South Carolina

USEPA State Innovation Pilot Grant Program, CDFA 66.606

Project Category
Reducing smog (EPA's Innovation Strategy target priority environmental area) through innovative environmental permitting activities and testing permitting incentives

Summary Page

Project Title
Regulatory Innovations to Adopt Early Action Approaches to Meet the 8-Hour Ozone

Standard in South Carolina

State Agency
SC Department of Health and Environmental Control (SCDHEC)

Project Contact
Renee G. Shealy, Director of Planning, Development & Outreach, Bureau of Air Quality
SC Department of Health and Environmental Control
2600 Bull Street, Columbia, SC 29201
(803) 898-4299
(803) 898-4117
shealyrg@dhec.state.sc.us

Relationship to Federal Programs
The proposed project will be executed in cooperation with several federal programs endorsed or authorized by EPA, including the Texas Early Action Protocol; the SCDHEC State Implementation Plan (SIP); the Commuter Choice Leadership Initiative; the Voluntary Diesel Retrofit Program; and the National Environmental Performance Track Program. However, this project will not be funded by another federal program.

Potential Federal Regulatory Flexibility Needed to Implement Project
Depending on the results of the first year of development work by a statewide stakeholder group created to develop the Early Action Ozone Compact elements and to explore incentives in air permitting to reduce emissions, federal regulatory flexibility may be needed to implement the project. The EPA proposed rulemaking to adopt regulatory flexibility for Performance Track members will be considered as well as voluntary emission reduction strategies such as commuter choice and diesel retrofit.

Agency Support
The Deputy Commissioner for Environmental Quality Control for SCDHEC and the Bureau Chief for the Bureau of Air Quality have reviewed and support this proposed project.

Summary Budget (2 years)

EPA Funds Requested
[REDACTED BY EPA]

Voluntary Leverage Funding by SCDHEC
[REDACTED BY EPA]

Total Project Budget
[REDACTED BY EPA]

Project Narrative

Introduction
Of South Carolina's 46 counties, 13 are potential areas of violation for the new 8-hour ozone standard, and 5 are areas of concern. This project seeks to address EPA's Innovation Strategy by focusing on the reduction of smog through the development of an Early Action Ozone Plan that incorporates innovative strategies to meet the 8-hour standard for ground-level ozone. These strategies may include both voluntary approaches and air permitting incentives. Our vision for the overall impact of this project is to devise a proactive plan to achieve significant and measurable emission reductions to maintain attainment status for all areas of South Carolina under the new standard. The goals and objectives to realize this vision are

Develop a Protocol for the development of a South Carolina Early Action Compact using the Protocol for the Texas Early Action Compact as a guide;

Pursue an Early Action Ozone Plan in cooperation with local areas, using the Protocol for the South Carolina Early Action Compact as a guide;

Develop voluntary reduction strategies and permitting incentive as part of the Early Action Ozone Plan;

Integrate existing state and federal innovative program initiatives to effect a comprehensive and multi-faceted approach to accomplishing the goals of the Early Action Plan;

Demonstrate and test the Early Action Plan through a cooperative effort with local area(s) at risk for violating the 8-hour ozone standard.

Project Schedule and Time Frame

The anticipated start date for this 2-year project is January 2003. The following is a summary of key activities, milestones, outcomes, products and their associated timelines for Year 1 and Year 2

YEAR 1 (Jan. 2003 - Dec. 2003) Key Activity Develop Early Action Ozone Plan	1^ST QTR Jan - Mar	2^ND QTR Apr - Jun	3^RD QTR Jul - Sept	4^TH QTR Oct - Dec	OUTCOME/ PRODUCT
Tasks
ID key stakeholders and create statewide group	X				Stakeholder Group Formed
ID key reps. of local areas of impact and create subgroups of the statewide group	X				Subgroups Formed
ID voluntary reduction strategies		X			Vol. Reduction Strategies Developed
ID potential permitting incentives			X		Potential Permitting Incentives ID
Finalize Early Action Plan				X	Early Action Plan Finalized
Conduct local Early Action Plan meetings	X	X	X	X	Meetings Completed

YEAR 2 Key Activity Demonstrate and Test Early Action Plan	1^ST QTR Jan - Mar	2^ND QTR Apr - Jun	3^RD QTR Jul - Sept	4^TH QTR Oct - Dec	OUTCOME/ PRODUCT
Tasks
Select 8-hr standard impact area(s) for demonstration location	X				Area(s) Selected
Meet with local subgroups and expand groups as needed	X
Establish emissions baseline and predict reductions based on selected components of Plan		X	X		Emissions Reductions Predicted
Implement selected components of Early Action Plan in local area(s)			X	X
Conduct project evaluation and final report				X	Final Project Report

Meeting Program Criteria Requirements

1. Target Priority Environmental Area. This proposal addresses the priority environmental area of reducing smog, and will do so in collaboration with local governments, key stakeholders and other identified environmental and industrial representatives participating in the statewide group and local subgroups developing the Early Action Ozone Plan as well as the demonstration of the Plan in selected local impact area(s) of concern.

2. Use of Incentives as a Tool. Through the Bureau of Air Quality, the proposed project seeks to identify and incorporate into the Early Action Ozone Plan those voluntary reduction strategies and permitting incentives that will help to reduce air emissions and maintain the state's current attainment status under the 8-hour ozone standard.

2.1. This approach is modeled after the Texas Early Action Protocol which is designed to achieve and maintain the 8-hour ozone standard. As part of the planning process, the Bureau of Air Quality will identify and design permitting incentives that may be offered in response to the adoption of voluntary emission reduction strategies by regulated facilities. This initiative is unique in that it represents a proactive approach to encourage facilities through voluntary measures and incentives to reduce emissions and go "beyond compliance" sooner than the required federal time frame. It is also consistent with legislation enacted by the South Carolina General Assembly in June 2002 authorizing SCDHEC to create a pilot program modeled after the Wisconsin Environmental Cooperation Pilot Program to test and demonstrate regulatory flexibility with up to 10 selected facilities through the use of negotiated, enforceable cooperative agreements.

2.2. The proposal will build on the "lessons learned" from the Texas Early Action Protocol as well as EPA's experience in designing incentives proposed for National Environmental Performance Track members (i.e. low priority for routine inspections, simplified reporting requirements under the MACT standard). It is also an opportunity to incorporate existing voluntary reduction strategies as part of the Plan, including EPA's Commuter Choice Leadership Initiative and the Voluntary Diesel Retrofit Program. Finally, the project links environmental leaders in South Carolina to the planning and demonstration phase; the South Carolina members of the Performance Track program as well as the South Carolina Environmental Excellence program members will be invited to participate as key stakeholders in the planning process .

2.3. The reduction strategies and permitting incentives will be developed throughout the first year of the project as part of the planning process for the Early Action Ozone Plan. Implementing the Plan will be demonstrated by working with at least one ozone impact area during the second year of the project. Demonstrated successes and lessons learned will be derived throughout both the planning and demonstration phases of the project.

3. Transferring Innovation.

3.1. There is great potential for significant environmental improvement through

commitments made as part of the Early Action Ozone Plan to reduce air emissions

that cause or contribute to ground-level ozone in exchange for adopted incentives. As part of the Plan, a baseline model and predictive model of potential reductions based on the Plan elements will aid in calculating and measuring these reductions.

3.2. The potential for application of this approach is substantial in that it incorporates a

number of innovative approaches at both the state and federal levels. It provides a mechanism whereby multiple approaches can be offered - both voluntary and regulatory - to achieve the goal of cleaner air and greater public health protection.

3.3. This project represents an opportunity to promote organizational change through the

use of innovations in permitting to achieve air emission reductions not otherwise currently required by law. It also will help develop a culture of environmental problem-solving through a stakeholder-based planning process, and a collaborative partnership with local area(s) at risk for non-attainment under the 8-hour ozone standard.

4. Guaranteeing Measures and Accountability. The success of the project will be measured by the extent to which the Early Action Ozone Plan and the implementation of the Plan locally will have the desired effect of implementing incentives and reduction strategies to maintain attainment with the 8-hour ozone standard.

4.1. Both output and outcome measures will be used to measure the project's success.

Output measures will include, for example, the degree of involvement of key stakeholders in the planning phase, the number of meetings held, and participation by local governments in the project's second phase. Outcome measures will include the number and type of regulatory incentives adopted as part of the Early Action Ozone Plan, and the extent to which voluntary reduction strategies are implemented in exchange for these incentives. Outcome measures will also include the baseline inventory of emissions, and the potential for reductions based on the Early Action Ozone Plan.

4.2. The achievable short-term (2-3 years) results are anticipated as the completion of the

Early Action Plan, and the implementation of it by at least 1 ozone impact area. While predictions can be made on the reduction achievable through the plan, actual reductions may not be realized within this time frame.

4.3. It is anticipated that the long-term results of this project, and the innovations adopted

as part of the Early Action Ozone Plan, will be reduction in emissions that contribute to ground-level ozone so that areas at-risk of non-attainment for the 8-hour ozone standard will be able to maintain attainment status.

PROPOSAL BUDGET

Year 1 Funding
[REDACTED BY EPA]

Year 2 Funding
[REDACTED BY EPA]