The Clear Skies Act of 2003, Release of Updated Analyses, July 1, 2003
In 2002, former President Bush announced his Clear Skies Initiative to dramatically reduce and cap emissions of sulfur dioxide (SO2), nitrogen oxides (NOx), and mercury from electric power generation to approximately 70% below 2000 levels. Clear Skies was introduced in Congress in February, 2003.
What Are the Results of EPA's Updated Analysis?
The updated analysis confirms that Clear Skies would deliver substantial human health and environmental benefits, far outweighing the cost of the program. Compared to the 2002 analysis, the updated analysis shows that more counties would meet the national health-based air quality standards, more people would benefit from breathing cleaner air, and more lakes would recover from acid rain damage. Consistent with last year's analysis, Clear Skies would not significantly affect fuel use or electricity prices for consumers.
Almost All Counties in the East Would Attain the Fine Particle Standards
The 2003 analysis again shows that Clear Skies would bring many counties into attainment with EPA's new health-based standards for ozone and fine particles. In fact, by 2020, the combination of Clear Skies, EPA's proposed rule to decrease emissions from heavy-duty nonroad diesel engines, and other existing state and federal control programs, such as pollution controls for cars, trucks, and industrial boilers, would bring all but 18 counties nationwide (including only eight counties in the East) into attainment with the fine particle standards and all but 27 counties nationwide (including only 20 counties in the East) into attainment with the ozone standards.
To compare, based on current data (1999-2001 data), 129 counties nationwide (114 counties in the East) currently exceed the fine particle standard and 290 counties nationwide (268 counties in the East) currently exceed the new ozone standard.
Clear Skies Would Improve Public Health
The refined analysis shows that benefits are expected to be even larger than the health benefits projected last year. By 2020, Clear Skies would prevent more than 14,000 premature deaths and deliver $110 billion in public health benefits each year. By 2010, early emissions reductions would annually contribute to the prevention of nearly 8,000 premature deaths and $54 billion in health benefits. An alternative methodology projects that, by 2020, Clear Skies would prevent more than 8,000 premature deaths and deliver $21 billion in public health benefits. It also projects that, by 2010, Clear Skies would prevent nearly 5,000 premature deaths and $10 billion in health benefits.
Clear Skies Would Deliver Impressive Environmental Benefits
The 2003 analysis again shows that visitors to National Parks would experience important improvements in visibility at scenic vistas, with some of the largest improvements in some of the most popular national parks in the east, such as Great Smoky and Shenandoah. By 2020, these improvements in visibility would be valued at $3 billion each year. These benefits result from improvements of approximately two to seven miles in visual range. Clear Skies would again make great strides in protecting the health of our ecosystems by reducing acid rain, nitrogen, and mercury in the environment. Chronic acidity would be eliminated in lakes in the Adirondacks by 2030, and lakes throughout the Northeast would recover more fully from acid rain damage.
U.S. Energy Diversity, Security, and Economic Growth Would Be Partnered with Environmental Progress
The updated analysis still projects that Clear Skies would not change national electricity prices significantly and that power generators would continue to rely on diverse fuel sources, including our abundant domestic coal resources. The total annual costs of Clear Skies by 2020 ($6.3 billion) under the updated analyses are comparable to those in the 2002 analyses and continue to be significantly outweighed by the benefits of Clear Skies.
Mercury Control Costs Would be Higher
The updated analyses show that mercury control costs would be higher than were estimated last year. We are still in the early stages of understanding how different technologies will affect mercury emissions from power plants because mercury is not currently regulated in the power sector. There is an ongoing research process sponsored by EPA, the Department of Energy (DOE), the Electric Power Research Institute (EPRI), and vendors specifically aimed at furthering our understanding of mercury control, with new data being made available on a continuous basis.
Over the last year, both EPA and DOE's Energy Information Agency (EIA) used updated information to reassess what mercury emissions levels would be in 2010 after installation of NOx and SO2 controls necessary to meet the Clear Skies' SO2 and NOx caps (NOx and SO2 control equipment also reduce some mercury emissions -- i.e., "cobenefit" reductions). Due to differences in assumptions and models, the Administration estimates that these mercury emissions would range from 34 to 46 tons. EIA's and EPA's updated analyses estimate the incremental cost now of complying with the 2010 cap to be $650 to $750 million per year.
A key feature of understanding this cost is the Clear Skies' safety valve provision that sets a maximum cost of $35,000 per pound of mercury emissions. The safety valve is designed to minimize unanticipated market volatility and provide more market information that industry can rely on for compliance decisions. The updated modeling projects that the safety valve provision would be triggered if technology does not improve in the future (the modeling does not include any assumptions about how technology will improve). If the safety valve is triggered, EPA will borrow allowances from the following year's auction to make more allowances available at the safety valve price. The future year cap is reduced by the borrowed amount, and the emissions reductions are ultimately achieved.
Why Is EPA Releasing Updated Analysis of Clear Skies?
Last year, EPA completed sophisticated modeling of emissions, air quality, deposition, and water quality to project the effects of the Clear Skies Act of 2002. To continue to provide high quality analyses of Clear Skies, EPA incorporated new data, new regulatory programs, and advances in modeling and monitoring capabilities.
For example, the updated analysis takes into account: