4,258
­
$
1,021
$
760
$
90.44
­

Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
­
­

Baseline
to
Floor
Option
A
$
4,258
­
$
1,021
$
760
$
90.44
­

Baseline
to
Floor
Option
C
$
4,258
­
$
4,942
$
9,116
$
90.44
­

Baseline
to
Floor
Option
D
$
4,258
­
$
2,360
$
4,052
$
18.17
­

Cement
Kilns
Baseline
to
Agency
Preferred
Approach
­
$
10,002
$
209
$
11,433
$
15.81
­

Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
­
­

Baseline
to
Floor
Option
A
­
$
10,002
$
209
$
11,433
$
15.81
­

Baseline
to
Floor
Option
C
­
$
10,002
$
1,394
$
17,200
$
15.81
­

Baseline
to
Floor
Option
D
­
$
24,342
$
442
$
5,156
$
5.60
­
IEc
DRAFT:
May
2005
Exhibit
8­
2
COST­
EFFECTIVENESS
RESULTSa
Pollutant
Source
Options
Dioxin
(
TEQ),
$
1,000/
gram
Hg,
$
1,000/
ton
SVM,
$
1,000/
ton
LVM,
$
1,000/
ton
PM,
$
1,000/
ton
TCl,
$
1,000/
ton
8­
7
Liquid
Boilers
Baseline
to
Agency
Preferred
Approach
$
447
$
51,829
$
3,241
$
429
$
8.53
­

Option
A
Floor
to
Agency
Preferred
Approach
$
647
­
­
­
­
­

Baseline
to
Floor
Option
A
$
364
$
51,829
$
3,241
$
429
$
8.53
­

Baseline
to
Floor
Option
C
$
364
$
52,407
$
3,676
$
231
$
8.53
­

Baseline
to
Floor
Option
D
$
364
$
62,753
$
1,369
$
261
$
9.37
­

Coal
Boilers
Baseline
to
Agency
Preferred
Approach
­
$
23,250
$
223b
$
204b
$
2.82
­

Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
$
2.57
­

Baseline
to
Floor
Option
A
­
$
23,250
$
715
$
368
$
5.92
­

Baseline
to
Floor
Option
C
­
$
23,250
$
715
$
368
$
5.92
­

Baseline
to
Floor
Option
D
­
$
23,250
$
715
$
368
$
5.92
­

HCl
Production
Furnaces
Baseline
to
Agency
Preferred
Approach
­
­
­
­
­
$
1.56
Option
A
Floor
to
Agency
Preferred
Approach
­
­
­
­
­
­

Baseline
to
Floor
Option
A
­
­
­
­
­
$
1.56
Baseline
to
Floor
Option
C
­
­
­
­
­
$
1.56
Baseline
to
Floor
Option
D
­
­
­
­
­
$
2.47
Notes:
a.
This
table
includes
pollutants
where
more
than
one
option
was
under
consideration.
b.
Although
the
SVM
and
LVM
standards
for
coal
boilers
are
the
same
under
the
Agency
Preferred
Approach
and
the
Option
A
Floor,
the
PM
controls
required
under
the
Agency
Preferred
Approach
have
the
ancillary
effect
of
reducing
SVM
and
LVM
emissions.
We
incorporate
these
additional
emissions
reductions
into
our
costeffectiveness
estimates.
Because
the
Agency
Preferred
Approach
does
not
require
coal
boilers
to
achieve
SVM
or
LVM
emissions
reductions
beyond
those
associated
with
the
Option
A
Floor,
we
do
not
estimate
the
incremental
cost­
effectiveness
of
coal
boilers
complying
with
the
Agency
Preferred
Approach
for
SVM
and
LVM
incremental
to
the
Option
A
Floor.

°
Across
options
and
combustion
sectors,
cost­
effectiveness
measures
exhibit
wide
variability.
As
shown
in
Exhibit
8­
2,
the
cost­
effectiveness
of
the
HWC
MACT
replacement
standard
options
ranges
from
$
1,600
per
ton
of
reduced
IEc
DRAFT:
May
2005
4
"
Less
cost­
effective"
means
that
the
emissions
reduction
is
achieved
at
a
higher
cost
per
ton.

8­
8
total
chlorine
emissions
from
HCl
production
furnaces
to
$
118
million
per
ton
of
reduced
mercury
emissions
from
LWAKs.
Dioxin
control
ranges
from
$
364,000
to
$
4.3
million
per
gram
reduced.

°
The
most
cost­
effective
reductions
in
PM
emissions
under
the
Agency
Preferred
Approach
occur
at
coal
boilers,
where
the
cost­
effectiveness
of
reducing
PM
emissions
is
approximately
$
2,800
per
ton.
In
contrast,
the
costeffectiveness
of
reducing
PM
emissions
at
incinerators
under
the
Agency
Preferred
Approach
is
approximately
$
90,400
per
ton.

°
The
reduction
in
dioxin
emissions
from
liquid
boilers
under
the
Agency
Preferred
Approach
incremental
to
the
Option
A
Floor
is
less
cost­
effective
than
the
reduction
achieved
under
the
Option
A
Floor.
4
In
contrast,
the
PM
emissions
reductions
achieved
by
coal
boilers
under
the
Agency
Preferred
Approach
incremental
to
the
Option
A
Floor
are
more
cost­
effective
that
the
reductions
achieved
under
the
Option
A
Floor.

Cost­
Effectiveness:
Dollar
per
Health
and
Ecological
Benefit
This
section
evaluates
cost­
effectiveness
per
unit
benefit
(
e.
g.,
cost
per
health
case
avoided).
EPA
developed
this
second
cost­
effectiveness
analysis
to
analyze
and
understand
the
relative
costs
of
achieving
specific
benefits
as
standards
become
increasingly
more
stringent.
The
two
components
of
this
benefit
cost­
effectiveness
measure
are
as
follows:

°
pollutant­
specific
health
and
ecological
benefits
associated
with
the
replacement
standards;
and
°
control
expenditures
associated
with
the
pollutant­
specific
emissions
reductions
responsible
for
these
benefits.

Approach
for
Calculating
Cost­
Effectiveness
per
Unit
Benefit
In
order
to
relate
costs
to
specific
benefits,
we
identify
the
pollutants
associated
with
specific
benefits
and
determine
the
costs
of
controlling
emissions
of
these
pollutants.
To
determine
the
costs
associated
with
pollutant­
specific
emissions
reductions,
we
do
not
use
estimates
of
social
costs,
but
instead
use
the
direct
compliance
(
engineering
cost)
estimates
presented
in
Chapter
4,
similar
to
our
IEc
DRAFT:
May
2005
5
Following
this,
all
caveats
regarding
the
cost
methodology
discussed
in
the
dollar
per
unit
of
reduced
pollutant
section
are
also
relevant
to
this
benefits
cost­
effectiveness
analysis.
As
stated
below,
the
analysis
does
not
incorporate
toxicity
metrics
into
emissions
estimates.
In
addition,
the
cost­
effectiveness
analysis
assumes
that
all
systems
will
decide
to
comply
with
the
standards.
Costs
may
also
be
overestimated
for
some
pollutants
since
the
feed
control
cost
measures
represent
a
high­
end
estimates
of
costs.
Moreover,
the
analysis
does
not
account
for
several
technological
issues,
such
as
the
relative
ease
with
which
a
device
can
control
one
pollutant
versus
another.
Finally,
the
quantified
benefits
included
in
this
assessment,
and
therefore
the
cost
effectiveness
estimates,
do
not
capture
all
of
the
benefits
associated
with
the
HWC
MACT
replacement
standards.

8­
9
analysis
of
costs
per
unit
emissions
reduction.
5
Because
estimates
of
social
costs
include
costs
for
some
facilities
that
send
waste
offsite
instead
of
complying
with
the
standards,
it
is
not
possible
to
identify
the
pollutant(
s)
associated
with
these
costs.
Based
on
this
engineering
cost
information,
we
estimate
the
cost
effectiveness
per
unit
benefit
by
dividing
the
costs
associated
with
reducing
emissions
of
a
specific
pollutant
by
the
benefits
resulting
from
these
emissions
reductions.
For
example,
we
calculate
the
cost
effectiveness
of
PM­
related
mortality
benefits
as
follows:

Cost­
Effectiveness
=
Cost
of
controlling
PM
emissions
Number
of
avoided
PM­
related
mortality
cases
=
$
16.8
million
÷
0.46
avoided
cases
=
$
36.6
million
per
life
saved.

We
follow
a
similar
procedure
for
calculating
cost­
effectiveness
with
respect
to
morbidity
and
ecological
benefits,
using
the
total
costs
of
control
for
each
pollutant
associated
with
specific
morbidity,
visibility,
and
ecological
effects.
It
is
worth
noting
that
our
cost­
effectiveness
per
unit
benefit
measures
may
be
somewhat
misleading
because
each
measure
reflects
all
of
the
costs
associated
with
a
pollutant
but
just
one
type
of
benefit.
For
example,
the
cost­
effectiveness
measure
associated
with
avoided
PM­
related
mortality
accounts
for
all
of
the
costs
associated
with
controlling
PM
but
reflects
only
the
mortality­
related
benefits,
ignoring
the
benefits
associated
with
reduced
morbidity.
Therefore,
when
comparing
the
cost­
effectiveness
of
different
regulatory
options
with
respect
to
a
specific
pollutant,
it
is
important
to
examine
cost­
effectiveness
estimates
for
all
benefits
associated
with
the
pollutant.

Results
of
Cost­
Effectiveness
per
Unit
Benefit
Analysis
The
primary
health
and
ecological
benefits
of
the
HWC
MACT
replacement
standards
include
avoided
cases
of
premature
mortality
(
cancer
and
non­
cancer),
reduced
morbidity,
improvements
in
visibility,
and
reduced
pollution
to
aquatic
and
terrestrial
ecosystems.
Exhibit
8­
3
presents
the
costeffectiveness
of
achieving
these
benefits.
Below,
we
summarize
the
results.

°
Cost
per
avoided
case
of
mortality:
We
expect
that
the
cost
per
avoided
case
of
PM­
related
mortality
under
the
Agency
Preferred
Approach
will
be
approximately
$
36.6
million.
This
estimate
is
significantly
higher
than
most
estimates
of
the
value
of
a
statistical
life
(
VSL)
found
in
the
economic
IEc
DRAFT:
May
2005
6
More
information
on
the
value
of
a
statistical
life
is
presented
in
Chapter
6.

7
U.
S.
EPA,
The
Benefits
and
Costs
of
the
Clean
Air
Act:
1990
to
2010,
November
1999.

8­
10
valuation
literature.
6
Similarly,
we
estimate
that
the
cost
associated
with
avoiding
dioxin­
related
cancer
deaths
under
the
replacement
standards
is
approximately
$
199.9
million
per
case,
which
is
also
greater
than
the
value
of
a
statistical
life,
as
estimated
in
the
VSL
literature.

°
Cost
per
avoided
case
of
morbidity:
For
avoided
morbidity
impacts
caused
by
PM
emissions,
we
estimate
cost­
effectiveness
of
approximately
$
2,900
per
avoided
morbidity
case.
Morbidity
impacts
reflected
in
this
estimate
include
chronic
bronchitis,
acute
bronchitis,
hospital
admissions
associated
with
respiratory
or
cardiovascular
disease,
upper
and
lower
respiratory
symptoms,
minor
restricted
activity
days,
and
work
loss
days.
We
lack
adequate
information
to
estimate
the
cost­
effectiveness
of
avoided
morbidity
associated
with
reduced
lead
emissions
under
the
replacement
standards.
The
results
of
the
1999
Assessment
suggest
that
the
replacement
standards
will
reduce
blood
levels
from
above
levels
of
concern
(
e.
g.,
above
10

g/
dL)
to
below
levels
of
concern
for
fewer
than
two
children
per
year.
We
are
also
unable
to
assess
the
cost­
effectiveness
of
avoided
morbidity
impacts
associated
with
reduced
mercury
emissions.
These
reductions
may
reduce
the
risk
of
developmental
abnormalities
in
children.

°
Cost
per
visibility
benefit:
Adequate
data
are
not
available
on
the
visibility
benefits
of
the
HWC
MACT
replacement
standards
to
estimate
the
costeffectiveness
of
such
benefits.
Although
we
estimate
the
monetary
value
of
these
benefits
in
Chapter
6
based
on
the
results
of
EPA's
1999
analysis
of
the
Clean
Air
Act,
we
do
not
estimate
the
physical
changes
in
visibility
likely
to
result
from
the
replacement
standards.
7
Such
estimates
would
be
necessary
to
evaluate
the
cost­
effectiveness
of
the
visibility
benefits
associated
with
the
rule.

°
Cost
per
ecological
benefit:
We
are
unable
to
evaluate
the
cost­
effectiveness
of
ecological
benefits
that
may
result
from
the
replacement
standards.
Based
on
information
presented
in
the
1999
Assessment,
we
surmise
that
hazard
quotients
will
fall
from
above
to
below
levels
of
concern
(
i.
e.,
less
than
one)
for
less
than
185
square
kilometers
of
land
and
surface
water,
but
this
estimate
is
highly
uncertain.
The
replacement
standards
may
also
lead
to
improvements
in
forest
health
or
enhance
the
productivity
of
agricultural
land,
although
we
are
unable
to
quantify
these
impacts.
IEc
DRAFT:
May
2005
8­
11
Exhibit
8­
3
COST­
EFFECTIVENESS
PER
UNIT
HEALTH
AND
ECOLOGICAL
IMPROVEMENT
(
2002
dollars
per
unit
benefit)

Benefit
Type
Pollutant
Agency
Preferred
Approach
Floor
Option
A
Floor
Option
C
Floor
Option
D
Cost
of
Controla
Benefit
Cost­
Effectivenessb
Cost
of
Controla
Benefit
Cost­
Effectivenessb
Cost
of
Controla
Benefit
Cost­
Effectivenessb
Cost
of
Controla
Benefit
Cost­
Effectivenessb
Health
Benefits
Avoided
Premature
Mortality
Casesc,
d
PM
$
16.8
million
0.46
avoided
cases
$
36.6
million
per
life
saved
$
15.3
million
0.45
avoided
cases
$
33.6
million
per
life
saved
$
15.3
million
0.45
avoided
cases
$
33.6
million
per
life
saved
$
27.3
million
0.75
avoided
cases
$
36.7
million
per
life
saved
Avoided
Morbiditye
PM
$
16.8
million
5,832
avoided
cases
$
2,900
per
avoided
case
$
15.3
million
5,789
avoided
cases
$
2,600
per
avoided
case
$
15.3
million
5,789
avoided
cases
$
2,600
per
avoided
case
$
27.3
million
9,519
avoided
cases
$
2,900
per
avoided
case
Avoided
Cancer
Deaths
Dioxin
$
1.0
million
0.005
avoided
cases
$
199.9
million
per
life
saved
$
0.9
million
0.004
avoided
cases
$
215.2
million
per
life
saved
$
0.9
million
0.004
avoided
cases
$
215.2
million
per
life
saved
$
0.9
million
0.004
avoided
cases
$
215.2
million
per
life
saved
Avoided
Morbidity
(
lead)
f
SVM
$
5.6
million
fewer
than
2
avoided
cases
Unknown
$
5.7
million
fewer
than
2
avoided
cases
Unknown
$
11.3
million
fewer
than
2
avoided
cases
Unknown
$
5.3
million
fewer
than
2
avoided
cases
Unknown
Visibility
Benefits
Improvements
in
Recreational
Visibility
PM
$
16.8
million
$
0.2
­
$
6.6
million
in
visibility
benefits
Unknown
$
15.3
million
$
0.2
­

$
5.2
million
in
visibility
benefits
Unknown
$
15.3
million
$
0.2
­
$
5.2
million
in
visibility
benefits
Unknown
$
27.3
million
$
0.3
­
$
9.3
million
in
visibility
benefits
Unknown
IEc
DRAFT:
May
2005
Exhibit
8­
3
COST­
EFFECTIVENESS
PER
UNIT
HEALTH
AND
ECOLOGICAL
IMPROVEMENT
(
2002
dollars
per
unit
benefit)

Benefit
Type
Pollutant
Agency
Preferred
Approach
Floor
Option
A
Floor
Option
C
Floor
Option
D
Cost
of
Controla
Benefit
Cost­
Effectivenessb
Cost
of
Controla
Benefit
Cost­
Effectivenessb
Cost
of
Controla
Benefit
Cost­
Effectivenessb
Cost
of
Controla
Benefit
Cost­
Effectivenessb
8­
12
Ecological
Benefits
Area
of
Land
and
Water
with
Reduced
Ecological
Risk
Dioxin,
Mercury,

and
Leadh
$
15.2
million
less
than
185
km2
Unknown
$
15.3
million
less
than
185
km2
Unknown
$
20.8
million
less
than
185
km2
Unknown
$
30.7
million
less
than
185
km2
Unknown
Notes:

a.
Engineering
costs.

b.
Costs
per
unit
benefit.

c.
These
cost­
effectiveness
per
unit
benefit
measures
are
upper
bound
estimates
that
apply
the
full
costs
of
control
(
by
pollutant)
to
a
single
type
of
benefit
(
e.
g.,
lives
saved).
The
cost
per
unit
benefit
measures
should
not
be
reported
in
isolation
from
other
benefit
estimates;
they
should
only
be
used
as
relative
measures
to
compare
across
MACT
standards.

d.
All
figures
are
incremental
from
the
baseline
to
the
HWC
MACT
replacement
standards.

e.
Pm
morbidity
includes
hospital
admissions
from
respiratory
illness
and
cardiovascular
disease,
chronic
bronchitis,
acute
bronchitis,
upper
and
lower
respiratory
symptoms,
minor
restricted
activity
days,
and
work
loss
days.

f.
Avoided
morbidity
associated
with
lead
exposure
is
represented
as
the
number
of
children
whose
blood
lead
levels
fall
below
the
critial
level
of
10
ug/
dL.

g.
Although
we
estimate
monetized
visibility
benefits,
we
do
not
estimate
specific
visibility
impacts
(
e.
g.,
changes
in
visibility
index
values).
Therefore,
we
are
unable
to
calculate
the
costeffectiveness
of
the
visibility
improvements
associated
with
the
HWC
MACT
replacement
standards.

h.
Costs
for
lead
were
estimated
together
with
costs
for
cadmium,
the
other
semi­
volatile
metal
considered
in
this
analysis.
Therefore,
we
use
total
SVM
costs
as
a
proxy
for
lead
costs.
IEc
DRAFT:
May
2005
8­
13
Caveats
and
Limitations
Our
methods
for
calculating
cost­
effectiveness
are
limited
in
several
ways.
First,
with
the
exception
of
dioxin/
furans,
our
estimates
of
costs
per
unit
of
reduced
emissions
do
not
incorporate
any
measure
of
relative
toxicity.
Therefore,
comparing
the
cost­
effectiveness
of
emissions
reductions
across
pollutants
is
misleading.
For
example,
the
cost­
effectiveness
of
reducing
incinerator
emissions
of
dioxins/
furans
is
approximately
$
4,258,000
per
gram
reduced
under
the
Agency
Preferred
Approach.
In
contrast,
the
cost­
effectiveness
of
reducing
LVM
emissions
from
incinerators
is
just
$
760,000
per
metric
ton
reduced.
The
stark
difference
between
dioxin/
furans
and
LVM
cost­
effectiveness
would
suggest
that
it
is
not
cost­
effective
to
regulate
incinerator
emissions
of
dioxins/
furans.
However,
these
cost­
effectiveness
figures
do
not
reflect
differences
in
the
toxicity
of
dioxin
and
LVM
emissions.
Although
the
cost
of
achieving
a
one­
ton
reduction
in
LVM
emissions
is
less
than
the
cost
of
reducing
dioxin
emissions
by
one
gram,
it
is
important
to
consider
the
benefits
associated
with
these
emissions
reductions
rather
than
the
magnitude
of
the
reductions
themselves.

The
second
limitation
of
our
analysis
is
our
assumption
that
all
facilities
continue
to
burn
hazardous
waste
and
implement
emissions
controls
to
comply
with
the
replacement
standards.
As
discussed
in
earlier
chapters
of
this
Assessment,
facilities
may
stop
burning
hazardous
waste
rather
than
make
the
upgrades
necessary
to
comply
with
the
standards.
For
those
facilities
that
send
waste
offsite,
it
is
difficult
to
assign
disposal,
transport,
and
(
for
boilers)
alternative
fuel
costs
to
specific
pollutants.
Additional
limitations
of
our
cost­
effectiveness
analysis
include
the
following:

°
The
feed
control
costing
approach
overestimates
expenditures
per
pollutant.
Feed
control
costs
are
high­
end
estimates
based
on
pollution
control
equipment
costs
and/
or
costs
associated
with
changes
in
the
design,
operation,
and
maintenance
of
existing
pollution
control
equipment.
Combustion
facilities
may
in
fact
be
able
to
implement
waste
feed
control
at
lower
cost.

°
In
cases
where
a
single
pollution
control
device
limits
emissions
of
more
than
one
pollutant,
costs
are
distributed
across
pollutants
in
direct
proportion
to
the
percentage
reduction
in
emissions
required
for
each
pollutant.
We
recognize,
however,
that
this
approach
does
not
reflect
the
relative
efficiency
with
which
a
technology
controls
emissions
of
one
pollutant
versus
another.
In
addition,
because
this
approach
allocates
costs
based
on
the
percent
reduction
in
emissions
required
for
individual
pollutants,
it
does
not
reflect
the
absolute
magnitude
of
the
reductions
for
each
pollutant.

°
The
benefits
included
in
the
cost­
effectiveness
estimates
presented
in
this
chapter
do
not
reflect
the
total
benefits
associated
with
the
replacement
standards.
We
were
unable
to
quantify
many
of
the
benefits
likely
to
result
from
the
standards.
IEc
DRAFT:
May
2005
8­
14
COST­
BENEFIT
COMPARISON
A
comparison
of
the
costs
and
benefits
of
the
HWC
MACT
replacement
standards
provides
an
assessment
of
the
rule's
overall
efficiency
and
impact
on
society.
In
this
section,
we
compare
the
total
social
costs
of
the
rule
with
the
total
monetized
and
non­
monetized
benefits
of
the
standards.
The
total
social
costs
and
monetized
benefits
of
the
Agency
Preferred
Approach
and
three
different
Floor
options
are
summarized
in
Exhibit
8­
4.
The
social
costs
in
the
exhibit
represent
the
market­
adjusted
costs
of
the
rule
and
also
include
government
administrative
costs.
The
benefits
presented
in
Exhibit
8­
4
include
only
those
benefits
that
we
were
able
to
monetize.

Across
all
four
regulatory
options
considered
in
this
analysis,
social
costs
significantly
exceed
monetized
benefits.
However,
the
HWC
MACT
standards
are
expected
to
yield
other
benefits
that
are
not
expressed
in
monetary
terms.
These
include
health
benefits
associated
with
reduced
lead,
mercury,
and
chlorine
emissions
and
ecological
improvements
to
terrestrial
and
aquatic
ecosystems.
The
full
range
of
impacts
associated
with
the
replacement
standards
also
include
equity­
enhancing
effects
such
as
environmental
justice
and
impacts
on
children's
health.
Consequently,
EPA's
final
regulatory
decision
with
respect
to
the
replacement
standards
reflects
policy
judgments
about
efficiency
as
well
as
equity
concerns.
IEc
DRAFT:
May
2005
8­
15
Exhibit
8­
4
BENEFIT
AND
SOCIAL
COST
SUMMARY
(
millions
of
2002
dollars)

Facility
Type
Agency
Preferred
Approach
Floor
Option
A
Floor
Option
C
Floor
Option
D
Human
Health
Benefits
PM­
induced
mortality
$
2.87
$
2.84
$
2.84
$
4.66
PM­
induced
morbidity
$
3.43
$
3.40
$
3.40
$
5.58
Dioxin­
related
cancer
deaths
$
0.03
$
0.03
$
0.03
$
0.03
Visibility
Benefits
Improvements
in
recreational
visibility
$
0.18
­
$
6.63
$
0.18
­
$
5.18
$
0.18
­
$
5.18
$
0.29
­
$
9.32
Social
Costs
Costs
to
Facilities
$
27.03
$
25.79
$
32.83
$
51.53
Government
Costs
$
0.46
$
0.46
$
0.46
$
0.45
Total
Monetized
Benefitsa
$
6.50
­
$
12.95
$
6.45
­
$
11.45
$
6.45
­
$
11.45
$
10.55
­
$
19.58
Total
Social
Costsa
$
27.49
$
26.25
$
33.29
$
51.98
Notes:
a.
Totals
may
not
add
due
to
rounding.